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Small group of countries driving innovation in breakthrough technologies – UN agency report
Japan and the United States lead a small group of nations that are driving innovation in 3D printing, nanotechnology and robotics, three frontier technologies that hold the potential to boost future economic growth, according to a new report by the World Intellectual Property Organization (WIPO).
“Historical technological breakthroughs have been at the root of long-lasting expansions in economic output,” said WIPO Director General Francis Gurry in a press release.
“Successful innovation, at the company level or across the wider economy, requires perseverance, particularly in periods of anaemic growth when innovation budgets are under pressure,” he continued. “We need to reinforce the environments that give rise to the breakthrough technologies of tomorrow.”
Amid lacklustre worldwide economic growth, the report, World Intellectual Property Report 2015: Breakthrough Innovation and Economic Growth, shows how previous game-changing advancements – such as airplanes, antibiotics and semiconductors – sparked new business activity. It also probes today’s promising breakthrough innovations, while urging governments and business to step up innovation-related investment.
Relying on an original mapping of patents to fields of innovation, the report finds that Japan, the United States, Germany, France, the United Kingdom and the Republic of Korea accounted for 75 per cent or more of all-time patent filings in the areas of 3D printing, nanotechnology and robotics.
Meanwhile, China is the only emerging middle-income country moving closer to this group of advanced, industrialized nations, accounting for more than a quarter of patents worldwide in the area of 3D printing and robotics – the highest share among all countries. In the case of nanotechnology, Chinese applicants make up close to 15 per cent of filings worldwide – the third largest origin of patents.
Furthermore, the report underlines the elements of successful innovation ecosystems: government funding for scientific research and support in moving promising technology from the laboratory to the production stage; competitive market forces that encourage firms to innovate, supported by vibrant financial markets and sound regulation; and fluid linkages between public and private innovation actors.
The report also documents how innovation is increasingly linked to research at universities and public research organizations. The 3D printing, nanotechnology, and robotics fields show higher shares of academic patenting compared to the three historical cases of airplanes, antibiotics and semiconductors. Nanotechnology stands out, with academic applicants accounting for around a quarter of patenting worldwide.
In addition, the case studies also document how innovation flourished as a result of knowledge sharing mechanisms – from the first clubs of amateur airplane inventors to modern open innovation models found in 3D printing and robotics research. By encouraging disclosure and providing a flexible tool for licensing, the IP system has facilitated the sharing of knowledge.
The patent mappings carried out also show that innovators have overwhelmingly sought patent protection for their inventions in high-income countries plus China, reflecting the large size of these countries’ markets, as well as the presence of competitors with frontier technological capabilities.
WIPO is underlining that the report’s case studies on 3D printing, nanotechnology, and robotics conclude that the large number of patent filings in these innovation fields have yet to result in increased litigation over patents and other friction over IP rights. However, as many of the underlying technologies are still at a relatively early stage of development and have yet to see any commercialization, conflicts surrounding IP rights may well increase in the future.
Meanwhile, copyright is becoming more visible and relevant for technological innovation: first with the inclusion of software as copyrightable subject matter and in the protection of any kind of digital expression, including 3D object designs and the design of computer chips.
The World Intellectual Property Report is published every two years, with each edition focusing on specific trends in an area of IP. Previous reports have explored the role that brands play in a global marketplace and the changing face of innovation.
» World Intellectual Property Report 2015: Breakthrough Innovation and Economic Growth (PDF, 4.86 MB)
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Environmental goods agreement trade talks set to review draft final list
A “draft final list” of potential products slated for tariff cuts as part of an effort to secure an Environmental Goods Agreement (EGA) will soon be circulated to participating WTO members on behalf of the talks’ chair, officials confirmed following the latest negotiating round.
The draft list will reflect the latest areas of convergence among the 17-member group – which counts the 28-nation EU as one – around various product nominations, building on work undertaken during talks held from 29 October-4 November in Geneva, Switzerland, sources say. The document will be reviewed at the next negotiating round scheduled from 30 November-4 December, although it could also be subject to some revisions intersessionally, based on participants’ comments.
Since the EGA plurilateral talks launched in July 2014, participants have been discussing the types of products that might be included, followed by product nominations put forward by most players last April equal to around 650 tariff lines.
This collection was subsequently streamlined by the chair in August into a list of 450 possible tariff lines covering over 1000 products, and related to areas such as clean energy, energy efficiency, air pollution control, environmental monitoring and analysis, among others.
Some sources said that while the talks are not aiming for a specific number of tariff lines, participants had agreed to build on a list of 54 environmental goods set for tariff reductions to five percent or less by the end of the year by the 21-nation Asia-Pacific Economic Cooperation (APEC) alliance, and that the EGA should therefore seek to go beyond this figure.
The latest round of talks served to focus attention on particular sensitivities and areas of agreement regarding the proposed EGA list coverage, several sources confirmed, adding that some of these sensitivities were discussed during bilateral meetings.
In addition, several days were dedicated to technical talks among customs officials, designed particularly to clarify over 100 or so “ex-out” product nominations that have proved tricky to navigate at the negotiator level. Several sources confirmed that the results of this work would help the EGA chair, Andrew Martin from the Australian mission to the WTO, put together the draft final list.
Other sources, however, noted that more work between customs officials would be needed again in the next round.
Ex-outs in trade jargon refer to the description of a particular product not specifically captured by the World Customs Organization Harmonised System (HS) tariff classifications. These are expressed in terms of chapters (two-digit code), headings (four-digit code), or subheadings (six-digit code).
In some instances, EGA participants have nominated ex-outs within a six-digit code without intending to liberalise the entire subheading, or are only detailed by national tariff codes that may vary by country. In addition, customs officials during the latest round also dealt with instances where multiple and different ex-outs had been nominated by participants under the same HS six-digit subheading.
Nairobi in sight?
The next round will take place just ahead of the WTO’s Tenth Ministerial Conference (MC10) scheduled for mid-December in Nairobi, Kenya, and will also coincide with the first week of the annual UN climate talks that are hoping to secure a new climate regime.
Several EGA participants have commented on the “unique convergence” of events in the international community’s agenda relevant to these talks. Although the scope of the EGA goes beyond products relevant to climate action, some nominations have been made in these areas.
A number of participants have signalled MC10 as a preferred date for delivering a list of products, with some time and space reportedly already set aside at the conference for talks at technical and eventually ministerial level to finalise outstanding issues, if required after the December round.
In recent months, however, not all participants have backed this target date and some have suggested that negotiations in Nairobi will depend on how much progress is made in the December round.
All participants have nevertheless indicated that this plurilateral is not intended to distract from the ongoing multilateral talks on possible deliverables for Nairobi, as well as the systemic question of how to deal with the Doha Round of trade negotiations after that meet, but should instead serve as a complement to updating global trade rules. The EGA is being negotiated as an “open plurilateral,” meaning that the eventual tariff cuts will apply to all WTO members on a most-favoured nation (MFN) basis.
Heads of delegation from WTO members participating in the EGA held a meeting with the global trade body’s Director-General Roberto Azevêdo on Tuesday 27 October to discuss the talks’ progress. The trade chief reportedly voiced support for the negotiations and expressed hope that these would be able to deliver something in time for Nairobi.
The meeting with Azevêdo was also designed to maintain a link between the talks and the broader WTO framework, particularly given that the Director-General has been involved in past plurilateral efforts, according to some participants.
Key weeks ahead
Several sources, however, have cautioned that some uphill work is needed to smooth out tricky areas in order to be able to deliver in time for MC10. Outstanding areas to address include some tariff lines as well as the scale of planned tariff cuts.
In addition, while the latest round reportedly saw China supporting several others’ product nominations, the Asian giant is also said to have indicated some significant sensitivity around goods covered by the APEC tariff lines.
Beijing has also reportedly raised concerns that the APEC list was negotiated on the basis of applied tariff cuts to five percent, rather than a full liberalisation of tariffs to zero as envisioned by many other EGA participants for this plurilateral. Applied tariffs represent the actual customs duty levied while bound tariffs signify the maximum duty ceiling that WTO members could potentially levy.
Several commentators have voiced concern that in this crucial stage the EGA talks will hit the same roadblocks as efforts to revise the scope of the WTO’s plurilateral tariff-cutting Information Technology Agreement (ITA), which stalled multiple times before participants in the expansion initiative – a subset of the full membership of the original ITA – were able to announce a final product list this past July.
With the product list for the ITA expansion completed, participants are currently working to finalise the staging – in other words, the length of tariff phase-outs – for the various products covered under the new list, aiming to sign off on the completed outcome in Nairobi.
Other trade watchers are hoping that EGA negotiators will be able to avoid ITA-like crises that could see these talks stall for lengthy periods of time.
According to some sources, the use of staging might be a way to get around some of the more sensitive areas in the EGA, although this has only been discussed at a general level to date.
Some participants have reportedly pointed towards the modalities for ITA-II, as the expanded deal is known, as a model for the EGA liberalisation. Under the draft declaration released in July together with the product list, items included under the ITA-II would see a default tariff elimination over three years through a series of four annual reductions, unless otherwise agreed.
Negotiations since have seen participants also discussing the potential for some five-year or seven-year extensions for agreed products. Which products would see the three, five, or seven-year extensions are still being fleshed out among ITA-II participants.
Next steps
With pressure mounting ahead of the December round, EGA participants remain flexible on the working mode for that session, which could see further bilateral talks held over the more difficult products.
Details such as staging, meanwhile, could be included in an eventual decision for adopting the EGA. The EU in July distributed a draft ministerial declaration to that effect, although that document did not envision any staging.
Brussels presented a revised version of the declaration during the final day of the latest round with some revisions to reflect other participants’ comments. The EU’s draft declaration reportedly pares back commitments suggested around environmental services liberalisation following resistance by other countries.
The draft text continues to include institutional provisions such as, for example, a review mechanism to examine the deal’s scope in future years. Whether participants will be able to deliver a text alongside a list in time for MC10, or instead work on these modalities next year, nevertheless remains an open question.
Agreement on the final list in Nairobi may eventually see other WTO members come on board accepting the deal in its completed form, a move that some experts say would help to boost the deployment of environmentally-friendly goods.
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CTO chair salutes Spio over African Trade Information Sharing Portal
The African Trade Information Sharing Portal initiative – brainchild of Ghana’s Hon Minister Dr. Ekwow Spio-Garbrah – has been upheld by H.E. Anthony De Bono, Malta’s former Ambassador to the Kingdom of Jordan and Chairman Emeritus of the Commonwealth Telecommunications Organisation, while briefing the media on the preparation for the Commonwealth Heads of Government Meeting (CHOGM).
In preparation for the 10th Ministerial Conference of the World Trade Organization (WTO) which is scheduled to take place in Nairobi-Kenya from 15-18 December 2015, the African Union held a Meeting of Trade Ministers on 20th July 2015 in Nairobi, Kenya.
During the deliberations, the AU Ministers were unanimous in reaffirming the strategic objectives for an African Trade Policy, which should be based on Africa’s industrialization in order to achieve the structural transformation of African economies.
The Conference was addressed by a distinguished cadre of personalities including H.E. Mrs. Fatima Haram Acyl, AU Commissioner for Trade and Industry, H.E. Mr. Mukhisa Khituyi, the UNCTAD Secretary General, Mr. David Shark, WTO Deputy Director General and, Mrs. Dorothy Tembo, Deputy Executive Director of the International Trade Center.
The meeting was chaired by H.E. Ambassador (Dr.) Amina C. Mohamed, the Kenya Minister for Foreign Affairs and International Trade.
During the meeting, the Ghana Minister for Trade and Industry, Hon. Dr. Ekwow Spio-Garbrah as is customary with his reputed leadership demeanor which excels on clear strategic vision, advocated the setting up of an unprecedented “African Trade Information Sharing Portal to boost trade and investment ties between African countries”.
For a full decade and for most of the time as his Chairman, I have witnessed Minister Dr. Spio-Garbrah’s highly acclaimed professional work in the area of ICT and telecommunications during his term of office as the CEO of the Commonwealth Telecommunications Organization.
It was, therefore, of no surprise that he has opted to tap his globally much admired expertise in the field of ICT, underscoring the urgent strategic need for the internet as the driving force to launch the proposal to the African Union, whereby an “African Trade Information Sharing Portal” to boost trade among AU Member States is incepted. This, with a view to enhancing Africa’s potential as a major growth frontier in the Trade and Investment sectors. Such a tool would enable Africa Union member states to take advantage of economies of scale within Africa’s regional value chains that would connect them to the global supply chain.
Minister Spio-Garbrah’s proposal should enable Africa – an emerging market – to be aggressively offensive and ambitious, to promote the private sector by developing the capacity of the Small and Medium Enterprises (SMEs). With this direction SMEs would improve their competitiveness in an export-led growth policy framework in the domestic market to compete in the prevailing global market place, which is governed by the rules-based multilateral trading system of the World Trade Organization (WTO).
Indeed, Dr. Ekwow Spio-Garbrah’s call has coincided with the 2015 Addis Ababa Declaration adopted in Addis Ababa, Ethiopia on 4th September 2015 by AU Ministers in charge of Communication and Information and Communication Technology (CICT).
In a nutshell the Declaration calls on all AU Member States to coordinate their efforts to put effective use the access to information in collaboration with the Regional Economic Communities including, among others, the Economic Community of West African States (ECOWAS), the Common Market for East and Southern Africa (COMESA), the Southern African Development Community (SADC), the Economic Community of Central African States (ECCAS) and the Arab Maghreb Union (UMA) as well as the Community of Sahel-Saharan States (CEN-SAD, the African Internet Exchange Point (AXIS), One Africa Network Initiative, African regional Internet Governance Forum (IGFs) and MENOS (Multimedia Exchange Network Over Satellite).
There is no denying the fact that that while Africa ships over 80% of her exports to the European Union, China and the US regrettably intra- regional trade remain as low as 10% to 12% on the continent.
Consequently, the African Trade Portal envisaged by Ghana’s Trade and Industry Minister, Dr. Ekwow Spio-Garbrah is not only a critical need but mandatory if Africa is to take advantage of the current shifting international balance of power to become a major global actor.
Through my current and hitherto international responsibilities I have crossed paths with several Governments of Africa who, in the main, believe in the promise and unfulfilled latent potentials of Africa becoming a major economic and industrial powerhouse. The challenge however will be whether the continent can implement, timely and effectively, Ghana’s Trade and Industry Minister’s vision.
Of specific pertinence to my homeland, Malta just like other EU countries is very interested in expanding its trade with Africa and with Malta’s strategic position between Africa and Europe, the country is geographical advantaged to potentially benefit more from this African Trade Portal.
It is in this light that I strongly would support Dr. Ekwow Spio-Garbrah’s call for the African Trade Information Sharing Portal. To that end, I would further recommend that the AU effort to implement Dr. Ekwow Spio-Garbrahs’s proposed Africa Trade Information Sharing Portal would require a coordinated effort drive even at the AU Commission. To my mind the AU Commissioner for Trade and Industry, Mrs. Fatima Harm Acyl may wish to collaborate very closely with her counterpart Mrs. Dr. Elham Mahmood Ahmed Ibrahim, the AU Commissioner for Infrastructure and Energy – in charge of ICT, to achieve this African Trade Information Sharing Portal. I am convinced that Minister Dr Ekwow Spio-Garbrah would not have overlooked the fact that the portal will emerge as one of the major driving instruments to promote intra- African trade propelling in the process the realization of the African Union Continental Free Trade Area (C-FTA) which is to be established by 2017 – just around the corner.
In addition to the above, I would also suggest that the African Trade Information Sharing Portal would also provide valuable information on goods and services available in African countries that have signed on to the Economic Partnership Agreement (EPA) between the European Union and West Africa, the European Union and East African Community, the European Union and SADC. Such a Trade Information Sharing Portal would certainly facilitate Business-to Business Meetings, Buyer-Seller Meeting and promotion of Investment and Business Fora between African countries-side on the one hand and the business community of the European Union side on the other hand. Furthermore, such an Africa Trade Information Sharing Portal would help promote the development dimension of the EPA with emphasis on addressing the supply-side constraints of the EPA through the implementation of the EPA Accompanying Measures Strategy which some AU Member States have already put in place.
As a Maltese citizen meaning a European, I am of the firm believe that the African Trade Portal proposed by Ghana’s Trade and Industry Minister should also be supported by the European Union in order to improve on the information gap that currently exists between the EU and Africa. This will help not only Europe but also Africa in the provision of a more precise picture of the economic activities in Africa and to give economic partners like the EU a better data set with which to work with.
Driven by my personal relationship with Africa, I believe the AU could better help the continent with this establishment so its development partners could formulate a more coherent agenda for Africa rather than the multispeed approaches that Europe and the rest of the world have adopted to North Africa, South Africa and sub-Saharan Africa.
While I conclude my submission, I wish to make a clarion call to Ghana’s Trade and Industry Minister, Hon Dr. Ekwow Spio-Garbrah and to H.E. President John Mahama not to relent but seek to spearhead an African Renaissance in the same determination that the Honourble Minister and yours truly had, unprecedentedly, mobilized most of the ICT Ministers to secure a leading and effective role at the Commonwealth Heads of Government Meeting (CGHOM) held in Malta a decade ago, thereby generating intellectual appreciation of the growth and importance of ICTs in the developments process, the challenges it faces and the steps that the Commonwealth needed to take to maximize these opportunities.
At the end of this month of November 2015, Malta will once again – after a decade – play host to the Commonwealth Heads of Government Meeting (CHOGM).
This is a unique and timely occasion for H.E. President Mahama to give a very wide profile to the Pan African Trade information sharing platform by cementing the concept into his policy statement, leading to its eventual inclusion in the final declaration of the Commonwealth Heads of Government, thereby serving as the eventual meaningful contribution by Ghana at the 10th Ministerial World Trade Organisation Conference scheduled for December 2015 in Kenya.
A challenging opportunity indeed for President Mahama to translate Ghana’s vision into reality…
Good luck Ghana.
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Level playing field needed to expand Somalia’s private sector – World Bank
Job creation through private sector led investment will be critical for sustainable and inclusive growth and to lift Somalis out of poverty over the medium term. However, the country will need to deepen and accelerate the current reform agenda if it is to ensure a level playing field for Somalia’s vibrant private sector, according to a new World Bank report.
The first in a new series of Somalia Economic Updates, entitled ‘Transition Amid Risks’, warns that the absence of appropriate regulations is responsible for the emergence of the anti-competitive behavior currently hindering the emergence of new Somali enterprises as well as prospects for smaller and medium sized enterprises. Continued commitment to the reform process will create the opportunity for broader participation in the economy; improved regulatory frameworks will encourage investment, generate better services and create the jobs much needed by Somalia’s youthful population.
In particular, the private sector is constrained by the lack of a mature and well-regulated domestic financial sector, combined with the financial “derisking” action against some international banks. De-risking threatens the remittances channeled by Somali money transfer operators which make up about 24 percent of the GDP and have hitherto constituted a crucial source of funding for the private sector as well as households.
Besides these impediments, the report warns that the occupation of available tax bases by newly forming state administrations will limit what it is possible to achieve in the short term, in designing new federal fiscal arrangements. Emerging inequality between states is a critical issue the federal government will need to address, but its capacity to do so is substantially reduced for as long as revenue streams are captured by state governments.
“Somalia has made important strides over the past three years in trying to establish priorities even as it continues to work towards improving peace and security,” says Bella Bird, the World Bank Country Director. “Somalia’s private sector has many assets on which to build – to expand further into Somali and international markets and create badly needed economic opportunities – for young Somalis in particular – then embracing regulatory international norms and standards will be critical.”
After twenty years of conflict, Somalia is ranked the fifth poorest country in the world with an estimated GDP of about US$ 5.7 billion in 2014 and a GDP per capita of US$ 435. It is estimated that only 42 percent of its school-age children are enrolled in primary school, with girls making up just 36 percent of these. About 67 percent of youth aged between 14 and 29 are believed to be unemployed, which makes them vulnerable to recruitment into militia or radicalized groups.
“Even though it inherited a dysfunctional economy, the Federal Government of Somalia is undertaking structural, legislative, and institutional reforms which have already started to yield results with the economy starting to respond,” says John Randa, Senior World Bank Economist and author of the report. “Somalis are returning from abroad to invest, shops are opening, and the property market is booming.”
Since 2012, Somalia has been going through a considerably more peaceful phase and this has facilitated the progress of several nation-building initiatives including a constitution-making process which is expected to be concluded in 2016 when the country also undergoes elections. A provisional constitution is currently in place, while the formation of states and their administrations, including the fiscal is also proceeding.
“There has been little discussion of the intergovernmental system that defines the interactions between the Federal Member States and the Federal Government,” says Kathleen Whimp, Senior Public Sector Specialist. “If the state formation process proceeds faster than the development of intergovernmental institutional arrangements, it may reinforce the division of functional responsibilities and revenue bases along geographic lines rather than across levels of government.”
The Somalia Economic Update proposes five key principles derived from international experience to support the continuing dialogue over the Intergovernmental Fiscal Relations, recommending that the focus for Somali stakeholders should be on developing “a sustainable fiscal bargain incrementally” rather than finding a final fiscal arrangement now.
Beyond intergovernmental fiscal arrangements, the economic update also proposes several key reforms to support the country’s economic development, including: support export growth through actions towards the establishment of a viable and regulated banking sector and making a decision on the country’s HIPC status; reforms to enhance budget credibility; operationalization of the 2011 Financial Institutions Act; and the development of reliable statistics to support policy formulation, planning, budgeting and service delivery.
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Economic Report on Nigeria 2015: Special Edition
This special edition of the Economic Report on Nigeria aims at serving a dual purpose. First, it serves as an instrument for engaging the new Administration of the Federal Government on the policy imperatives for sustainably transforming the Nigerian economy. Hence, key focus areas for policy imperatives for the Administration are outlined. Second, it aims to review the current challenges facing the economy and provide a menu of policy options on possible way forward.
Global developments resulting in the precipitous fall in oil prices is impinging greatly on Nigeria’s key macroeconomic variables. The economy is now on a slow track for the first half 2015 with around 3.14% real GDP growth and 4% projection for the year. Inflation is trending upwards, inching towards double digit as end of the year approaches. Throughout the first half of 2015, economic management has rested largely on the use of monetary policy with limited room for fiscal policy as a result of the change in government and delay in appointing Ministers. The country’s external position continues to weaken with foreign reserves falling precipitously from US$40.7 billion at end-September 2014 through US$34.5 billion at the beginning of 2015 to US$29 billion by June 30.
Tackling the current macroeconomic challenges facing the economy has seen the monetary authorities adopting both policy and administrative interventions in the money and exchange rate markets. The perceived capital control led to the removal of the country’s Bond from the JP Morgan’s Government Bond Index-Emerging Markets. A possible outcome of the delisting is withdrawal of foreign investors from the market and consequently capital outflows. It is expected, however, that the affirmation of the country’s credit rating by S&P at ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings with stable outlook may moderate investor confidence and reduce potential capital outflows.
Nigeria has attempted several tax reforms over the years that have gained momentum with the recent fiscal consolidation policy of the Federal Government. The poor tax compliance and in particular relatively small share of VAT in total fiscal revenue of around 7.2% on average between 2011 to 2014 remains a concern. Tapping fully into this high potential revenue source would require deepening domestic resource mobilization through tax compliance and broadening tax base, among other actions.
Given that proposed policy priorities for the new Government is one of the objectives of this report, the following priority areas are identified: macroeconomic stabilization; effective governance and public financial management; security and job creation; infrastructure development; and social sector and safety nets interventions. Specifically, the available options for improved policy space for economic growth and better social outcomes should be deeply explored. A choice will have to be made between social infrastructure investments and direct household empowerment in strengthening social safety nets. The fiscal revenue pressures facing the country should necessitate exploring public-private partnership (PPP) strategy for infrastructure provisioning. Three key options for creating fiscal space are available. They include: enhanced domestic resource mobilization through improved tax administration including broadening of the tax base; improved public financial management through reallocation of resources saved from low priority spending; and external financing.
As a way forward, the following recommendations are proposed:
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increased domestic financial resource mobilization to create additional fiscal space for social protection interventions;
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accelerate finalization of the NNPC’s proposed framework for determining open market price for petroleum products for the purpose of plugging fiscal leakages emanating from the petrol subsidy;
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effectively deploy the additional fiscal revenues from increased domestic resource mobilization and savings from plugging fiscal revenue loopholes into social protection policies that would strengthen the social contract between government and the people;
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the current monetary stance of the monetary authorities should be maintained but re-examined with a view to softening the stance once key macroeconomic variables stabilize;
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and deepen and consolidate infrastructure development reform, especially in power and transport sectors.
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tralac’s Daily News selection: 11 November 2015
The selection: Wednesday, 11 November
Dueling with Lions: playing the new game of business success in Africa (BCG)
As Africa’s economy has risen in recent years, so have valuations, making it more expensive for MNCs to do business on the continent and to acquire companies based there. Still, the higher cost of entry hasn’t diminished foreign interest. An analysis by The Boston Consulting Group found that almost nine in ten MNC CEOs visited the continent in 2013, compared with fewer than one in ten in 2000. To many of those executives, Africa remains a frontier with huge opportunity for growth but unfamiliar rules. It’s still early in the game, and both the MNCs and the Africa-based companies they’re competing against have opportunities to develop dominant positions.
Four findings on attitudes towards foreign aid in 17 donor countries (World Bank Blogs)
A recent study by the Pew Research Center reveals that a majority of people in nine selected Sub-Saharan African countries believe their countries need more foreign aid than they currently receive. However, according to Ipsos, a global research company, the citizens in donor countries are not necessarily eager to provide financial assistance abroad. Ipsos recently surveyed 12,709 individuals from 17 leading and emerging donor countries. Ipsos asked them: how much they believe their governments currently are and should be spending on foreign aid; whether they perceive Sustainable Development Goals to be important; and, who they think should be responsible for financially assisting developing countries to achieve those goals.
A global profile of Diasporas 2015 (OECD)
This publication describes the size and characteristics of emigrant populations by origin countries with a special focus on educational attainment and labour force status. It offers origin countries a detailed picture of the size and composition of their diasporas, as well as their evolution since 2000. It contains an overview chapter and six regional chapters, covering: Asia and Oceania, Latin America and the Caribbean; OECD countries; Non-OECD European and Central Asian countries; Middle East and North Africa; and Sub-Saharan Africa. Regional chapters are followed by a regional note and country notes.
Millions of graduates quit Sub-Saharan Africa (SciDev)
Will Africa get a schooling dividend? (World Bank Blogs)
Kenya among top sources of Africa migrants to US (Business Daily)
Kenya’s September 2015 remittances data (KNBC)
South Africa's migration policy: selected updates
Home Affairs reviewing migration policy (SANews)
Government would also develop a comprehensive strategy with SADC states for managing migration into South Africa. To improve border management, Minister Radebe said government will fund, capacitate and deploy the requisite South African National Defence Force companies to the borderline. He said this would go hand-in-hand with expediting the construction of border fences and the establishment of patrol roads. While government was mobilising and involving communities in borderline security management, it was also working hard to eradicate corruption and illegal activities at ports of entry and the borderline.
Economic assistance for informal sector (SANews)
The Chairperson of the Inter-Ministerial Committee on Migration, Minister Jeff Radebe, says government is focusing on providing economic assistance to communities where there is strain between locals and foreign nationals. The Minister, who is also responsible for the Ministry in the Presidency for Planning, Monitoring and Evaluation, said government would tackle poverty and unemployment, as well as support the development of informal traders in townships and rural areas in order to mitigate attacks on foreign nationals. The Minister said government’s response was due to concerning trends that were emerging from townships. This includes:
US and SA ‘close to resolving meat dispute’ (Business Day)
He [Mr Treiber] said the US was happy to see South African companies taking advantage of AGOA even when it was giving them an edge against US competitors. "That is the whole point. We believe in the open market. We believe in its power to transform, spark job growth and prosperity. What we have asked for in return is that SA … basically fulfil the requirements of Agoa that have been present since (the act was passed) in 2000 that a country not block our exports." [US poultry meat import dispute: South Africa's story (The Poultry Site)]
EAC: Will Magufuli avoid isolation, show leadership? (The Citizen)
Partner states will surely watch the manner in which Dr Magufuli maneuvers his way through the EAC. The first signals he sends will be important in defining the direction of the EAC. He should understand that the CoW’s efforts to advance outside the formal EAC arrangement reflects the inadequacy of the secretariat as far as enforcing agreements and EAC protocols are concerned. The EAC Charter which makes the EAC Summit the ultimate decision making organ. But some of the failures of the CoW point to how key a link Tanzania is in the EAC integration process owing to its strategic geographical position, its population size and relative peace and political stability.
In reassuring EAC partners about the renewed Tanzania’s commitment Dr Magufuli must make some quick gestures. These can include easing movements of people (possibly allowing the use of IDs and voter register cards); relaxing restrictions on the movement of labour across the region and right of residence. But Dr Magufuli must also find ways to convincingly explain to his counterparts the rationale behind Tanzania’s hard positions and should be quick to suggest alternatives. [The author: Damas Kanyabwoya]
Regional integration the way for Tanzania's growth - EU's Sebregondi (IPPMedia)
Regional trade has kept Kenya's economy afloat, says CBK deputy boss (The Standard)
Africa calls for a fair, equitable and legally binding agreement during the COP 21 (AU)
Mr Ayele Hegena, Director of Law and Standards at the Ministry of Environment, Forest and Climate Change of the Federal Democratic Republic of Ethiopia and member of the African group of negotiators on Climate Change, declared that COP 21 is an opportunity for the continent to claim its right to sustainable development as well as to make sure that the African common positions are featured in the final text to be adopted. Mr. Ayele also presented some of the expectations of Africa during COP 21. Those expectations include the need to have a comprehensive agreement focusing on the issues of mitigation, adaptation, financing and technology transfer. Indeed, only an inclusive approach can be successful in addressing the challenges of climate change. Moreover, he said that the need of the continent would be taken into account only if a differentiation approach based on the realities and circumstances of each continent.
Ahead of next week's G20 summit: Aldo Caliari: 'The G20’s principles on institutional investment - a Trojan horse for finance-driven infrastructure?' (HBS), Still Broken: major new report on global corporate tax cheating (TJN), Turkey brings sun to sub-Saharan Africa (Daily Sabah), Carbon emissions fall in 11 of G-20 members, in turning point (Business Day)
MC10: selected updates
Uganda leads push for permanent waiver on drug patents (The East African)
Uganda is leading the world's least developed countries (LDCs) in the ongoing showdown talks at the World Trade Organisation headquarters in Geneva, where America remains the only powerful country still refusing to grant a permanent waiver on patents on medicines. Joining Uganda in demanding that LDCs remain protected from the enforcement of patents and other intellectual property rights on the manufacture of pharmaceuticals are the Asian states of Nepal and Bangladesh. At issue is the impending closure, at the end of this year, of the 10-year window that WTO granted poor countries in 2006 to continue manufacturing generic drugs using the intellectual property rights of established companies from the West.
WTO meet: India needs to stand by farmers (Livemint)
An electoral debacle for the ruling party in a major state is one thing. But the failure to safeguard the interests of hundreds of millions of poor farmers will be a much bigger embarrassment. That is the predicament the Narendra Modi governments faces in less than five weeks. China, India, South Africa, Indonesia and other countries should form a robust alliance to prevent these sordid developments at the 10th ministerial conference. The developing countries must ensure that WTO is not reduced to a permanent satellite of Washington and Brussels. In short, the Modi government has an opportunity to prove that it stands for its farmers when push comes to shove at Nairobi. Otherwise, poor farmers of Bihar, Uttar Pradesh, West Bengal, Tamil Nadu, and Kerala will never forgive.
Angola/Mozambique agreements have broad scope (AngolaPress)
The agreement of promotion and protection of investments, as well as the memorandum of understanding for co-operation in the industry sector, signed last Monday in Luanda between the governments of Angola and Mozambique, "are of great bilateral, regional, continental and global importance". This was said last Monday, in Luanda, by the Mozambican minister of Foreign Affairs, Oldemiro Baloi.
China slow down dims Botswana’s minerals prospects (Mmegi)
According to the report compiled by the Economist Intelligence Unit, the impact of the softening in international demand was already evident in the first half of 2015, with Botswana’s earnings from rough diamond exports falling by 16.8% year-on-year to $1.7bn (P17.6bn). Export of polished stones were worst affected as it declined even more sharply by 32.2% to $300m.
Botswana firms urged to utilise Walvis Bay Corridor (Mmegi)
“We have quicker access routes to Europe and America,” Johny Smith, the chief executive officer of Walvis Bay Corridor Group, said. “Botswana firms should develop alternative routes and establish more trading partners. Namibia is available.” He said it was quicker for goods to arrive from America and Europe to Namibia. “Usually goods ordered from those destinations will take about 20 days to arrive at the port of Walvis Bay and then take two days to reach Gaborone which is quicker,” he said.
Zimbabwe: Highway dualisation costs balloon to $2,4bn (News Day)
The cost of dualising the Beitbridge-Masvingo-Harare-Chirundu highway has almost trebled to $2,4 billion as it will have facilities for overnight truckers and plazas, an executive with Infrastructure Development Bank of Zimbabwe has said. In 2003, the cost of dualising the 900km highway was pegged at $833 million and the latest figures have raised concerns from stakeholders who fear the project could have been overpriced. But IDBZ executive director for infrastructure projects Desmond Matete said on Monday the amount tallied with the enormous work that would have to be done on the highway.
Zambia: Cashew infrastructure development project appraisal report (AfDB)
The Cashew Infrastructure Development Project aims at reviving the cashew subsector and is one of the Government of Zambia’s priority projects. The Project will benefit 60000 smallholder farmers including 30,000 (50%) women and 7,000 youths, each planting 1 ha (100 cashew trees). The Project will create about 6,000 full time jobs (3,000 women, and 1,000 youths) along cashew value chain from production, processing to marketing. At full maturity of the cashew trees, each farming household (with 1 ha) will have annual income of ZMW 2,223 (USD 429).
Kariba Dam rehabilitation project: ESIA summary (AfDB)
Tobacco Institute of Southern Africa: anti-illicit trade conference (GCIS)
These increased law enforcement actions and enhanced administrative controls in South Africa and other member-states of SARPCCO, are yielding the desired results, albeit at a painful snail pace. This means, more needs to be done, as more related problems, challenges, and worrying trends still remain, nationally, regionally and globally. For instance, experts tell us that, according to global estimates of illicit trade markets, South Africa currently ranks amongst the top 5 countries in the world with the highest incidence of trade in illicit cigarettes, together with Malaysia, Iraq, Brazil and Pakistan. If this trend is not tackled decisively, we will continue to have the following crisis:
Financial inclusion and development in the CEMAC (IMF)
The contribution of this paper is twofold. First we examine the level of financial development in the CEMAC comparing it with peers from SSA and identify where the region stands once structural characteristics have been accounted for. We show that all CEMAC countries have a less developed and less inclusive financial sector relative to their peers and relative to their expected development given their structural characteristics. These results support those of Singh et al. (2009); while they found that Zone Franc countries had more shallow financial sectors, we show they are also less inclusive. Second, we then turn to factors that could cause this relative underdevelopment.
Congo: Public investment in a developing country facing resource depletion (IMF)
This paper analyzes the tradeoffs between savings, debt and public investment in the Republic of Congo, a developing country with looming oil exhaustibility concerns. Our results highlight the risks to fiscal and capital sustainability of oil exporting countries from large scaling-up in public investment and oil price volatility in view of a projected decline in the oil revenue to GDP ratio.
Tazara gets new engines, coaches (The Citizen)
Uneven trade is a persistent development challenge requiring policy attention (UNCTAD)
Satellites for development: what's in it for you? (World Bank Blogs)
Mali: 2015-2019 Country Strategy Paper, Appraisal report: Economic governance reform support programme
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Uneven trade is a persistent development challenge requiring policy attention, said UNCTAD before the UN General Assembly
UNCTAD presented its report on international trade and development before the United Nations General Assembly, highlighting the trade inequality that persists between countries and warrants urgent policy attention.
From 26 to 28 October, the Second Committee of the 70th session of the United Nations General Assembly discussed macroeconomic policy questions, examining how international trade, the international financial system, external debt sustainability and commodities can contribute to development. UNCTAD contributed extensively to the debate.
As part of the discussion, UNCTAD presented the main findings of its Report of the Secretary-General on international trade and development on 26 October.
The report found that world trade increased by a modest 3.2 per cent in 2014, and is expected to grow by 3.8 and 4.8 per cent in 2015 and 2016. Importantly, goods exports represented more than twice the combined inflows of foreign direct investment, official development assistance and remittances, showing the potential of trade as a tool for development.
“But is international trade dynamic enough to live up to its potential?” asked the Director of UNCTAD’s Division of International Trade in Goods, Services and Commodities, Guillermo Valles, as he presented the report. In other words, is trade working for developing countries?
The general findings were positive: developing countries have increased their share in merchandise exports from 32 to 45 per cent since 2000. Particularly encouraging was the increased share of least developed countries, which doubled during the same period.
But these trends mask important variations. Although the exports of 34 developing countries grew at an annual rate of 10 per cent over the past decade, 78 faced persistent trade deficits and 3 reported export contractions during the same period. The report also highlighted that the largest 20 exporting countries – mainly developed economies – accounted for 71 per cent of world exports in 2014.
Referring to these statistics, the representative speaking on behalf of land-locked developing countries stressed that “global trade has displayed little dynamism, and the observed growth in volume is largely attributed to North-North trade, with only limited positive effects on exports from developing to developed countries”.
Mr. Valles concluded that “this uneven trade reminds us that inequality between and within countries remains a persistent development challenge requiring policy attention”. He reiterated UNCTAD’s view of the importance of export diversification.
In this regard, the report highlighted the potential of services as a source of export diversification. The report also showed that the services sector has been the most effective in creating new jobs in developing countries.
A particular element in the services trade that stood was the flow of global remittances, which stood at 583 billion dollars in 2014, 75 per cent of which went to developing countries.
In fact, the report found that after official development assistance remittances were the second most important source of external finance for least developed countries, behind official development assistance. Public policy should therefore facilitate remittances and reduce transfer costs.
“A 10 per cent rise in remittances could help reduce by 3.5 per cent the share of people living in poverty, and a 5 per cent reduction in remittance costs could yield 15 billion dollars in savings”, Mr. Valles said.
In his concluding remarks, Mr. Valles highlighted the importance of global trade governance, built on the rules agreed in the multilateral trade negotiations of the World Trade Organization (WTO). He reiterated UNCTAD’s view that a strong multilateral trading system is essential for harvesting the development potential of trade.
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Immediate push on climate-smart development can keep more than 100 million people out of poverty
Africa and South Asia most threatened regions
Climate change is already preventing people from escaping poverty, and without rapid, inclusive and climate-smart development, together with emissions-reductions efforts that protect the poor, there could be more than 100 million additional people in poverty by 2030, according to a new World Bank Group report released before the international climate conference in Paris.
The report, Shock Waves: Managing the Impacts of Climate Change on Poverty, finds that poor people are already at high risk from climate-related shocks, including crop failures from reduced rainfall, spikes in food prices after extreme weather events, and increased incidence of diseases after heat waves and floods. It says such shocks could wipe out hard-won gains, leading to irreversible losses, driving people back into poverty, particularly in Africa and South Asia.
“This report sends a clear message that ending poverty will not be possible unless we take strong action to reduce the threat of climate change on poor people and dramatically reduce harmful emissions,” said World Bank Group President Jim Yong Kim. “Climate change hits the poorest the hardest, and our challenge now is to protect tens of millions of people from falling into extreme poverty because of a changing climate.”
The report finds that the poorest people are more exposed than the average population to climate-related shocks such as floods, droughts, and heat waves, and they lose much more of their wealth when they are hit. In the 52 countries where data was available, 85 percent of the population live in countries where poor people are more exposed to drought than the average. Poor people are also more exposed to higher temperatures and live in countries where food production is expected to decrease because of climate change.
The report, released a month before negotiators gather in Paris for international climate talks, shows how ending poverty and fighting climate change can be more effectively achieved if addressed together.
Agriculture will be the main driver of any increase in poverty, the report finds. Modeling studies suggest that climate change could result in global crop yield losses as large as 5 percent by 2030 and 30 percent by 2080. Health effects – higher incidence of malaria, diarrhea and stunting – and the labor productivity effects of high temperatures are the next-strongest drivers.
The impact of climate change on food prices in Africa could be as high as 12 percent in 2030 and 70 percent by 2080 – a crippling blow to those nations where food consumption of the poorest households amounts to over 60 percent of total spending.
In focusing on impacts through agriculture, natural disasters and health, the report calls for development efforts that improve the resilience of poor people, such as strengthening social safety nets and universal health coverage, along with climate-specific measures to help cope with a changing climate, such as upgraded flood defenses, early warning systems and climate-resistant crops.
At the same time, the report says an all-out push to reduce greenhouse gas emissions is needed to remove the long-term threat that climate change poses for poverty reduction. Such mitigation efforts should be designed to ensure that they do not burden the poor. For example, the savings from eliminating fossil fuel subsidies could be reinvested in assistance schemes to help poor families cope with higher fuel costs.
In poor countries, support from the international community will be essential to accomplish many of these measures, according to the report. This is particularly true for investments with high upfront costs – such as urban transport or resilient energy infrastructure – that are critical to prevent lock-ins into carbon-intensive patterns.
“The future is not set in stone,” said Stephane Hallegatte, a senior economist at the World Bank who led the team that prepared the report. “We have a window of opportunity to achieve our poverty objectives in the face of climate change, provided we make wise policy choices now.”
The report also reviews successful policy solutions to show that good development can protect the poor from shocks. For example, after Typhoon Yolanda, the Philippines was able to use the existing conditional cash transfer system to quickly distribute emergency funding to the affected population. In Uganda, the combination of new crop varieties and extension visits has boosted household agricultural income by 16 percent.
Shock Waves: Managing the Impacts of Climate Change on Poverty – Background Papers
The report “Shock Waves: Managing the Impacts of Climate Change on Poverty” commissioned 14 background papers in collaboration with research institutions across the globe to provide the report with innovative analyses to provide insights on the relationship between climate change and poverty. These papers examined the impacts of climate change on poverty, through agriculture, ecosystems, natural disasters, and health, as well as strategies to reduce these impacts. While we cannot do justice to each paper through the report itself, this page provides full access to the papers commissioned so interested readers can delve into the full details behind each analysis.
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Foreign direct investment: All present and direct
Foreign direct investment (FDI) flows into SA are expected to gain momentum in the coming year after declining over the past 12 months.
FDIs are more desirable than other forms of investment such as portfolio inflows as their long-term nature means they help create sustainable and permanent jobs. This is helpful to a country with chronic unemployment such as SA. FDI can also help promote a country’s productive capacity.
FDI flows into SA fell sharply from US$8,3bn in 2013 to $5,7bn last year, according to the UN Conference on Trade & Development’s (Unctad) World Investment Report released in June.
SA has an attractive profile, says Yunus Hoosen, head of the Investment Promotion & Inter-Departmental Clearing House at the department of trade & industry.
Manufacturing investments are also beginning to take off after struggling over the past few years, he says.
SA wants investments to move away from the traditional resources and manufacturing to other sectors.
“As we are scaling up the Industrial Policy Action Plan we are looking at diversifying beyond reliance on commodity investment,” Hoosen says.
Manufacturing has been in the doldrums, hit hard by weak demand, rising input costs and low global commodity prices.
Companies such as Unilever, Nestlé, Procter & Gamble and BMW are investing for the long term in SA, Hoosen says.
SA’s economic challenges, including pedestrian economic growth and strikes, may have weighed on investment sentiment, but these have not led to any company pulling out of investing in the country, he says.
This is supported by recent comments from BMW’s global group marketing head, Ian Robertson, who says uncertainty over industrial policy and labour stability will not deter the German car maker from further investment in SA.
BMW’s SA production plant in Rosslyn, Pretoria, produces around 80 000 3-Series models a year, most of which are exported to other countries.
Whether FDI flows into SA improve or remain stagnant next year will depend a lot on what happens in China and other emerging markets, says Frost & Sullivan senior economist Craig Parker.
He says though European companies see SA as safe for FDI, the country has to maintain stable politics and avoid corruption as these “scare away investments”.
The economic slowdown in China will negatively affect the amount of investment it will be able to make in SA, Parker says.
Unctad forecasts global FDI flows to increase from US$1,2trillion last year to $1,4trillion this year and to $1,5trillion next year.
These projections are mainly based on growth prospects in the US, the demand-stimulating effects of lower oil prices, accommodating monetary policy, and continued investment liberalisation and promotion measures, says Jorge Maia, head of the research & information department at the Industrial Development Corp.
An Unctad survey of more than 1000 top executives of large multinational enterprises found that executives from Africa and the Middle East were the most optimistic about FDI prospects: 67% expect global FDI activity to increase in the next few years.
A number of economic and political risks, including ongoing uncertainty in the eurozone, potential spill-overs from geopolitical tensions and persistent vulnerability in emerging economies, were seen as downside risks to the FDI flows outlook.
Platinum miners embarked on a five-month strike last year, which dented economic growth. This year, GDP declined by 1,3% in the second quarter due to contractions in agriculture, mining and manufacturing. These are some of the factors weighing on investor and business confidence.
The economy’s “short-term constraints” are not enough to deter investors, who still find SA a good investment destination, according to Hoosen.
“Overall, I think we have a healthy and steady investment pipeline of R43,8bn over last year that we have attracted as potential investment projects,” he says.
FDI inflows to SA were registered at around R30bn from January to July this year, resulting in the creation of just over 5 000 jobs.
The slow growth in FDI is not unique to SA. Globally, FDI flows slowed to $1,2trillion last year from $1,5trillion in 2013.
Companies and countries have had to slow investments down because of weak global demand and weak economic growth.
Unctad is confident a recovery in global FDI “is in sight in 2015 and beyond”. FDI flows today account for more than 40% of external development finance to developing and transitioning economies.
FDI flows out of SA are bucking the trend. They are gaining momentum and are an indication of the growing appetite by local companies to invest in high-growth and high-demand markets, particularly in other African countries. SA’s outward FDI increased to $6,9bn last year from $6,6bn in 2013. Retail companies and banks are leading investments outside SA.
Though the widespread fall in commodity prices over the past year will have a mixed impact on the terms of trade of a net oil importer like SA, it may also delay investment spending and projects, particularly those relating to the extractive industries and construction sectors, Unctad warns.
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Agoa quarrel can be resolved: US
The United States embassy here shared South African Trade and Industry Minister Rob Davies’s assessment that South Africa and the US were “tantalisingly close” to concluding a meat trade deal that would save South Africa’s duty-free access to the lucrative US market for its agricultural exports.
However, embassy economic counsellor Laird Treiber also said on Tuesday that the US was watching closely to see if President Jacob Zuma signed a controversial bill that required US and other foreign private security companies to sell off majority stakes to South Africans. The US has warned before that that could also jeopardise SA’s trade access because it would be deemed as expropriation.
Treiber was briefing journalists about last week’s decision by President Barack Obama to suspend South Africa’s benefits under the African Growth and Opportunity Act (Agoa) for its agricultural products.
But Obama gave the South African government 60 days – until January 4 – to open its market to some US poultry, beef and pork imports if it wished to avoid losing its Agoa benefits.
South Africa has blocked imports of US poultry for 15 years, beef imports for 12 years and pork imports for three years, as Treiber said. For the past few years the two governments have been negotiating to lift the embargoes, which are now based on health concerns.
But they have not yet resolved the disputes, despite several deadlines set by the US. After Obama’s announcement of his decision to suspend SA’s Agoa agricultural benefits, Davies expressed surprise, saying that veterinary experts from both governments were negotiating the issues and were “tantalisingly close” to a deal.
He said he believed that deal would soon be concluded and that US poultry – the main issue in the so-called “three meats” dispute – could start entering South Africa before the end of the year.
Treiber agreed with that assessment. He said what remained outstanding in the negotiations was for both sides to agree on health certificates that would allow the US meat imports.
He said the two sides were very close to agreeing on health certificates on poultry and pork but still had a bit of work to do on beef. On poultry the main issue has been that South Africa wanted to maintain the total ban on poultry imports because of outbreaks of avian flu in some parts of the US.
The US wanted South Africa to “regionalise” its approach, by only barring imports of poultry from areas of the US affected by avian flu.
Treiber said the US was “very hopeful” these negotiations would conclude in time to allow poultry imports in before the end of the year and avoid SA’s suspension from Agoa.
The suspension would hit citrus and wine exports hardest.
He also noted that if the meat dispute was not resolved by March 1 next year, the US would consider suspending other Agoa benefits which SA enjoys. The biggest exports from SA to the US under Agoa are automobiles of which about $1,3 billion worth were exported last year, constituting 74% of all SA exports to the US under Agoa.
Treiber dismissed criticism that the US was bullying SA into accepting US imports. He insisted that Washington was acting in accordance with the rules that had been in place since Agoa was introduced in 2000, that African countries should maintain open markets to US goods, in order to quality for Agoa benefits.
Treiber said that SA was blocking US meat imports while allowing meat imports from many other producers which was putting the US at a disadvantage relative to its competitors.
Treiber was asked if SA would be immediately suspended from all of its Agoa benefits if Zuma signed into law a bill which has been passed by Parliament that would require US and other foreign owners of private security firms to sell off majority stakes to South Africans.
He said the US was watching this bill closely but if Zuma signed it, the US would have to study the legal implications and also give South Africa 60 days notice before taking action.
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Africa calls for a fair, equitable and legally binding agreement during the COP 21
As part of the preparation of the 21st Conference of the Parties (COP 21), the United Nations Conference on Climate Change that will take place from November 30 to December 11 in Paris, different stakeholders involved in the negotiations reaffirmed the necessity for the continent to negotiate a fair, equitable and binding agreement on Climate Change.
This was during a session of the “Fridays of the Commission” organized at the African Union headquarters under the theme: “Towards Climate Justice” on 6th November 2015. The session brought together various participants including the African Union Commission, the United Nations Economic Commission for Africa (UNECA), members of the diplomatic corps, religious leaders and representatives of the African civil society.
Speaking during the opening session of the Fridays of the Commission, Mr. Desire Assogbavi, Head of Oxfam Liaison Office to the African Union, emphasized the fact that the climate variability is increasingly having damaging consequences on people across the continent. He also pointed out that Africa should be at the forefront of the negotiations since it is one of the world’s most vulnerable continents to climate change. “Africa must strategically be engaged in this process,” he insisted.
Mr. Ayele Hegena, Director of Law and standards at the Ministry of Environment, Forest and Climate Change of the Federal Democratic Republic of Ethiopia and member of the African group of negotiators (AGN) on Climate Change, declared that COP 21 is an opportunity for the continent to claim its right to sustainable development as well as to make sure that the African common positions are featured in the final text to be adopted.
Mr. Ayele also presented some of the expectations of Africa during COP 21. Those expectations include the need to have a comprehensive agreement focusing on the issues of mitigation, adaptation, financing and technology transfer. Indeed, only an inclusive approach can be successful in addressing the challenges of climate change. Moreover, he said that the need of the continent would be taken into account only if a differentiation approach based on the realities and circumstances of each continent.
On the other hand, Hon. Awudu Cyprian Mbaya, Executive President of the Pan African Parliamentary Network on Climate Change (PAPNCC), called upon the African group of negotiators to ensure that the Paris’s agreement is in line with the expectations of the African people. Hon. Awudu took advantage of the session to share with the participants the work the parliamentarians are doing in Africa to raise awareness on the existence climate change. In that regard, he highlighted the need to mainstream climate change in school curricula across the continent. He also pledged the total support of the PAPNCC to African governments, specialized institutions and civil society organizations who are defending the African positions.
“I hope the people of Africa will be able to smile after COP 21. I am optimistic in the sense that I am sure the negotiators will turn our slogan “One Africa, one voice and one position” into a reality. An unfair agreement will be considered as a gross violation of the African people’s rights,” he concluded.
Mrs. Mwanahamisi Singano, Lead of the Oxfam Public campaign encouraged Africans to advocate for gender responsive agreement. As a matter of fact, women, most often responsible for feeding their families, are being hit hardest by the impact of climate change. She also said that the willingness of the two biggest emitters of greenhouse gases, namely China and the United States of America, to reduce their emission is a positive message to the world.
In the same vein, Mr. Mithika Mwenda, Secretary General of the Pan African Climate Justice Alliance (PACJA) urged African countries to remain united during COP 21 as well as to avoid a mitigation centric position, as was the was the previously. He added that instead of 2°C, Africa should stand for 1,5°C during the negotiations. Furthermore, he argued that justice should be at the center of the Agreement in Paris. “Climate justice means that those who have caused the damages of the climate change should also provide means to solve the consequences on other people,” he said.
Aba Melake Selam, representing the Ethiopian Orthodox Church, stated that the protection of our environment is a sacred duty for all the mankind. He underlined that the consideration of that moral obligation will pave the way for a fair agreement during COP 21. He also said that the Church will keep supporting African stakeholders in that regard.
All the participants agreed that the continent should be consistent during the negotiations COP 21 as well as they highlighted the need for an inclusive and global agreement during the Conference. The agreement to be reached at the Conference of the parties will replace the Kyoto Protocol that was adopted in Kyoto, Japan on 11 December 1997 and entered into force on 16 February 2005.
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National climate targets signal ‘unprecedented momentum’ for climate agreement in Paris – UN report
Implementation of the national climate plans prepared by countries ahead of the Paris climate meeting will limit greenhouse gas (GHG) emissions by 2030, but a new climate agreement can encourage further action that will be necessary to limit global temperature rise to 2 degree Celsius by 2100, according to a new United Nations Environment Programme (UNEP) report.
The sixth Emissions Gap Report is an assessment undertaken by a team of leading scientists and modelling experts from around the world.
It presents a study of the Intended Nationally Determined Contributions (INDCs) submitted by 146 countries party to the UN Framework Convention on Climate Change (UNFCCC) by 1 October – and up to 88 per cent of global GHG emissions in 2012. At present, 155 countries have submitted their plans.
According to the UN, these INDCs will form the basis of the agreement expected to be reached at the 21st Conference of the Parties to the UNFCCC, COP 21, to be held in Paris, France starting at the end of November.
UNEP’s new report underlines that the national targets represent GHG emission reductions of four to six gigatonnes of carbon dioxide equivalent per year in 2030 compared to projected emissions under current policy trajectories. However, an additional 12 gigatonnes are required to close the gap and maintain a “likely chance” of staying below the 2 degree Celsius target.
“The challenge is to bend the emissions trajectory down as soon as possible to ensure that the net zero emissions goal in 2060-2075 is within reach,” the UN’s environmental programme underlined in a press release.
Meanwhile, UNEP Executive Director Achim Steiner said the current INDCs, combined with policies over the last few years, present a real increase in ambition levels and demonstrate an unprecedented commitment and engagement by member states in tackling this major global challenge.
“The INDCs assessed in this Emissions Gap report signal a breakthrough in terms of international efforts to bend the curve of future emissions,” he explained. “While in themselves not sufficient to limit global temperature rise to the recommended level of 2 degrees Celsius this century, they represent a historic step in the direction of decarbonizing our economies. However, in order to close the gap it is essential that the Paris Agreement adopt a dynamic approach in which ambitions, the mobilization of climate finance and other forms of cooperation can be adjusted upwards at regular intervals.”
If all INDCs are fully implemented, UNEP says the 2030 emissions gap would still be 12 gigatonnes of carbon dioxide equivalent, putting the world on track to a temperature rise of around 3 degrees Celsius by 2100, and bringing significant climate impacts. However this scenario assumes that nations would not review and further accelerate efforts in subsequent years. The report also shows the uncertainties that exist for different scenarios based on the best available scientific evidence, and recommends early action on climate to keep costs as low as possible and avoid deeper and more challenging cuts later.
The UNEP report also found that implementation of the INDCs will likely have benefits beyond the estimated reductions to GHG emission levels as new climate policies and actions are being galvanized by the process. It shows that the preparation of the INDCs has incentivized the exploration of links between development and climate, and the development of new national climate polices, and may be considered as the first step in a transition towards low-carbon economies.
In the meantime, the Paris agreement could build on and support these processes and provide the framework for mobilization of the enhanced mitigation efforts required, the report says.
In addition, it highlights how enhanced energy efficiency – with a particular emphasis on industry, buildings and transport – and expanded use of renewable energy technologies for power production will be critical. Other key sectors emphasized in the studies include forestry, agriculture and waste.
In recognition of the significant opportunity for climate change mitigation through forest-related actions, the report also includes a focus on REDD+, a mechanism being developed by Parties to UNFCCC to reward developing countries for reducing emissions from deforestation and forest degradation. Forest loss reached 7.6 million hectares per year between 2010 and 2015, and reportedly accounts for the largest portion of emissions from land use.
Finally, the report finds that the impact of actions by International Cooperative Initiatives – such as the C40 Cities Climate Leadership Group, the Compact of Mayors, and the Cement Sustainability Initiative – can also be significant.
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BEPS implementation and beyond: Developed and developing countries gather at the OECD to tackle reforms to the international tax system
In-depth discussions took place last week as the international community continues to make progress on the international tax agenda.
Officials from more than 100 countries drawing from tax authorities, ministries of finance, development agencies, as well as regional and international organisations, business and civil society came together in a series of meetings hosted by the OECD. The role of tax in State building and domestic resource mobilisation, enhanced cross-border co-operation and the development of global solutions to international tax challenges were important topics debated amongst participants as they worked together to shape the solutions.
Task Force on Tax and Development
The OECD’s Task Force on Tax and Development met on 2-3 November 2015 to review progress on tax and development made in 2015, including in relation to the UN Sustainable Development Goals (SDG’s), the Financing for Development Conference, the Addis Tax Initiative, and the OECD/G20 Base Erosion and Profit Shifting Project (BEPS). The meeting welcomed the completion of the G20 Development Working Group report on Options for Low Incomes Countries’ Effective and Efficient Use of Tax Incentives for Investment. Over 200 participants from governments, international and regional organisations, civil society and business took stock of how the Task Force is helping developing countries to raise revenues efficiently and fairly in support of the Sustainable Development Goals.
The seminar on State building, Citizenship and Taxation explored and discussed the current thinking on the role taxation plays in building effective states through enhanced accountability. It provided concrete country examples on how to address the practicalities of building the social-fiscal contract in developing countries and connecting taxpayers’ expectations with the delivery of public services.
The meeting concluded with the official launch of the Source Book on Taxpayer Education, which focuses on country-specific case studies of governments reaching out to inform and engage today’s – and future – taxpayers. Fostering an overall “culture of compliance” based on rights and responsibilities is fundamental, in which citizens see paying taxes, as an integral aspect of their relationship with the government.
Co-Chaired by South Africa and the Netherlands, the Task Force is a multi-stakeholder advisory group set up to help to improve the enabling environment for developing countries to collect taxes fairly and effectively. More information is available in the Statement of Outcomes.
Advisory Group for Co-operation with Partner Economies
A meeting of the Advisory Group for Co-operation with Partner Economies consisting of key stakeholders in the Global Relations tax programme, was held on 3 November to discuss the impact, opportunities, challenges and future directions of the programme. It was attended by 15 OECD and Partner economies and 3 regional tax organisations.
In the sidelines of the Task Force and Advisory Group meetings, the African Tax Administration Forum and OECD signed a Memorandum of Understanding (MoU) renewing their co-operation on taxation for three years. The MoU recognises the achievements of this co-operation so far and the role of this partnership in ensuring that Africa's voice be heard in the global tax debate. As a concrete recognition of this close collaboration OECD will second a technical expert to the African Tax Administration Forum for two years starting in January 2016.
CREDAF Working Group on BEPS
The CREDAF Working Group on BEPS also held its second meeting last week in Paris following the event organised in Kinshasa in May 2015. Twenty five participants, mostly from African countries, gathered to discuss the next steps of the BEPS implementation phase.
February 2016 will mark the next stage of co-operation between the CREDAF and the OECD, in Senegal with the organisation of a number of events including a seminar on transfer pricing, a meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes, as well as the regional consultation for Africa. Click here for more information.
Global Forum on Tax Treaties
On 3-4 November, the 20th Annual Global Forum on Tax Treaties brought together more than 260 senior tax officials from 102 jurisdictions and international organisations to discuss the tax treaty-related outcomes of the OECD/G20 BEPS Project.
The tax treaty-related measures agreed upon in the BEPS Project offer solutions to BEPS concerns caused by the abuse of tax treaties and the artificial avoidance of permanent establishments. Participants welcomed these measures that will help tax administrations to effectively address double non-taxation. At the same time, the discussions at the meeting confirmed that double taxation should be prevented and legal certainty should be improved. The BEPS minimum standard to make dispute resolution mechanisms more effective was discussed in this context.
The need to ensure that BEPS concerns should be addressed with global solutions was emphasised. A global community that co-operates to implement the BEPS package in a timely and consistent matter is vital, and discussions were held on the design of an inclusive framework for the BEPS implementation phase.
Inaugural Meeting on the BEPS Multilateral Instrument
The Global Forum on Tax Treaties was the prelude to the Inaugural Meeting of the Ad hoc Group for the development of a Multilateral Instrument held on 5-6 November. Over 100 countries, non-state jurisdictions and international organisations are working together on the development of a multilateral instrument capable of incorporating the tax treaty-related BEPS measures into the existing network of bilateral treaties. Last week’s inaugural meeting follows the procedural meeting held in May, that saw Mr. Mike Williams from the UK appointed as Chair, supported by Vice-Chairs Mr. Liao Tizhong from China, Mr. Mohammed Amine Baina from Morocco and Mrs. Kim S. Jacinto-Henares from the Philippines.
The ad hoc Group comprises 94 members from OECD and G20 countries, developing countries and non-OECD/non-G20 economies, all participating in the work on an equal footing. At its inaugural meeting, the ad hoc group decided on issues relating to the organisation of the work on the Multilateral Instrument, as well as approaches for addressing key substantive issues such as the relationship between the Multilateral Instrument and the existing bilateral treaty network. This will enable the Group to swiftly develop the Multilateral Instrument and open it for signature in 2016. The Group also established a sub-group of interested countries and jurisdictions for the development of the optional provision on mandatory binding MAP arbitration.
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Regional trade has kept Kenya's economy afloat, says CBK deputy boss
Kenya’s resilient economy is linked to the country’s strong intraregional trade, which has cushioned it from the global financial crisis.
Much of Kenya’s trade is with its East African peers, a factor that has strengthened its financial sector by ensuring the country is not exposed to the volatility in the global financial market.
According to Central Bank of Kenya (CBK) Deputy Governor Sheila M’Mbijiwe, 40 per cent of Kenya’s trade is largely regional and this has cushioned the country’s currency against volatility in the global market.
“The diversity of Kenya’s trade within the region has helped it stabilise its currency,” explained M’Mbijiwe.
Kenya’s trade with the East African countries – Tanzania, Uganda, Rwanda and Burundi – in 2014 amounted to Sh126 billion, while trade with the rest of Africa amounted to Sh115 billion. This brought trade with Africa to stand at Sh241 billion.
However, the shilling has lately been hard-hit by the strengthening of the dollar, with the local currency dipping to a low Sh106 against the greenback in September.
M’Mbijiwe also noted that a dozen of Kenyan banks have been at forefront in doing cross-border trade in the region. A recent report by the International Monetary Fund (IMF) showed that Kenya is among the few countries in Africa that have played an active role in shaping the concept of Pan-African banking with banks such as Equity, Co-operative Bank and KCB venturing into the region and beyond. Other countries include Nigeria and South Africa.
She was speaking at the opening of the 15th Advanced Structured Trade Finance Seminar organised by Pan-African multilateral financial institution, the African Export-Import Bank (Afreximbank). The seminar is aimed at bolstering Africa’s participation in global trade.
Afreximbank’s President Dr Benedict Oramah reckoned that few African countries trade more with Africa compared to Kenya.
He added that unlike in the 1980s, the African continent today is teeming with Pan African banks, which are among the “ammunitions” the continent has put in place to deal with the 1980s risks.
Dr Oramah regretted that while central banks in Africa have huge reserves – about $500 billion – they still placed them in offshore accounts.
“We can create instruments to help mobilise these deposits. These central banks can put money at Afreximbanks at our risk,” he explained.
M’Mbijiwe regretted that Africa contributes only three per cent of global trade.
Concerns were also raised over Africa’s large trade financing gap amounting to $100 billion dollars, according to African Development Bank (AFDB).
For Kenya, for example, trade balance worsened by 18.7 per cent from a deficit of Sh911 billion in 2013 to a deficit of Sh1.1 trillion in 2014 as imports outpaced exports in growth, according to the Economic Report 2015. While imports grew at 14.5 per cent, exports grew at seven per cent.
Afreximbank’s main areas of intervention include provision of trade finance, project finance, research and policy inputs, corporate finance and advisory services capacity building. Its clients include businesses, government, financial institutions and local banks.
The bank with the participation of JP Morgan gave Kenya’s national carrier, Kenya Airways (KQ), Sh86 billion guaranteed long-term loan to support its fleet renewal and expansion programme.
The bank will soon be setting up base in Kenya and has already received Cabinet approval.
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Africa Oil sees joint pipeline as only option for Uganda, Kenya
East Africa’s race to export its first oil will eventually be a tie between neighbors Kenya and Uganda because both need to share a pipeline rather than compete for different routes, a producer in the region said.
“The only sensible route for the pipeline is a joint pipeline” running through both countries, Africa Oil Corp. Chief Executive Officer Keith Hill said by phone from Calgary. The company this week sold stakes in some East Africa assets to Maersk Oil & Gas A/S.
Agreement on an export route is necessary to get the countries’ oil industries off the ground: While crude was discovered in Uganda in 2006 and four years later in Kenya, both are still in the planning stage of commercial development. One option is to send the oil through the Lokichar basin in northern Kenya. Another is to run a line via southern Kenya and the capital, Nairobi. A third is to pipe the oil through Tanzania.
"I don’t believe the Tanzanian pipeline is commercially viable,” Hill said on Monday, without elaborating. Uganda, which last month signed a memorandum of understanding with Tanzania and oil producer Total SA to study a possible pipeline through the coastal nation, has repeatedly said the eventual shipment route must be the cheapest to develop. Kenya has estimated the cost of the proposed northern line at about 400 billion shillings ($3.9 billion).
Joint Ventures
A pipeline to the Indian Ocean would allow Africa Oil, together with larger partner Tullow Oil Plc, to start exports from joint ventures. Tullow has found oil in both countries, with Uganda estimating finds at 6.5 billion barrels and Kenya at 600 million barrels.
Maersk Oil said Monday it will acquire half of Africa Oil’s shares in three onshore exploration licenses in Kenya and two in Ethiopia for as much as $845 million. The deal shows companies are willing to invest in East African discoveries even before a pipeline route is decided. It drove Tullow shares up 4.5 percent.
Oil-industry development has slowed in East Africa over the past year as slumping energy prices forced companies to cut costs and trim budgets. Brent crude has tumbled more than 40 percent to about $47 a barrel in the past 12 months amid a global supply glut.
“People have finally decided the oil price has hit bottom and we will see more deals being done in the next three to six months as people start to feel a little bit more stability,” Hill said. “There is no way on earth we can satisfy world demand below $75 a barrel long-term.”
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tralac’s Daily News selection: 10 November 2015
The selection: Tuesday, 10 November
Live blog: the Arabian Business Africa forum
AfDB Transport Forum 2015: sustainable transport for an integrated Africa
The first African Development Bank Transport Forum will bring together high-level government representatives, experts, development partners, international organizations, the private sector, academia, NGOs and other stakeholders to discuss the key issues and challenges facing the transportation sector on the African continent. How can we facilitate the movement of people and goods to meet the increasing needs of producer and consumer markets in Africa? How can we facilitate reliable, safe, sustainable and inclusive travel, both locally and internationally? These questions and more will be at the heart of the two days of debate and discussion, which will be animated by more than 30 high-level speakers.
Central Corridor states bank on railway project to make route more competitive (New Times)
Rwanda’s State Minister for Transport and the Central Corridor Transit Transport Facilitation Agency chairman, Dr Alexis Nzahabwanimana, says the creation of the agency has played a major role in efforts geared at eliminating trade barriers along the corridor. Business Times’ Peterson Tumwebaze caught up with Nzahabwanimana and he explains the initiatives TTFA is working on to make the corridor more competitive and route of choice for business people in the region:
Rwanda government, WB officials to meet over investor report index (New Times)
The government is this week expected to meet with top officials of the World Bank group to discuss the latest Doing Business Report (DBR) and the change in methodology that saw the country’s global rankings on various indicators taper. According to Rwanda’s Minister for Finance and Economic Planning, Claver Gatete, the discussions with WB officials will centre on the global survey’s new methodology in a bid to understand how it works and inform new government reforms to spur private investment. “They will be coming here this week and we shall discuss item by item of the new rankings on each indicator in order for us to properly understand the new methodology, which introduced new elements that weren’t previously there,” Gatete said.
Mozambique’s conformity with Trade Facilitation Agreements: Part 4 (SPEED)
In this fourth blog in our series we consider Mozambique’s degree of conformity with SADC provisions: Consistent with its role, the SADC Secretariat developed a framework for evaluating each member state’s progress in 30 different aspects of the SADC trade facilitation agenda grouped into 9 different categories. The SADC Secretariat, with the assistance of the USAID Southern Africa Trade Hub, then proceeded to conduct a Customs Audit of all 15 SADC members in 2011. Drawing from the SADC report, Table 4 summarizes the findings for Mozambique, showing that Mozambique scored well on the SADC Customs Audit in 2011. Without the benefit of field interviews, it was not possible for this preliminary study to assess the conditions in 2015.
A busy week for SACU Secretariat (New Era)
When the heads of state and government of Botswana, Namibia, Lesotho, Swaziland and South Africa meet in Windhoek on Thursday, giving their blessings to the Southern Africa Customs Union head office building will not be the only item on the agenda. The heads of state and government would also, according to the SACU Secretariat’s executive secretary, Paulina Elago, have an “informal discussion to consider issues related to implementation of the SACU work programme”. Issues would include the promotion of economic growth in the member state countries through regional industrial development policies, revenue sharing arrangements and trade facilitation.
SACU Trade Policy Review: opening statement by SA, on behalf of SACU
Despite the outbreak of the financial crisis in 2008, the simple average applied MFN tariff remained stable at around 8% since the last trade policy review in 2009 as attested by the latest WTO Secretariat Report. It is noteworthy that SACU increased the percentage of duty-free tariff lines from around 54% in 2009 to 56% percent in 2015. Despite our varied levels of development, the shares of SACU’s WTO agricultural products and WTO NAMA products attracting a zero tariff in 2015 are 40% and 58% respectively. In light of this and other features of our trade regime, we do not concur with the assertion made in the Secretariat Report that the SACU Common External Tariff remains complex.
Value chains in Southern Africa: entry points for donor impact (SAIIA)
The downside of the project, however, is that the policy framework has now been lying on a desk at the Ministry without any feedback or evidence that it is being prioritised for passing through cabinet and beyond. From a donor perspective, the project was highly relevant, was effectively and efficiently implemented and yet the impact is zero. Should donors, therefore, get involved in government processes where the outcomes are uncertain or is there value in the exercise in and of itself?
Kenya yet to tap full potential of AGOA pact (Daily Nation)
Kenya could increase by 50% its exports to the United States under the African Growth and Opportunity Act, according to a US-backed trade plan seen by the Nation. The study initiated last year seeks to enable East African Community member states including Kenya, better utilise the trade platform. “We are looking at increasing exports from the region to the US under AGOA by 50%. We are also looking to bring in $100m in new investments to the region, which will create about 10000 new jobs,” said AGOA Trade Advisor, USAid East Africa Trade Hub, Mr Finn Holm-Olsen.
China-Africa trade approaches $300bn in 2015 (China Daily)
China's trade with African states has grown about ten times in the last decade, with the total value likely to hit $300 billion this year, according to the Fourth China-Africa Industrial Forum, which opened Monday in Beijing. China's trade with Africa recorded $10bn in 2000. Last year, the figure grew to $220bn. China is seeking to raise the amount to $400bn by 2020, said Yang Fuchang, a former deputy foreign minister, at the fourth CAIF opening session. Statistics show China's trade with the European Union stood at 467.3 billion euros in 2014 and $590.68 billion with the United States.
ACP-EU Development Minerals Programme launched in Addis (AU)
The African Union Commission and the African Minerals Development Centre hosted the Africa launch of a new global programme to support small-scale miners, public institutions, and communities operating in the low value minerals and materials (LVMM) sector. The ACP-EU Development Minerals Programme is an initiative by the ACP Group of States and financed by the EU and the UNDP. Africa’s strong economic growth, infrastructure boom, and rapid urbanisation are driving the demand of construction materials, dimension stones, industrial minerals and semi-precious stones. Estimates indicate that more than 8 million Africans are engaged in the sector, with women making up more than 40 of the workforce.
Uganda: Small-scale miners seek government regulation (Daily Monitor)
Emerging market slowdown and drop in trade clouding global outlook (OECD)
A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9% this year – well below the long-run average – and is a source of uncertainty for near-term prospects, says the OECD. In its latest twice-yearly Economic Outlook, the OECD projects a gradual strengthening of global growth in 2016 and 2017 to an annual 3.3% and 3.6% respectively. But a clear pick-up in activity requires a smooth rebalancing of activity in China and more robust investment in advanced economies.
How to monitor the trade elements of the 2030 Agenda? (ICTSD)
Yesterday, at the UN:
UNSC calls for total neutralization of foreign, local armed groups in east DRC
Burundi experiencing 'deep political crisis' with hundreds dead since April, UNSC told
South Sudan’s push to join EAC gains momentum (The East African)
South Sudan will push for admission into the East African Community at the Heads of State Summit in two weeks time, despite having not met all the eligibility criteria. Government officials argue that Juba has already opened its economy to EAC members though questions on governance, democracy, human rights and security linger. Foreign Minister Barnaba Marial Benjamin, who led a high level ministerial committee to the latest EAC session on South Sudan accession in mid-October, said that a technical committee had recommended that Juba "is now qualified" to join the bloc.
EAC expert warns of El Nino and associated '5 Deadly Sisters' (Arusha Times)
The EAC has urged its member states to stem any likelihood of outbreak of the deadly Ebola and other highly infectious diseases in the region. With the El Nino rains around the corner, the region can be vulnerable to the re-emergence of Rift Valley Fever which created much havoc in 2006/2007, wiping out livestock herds and wild animals in some areas. "There is a high possibility for infectious diseases to spread out to many countries across the world if they are not properly controlled" said Dr. Timothy Wesonga, a senior livestock and fisheries officer with the EAC Secretariat in Arusha.
IGAD, WHO chart way forward on regional medicines regulation
Senior officials of the Intergovernmental Authority on Development and the World Health Organization held a joint meeting in Djibouti to discuss the development of a regional program to regulate medicines and other medical products. Mr Abdalla further noted that the region was severely affected by the burden of Substandard, Spurious, Falsely labeled, Falsified and Counterfeit (SSFFC) medical products, calling for joint collaborative efforts to address the root causes and challenges, as well as availing necessary resources to establish and strengthen harmonized national regulatory systems.
ECOWAS, other regions cooperate to promote peace in Africa
The Economic Community of West African States, the Economic Community of Central African States and the Eastern African Regional Mechanism, have been commended for the high level of cooperation and synergy exhibited during the Amani Africa II Field Training Exercise. This type of multinational, inter-regional, and multidimensional cooperation, according to Ambassador Augustine Philip Mahiga, is one of the main reasons behind the success of the exercise. The Troop Contributing Countries of Nigeria, Angola and Kenya, through the ECOWAS Standby Force, Central African Standby Force and the Eastern Africa Standby Force, were grouped together under Sector Three at Tactical level of the exercise, in order to validate the workings of different troops of the African Standby Force, coming under one central command, during peace support operations. [African security cooperation suffers from uneven regional integration (World Politics Review)]
EAC, Interpol to boost border security (The Citizen)
Joint projects being implemented by the two organisations included the EU-funded Eastern and Southern Africa-India Ocean (ESA-IO) Maritime Strategy, the operationalisation of the Regional Forensic Referral Centre and the establishment of a Police Liaison Office at the EAC Secretariat, to enhance coordination of policing activities in the region.
Nigeria: MTN, Stanbic IBTC and effective regulatory regime (ThisDay)
As a society, our concern should be about having an effective regulatory regime that ensures the proper functioning of the market and reinforces the faith of citizens in their government and in their country. We do not have that now. Most of our regulators are indecisive and inconsistent, are open to capture by political and business interests, and are not as resourced and as knowledgeable as those they are supposed to regulate. They do not communicate effectively to the public on whose behalf they exercise enormous powers and do not adequately factor in the interests of the dispersed and mostly voiceless consumers. Also, the countervailing mechanism for checking abuse of regulatory powers is very thin. All these must change.
EAC, Comesa receive €85 mn grant to aid regional integration (The East African)
Pegging currency to dollar costs Zimbabwe (Business Day)
Zimbabwe: Rising imports push up cost of living (NewsDay)
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Emerging market slowdown and drop in trade clouding global outlook
A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9% this year – well below the long-run average – and is a source of uncertainty for near-term prospects, says the OECD.
In its latest twice-yearly Economic Outlook, the OECD projects a gradual strengthening of global growth in 2016 and 2017 to an annual 3.3% and 3.6% respectively. But a clear pick-up in activity requires a smooth rebalancing of activity in China and more robust investment in advanced economies.
Emerging market challenges, weak trade and concerns about potential output suggest higher downside risks and vulnerabilities compared with the OECD’s June Outlook.
Presenting the Outlook in Paris, OECD Secretary-General Angel Gurría said: “The slowdown in global trade and the continuing weakness in investment are deeply concerning. Robust trade and investment and stronger global growth should go hand in hand. G-20 leaders meeting in Antalya need to renew their efforts to secure strong, sustainable and balanced growth.”
In the US, output remains on a solid growth trajectory, propelled by household demand, with GDP expansion expected to be 2.5% next year and 2.4% in 2017.
The recovery in the euro area is set to strengthen, helped by accommodative monetary policy, lower oil prices and an easing of the pace of budget tightening. Euro area activity is expected to grow by 1.8% in 2016 and 1.9% in 2017.
In Japan, recovery was derailed in 2015 by a sharp slowdown in demand from other Asian economies and sluggish consumption. Japan’s GDP growth is expected to accelerate to 1.0% next year, but to slow to 0.5% in 2017 due to the planned consumption tax hike.
Economic growth in China is projected to slow to 6.8% in 2015 and to continue to decline gradually thereafter, reaching 6.2% by 2017, as activity rebalances towards consumption and services. Achieving this rebalancing, whilst avoiding a sharp reduction in GDP growth and containing financial stability risks, presents significant challenges.
In other emerging economies, headwinds have generally increased, reflecting weaker commodity prices, tighter credit conditions and lower potential output growth, with the risk that capital outflows and sharp currency depreciations may expose financial vulnerabilities. Brazil and Russia have experienced recessions and will not return to positive growth in annual terms until 2017. By contrast, growth prospects in India remain relatively robust, with GDP growth expected to remain over 7% in the coming years, provided further progress is made in implementing structural reforms.
The Outlook calls for greater ambition by OECD and G20 countries in supporting demand and pursuing structural reforms to boost potential growth and ensure that its economic benefits are shared by all.
It calls for policies to support short-term demand, including on-going monetary and fiscal policy support in accordance with countries’ policy space. Collective action to increase public investment is essential and would increase growth without increasing debt-to-GDP ratios.
In the run up to the COP21 UN Climate Change Conference in Paris, a special chapter of the Economic Outlook calls for unequivocal action to address climate change, which is critical for long-term economic sustainability and healthy growth.
Most climate policies could be budget-neutral and support growth. There are plenty of examples of countries that have taken action successfully without negative consequences. An effective policy stance would create a more positive environment for investment that would support growth and trade, as well as put us on a path to urgently-needed climate improvement.
The Economic Outlook also looks at the labour market and fiscal impact of the European refugee surge, and will release on Thursday, in advance of the G20 summit in Antalya, a policy note on this issue.
In addition, the Outlook includes a scenario for the global impact of weaker demand growth in China and discusses a number of other issues including: rising US policy interest rates and spill-overs to emerging market economies; growth shortfalls in the euro area and Japan; revisions to potential output growth; and the impact of an increase in public investment in OECD economies.
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How to monitor the trade elements of the 2030 Agenda?
Can existing institutions be used to ensure proper follow-up and review of the trade commitments made in the UN’s new 2030 Agenda for Sustainable Development?
Trade is reflected throughout the new global sustainable development agenda, both in “Transforming Our World: The 2030 Agenda for Sustainable Development,” and in the outcome document from the Third International Financing for Development (FfD3) conference known as the “Addis Ababa Action Agenda.” These outcome documents are intended to guide and balance social, economic, and environmental objectives over the next 15 years. Follow-up and review of the agenda as a whole is essential, although delicate because the Sustainable Development Goals (SDGs) are aspirational objectives, not legally binding obligations. In themselves, the SDGs will not directly change policy, but the review process might.[1]
Most of the action needed on sustainable development is national and even local. Follow-up and review mechanisms will allow national and local-level policymakers, as well as civil society, to review both effort and outcomes. And by learning from the experience of others, adjustments can be made. The purpose of review mechanisms is thus not “evaluation” but the sharing of experiences as a way to facilitate learning and policy improvement. The 2030 Agenda is also universal, as the goals and targets apply to all countries, whatever their level of development. Regional and global review as well as national review will help, as countries in different regions or at the same level of development may face similar challenges, and hence have lessons to share.
Trade is part of the 2030 Agenda in each of the three dimensions of sustainable development, but its diffuse contribution means that follow-up and review will be challenging.[2] Unlike other aspects of the SDGs and FfD3, international trade is covered by numerous bilateral, regional, and multilateral agreements, which have their own review mechanisms. Some trade-related targets in the SDGs are goal specific, others feature trade as a cross-cutting “means of implementation” (MoI) relevant to the achievement of the framework as a whole. For example, SDG 14 on oceans conservation refers to the WTO fisheries subsidies negotiations, while the final SDG 17 identifies the principles upheld by the WTO and conclusion of the Doha Round negotiations as an overarching supportive effort. The FfD3 outcome includes some trade-related targets similar to those identified in the SDGs as well as several other unique trade issues – such as on regional economic integration – that are useful complements. The SDGs regrettably focus predominantly on expanding exports; while they recognise, if only implicitly, the importance of maintaining an open trade regime that would allow domestic firms access to low-cost inputs, they do not explicitly address the central role that services play in accessing global value chains (GVCs). The SDGs are also limited in devoting insufficient explicit attention to things like trade costs that are important for participation in GVCs, although some of these elements such as trade facilitation and trade finance are part of the FfD3 outcome.
A universal, rules-based, open, non-discriminatory, and equitable multilateral trading system, as well as meaningful trade liberalisation, in the words of the FfD3 outcome document, can serve as an engine of economic growth, not least by encouraging long-term private and public investment in productive capacities, reduce poverty, and promote sustainable development. With appropriate supporting policies, infrastructure, and an educated work force, according to the AAAA, trade can promote employment, decent work and women’s empowerment, reduce inequality, and contribute to the realisation of the SDGs.
With this context in mind, trade’s contribution to sustainable development ought to be reviewed as part of the broader policy framework. In a longer paper originally published last June, which includes current thinking on possible trade indicators and where the necessary data is already being collected, the trade-related elements in the draft SDGs and FfD3 outcome were grouped into six clusters: subsidies and commodities trade; access to water, energy, medicines; economic diversification, GVCs, and trade facilitation; illegal extraction and trade in natural resources, trade in hazardous chemicals and waste; multilateral trading system, regional trade, and investment agreements; and policy coherence for sustainable development. The purpose of the rest of this article is to describe where trade-related review and follow-up mechanisms already exist that could help policymakers compare experiences.
Trade policy review at the WTO
Various peer review mechanisms, ranging from multilateral reviews to regional mechanisms that could review groups of UN members, to regional economic integration organisations, offer forums where policymakers could discuss progress against specific trade-related elements of the 2030 Agenda. The WTO provides an obvious starting point for this survey, given its centrality in the system of rules of the global trading system, its transparency and accountability mechanisms will be critical for review and follow-up of the 2030 Agenda.
One way that WTO members could enhance the work the secretariat does for them is by asking it to facilitate an integrated discussion of how those mechanisms could contribute to achieving the trade-related objectives of the SDGs and FfD. Moreover, while many existing WTO processes could contribute to review and follow-up, it might also make sense for the chair of the General Council to write to the chairs of all WTO bodies asking how they intend to internalise the SDGs in their work.
For example, the Committee on Trade and Environment (CTE) could play a key role in the review of trade-related SDGs, given its broad mandate and the fact that it is not linked to any WTO agreement. In recent years, it has discussed the trade-related aspects of illegal logging, fossil fuel subsidies, energy efficiency, carbon footprinting and environmental labeling, to list just a few. It could also monitor negotiations on green goods and services, and it could commission an annual report on the environmental dimension of trade-related SDGs, perhaps based on its database of all environment-related WTO notifications.
The WTO Committee on Regional Trade Agreements (CRTA) could use its Transparency Mechanism to consider a horizontal review of sustainable development chapters in regional trade agreements (RTAs). It could also consider whether trade and investment treaties appropriately safeguard domestic policies for sustainable development. The Committee on Trade and Development (CTD)’s Monitoring Mechanism, which analyses the implementation of all special and differential treatment provisions with a view to facilitating integration of developing and least-developed members into the multilateral trading system, could be another important point of reference.
The most comprehensive platform for trade related peer review is the WTO Trade Policy Review Body (TPRB) since its analytic reports on individual countries and on the trading system can draw on information from other WTO committees, as well as the work of other international organisations and non-state actors, with regular opportunities for discussion by all members of the WTO. The main work of the TPRB is the discussion of the periodic Trade Policy Review (TPR) reports on every member. The four largest traders are reviewed every two years, the next 16 every four years, and the rest every six years. This schedule could be aligned, if not perfectly, with the every-four-years schedule of national reviews of the SDGs. It ought to be possible to have the reviews for most members precede by no more than a couple of years its national review, ensuring that WTO review of the trade-related aspects of the SDGs does not add to the reporting burden on governments, while allowing the national report to benefit from the results of peer review in the WTO.
The second major task of the TPRB is the annual monitoring report reviewing the trading system, members’ policies, and the work of the WTO itself. Various sections of this flagship report, including “recent economic trends,” “trade and trade-related policy developments,” and “transparency of trade policies” could maintain an eye on SDG-related issues and pull-out the 2030 Agenda aspects of all country reporting made available through the TPR process.
While not subject to discussion, the WTO Annual Report, could be used to identify what the organisation has accomplished in areas relevant to the 2030 Agenda. Finally, given the diffuse nature of potential options for review within the WTO, members could place as a standing item on the agenda of the biennial ministerial conference consideration of a synthesis report on the contribution of trade to achieving the SDGs. Such a broad review is important for a global assessment of progress especially as the UN High-level Political Forum (HLPF) charged with leading that process may not have sufficient time to devote to trade in most years.
Other options for review of trade-related elements
The UN Conference on Trade and Development (UNCTAD) provides another possible multilateral avenue for 2030 Agenda review. In addition to discussion in its Trade and Development Commission, UNCTAD review mechanisms include Investment Policy Reviews, the Voluntary Competition Policy Review, and the Global Commodities Forum. The main advantage of UNCTAD’s existing peer review processes is that these are voluntary, exemplifying national ownership of the process, and imposing a more manageable burden on developing countries’ public resources. Given the breadth of UNCTAD’s membership, it provides a wide range of countries with the opportunity to have their policies reviewed.
At the same time, a wider review role for UNCTAD could be supported by improvements to the organisation’s institutional capacity, and by increasing developed countries’ relatively lower level of engagement its work. The UNCTAD secretariat has already begun to consider how the organisation could play a role in review of governments’ trade and sustainable development policies.
The World Bank could also serve as an important source of data and analysis on the trade-related elements of the 2030 Agenda using its immense data collection and analytical capacity. It could play an important potential part in reviewing investments made by international financial institutions (IFIs), for example in infrastructure, in the context of the framework’s new commitments. It could also play a role in convening national and global experts to develop cross-cutting global reviews of the role of trade in relation to particular objectives. This work could build on the existing system of knowledge platforms within the Bank.
Regional review
The UN Regional Commissions, such as the UN Economic Commission for Europe (UNECE) and Economic Commission for Latin America and the Caribbean (ECLAC) are also currently thinking about their roles in supporting the implementation and review of the 2030 Agenda, and assessing their capacity to undertake this augmented role.
Many regional economic integration bodies such as the Asia-Pacific Economic Cooperation (APEC) group also already conduct peer reviews of members’ trade and trade-related policies, as does the African Peer Review Mechanism (APRM). Like the UN regional commissions, these organisations could potentially provide a good environment for further discussion, among peers at a regional level, of the contribution of trade-related policies to sustainable development. A potential disadvantage of these organisations, however, is that not all of their secretariats have the capacity to support a follow-up and review process.
The regional development banks, in concert with the World Bank, could also play a role in reviewing the trade-related elements of the 2030 Agenda. Data collection, analysis, and peer review may be easier to mobilise at regional level, perhaps following the model of the European Bank for Reconstruction and Development in conducting policy reviews at country level.
In this context we consider the Organisation for Economic Co-operation and Development (OECD) and International Energy Agency (IEA) to be regional bodies since their membership is far from universal. But these two organisations will nonetheless be invaluable in reviewing the progress of their members to achieving the 2030 Agenda. Peer review is deeply embedded in the work of the OECD, drawing on the secretariat’s considerable capacity for data gathering and analysis. For several of the trade-related elements of the SDGs mapped above, in particular the elements related to agriculture, fisheries and fossil fuel subsidies, OECD and IEA data is probably the most reliable available. Review of the coherence between OECD members’ aid and trade policies will be especially important.
The semi-annual, multi-stakeholder Global Aid for Trade Review provides a regular forum for reviewing Aid for Trade flows, while the coherence of aid and trade policies could be reviewed at a regional level in the OECD Development Assistance Committee, or in meetings of the OECD Policy Coherence for Development Focal Points. Members of the OECD may wish, moreover, to create a mechanism for periodic peer review of each member’s national SDG reports.
Bringing it all together
We have mentioned a great many reports and institutions in this article. Our longer paper provides a sketch of the architecture that might support this process. In light of the inevitable complexity and distinct areas of expertise in each trade-related review forum, an additional option could be the creation of an inter-agency “trade and 2030 Agenda” group – perhaps building on the work that several trade organisations undertook as part of the UN Technical Support Team that helped the SDG negotiations – to prepare a synthesis report as needed for the national reviews and an annual synthesis for the regional and global levels. While many UN entities have a trade-related role, the body with the most significant review capacity is the WTO. One option might therefore be to ask the WTO to coordinate such a task force. The aim of such a thematic report on the trade-related elements prepared for the HLPF would be to keep attention on the trade opening “forest” as opposed to all the “trees.” As with all the other reports discussed, it should be a public document, the foundation for an open and participatory process for review and follow-up of the sustainable development agenda.
Alice Tipping is a Senior Programme Officer, International Centre for Trade and Sustainable Development (ICTSD). Robert Wolfe is a Professor at Queen’s University and Senior Associate, International Institute for Sustainable Development (IISD).
This paper is adapted from a longer working draft Options for follow-up and review of the trade-related elements of the post-2015 agenda and financing for development published jointly by ICTSD and IISD in June 2015. The longer paper has an extensive list of the work of other scholars and organisations on which we draw. A revised paper based on the final SDG and FfD3 outcomes was published in November 2015: download it here.
This article is published under BioRes, Volume 9 - Number 9, by the ICTSD.
[1] For further details on the mandated 2030 Agenda review process see paragraph 90 in “Transforming our world: The 2030 Agenda for Sustainable Development.” Draft resolution referred to the United Nations summit for the adoption of the post-2015 development agenda by the General Assembly at its sixty-ninth session.September 2015. For details of the review process prescribed by FfD3 see “Addis Ababa Action Agenda of the Third International Conference on Financing for Development (Addis Ababa Action Agenda).” Draft resolution submitted by the President of the General Assembly. July 2015.
[2] For more details on the trade outcomes of the 2030 Agenda see “World leaders set to adopt post-2015 sustainable development agenda.” Bridges Trade BioRes. ICTSD. 18 September 2015.
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The AMV adopted by the AU Heads of State in 2009, aims to harness the potential of artisanal and small scale mining to encourage local entrepreneurship and enhance socio-economic development.
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While so called ‘low value minerals’ may not generate the same attention as precious metals or base metals, their value lies in their potential to be minerals of development, boosting the livelihoods of millions people. With greater attention, policy support and regulatory oversight, LVMM could play a key role in driving Africa’s inclusive growth agenda.
“Many ACP countries, African countries, have adopted policies, legislation and regulatory frameworks that place the LVMM subsector at the centre stage of development,” said H.E. Dr. Patrick I. Gomes, the Secretary General of the ACP Group of States. “These natural resources have the potential to increase income of vulnerable populations, create jobs for millions of people at the local level, and stimulate intra-Africa trade.”
In Ethiopia, the cobblestone project, aimed to promote usage of local materials and community participation, has created 489,000 jobs and more than 2,202 kilometers of roads in 140 cities over the past five years, and in Angola, infrastructure-led spending reduced unemployment from 35 percent in 2006 to 26 percent in 2014.
In this context, the ACP-EU Development Minerals Programme, aims to support the capacity development of key stakeholders in the sector such as regulatory agencies and local governments; private stakeholders including small-scale mining enterprises, construction companies, mining and quarrying associations; as well as training centres, universities, civil society organizations and community groups.
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The new programme will focus on training and capacity building, small grants and partnership development for upgrading value chains in LVMM, organization of public-private dialogues to strengthen these value chains, production of maps and databases on low-value minerals, and support to strengthening of regulations on environment, health and safety.
“Creating shared welfare at local levels, calls for stronger partnerships,” noted Ambassador Gary Quince, Head of EU Delegation to the AU. “At the EU, we are proud to be part of this new programme which can help to boost inclusive and sustainable development, as well as resilient economic growth.”
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The indicative African countries participating in the programme, include: Angola, Benin, Burkina Faso, Cameroon, Ethiopia, Guinea, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mozambique, Niger, Nigeria, Senegal, Sierra Leone, Tanzania, Togo, Uganda, Zambia and Zimbabwe.
Background
Earlier launched in Brussels, Belgium in mid-July 2015, the ACP-EU Development Minerals Programme is now launched in Africa on the occasion of the first regional training workshop on environment, community, health and safety in the low value minerals and materials sector, with the participation of representatives from Ethiopia, Kenya, Uganda, Tanzania and Zambia.
The initiative aims to contribute toward the ACP Framework of Action on the Development of the Mineral Resources Sector, endorsed by the ACP Committee of Ambassadors in 2011.