tralac’s Daily News Selection
Starting, Sunday, in Cape Town: the inaugural UN World Data Forum
Learning to Compete: evidence on exporting and firm-level performance (UNU-WIDER)
This Special Issue by the Journal of African Economies is based on the UNU-WIDER project Learning to compete (L2C) – accelerating industrial development in Africa. Learning to Compete seeks to answer a seemingly simple but puzzling question: why is there so little industry in Africa? Industry – including modern services and agro-industry – is often the key to job creation, poverty reduction, and growth. Most Asian economies began their industrialization processes with initial conditions quite similar to many African countries today, yet, while Asia had explosive industrial growth, Africa’s shares of global manufacturing value added and exports have fallen. To sustain growth Africa must learn to compete in global markets. [Table of contents: (i) Learning to export and learning from exporting: the case of Ethiopian manufacturing (ii) Export spillovers: comparative evidence from Kenya and Malaysia (iii) The dynamics of exporting and innovation: evidence from the Tunisian Manufacturing Sector (iv) Exporting and productivity: learning from Vietnam (v) Learning by exporting: the case of Mozambican manufacturing]
Kenya’s vegetable exports grow 17% on better access to the EU market (Business Daily)
Data from the Kenya National Bureau of Statistics indicates that vegetable sales stood at Sh19.6 billion up from Sh16.7 billion the previous year. The good performance resulted from improved market access after the country met most of the stringent measures set by EU, which had affected horticultural produce sales. The export volume rose from 40,000 tonnes in 2015 to 55,000 tonnes between January and October last year.
EAC-EU trade: Defining talks for East Africa presidents for late January (Business Daily)
Dr Kiptoo said that they would not want a scenario where the impasse on the EPA and negotiations would rock the gains the intra-regional trade bloc has made so far. “For us, this is a delicate matter as it involves one of our biggest local trading partners. It requires work for a mutual balance to be found and that’s what we are working on. I am hoping that in the next few weeks, from the scheduled meetings, we will get directions on how to proceed,” Dr Kiptoo said. Kenya is also looking at the variable geometry option for unlocking the impasse, which will see imports from European Union enter its market through its borders, but which will subsequently be subject to rules of origin in markets like Tanzania. “Unless the heads of state agree, then we could consider the variable geometry option, but this will see some countries impose the rules of origin conditions, which could also now be a new challenge and self-defeating,” Dr Kiptoo said.
Zimbabwe: Local firms decry delay in imports certification (Zimbabwe Independent)
Bureau Veritas, a company contracted by government to inspect imports, says it is not creating bottlenecks but abiding by international standards to block counterfeit goods into the country. BV vice-president Arnaud de Lamotte on Wednesday said due to a meticulous verification process conduted on imported goods, it takes an average of five days from the day an exporter contacts BV to the inspection date and the issuance of a certificate of conformity. “If the exporter is not compliant, BV cannot issue a certificate. Some guys are blaming BV for delays. This is not a delay, but a process. We don’t do what we want. We are accredited by International Organisation Federation of Inspection Agency. So we have to abide by those rules,” Lamotte said. This comes after Vice-President Emmerson Mnangagwa in December said the Ministry of Industry and Commerce should re-examine BV’s operations, amid concerns it was becoming a burden on local industries.
East Africa Agri Summit to address ICT and logistics in agriculture (Africa Science News Service)
The joint keynote plenary session, chaired by Ali Mufuruki, Chairman, TradeMark East Africa and CEO of Infotech Investment Group Ltd will look at a regulatory framework, opportunities in trade agreements, investment needs and new innovations in technology to create an enabling environment for agricultural development in East Africa. Agri Logistics East Africa Summit 2017 highlights include an in-depth look at first mile transport and development, transport hubs for agriculture transhipment, cold chain logistics and supply chain innovations and quality certification and customs management for exports. It will take place in Nairobi, 28 February to 1 March. [Boost for agriculture as Kenya gets Sh10b credit from India]
How creating new markets can change the future of development finance (WEF)
Africa is deep into the digital age. Around 750 million Africans have mobile service and access to the lifeline it can provide – linking distant communities, creating jobs, providing basic financial services and real-time crop information. For most people in Africa today, the first phone they ever used was a mobile phone. How was Africa able to so quickly embrace – and benefit from – the mobile revolution? By mixing smart regulatory reforms that encouraged opening up the telecom sector to competition with private investment. This powerful combination created a new market from scratch and changed lives for the better.
Macroeconomic developments and prospects in Low-Income Developing Countries, 2016 (IMF)
This paper is the third in a series assessing macroeconomic developments and prospects in low-income developing countries. The first of these papers examined trends during 2000–2014, a period of sustained strong growth across most LIDCs. The second paper focused on the impact of the drop in global commodity prices since mid-2014 on LIDCs—a story with losers (countries dependent on commodity exports, notably fuel) and winners (countries with a more diverse export base, where growth remained robust). The overarching theme in this paper’s assessment of the macroeconomic conjuncture among LIDCs is that of incomplete adjustment to the new world of “lower for long” commodity prices, with many commodity exporters still far from a sustainable macroeconomic trajectory. Extract: ’Box 1: Export diversification in LIDCs: progress and challenges’ (p9): The deterioration in economic prospects for commodity exporters has underscored the need for LIDCs specialized in a narrow range of exports to develop a wider export base. This box examines progress in export diversification, looking at: (i) product variety; (ii) variety in trading partners; and (iii) quality upgrading.
World Employment and Social Outlook: Trends 2017 (ILO)
Third, reductions in working poverty are slowing, endangering the prospects for eradicating poverty as set out in the Sustainable Development Goals Working poverty remained a problem in 2016, with nearly half of workers in Southern Asia and nearly two-thirds of workers in sub-Saharan Africa living in extreme or moderate working poverty (i.e. living on less than US$3.10 per day in purchasing power terms). Working poverty rates have been declining over the long term and this trend is expected to continue in 2017. In emerging and developing countries, the share of workers living in moderate or extreme poverty is expected to fall from 29.4% in 2016 to 28.7% in 2017. However, progress in reducing working poverty rates is slowing. The absolute number of working poor has also been declining over recent years, but the rate of that reduction is now also slowing, and in developing countries the number is on the rise. While both the rates and numbers of working poor have been falling rapidly in emerging countries, progress in developing countries has been too slow to keep up with employment growth. Consequently, the number of workers earning less than US$3.10 per day over the next two years is expected to increase by around 3 million per year in developing countries.
Harnessing automation for a future that works (McKinsey Global Institute)
The right level of detail at which to analyze the potential impact of automation is that of individual activities rather than entire occupations. Every occupation includes multiple types of activity, each of which has different requirements for automation. Given currently demonstrated technologies, very few occupations - less than 5% - are candidates for full automation. However, almost every occupation has partial automation potential, as a proportion of its activities could be automated. We estimate that about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies. That amounts to almost $16 trillion in wages. The activities most susceptible to automation are physical ones in highly structured and predictable environments, as well as data collection and processing. In the United States, these activities make up 51% of activities in the economy, accounting for almost $2.7 trillion in wages. They are most prevalent in manufacturing, accommodation and food service, and retail trade.
The future is automated. Here’s how we can prepare for it. (WEF)
Thus, we are witnessing the emergence of the “liquid workforce” and the “human cloud” as new workforce models. The “liquid workforce” refers to employees who are able to re-train and adapt to their environment in order to stay relevant during the digital revolution. In recent years, Accenture and the business media have popularized the “liquid workforce” term, bringing it into the mainstream business lexicon as Accenture develops innovative and dynamic “liquid” workforce strategies for itself and its clients. [The next industrial revolution will reinvent supply chains (Manufacturers’ Monthly)]
Dani Rodrik: Trump’s defective industrial policy (Project Syndicate)
Sociologists Fred Block and Matthew Keller have provided perhaps the best analysis of the US “developmental state” – a reality that they say the reigning market-fundamentalist ideology has obscured. Block and Keller describe how a “decentralized network of publicly funded laboratories” and an “alphabet soup” of financing initiatives, such as the Small Business Innovation Research program, work with private firms and help them commercialize their products. They and their colleagues have documented the extensive role of both federal and state governments in supporting the collaborative networks on which innovation rests – whether in biotech, green technologies, or nanotech. Such industrial policies, based on close collaboration and coordination between the public and private sectors, have of course been the hallmark of East Asian economic policymaking.
Joshua Kurlantzick: The world isn’t waiting for Trump on trade (Bloomberg)
Many Asian officials privately say they would still prefer the TPP but will support any deal that even marginally maintains the momentum for trade in Asia. They also say they could eventually support a broader, regionwide trade deal known as the Free Trade Area of the Asia-Pacific that also excludes the U.S. (and includes China). Leaders of ASEAN, the Southeast Asia regional organization, recently proposed another trade pact that would expand the deal covering the region to include other Asian economies. While some Asian businesses are trying to use their ties to the president-elect to bolster their companies, there appear to be many more searching for ways to ensure their businesses grow even if the U.S. embraces protectionism. Many aren’t waiting for the RCEP or another replacement TPP deal to be completed to examine the long-term risk of investing in the U.S. for the next four years, or for the possibility that Trump will deliver on his suggestions of a 5 percent or 10 percent tariff on imports. [The author is senior fellow for Southeast Asia at the Council on Foreign Relations]
Robert Manning: In trade with China, the key is reciprocity (Nikkei Asian Review)
When it comes to U.S.-China relations, the pressing, real economic questions are whether to grant China market status in the World Trade Organization and how to counter China’s predatory industrial and investment policies. These matters require close U.S., European Union and Japanese cooperation. Trump’s anachronistic views on U.S.-China economic ties -- with his charges of currency manipulation and unfair trade practices -- suggest he is in something of a time warp. Yet he may well carry out his threat to impose 45% tariffs. [The author is a senior fellow of the Brent Scowcroft Center for International Security at the Atlantic Council and its Strategic Foresight Initiative]
China posts worst export fall since 2009 as fears of US trade war loom (Reuters)
The world’s largest trading nation posted gloomy data on Friday, with 2016 exports falling 7.7 percent and imports down 5.5 percent. The export drop was the second annual decline in a row and the worst since the depths of the global crisis in 2009. [Related: China steel exports fall from record in relief for global steelmakers, China’s trade surplus down 9.1% in 2016]
China: Measures planned to develop exports (ecns)
China will adopt fresh measures - such as encouraging more multinational Chinese companies to be formed and actively managing any friction created over trade - to help its exports in the current year, the Ministry of Commerce said on Thursday. The ministry said that the development of more Chinese multinational companies is part of the overall push for corporate China to go global and stimulate trade. The ministry also said the country has decided not to pursue high growth in foreign trade in 2017.
The Obama Administration’s record on trade enforcement (White House)
From day one, President Obama and his Administration have vigorously worked to build a far more capable trade enforcement system. The result has been a strong record of enforcement victories that are helping to level the playing field for American workers and businesses. The Administration has enlisted all relevant agencies and used all the tools at its disposal to identify, monitor, enforce, and resolve the full range of international trade issues, so that American workers, farmers, and businesses receive the benefits they are due under our trade and investment agreements and to prevent American jobs from being threatened by unfair trading practices.