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SACU leaders calls for economic diversification
The Southern African Customs Union (SACU) leaders have admitted that the member countries of the regional body need each other more than ever before as global economic growth is expected to be slowest since the great recession.
The news of slow growth comes at a time whereby a new world order is being characterised by lower commodity prices which are likely to stay that way for the foreseeable future, and weakening of currencies resulting from slow growth in the economies of SACU major trading partners, particularly China.
South African President Jacob Zuma, who is chairperson of SACU, described the body’s new headquarters in Windhoek as a symbol of unity for the union’s member states.
SACU leaders joined Namibian President for the inauguration of SACU headquarters in on November 12, 2015.
Other SACU leaders – Botswana President Ian Khama and the Prime Minister of Swaziland Barnabas Dlamini as well as Mothetjoa Metsing, the deputy prime minister of Lesotho attended the official inauguration of the N$42 million five storey building.
Zuma noted that: “We are pleased to gather here as regional leaders today to witness the official launch of the SACU headquarters, which is a symbol of our collective effort to promote regional growth and development of the SACU region and its people, as well as a symbol of unity among SACU member states,” Zuma said while speaking at the inauguration.
“Effective regional integration is of particular pertinence now, especially with uncertainty surrounding the global economy and stagnation still likely to continue in traditional markets such as Europe.”
Zuma said developing economies face widening trade deficits resulting from low commodity prices and weak demand for imports have put pressure on the foreign exchange reserves and, consequently, on the fiscal and monetary policies.
“It cannot be business as usual, we need to develop practical work programmes that address the challenges we collectively face to promote complementarities between our economies.
“We need to consider a funding mechanism that will ensure speedy and effective implementation of agreed programmes. This requires that we take charge of our destiny due to limited resources and aid globally,” he said.
President Zuma said diversification was important while economy and export basket concentrated in a few products could be very vulnerable and prone to destabilization.
“Sustainable and continued economic development becomes very unlikely, if not impossible, in such a destabilised economic environment.
“In addition, a strong and diversified manufacturing sector across the region will increase the impact of SACU as an integration tool for all of us.
Competitive and diversified manufacturing will increase the trade potential among us.
“Our economies have resources that can be utilised to spur economic growth through the development of both our agriculture and manufacturing sectors.
“We must redouble our efforts to build and rehabilitate the regional infrastructure that must underpin production and trade growth,” he said.
The SACU chairperson said enormous opportunities for cross border trade within Africa in food products, basic manufacturing and services remain unexploited.
Cross border production networks that have been a significant feature of development in other regions, especially East Asia, are yet to materialise in Africa, hence the renewed focus on sectoral cooperation through a value-chain approach to industrial development, Zuma noted.
“We need to utilise our resources to change the region’s fortunes away from being an exporter of primary products and an importer of manufactured goods.
“Challenges on our own continent remind us of the immense burden of responsibility we carry as African leaders, to bring about substantive improvements to the material wellbeing of all our citizens.”
The South African leader said as agreed, “SACU must continue to play an important role in the economies of its Member States and that it should be transformed into a vehicle for regional integration capable of promoting equitable development and the new SACU Vision.
“Consequently, as leaders, we agreed on the need to take bold decisions, requiring a collective commitment towards securing the long-term economic prosperity of our region for the benefit of our people.
“We need to consider very seriously what we can do to avert these crises for the benefit of our people.
As SACU Member States, we need each other more than ever before.”
President Geingob on his part said member countries needed to work together to further deepen and strengthens the customs union.
He said they needed to work on the priority areas of focus of the union including a review of the revenue sharing model, intellectual property, industrial development, industrial policy, and strengthening the capacity of the SACU Secretariat, amongst others.
“A worrying global development is the discrepancy in income distribution across and within nations.
The rich are getting richer while the poor remain in a vicious poverty trap.
“Therefore, prosperity must be shared and growth must be inclusive. Furthermore, let us be cognisant of the dangers of unequal economic development.
What we want for our Union and region are economies characterized by sustained and inclusive growth as well as stable political climates,” he said.
Geingob noted that that leaders of the union’s member states need to be cognisant of the dangers of unequal economic development.
Geingob noted that it was political will and commitment to the economic integration process that will determine the success of the regional body.
“What we want for our union and region are economies characterised by sustained and inclusive growth, as well as stable political climates,” Geingob said.
“Let us continue to work together as a family in this SACU house to build a strong and prosperous sub-region where nobody should feel left out.”
Geingob shared Zuma’s sentiment about the need for economic diversification.
He said the African Development Bank undertook a study on the prospects for the economic integration of Southern Africa.
“The study indicates that Africa must transform its weak production structures and fragmented markets by embracing economic integration with a renewed sense of purpose and direction.
“The ghastly alternative would be a sub-continent at risk of marginalisation in its participation in the global economy.
“In this regard, we need to transform our region into a hive of economic opportunities and in so doing; make economic participation more accessible and inclusive,” said Geingob.
Geingob however said he was happy that they have made progress in institutionalizing the Summit of the SACU Heads of State and Government.
“It can thus be expected that the SACU Summit will strengthen sub-regional stability and development, and increase investor confidence in our sub-region.
The extent of our political will and commitment to the economic integration process will determine the success of SACU.”
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tralac’s Daily News selection: 24 November 2015
The selection: Tuesday, 24 November
A selection of African and international trade and development conferences:
In Gaborone: the Connecting Resources and Society in Botswana conference
Highlighted conference document: Turning finite resources into enduring opportunity (De Beers, Genesis Analytics, PwC UK)
This analysis – the first of its kind – examines the value generated by the Partnership in 2014, and demonstrates the shared long-term vision of the respective partners. It demonstrates a shared understanding that as much value as possible should be generated from the activities of the Partnership in Botswana, for Batswana. On Partnership revenues of almost US$7bn in 2014, the Partnership directly generated US$4bn of value to the economy, which was the equivalent of 25% of GDP for the year. Put into context, the Partnership contributed nearly double that of the entire wholesale and retail trade sector combined in Botswana to the country’s GDP. When the direct contributions of the Partnership to the economy are combined with the contribution through the supply chain and employee spending, the total economic contribution grows to US$4.4bn, or 27% of Botswana’s GDP in 2014. [Download]
Conference commentaries: Alex Vines ‘Botswana explores a future without sparklers’ (Business Day), Philippe Mellier ‘Mining for social value in Botswana’ (The Guardian)
In Khartoum: 17th Africa Oil, Gas and Mines Trade and Finance Conference and Exhibition (UNCTAD)
In Geneva: Tenth International Debt Management Conference (UNCTAD)
Highlighted presentations: Debt management in Africa (Adam Elhiraika, UNECA), Financing options for development (Raphael Otieno, MEFMI)
UNIDO's forthcoming Least Developed Countries’ (LDC) Ministerial Conference: the 5 background papers
In Brussels: the ACP Council of Ministers
“This Council session takes place at a very critical time, in the midst of major global summits on trade, climate change, and other essential aspects related to development. Moreover, the ACP Group of countries is at a juncture where we must ask fundamental, existential questions about how the organisation can contribute in an effective way that impacts on our peoples’ lives, in light of all the global challenges we face today,” said ACP Secretary General H.E Dr. Patrick I. Gomes. “It is essential to engage strategically during this period.” Aside from approving the 2016 budget for the ACP Secretariat, major decisions expected out of the meeting include those on the 8th Summit of ACP Heads of State and Government, outlooks on the United Nations Climate Change Conference COP21, the WTO Ministerial conference in Nairobi, amongst others. Ministers will also hold deliberations on the ACP Small Islands Developing States Forum, and the future of ACP-EU relations.
Trade in services in Africa: a set of papers from tralac
The set of papers contains a large amount of visualised data on trade in services in Africa. There are seven sectoral papers (three still forthcoming) and one framework paper, which contextualises, defines and presents top level data. The intention of these papers is to especially assist non-quantitative researchers in understanding the pattern of services trade within Africa and between Africa and the rest of the world. However, the papers will be of use to anyone interested in quickly understanding services trade patterns in Africa. For an overview of services trade in Africa and to understand data definitions, limitations and sources, please refer to the Framework Report. In order to drill down into a particular sector to understand the sectoral trade patterns in more depth and to access inter and intra-REC trade patterns, please refer to the relevant sectoral report
Ethiopia’s Great Run: the growth acceleration and how to pace it (World Bank)
Ethiopia has witnessed rapid economic growth, with real GDP growth averaging 10.9% between 2004 and 2014, which is lifting the country from being the second poorest in the world in 2000 to becoming a middle income country by 2025, if it continues its current growth trajectory. Fueled by substantial public infrastructure investment and a conducive external environment, the country’s growth has been stable, rapid and it has managed to decrease poverty substantially from 44% in 2000 to 30% in 2011, according to the national poverty line, according to a new World Bank report, Ethiopia’s Great Run: The Growth Acceleration and How to Pace It. The report’s key findings include:
Services and agriculture have largely contributed to the growth. Initially, agriculture was the main contributor to growth but aided by a construction boom the services sector has taken over. Services contributed 5.4% to the GDP growth rate, followed by agriculture at 3.6%.
Ethiopia witnessed accelerated growth as service sector began to rise. The shift of workers from agriculture to service and construction contributed to a quarter of Ethiopia’s per capita growth from 2005 to 2013. It was also complemented by a marked increase in the share of working-age population, the so-called demographic dividend, which can be attributed to up to 13% of per capita growth from 2005 to 2013.
AfDB Annual Report 2015 for North Africa: taking the pulse of the region
Botswana taps into Lesotho project (IOL)
Arid Botswana has finalised a deal with South Africa and Lesotho to tap some of the water from the Lesotho Highlands Water Project. Botswana’s Minister of Mineral, Energy and Water Resources Minister, Onkodame Kitso Mokaila confirmed this at a conference in Gaborone on the diamond industry. Mokaila stressed that the agreement was a “done deal” and it was now just a matter of drawing up a plan and a design to implement the agreement. A pre-feasibility study was now being conducted. He said that all three countries were part of the Orange River system “and so we all decided to work together”.
Mozambique: Can investments by the extractive sector be used to increase financial inclusion? (SPEED)
A recent report by OzMozis for FSDMoç (Financial Sector Deepening – Mozambique) discusses opportunities to improve financial inclusion in Mozambique building on investments and economic activities associated with the extractives sector. The report notes that even though resource development generally takes a long time, in Mozambique many people expect and hope that the country’s resource endowment will quickly contribute to greater employment and increased financial inclusion. The report therefore considers ways that the extractives boom could be used to increase financial inclusion.
Kenya: Sugar price falls to five-year low on inflow of imports (Business Daily)
New data by the Agriculture, Fisheries and Food Authority shows that a kilo of sugar retailed at an annual average of Sh104 in the period to October, reflecting a general cooling of prices as the market responds to the effects of a steady inflow of imports that have helped meet local demand. As at October the country had imported a total of 196,713 tonnes of sugar, surpassing the 192,121 tonnes imported over the entire 2014.
Maximising benefits from water for tourism in Africa (AfDB)
Using widely varying African case studies and the latest tourism research, the study illustrates the opportunity for economic growth and job creation in this complex natural resource area. Shared water resources are highlighted, as well as Regional Member Countries’ challenges and opportunities. The potential for green growth and inclusive development through improved management of water resources in Africa’s growing tourism industry is illustrated in this report.
South Africa: Parliamentary report on xenophobic violence talks a lot, says very little (Daily Maverick)
Parliament's ad hoc joint committee on probing violence against foreign nationals has finally submitted its report. There is little new in its findings, and if past reports on the issue are an indication, few of the broad recommendations will be implemented. But policy changes resulting from the attacks on foreigners this year are likely already decided: Implement harsher controls of those coming into SA while attempting to build township economies. [Download]
EALA reconvenes: session overview (EAC)
Other notable business for consideration during the two week period will comprise: debate and possible adoption of reports of various committees of the EALA. One such key report is that of the Committee on Trade and Investment On-spot assessment of One Stop Border Posts in the EAC which shall give us a score-card on the processes in place with regards to the implementation and its linkage to trade facilitation and the effect on the EAC business environment. You will recall that EALA passed the OSBP Bill, 2012 to facilitate, simplify and expedite border controls. [Committee reports]
EALA calls for speedy end to Burundi crisis (New Times)
EALA to decide on Burundi’s move to oust four lawmakers (New Times)
WTO sub-committee on cotton: background paper by the Secretariat
As requested by the Bali Ministerial Decision, and following up on the three dedicated discussions held so far, the WTO Secretariat has prepared a revised compilation of factual information and data available from Members’ notifications and other submissions, on Market Access, Domestic Support and Export Competition in relation to cotton, received up to 5 November 2015. The paper is organized in three parts, namely: export subsidies, domestic support, market access.
Divergence remains as WTO members look at new agriculture proposals (WTO)
D Ravi Kanth: 'A trade initiative on its last legs' (LiveMint)
The nature of China's involvement in Sub-Saharan Africa (World Bank's Weekly Insight)
However, over the medium to long term, Chinese engagement is expected to grow, reflecting greater opportunities in SSA, as well as strategic Chinese interests in the region. To fully benefit from this, countries in SSA need to strengthen domestic institutions, increase transparency (especially in mining), improve business environments, and promote the development of human capital. Closer economic cooperation among African countries, for instance harmonizing laws and facilitating cross-border business and collaboration, could allow SSA to leverage the benefits of commerce with China and other major emerging market economies. This would also help lower the costs of bureaucracy and improve competitiveness. Improvements in regional infrastructure would encourage domestic and foreign investment.
Zimbabwe: Team finalises Sino-Zim deals...as President XI Jinping’s visit nears (The Herald)
Ahead of this week’s Spending Review, the government has published its new aid strategy, re-affirming its commitment to spend 0.7% of national income on official development assistance (ODA), and setting out how development spending will meet Britain’s moral obligation to the world’s poorest and also support its national interest. [Downloads available]
SACU leaders calls for economic diversification (Southern Times)
Vietnam-Africa trade turnover increases fivefold in seven years
Kenya’s foreign currency reserves decline to Sh688bn (Daily Nation)
Zambia’s currency, seen as world’s worst performing, rallies the most in 7 years (M&G Africa)
WB surveys confirm concerns over reduced access to banking services
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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UNCTAD conference will focus on sustainable job creation in Africa’s extractive industries
The 17th Africa Oil, Gas and Mines Trade and Finance Conference (OILGASMINE) and Exhibition will examine how the extractive industries can contribute to sustainable job creation, within the sector and in the broader economy.
Every year, more than 12 million young Africans join the continent’s labour force. But only around 5 million of them will find jobs.
Creating more jobs continues to be a major challenge, and the continent’s ability to put more of its labour force to work will, in part, determine how successful it will be at achieving the 2030 Agenda for Sustainable Development – in particular goals 1 and 8, which aim to end poverty and promote full and productive employment and decent work for all.
The extractive oil, gas and mining industries play a key role in many African economies but create few employment opportunities. The continent is richly endowed with mineral reserves and hosts about 8 per cent of the world’s oil and gas. These resources account for a significant share of export earnings in many African countries, yet the extractive industries employ only around 1 per cent of Africa’s workforce.
UNCTAD research, however, shows that these industries can contribute to sustainable job creation, particularly by supporting other economic sectors, and this will be the main discussion at its 17th African OILGASMINE Conference and Exhibition, taking place in Khartoum, Sudan, from 23 to 26 November 2015.
The conference will bring together governments, the private sector and civil society to redefine the extractive industries’ role in job creation, both within the sector and in the broader economy. In addition, the conference will look at investment opportunities in Africa, and discuss how these investments could lead to more and better economic opportunities for local populations.
Seventeenth African OILGASMINE Conference and Exhibition
23–26 November 2015, Khartoum
The central theme for this year’s event jointly organized by UNCTAD and the Government of Sudan in partnership with Cubic Globe Ltd is “Extractive industries and sustainable job creation”.
Africa is richly endowed with metals and mineral resources. The continent contributes to a sizeable share of the global reserves of some minerals such as bauxite, chromite, platinum, tin, gold, gemstones, diamonds, manganese, uranium, and iron ore. The continent also holds almost 8 per cent of proven world oil and gas reserves. Many African economies are highly dependent on the exploitation of these minerals. However, the continent’s participation in the global oil, gas and minerals industry is limited to providing raw materials. Today, most of Africa’s extractives are still exported as crudes, ores, concentrates and metals, without significant value addition and job creation.
The oil, gas and mineral sectors of several African developing countries have shown limited positive impacts on other sectors of the economy, job creation, or on addressing problems of environmental degradation. African oil-, gas- and mineral-exporting countries could derive more benefits from the sectors by stimulating the development of forward (adding value to the extracted materials) and backward (through the supply of local goods and services) linkages broadly within their national economies. Countries could also leverage the skills and technology acquired from developing such linkages to serve other sectors of the economy and generate jobs in a sustainable manner, beyond the life cycle of the extractive industry. To attain this objective, long-standing challenges such as insufficient access to financing, low education and skills, lack of technology transfer, weak infrastructure and in several instances insufficient progress in improving the governance, including transparency and accountability frameworks, need to be addressed.
OILGASMINE Conference and Exhibition
Since 1996, UNCTAD has organized an annual Africa Oil, Gas and Minerals Trade and Finance Conference and Exhibition (OILGASMINE) in different locations in Africa with a view to providing a platform for an open and inclusive dialogue among all stakeholders (public, private, civil society and academia) to address the challenges faced in Africa’s extractive sector. The principal objectives of the conference are to:
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Share information and experiences in particular success stories;
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Attract investment into extractive industries;
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Foster and build intraregional partnerships by focusing on South-South cooperation as well as renewing North-South partnerships;
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Create better linkages between the extractive sector and other domestic sectors;
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Build effective multi-stakeholder partnerships, particularly with private firms;
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Provide networking opportunities;
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Showcase equipment, innovative technology, goods and services in the extractive sector.
Theme and questions to debate
The theme for this year’s OILGASMINE is “Extractive industries and sustainable job creation”. In various sessions, participants will debate topics such as legal and regulatory frameworks for developing a sustainable industry from within; challenges and opportunities for job creation in artisanal-scale mining; training and capacity-building in the extractive industries for sustainable job creation; innovations and technology transfer; partnerships for mining and petroleum sector development; and investing in renewables for green jobs, among others.
A component of the conference agenda will focus on the host country’s upstream potential in the extractive industries and the available investment opportunities. This session will be complemented with another one on the opportunities in investing in Africa’s extractive industries. Participants at the seventeenth Africa OILGASMINE will share their views and experiences on these various topics that will contribute to the major conclusions and recommendations of the conference.
The key questions to be discussed at the conference include:
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What are the opportunities for investment in Africa’s extractive industries? What partnerships can be formed to enhance job creation?
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How can legal and regulatory measures be used to promote job creation? What is the best practice in structuring agreements with foreign oil and mining companies to promote job creation? What are the challenges facing job creation in Africa’s oil and mining companies?
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How can artisanal-scale mining be structured and organized to attract more workers, irrespective of gender, increase safety and improve environmental management?
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How can access to finance be improved for small and medium-sized enterprises to participate in the extractive industry and generate jobs?
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How can skills development and technology transfer be promoted in the extractive industries?
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What can be done to strengthen intra-African/Arab-African cooperation for mining and petroleum sector development? What are the challenges in maintaining such relationships and how can they be addressed?
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Botswana: Turning finite resources into enduring opportunity
In the 50 years since independence, Botswana has experienced remarkable economic growth. This growth has been underpinned by the partnership between Botswana and De Beers.
Botswana’s diamond-led development story is widely celebrated as an African success story. In just 50 years, the country has transformed itself from one of the poorest nations in the world into a modern, upper middle-income country. By any measure, this is an achievement of which Botswana can be proud.
This economic and social progress has been built largely on a diamond foundation, enabled by high standards of governance, political stability, and the judicious investment of diamond-generated wealth.
While historically resource-rich economies often grow more slowly than resource-scarce economies, the reverse has been true for Botswana. This has been largely due to the fact that it has managed its resource with long-term development goals in mind.
Importantly, it has avoided the worst effects of Dutch Disease (a sharp currency appreciation that makes other exports less competitive). It did this in a number of ways. Firstly, it introduced a revenue stabilisation fund in 1970 to even out revenue fluctuations and to store budget surpluses. Secondly, it accumulated international reserves and introduced a national currency, the Pula, which was pegged to a basket of currencies to prevent rapid currency appreciation. Thirdly, it established a sovereign wealth fund as an offshore investment vehicle for diamond revenues, which could be drawn on in times of crisis.
Moreover, a decision was taken to partner with the private sector in developing the diamond resource. Engaging private capital and expertise was an unusual decision in an era when nationalisation and a preference for state-led development was common in much of Africa.
Diamonds have made a hugely positive contribution to Botswana through the application of a simple partnership formula: locate and mine diamonds efficiently and provide a steady supply; grow the demand for diamonds and maintain high product equity; sell rough diamonds to the world’s leading diamantaires; maximise exposure to the diamond value chain within Botswana; and invest diamond revenues wisely.
Capital expenditure on mines helped to kick-start other sectors, including construction, financial services and transport. Growth of the economy increased development investment and lifted national wealth levels rapidly. From 1966 to 2014, Botswana’s GDP per capita grew at an average rate of 5.9 per cent a year (measured in purchasing power parity which is used worldwide to compare the income levels in different countries), one of the highest rates in the world in that period.
High levels of public spending created a better quality of life for many Batswana, providing access to free public healthcare, free education, transport, energy and water infrastructure.
Botswana’s success in the diamond industry has been supported by a five-decade partnership between the Government of Botswana (the Government) and The De Beers Group of Companies (De Beers), referred to as the Partnership in this report. This is one of the world’s longest existing public-private partnerships.
Starting with mining, the Partnership later extended operations further down the value chain to the sorting, valuing and selling of rough diamonds in Botswana. This ultimately led to the relocation of De Beers’ international sales function – De Beers Global Sightholder Sales (DBGSS) – from London to Gaborone at the end of 2013.
The success of the Partnership, and what that success has meant to the growth of Botswana, has been underpinned by a shared understanding by both the Government and De Beers that diamonds are unique and require a long-term view. They are a finite resource and are ultimately a luxury product.
Perhaps most importantly, the Partnership has endured because it has linked the success of one partner with the success of the other. Partnership interests have become intertwined over time with the establishment of two 50/50 joint ventures and the Government’s increased shareholding in De Beers’ main holding company, De Beers Société Anonyme.
De Beers has provided capital, technology, skills transfer and an effective route to market, while the Government has ensured a stable and supportive operating environment. De Beers has also respected and supported the broader developmental aspirations of Botswana, while the Government has granted De Beers long-term access to diamond supply.
The partnership has made, and continues to make, a significant socio-economic contribution to Botswana, supporting more than a 500 times increase in nominal GDP since 1960 as well as a substantial improvement in the Human Development Index.
This analysis – the first of its kind – examines the value generated by the Partnership in 2014, and demonstrates the shared long-term vision of the respective partners. It demonstrates a shared understanding that as much value as possible should be generated from the activities of the Partnership in Botswana, for Batswana.
On Partnership revenues of almost US$7 billion in 2014, the Partnership directly generated US$4 billion of value to the economy, which was the equivalent of 25 per cent of GDP for the year. Put into context, the Partnership contributed nearly double that of the entire wholesale and retail trade sector combined in Botswana to the country’s GDP.
When the direct contributions of the Partnership to the economy are combined with the contribution through the supply chain and employee spending, the total economic contribution grows to US$4.4 billion, or 27 per cent of Botswana’s GDP in 2014.
With taxes, royalties and dividends combined, the total distribution of Partnership revenues to the Government represents a significant proportion of its total revenue raised in 2014.
These revenues help to provide employment and support skills development, which is strongly supported by the Partnership. In total, the Partnership contributed more than 34,000 jobs in Botswana. Directly, it employed almost 8,000 people in 2014, of whom 96 per cent were Botswana citizens, including almost 85 per cent of management. A further 12,870 jobs in the broader economy were supported through the Partnership’s supply chain contribution. Another 13,400 jobs were supported by the spending of employees of the Partnership and its suppliers’ employees.
In total, the Partnership supported one in every 20 jobs in Botswana. In addition, the Partnership spent approximately US$6 million on 550,000 hours of training and skills development for employees.
2014 was the first full year that DBGSS operated from Botswana. The revenues generated from the sale of De Beers’ supply of rough diamonds to international diamantaires contributed US$380 million, or nine per cent of the Partnership’s total direct contribution to GDP. In addition, through supplier and employee expenditure, DBGSS added another US$30 million to GDP, representing 2.5 per cent of Botswana’s GDP.
This analysis suggests that the Partnership is the largest single contributor to the Botswana economy, besides the Government itself.
Mindful stewardship of Botswana’s diamond resource has provided a strong foundation for further growth and economic diversification.
Botswana has managed to turn the promise of resources below ground into opportunities above ground. A previously poor, small nation has achieved economic and social progress that is a modern success story. The foundations of this have been political stability, good governance, and the wise investment of diamond revenues in the long-term development of infrastructure and human capital.
The Partnership between the Government and De Beers has played an important role in funding this progress by securing and realising high value from Botswana’s natural resource.
Few can dispute that diamonds have been positive for Botswana, but they have not been a panacea.
The Government has been quick to recognise that past achievements do not automatically translate into future successes. Challenges such as unemployment, high levels of income inequality, residual poverty and an over-reliance on diamonds still need to be overcome. Progress is, however, being made. This is particularly true with regards to economic diversity, with the non-mining sector now making up 70 per cent of total value added to GDP compared with less than 50 per cent in 2002.
The Partnership can help Botswana to move further down this path. Arguably, its first responsibility is to continue to maximise the value of every Botswana diamond yet to be mined and sold. This will provide the fiscal basis to support further developmental investment, improve health and education, provide social safety nets and, importantly, support new, more sustainable sectors.
This will require the extraction of diamonds as efficiently and safely as possible, making use of new technologies; exploring for new reserves; and investing in new assets such as Cut-8 at the Jwaneng Mine. The Partnership will need to continue to invest in building global demand for diamonds, safeguarding their image and guarding against challenges from other luxury products and synthetics.
It must also continue to support and promote Botswana as a global diamond hub, and use its considerable power in the economy to build linkages to local businesses, as well as to support initiatives outside of diamonds with enterprise development programmes such as Tokafala.
The Partnership provides a model of how public and private interests can work together in the long term. The key is to have an aligned vision: in this case, a deep appreciation of diamonds as a finite, luxury product, and a long-term approach to creating value from one of nature’s treasures. The partners will need to retain this long-term vision in order to deliver the next 50 years of development.
The challenge that Botswana faces is to build on a foundation of wise development to create new areas of competitiveness and employment, while moving to a post-diamond era. But these challenges should not detract from the success the Partnership has had in spurring the country’s socio-economic development. By translating the potential of resources below ground into enduring value above ground, Botswana has succeeded where many others have failed.
Background
This report explores the economic contribution to Botswana of the Partnership between the Government of the Republic of Botswana and De Beers. This is described both historically and specifically through an analysis of the economic contributions made by the Partnership in 2014. An embedded theme is the way in which the Partnership has endured for almost 50 years.
The research on which the report is based relied on both quantitative and qualitative techniques. Interviews were held with many of those involved with the Partnership and their insights have been incorporated in the report. De Beers would like to thank all those who participated for their invaluable contribution. The economic contribution of the Partnership in 2014 is calculated using input-output modelling techniques – and a full methodological description is provided in Appendix 1.
De Beers has authored this report with support from Genesis Analytics and PwC. Genesis Analytics facilitated a stakeholder engagement process, assisted with background information and provided development economics insights. PwC collected and analysed data from the Partnership, using internationally recognised methodologies to calculate the socio-economic impact of the Partnership in 2014. De Beers would like to thank Genesis Analytics and PwC for their contributions.
Several features of the study should be noted:
First, the contribution of the Partnership is measured at a national not a local level.
Second, the measurement framework is socio-economic and does not include an assessment of environmental impact.
Third, the results for 2014 are a snapshot in time that cannot be used to predict long-term trends.
The year 2014 was selected for analysis as it was the last complete year and provided the most up-to-date results. This is recognised to have been a strong scal year for Botswana.
Finally, the report does not take into account the extent to which some or all of the noted contributions might have happened in the absence of the Partnership. In other words, no attempt has been made to assess the counterfactual or substitution effect that might have applied in the absence of the Partnership.
About the partnership
The Partnership is referred to throughout the report. In 2014, the Partnership comprised four companies, all operating from Botswana:
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De Beers Holdings Botswana, the exploration arm of De Beers in Botswana;
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Debswana, a 50/50 joint venture between the Government and De Beers. This is the primary producer of diamonds in Botswana;
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Diamond Trading Company Botswana (DTCB), a 50/50 joint venture between the Government and De Beers, which sorts and values rough diamonds mined by Debswana; and
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De Beers Global Sightholder Sales (DBGSS), the rough diamond sales arm of De Beers, which is responsible for selling the bulk of De Beers’ global production to its rough diamond customers (called Sightholders).
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AfDB Annual Report 2015 for North Africa: Taking the pulse of the region
In its 2015 Annual Report for North Africa, the African Development Bank assessed the economies of the six countries in the region: Algeria, Egypt, Libya, Mauritania, Morocco and Tunisia.
The report notes that the major transition period in the region, which started in the wake of the Arab Spring in 2011, led to democratic elections in almost all the countries of North Africa in 2014 and 2015. The report also highlights the key role of many of these countries in solving the recent crises in Mali and Libya by leading international mediation to strengthen the security situation.
The report notes that the large majority of North African economies registered relatively modest growth rates in 2014. For the oil-importing countries, lower energy prices and more favourable external environment are positive growth-boosting factors this year. However, it is unlikely that this is enough for a significant drop in unemployment rates. In addition, security challenges continue to weigh on investors’ confidence, including in countries that have made progress in the political and democratic transition – which implies that peace and stability in the region are clearly prerequisites for long-term development. For oil-producing countries, the drop in oil prices is an opportunity to launch reform programs required to strengthen the resilience of the macroeconomic framework and support the diversification of the economy.
The report also notes that most countries are moving towards the removal of constraints to the development of the private sector. Increasing importance is attached to transparency, to the efforts to improve the efficiency of the public sector, to reducing administrative constraints on normal economic activities and efforts to help private sector companies to comply with rules. However, three main challenges continue to hinder private sector development and public sector management in the North African countries. The first is related to recent events, notably, the political instability and security concerns in some countries that discouraged private investment and weakened the public sector administration. The second, which affected all countries in the region to varying degrees, is linked to a history of the state interventionism, which has discouraged foreign investment, reduced incentives to hire long-term employees (pushing large segments of the economy into the informal sector) and has hindered the development of the financial sector. The third is has to do with poor governance, which has increased the returns from rent-seeking compared to economically productive activities.
Structural reforms are needed to improve economic and social outcomes. This would allow, in particular, youth and women, who are the key assets of the region, to participate in the economy with all their potential, and should be a priority in addressing economic handicaps for men and women living in marginalized areas. Such reforms will improve the quality of education, access to quality health care, vocational training and the development of effective policies that promote participation in the labour market. Removing excessive trade barriers in the private sector and well-targeted interventions in the poorest and most marginalized regions will also be critical.
The AfDB’s Annual Report dedicated to North Africa also provides more detail on major projects funded by the Bank in each country of the region. It provides figures and overview of AfDB activities and summarizes the projects funded by the Bank, by specifying the expected results and their development impact. In December 2014, the active portfolio of the Bank Group in North Africa had over 114 approved and ongoing operations, with a total net commitment of US $5.81 billion. The region retains its position as having the Bank’s largest portfolio. Notable among the flagship projects approved in the region in 2014 is the Ouarzazate Solar Complex in Morocco, being financed to the tune of US $100 million. The Bank has also contributed US $75 million towards the Nawara pipeline project in southern Tunisia. This project was among the largest investments in southern Tunisian in 2014.
» Download: Taking the pulse of North Africa: 2015 AfDB Annual Report (PDF, 7.45 MB)
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With continued rapid growth, Ethiopia is poised to become a middle income country by 2025
Over the last decade, Ethiopia has made remarkable progress in its economic growth exceeding other low income and Sub-Saharan African countries, with real gross domestic product (GDP) growth averaging 10.9 percent in 2004-2014. Ethiopia has moved from the second poorest in the world in 2000 and, if it can keep the current pace, it’s on its way towards becoming a middle income country by 2025.
Ethiopia’s growth strategy stands out for its uniqueness in focusing on promoting agriculture and industrial development with a strong public infrastructure drive. According to a new World Bank report, Ethiopia’s Great Run: The Growth Acceleration and How to Pace It, the agriculture and services sectors, were the main contributors to this accelerated growth, which was driven by high government investment in the energy, transport, communications, agriculture and social sectors.
“Ethiopia is in it for the long run as the title of this highly interesting and very useful report suggests. Our country is in the business of enduring the challenging course of development and breaking new world records just like the famous long distance runners that our country is known for. We have been successful so far and like our runners we are determined to win the race at our own pace.
“We have a clear and shared long-term vision, and committed government for development centered on economic growth, transformation and poverty eradication,” said Dr. Abraham Tekeste, Deputy Planning Commissioner, National Planning Commission.
High public infrastructure investment was facilitated by a decline in military spending as a part of a restraint on government consumption. A strong rise in exports, greater trade openness, and an expansion of secondary education were some of the additional enabling factors that supported the economic boom and facilitated a substantial decrease in poverty from 44 percent in 2000 to 30 percent in 2011, measure by the national poverty line.
“Ethiopia began to see accelerated economic progress in 1992 and it shifted to an even higher gear in 2004, pulling millions of people out of poverty and leading to improvements in other areas like improved life expectancy and reduced child and maternal mortality,” said Lars Christian Moller, the World Bank Group’s lead economist for Ethiopia and lead author of the report. “To continue the impressive run, Ethiopia needs to modernize the policy framework to further strengthen the foundations of its economy.”
The report’s key findings include:
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Services and agriculture have largely contributed to the growth. Initially, agriculture was the main contributor to growth but aided by a construction boom the services sector has taken over. Services contributed 5.4% to the GDP growth rate, followed by agriculture at 3.6%.
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Ethiopia witnessed accelerated growth as service sector began to rise. The shift of workers from agriculture to service and construction contributed to a quarter of Ethiopia’s per capita growth from 2005 to 2013. It was also complemented by a marked increase in the share of working-age population, the so-called demographic dividend, which can be attributed to up to 13% of per capita growth from 2005 to 2013.
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Rapid growth in the agriculture sector contributed significantly toward poverty alleviation. Each percent of agriculture growth reduced poverty by 0.9%. Yield growth averaged about 7% per year while the country registered a 2.7% annual increase in cultivated land.
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Public infrastructure investment has been a key structural driver of growth. With the country enjoying a long spell of relative peace, the government has been able to prioritize capital spending over consumption within the budget. In an analysis of 124 countries over four decades, the country was among the fastest 20% in infrastructure growth in the past decade.
The report highlights three policy recommendations to help Ethiopia achieve its broader goal of becoming a lower middle income country by 2025:
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Continued infrastructure investment, sustainably financed: Exploring new ways to finance infrastructure such as raising tax revenues, encouraging private sector involvement, and improving public investment management can help Ethiopia continue its fast growth in the coming years. This would help reduce reliance on debt financing and free up domestic credit for the private sector.
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Supporting the private sector through credit markets: Sustaining economic growth through private investments will be critical, and in order to do so firms need to be supported by getting better access to credit. Ethiopian firms are more credit constrained than peers and exhibit poorer performance as a result.
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Tapping into the growth potential of structural reforms. Ethiopia has so far liberalized its merchandise trade, but to continue growing fast it can make further progress by gradually reforming the services sector, including domestic finance. In doing so, it can benefit from the lessons of early reformers and tailor reforms to its own circumstances.
Moving forward, the report also proposes a series of indicators that would monitor the trade-offs that could occur while implementing the current growth strategy. This could provide early warnings to policy makers and help initiate reform efforts to sustain higher growth.
The launch event held in Addis Ababa on 23 November 2015 was co-chaired by Ato Ahmed, State Minister of Finance and Economic Corporation, and by H.E. Dr. Abraham Tekeste, Deputy Commissioner for Planning.
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AUC-FSIN Technical Consultation concludes with recommendations for harmonising and improving food and nutrition security information in Africa
From 17-19 November 2015, the African Union Commission (AUC) in collaboration with the Food Security Information Network (FSIN), a partner initiative between FAO, WFP and IFPRI, held a technical consultation themed “Food and Nutrition Security and Resilience Analysis: Are we effectively using the right data?,” in Addis Ababa, Ethiopia.
The objective of the Consultation was to launch a process leading to development of a framework to strengthen national food security and nutrition information systems and statistical capacities, to enhance evidence-based decision making and policy monitoring in the region.
In his concluding remarks at the closure of the Consultation, Mr. Laila Lokosang, CAADP Advisor for Food and Nutrition Security, representing AU Commissioner for Rural Economy and Agriculture, H.E Tumusiime Rhoda Peace underscored that the African Leadership had already made firm commitments on issues of improving Africa’s capacity for generating data and information to facilitate evidence-based policy development and tracking of progress of implementation of planned activities.
“The onus is, therefore, on all of us, working together as experts, to ensure that such commitments are followed through,” he said.
Over 80 technical experts, practitioners and decision makers from regional and national institutions, UN agencies, academia, NGOs and the private sector participated and contributed to the discussions around the following topics: food and nutrition security analysis; resilience analysis; data governance and institutional capacities and innovative means to collect and use data.
Strong participation from AU Member States ensured that country level needs provided the basis for the expected framework. Participants worked on a concrete set of recommendations that shall be taken forward. The Technical Consultation concluded with firm recommendations for action by AU Commission, FSIN and Member States. A principal recommendation is for AUC to lead a process for developing a framework for improving food and nutrition security information systems, data analysis and access.
FSIN-AUC Technical Consultation
Background
The conference was structured around four thematic panels, each guided by a background paper written by recognized topical experts, including the chairs of the FSIN Measuring Food and Nutrition Security and Resilience Measurement TWGs. In this way, the recent technical outputs of the FSIN were shared with a large number of policymakers and practitioners.
Panel topics and related discussion papers were the following:
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Food and Nutrition Security Analysis: Data availability, access and analysis;
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Resilience Analysis: Data availability, access and analysis;
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Filling the gaps by exploiting innovation around data production, data collection and data sharing
The Consultation had a strong focus on the conditions required for promoting and strengthening the institutional culture of evidence-based decision-making, particularly through enhanced and more conducive institutional frameworks that recognize the importance of rigorous data collection and effective utilization of processed information.
The expected outcome is to develop a framework for strengthening national food security and nutrition information systems and statistical capacities in support of evidence-based decision-making and monitoring.
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WTO Sub-Committee on Cotton: Background paper by the Secretariat
The Ministerial Decision on Cotton of 7 December 2013 adopted by Ministers at the 9th WTO Ministerial Conference in Bali states, inter alia that:
“5. In this context, we therefore undertake to enhance transparency and monitoring in relation to the trade-related aspects of cotton. To this end, we agree to hold a dedicated discussion on a bi-annual basis in the context of the Committee on Agriculture in Special Session to examine relevant trade-related developments across the three pillars of Market Access, Domestic Support and Export Competition in relation to cotton.
6. The dedicated discussions shall be undertaken on the basis of factual information and data compiled by the WTO Secretariat from Members’ notifications, complemented, as appropriate, by relevant information provided by Members to the WTO Secretariat.
7. The dedicated discussions shall in particular consider all forms of export subsidies for cotton and all export measures with equivalent effect, domestic support for cotton and tariff measures and non-tariff measures applied to cotton exports from LDCs in markets of interest to them.”
As requested by the Bali Ministerial Decision, and following up on the three dedicated discussions held so far, the WTO Secretariat has prepared a revised compilation of factual information and data available from Members’ notifications and other submissions, on Market Access, Domestic Support and Export Competition in relation to cotton, received up to 5 November 2015.
Further to Members’ requests at the second dedicated discussion, this revised background paper also includes (i) Members’ responses to the questionnaire on cotton policy developments circulated on 4 February and 17 September 2015; and (ii) relevant information on cotton markets and policies from Trade Policy Review reports circulated up to 5 November 2015, for the 32 Members identified in paragraph 10 of this paper.
The paper is organized in three parts, namely:
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Export Subsidies;
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Domestic Support; and
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Market Access.
The factual information and data contained in this paper have been compiled from:
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Members’ schedules and notifications in the Market Access (MA), Domestic Support (DS) and Export Subsidies (ES) series under the Committee on Agriculture;
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Tariff data available in the WTO Integrated Database (IDB) and Consolidated Tariff Schedules Database (CTS); as well as
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Non-tariff measures available in the WTO Integrated Trade Intelligence Portal (I-TIP) Goods Database.
The specific sources of information for each of the areas covered are described under the relevant parts of the paper.
With regards to Export Subsidies and Domestic Support (Part one and two of the paper), factual information and data were collected for all WTO Members with relevant commitments or who have reported measures benefitting cotton in their relevant notifications.
With regards to Market Access (Part three of the paper), the Bali Ministerial Decision on Cotton notes that “the dedicated discussions shall in particular consider… tariff measures and nontariff measures applied to cotton exports from LDCs in markets of interest to them”.
A list of markets of interest to LDCs was established by collecting market access data for WTO Members that are either: (i) classified as developed economies for the purpose of the WTO Secretariat note on the “Participation of Developing Economies in the Global Trading System”; (ii) amongst the top 20 cotton importing countries in quantity for the period 2010-2012; or (iii) amongst the top 20 cotton importing countries in quantity from LDCs for the period 2010-2012.
As a result, market access data are provided for the following 32 Members: Australia; Bahrain, Kingdom of; Bangladesh; Brazil; Canada; China; Colombia; Egypt; the European Union; Hong Kong, China; Iceland; India; Indonesia; Japan; Kenya; Korea, Republic of; Malaysia; Mauritius; Mexico; Morocco; New Zealand; Norway; Pakistan; Peru; Russian Federation; South Africa; Switzerland; Chinese Taipei; Thailand; Turkey; the United States of America and Viet Nam.
Unless otherwise indicated, the term “cotton” in this paper refers to the products covered by the Harmonized System nomenclature (HS) headings 52.01, 52.02 and 52.03.
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Divergence remains as WTO members look at new agriculture proposals
WTO members exchanged views on two recent proposals for possible areas of agreement in agriculture at the WTO’s Ministerial Conference in Nairobi, at an informal meeting of agriculture negotiators on 18 November. Differences remain among members on the way forward.
One of the proposals relates to a possible outcome on export competition at the Ministerial Conference. The second proposal – by the G33 group* – updates the group’s earlier proposals regarding the special safeguard mechanism, which would enable developing countries to temporarily raise tariffs to curb import surges. The G33 believes that this should be part of the package of issues to be agreed in Nairobi.
A paper was also submitted by Australia, highlighting how a legally binding decision in Nairobi on export competition could be commercially beneficial. In addition, the Chairperson of the agriculture negotiations, Ambassador Vangelis Vitalis of New Zealand, updated members on his recent consultations on a number of important agricultural issues.
“The export competition pillar remains in substance where it was at our last meeting on 30 October,” Ambassador Vitalis told members. He regretted that on domestic support and market access – two other pillars of the agriculture negotiations – he has “seen no evolution in the substantive positions of members”.
On the special safeguard mechanism (SSM), Ambassador Vitalis noted that “notwithstanding this useful discussion, it is clear that a difficult political threshold question remains unresolved. This is whether there is a shared sensed that the SSM is a potential deliverable for Nairobi.” He said that views appear to be diametrically opposed.
He stressed that “cotton must be part of any outcome from the 10th Ministerial Conference”. However, “there is no convergence as of today on what should constitute such an outcome”.
On public stockholding for food security purposes, the Chair said that “with regret I have to say that I did not see any fundamental change in members’ well-known positions”. He reminded members that “we have a mandate both from the Bali Ministerial in 2013 and from the General Council in 2014” to make all concerted efforts to find a permanent solution.
New proposals
The proposal on export competition is co-sponsored by Brazil, the European Union, Argentina, New Zealand, Paraguay, Peru and Uruguay. In presenting their proposal, they stressed that a decision on this issue would be of great benefit to developing countries in particular. The proposal is based on the 4th revision of the agricultural negotiations text of 2008 – also known as ‘Rev 4’ – but includes some adjustments to reflect the concerns expressed by some members. It proposes to eliminate export subsidies and certain disciplines relating to other export policies — such as export credits, international food aid and state trading enterprises – that could have an equivalent trade distorting effect.
Indonesia’s proposal on the special safeguard mechanism, presented on behalf of the G33, was put forward in the form of a draft ministerial decision. It introduces a few changes to the G33’s previous proposals in terms of the products subject to tariff increases, the extent and duration of such increases, and flexibilities for poor countries in order to reflect concerns raised by members.
Members discussed the two proposals and gave their general views on what could be an outcome on agriculture for the Ministerial Conference.
G33 members argued that the special safeguard mechanism and finding a permanent solution to public stockholding programmes needed to form part of the outcome. Some members supported this but many others continued to reject this possibility, citing the absence of a market access proposal and the lack of time to reach an agreement.
There was a shared sense among members that an outcome on export competition remained possible for Nairobi, but a wide divergence remained on this issue. Several members observed that removing export subsidies would be a historic achievement for the Nairobi Ministerial Conference. They urged members to adopt a pragmatic approach and underlined that there should not be an attempt to link export competition with other agricultural topics.
Some developing countries stressed the need to maintain flexibilities in the negotiations, particularly for small, vulnerable economies.
Members generally welcomed the efforts to move the negotiations forward on export competition. A few developing countries noted, however, that a binding requirement to notify their export subsidies programmes could be cumbersome to comply with. Some members raised concerns about certain aspects of the proposal on export competition, including the new proposed timeline to fully eliminate export subsidies, the rules on state trading enterprises, and the disciplines to ensure that food aid does not negatively affect regional and domestic food production.
Concluding the meeting, the Chair stated that he saw no convergence on any of the key areas and expressed concern about the limited time remaining before Nairobi. Ambassador Vitalis recalled his first statement to the Special Session of Committee on Agriculture on 8 September where he had stated that he had “neither a magic wand nor a magic draft, nor any other kind of magical powers”. He reiterated that “this is a member-driven process and in this regard I expect the solutions and thus progress to come from you”.
The Chair emphasised that his role is to facilitate the negotiations and he would continue to do this intensively in the period ahead. He also warned members that they should be ready to meet at extremely short notice and at unsocial hours, underlining that a high level of engagement would be needed from all members if there are to be worthwhile results in Nairobi on agriculture.
* G33 is a coalition of developing countries pressing for flexibility for developing countries to undertake limited market opening in agriculture.
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Trade can beat poverty – starting with Nairobi Conference
Travelling the globe for the World Trade Organization (WTO), I get asked the same questions everywhere I go: what is my view of the global economy and what is the next big trend? I always give the same answer: Africa.
I talk about Africa’s dynamism – that it has the youngest population of any continent and the highest growth. I talk about the sense of energy and purpose that I find in every African leader or businessperson I meet. I think Africa’s potential is unmatched – and that trade has a crucial role to play in helping to realize this potential.
In 1994, the world came together in Marrakesh to create an organization to govern and reform international trade. The WTO opened its doors for business on January 1, 1995. Now, two decades later, the WTO is returning to Africa to hold its biennial ministerial conference in Nairobi – the first such meeting on the African continent in the organization’s 20-year history. We need to make sure that we seize this opportunity to deliver for Africa.
Today the WTO encompasses 161 members, the majority of which are developing or least-developed countries (LDCs). This is the unique point about the WTO – all voices are heard, everyone has a seat at the table, rich or poor, developing or developed. But among these voices, the voice of Africa has been growing louder in recent years.
The WTO currently has 43 African members – accounting for more than a quarter of the total membership – and this representation is growing. In April this year we welcomed Seychelles as a new member, and when we meet in Nairobi in December we look forward to welcoming Liberia.
The engagement of African countries in the WTO has been vital in delivering successful development outcomes. The “Bali Package”, agreed in 2013, is a good example. African nations played a crucial role in the negotiations to shape this package of measures and so, unsurprisingly, it delivered a great deal for the region. It contained steps on agriculture, food security, a set of decisions on LDC issues (including on cotton), and the Trade Facilitation Agreement.
This agreement will make a big difference and it could play an important role in facilitating economic integration in Africa. By streamlining and standardising border and customs procedures the agreement will help cut the costs of trade dramatically - by more than 16 percent in developing countries. This is particularly important for Africa where the cost of customs procedures tends to be high (around 30 percent higher than the global average according to the UN Economic Commission for Africa).
East Africa has already seen the difference that trade facilitation can make. It used to take a lorry up to three weeks to arrive in Kampala from the port of Mombasa due to delays at the port and at border crossings. With targeted trade facilitation support, the average time to clear goods at port and transport them to Kampala is now around four days, bringing huge savings for businesses. The Trade Facilitation Agreement could have an even bigger impact across the board – particularly as it also provides support on the ground to implement the agreement.
The WTO’s work is not limited to adjusting trade rules. We also provide practical support to increase countries’ capacity to trade. More than U.S. $260 billion has been disbursed through the WTO-led “Aid for Trade” initiative, and we know that this support is having a positive effect.
For each dollar invested in Aid for Trade we have seen nearly eight dollars of exports from developing countries in general – and 20 dollars of exports from the poorest countries. This work will be on the agenda when we meet in Nairobi, where we will be launching the second phase of a programme (known as the “Enhanced Integrated Framework”) which is focused on assisting LDCs to use trade as a tool for growth and poverty reduction.
We are looking to deliver in a number of areas in Nairobi. WTO members are now discussing important potential deliverables in agriculture, as well as a set of measures aimed at boosting LDCs’ trading capacity.
Advancing these negotiations will be tough, but our record shows that it is possible when we are creative and innovative. We have had some recent inspiration in the form of the successful Bali Package and a recent deal that members struck to extend an exemption on drug patent rules for the poorest nations.
But, of course, our work will not end in Nairobi. Just as important as any deliverables there will be the debate on the direction of our work afterwards, especially on the future of the “Doha Development Round” of negotiations. This has seen slow progress since its launch in 2001 – and when negotiations are slow in the WTO, countries will explore other avenues such as regional trade agreements. These initiatives are positive, but the WTO must advance as well. The risk of doing everything in regional forums is that most of the time developing countries and LDCs will be left out of the conversation. It is only at the multilateral level where all voices are heard, and where the biggest development issues, such as agricultural subsidies, can be successfully addressed.
Trade has proved to be one of the best anti-poverty tools in history. It played a key role in reaching the Millennium Development Goal to cut extreme poverty by half – and it is a key element of the new United Nations Sustainable Development Goals. For the past two decades, the WTO has supported African economies to grow. Let’s make sure that we keep working together to achieve even more – starting in Nairobi in December.
The author of this Guest Column, Roberto Azevêdo, is Director-General of the World Trade Organization.
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tralac’s Daily News selection: 23 November 2015
The selection: Monday, 23 November
Starting today, in Durban: Conflict-induced migration in Africa - high-level expert group meeting (OSAA)
The main objective of the meeting is to provide a platform for key African regional and subregional organizations and their international partners as well as civil society organizations to: (i) assess the current trends and challenges of conflict-induced migration, and (ii) discuss new opportunities to prevent and address its root causes, as well as mitigate its negative impacts within the context of implementation of the global 2030 Agenda for Sustainable Development, Africa’s Agenda 2063 and its First 10-Year Implementation Plan. [Concept note, Programme]
SADC summit cancelled – source (StarAfrica)
An extra-ordinary meeting of the Southern African Development Community Organ on Politics, Defence and Security Cooperation has been cancelled. The summit scheduled for Maputo, Mozambique was cancelled due to a High Court case lodged last month by Special Forces Commander Lieutenant Colonel Tefo Hashatsi, APA learnt on Sunday.
Today, in Vienna: 2015 Africa Industrialization Day seminar (UNIDO)
Today, in Luanda: Angola to host Inter-Africa Coffee Organisation meeting
Angola will host the 55th general assembly of the Inter-Africa Coffee Organisation from November 23-27, to analyse all coffee policies on the continent related to production, processing, trade and modernisation. Ethiopia, Uganda and Côte d'Ivoire are currently the main coffee growing countries on the continent. With its current 25 members the Inter-Africa Coffee Organisation was established on 7 December 1960 in Antananarivo, to draft policies and defend the production of coffee in the socio-economic development of the continent.
2015 Ibrahim Forum Facts and Figures: African Urban Dynamics (Mo Ibrahim Foundation)
The main objective of the meeting is to provide a platform for key African regional and subregional organizations and their international partners as well as civil society organizations to: (i) assess the current trends and challenges of conflict-induced migration, and (ii) discuss new opportunities to prevent and address its root causes, as well as mitigate its negative impacts within the context of implementation of the global 2030 Agenda for Sustainable Development, Africa’s Agenda 2063 and its First 10-Year Implementation Plan. [Concept note, Programme]
Kenya can’t afford to ignore new US foreign tax law (Business Daily)
Yet the mother of all US legislation that is sending shockwaves through the global financial services sector is FATCA (the Foreign Account Tax Compliance Act). This law mainly aims to curb tax evasion by US citizens holding financial assets abroad. The law requires non-US financial institutions (foreign financial institutions or FFIs) and other vehicles to report certain relevant US persons’ information to the US tax authority — the Internal Revenue Service. Kenya’s financial institutions and especially banks are exposed. This is because diaspora remittances from Kenyans in North America account for more than 45% of all remittances. These funds are mostly transmitted through banks. So it is fair to assume that most, if not all, banks in Kenya have US persons account holders.
An SME landscape study: the conduciveness of starting and conducting business in Africa
This secondary study incorporates the assimilation of key indicators from a number of credible studies across twelve African countries to determine a measure for the conduciveness of starting and operating a business as a Small and Medium Enterprise in the country in question. The twelve African countries covered are Botswana, Ethiopia, Ghana, Kenya, Mauritius, Namibia, Nigeria, Rwanda, South Africa, Uganda, Zambia and Zimbabwe.
South Africa: Parliament recommends regulation of small-scale businesses (GCIS)
The Portfolio Committee on Small Business Development has recommended for the regulation of small-scale businesses in townships, tuck shops, spaza shops, street vendors and general dealers. “We feel strongly that the regulation will address issues of unfair business practice in this sector and ensure that owners also contribute to the tax revenue,” said Committee Chairperson Ms Ruth Bhengu. Ms Bhengu said it became clear during the visit that these businesses had initially operated in the township and village economy without any competition or assistance from government, but the entrance of foreign nationals in the space created unfair competition.
The private sector in Africa contributes to a projected 80% of the continent’s gross domestic product and supports an estimated 90% of all jobs. SMEs have a pivotal role to play in the industrial development of Africa. Nevertheless, the UN chief noted that the opportunities for youth and women generated by SMEs are limited, thus failing to harness the full entrepreneurial potential of the continent. “This means less capacity for transformative socio-economic development, innovation and value addition,” he said.
Thoughts on Africa Industrialization Day: ‘Industrial-strength’ poverty reduction? (World Bank Blogs)
This situation poses a challenge for African development. If those firms with the highest poverty-reduction potential also face the highest labor costs, it will limit growth in those sectors that offer the prospect of shared prosperity. Why might this be? My team and I will be examining this question in the context of an upcoming study in Côte d’Ivoire’s cashew processing industry. [The author: Aletheia Amalia Donald]
Tanzania: Govt moving to regulate labour migration (IPPMedia)
The International Organisation for Migration in Tanzania and the Ministry of Labour and Employment has launched an initiative to support strategic interventions towards effective and sustainable labour migration management and information sharing in Tanzania. Speaking during the launch over the weekend in Dar es Salaam, Director of Employment in the Ministry of Labour and Employment, Ally Ahmed said in order to build this institutional capacity within the government of Tanzania, a comprehensive roadmap for Labour Market Information System and Labour Migration Policy and electronic work permits system will be developed. Ahmed said that collection of information regarding Tanzanians who are working abroad is among the challenges facing the National Labour Market System.
Zimbabwe: RBZ backs rand rejection (The Herald)
The Reserve Bank of Zimbabwe governor Dr John Mangudya has backed businesses rejecting South African rand coins saying doing so is acceptable in managing risks associated with weakening currencies. In an exclusive interview he admitted that the fall of the rand, now trading at $1 to R14,3, has become a problem for businesses, mainly those involved in trade with South Africa. “We’re in a multiple-currency system, which provides choice to consumers on what currency to use. If businesses feel there are losses attributed to a particular currency, you can’t force them to use it,” said Mangudya.
Zambia: IMF concludes visit (IMF)
At the end of the mission, Mr Tsikata issued the following statement: “The Zambian economy is under stress. Low copper prices and a severe electricity shortage are straining economic activity. The Zambian kwacha has lost half of its value since the beginning of the year, causing difficulties for many segments of the economy and population, and putting upward pressure on inflation. Moreover, domestic and external financing conditions have tightened markedly, with increased interest rates on Zambian government debt.
SA to grow presence in Central Africa (Business Report)
Minister of Trade and Industry Rob Davies said the visit was aimed at “increasing and strengthening South Africa’s trade and investment relation with Gabon and Cameroon”. South Africa has a signed Bilateral Trade Agreement with Cameroon, and an Agreement for the Reciprocal Promotion and Protection of Investment with Gabon, said Davies. Furthermore, he added that Cameroon and Gabon, which are located within the Economic Community of Central African States, would open investment and trade opportunities for South African businesses within this bloc.
Abuja to South Africa route will serve as catalyst of bilateral trade (Leadership Newspapers)
South Africa: ITAC to decide on steel tariffs (Business Report)
The International Trade Administration Commission is meeting its deadlines for investigations and determinations on a whole spectrum of tariff interventions applied for by the steel industry, and will have considered all applications by the end of this month. The commission is set to make recommendations for tariff reviews on 77 steel product codes as requested by the South African Iron and Steel Institute, ArcelorMittal South Africa and Evraz Highveld Steel and Vanadium, which have applied for the maximum 10 percent allowed for tariff protection from cheap imports.
Ghana: AGI commends gov’t for ban on importation of cables (GhanaWeb)
Can Ethiopia's railway bring peace to Somalia? (BBC)
Mr Getachew shows me diagrams of a vast planned railway network, snaking its way across landlocked Ethiopia, linking Africa's second most populous country to Djibouti, Sudan, South Sudan and Kenya. The railway is his baby. Like many Ethiopians, he left the country during the harsh years of dictatorship, but returned with a doctorate in engineering and a vision.
Putting innovation in African logistics at the centre of regional economic growth (Ventures Africa)
Currently, regional logistics infrastructure paints a disparate picture. Central African markets are particularly difficult and expensive for companies to penetrate, in comparison to East Africa, which has benefitted from the East African Community intra-regional trade links and diverse domestic markets. West Africa (reliant on extractives) is lagging behind. Naturally the most important element is transport, particularly rail and ports, which is crucial for intra-regional and global trade. In these two areas, East Africa is arguably leading the way. [The author, Jean-Claude Bastos de Morais, founded the African Innovation Foundation]
‘Transport costs in East Africa 60% higher than in US and Europe’ (How we made it in Africa)
But there is a difference between informal and illicit trade. Illicit trading involves fake goods and smuggling of things like diamonds, extractives [and] timber. We know, for instance, that there is a lot of timber being moved from the DRC to the other countries. The volumes are difficult to tell. Illegal goods don’t often go through the mainline border points. In some industries, counterfeits are a big issue, such as in pharmaceuticals. The balance [between improving cross-border trade and curbing illegal trading] is in making sure that standards are agreed between all countries. At the moment some of the national standards disagree with each other, which makes it harder to combat counterfeiting issues. [An interview with TMEA's chief executive Frank Matsaert]
Feed the Future Food Across Borders Program: factsheet (ReliefWeb)
Nigeria: Shippers’ Council faults opposition against tracking note (Vanguard)
West Africa: ERERA rolls out cross-border electricity market (StarrFM)
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Sustainable Development Goals are in sync with Africa’s priorities
Newly adopted Sustainable Development Goals could transform the continent
On 26 September, a day after world leaders adopted the new development agenda known as the 2030 Agenda for Sustainable Development, prominent personalities in world politics, social activism, business and entertainment gathered in New York’s Central Park for an annual event organized by the non-governmental organization, Global Citizens.
Among the distinguished personalities were US Vice President Joseph Biden, First Lady Michelle Obama and UN Secretary-General Ban Ki-moon. Other guests included Nobel Peace Prize Laureate Malala Yousafzai, British billionaire businessman Richard Branson and Grammy-Award winning singer Beyoncé Knowles.
Over 60,000 people witnessed the event whose aim was to raise awareness on the issues of gender equality, the environment, poverty, peace and justice. Top leaders who could not make it to the event, including US President Barack Obama and British Prime Minister David Cameron, addressed the crowd via video links.
Given that the UN had just agreed on the SDGs’ adoption, the festival became as much a victory lap as it was a rallying cry for individuals, organizations and countries to redouble their efforts to make the world a better place.
“Take your passion and compassion – and let’s make the global goals a global reality,” said Mr. Ban, in an impassioned speech at the event. The head of the UN was referring to the 17 SDGs and 169 targets designed to guide the world’s development agenda over the next 15 years. These goals, he said, are “a promise from your leaders. Hold them to it. Demand that they deliver.”
Ms. Obama, Ms. Yousafzai and Amina Mohammed, former UN special adviser on Post-2015 Development Planning, underscored the message of Mr. Ban, with the US first lady putting emphasis on the need for education for girls. True to form, Beyoncé spiced up the event, viewed on satellite television and the Internet by millions worldwide, with a performance that was both entertaining and instructive on the SDGs.
The pomp and the substance
Some 193 member states, most represented by their heads of state, ratified the SDGs on 25 September at the start of a three-day UN summit on sustainable development in New York. The 39-storey UN headquarters building was bathed in 17 different colours, each colour representing a goal, turning the iconic building into a dazzling spectacle.
Speaking at the summit, the world leaders pledged to work hard to achieve the goals and their targets. Chancellor Angela Merkel of Germany put it forcefully: “We want to change our world, and we can.”
The address by Pope Francis, head of the Catholic Church, to the UN General Assembly was particularly poignant. Speaking to heads of state and other dignitaries, he warned: “A selfish and boundless thirst for power and material prosperity leads both to the misuse of available natural resources and to the exclusion of the weak and the disadvantaged.”
But beyond the pomp lay the substance: that the SDGs aim to end poverty, hunger and inequality, tackle climate change, and build resilient infrastructures – all to be achieved between now and 2030. In particular, efforts will be deployed to reduce maternal mortality to below 70 per 100,000 live births, end HIV/AIDS, tuberculosis, malaria and other tropical diseases; ensure quality education and gender equality; achieve universal access to safe drinking water and energy; address climate change; and achieve at least a 7% global economic growth, among other major goals.
MDGs’ uneven benefits
Meeting the 169 targets would transform the world, some development experts say. It would lead to a world without wars, where everyone lives a good life, where people go to bed with stomachs filled with nutritious food, where the gulf between developed and developing countries is narrowed, where women and men get equal opportunities, where modern infrastructure is accessible to rural dwellers and where climate change no longer threatens human existence. A utopian dream?
Yet could this dream become reality? Why not, proponents of the SDGs respond. After all, the Millennium Development Goals (MDGs), regarded as largely successful, inspired less confidence in their ultimate achievement than the SDGs have received. Mr. Ban described the MDGs as the “most successful anti-poverty movement in history.” And Ms. Mohammed, in an interview with Africa Renewal, defined the 17 goals as “a response to the crises we have in the world today” (see interview on pages 6-7).
The logic is if the MDGs were good for the world, the SDGs will be even better. For example, because of the MDGs, the number of people worldwide living in extreme poverty (less than $1.25 a day) fell from 47% in 1990 to 14% in 2015, while deaths of children worldwide fell to 6.6 million from 12.6 million during the same period, notes the World Bank.
But positive reviews of the MDGs may not reflect current socioeconomic situations for all developing countries, particularly in Africa. An MDGs assessment report on Africa released in September by the UN Economic Commission for Africa (ECA), the African Development Bank (AfDB), the UN Development Programme (UNDP) and the African Union (AU) indicates mixed results. While there has been progress in areas such as women’s political representation, maternal mortality, and secondary school enrolment, Africa could not meet all the targets, including that on poverty, blamed on poor implementation and a drip-feed of funds.
The reduction by more than half of the number of people living in extreme poverty, touted by MDGs proponents, was not universal, some critics say. Impressive economic growth in Brazil, China and Vietnam influenced that data. But the growth of these economies is currently slowing down, according to the International Monetary Fund, making it doubtful that their contribution to global poverty reduction in the next 15 years will be at the level witnessed in the past 15.
Dealing with realities
In addition, Africa’s economy, which has been growing at approximately 5% over the last decade, will slow to around 4.2% in 2015, according to the World Bank. Even if growth ticks up to around 5%, and China’s economy grows faster, between 6% and 7% of the global population will still be living in extreme poverty, says Jim Yong Kim, the president of the World Bank. Currently, of the over a billion people living in extreme poverty, 415 million are in Africa.
Worse, with falling oil and commodity prices, oil export countries such as Nigeria, Africa’s biggest economy, and Angola, among others, will most certainly face new economic headwinds that could complicate the poverty fight, says Kaushik Basu, the World Bank’s chief economist. This means that achieving the SDGs targets in Africa will require extraordinary efforts.
But statistics from Africa do not tell the whole story, counsels Carlos Lopes, the ECA’s executive secretary, in an interview with Africa Renewal. “Sometimes comparisons are not appropriate, methodologically speaking. You can’t compare a marathoner with a speed runner by saying that both have the same finish line,” says Mr. Lopes. Countries with better socioeconomic positions will achieve targets faster than the others, he says. The real success of the MDGs was that they “helped focus the efforts of [African] governments and development partners on pressing issues in human development,” according to the assessment report issued by the AfDB, AU, ECA and UNDP.
The SDGs include a heavy dose of pro-poor, pro-women, pro-equality, pro-development targets, which will challenge Africa, where HIV/AIDS, malaria, tuberculosis and other tropical diseases have set back wealth accumulation and development. The Ebola epidemic, which hit Guinea, Liberia and Sierra Leone from early 2014, will cost those countries a total of $1.6 billion in economic growth, reckons the World Bank. UNDP added that the West African region as a whole may suffer Ebola-related losses of $3.6 billion per year between 2014 and 2017, due to a decrease in foreign direct investment, border closures and flight cancellations.
Since the beginning of 2015, there have been 214 million new malaria cases in Africa and 438,000 deaths. “Fifteen countries, mainly in sub-Saharan Africa, accounted for 80% of malaria cases and 78% of deaths globally in 2015,” says the World Health Organization (WHO). Eradicating malaria and other tropical diseases would be huge for Africa.
SDGs vs. Agenda 2063
Ending hunger and increasing investments in rural infrastructure are also priorities for Africa, as are economic growth, access to energy and water and investments in agriculture. In 2013 African leaders adopted their own Agenda 2063 – a set of seven ‘aspirations’ that resemble the SDGs. These aspirations are not a planning document, explains Mr. Lopes. Rather, they envision “the Africa you would like to have 100 years after the founding of the OAU [Organization of African Unity],” the continental body that morphed into the AU in 2002. Last March, African leaders approved the aspirations’ first 10-year implementation plan.
The link between the SDGs and Agenda 2063 is clear from the first aspiration: “We want a prosperous Africa based on inclusive growth and sustainable development,” specifically an annual growth rate of at least 7% (the same as the SDG target), healthy and nourished citizens, and a three-fold increase in food and agriculture. Under aspiration 6, Africa hopes to achieve development, “relying particularly on the potential of women and youth.”
The alignment between Agenda 2063 and the SDGs is clear, experts say. But could Agenda 2063 interfere with the SDGs’ implementation? Not at all, says Mr. Lopes, who envisages a convergence of both agendas. “Africa will have their own agenda and then dialogue with the universal agenda,” he says, adding that African countries creating development plans on the basis of Agenda 2063 may decide to infuse SDG-related activities in those plans.
Considering that many African countries will depend on donor funds to implement the SDGs, there may be little wiggle room regarding which resources are allocated to what sectors. Mr. Lopes hopes Africa will not rely too heavily on donor funds. “Countries must generate internal revenue. No countries have developed without internal revenue,” he observes, with the caveat that donor money be used only to stimulate domestic resource mobilization.
Ms. Mohammed, the UN special adviser, hopes that the SDGs, just like the MDGs, will galvanize the continent into taking action to achieve set goals. Specific indicators for the SDGs will be released in March 2016, she says, which will help to measure the progress that each country makes to achieve set targets.
Given that most of the SDGs and their targets align with Africa’s priorities, the continent may well be on the brink of a transformation.
This article appears in the December 2015 edition of Africa Renewal, published by the United Nations.
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Towards a unified African market
Newly-signed tripartite free trade area to bring together EAC, COMESA and SADC blocs
For several years, experts from the three largest trading blocs in Africa – the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) – were locked in intense negotiations over a free trade agreement whose aim is to bring about a unified and liberalized single market. The talks finally bore fruit on 10 June 2015 when 26 African countries signed the Tripartite Free Trade Area (TFTA) agreement in Cairo, Egypt.
Under this agreement, all the 26 countries, with a combined gross domestic product (GDP) of about $1.3 trillion and a population of 565 million, will merge into a common market and eliminate tariff lines and trade barriers. The participating countries will benefit from liberalized intra-regional trade, which is expected to boost the flow of goods and services. When implemented, the free trade area will constitute about half of Africa’s GDP, half of its population and will cover a combined landmass of 17 million square kilometres, about the size of Russia.
At the moment, however, only three of Africa’s eight regional economic communities are participating in the TFTA. Non-participating economic blocs include the Arab Maghreb Union, the Economic Community of West African States, the Intergovernmental Authority on Development, the Economic Community of Central African States and the Community of Sahel-Saharan States. For now, these blocs are not participating in this new initiative for political and economic reasons. The Abuja Treaty of 1995 signed by 51 African countries mandates all regional economic communities to join the group by 2017 in anticipation of an African Economic Community by 2028.
“The conditions [to form the TFTA] have never been better,” says Sindiso Ndema Ngwenya, the secretary-general of COMESA. “We have improved governance, and the very fact that we withstood the global financial crisis of 2008 attest to sound macroeconomic policies. This is what is giving us resilience,” he told Africa Renewal in an interview.
The benefits of the free trade area are numerous. “It has the potential to increase economies of scale [which are the cost advantages that can be derived from size of a market and production] through integration, will increase demand for the region’s goods and services and make the region more attractive to foreign investments,” says Jason Kapkirwok, senior director of TradeMark East Africa, an African non-profit company that supports trade growth in East Africa. “This would in turn create more jobs and catalyze technology transfer.”
Trade between African countries, as a share of the continent’s total trade has hovered at 10-12% for decades, but some experts argue that the actual figure is much more than that because a big part of the continent’s trade is conducted informally and at times across porous borders where it’s not recorded. The proportion in Europe and Asia, by contrast, is close to 60%.
Leading the tripartite
South Africa and Egypt, two of Africa’s biggest economies in terms of manufacturing and services, are the main forces driving the TFTA, followed by Kenya and Mauritius. Angola, Mozambique, the Democratic Republic of the Congo and Ethiopia could also play key roles in fostering the region’s economy as they are expected to absorb a large share of the region’s exports while supplying cheaper inputs such as electricity, petroleum, gas and other raw materials.
Even as the bigger economies take advantage of the opportunity of an expanded and liberalized market, less advanced economies could also benefit from the TFTA. For example, countries in the EAC, such as Kenya and Uganda, have the most advanced customs union, which they will be expected to deploy to increase the pace and depth of integration.
However, experts caution against high expectations of the TFTA because of existing hurdles that may slow down its implementation. For instance, the current low level of intra-regional trade in Africa could impede attempts to boost trade volume within the single market. In addition, some countries have overlapping memberships in the regional economic blocs, leading to incoherent national trade policies. Also, there are varying levels of socioeconomic development across countries, particularly in industrial, infrastructure and energy sectors, making it difficult for some participating countries to implement the agreement as speedily as others.
Further, economies represented in this and other trade agreements are dominated by agricultural production; the UN Conference on Trade and Development notes that “the narrowness of African production and export structures and relative dependence on primary commodities are inhibiting factors to the boosting of intra-regional trade in Africa.”
Open trade with a country with very different economic characteristics will yield predictable results – however, for African farmers, opening to trade with their similarly agricultural neighbours is a fraught prospect. When considering increased trade between two agriculturally dominant African countries, it is not immediately apparent which country will have the comparative advantage in its existing agricultural production – this uncertainty stunts regional economic integration.
Experts have argued that there is a lack of political will in some countries to implement the TFTA agreement. Already, not all participating countries have ratified the agreement, although they have until the end of the year to do so. Even South Africa, one of the most influential within the block, along with Botswana, Lesotho, Mozambique and Zambia, have yet to sign the TFTA, which must be ratified by two-thirds of the participating countries before it comes into force by the expected date – January 2016.
Even if two-thirds of the countries do not ratify the agreement, Mr. Ngwenya, the COMESA official, says the ball will keep rolling. “In the event that not all the 26 countries sign the tripartite, we shall use the principle of variable geometry in terms of implementation, because those that are ready must move on. If we allow one or two countries that are not ready to hold up the process, then we will never move.” The principle of variable geometry means that members from an integration scheme will be flexible enough to adopt different speeds to make progress.
A major sticking point for many undecided countries is the TFTA’s elimination of trade taxes, which serve as a major supplier of domestic revenue. The TFTA requires all countries to open up their markets to duty-free imports, which could spell some revenue loss. To this point, the TFTA includes phased reduction of tariffs, specifically the immediate liberalization of just 63% of tariff lines, to address such revenue losses.
Overall, there are many enticing elements in the TFTA. By harmonizing policies on trade, movement of business persons and industrial and infrastructure development, the agreement will expand the market for goods and services and subsequently promote greater intra-regional trade. Mr. Kapkirwok hopes that all forms of trade barriers such as import and export restrictions will eventually be eliminated.
Africa on international trade scale
While the TFTA may accomplish its goal of an expanded market for countries in the single trading bloc, Africa still needs to be more prominent in the international trade arena, says Mr. Kapkirwok. Africa should implement prudent macroeconomic policies and regulatory reforms, he says, and countries should embrace good governance and establish competent institutions.
Currently, massive infrastructure deficit impedes trade and development, according to Mr. Kapkirwok, and underscores the need for Africa to understand properly the international markets, and to build better trade facilitation and services programmes across all the regional economic communities.
Overall, the hope is that TFTA’s success will strengthen one of Africa’s ambitions – the establishment of a single market.
This article appears in the December 2015 edition of Africa Renewal, published by the United Nations.
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2015 Ibrahim Forum Facts and Figures: African Urban Dynamics
Held annually since 2010, the Ibrahim Forum aims to tackle specific issues that are of critical importance to Africa, and require both committed leadership and governance.
Bringing together a diverse range of high-level African stakeholders belonging to various public and private constituencies, as well as selected non-African partners, the Forum is an open and frank discussion. It aims to go beyond stating issues and renewing commitments by defining pragmatic strategies, operational action points and shared responsibilities.
In order to facilitate this and to focus energies on a constructive debate, the Foundation publishes a ‘Facts & Figures’ report for each Forum. The report compiles the best and most recent data and analysis relevant to the issues to be addressed.
The focus of the 2015 Ibrahim Forum is ‘African Urban Dynamics’. Cities have the potential to play a pivotal role in Africa’s development. As the last continent in which 50% of the population will become urban, Africa is expected to accommodate almost 900 million additional urban dwellers within the next 35 years. This is more than 3 times the current population of Indonesia, or slightly less than 3 times the population of the USA. This urban growth is characterised by a massive youth surge. Meanwhile, economic growth is often taking place without job creation, inequalities are widening and per capita incomes are up to 5 times lower than in other regions at similar urbanisation levels. Moreover, the new century brings unprecedented pressures linked to climate change, global pandemics, worsening security threats and growing migration flows.
This is a huge and immediate challenge. However, properly managed, with sound governance and focused leadership, it could also be a transformative opportunity. Urban policies and planning are about people’s daily lives. They have the potential to foster and trigger sustainable and equitable development. They may also contribute to a renewed sense of participation, public service and citizenship.
The ‘African Urban Dynamics’ report provides data-driven content for the discussions at the 2015 Ibrahim Forum in Accra on 21 November, and beyond. With the urban agenda being so crucial for Africa, many global institutions will continue the debate in the coming months and will hopefully ensure that decisions are implemented. This report and event are contributions to this process.
The report presents an overview of the sheer demographic challenge; how this translates into the required delivery of goods and services; the impact on people’s lives; and the significance of governance and leadership in the solution.
The research for ‘African Urban Dynamics’ has reinforced a primary challenge in the drive to harness the power of urbanisation on the continent: data availability. This vacuum will only be highlighted by the need to provide guidance for the implementation of urban development projects, and measure the progress of the Sustainable Development Goals (SDGs), specifically Goal 11, but also almost every other goal of the agenda. Without a concerted effort to address the data challenge, the urban opportunity will prove that much more difficult to harness.
Highlights
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In the next 35 years, Africa will need to accommodate almost 900 million new urban dwellers, which is equivalent to what Europe, USA & Japan combined have managed over the last 265 years.
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Rwanda has the 2nd fastest urban growth rate in the world, after Oman.
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Cairo, Africa’s most populous city, manages a population that is larger than each of the 36 least populous countries on the continent.
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¾ of Africa’s urban population is younger than 35.
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Almost ½ of Africa’s urban population lives in slums & informal settlements.
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Inequality in African cities is the 2nd highest in the world.
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Youth unemployment in Africa is 3 times higher in urban areas than in rural areas.
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In Kinshasa, there is only 63m of paved road per 1,000 inhabitants, as opposed to 1,000m per 1,000 inhabitants in developing countries.
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61% of urban employment opportunities in Africa are informal.
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In Dakar, 1 million working hours are lost every day due to traffic congestion.
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In Lagos, there are 200,000 commercial motorcycles.
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Opened in September 2015, the Addis Ababa light rail carries 60,000 passengers per day.
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Around 1⁄3 of urban dwellers in sub-Saharan Africa have no access to electricity.
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37 out of the 54 African countries are still more than 50% rural.
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In 2050, Africa is expected to host nearly ¼ of the global urban population.
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Between 1988 & 2012, Bangui has been flooded 7 times & Lagos 4 times.
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By 2050, it is estimated that Abidjan could lose $1 billion due to sea-level rise.
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Residential electricity consumption per capita in Africa is only ½ that of China.
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Mauritius, Swaziland & Zimbabwe are the only 3 African countries to have de-urbanised between 2010 & 2015.
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In Nigeria, more than 80% of households use kerosene, charcoal or wood for cooking.
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Waste generated in most urban areas in Africa could quadruple by 2025.
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Agbogbloshie, near Accra, has become the world’s largest e-waste dumping site.
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In Africa, less than 50% of solid waste is collected & only 5% is contained or recycled.
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Nigeria’s housing shortage is estimated at 17 million units.
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The total resources of local authorities in Africa were estimated in 2010 at $52 per capita per year.
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On Africa Industrialization Day, Ban warns gender inequity, youth unemployment risk continent’s progress
Marking the Africa Industrialization Day, United Nations Secretary General Ban Ki-moon is calling for job creation in small and medium enterprises (SMEs) for women and youth to eradicate poverty and achieve sustainable industrial development on the continent.
“In recent years, many countries in Africa have experienced significant economic growth and progress in human development. However, inclusive and sustainable industrial development remains elusive,” said Mr. Ban in his message on the Day, marked annually on 20 November.
He pointed out that both youth unemployment and gender inequity jeopardize the continent’s efforts to eradicate poverty.
The private sector in Africa contributes to a projected 80 per cent of the continent’s gross domestic product (GDP) and supports an estimated 90 per cent of all jobs. SMEs have a pivotal role to play in the industrial development of Africa.
Nevertheless, the UN chief noted that the opportunities for youth and women generated by SMEs are limited, thus failing to harness the full entrepreneurial potential of the continent.
“This means less capacity for transformative socio-economic development, innovation and value addition,” he said.
The theme for this year’s Day is ‘SMEs for Poverty Eradication and Job Creation for Women and Youth.’
In his message, the Secretary-General stressed that Africa needs to invest in training and education for women and youth to industrialize, grow the private sector and achieve sustainable development. “SMEs can provide a solid foundation for sustained economic growth, job creation and poverty eradication,” he added.
The important contribution of inclusive and sustainable industrialization in helping Africa to overcome its critical development challenges is clearly recognized in the 2030 Agenda for Sustainable Development adopted by United Nations Member States in September.
“I reaffirm the commitment of the United Nations to enhance Africa’s SME sector and stimulate economic opportunities for women and youth to promote the continent’s progress towards economically enriched, socially inclusive and prosperous societies,” concluded Mr. Ban.
Africa Industrialization Day 2015
“SMEs for Poverty Eradication and Job Creation for Women and Youth”
The Africa Industrialization Day (AID) is organized every year by UNIDO, in collaboration with the AUC, UNECA, and the support of the UN family. Due to its expertise and long-standing commitment in providing technical cooperation to African governments on industrial issues, UNIDO has been tasked to play a central role in coordinating all worldwide activities pertaining to this global event. Through the organized activities, UNIDO seeks to further stimulate the global debate on Africa’s major developmental challenges. This year’s theme, “SMEs for Poverty Eradication and Job Creation for Women and Youth”, will be discussed during the symposium to be held in Vienna on Monday 23 November 2015 and in several UNIDO field offices and desks. The debate will aim to initiate discussions and generate political and financial commitment towards Africa’s industrial development in general, with a special focus on SMEs and marginalized groups as development agents.
As codified in UNGA Resolution 44/237 of 22 December 1989, the Africa Industrialization Day (AID) is celebrated each year on 20 November and allows interactions on strategies related to the sustainable industrial development of Africa, including the evaluation of results as well as the identification of achievements and future challenges.
At the global level, the AID allows for the expression of the international community’s commitment to the accelerated economic growth of Africa, through sound structural industrial development. Simultaneously, the AID is an important occasion to interact with major stakeholders on the challenges pertaining to industrialization and poverty eradication in Africa.
Theme
Despite the seismic shifts in the global economic sphere over the last decade, Africa has experienced a burgeoning economy and seen significant progresses in its Human Development Indicators. However, these optimistic developments have been hampered by several challenges among which an increasing youth unemployment and a mounting gender disparity. Unemployment and economic disempowerment remain critical obstacles towards Africa’s industrialization and economic growth, especially for the vulnerable groups, namely, youth and women.
In order for the African region to transition into a prosperous continent with high quality growth, sound economic and industrial policies should be geared towards providing economic and employment opportunities for all, with a particular emphasis placed on marginalized communities and groups.
More specifically, it is imperative to note that youth and women constitute the largest and the weakest segment of least developed countries’ (LDCs) populations. As a continent, Africa harbors the majority of the least developed countries with 34 countries out of the 48 listed as LDCs in 2015. The Istanbul Programme of Action (IPoA) 2011-2020 for LDCs has identified youth as a fundamental asset towards graduation. The potential of young generations, if maximized, could have tremendous bearings on society if they are able to fully engage both economically and socially. Consequently, their inclusion in the productive system will assist the region in tackling the overwhelming challenges impeding most required socio-economic transformations.
In addition to the enhancement of youth socio-economic participation, gender equality and the empowerment of women and girls were determined as vital to achieving better sustainable and prosperous growth. Therefore, operational strategies piloted towards enhancing the capacities of these vulnerable communities are imperative for the overall inclusive and sustainable development of Africa.
As such, the AID’s theme of this year is particularly relevant as the African Union Assembly of Heads of State and Government declared 2015 the Year of Women’s Empowerment & Development towards Africa’s agenda 2063. Moreover, 2015 marks a significant milestone in development initiatives. It is situated amidst, the African youth Decade Plan of Action (2009-2018) and the African Women’s Decade (2010-2020), which were both formulated by the Africa Union Assembly in the years 2009 and 2010 respectively. These initiatives are geared towards accelerating youth and women’s empowerment and development. More specifically, the UNIDO symposium will provide an arena for experts to deliberate on concerns associated with SMEs pertaining particularly to women and youth in line with the organization’s mandate as delineated in the Lima Declaration 2013, which set the basis of UNIDO’s mandate of inclusive and sustainable industrial development (ISID).
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Roadmap for environmental security created by INTERPOL-UNEP conference
The Second INTERPOL-United Nations Environment Programme (UNEP) Environmental Compliance and Enforcement Conference has ended with a blueprint outlining future efforts to enhance environmental security.
The global action plan, based on recommendations put forward by the more than 140 high-level experts from 50 countries and 20 international organizations attending the conference, details a series of steps for improving the implementation and enforcement of environmental laws and encouraging close multisector collaboration.
All types of environmental crimes were addressed during the two-day (16 and 17 November) conference, including wildlife trafficking, the illicit timber trade, illegal fishing, pollution crime and the illegal dumping of waste.
Delegates stressed the importance of wide-reaching global intelligence exchange among police and non-governmental organizations to support successful investigations, and the critical role of enforcement in the climate change and sustainable development debates.
In addition, the importance of involving the private sector – such as the transportation industry – in efforts to tackle environmental crime was emphasized.
The action plan focused on four main areas: multi-agency cooperation; police and judicial training; awareness raising; and strengthening legislative and regulatory mechanisms.
Strong national, regional and international enforcement networks encompassing all relevant agencies from law enforcement and beyond were considered as key to enhancing environmental security globally. During the conference, INTERPOL released a directory of existing environmental law enforcement networks to assist all stakeholders in identifying and accessing these networks.
With the complexities of environmental legislation requiring specialized knowledge which does not always exist within police agencies and the judiciary, the need to assist countries in developing robust judicial systems capable of turning investigations and arrests of environmental criminals into successful prosecutions was highlighted. Proposed areas of support include training programmes, guides on best practices and reviewing existing environmental legislation.
To raise awareness of the true scale of environmental crime and provide strong evidence for policy-makers, INTERPOL and UNEP will commence a study assessing the rises of emerging environmental crime threats and conduct regular crime mapping to gain a clearer picture of the global situation.
By encouraging countries to strengthen and harmonize their laws and regulations governing environmental resources, the delegates aimed to create a framework for the effective and coordinated enforcement of the trade in environmental commodities.
2nd Interpol-UNEP Environmental Compliance and Enforcement Conference: Singapore, 16 and 17 November 2015
Keynote address by Minister Edna Molewa (South Africa Department of Environmental Affairs)
I address this conference today at critical time when the seriousness of environmental crime is no longer in question.
We also note that during the recent times, Environmental crime is being dealt with at the highest levels of governments across the world, with numerous resolutions and commitments being made, as part of the collaborative international effort.
Ladies and gentlemen, it goes without saying that the increase in environmental crime must be recognised as crime mainly driven by greed. More often than not, such crime is organised by international criminal syndicates, that engage in calculated business decisions to make money at a great cost detrimental to our environment.
The INTERPOL-UNEP report titled; “The Environmental Crime Crisis: Threats to Sustainable Development from illegal Exploitation and Trade in Wildlife and Forest Resources”, estimates the monetary value of environmental crime to be worth between US$70 and US$213 billion annually.
These criminal syndicates exploit existing systemic societal, legal, structural and enforcement weaknesses in countries, at times taking advantage of poor and vulnerable communities.
Environmental crime does more than threaten the world’s natural resources. It also results in financial burden and loss of economic and development opportunities in States. It is a real threat to security and the rule of law.
That been said, we cannot afford to lose sight of the complexities we are dealing with.
Conferences such as this one must therefore continue to contexualise these often, complex situations and find solutions constantly. Failure to do so will lead to us chasing behind the criminal syndicates. We cannot afford this. So, failure is not an option.
Many of these crimes must be understood within the context of globalisation and the rise in disposable incomes. As the demand for these illegal wildlife products grows, the interest in purchasing wildlife products and access to markets widens. Opportunities are then created for transnational organized crime to exploit.
As a country richly endowed with natural resources, South Africa is not immune to these challenges. Environmental crime threatens to undermine our country’s rich conservation history.
Unfortunately, our rich biodiversity is proving to be our Achilles heel. These transnational criminal syndicates target our iconic species.
The most visible of these currently in South Africa are illegal activities targeting our wild cycads, abalone and the illegal killing of rhinoceros for its horn.
Ladies and gentlemen, Lest we forget; It was South Africa who brought the rhino back from the brink of extinction in the early 1900’s, and who continues to lead the world in rhino conservation best practice and management.
It is because of this successful track record that today we are home to 22 000 both black and white rhino. This is more than seventy per cent of Africa’s rhino, and more than eighty per cent of the entire world’s rhino population.
Our experience is that poaching is not just wreaking havoc on our rhino populations; it is negatively impacting vulnerable communities whose livelihoods are increasingly under threat.
The criminal syndicates who poach, have little or no regard for the disastrous impact of their activities on our country’s and the world’s natural heritage. Neither do they care about the impact of their criminal activities on vulnerable communities. What they only see is a mere commodity to be slaughtered or picked for easy money.
It is for this reason that “a call to act together decisively” must be made here today.
Just to share with this Conference; South Africa is spending significant resources on implementing the recently developed “Integrated Strategic Management Approach”. The Approach entails, among others, priority actions such as:
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The disruption of criminal activities and organized crime networks;
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Multi-sectoral approach focused on collaboration through our national security forces and systems;
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The enhancement of International partnerships and collaboration through well-structured Memoranda of Understanding (MOU) with the rhino range states, transit and end-user countries such as Mozambique, Cambodia, Vietnam and China who we already have MOUs with;
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To address long-term sustainability through growing rhino numbers and populations, which include translocations to other range States as well as to safer areas in South Africa and elsewhere on the continent and the world;
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Practical support to our vulnerable communities through the recently adopted Biodiversity Economy Strategy;
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Strengthening our Prosecution capacity as well as the Justice system;
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Stronger collaboration with Private Sector and the Non Government Sector;
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Enhanced use of technology and continuous improvement as well as the introduction of new technologies;
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Enhanced border control and management systems;
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Improving communication and information sharing.
As South Africa, we have also long emphasized that people are the cornerstone of conservation. By facilitating the creation of sustainable livelihoods for our communities and giving them a stake in the management of wildlife, they will be less vulnerable to recruitment by poaching syndicates.
Our Biodiversity Economy Strategy, which was recently finalised, will play a major role in the communities’ ownership of wildlife, as entrepreneurs and thereby motivating them. We hope that this will serve as a real incentive against being lured to poach.
We believe that the implementation of these types of strategies will assist South Africa and the world in meeting a number of the newly adopted UN Sustainable Development Goals.
There are specific goals that this conference will need to consider as you deliberate on our global action from here. Goals one (1) and ten (10) require the world’s response to poverty reduction and inequality, respectively. While we acknowledge that neither INTERPOL nor UNEP can successfully implement these two Sustainable Development Goals directly, it is highly imperative that these two international Bodies, working in collaboration with all of us here today, continuously lobby other sectors to ensure success in these areas.
Having noted that the international criminal syndicates are driven by greed, their illegal killing and trade could lead to Biodiversity loss. Goal fifteen (15) requires the world to do all in our power to… “halt biodiversity loss… and enhance global support for efforts to combat poaching and trafficking of protected species’’.
The most relevant and direct responsibility of this Conference as it concerns the Sustainable Development Goals is Goal Sixteen (16) which is about “Promotion of just, peaceful and inclusive societies”.
It is highly imperative that we formulate our responses to specifically eight out of the twelve targets of this SDG. These are as follows:
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Promote the rule of law at the national and international levels and ensure equal access to justice for all.
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By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organised crime.
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Substantially reduce corruption and bribery in all their forms.
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Develop effective, accountable and transparent institutions at all levels.
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Ensure responsive, inclusive, participatory and representative decision-making at all levels.
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Broaden and strengthen the participation of developing countries in the institutions of global governance.
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Strengthen relevant national institutions, including through international cooperation, for building capacity at all levels, in particular in developing countries, to prevent violence and combat terrorism and crime.
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Promote and enforce non-discriminatory laws and policies for sustainable development.
We are mindful that unless environmental crime is addressed, our ability to achieve these Sustainable Development Goals could be negatively impacted.
This Conference provides us as the international community responsible for Environmental Compliance and Enforcement a chance to assess our progress, understand and devise further strategies to overcome the challenges we face. We must simultaneously harness the critical global support required to ensure the future security and sustainability of our environment.
South Africa has played a key role in interfacing with INTERPOL over the last two years, through the Advisory Board of the Environmental Compliance and Enforcement Committee as well as the Crime Working Groups and other forums.
We made important progress towards implementing the Action Points agreed to at the Interpol-UNEP 2013 Conference.
The declaration of wildlife crime as a priority crime in South Africa has resulted in a multidisciplinary, multi-sectoral approach focused on collaboration through our national security structure, which is in line with Interpol’s concept of a NEST (National Environmental Security Task Force).
Some of these structures operate horizontally and vertically and involves our Police structures, the South African National Defense Force (SANDF), our Intelligence Community, our Park Rangers, our Environmental Management Inspectors (EMI’s), Border and Customs officials, the National Prosecuting Authority (NPA) and importantly, private rhino owners.
Through this structure, information and intelligence is analyzed, operations are planned and executed and strategies refined and further developed.
In the world-famous Kruger National Park, the epicenter of the rhino-poaching epidemic, we have stepped up our efforts, bolstering traditional anti-poaching strategies with the utilisation of K-9 units, air and land capability, and night capability.
Our President Jacob Zuma officially opened our Mission Area Joint Operations Center recently in the Kruger National Park. The center enables real-time decision-making, faster reaction and more proactive operations through live streaming of information, that enables us deploy our resource more intelligently and to be one step ahead of the poachers.
In addition the GEF-UNEP Rhino Programme continues to strengthen our capabilities in relation to forensic capacity, information sharing and implementation of our commitments. The Programme enables us to raise awareness of environmental crime with 150 of our magistrates and train 120 prosecutors during 2015.
South Africa has realised that we will never succeed without working with our international counterparts. We have done this through the improvement of bilateral relations and the strengthening of regional and global partnerships.
As alluded to earlier on, we have in place several Memoranda of Understanding between South Africa and other countries and partners such as the members of the International Consortium On Combating Wildlife Crime (ICCWC).
In September 2016 South Africa will host the 17th Conference of Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), where
illegal wildlife trade will also be on the agenda. We hope that by the time we meet at the Seventeenth CITES Conference of Parties (CoP17), this collective can have demonstrable results from the commitments we will be making at this conference.
The importance of international law enforcement cooperation in addressing environmental crimes cannot be over-emphasized; and INTERPOL plays a critical role.
At the same time, we must also overcome some of the obstacles that still exist to sharing necessary information, and find ways to respond appropriately and act quickly in spite of the bureaucratic processes and systems currently in place.
It is only through effective multi-agency cooperation at both operational and strategic level that each country can ensure that Law Enforcement Officers on the ground are well equipped to tackle this crime.
All of us gathered here today face our own specific challenges in our countries: but we need never lose sight of the fact that we are not fighting this alone. We also count on the support of the private sector, communities, civil society and business.
In South Africa, we have a slogan that assists us in communicating our conviction to save the rhino. It emphasizes the fact that we will not allow the rhino to become extinct – “Not on our Watch”.
I want to once again reaffirm this commitment by South Africa here today;
“Not on Our Watch” shall one of the world’s most iconic species become extinct!
I thank you!
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African leaders pledge to fight for a deal on climate change
An opportunity to emphasize the link between climate and development
As African leaders, climate change experts and scholars understand it, the climate change agreement currently being negotiated and expected to be adopted in Paris in December is an opportunity to emphasize the link between climate and development.
At the Sustainable Development Summit held at the United Nations in New York in September, various African leaders forcefully made the case for a strong climate change agreement in Paris. They said extreme weather variations on the continent had led to devastating human costs, affecting livelihoods. Taking action to address climate change is essential for promoting sustainable development, the leaders told the UN, as they joined in adopting a new global agenda – the Sustainable Development Goals (SDGs) – to end poverty, promote prosperity and protect the environment.
The 196 countries that are parties to the UN Framework Convention on Climate Change (UNFCCC) are negotiating the details of an agreement that will put the world on a pathway to meeting the goal of limiting the rise in global temperature to less than 2 degrees Celsius (which is the point at which climate change’s worst impacts can be prevented) and reduce greenhouse emissions blamed for causing extreme weather variations.
To ensure a unified approach during the negotiations, African experts from the government, the private sector, academia and the media met last March in Addis Ababa, Ethiopia, under the auspices of the UN Economic Commission for Africa (ECA) at the Conference of African Ministers of Finance, jointly organized by the commission and the African Union. At the end of their deliberations, in addition to existing individual countries’ efforts and resources from international partners, the experts requested additional resources to address Africa’s climate change challenges, according to a report on the ECA meeting.
The African experts argued that Africa is contributing little to global warming, and that emissions coming from the activities of multinational companies should be blamed on the beneficiaries of such investments, not on the host countries.
Extreme weather variations
There are many ways climate change is taking a toll on African countries, African heads of state maintained at the UN in September. Nigeria’s new president, Muhammad Buhari, said these include extreme weather variations, rising sea levels, encroaching desertification, excessive rainfall, floods and land degradation. “These developments have devastating human costs and are affecting food security, livelihoods and the very survival of our people,” said President Buhari.
Unlike earlier climate talks that featured “top-down” targets, for the Paris agreement individual countries will come up with plans for carbon reduction. These national plans, designed to make countries accountable for their pledges, will in turn be included in the global goal. Experts do not anticipate the plans, which were submitted before the conference, to be sufficient, and the Paris agreement will need to outline how the world will move forward to strengthen the will needed to avoid the worst impacts of climate change.
Rising temperatures
African policy makers are aware of the consequences of inaction on climate change, which includes temperatures rising by more than 4 degrees Celsius by the end of the century. According to the Intergovernmental Panel on Climate Change (IPCC), a UN body that evaluates and reports on the state of climate change, the region is already facing faster acceleration of climate change than the rest of the world. “An increase of global temperatures of 2°C by 2050 is going to be catastrophic for Africa,” warns the report at the meeting in Addis Ababa.
The IPCC says there is already increasing evidence of warming over land regions across Africa, which is precipitating patterns, water availability and food security. And African heads of state made it clear at the SDGs Summit in September that any agreement needed to be supported by a climate finance package that will allow their countries to develop low-carbon economies as well as adapt to the impacts of climate change.
For financing climate change adaptation and mitigation activities, Africa will rely heavily on the Green Climate Fund (GCF), which was created by parties to the UNFCCC to assist developing countries. But the snag is that rich countries are slow to fulfill their financial commitments. For example, Japan and the US have disbursed just $15 million of the $4.5 billion each country pledged to support Africa’s efforts. “This is a drop in the ocean,” states the report, adding that Africa may need between $20 billion and $30 billion per year for adaptation.
Some experts are sceptical about the availability of finance to implement any agreement to be reached in Paris. South Africa, which currently chairs the Group of 77 representing 134 developing countries in the negotiations, has advised that a viable finance package is essential for a deal. South African President Jacob Zuma warned that “a Paris package that is hollow and weak on finance would not be acceptable,” urging developed countries to honour existing obligations.
While referring to climate change as the “greatest challenge confronting humankind,” Djibouti President Ismaël Omar Guelleh added that Africa’s request for assistance was legitimate and understandable, because the continent has more to lose than other regions.
Money matters aside, the African experts who met in Addis Ababa would like future discussions about climate change to involve more African experts. “African scientists and scholars are grossly underrepresented in the IPCC process,” they said.
With the ECA recommendations as a guide, African negotiators will argue that any climate change agreement should also include a plan that addresses social issues such as poverty, health, education and gender. Adaptation programmes must be designed by a group that includes representatives from the private sector, civil society and academia.
In addition, African experts will call for more climate observation networks on the continent to assist in real-time monitoring and data collection. The ECA report indicates a need for “appropriate capacity building and technologies for climate-smart development.”
President Zuma wants negotiators in Paris to close the existing ambition gap between now and 2020, including by ramping up action before the new agreement goes into effect to meet the goal of limiting the rise in global temperatures to less than 2 degrees Celsius. It is not yet clear if all the African leaders’ and experts’ recommendations are included in the final agreement.
Meanwhile, as Africa pushes its interests at the negotiations leading up to the Paris conference, the hope is that the current global enthusiasm for a climate change agreement will be matched by action during implementation.
This article appears in the December 2015 edition of Africa Renewal, published by the United Nations.
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Making mining work more for the local community and the sustainability of the planet
The minerals and metals mining sector must do a better job at making a positive impact on local economies.
Around the world local communities worry that mining projects will contaminate their environment and disrupt their social fabric and livelihood, without bringing lasting benefits.
On 27 October 2015, UNCTAD and representatives from governments, the mining industry and civil society gathered in Geneva for the annual general meeting of the International Forum on Mining, Minerals, Metals and Sustainable Development (IGF).
Taking place in the context of global decision-making on sustainability and climate change, through the adoption of Sustainable Development Goals and the global climate conference in Paris, one of the objectives of the IGF is to foster dialogue between all the stakeholders in mining projects, so as to avoid such clashes between mining companies, governments and local communities.
The Head of UNCTAD’s Special Unit on Commodities, Samuel Gayi, underscored the importance of the forum as a multistakeholder gathering.
Mr. Gayi pointed out that many of the issues discussed at the meeting, which went beyond environmental considerations to include the effects of mining on local communities, were “taboo” a decade ago, dividing opinions between, on one side, transnational corporations and developed countries and, on the other side, civil society and host countries, usually developing countries.
“The fact that we can debate these today in a congenial environment attests to the significant progress we have made in bringing all parties to the table to have a good understanding of these complex issues, and which policy instruments best address them,” he said.
UNCTAD has a long history of research, analytical work and policy initiatives in the area of mining and sustainable development. Its view, reiterated during the meeting, is that mining has the potential to contribute to the development of resource-rich countries, many of which are among the poorest in the world. But the key word is potential.
Mr. Gayi highlighted that UNCTAD’s work showed that too often “mining has generated only very limited benefits in terms of sustainable development and poverty reduction”. More important, in some countries mining activities have aggravated many of the problems the Sustainable Development Goals aim to solve, such as pollution and social and economic inequality.
A particular focus of UNCTAD’s work has been on the sector’s contribution to creating jobs and supporting other sectors of the economy. It has found that in many developing countries the mining sector remains an economic enclave, with limited positive spillover effects.
The positive impact of mining on the local economy would improve if the sector did a better job of supporting ancillary industries and activities around the mine, UNCTAD said. Procuring locally the goods and services the mining projects require would support business opportunities and jobs that have a better chance of outliving the projects.
UNCTAD also stressed that governments need to put in place policies and programmes that strengthen the education and skills of the local labour force, increase access to financing for small- and medium enterprises and improve the basic infrastructure of the areas surrounding the mines. And resource-rich countries should focus more on developing their capabilities to add value to their natural resources.
The IGF was born out of the 2002 World Summit on Sustainable Development, when 53 governments with an interest in the mining sector launched the forum to promote sustainable mining practices and productive dialogue between all stakeholders.
UNCTAD hosted IGF preparatory meetings in 2003 and 2004, and has since hosted the IGF annual general meetings in coordination with the IGF secretariat, currently run from the International Institute of Sustainable Development.
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AUC and RECs harmonizing their M&E systems of the first Ten Year Implementation Plan of the Agenda 2063
The technical meeting of the African Union Commission (AUC), United Nations Economic Commission for Africa (UNECA) and Regional Economic Communities (RECs) on the convergence of Monitoring & Evaluation (M&E) systems for the first 10 Years Implementation Plan of the Agenda 2063 was held from 16 to 18 November 2015 in Nairobi, Kenya.
Representatives of the AUC, UNECA, Joint Secretariat Support Office (JSSO), Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Economic Community Of West African States (ECOWAS) and Community of Sahel-Saharan States (CEN-SAD) attended the meeting. The meeting outlined key national targets and indicators that would be monitored and evaluated directly by RECs.
In his welcome remarks, Mr. Jacques Mukwende, Head of the Resource Mobilization Division in the Strategic Policy Planning, Monitoring and Resource Mobilization Directorate recalled that the first such meeting was held in Johannesburg, South Africa that proposed the then structural framework among the Tripartite RECs of ECOWAS, EAC and SADC be expanded to include the other five RECs, the AUC, AfDB and ECA for purposes of harmonizing their respective monitoring and evaluation systems and achieve convergence for the implementation of Agenda 2063 First Ten Year Implementation Plan. According to him that meeting also proposed that the enlarged group will meet in Nairobi, Kenya to develop a roadmap for the convergence of monitoring and evaluation systems, at the invitation and under the AUC sponsorship.
In the course of the meeting, COMESA, EAC, CENSAD and ECOWAS presented their perspectives and strategy for alignment of the M&E architectures with a view to identifying areas of convergence with each other and AUC M&E framework. The presentations showcased RECs critical roles, including monitoring and evaluation at the regional level. It was highlighted that it is imperative that the M&E frameworks at the regional levels talk to each other so that a continental aggregation can be done with respect to progress towards the attainment of the African Aspirations and its associated goals.
During the discussions, the meeting was guided by guidelines such as value addition, uniqueness and commonality, comparability, transparency and accountability in reinforcing the convergence process.
On the way forward, it was stated that the outcome of this meeting is expected to be presented at the Chief executives officers of the RECs coordination meeting for the 6th of December, 2015 in Johannesburg, South Africa.
Agenda 2063 and its First Ten Year Implementation Plan Vis-à-vis RECs
Agenda 2063 and its First Ten Year Implementation Plan both which were adopted by the AU Summit in January and June respectively this year make the RECs the point of entry at the regional level prior to reaching the member states. In effect the RECs will coordinate the implementation, monitoring and evaluation of the First Ten Year Plan at the regional level – providing oversight, coordination, technical backstopping, resource mobilization etc to member states with the region.
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The future of the global trade and investment architecture: Pursuing sustainable development in the global economy
Overview of issues, challenges and debates
The global trade and investment architecture (GTIA) plays a critical role in shaping the organisation and structure of international commerce – from production and distribution to consumption. In so doing, the architecture impacts trade and investment outcomes, with a range of economic, social, and environmental implications. Yet the GTIA faces a suite of tensions and questions – some longstanding and some new – about whose interests it best advances, its distributional impacts, as well as its responsiveness to changing market forces and needs, and political demands.
A critical review of the GTIA is necessary on several grounds. First, the implications for the GTIA of several “game changers” in the global trade and investment arena demand attention, including the rise of emerging economies and subsequent shifts in economic and geo-political dynamics; the growth of the digital economy; the upsurge of global value chains (GVCs) and international production networks; and new inter-governmental commitments in the United Nations’ (UN) 2030 Sustainable Development Agenda. Numerous references to trade and investment in the Agenda’s Sustainable Development Goals (SDGs) signal increasing recognition of the ways trade and investment flows, rules, and policies can exacerbate social and environmental challenges but may equally be part of the solution to these. The world’s new to-do list also raises questions about where and how the GTIA needs updating to facilitate more sustainable development.
Second, ongoing changes in the trade and investment landscape – in what is traded and among whom, as well as in the types of negotiations and cooperation that governments pursue – give rise to new opportunities and challenges, spurring numerous questions about how the GTIA can respond and should evolve. As the GTIA is populated by a growing multitude of bilateral and regional deals, questions about the political and practical significance of mega-regional and plurilateral approaches abound, as do their implications for faltering multilateral trade negotiations and the role of the World Trade Organization (WTO). In addition, the rise of trade in services, developing countries’ boosted share of world trade and investment, the growth of South-South trade, and increasing intersections between trade and investment flows, all present a changing scene for the GTIA. Further, the rise of GVCs – combining goods, services, investment, intellectual property (IP), and know how – alters the mechanics of international commerce and complicates the traditional boundaries of trade and investment disciplines.
Meanwhile, governance arrangements still fail to adequately address many long-standing challenges, most notably enduring developing country calls for greater action to address their needs. Further, the proliferation of private standards and the emphasis of contemporary trade and investment diplomacy on “behind the border” regulatory matters are just two examples of how the contours of cooperation are evolving and the array of actors expanding. They also highlight the rising interest in moving beyond treaty negotiations to new modalities for cooperation, from soft law approaches and technical cooperation to public-private partnerships.
Third, the GTIA faces pressures to help tackle a growing list of economic, social, and environmental challenges. Mounting public concerns about rising inequality, vulnerability in the global economy, and demands for greater inclusiveness set the context in which policy debates on trade and investment occur. Multiple, intersecting crises – in food, migration finance, pandemics, climate change, and security – similarly generate political pressures on the GTIA to respond. For example, the trade and investment system is increasingly called up on to assist in the transition to a low-carbon economy. Meanwhile, a range of labor unions and civil society groups view contemporary trade and investment agreements as inextricably linked to a globalisation process associated with a range of ills – from unemployment to migration pressures; the rising power of large corporations; and threats to national regulatory powers, among others.
In national parliaments, recurring disputes between legislators confident in open markets and those who disdain them accompany heated debates on proposals to integrate provisions on labor, the environment, human rights, and development considerations into new trade and investment deals. The financial crises of recent years have rightly revived debate about the suite of flanking policies and national institutions required for closer international integration to serve national sustainable development priorities. The ensuing domestic politics of trade and investment drive both expectations of the international architecture and pressures on it.
Against this backdrop, governments, stakeholders, and experts offer a regular supply of policy proposals to address the various game changers, trends, and challenges at hand. What is less prevalent, however, is critical thinking on their implications for the trade and investment architecture. And yet questions abound. Is the contemporary GTIA adequately equipped to respond to the gamut of challenges and dynamics it faces? Are the various components of the GTIA achieving their intended purposes and are they moving collectively in the right direction? Where does the GTIA perform well and where are there gaps, systemic problems, or structural weaknesses? Looking ahead, what changes or improvements to the architecture are needed urgently, and over the medium term? And what are the scenarios if governments and stakeholders fail to act – what kinds of problems, challenges, or crises may emerge?
This overview paper presents a mapping of the GTIA and a scoping of some of the core issues and debates at hand. Looking across the global trade and investment landscape, it proposes a set of key game changers, emerging issues, and enduring challenges that raise questions for conversations on the future of the GTIA.
The paper does not assume or promote the notion that a perfect “divine architecture” exists or that such an architecture could be negotiated among governments with diverse political and economic interests. As a scoping exercise designed to spur conversations among experts, the paper does not take positions on where reforms are most urgent or advocate particular options. However, we do view the architecture as open and evolving, where change is a constant. The GTIA’s evolution over several decades illustrates that governments and stakeholders have the power to shape the GTIA, albeit with varying degrees of power and influence. It also reflects the multiple and sometimes competing goals for international cooperation on trade and investment. As such we emphasise the need for critical examination of assumptions on the visions and principles as well as the purposes and rationales – economic, strategic, political, social and environmental – that shape international cooperation on trade and investment and associated governance arrangements.
Although we adopt the familiar term “architecture,” we use it as short hand for an evolving ecosystem comprising international agreements, arrangements, institutions, and processes as well as private initiatives and public-private efforts. Together, this ecosystem establishes the global playing field for trade and investment, as well as the formal and “default” rules of the game. It also serves numerous practical functions ranging from the provision of platforms for negotiation and dispute settlement to the provision of Aid for Trade.
Across the ecosystem, a diversity of actors – governments, industry, international organisations, research institutions and civil society groups – have and exert different kinds of power. Material resources and economic might are clearly at play, but power is also expressed through legal agreements, through ideas embedded in policy advice and capacity building, and through discourse. The architecture thus reflects wider political and economic power relations – and asymmetries – and is also a framework through which power dynamics are expressed. Some players are dominant across the system and some on discrete parts of the architecture; while large multinational enterprises (MNEs) drive agendas for inter-governmental cooperation on many trade and investment issues, civil society groups play a leading role on the incorporation of many social and environmental considerations.
Moving beyond a more traditional focus on the global “trade architecture,” the ambit of the E15Initiative is on a broader “trade and investment” architecture. Although widely analysed as two separate legal regimes, with distinct foundations, there are strong grounds for considering these together in this scoping exercise – the growing intersections of flows mentioned above; the push to widen the regulation of international investment to better serve sustainable development priorities; the growing number of agreements that already link trade and investment; and the fact that responses to many social and environmental challenges call for coherent approaches to the international regulation of both trade and investment. The call to combine considerations of the future of the trade and investment architectures reflects this latter quest for greater coherence and the need for constructive discussion; it does not imply a position for or against a more unified global or multilateral architecture nor a view on what it might look like.
Setting aside partisan, special, or national interests, the vision underpinning the E15Initiative’s work on the GTIA is of an architecture that serves the international community’s commitment to sustainable development, driven by concerns for ensuring that trade and investment flows, rules, and policies help foster environmental integrity, equity, inclusiveness, and human well-being. On this basis, the landscape of the GTIA that we map out includes the wider constellation of international agreements, institutions, laws, processes, and actors that intersect with the “core” trade and investment architecture. Our mapping also underscores the GTIA’s links to wider global governance arrangements and processes on issues ranging from finance and development aid to security and the environment.
Debates and questions on the future of the GTIA can be usefully clustered into four themes, namely: its scope; its existing and potential governance functions; its internal complexity; and its links to wider global governance processes.
On scope, for instance, there are numerous questions about the principles that should undergird international cooperation on trade and investment as well as about issues, existing and emerging, that demand greater attention within the architecture or require new collaborative frameworks. Questions are also plentiful on the GTIA’s governance functions, whether some are missing and which deserve greater attention, bolstering, or rethinking.
The internal complexity and fragmentation of the GTIA raises questions about subsidiarity, the intersection of its many rules, and the division of labour among a plethora of inter-governmental institutions and processes, as well as the appropriate response to the rise of private sector initiatives. There are also numerous debates on how the GTIA can be better informed by wider global governance processes and contribute to these. How, for example, can the GTIA be anchored more concretely in priorities expressed in the 2030 Agenda and contribute to the implementation of the SDGs? What should be the role of platforms such as the UN and the Group of Twenty (G20) on trade and investment?
The role of national governments is clearly critical across the GTIA. This paper underscores that the ways governments organise decision-making processes at the domestic level – and provisions they make for transparency and public participation; contribute to animating the GTIA’s various functions; and their interactions with its many components each matter to the GTIA’s future.
This overview paper is broad in scope, but so is the topic at hand. It is offered as a starting point for a journey meant to inspire reflection on future of the GTIA in a complex, rapidly evolving, and yet fragile world.
Implemented jointly by ICTSD and World Economic Forum, the E15Initiative (E15) convenes world-class experts and institutions to generate strategic analysis and recommendations for government, business, and civil society geared towards strengthening the global trade and investment system for sustainable development.