tralac Daily News
South Africa’s budget, which is to be presented in Parliament on February 24, is unlikely to result in the introduction of a wealth tax or any other significant tax increases. Rather, it is more likely that the National Treasury will take steps to ensure tax enforcement and collection, says professional services network EY. “The Budget trend since 2019 has mainly been to equip the South Africa Revenue Services (Sars) to enhance tax enforcement and improve tax collections. We do not anticipate a significant departure from this focus in this month’s budget,” says EY South Africa tax leader Ekow Eghan. He adds, however, that EY continues to be of the view that a phased-in reduction of corporate tax rates, however unpopular, could help drive South Africa’s trade, economic reform and competitiveness.
Meanwhile, economists and tax experts from professional services firm PwC have also released their predictions for the 2021 Budget. This includes that Budget margins will be trimmed and reprioritised towards medical and other necessary social expenditure.
International Relations and Cooperation Minister, Dr Naledi Pandor, says government has created a significant footprint in Asian markets as part of efforts to return the country to pre-COVID-19 economic growth. “We will identify new opportunities and expand those that have benefit for South Africa. In pursuit of this objective, South Africa has created a significant footprint in Asia, which is the continent showing the most promise of a speedy return to pre-COVID-19 levels of economic growth.
The Minister said in response to the President’s call of intensifying efforts to stimulate growth, government is working tirelessly to raise South Africa’s global visibility by also “promoting [South Africa] as the best place to be, to do business, to visit, to work, to study and to live”. South Africa, the Minister said, will leverage engagement with the Association of Southeast Asian Nations (ASEAN) to enhance mutually beneficial trade, investment and tourism ties, and to support skills development and training for South Africans.
Taxing the digital economy has the potential to plug gaping gaps in the country’s budget. However, the unilateral introduction of a digital tax by the South African Revenue Service (Sars) poses considerable challenges. A digital tax will hit American companies hard; does South Africa have the might to take on the US in a trade war?
Envoy stresses exchanging information to boost trade (The Express Tribune)
The exchange of trade-related information between Pakistan and South Africa can help boost trade between the two countries, said High Commissioner of South Africa Mthuthuzeli Madikiza. Speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Wednesday, he said that South African businessmen were aware of investment opportunities in various sectors of Pakistan’s economy. He identified multiple sectors where the two countries can focus to enhance trade.
Environment, Forestry and Fisheries minister Barbara Creecy has conceded that traders in some of the largest economies in the world are unlikely to prioritise trade with SA because of its highly carbon-intensive production processes. This posed a risk of non-tariff trade barriers, she said during the state of the nation debate on Wednesday.
Creecy said nine of the world’s 12 largest economies, and many of SA’s major trading partners, had in the past year made net zero carbon commitments, due to investor and societal pressures. These countries included China, the European Union bloc, Japan, and Korea. However, the US was likely to follow suit after announcing its intention to rejoin the Paris Agreement. “Because our energy and production processes are highly carbon-intensive, our major trading partners, who have made net zero commitments, are likely to prioritise trade with other low-carbon economies. This poses a risk of non-tariff trade barriers. Already there is increasing pressure from financial institutions who refuse to fund the development of new carbon-intensive assets,” said Creecy.
Namibia: Repo rate maintained at 3.75% (The Southern Times)
The Monetary Policy Committee (MPC) of the Bank of Namibia has decided to keep the Repo rate unchanged at 3.75 percent. The MPC is of the view that the rate remains appropriate to continue supporting domestic economic activity, while at the same time safeguarding the one-to-one link between the Namibia Dollar and the South African Rand.
Domestic economic activity slowed considerably in 2020 compared to 2019. Contractions were observed in key sectors such as tourism, wholesale and retail trade, mining, manufacturing, construction, as well as transport and storage. The contraction was mainly due to the devastating effects of the COVID-19 pandemic. On the contrary, activity in the telecommunication and local electricity generation subsectors improved during the same period. The domestic economy is estimated to have contracted by 7.3 percent in 2020, before returning to an expected moderate recovery of 2.6 percent in 2021.
Kenya is the first African Union (AU) member state to ratify the AfCFTA agreement out of the 29 countries that have ratified so far. The exemplary lead Kenya has accorded the Free Trade Area underscores the country’s commitment to its successful implementation.
Under AfCTA, it is about time the African governments to turn the tide of the international trade by making the unified continental trade agreement as source of exported goods through value addition rather than a disadvantage market for foreign exports. Kenya being a regional economic hub, this level of high market integration supported by a 1.3 billion population places the country at a vantage point to take advantage of the new opportunities particularly on the export market of goods and services.
To maximise the benefits from the agreement, the quality and competitiveness of the export market products and services should be continuously improved to match the global standards particularly with regard to the four delivery pillars on manufacturing, affordable housing, Universal Health Coverage and food security.
Kenyan business community need supportive sound policies championed by both the government and the private sector mainly on; access to credit lines for capital, address multiple taxation, fees and charges, lowered cost of production, adequate and timely trade networks and market intelligence to have an upper hand to take the lead.
The government is banking on recognition of top industry performers and private-public partnerships in its efforts to revive the tourism sector, which suffered a slump last year due to the coronavirus pandemic. Tourism Cabinet Secretary Najib Balala said Magical Kenya Signature Experiences (MKSE), a programme that recognises outfits that offer the best safari and tour experiences, is a key part of the ministry’s strategy to revive the crucial sector.
The CS said although the past one year has been difficult for tourism, he was optimistic that the industry will soon bounce back. “A lot has been going on behind the scenes to ensure Kenya comes back stronger. MKSE is part of our strategy to revive tourism in Kenya through partnership with the private sector,” he added.
Kenya’s trade deficit drops Sh205bn on lower imports (Businsss Daily)
Kenya’s trade deficit last year narrowed by 16.97 per cent, or Sh204.57 billion, helped by a double-digit drop in imports amid disruptions in global supply chains as a result of Covid-19 shutdowns and restrictions. The deficit – the gap between imports and exports – dipped to Sh1.001 trillion in 2020 from nearly Sh1.21 trillion in 2019, provisional statistics published by the Kenya National Bureau of Statistics (KNBS) show. The value of imports dropped by 8.81 per cent or Sh158.74 billion to Sh1.64 trillion in 2020 compared with a year earlier, while total exports increased by 7.77 per cent to Sh641.21 billion.
Kenya to complete grid connection to Ethiopia by June (Pumps Africa)
Kenya is expected to complete the connection of its national grid with Ethiopia’s by June this year. Energy Cabinet Secretary Charles Keter made the announcement and said that said the new connection will be ready for commissioning at the end of three months. “Kenya will venture into the power trade businesses with this new regional interconnect. We view this as a critical installation to the development of the country,” said CS Keter. The Ethiopia-Kenya Inter-connector is Kenya’s second cross-border grid link after Uganda which connects through the Olkaria-Lesos 132 Kilovolts (kV) line. It is also the longest transmission line in East and Central Africa.
Rwanda’s economy hit hard by lockdowns, curfews (The East African)
Rwanda’s economic managers face a daunting task in the coming months to find new sources of growth to revive the economy, which is currently in recession. Coronavirus restrictions imposed by the government during the pandemic have had a negative impact. Faced with mounting uncertainties surrounding the duration and spread of the pandemic, analysts say the economic fallout could intensify unless the government takes additional measures to spur growth.
The pandemic has hit Rwanda’s key strategic sector – service, particularly retail trade, leisure and hospitality and conference tourism – which collectively account for most jobs in the country. And despite the government adopting the Economic Recovery Plan estimated at $900 million over the two fiscal years 2019/20 and 2020/21, economic recovery remains slow in part because of the second wave of infections that recently led to a three-week lockdown in Kigali and reintroduced restrictions on movement.
Rwanda secures $200 million for continental export fund (The New TImes)
Rwanda has secured an initial commitment of $200 million from the African Export-Import Bank to support the country’s preparations to host the Fund for Export Development in Africa (FEDA). The funding was announced by the Minister of Foreign Affairs, Vincent Biruta as he addressed the lower house of parliament on Wednesday, February 16, during a virtual sitting.
Biruta told MPs that FEDA aims at increasing private equity investments in sectors critical to driving intra-African trade and export development. This, he noted, is vital in addressing constraints to the advancement of export growth and diversification, as well as promoting Africa’s export sector.
Rwanda’s robotic advancements in response to Covid-19 (The New Times)
According to information from the World Health Organization, one of the challenges brought about by the Covid-19 pandemic is a stout chain of transmission, especially the rate of infection of health professionals while treating Covid-19 patients. This, experts argue, has seen countries, including Rwanda, adopt the science of robotic systems as part of the ways to offer effective treatment at the same time strengthening the fight against the pandemic.
The minister for Agriculture, Prof Adolf Mkenda, disclosed yesterday that the government was issuing permits to companies to import sugar for the last time this year, urging the sugar board to start importing the sweetener next year. The comment signals change in the government policy, which has been allowing traders to import sugar to offset the shortages. Recent reports indicate that Tanzania’s demand for domestic sugar was 470,000 metric tons, while the country’s five sugar processing factories had the capacity of producing 378,000 tonnes in 2019.
The African Continental Free Trade Agreement, AfCFTA, is a continent-wide trade pact aimed at tearing down barriers to commerce among African countries. It is focused on trade liberalisation across the continent and provides for progressive elimination of tariff and non-tariff barriers and development and promotion of regional and continental value chains.
The AfCFTA will cover a market of 1.2 billion Africans with a combined Gross Domestic Product, GDP, of $2.5 trillion. It would increase intra-African trade by up to 52.3 per cent; and enable all AU countries to share in the welfare gain, which is estimated at 2.64 per cent of continental GDP – roughly $65 billion in 2018 terms. It is also expected to double the continent’s share of world trade from three per cent to six per cent over the next 10 years.
The pact will expand the size of Africa’s economy to $29 trillion by 2050, as estimated by the United Nations’ Economic Commission for Africa, ECA. The general view is that no African country is fully ready for trade liberalisation. Most plan to use the AfCFTA as a driving force to enhance their global trade competitiveness.
Trudi Hartzenberg, Executive Director of South Africa-based Trade Law Centre (Tralac) said: “The negotiations are pretty complex because the countries that are negotiating would lose tariff revenues. Reducing the tariffs means the import duties are lower so they would be gathering less revenue than before. “For some countries, the tariff revenues they get from trade taxes amounts to 25 per cent or more of their total fiscal tax revenues. The easiest taxes to collect are import duties.”
Indian Cabinet okays trade deal with Mauritius, the first with an African nation (Business Standard)
The Cabinet has approved the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) between India and Mauritius to encourage and improve trade between the two countries. The Agreement is a limited agreement, which will cover trade in goods, rules of origin, trade in services, technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, dispute settlement, movement of persons, telecom, financial services, customs procedures and cooperation in other areas. The CECPA will be the first trade agreement to be signed by India with a country in Africa, information and broadcasting minister Prakash Javdekar said.
Mauritius will benefit from preferential market access into India for its 615 products, including frozen fish, speciality sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment, and apparel, Javdekar said. As regards trade in services, Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors such as professional services, computer-related services, research & development, other business services, telecommunication, construction, distribution, education, environmental, financial, tourism & travel related, recreational, yoga, audio-visual services, and transport services.
Even as trade and economic relations between India and Ethiopia are booming, there is still huge scope to expand and diversify trade between the two countries, said V Muraleedharan, minister of state for External Affairs said at an ASSOCHAM event held in New Delhi.
Muraleedharan said that the economy of Ethiopia, the second-most populous African country which has been posting a double-digit growth rate for over 15 years together with its highly-educated, skilled populace and sound economic policies makes it an attractive investment destination for Indian entrepreneurs. Highlighting the expansion in economic collaboration between India and Ethiopia, the minister highlighted that despite Covid-19 global pandemic, Indian businessmen continued to explore investment opportunities in the African country.
News from Africa and Africa’s international trade relations
When the COVID-19 pandemic crisis started; most people were extremely pessimistic. They thought that the the region would drown in terms of trade declining catastrophically. But in actual fact the the East Africa Community economies (Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda) have, by global standards, proven to be relatively resilient. The newly launched joint report by UN Economic Commission for Africa (UNECA), TradeMark East Africa (TMEA) and African Economic Research Consortium (AERC) entitled pdf “Waving or Drowning? The Impact of the COVID-19 Pandemic on East African Trade” (4.01 MB) notes that declines in imports broadly reflected the adverse trade performance of the EAC’s main trading partners during the early phases of the pandemic in April and May 2020, but the imports of all the EAC Partner States subsequently recovered to pre-pandemic levels by the second half of 2020, after governments’ lockdown restrictions were eased and a broader global trade recovery started to take place. Nonetheless, despite showing resilience, COVID-19 has reversed some of the gains made in trade facilitation.
As African countries continue to borrow billions of dollars internationally for a range of activities, including much-needed infrastructural development, in energy, transport, water and other sectors, servicing this debt can be challenging, and can hinder African countries’ fiscal space for other expenditure, such as regular social spending on education and health. The ongoing COVID-19 pandemic has pushed some African countries into debt crises, with reduced tax revenues due to, for example, the collapse of commodity prices and tourist arrivals. Simultaneously, government expenditure has increased, with pro poor policies to protect livelihoods and businesses from the impacts of COVID-19, as well as the new costs of PPE, medication and vaccines. But this is all happening amidst existing development challenges, with huge, tens of billions of dollars per year financing gaps for infrastructure and SDG achievement. What’s the background of debt in Africa? How has COVID-19 impacted the situation? What solutions and methods are available?
To explore these critical questions, Development Reimagined has launched a new Flagship Report- “Options for Reimagining Africa’s Debt System”. The paper, part of the Africa Unconstrained series, presents ten “options” for African and other stakeholders to pursue going forwards – three previously utilised, and seven new.
After Zambia became the first coronavirus-era debt default on the African continent, analysts are questioning whether nations heavily dependent on Chinese loan financing would be susceptible to debt distress. The Covid-19 pandemic has posed difficulties for a host of sub-Saharan African countries that have borrowed substantially from China in recent years to fund major infrastructure projects, compounding pressures from a slowdown in the continent’s economic growth and falling commodity prices.
Verisk Maplecroft Research Associate Aleix Montana said in a recent report. Montana said the Zambia case indicates that beyond just the size of debt, the composition of creditors also plays a role in determining debt risk.
Resource-backed loans are often attractive to nations with rich natural resources, a need to finance infrastructure projects and limited access to capital markets. In some of China’s financing arrangements, commodities are used as a means of repayment or collateral, Montana highlighted. Loans are often predicated on future production of resources like cocoa, tobacco, oil or copper.
“Repayment deals based on the future value rather than on the quantity of a commodity are especially risky for the borrower, since a decrease in commodity prices in the global market would require an artificial increase in its production to cover the debt obligations,” Montana said.
An ambitious new program to fight corruption by identifying who benefits from the proceeds of lucrative extractive industries is being launched by transparency campaigners. Opening Extractives is a collaboration between Open Ownership and the Extractive Industries Transparency Initiative, both organizations campaigning for more accessible knowledge about private finances.
An estimated $88.6 billion is lost from Africa alone each year, according to the United Nations Conference on Trade and Development. Nearly half of this, $40 billion, is associated with extractives industries, particularly the mining of precious metals and stones, according to UNCTAD. The agency also highlighted that annual international aid to the continent amounts to $48 billion. Last year an investigation into hundreds of thousands of documents dubbed the Luanda Leaks found that shady contracts in Angola had funneled a fortune to billionaire Isabel dos Santos, the daughter of the country’s former president. “Anywhere you find political control over the distribution of public funds or public assets, the absence of understanding who ultimately benefits from them leads to a massive corruption risk,” said Thom Townsend, executive director of Open Ownership. He added: “Wherever there is a proximity of political power and the ability to distribute funds and control where they end up, the absence of beneficial ownership data produces a significant risk.”
The COVID-19 pandemic has wreaked havoc on the global economy, with world output contracting at 3.5% in 2020, and no recovery likely before the fourth quarter of 2021. Similar to other developing regions, sub-Saharan Africa recorded a 2.6% decline, following strong growth of 3.2% in 2019. Unfortunately, this comes at a time when the region has been experiencing a surprising and very welcome manufacturing renaissance. Historically, industrialisation has been associated with rapid technological improvements and sustained growth in the western world, and more recently east Asia, gainfully employing millions of workers and helping it to close the income gap with richer countries.
But recently the trend has reversed across the region. We have documented this in new research based on an in-depth investigation of national statistics in 51 countries, including 18 in sub-Saharan Africa, ranging from South Africa to Ethiopia to Nigeria to Kenya to Mauritius. These 18 countries account for nearly three-quarters of the GDP of the region, so they are a good representation of the overall picture.
One major question that stems from our research is how this trend towards more industrialisation in sub-Saharan Africa is likely to have been affected by COVID-19. Various economic activities have taken a hit, particularly travel and tourism, as lockdown policies have put a break on commerce and travelling. Fundamental drivers of long-term manufacturing growth have also been held back – especially education, with schools closed in many countries for extended periods.
On the other hand, since the recent manufacturing growth has mainly been serving a domestic and not an export market, it is at least not primarily depending on demand from other countries. But as far as exports are concerned, the initial indications are that commodity exports in sub-Saharan Africa were hit harder than manufacturing – vividly illustrated by the collapse in oil prices in 2020 (which has since bounced back). The recently created African Continental Free Trade Area might also boost regional trade in manufactured goods in the years to come. So all in all, the manufacturing renaissance in the region may be relatively resilient.
Over the past 12 months, there's been increasing talk in East African intelligence and law enforcement circles about the role Mombasa could play in facilitating shipments of falsified and substandard Covid-19 vaccines. Mombasa's many organised crime groups have never been shy to miss out on new opportunities - and there are a lot of them.
Now, the port is set to become the primary conduit for vaccine supplies from India and China to landlocked East African countries, such as Uganda, Rwanda and Burundi, plus South Sudan, Somalia and the Democratic Republic of Congo. More goods mean less inspection — less inspection makes it easier for criminals to operate Interpol East Africa crime intelligence analyst John-Patrick Broome identifies Mombasa as a "key facility" for trade in falsified and substandard medicines. Already, he says, there's been a noticeable reduction in inspections at Mombasa port and other ports in the region.
On February 15th, in Douala, a session of the technical commission in charge of monitoring the mobilization of financial resources for the implementation of the CEMAC’s 11 integrating projects started. Until February 19th, 2021, the commission will implement resources mobilization mechanisms for the effective mobilization of the XAF2, 492 billion pledged by backers during the investors’ round table organized in Paris on November 16th – 17th, 2020.
The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa. Prof. Benedict Oramah, President of Afreximbank and Mike Whitfield, President of AAAM and Managing Director of Nissan Africa, signed the MoU in early February, formalizing the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.
Prof. Benedict Oramah, President of Afreximbank said that “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA)”.
The APRM has noted the downgrade of the Republic of Ethiopia’s long-term foreign currency sovereign credit rating by Fitch on the 09th of February 2021, 2-notches from B to CCC. Moody’s and S&P Global rating still has the country’s long-term credit rating on B2 and B, respectively. The newly assigned rating for Ethiopia means the country is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for it to meet its financial commitments on the obligation. The APRM raises the following observations;
The Japan International Cooperation Agency (JICA) and the African Development Fund (ADF) – the concessional arm of the African Development Bank Group – on Tuesday signed a loan agreement of 73.6 billion Japanese yen ($668.1 million) to support the 15th replenishment of the African Development Fund (ADF-15). Ambassador Kuramitsu Hideaki, whose country has been the fifth-largest contributor to the ADF in cumulative terms, said the loan formed part of Japan’s commitment to promote industrial human resource development, innovation and investment, and to invest in quality infrastructure to enhance connectivity, expressed at the TICAD 7 conference in August 2019.
The report measures private investment in development projects in which MDBs and DFIs also make investments or have otherwise provided deal structuring or other support. These investments support global sustainable development goals by promoting inclusive and sustainable growth, tackling poverty and inequality, and mitigating climate change, among other impacts.
Trade experts optimistic of WTO reforms by Okonjo-Iweala (News Agency of Nigeria)
Some trade experts have affirmed that Dr Ngozi Okonjo-Iweala’s appointment as Director-General of World Trade Organisation (WTO) would make a difference through reforms in the global economic and trade space. The experts told the News Agency of Nigeria (NAN) in Abuja on Wednesday that the world looked forward to radical reforms of WTO system, especially with the catastrophe caused by COVID-19 on trade.
Mr Sand Mba-Kalu, a trade expert, urged Okonjo-Iweala to provide strong leadership on current expectation of global trade and increase developing countries participation in WTO activities. Mba-Kalu, who is Executive Director, Africa International Trade and Commerce Research, emphasised the need to address the call for the suspension of Intellectual Property (IP) rights related to COVID-19. He said that the suspension would ensure that not only the developed countries would be able to access and afford the vaccines, medicines, and other medical supplies. Another expert, Mr Lawrence Nze, underscored the need to strengthen domestic and continental trade and equally boost confidence of Nigeria and Africa in multilateral trading system. The expert emphasised the need for global value chain opportunities and seamless trade facilitation regime through effective mechanism.
World merchandise trade volume growth remained strong in the fourth quarter of 2020 after trade rebounded in the third quarter from a deep COVID-19 induced slump; however, the pace of expansion in the fourth quarter is unlikely to be sustained in the first half of 2021 since key leading indicators appear to have already peaked, according to the WTO’s latest Goods Trade Barometer of 18 February 2021.
Publication of Joint WCO-ICAO Guiding Principles and Guidelines to enhance Air Cargo Security and Trade Facilitation (World Customs Organization)
The World Customs Organization (WCO) and International Civil Aviation Organization (ICAO) released their Joint WCO-ICAO Guiding Principles for Pre-Loading Advance Cargo Information and Joint WCO-ICAO Guidelines on Alignment of the Customs Authorized Economic Operator and Aviation Security Regulated Agent/Known Consignor Programmes. These Guiding Principles and Guidelines are a result of continuous joint efforts over the last 10 years, following serious threats and vulnerabilities to international trade supply chains. “In the context of the COVID-19 pandemic and the need to facilitate safe and secure vaccine distribution, strong collaboration among Customs, Civil Aviation Authorities and the relevant stakeholders is highly recommended,” said the WCO Secretary General, Dr. Kunio Mikuriya. “WCO and ICAO Members are encouraged to make the best use of advance cargo information for risk assessment as well as to align partnership and security programmes to ensure secure and efficient air cargo supply chains,” he added.
Dubai launches Covid-19 Vaccine Logistic Alliance to speed up distribution around the world, under the directives of Vice President and Prime Minister of the UAE and Ruler of Dubai HH Sheikh Mohammed bin Rashid Al Maktoum. This is an initiative in support of the World Health Organisation’s (WHO) COVAX initiative and its efforts to equitably distribute two billion doses of COVID-19 vaccines in 2021.
The Dubai Vaccines Logistics Alliance combines the expertise and global reach of Emirates airline with DP World’s worldwide network of ports and logistics operations, along with the infrastructure of Dubai Airports and International Humanitarian City to distribute vaccines worldwide. The distribution will particularly focus on emerging markets, where populations have been hard-hit by the pandemic, and pharmaceutical transport and logistics are challenging.
World Debt Reaches Record $281 Trillion (Bloomberg)
The world has never been more indebted after a year of battling Covid-19. And there’s even more borrowing ahead. Governments, companies and households raised $24 trillion last year to offset the pandemic’s economic toll, bringing the global debt total to an all-time high of $281 trillion by the end of 2020, or more than 355% of global GDP, according to the Institute of International Finance. They may have little choice but to keep borrowing in 2021, said Washington-based director of sustainability research Emre Tiftik and economist Khadija Mahmood.
Even as vaccines are rolled out, low central bank policy rates are keeping issuance above pre-pandemic levels. Governments with big budget deficits are set to increase debt by another $10 trillion this year as political and social pressures make it hard to curb spending, pushing this group’s debt load past $92 trillion by end-2021, the IIF estimates.
European Union finance ministers discussed a “global recovery initiative” in response to the COVID-19 pandemic Tuesday, though the planned link between debt relief and sustainable investments remains vague nine months after the idea was first announced. Ursula von der Leyen, president of the European Commission, told the United Nations last May that Europe needs to do more than hold pledging conferences on global access to vaccines. “I would like to propose something even more ambitious,” she said at the event on Financing for Development in the Era of COVID-19 and Beyond. “We need a global recovery initiative that links investment and debt relief to the Sustainable Development Goals.”
On 17 February, the Commission and the High Representative put forward a new strategy to strengthen the EU’s contribution to rules-based multilateralism. The Joint Communication lays out the EU’s expectations of and ambitions for the multilateral system. Today’s proposal suggests to make use of all tools at the EU’s disposal, including its extensive political, diplomatic and financial support to promote global peace and security, defend human rights and international law, and to promote multilateral solutions to global challenges.
High Representative of the Union for Foreign and Security Policy/Vice-President for a Stronger Europe in the World, Josep Borrell, said: “Multilateralism matters because it works. But we cannot be ’multilateralists’ alone. At a time of growing scepticism, we must demonstrate the benefit and relevance of the multilateral system. We will build stronger, more diverse and inclusive partnerships to lead its modernisation and shape global responses to the challenges of the 21st century, some of which threaten the very existence of humanity.”
The adoption of technology was much lower among smaller firms, which typically face tougher constraints in terms of lack of demand, higher uncertainty and weaker managerial capacities. In addition, these companies often have less access to finance and more difficulty accessing high-speed internet.
Addressing the equitable distribution of vaccines against the coronavirus in the Security Council today, United Nations Secretary-General António Guterres proposed the creation of an emergency task force by the G20 countries to prepare and help implement a global immunization plan. “The rollout of COVID-19 vaccines is generating hope,” he told the 15-member Council’s videoconferencing meeting. “At this critical moment, vaccine equity is the biggest moral test before the global community.”
The Secretary-General pointed out that the coronavirus continues its merciless march across the world – upending lives, destroying economies and undermining the Sustainable Development Goals – while exacerbating all the factors that drive instability and hindering global efforts to implement Security Council resolution 2532 (2020) on conflict prevention and resolution.
Recalling the creation of the COVAX facility – the one global tool to procure and deliver vaccines to low- and middle-income countries – he stressed the urgent need for a global vaccination plan to bring together all those with the required power, scientific expertise and production, and financial capacities.
Mining boom could herald commodity ‘supercycle’ (The Guardian)
It is known as a “supercycle” – and there have only been four in the past century. The term defines periods when commodity prices enjoy an extended boom, and this week’s multibillion-dollar windfalls for mining company investors suggest a fifth supercycle is on its way. Indeed, there are signs it may have already begun. In recent weeks the price of iron ore, which is used to make steel, surged by more than 85% to reach highs not seen in almost 10 years. The market price for copper, used in electrical wiring, has followed suit by climbing 80% since last March to reach a nine-year high. Meanwhile, nickel is trading close to 17-month highs and cobalt is at close to two-year peaks.
The next 30 years are “likely to bring a supercycle in investments in clean energy infrastructure, clean transportation and everything else that is required to make the green transition possible,” Mark Lewis, the chief sustainability strategist at BNP Paribas Asset Management, said.
The impacts of the COVID-19 pandemic have dramatically increased food insecurity in the poorest and most vulnerable countries served by the World Bank’s International Development Association (IDA). What does this mean for the kind of support these countries need and what is IDA doing to address this emerging crisis?
COP26: One Earth One Future (UNDP)
During this Decade of Action, we strongly believe we need to amplify the importance of integrated solutions to address the multiple crises facing us – the crisis of biodiversity loss, degraded ecosystems and landscapes, climate change, and poverty and persistent inequality, all compounded in the last year by the COVID-19 pandemic. By safeguarding natural ecosystems and harnessing nature-based solutions, we have the opportunity to build a truly sustainable pathway for a climate resilient development. Well-designed, nature-based solutions can deliver multiple benefits – they support climate adaptation and mitigation, and they protect biodiversity and the valuable ecosystem services, on which our humanity depends to survive and prosper.