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India, Africa on same page for bolstering investment, opening up new markets
India and African nations on Thursday pledged to continue promoting investment and trade through opening of new markets and raising the level of economic partnership between the two sides.
“We agree to... continue to work together in promoting investment exchanges and encourage establishment of direct trade relations through opening of new markets and raising the level of trade relations between the two sides in order to contribute to sustainable growth and economic development,” said the Delhi Declaration issued at the third India-Africa Forum Summit.
Both sides agreed to work closely together within the framework of the Tripartite Free Trade Agreement for the expansion of trade and investment linkages and extend the framework to other regional economic communities, it said.
They were on the same page to support the establishment of the Continental Free Trade Area (CFTA) aimed at integrating Africa’s markets in line with the principles laid down in the Abuja Treaty, establishing the African Economic Community and its resolve to support the Continental Free Trade Area Negotiating Forum to conclude the negotiations by 2017.
They would fast-track implementation of the Duty Free Tariff Preference scheme offered by India since this would play “a significant role” in increasing trade between the two regions, the Declaration said, adding that both would strive for creating a conducive environment for trade facilitation in accordance with the WTO Bali Trade Facilitation Agreement.
In the infrastructure sector, there was agreement on intensifying ongoing cooperation in training, capacity building, consultancy and project implementation through concessional credit in infrastructure areas, including maritime connectivity, road and railway construction.
According to the India-Africa Framework for Strategic Cooperation, the two sides would explore possible joint investments to establish a robust fibre optic infrastructure in Africa. India has also “taken note of” the request by the African side to further expand its Duty Free Tariff Preference Scheme for least developed countries for greater coverage.
“Efforts should be made to promote private and public investment from Africa into India,” it added. Both sides agreed to enhance cooperation through training and collective negotiations on global trade issues, including at the WTO, to protect and promote legitimate interests of developing countries.
They are also expected to step up ongoing cooperation in training, capacity building, consultancy and project implementation through concessional credit in infrastructure. Furthermore, it said the two sides agreed to train doctors and healthcare personnel through deployment of telecom and ICT in support of tele-medicine and e-health applications and strengthen public-private sector collaboration in pharmaceuticals.
India-Africa Forum Summit: Closing Remarks by Prime Minister Shri Narendra Modi
29 October 2015, New Delhi
This has been a truly historic day.
This week, we had the opportunity to listen to the whole of Africa.
Our first two Summits were limited to a few countries on the basis of the Banjul formula.
We are honoured today that all 54 African nations are participating.
Your response is a clear affirmation that this is the right format for India and Africa to meet.
I express profound gratitude to each of you for sharing your thoughts.
There is nothing that teaches you more than the wisdom of your friends.
All of us in India have been inspired by your aspirations for your country and Africa; your vision for this world; your feelings for India; and, your expectations from our partnership.
Your friendship and faith is a source of great pride and strength for us.
Listening to you has reinforced my conviction that partnership between India and Africa is natural, because our destinies are so closely inter-linked and our aspirations and challenges are so similar.
We will work with you to realize your vision of a prosperous Africa based on inclusive growth, empowered citizens and sustainable development; an integrated and culturally vibrant Africa; and, a peaceful and secure Africa, which has its rightful global place and is a strong partner for the world.
I have listened carefully on how we can make our partnership more effective in support of your goals.
Your feedback and suggestions will be very helpful in restructuring our Lines of Credit. We will take into account your special circumstances and we will ensure even greater speed and transparency in their utilisation. As always, we will be guided by your priorities.
What we have learnt in the process of establishing institutions in Africa will help us to implement the projects in the shortest possible time.
We are very encouraged by the response to our scholarship programme. We will improve it further and also create a more supportive environment to live, study and train in India.
We will increase focus on using technology to support Africa’s development:
To transform governance, empower citizens, impart scale and speed to development, improve services, increase access to health and education, design products that are affordable for the poor, customize services to the needs of specific groups and build a more sustainable future for our planet.
We will give high priority to increase trade and investment flows between India and Africa. We will facilitate Africa’s access to the Indian market, including through the full and effective implementation of the duty free access extended to 34 countries.
We have excellent defence and security cooperation with many African countries. We have done this bilaterally and through multilateral and regional mechanisms. Closer defence and security cooperation, especially in capability development, will be a key pillar of India-Africa partnership.
We will intensify our cooperation against terrorism and rally the world to build a common cause against it.
Excellencies, we are conscious of the shadow that falls between an idea and action, between intention and implementation.
So, implementation will be as important as initiating projects. We will strengthen our monitoring system. This will include a Joint Monitoring Mechanism with African Union.
Excellencies, our solidarity and unity can be a major force in the cause of a more inclusive, fair and democratic global order. We are at a decisive moment in charting its course.
We should intensify our cooperation and collaboration to seek reforms of the United Nations,; achieve our shared goals in the Doha Development Round at the Nairobi Ministerial; a concerted global partnership in pursuit of the Development Agenda 2030; and, a comprehensive, concrete and balanced outcome on climate change in Paris.
A world mirrored in our vision and aspirations will give us each a better chance to succeed.
Today, we have adopted the Declaration of this Summit and the Framework for Strategic Cooperation.
But, more than numbers and documents, the biggest outcome is our renewed friendships, deepened partnerships and stronger solidarity.
Excellencies, given the scale of our Summit and the ambitious goals of our partnership, we have jointly agreed that the Summit should be held every five years.
However, Africa will remain at the centre of our attention. Our engagement with Africa will remain intense and regular. I hope to see you here on bilateral visits. And, I look forward to visiting all regions of Africa in the years ahead.
Finally, I sincerely thank you, your delegations, and other distinguished visitors from Africa, for being here. I hope you enjoyed your stay. Thank you for bringing good weather to Delhi.
I thank my ministerial colleagues, our officials and the city of Delhi for making this Summit a great success.
Thank you.
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‘90% of income in Africa used to fund imports’
Maritime experts have said ports in African countries are designed mostly for imports rather than export, noting that not less than 90 per cent of the income accruing into the African continent is used to fund import.
According to them, design and location of ports in African countries do not make room for export trade whereas in Western states ports are designed purposely for exports.
While noting that commercial banks are not committed to funding of export trade, they opined that Africa is now at a crossroad where it either exports or perishes.
They noted that the continent is endowed with vast natural resources, coastline, arable land and huge population which is critical for the diversification of trade in the continent.
The maritime experts stated this in a communiqué issued at the end of the just concluded inaugural edition of the International Sea Trade and Investment Convention 2015 with the theme “Exploring New Trade Frontiers.”
Though they observed that Nigerian economy as well as that of the entire African continent is import and mono product based, the experts stated that there are vast trade opportunities in landlocked countries which should not be neglected.
They decried the low volume of export cargo in African countries which leads to high cost of shipping and thus is detrimental to intra-regional trade.
They called for effective government regulatory climate needed to ensure quality control as the cornerstone of the production of indigenous goods and services.
“There are no direct trade routes amongst African countries and this is detrimental to intra-regional trade. Central Bank of Nigeria’s recent withdrawal of access to foreign exchange on 41 import items is a welcome development. Not all international conventions Nigeria is a signatory to are domesticated and implemented,” they said.
The experts stated that standardisation is key to international trade, even as they expressed regret that most exporters are unable manage and preserve the standard of their products as they do not have adequate knowledge of existing international specifications.
According to the communiqué, export tariff are ambiguous and complex therefore not easily understood by exporters. Policy inconsistency and overt dependence on road transportation are major obstacles to export trade in Africa.
“Undocumented export trade is the reason for inaccuracy in export data and adversely affects funding by commercial banks. The lack of upgrade in the quality and scale of infrastructural investments in the hinterland ports contributes to high transportation cost. Lack of maintenance of pipelines contribute to gridlocks in port access roads in Lagos areas,” they said.
The experts, which include: the Executive Secretary, Nigerian Shippers Council (NSC), Mr. Hassan Bello; former Director General, Nigerian Maritime Administration and Safety Agency (NIMASA), Mrs. Mfon Usoro; and the Director General, Nigerian Chamber of Shipping (NCS), Mrs. Ifeanyinwa Anazonwu-Akerele stated that the contribution of truckers to the economy is vital and can bring the economy to a halt if their problems are not properly addressed.
“Advocacy to ensure the implementation of government policy is lacking. The lack of concessioning of port railway system affects adversely export trade. There is a lot of suspicion amongst African countries which constitute hindrance to building enduring trade relationships”, the communiqué added.
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WTO MC10: Developing countries propose reforms on agriculture, cotton, safeguards
Three separate developing country groups have tabled negotiating proposals on agriculture at the WTO, only weeks ahead of the global trade body’s tenth ministerial conference in Nairobi, Kenya. However, trade sources cautioned that the dwindling package of issues on the negotiating table could limit the chances of progress on the broader agenda that developing countries have highlighted for action.
The three proposals, copies of which have been seen by Bridges, all raise negotiating issues that are central to the Doha Round of talks that was first launched in the Qatari capital in 2001. However, the US and increasingly also other developed countries have had less and less appetite for the wide-ranging agenda in recent months, particularly after an earlier effort to reach a Doha Round work programme by July failed to bear fruit.
One group of mainly agricultural-importing developing countries, the G-33, has tabled a proposal calling for an “accessible and effective” special safeguard mechanism that developing countries would be able to use to raise tariffs temporarily in the event of a sudden surge in import volumes or a price depression.
Another group, the C-4 group of West African cotton-producing countries, has tabled a draft decision on cotton.
Finally, the African Group at the WTO has tabled a set of “elements on agriculture” which they argue must be delivered in the Doha talks.
The proposals come only weeks after WTO Director-General Roberto Azevedo recommended that the trade body’s members explore options for a slimmed-down package for the Nairobi ministerial, which he said could focus on agricultural export competition, least developed country (LDC) and development issues, and improved transparency.
Trade sources told Bridges that the chair of the WTO agriculture negotiations, New Zealand Ambassador Vangelis Vitalis, had convened a meeting this coming Friday to discuss the new proposals and update members on his latest consultations with negotiators.
Special safeguard mechanism
The G-33 proposal identifies four new areas of flexibility which the group indicates could help foster agreement on an earlier proposal they circulated in July 2014.
The proposal, which was submitted by group coordinator Indonesia, says that negotiators could explore whether a time-bound limit on the number of products eligible for enhanced protection under the mechanism might help promote consensus.
It also suggests that the WTO could establish a consultation mechanism to exempt from safeguard duties those exports coming from least developed countries and those classified as small, vulnerable economies.
The G-33 also proposes that limits could be set on the number of consecutive times a country could apply safeguard duties, or the length of time for which the mechanism would be applied.
Finally, the group suggests revisiting the existing special agricultural safeguard agreed at the end of the Uruguay Round as a possible model for resolving other outstanding issues, such as whether safeguards would be allowed to breach pre-Doha ceilings on tariffs that had previously been agreed at the WTO.
“It’s a gesture from the group,” one G-33 official familiar with the proposal told Bridges. “We’re willing to discuss some of the concerns raised by the members.”
However, another delegate suggested that the political dynamics of the talks would make it hard for the group to win acceptance of their proposal.
“It’s crystal clear that market access will not be part and parcel of the deal,” the source said.
Cotton: African countries seek reforms
The C-4 group of African countries tabled a wide-ranging draft decision on cotton for Nairobi, which includes proposed action on the product in the area of market access, domestic support, export competition, and development assistance. The C-4 includes Benin, Burkina Faso, Chad, and Mali.
If the decision were to be adopted, developed countries would have to cut their trade-distorting “amber box” payments in half by 1 January 2016, with three-quarters of the amount cut a year later, before eliminating these subsidies completely at the start of 2018.
Production-limiting “blue box” payments would also be reduced according to the proposal, which would cap this type of support at one-third of the limit that would otherwise have been applicable for product-specific amber box payments.
Developing countries would be allowed to make gentler cuts, in five successive tranches of 20 percent to be made between 2017 and 2021.
The proposal would also require developed country members to provide duty-free, quota-free market access to LDC cotton exports from the beginning of 2016 onwards. Developing countries “in a position to do so” would undertake the same commitment, but would not undertake a binding commitment to increase market access.
If adopted, the proposal would require major trading powers such as the US to make immediate changes in its existing legislation – which some trade sources warned would make the proposal hard for the US to accept in its current form.
“It’s a red flag to the Americans,” the source told Bridges, who also cautioned that the limited concessions being sought from large developing countries would also make the proposal unpalatable to Washington.
In recent months, Washington has consistently argued that Beijing in particular would need to make reductions in its own trade-distorting domestic support payments as part of any eventual Doha deal.
African Group: a “fair and equitable outcome”
The African Group proposal argues that a “fair and equitable outcome” is needed across all three pillars of the agriculture negotiations: market access, domestic support, and export competition.
It argues that a monetary limit on developed countries’ overall trade-distorting support (or OTDS) is needed, as set out in the most recent draft Doha negotiating text tabled in 2008. Earlier this year, a Norwegian non-paper suggested that new domestic support disciplines could be adopted without including a ceiling on OTDS.
The 2008 draft should also be the model for cuts to trade-distorting “amber box” payments, the proposal says, as well as for the percentage of such support that would be allowed under the WTO’s “de minimis” provision.
However, the group also argues that stricter rules should be established on payments that are currently allowed as “decoupled income support payments” in the WTO’s green box. Currently, these payments are allowed without any limits, on the basis that they cause no more than minimal trade distortion.
On export competition, the proposal calls for export subsidies to be eliminated and for export credit and food aid to be subject to the disciplines set out in the 2008 draft Doha text. Trade sources told Bridges that the US is anxious to secure greater flexibility for these types of support than is currently provided in the draft.
The proposal also says that new public stockholding programmes should benefit from a “peace clause” agreed at the trade body’s last ministerial conference, which was held in Bali, Indonesia, in 2013. The deal – which allowed developing countries more flexibility to purchase food at administered prices under existing farm subsidy rules – only applied to existing programmes.
Glass half full or half empty?
While Ambassador Vitalis was reported to have invited members to submit comments and suggestions on agricultural export competition that could help him with the drafting process, some trade sources told Bridges that they were disappointed that negotiators were not working towards progress on a more wide-reaching agenda for the Nairobi ministerial.
“Our preference would’ve been for a comprehensive package,” said one.
Another said negotiators were still grappling with the crucial question of what happens after the ministerial in December. The source said that the WTO Director-General may need to help draft language on the controversial question.
“For the US, the single undertaking is an absolute no-go,” said one, who added that Washington was reluctant to continue negotiations under the existing Doha framework. The US has recently indicated, however, that it is open to discussing those Doha issues, as well as new ones, outside of this framework.
Another said that the recent conclusion of the Trans-Pacific Partnership (TPP) between 12 major trading powers – including the US – was likely to change the dynamics in Geneva.
One developing country delegate told Bridges that they were disappointed with the direction the talks had taken, and tended towards pessimism about the likely outcome from Nairobi. “For LDCs, the glass is half full,” he said. “For us, it’s half empty.”
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Africa’s high stake in climate change
“For Africa, climate change has massive consequences, the continent contributes the least to greenhouse gases but tends to be the most vulnerable to its consequences. This climate change is a threat to human survival in Africa,” said Mr. Emmerson D. Mnangagwa, the Vice-President of Zimbabwe, when opening the 5th Climate Change and Development in Africa Conference, currently taking place in Victoria Falls.
Mr. Mnangagwa pointed out that Africa has a large stake at the forthcoming COP21 negotiations in Paris and at adapting to climate change since it will be the region most affected by the impact of this change.
“Africa is grappling with recurring droughts due to climate change. Africa has the greatest interest in a climate change governance framework,” he emphasised and noted that “COP21 represents a unique chance for Africa to assert itself in climate global governance”.
Ms. Fatima Denton, the Economic Commission for Africa Director of Special Initiatives Division, under which the African Climate Policy Centre falls, reiterated the significance of the upcoming negotiations for the continent.
“Stakes for Africa at COP21 are high, Africa will be at the receiving end of climate change impact. We need to understand what is at risk,” she said to the more than 400 delegates at the conference who included ministers from Zimbabwe, Zambia, the Gambia, representatives from the African Union Commission, the African Development Bank and UN agencies and members of the diplomatic corp.
Ms. Denton reminded delegates of the importance of Article 2 of the convention: an article we seem to have forgotten about. “In Paris we demand that the sacred principle of common but shared responsibility be given central place”.
The responsibility of change lies with the whole world, believes Ms. Denton. “Are we doing enough to stop the current haemorrhaging of the earth’s resources? Are we able to replenish, regenerate our soils to ensure that those most dependent on our natural capital do not find themselves held up in a cul-de-sac that bears no signposts?
Africa depends largely on its rain-fed agricultural production. However the continent is facing challenges in responding to challenges such as the “alarming rate of degradation of our water resources, soils, food systems, land, forest and air and the rainfall and temperatures that we rely on to sustain our people,” said Ms. Denton.
“Today is about what Africa can do for itself and with others to be able to act as the main purveyor of climate resilient development services”. Ms. Denton asserted Africa is confident enough to tell the rest of the world that “it no longer has the license to emit on our behalf and that we are prepared to invest in smart development by using our current atmospheric space to green our economies and to build climate resilient infrastructure”.
Institutions such as the African Development Bank “have stepped up support for African countries to build resilience to climate change and to finance green economy since the global finance architecture does not provide the finances Africa needs,” said Ms. Mary Manneko Monyau, AfDB’s representative in Zimbabwe.
Ms. Denton reminded those present that this 5th Climate Change and Development in Africa Conference is about our collective security, what we can do today so that no one is left behind, global solidarity and addressing our collective responsibility.
“The climate risks that we face are real but the opportunities for change and for designing a new climate business model are immense,” concluded Ms. Denton.
The 5th Climate Change and Development in Africa Conference titled “Revising Article 2 of the United Nations Framework Convention on Climate Change” whose main theme is ‘Africa, climate change and sustainable development: what is at stake at Paris and beyond?’ is being held from 28 to 30 October 2015.
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OECD Global Forum on Competition: Keynote Address by Guy Ryder, Director-General of the ILO
Keynote Address delivered by Guy Ryder, Director-General of the International Labour Organisation (ILO), at the 14th OECD Global Forum on Competition in Paris, 29-30 October 2015
In recent years, especially since the crisis, we have had a wave of reforms, mostly of a liberalizing character, yet labour markets are still weak measured not just by employment or unemployment but also by various benchmarks of the quality of jobs. Neither has investment picked up.
I propose to first summarize the current outlook for growth and jobs, as the essential context for competition policy initiatives.
Second, I will look at recent work by international organizations on inequality and growth which has pointed to more intense product market competition as one of several factors that could be causing a decline in the labour share in national income in many countries and widening income inequality.
Third, I will bring in the notion of creative destruction as a way of thinking about the appropriate employment institutions that should accompany policies to sustain competitive product markets. And I will also underline that the ILO Constitution and therefore the standards that guide our advice on labour market institution building states very starkly that labour is not a commodity.
My fourth point is that a broad consensus over employment policy priorities is emerging which can support enhanced competition in product markets. It is pointing in a different direction from a simplistic “get rid of rigidities” approach.
Finally, I will conclude that because labour markets are about people they work differently from product markets. Since competition both creates and kills jobs, getting the policy setting right requires recognition of that reality.
First then, growth and jobs.
The Secretary-General has referred to the increasingly close collaboration between our two organizations in recent years.
That includes our joint work done at the request of the Turkish Presidency of the G20 to look at factors affecting employment and growth and especially the inclusivity of growth. As he has stressed, most of our countries’ Leaders, and electorates, are very preoccupied by the weak prospects for growth and the rise in inequality.
Overall, employment growth remains well below pre-crisis levels with growth decelerating in 2015 and expected to remain sub-par in 2016. The G20 unemployment rate remains high and only slightly down on its post crisis peak. Labour force participation rates have declined in several countries, in part because discouraged workers have left the labour market.
Particular concerns are long term unemployment and youth unemployment, both of which are higher now than before the crisis in most countries.
The quality of jobs created is also an important indicator of labour market performance. Much of the net new employment created between 2009 and 2014 in advanced economies was part-time.
Leaving aside the involuntary nature of many of them, part-time jobs generally offer lower earnings, lower levels of job security and weaker social protection coverage. So this type of job creation has obvious implications for employment quality and provides less support to aggregate demand.
In emerging economies, growth has been associated in recent years with welcome reductions in the number of workers in poverty or near the poverty line. However, 51 per cent of workers were still in vulnerable employment in 2014, a 3.9 percentage point reduction since 2009.
The large share of workers remaining in vulnerable employment shows that the informal economy continues to be stubbornly large and a crucial drag on the creation of better quality jobs.
This brings me to my second point, relating to inequality and growth.
An ever-growing body of research documents the rise in inequality across the globe, in some cases to historic highs. The middle class has been squeezed in many advanced and some emerging economies, with their incomes stagnating or even declining.
The share of national income going to labour has declined in almost all G20 countries, with productivity rising much faster than real wages. Within the labour share, the highest earners have captured an increasingly large portion, while those at the bottom have seen their shares decline significantly.
Many emerging G20 economies, despite having lifted millions of people out of absolute poverty over the past two decades, have seen sharp increases in income inequality. Overall, the reality for emerging markets and developing countries is more mixed than for the developed world. Inequality has been increasing in some – such as Indonesia and China – while falling in others – such as Brazil and Argentina.
Rising inequality has raised longstanding concerns about its corrosive effect on social and political cohesion. More recently, a growing body of research has demonstrated that high inequality may also lead to slower and less sustained economic growth. This occurs through various channels, including lowering consumption, under investment by firms in the face of slack demand, less government revenue and less investment by low-income households in education and skills.
The new body of evidence, from the OECD, IMF, World Bank, ILO and many others shows that reducing inequality can lead both to stronger economic growth and the creation of better jobs and more inclusive societies.
The interrelated factors causing rising inequality and declining labour shares of income have been identified as including:
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labour market developments,
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technological change,
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shifts from labour-intensive to more capital-intensive production,
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globalization, in particular the intensification of international competition and the entry of labour-abundant countries into the global economy,
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financial deepening which may have increased pressures to maximize profits and shareholder value or to pay dividends rather than improve wages and conditions, and
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regulatory reforms to strengthen product market competition.
On this latter point let me quote from a joint paper on Income inequality and labour income share in G20 countries by the ILO, IMF, OECD and World Bank:
On the one hand, a recent OECD study points to the significant positive impact of reforms on employment levels largely by reducing market rents and expanding activity. On the other hand, most of these policies and regulatory reforms have also contributed to widening wage disparities, as more low paid people entered employment in the deregulated sectors and the highly-skilled reaped more benefits from a more dynamic economy.
The labour market developments increasing inequality highlighted by the report were:
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the gap between wages and productivity;
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employment levels;
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changing patterns of employment relationships;
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a weakening of labour market institutions; and
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increasing wage dispersion.
This brings me to the notion of creative destruction.
Whether the economy is at full employment or as in many countries in recent years well below, affects the impact of increased competition in product markets on employment.
Many of the model-driven studies showing the positive effect of increased competition and trade on productivity, wages and employment assume full employment as a baseline. But that is not where most of us are.
Businesses, large and small, are constantly creating and destroying jobs as Schumpeter described more than 70 years ago with his memorable phrase describing the attributes of capitalist economies, “creative destruction”. In up swings, hiring exceeds firing and you get the reverse in down swings. We seem to be in the midst of one of those 'cycles of creative destruction'.
Young women and men entering the world of work are particularly at risk of failing to get a decent start in working life when hirings are less than job losses for a prolonged period.
Around the same time that Schumpeter was writing, the ILO held a historic conference in Philadelphia in 1944 which adopted a Declaration that was taken into our Constitution. It reaffirmed that “labour is not a commodity”.
Re-affirmed, because the 1919 Versailles Treaty, by which the ILO was founded, enunciated the principle that “labour should not be regarded merely as a commodity or article of commerce.”
To 21st century ears, the phrase may sound a little antiquated. But it encapsulates a critical consideration for policy makers which they are unwise to ignore or forget. The factor of production which is being reallocated, in good part because of the forces of creative destruction in product markets, is people – individual women and men or whole communities.
The Nobel prize-winning economist, Robert Solow, in his series of lectures “The Labour Market as a Social Institution”, concluded that
“…labour is not a commodity exactly like others. It does not seem to me at all inconsistent or strange to suppose a society might be happy to see fish or candy bars or computers traded in a competitive market, but would rather not allocate and pay labour in quite the same way. It would then follow that the achievement of wage flexibility through unrestricted competition might not be the way to go.”
As Solow goes on to conclude, we need to focus on how to provide the job security and wage continuity that people want without falling into inefficiency, not least the inefficiency of large scale under employment and out right unemployment.
Labour market institutions therefore need to balance several objectives including protection of workers’ rights, inclusive economic growth and cohesive societies, as well as innovation in products and processes.
Finding that balance is best realized by dialogue between government, employers and trade unions because one size does not fit all especially in the design of labour market institutions. Attempting to identify a set of “best practice” institutions that set the direction of reform for all countries is unlikely then to be a promising guide for the adaptations that all countries need to consider from time to time as economic, social and indeed environmental circumstances change.
My fourth point relates to a convergent agenda of employment policy priorities.
Discussions in the OECD, the ILO and elsewhere seem to me to be converging around an agenda of labour market policies that are capable of making positive contributions to accelerating growth, narrowing inequality and smoothing structural change.
The number one priority is tackling the shortfall in demand in many countries in which a key factor is the sustained downward trend in the labour share of national income, driven particularly by significant losses in labour shares for middle- and lower-earning workers.
This points to:
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Setting minimum wages to provide an adequate wage floor for low-paid workers.
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Counteracting the long-term decline in union density and collective bargaining coverage in many countries, as part of wage policies that ensure the growth of living standards in line with productivity.
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Building up social protection systems that help households to weather economic shocks and smooth consumption, thus acting as automatic stabilizers.
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Implementing public employment programmes and guarantees to increase employment and raise incomes among low-income and vulnerable households, particularly in countries with large shares of informal, self-employed and unpaid work.
A second area of focus is the better and faster matching of workers with job opportunities. And here the work of public employment agencies, skills development and apprenticeships are clearly important ways to improve the working of supply and demand.
Employment protection laws are often a focus of alleged labour market rigidity. Recent research for an ILO Conference on Regulating for Decent Work, based on an index of labour laws covering 63 countries for the period from the early 1990s to the present day, finds that the economic effects of employment protection laws are not negative, and may sometimes be positive. Either way, such effects are relatively small when set against wider economic trends.
The ILO recommends that countries should have laws covering the termination of employment which prevent unfair dismissal, provide a reasonable period of notice or compensation in lieu, a severance allowance, consultation with workers’ organizations and notification of a competent authority. Many countries have laws along these lines although the way these issues are dealt with does vary.
Since increased production market competition may increase both hiring, firing and voluntary severance, support to workers in moving to a new job perhaps in a different region and requiring new skills is critical to assuring that overall productivity and employment is enhanced.
Similarly, the coverage and level of unemployment insurance schemes to maintain income during job search is part of a package of employment mobility policies that need to accompany competitive product markets.
This emerging consensus on employment policy priorities can support the positive impact of enhanced competition both by helping workers to move from less to more productive jobs with a lower risk of falling out of the labour market, and also by lifting consumption by ensuring that wages do not lag behind productivity or fall below a reasonable minimum.
In conclusion, therefore:
Embedded in the ILO’s mandate is the idea that work should be an act of self-realization, imbued with the notion of personal and collective purpose.
Work must certainly meet material needs, but it must also respond to an individual’s quest for personal development and the instinctive desire to contribute to something larger than one’s own or one’s family’s welfare.
Sigmund Freud said “work is the individual’s link to reality” and when that link is broken through unemployment the consequences for the individual are serious, and in the long-term devastating – extending even to health status and longevity. Access to work is a precondition for personal development and social inclusion. And this can be more or less satisfactory, depending on the nature and the conditions of the work undertaken.
The individual will want to find meaning and purpose in work and material compensation for it that allows him or her to become an independent, full and valued actor in society. The workplace itself is also where socialization processes initiated in education are deepened and where many of the individual’s social relations are forged and maintained.
Frustration of these desires and pressures is a serious matter. And policy makers should recognize it.
Does competition kill or create jobs? The answer is clearly yes. It does kill and create jobs.
Employment systems therefore need to address the societal challenges that competitive product markets generate. They need to move with the times. But in doing so considerations of fairness or social justice must not be set aside because that starts us down the slippery slope to treating labour as a commodity. And at a time of weakening economic growth worldwide, there is equally a serious danger of countries getting into the other slippery slope of beggar thy neighbour policies of cutting wages and other conditions of work and undermining essential labour market regulations. We can all get more productive – but we can’t all get more competitive.
So, policies to enhance competition in product markets, domestically and internationally, need to be complemented by sound labour market policies recognizing that the labour and product markets work very differently and therefore need very different approaches to policy design.
Background
The 14th OECD Global Forum on Competition is in Paris on 29-30 October 2015. High-level competition officials from more than 100 delegations worldwide will come together to discuss:
Does competition kill or create jobs? The links and drivers between competition and employment
In many economies, both emerging and developed, it is often the case that opening economic sectors hitherto protected to competition is perceived as threatening existing jobs. In times of an economic downturn, a typical policy response may be retrenchment and the erection of regulatory or political barriers to competition in an effort to preserve jobs. This may be the case in merger reviews where job preserving remedies may be imposed by the enforcer. However, such barriers may in the long term prevent the creation of new jobs. This session thus aims to explore the nature of this relationship.
The impact of disruptive innovations on competition law enforcement
Disruptive innovations raise questions for competition law enforcement, for instance when considering mergers between disruptive innovators and incumbents, or exclusionary conduct by incumbents against innovators. Incumbents not only have an incentive to destroy an innovation by merger or exclusion, but might also inadvertently kill it through acquisition.
Serial offenders: Why do some industries seem prone to endemic collusion?
Economic theory has developed well-established guidelines on the factors that are considered conducive to collusion and could therefore help explain endemic collusion. These factors include market concentration, high entry barriers, a high ratio of fixed costs to variable costs, market transparency and frequent interaction among competitors that facilitate information sharing. Repeated collusion by the same companies could also have other explanations, such as the interplay between firm-specific factors and sector-specific factors.
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New infoDev Annual Report highlights a rise in high-potential entrepreneurs and evolving entrepreneurial ecosystems
As part of the World Bank Group’s Global Practice on Trade and Competitiveness, infoDev supports entrepreneurs in high-growth sectors with the power to have profound impact: clean technologies, agribusiness, and digital innovation. With access to early-stage financing, business training, and regional and global networks through infoDev, entrepreneurs can grow competitive ventures, while creating jobs and services that benefit their communities.
infoDev’s latest annual report shares two years of progress toward this critical mission. It shares the story of Judith Owigar, the founder of AkiraChix, an innovation hub in Nairobi, Kenya, that seeks to increase the number of skilled women in technology. In July 2015, Judith joined U.S. President Barack Obama and Kenyan President Uhuru Kenyatta on stage at the Global Entrepreneurship Summit to tell the world about her entrepreneurial journey. It also shares the story of Charity Wanjiku of Strauss Energy, a company that makes solar power more accessible and affordable for consumers at the base of the pyramid in Africa. Charity successfully pitched her business at the 1776 Challenge Cup, a tournament for world-changing startups held in Washington, D.C.
Between 2014 and 2015, infoDev, a multi-donor global program, supported entrepreneurs in more than 70 countries and designed innovative pilot programs that will inform World Bank Group initiatives on a greater scale. infoDev also published more than 30 knowledge products, including educational toolkits for business incubator managers and data-rich studies of entrepreneurial ecosystems.
infoDev-backed Climate Innovation Centers are supporting entrepreneurs in seven countries around the world. These locally-owned centers are providing more than 270 clean technology enterprises with knowledge, capital, and access to markets, and the centers were recognized by the International Energy Agency as models for clean energy innovation in emerging markets. In particular, the Kenya Climate Innovation Center was named “Most Promising Business Incubator in Africa” in the 2014 University Business Incubators Index.
In 2014, infoDev concluded the three-year Creating Sustainable Businesses in the Knowledge Economy (CSBKE) Program, a program funded by Finland’s Ministry of Foreign Affairs that sought to accelerate the growth of small and medium enterprises in the agribusiness and ICT sectors. It oversaw the launch of four Mobile Application Laboratories (mLabs) and eight Mobile Social Networking Hubs (mHubs) in 10 countries. These thriving communities for mobile software entrepreneurs offer training programs, testing facilities, and competitions such as hackathons. The program aided over 500 entrepreneurs with in-depth incubation services, and 150 entrepreneurs were able to secure $51.5 million in external investments. The program also engaged with more than 90 industry and private sector partners, including Nokia, Google, Microsoft, and Samsung.
In the Caribbean, the Accelerate Caribbean program is helping 10 business enablers improve their services for entrepreneurs. In recognition of the constraints faced by women in the region, infoDev launched an acceleration program for Caribbean women entrepreneurs. It also helped to establish three angel investor groups in the region, opening the possibilities for high-potential entrepreneurs to receive early-stage financing.
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2015 SADC-EU Ministerial Political Dialogue held in Luxembourg
The Southern Africa Development Community (SADC) and the European Union (EU) Regions met under the 2015 SADC-EU Ministerial Political Dialogue Meeting on 27 October 2015 in Luxembourg. The objective of the meeting was to discuss issues of mutual interest and to enhance cooperation between the two Regions.
The meeting was co-chaired by H.E, Mr. J. Asselborn, Minister for Foreign Affairs of Luxembourg and Hon. Kenneth Matambo, Minister of Finance and Development Planning of Botswana, Chairperson of the SADC Council of Ministers.
The meeting discussed pertinent issues affecting the two regions and how to enhance collaboration in programmes that can generate investment, create jobs, boost economic growth and promote peace and security in the two regions. Discussions centered on implementation of the Revised Regional Indicative Strategic Development Plan (RISDP) for the SADC region and on the European Commission Investment Plan for Europe (ECIPE) also referred to as “Junckers Plan” or EU Infrastructure and Investment Plan.
The meeting also discussed how to enhance collaboration to address common challenges such as migration and climate change. They welcomed the adoption of the United Nations Sustainable Development Goals (SDGs) by World Leaders in September 2015 under the 2030 Agenda for Sustainable Development.
The meeting concluded that EU and SADC would continue to work together to enhance collaboration in implementing programmes of mutual interest under the support of the European Development Fund (EDF), recognizing the status of implementation of programmes under the 10th EDF and the programming of the 11th EDF. Under the 11th EDF, the EU had allocated a total of Euro 90 million for the SADC Sub-Regional Indicative Programme to support priority programmes under Regional Economic Integration; Peace, Security and Regional Stability; Regional Natural Resource Management; Capacity Development as well as technical cooperation facility. SADC will also benefit from the 11th EDF Cross Regional Envelope for Eastern Africa, Southern Africa and Indian Ocean (EA-SA-IO) infrastructure envelope allocated Euro 600 million. The two regions recognize the important role of the private sector in implementing infrastructure programmes.
The meeting was also attended by Hon. Mrs Nyeleti Mondlane, Mozambique Deputy Minister for Foreign Affairs and Cooperation, representing the Chairperson of the Ministerial Committee of the SADC Organ on Politics Defence and Security; H.E., Dr Stergomena Lawrence Tax, Executive Secretary of SADC; and Senior Officials from the SADC Double Troika Member States; the European Union Commission and the SADC Secretariat.
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tralac’s Daily News selection: 29 October 2015
The selection: Thursday, 29 October
Today, in Cape Town: tralac's BLNS Trade Governance and Remedies workshop
Featured tweet, @jpstijns: Africa allocates 94.7% of its foreign investment flows in Europe, Europe 0.4% in Africa [CBRE report]
SADC-EU Political Dialogue: outcomes
The meeting discussed pertinent issues affecting the two regions and how to enhance collaboration in programmes that can generate investment, create jobs, boost economic growth and promote peace and security in the two regions. Discussions centred on implementation of the Revised Regional Indicative Strategic Development Plan for the SADC region and on the European Commission Investment Plan for Europe also referred to as “Junckers Plan” or EU Infrastructure and Investment Plan. The meeting also discussed how to enhance collaboration to address common challenges such as migration and climate change. [Download the communiqué]
EU Fact Sheets on support to SADC: SADC liberalises trade in services with support from the EU, Safer SADC agricultural commodities and agro-processed goods, Evolution – or revolution – in SADC payments systems?
EU-Southern Africa trade deal to be signed in Botswana in May 2016 (Bloomberg)
This study first shows the relevance of GVCs and global production networks in general, after which it considers the challenges of fragmentation for ACP countries. It analyses the role of GVCs in modern trade and development and then shows the problems faced by ACP countries wishing to integrate into GVCs and upgrade within them. Accordingly, it clusters the heterogeneous ACP countries into groups with similar characteristics before asking what they can do to integrate into value chains, whether global or regional. The final section summarises the policy options developed in the course of the analysis. [The authors: Peter Draper, Andreas Freytag, Susanne Fricke]
EU's trade in goods with ACP states: excluding South Africa, including South Africa
India, Africa bright spots in global economy: key takeaways from PM Modi’s IAFS speech (FirstPost)
Much of India’s development priorities and Africa’s vision for its future are aligned, Prime Minister Narendra Modi said today at the third India-Africa Forum Summit in New Delhi on Thursday, announcing a slew of measures to support the continent. "We will open our doors more; we will expand tele-education; and we will continue to build institutions in Africa," he said. Ever since the first such summit happened in 2008, India has given $7.4bn in concessional credit to Africa, and also a $1.2bn grant. More than this, India is building infrastructure on the continent. According to the prime minister, nearly 25,000 young Africans were trained and educated in India in the last three years alone. [Modi’s speech: Full text]
Africa-India: Facts and Figures 2015 (UNECA)
FDI: In 2013, 16% of India’s total foreign direct investment stocks were in Africa. Altogether, India has the second largest FDI stocks in Africa after the United States of America. However, in terms of relative importance of Africa in the countries’ total FDI stocks, India is outstanding. In the same year, 16% of India’s total FDI stocks were in Africa, while Brazil and China had 9% and 0.8% of their FDI stocks in the continent, respectively.
Trade: In 2014 Africa accounted for 11% of India’s exports and 9% of its imports. Since 2010, India’s exports to and imports from Africa increased by 93% and 28%, respectively. In the meantime, Africa’s share from India’s total exports has increased from 8.1% to 10.9%.
President Museveni to India-Africa summit: ‘eliminate trade barriers, facilitate trade’
The Third India-Africa Forum Summit: resources from SAIIA
North Africans discuss regionalisation and the CFTA (UNECA)
The Economic Commission for Africa yesterday launched, in Rabat, a North African private sector workshop on the challenges of trade integration within the context of the African Free Trade Agreement. As the economic cost of “non integration” is becoming increasingly unbearable for North Africa, participants focused on the sub-regions’ existing opportunities. Organized as part of the 6th North Africa Development Forum, this workshop made it possible to gather representatives of the North African private sectors.
SADC should put extra emphasis on the implementation of the Technical Regulation Framework in the TBT Annex to the SADC Protocol on Trade, and it will certainly be beneficial if the issue of conformity assessment by way of pre-shipment inspection in the form of CBCA/PVoC programmes is added to discussions about the implementation of the Technical Regulation Framework. As part of such a discussion SADC should also consider whether the dispute resolution mechanisms currently available to exporters are sufficient or should be addressed within the SADC context, where there is currently no functioning SADC Tribunal and where national courts cannot normally provide judicial remedies in these instances. [The author: Abrie du Plessis] [Access the latest tralac newsletter: here]
Preliminary baseline analysis of Mozambique’s conformity with trade facilitation agreements (SPEED)
Mozambique is in a unique position amongst its southern African neighbours as the only SADC country with no overlapping regional trade agreements. Mozambique has done well in meeting its SADC obligations, as one of only 3 countries to have aligned with the SADC Model Act and is only the one applying the SADC Common Tariff Nomenclature at the time of the last SADC Customs Audit. Mozambique can enhance its economic competitiveness by undertaking steps suggested in the AU’s Action Plan for Boosting Intra-African Trade and in seeking greater conformity with the trade facilitation procedures under its sole regional-level trade agreement, the Southern African Development Community. Mozambique must carefully pick and choose how to deploy the efforts of its negotiating teams in order to glean the greatest gain from the myriad trade agreements already in place and in the process of negotiation. [The author: Daniel Plunkett]
KRA in race for new cargo scanners, upgrades to seal revenue loopholes (Business Daily)
Cargo scanners in all the main ports of entry are set for upgrade and additional ones installed as the Kenya Revenue Authority moved to seal tax leaks amid shortfalls in revenue collection. The taxman said the existing scanners would be upgraded to provide sharper image quality and boost their speed and detection capabilities. “You will be required to establish a modernised customs management solution having a centralised supervision system with multi-functionalities to realise centralised status monitoring of scanning operations, auditing onsite operation and data mining of the inspection data generated by the scanners,” John Njiraini, KRA commissioner general, said as he invited firms interested in the project.
Payments on COMESA platform hit Sh185m (Business Daily)
Payments made through a regional cross-border transfer system hit Sh185 million in the first six months of the year, indicating rising public awareness and uptake of a platform introduced to ease trade. The Regional Payment and Settlement System (REPSS) said it handled real-time bank transfers totalling $1.69 million and €63,656.71 in the half year to June. COMESA launched the platform in October 2012 to ease regional trade by offering same-day settlement of funds within the bloc. Kenya plugged into the payments system in 2014. The platform has so far interconnected banks in eight member countries including DR Congo, Malawi, Mauritius, Rwanda, Swaziland, Uganda, and Zambia.
Zimbabwe: Manufacturing capacity utilisation slips to 34,4% (News Day)
Capacity utilisation in the manufacturing sector declined to 34,4% in 2015 attributed to capital constraints and antiquated machinery, a new report by the Confederation of Zimbabwe Industries has shown. Last year, capacity utilisation was 36,5%. Mazambani-Mutaferi said on the export front, Zambia remained the top destination for Zimbabwean goods followed by South Africa, Malawi and Mozambique. She, however, said the reason companies were not exporting was lack of export incentives, high cost of doing business, limited capacity and the costs associated with exporting. Mazambani-Mutaferi listed the problems being faced by companies in exporting as complexities on procedures, delays, corruption at the borders and failing to meet customer requirements.
Botswana: concept note for Vienna Programme of Action for LLDCs workshop (MTI)
REC updates: ECOWAS ministers adopt disaster management model, IGAD countries resolve to tackle human trafficking, EAC health, safety rules harmonised, Angola hosting meeting of SADC Central Bank Governors
Information sharing will boost intra-African trade - expert (GhanaWeb)
A UN trade expert, Mr Frederick Alipui, has urged the African Union Commission to expedite action on the call made by Dr Ekwow Spio-Garbrah, Minister of Trade and Industry for an African trade information sharing portal to boost intra-African trade. He recalled that in the 1980s the then OAU sought to create a “Pan- African Trade Information System (PANAFTIS) in its quest to set up an Africa-wide platform that would link up all trade information networks of member states of the various regional trade blocs. He said the existence of such a platform would propel the AU’s agenda of boosting intra-African trade and thereby achieve the target goal of creating a Continental Free Trade Area by the 2017.
India's trade data: the importance of data dissemination (Mint)
While broad patterns in Indian trade are rather well known and well studied, what we’ve largely lacked so far is a mechanism to track Indian imports at a much more granular level. Now, thanks to the efforts of the customs department, which uploads commodity-wise and port-wise trade data on a daily basis, and activist and open data enthusiast Srinivas Kodali , who has scraped and compiled the data, it is possible to look at Indian exports and imports at a much more granular level. Kodali released the above data last week through the Datameet platform during the Open Data Week celebrations. Data is available for trade between 8 August and 17 October 2015, and provides us some very interesting insights into the way India trades.
Bright Lights, Big Cities: measuring national and sub-national economic growth in Africa from outer space, with an application to Kenya and Rwanda (World Bank)
This paper uses the night lights (satellite imagery from outer space) approach to estimate growth in and levels of subnational 2013 gross domestic product for 47 counties in Kenya and 30 districts in Rwanda.
UN agencies warn of deteriorating food security in Southern Madagascar
Ethiopia experiencing ‘worst drought in 30 years’ due to El Niño conditions – UN report
Zimbabwe's tobacco exports hit $500m mark (The Herald)
Regional meeting on agroecology in Sub-Saharan Africa (FAO)
Decent work in Africa in the post-2015 context: rights and social dialogue for inclusive, sustainable growth (prepared for the ILO’s African Regional Meeting, 30 Nov-3 Dec)
OECD Regulatory Policy Outlook 2015: Policy Brief
Embattled UN climate talks send complex draft text to Paris meet (BioRes)
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At Geneva meeting, policymakers share lessons learnt in making trade work for development
Senior trade policymakers from developing countries hailed UNCTAD’s support on trade policy frameworks in making progress towards Sustainable Development Goals at a meeting held in the Palais des Nations in Geneva on 6-8 October.
The crucial importance of UNCTAD’s assistance in support of developing countries’ efforts to put in place conditions necessary for trade to play its full part in development and create employment was highlighted by participants in a meeting on trade policy and sustainable development hosted by UNCTAD on 6-8 October 2015.
The meeting was held to foster the exchange of experiences and lessons learnt in formulating and implementing development-oriented trade policy. Participants included senior policymakers and trade negotiators, as well as representatives of international organizations, civil society and academia.
International trade is expected to act as a powerful enabling force in the achievement of the new Sustainable Development Goals, which were adopted at the United Nations Summit on Sustainable Development in New York on 27 September.
This is because trade provides means to overcome constraints posed by small domestic markets, allowing access to larger external markets, as well as skills, technology and capital, which in turn enable a better use of productive resources to catalyze structural transformation and create jobs.
But trade can play this role only under the right conditions. The extent to which such conditions exist has proven to be uneven across economies. A lack of economic diversity and the failure to translate growth into more and better jobs continue to challenge countries with limited productive capacity and resources.
This is why the design of trade-related policies should be formulated and implemented in a coherent and integrated manner with other complementary policies, and take into account recent changes in how trade is conducted (such the growing link between trade in goods and services in the digital economy, and the rise of global and regional value chains).
This has come to represent a daunting task for developing country policymakers.
Speaking at the meeting, the Permanent Secretary of the Ministry of Trade and Industry of Rwanda, Emmanuel Hategeka, acknowledged the support his country received from UNCTAD in setting up its trade policy framework, and also conducting a Services Policy Review, published in 2014. This support had helped the country to set up the robust basis of its trade policy and the recommendations in the Services Policy Review, since adopted, were helping to strengthen the country's services sector.
Noting the significant progress made in developing trade capacity, improving the business environment and reducing extreme poverty, Mr. Hategeka underlined the importance of policy interventions in such areas as: (i) sustained supply-related capacity support; (ii) technology transferal and the strengthening of innovation; and (iii) regional investment in transport infrastructure. Putting in place a comprehensive package of support for unregistered and small-scale cross-border trade was important in formalizing informal trade and fighting against poverty.
African Union Ambassador to the United Nations Jean-Marie Ehouzou also emphasized the need for African countries to increase "value addition" in domestic economies by processing raw materials. He encouraged UNCTAD to continue its support through Trade Policy Framework Reviews, Services Policy Reviews and to the planned Continental Free Trade Area in Africa.
The Deputy Permanent Secretary of the Ministry of Trade and Industry of Botswana, Ontlametse B. Ward, said that her country's regional dimension was particularly important as the bulk of its trade takes places with its neighbors in the Southern African Customs Union.
Participants also recognized that what countries consider "best" for their national development objectives could evolve over time and policy adaptation is an important element of "best-fit" trade policy frameworks.
The Director of the International Trade Division of the Ministry of Foreign Affairs of Mauritius, Assad Bhuglah, said that due to lack of raw materials and the impossibility of diversifying its agricultural sector, Mauritius's trade policy had now shifted from manufacturing to services, including knowledge-based services and information and communications technology/business process outsourcing. He said that proactive participation in the multilateral trading system, mega-regional trade agreements, and regional trade agreements was a crucial component of Mauritius's integration into international trade and the global economy.
The Director for Dispute Settlement of the Ministry of Trade, Industry and Energy of the Republic of Korea, Dongwook Chun, said that after securing market-access opportunities abroad by joining a series of free-trade areas, the Republic of Korea had sought to deepen the synchronization of its trade policy with industrial policy by strengthening domestic coordination between institutions in charge of trade, investment, industry and energy.
He also said that the Republic of Korea was considering the possibility of joining the recently-signed Trans-Pacific Partnership Agreement (TPP) between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America, and Viet Nam. As a country which had moved up the value chain, Mr. Chun offered to continue to share the Republic of Korea's successful experience with developing countries.
The Director-General of Foreign Trade of the Ministry of Industry and Trade of the Dominican Republic, Katrina Naut, said that institutional coordination, synergies in formulation, implementation and monitoring were important elements of trade policy frameworks.
Many participants referred to possible implications for their economies of the TPP and other mega-regional trade agreements. Several panelists said that the possible effects of TPP could be limited for outsiders, and that expected global welfare gains would be much higher under the Doha Development Round of the World Trade Organization than under mega-regional trade agreements such as the TTP. Referring to recent deceleration in global trade, Simon Evenett of the University of St. Gallen said that the spread of state export incentives had created a large distortion which needed to be carefully monitored.
A set of policy recommendations emerged from the meeting. These pointed to the importance of deliberate trade policymaking process; strengthening related institutions and regulations; following a robust implementation roadmap, producing an action plan and monitoring outcomes; and putting in place public-private partnerships.
Participants at the meeting also recognized the need to strengthen the linkage between trade and employment by enhancing services infrastructure, developing skills tailored to the needs of the market, and diversifying into services. Such measures strengthen the competitiveness of economies, add resilience against financial and other shocks, and increase employment.
In addition, the meeting facilitated the creation of a network of trade directors on trade policy formulation and implementation. A large number of requests were made for UNCTAD's support on trade policy frameworks and Services Policy Reviews, including for regional groupings (for example, from Botswana, Dominican Republic, Ghana, Jamaica, Mauritius, Namibia and Tunisia).
Under United Nations Development Account projects, UNCTAD has supported developing countries in assessing and formulating coherent national trade policy frameworks and in strengthening the linkage between trade, employment and development. Such support has been provided to Algeria, Angola, Botswana, the Dominican Republic, Jamaica, Namibia, Panama, Papua New Guinea, Rwanda, Tunisia and Zambia.
UNCTAD delivers on the Global Goals
The 2030 Agenda for Sustainable Development is a global plan of action for people, planet and prosperity, which demands an entirely new level of international partnership in pursuit of the future we all want.
With more than fifty years of trade and development expertise and experience, UNCTAD is already implementing a number of the Sustainable Development Goals.
The Report of the Secretary-General of UNCTAD to UNCTAD XIV: From Decisions to Actions, underscores four action lines needed to fulfil the ambitions of the 2030 Sustainable Development Agenda:
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Building productive capacity to transform economies
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More effective States and more efficient markets
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Tackling vulnerabilities, building resilience
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Strengthening multilateralism, finding common solutions
Through these actions, in total, UNCTAD contributes to progress on 52 specific SDG targets, grouped under 10 of the 17 Sustainable Development Goals.
The two areas of critical importance to this transformative agenda where UNCTAD contributes most, are Partnership and Prosperity.
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Africa, India are two bright spots of hope, opportunities in global economy: PM
Prime Minister Narendra Modi on Thursday said India’s development priorities and Africa’s lofty vision for its future are aligned, adding that both sides are two bright spots of hope and opportunities in the global economy.
Prime Minister Modi, who was speaking at the inaugural ceremony of the third India-Africa Forum Summit, said India is honoured to be a development partner for Africa.
“It is a partnership beyond strategic concerns and economic benefits. It is formed from the emotional bonds we share and the solidarity we feel for each other. In less than a decade, our trade has more than doubled to over 70 billion dollars. India is now a major source of business investments in Africa. Today, 34 African countries enjoy duty free access to the Indian market. African energy helps run the engine of the Indian economy; its resources are powering our industries; and, African prosperity offers growing market for Indian products,” said Prime Minister Modi.
“India has committed 7.4 billion dollars in concessional credit and 1.2 billion dollars in grant since the first India-Africa Summit in 2008. It is creating 100 capacity building institutions, and developing infrastructure, public transport, clean energy, irrigation, agriculture and manufacturing capacity across Africa,” he added.
He pointed out that nearly 25,000 young Africans have been trained and educated in India in the last three years and said that they are the 25,000 new links between us.
The Prime Minister said the fabric of this world is richer because of the 54 sovereign flags of Africa.
“Today, their brilliant colours have made Delhi the most special place in the world. To the 41 Heads of State and Government and the other eminent leaders; to the hundreds of senior officials, business leaders and journalists from Africa, I say this: we are deeply, deeply honoured by your presence today,” said Prime Minister Modi.
“To our visitors from the land where history began, humanity grew and new hope rises; From the deserts of the north, where the glory of human civilization shines through the shifting sands of time; From the south, where the conscience of our age has been forged - from Mahatma Gandhi to Albert Luthuli to Nelson Mandela; From the shores of Atlantic that has been at history’s tragic crossroads and now at the frontiers of many successes; From our neighbours on the resurgent east coast; From Africa’s heart, where Nature is generous and culture is rich; And, from the sparkling gems of island states; a very warm embrace of welcome and friendship from India,” he added.
Asserting that it is not just a meeting of India and Africa, Prime Minister Modi said the dreams of one-third of humanity have come together under one roof today.
“Today, the heart beat of 1.25 billion Indians and 1.25 billion Africans are in rhythm,” he added.
Prime Minister Modi further said India and Africa are among the world’s oldest civilisations.
“We are each a vibrant mosaic of languages, religions and cultures. Our histories have intersected since ages. Once united by geography, we are now linked by the Indian Ocean. The currents of the mighty ocean have nurtured the ties of kinship, commerce, and culture through centuries. Generations of Indians and Africans have travelled to each other’s land in search of their destiny or by the force of circumstances. Either way, we have enriched each other and strengthened our ties,” said Prime Minister Modi.
“We have lived in the long shadow of colonialism. And, we have fought for our liberty and our dignity. We have struggled for opportunity, and also for justice, which, the African wisdom describes, is the prime condition of humanity. We have spoken in one voice in the world; and, we have formed a partnership for prosperity among ourselves. We have stood together under blue helmets to keep peace. And, we have fought together against hunger and disease. And, as we look to the future, there is something precious that unites us: it is our youth. Two-thirds of India and two-thirds of Africa is under the age of 35 years. And, if the future belongs to the youth, then this century is ours to shape and build,” he added.
The Prime Minister emphasized that Africa’s modern strides are catching the attention of the world.
“The continent is more settled and stable. African nations are coming together to take responsibility for their development, peace and security. African struggles and sacrifices are upholding democracy, combating extremism and empowering women. Women now constitute around 20 percent of the elected Members of Parliament in Africa,” said Prime Minister Modi.
“To one who has played a role in that, President Sirleaf, I extend our best wishes on your birthday today,” he added.
Prime Minister Modi further said Africa’s economic growth has gathered momentum and has a more diversified base.
“African initiatives are replacing old fault lines with new bridges of regional economic integration. We see many successful examples of economic reforms, infrastructure development and sustainable use of resources. They are turning adrift economies into dynamic ones,” Prime Minister Modi said.
“Four hundred thousand new businesses were registered in Africa in 2013; and, mobile telephone now reaches 95 percent of the population in many places,” he added.
Prime Minister Modi said Africa is now joining the global mainstream of innovation.
“The mobile banking of M-Pesa, the healthcare innovation of MedAfrica, or the agriculture innovation of AgriManagr and Kilimo Salama, are using mobile and digital technology to transform lives in Africa. We see strong measures that are radically improving healthcare, education and agriculture. Primary school enrolment in Africa now exceeds 90 percent. And, across its magnificent landscape, Africa is setting standards in wildlife conservation and eco-tourism. Africa’s sports, art and music delight the entire world,” said Prime Minister Modi.
“Yes, Africa, like the rest of the developing world, has its development challenges. And, like others in the world, it has its own concerns of security and stability, especially from terrorism and extremism. But, I have confidence in African leadership and the African people to rise to those challenges,” he added.
Speech by Prime Minister Shri Narendra Modi at the Inaugural Ceremony of the Third India-Africa Forum Summit
29 October 2015, New Delhi
The fabric of this world is richer because of the 54 sovereign flags of Africa. Today, their brilliant colours have made Delhi the most special place in the world.
To the 41 Heads of State and Government and the other eminent leaders; to the hundreds of senior officials, business leaders and journalists from Africa, I say this: we are deeply, deeply honoured by your presence today.
To our visitors from the land where history began, humanity grew and new hope rises;
From the deserts of the north, where the glory of human civilization shines through the shifting sands of time;
From the south, where the conscience of our age has been forged – from Mahatma Gandhi to Albert Luthuli to Nelson Mandela;
From the shores of Atlantic that has been at history’s tragic crossroads and now at the frontiers of many successes;
From our neighbours on the resurgent east coast;
From Africa’s heart, where Nature is generous and culture is rich;
And, from the sparkling gems of island states;
A very warm embrace of welcome and friendship from India.
Today, it is not just a meeting of India and Africa.
Today, the dreams of one-third of humanity have come together under one roof.
Today, the heart beat of 1.25 billion Indians and 1.25 billion Africans are in rhythm.
We are among the world’s oldest civilisations. We are each a vibrant mosaic of languages, religions and cultures.
Our histories have intersected since ages. Once united by geography, we are now linked by the Indian Ocean. The currents of the mighty ocean have nurtured the ties of kinship, commerce, and culture through centuries.
Generations of Indians and Africans have travelled to each other’s land in search of their destiny or by the force of circumstances. Either way, we have enriched each other and strengthened our ties.
We have lived in the long shadow of colonialism. And, we have fought for our liberty and our dignity. We have struggled for opportunity, and also for justice, which, the African wisdom describes, is the prime condition of humanity.
We have spoken in one voice in the world; and, we have formed a partnership for prosperity among ourselves.
We have stood together under blue helmets to keep peace. And, we have fought together against hunger and disease.
And, as we look to the future, there is something precious that unites us: it is our youth.
Two-thirds of India and two-thirds of Africa is under the age of 35 years. And, if the future belongs to the youth, then this century is ours to shape and build.
Excellencies, Africa is already on that path.
We are all familiar with Africa’s ancient achievements. Now, its modern strides are catching the attention of the world.
The continent is more settled and stable. African nations are coming together to take responsibility for their development, peace and security.
African struggles and sacrifices are upholding democracy, combating extremism and empowering women. Women now constitute around 20% of the elected Members of Parliament in Africa.
To one who has played a role in that, President Sirleaf, I extend our best wishes on your birthday today.
Africa’s economic growth has gathered momentum and has a more diversified base. African initiatives are replacing old fault lines with new bridges of regional economic integration.
We see many successful examples of economic reforms, infrastructure development and sustainable use of resources. They are turning adrift economies into dynamic ones.
Four hundred thousand new businesses were registered in Africa in 2013; and, mobile telephone now reaches 95% of the population in many places.
Africa is now joining the global mainstream of innovation. The mobile banking of M-Pesa, the healthcare innovation of MedAfrica, or the agriculture innovation of AgriManagr and Kilimo Salama, are using mobile and digital technology to transform lives in Africa.
We see strong measures that are radically improving healthcare, education and agriculture. Primary school enrolment in Africa now exceeds 90%.
And, across its magnificent landscape, Africa is setting standards in wildlife conservation and eco-tourism.
Africa’s sports, art and music delight the entire world.
Yes, Africa, like the rest of the developing world, has its development challenges. And, like others in the world, it has its own concerns of security and stability, especially from terrorism and extremism.
But, I have confidence in African leadership and the African people to rise to those challenges.
Excellencies,
For the past six decades, so much of our independent journeys have been together.
Now, so much of India’s development priorities and Africa’s lofty vision for its future are aligned.
Today, Africa and India are two bright spots of hope and opportunities in the global economy.
India is honoured to be a development partner for Africa. It is a partnership beyond strategic concerns and economic benefits. It is formed from the emotional bonds we share and the solidarity we feel for each other.
In less than a decade, our trade has more than doubled to over 70 billion dollars. India is now a major source of business investments in Africa. Today, 34 African countries enjoy duty free access to the Indian market.
African energy helps run the engine of the Indian economy; its resources are powering our industries; and, African prosperity offers growing market for Indian products.
India has committed 7.4 billion dollars in concessional credit and 1.2 billion dollars in grant since the first India-Africa Summit in 2008. It is creating 100 capacity building institutions, and developing infrastructure, public transport, clean energy, irrigation, agriculture and manufacturing capacity across Africa.
In the last three years alone, nearly 25,000 young Africans have been trained and educated in India. They are the 25,000 new links between us.
Excellencies,
There are times when we have not done as well as you have wanted us to. There have been occasions when we have not been as attentive as we should be. There are commitments we have not fulfilled as quickly as we should have.
But, you have always embraced India with warmth, and without judgement. You have rejoiced in our success, and taken pride in our achievements. And, you have stood for us in the world.
This is the strength of our partnership and our friendship.
And, as we travel on the road ahead, we will do so with the wisdom of our experience and the benefit of your guidance.
We will raise the level of our support for your vision of a prosperous,integrated, and united Africa that is a major partner for the world.
We will help connect Africa from Cairo to Cape Town, from Marakesh to Mombassa; help develop your infrastructure, power and irrigation; help add value to your resources in Africa; and, set up industrial and information technology parks.
Excellencies,
As the great Nigerian Nobel Laureate Wole Soyinka insisted, human entity remains the primary asset in overall development.
Our approach is based on the same belief: that the best partnership is one that develops human capital and institutions; that equips and empowers a nation to have the freedom to make its own
choices and shoulder the responsibility for its own progress. It also opens doors to opportunities for the youth.
So, development of human capital in every walk of life will be at the heart of our partnership. We will open our doors more;we will expand tele-education; and we will continue to build institutions in Africa.
The Egyptian Noble Prize winning writer Naguib Mahfouz said, “Science brings people together with the light of its ideas…and prods us towards a better future.”
There can be no better expression of the ability of science to unify people and advance progress.
So, technology will be a strong foundation of our partnership.
It will help develop Africa’s agriculture sector. Africa has 60% of the world’s arable land reserves, and just 10% of the global output. Agriculture in Africa can drive the continent’s march to prosperity, and also support global food security.
India’s expertise in healthcare and affordable medicines can offer new hope in the fight against many diseases; and give a newborn a better chance to survive. We will also collaborate to develop Indian and African treasures of traditional knowledge and medicines.
We will make available our space assets and technology. We will use the possibilities of digital technology to transform development, public services, governance, disaster response, resource management and quality of life.
We will expand and extend the Pan Africa E-Network, conceived by late President APJ Abdul Kalam, which links 48 African countries to India and to each other. This will alsohelp set up your Pan Africa Virtual University.
We will work to reduce digital divide within Africa and between Africa and rest of the world.
We will cooperate for sustainable development of Blue Economy that will become important future drivers of our prosperity.
For me, Blue Economy is part of a larger Blue Revolution to reclaim our blue skies and blue waters, as we move on the path of clean development.
Excellencies,
When the sun sets, tens of millions of homes in India and Africa become dark. We want to light up lives of our people and power their future.
But, we want to do it in a way that the snow on Kilimanjaro does not disappear, the glacier that feeds the River Ganga does not retreat and our islands are not doomed.
No one has done less to contribute to global warming than India and Africa. No one can be more conscious of climate change than Indians and Africans.
This is because we are the inheritors of Nature’s most precious gifts, and of traditions that respect them the most; and, our lives remain most connected to Mother Earth.
We are each making enormous efforts with our modest resources to combat climate change. For India, 175 Gigawatts of additional renewable energy capacity by 2022 and reduction in emission intensity by 33-35% by 2030 are just two aspects of our efforts.
We will also deepen India-Africa partnership on clean energy, sustainable habitats, public transport and climate resilient agriculture.
But, it is also true that the excess of few cannot become the burden of many. So, when the world meets in Paris in December, we look to see a comprehensive and concrete outcome that is based on the well established principles in the UN Convention on Climate Change. We will all do our part for it.
But, we also want to see a genuine global public partnership that makes clean energy affordable; provides finance and technology to developing countries to access it; and the means to adapt to the impact of climate change.
I also invite you to join an alliance of solar-rich countries that I have proposed to launch in Paris on November 30 at the time of COP-21 meeting. Our goal is to make solar energy an integral part of our life and reach it to the most unconnected villages and communities.
India and Africa seek also seek a global trading regime that serves our development goals and improves our trade prospects.
When we meet at Nairobi Ministerial of the WTO in December, we must ensure that the Doha Development Agenda of 2001 is not closed without achieving these fundamental objectives.
We should also achieve a permanent solution on public stockholding for food security and special safeguard mechanism in agriculture for the developing countries.
Excellencies,
This is a milestone year when we are setting the agenda for our future and celebrating the 70th anniversary of the United Nations.
The world is undergoing political, economic, technological and security transition on a scale and speed rarely seen in recent history. Yet our global institutions reflect the circumstances of the century that we left behind, not the one we are in today.
These institutions have served us well, but unless they adjust to the changing world, they risk becoming irrelevant. We cannot say what will replace them in an uncertain future.
But, we might have a more fragmented world that is less capable of dealing with the challenges of our era. That is why India advocates reforms in global institutions.
This is a world of free nations and awakened aspirations. Our institutions cannot be representative of our world, if they do not give voice to Africa, with more than a quarter of UN members, or the world’s largest democracy with one-sixth of humanity.
That is why India and Africa must speak in one voice for reforms of the United Nations, including its Security Council.
Excellencies,
Today, in many parts of the world, the light of a bright future flickers in the storm of violence and instability.
When terror snuffs out life on the streets and beaches, and in malls and schools of Africa, we feel your pain as our own. And, we see the links that unite us against this threat.
We also see that when our oceans are no longer safe for trade, we all suffer together.
And, when nations are caught in conflict within, no one around remains untouched.
And, we know that our cyber networks bring opportunities, but also carry huge risks.
So, when it comes to security, distance no longer insulates us from each other.
That is why we wish to deepen our cooperation in maritime security and hydrography, and countering terrorism and extremism; and, why we must have a UN Comprehensive Convention on International Terrorism.
We will also provide support for Africa Union’s peacekeeping efforts. And, we will train African peacekeepers here and in Africa. We must also have a stronger voice in decisions on UN Peacekeeping Missions.
Excellencies,
From connecting lives to collaborating for our prosperity, from keeping our people safe to advancing our global interests, the agenda of our partnership stretches across the vast territory of our linked aspirations.
To add strength to our partnership, India will offer concessional credit of 10 billion U.S. dollars over the next five years. This will be in addition to our ongoing credit programme.
We will also offer a grant assistance of 600 million U.S. dollars. This will include an India-Africa Development Fund of 100 million U.S. dollars and an India-Africa Health Fund of 10 million U.S. dollars.
It will also include 50,000 scholarships in India over the next five years. And, it will support the expansion of the Pan Africa E-Network and institutions of skilling, training and learning across Africa.
Excellencies,
If this century is going to be one in which all humans have a life of opportunity, equality and dignity; stand in peace with each other; and live in balance with nature, then India and Africa must rise together.
We will work together:
from the memory of our common struggles; and, the tide of our collective hopes;
From the richness of our heritage; and, the commitment to our planet;
From the pledge to our people; and, the faith in our future;
from the generosity of the African saying that a small home can hold hundred friends;
from the spirit of India’s ancient belief: सन्तः स्वयं परहिते निहिताभियोगाः that great souls are always taking the initiatives to do good to others;
from the inspiration of Mandela’s call to live in a way that respects and enhances the freedom of others.
Today, we pledge to walk together, with our steps in rhythm and our voices in harmony.
This is not a new journey, nor a new beginning. But, this is a new promise of a great future for an ancient relationship.
Your presence here today, Your Majesties and Excellencies, is the strongest proof of our resolve and our commitment.
Thank you! Thank you very much!!
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Embattled UN climate talks send complex draft text to Paris meet
Following a week of tense multilateral talks in Bonn, Germany on a universal emissions-cutting regime, which often saw familiar divisions between so-called “developed” and “developing” parties re-visited, negotiators agreed to forward a 51-page text for consideration at an annual climate meet due to start in just under five weeks.
The document includes both a 35-page “agreement” followed by 16 pages of “decisions” designed to give effect to the former. Together, these would in theory cover all manner of details relevant to the functioning and operationalisation of the new climate regime, including its purpose, long-term goal, management of individual party climate efforts, and the general supportive architecture.
A separate document on scaling up climate action before the end of the decade will also be sent for consideration at the next meet.
Parties to the UN Framework Convention on Climate Change (UNFCCC) agreed in 2011 to conclude a global climate deal for the post-2020 period, taking effect upon the expiry of the current Kyoto Protocol, in time for the Twenty-first Conference of the Parties (COP 21) scheduled this year from 30 November-11 December in Paris, France.
The deal should be capable of keeping planetary temperatures below a two degree Celsius rise from pre-industrial levels. To that end, all parties in 2013 agreed to submit “intended nationally determined contributions” (INDCs) outlining at a minimum domestic mitigation efforts, with 128 of these counting the EU as one having since been presented.
Constructing the new regime
At the start of the latest round on Monday 19 October, parties squarely rejected an effort by the co-chairs of the negotiations to shorten various textual proposals made to date into a 20-page “non-paper,” eventually agreeing to make insertions to ensure key topics were not missing and the document regained “party ownership.”
Throughout the rest of the week, parties engaged in recompilation and streamlining exercises to accommodate the new proposals. These talks were held in nine spin-off groups focused on different aspects of climate action that the new architecture will need to address, including mitigation, adaptation and loss and damage, finance, technology development and transfer, among others.
According to Earth Negotiations Bulletin (ENB), some delegates expressed concern that the process resulted in some formerly hard-won compromises being lost, with a few lamenting the lack of focus on the decision section.
Moreover, as parties grappled to build their new climate agreement across the numerous parallel groups, tensions on some long-standing and new topics also flared up, including on climate finance and the interpretation of the original 1992 UNFCCC text.
As parties left Bonn on a chilly autumnal evening, many stakeholders said that negotiators had been waylaid by clarifying textual options rather than moving to concrete drafting and bargaining, leaving delegates facing an uphill battle to shape an effective climate regime when they meet again in Paris.
US Special Envoy for Climate Change Todd Stern, however, informed journalists that a deal remained within reach but that governments still needed to “hack our way through specific language and it gets pretty sensitive and pretty contentious.”
Who pays?
Divisions around climate funding in poor countries are showcased in the text released last Friday. One option would see all parties take action to mobilise, or facilitate the mobilisation of, climate finance in line with their respective and evolving responsibilities and capabilities.
Another option would see just developed countries – as defined by the UNFCCC Annexes – provide new and additional financial resources to help developing countries mitigate and adapt to climate change.
A third textual option would scale up climate finance beyond 2020. And still another, more specific proposal would see developed countries pledge to scale up financial resources from a floor of US$100 billion annually from the end of the decade onwards.
Some options would see parties periodically communicate relevant information on climate finance mobilisation and the policy frameworks created to attract climate-resilient investment, while others would enshrine an equal allocation of resources between mitigation and adaptation or recognise that financing for adaptation should be public and grant-based.
While developed countries in 2009 pledged to scale up climate finance to US$100 billion per year by 2020, no multilaterally-agreed definition of climate finance exists. Developing nations, for their part, have long worried that the pledge will not be fulfilled.
The Organisation for Economic Co-operation and Development (OECD) in partnership with the Climate Policy Initiative released a report earlier this month attempting to benchmark progress towards the financing goal, finding that public and private climate finance from developed to developing countries in 2014 was around US$62 billion, with some 77 percent allocated towards mitigation, 16 percent to adaptation, and 6 percent to cross-cutting issues.
Nozipho Mxakato-Diseko, South Africa’s lead climate delegate, said on behalf of the G77 and China negotiating group that the OECD estimate had no legal status within the UN negotiations.
“Climate change is a matter of life and death and we are dead serious about this challenge,” Mxakato-Diseko added. “We have often had to respond to crises without support. Developed countries have an obligation, as prescribed in the UNFCCC, to provide finance. Whether Paris succeeds or not depends on what we have as part of the core agreement on finance.”
Elina Bardram, head of the 28-nation EU delegation, said that it was important to revisit the climate mobilisation base given shifts in capital concentration and new geo-economic dynamics.
Who takes action?
These divisions on climate finance also reflect a key cross-cutting area of tension around the principle of “common but differentiated responsibilities and respective capabilities” (CBDR) between developed and developing nations on addressing climate change. The current regime only mandates emissions cuts from rich nations, while the 2011 decision prescribed efforts from all, now resulting in several competing narratives of where climate action should come from.
The CBDR principle is enshrined in the original Convention and, while last December’s annual meet saw some evolution on its application, the principle’s interpretation remains a sensitive topic.
As such, many of the insertions made into the text last week focused directly on the CBDR principle and equity issue itself, with it now featuring 13 times compared to the co-chairs’ slimmed-down non-paper.
A proposal on the abatement of international transport emissions has made it back into the agreement’s mitigation section after being left out of the co-chairs’ version, which would see parties pursue limitation or reduction of greenhouse gas emissions from international aviation and marine bunker fuels including by working with the relevant UN bodies known as the International Civil Aviation Organization (ICA) and the International Maritime Organization (IMO) respectively.
The mitigation section, meanwhile, also includes an option specifying that parties should “not resort to any form of unilateral measures against goods and services from developing country parties on any grounds related to climate change,” recalling several principles relating to international trade in the Convention.
International carbon markets?
A number of textual insertions were made last week regarding markets, after several parties expressed concern that references to international emissions trading were largely dropped from the co-chairs’ non-paper.
New additions include an EU proposal on avoiding double counting, complemented by another proposal from the so-called Environmental Integrity Group (EIG) which added that carbon markets should ensure “real permanent additional and verified internationally transferrable mitigation outcomes,” as well as a submission from Switzerland supporting accounting rules for international emissions transfers.
The EIG is made up of Mexico, Liechtenstein, Monaco, Switzerland, and South Korea.
Brazil, meanwhile, proposed moving a reference to a “mechanism to support sustainable development” from the decision section to the agreement section.
A plethora of options for this mechanism now exist within the mitigation section of the agreement, ranging from a mechanism which would aim to enhance mitigation ambition and the mobilisation of climate finance and incentivise cost-effective mitigation action, to joint mitigation and adaptation approaches between parties, standards for environmental integrity, and the transfer of emissions units.
The agreement’s preamble, meanwhile, would according to a Swiss proposal potentially acknowledge that “putting a price on carbon is an important approach for cost-effectiveness of the cuts in global greenhouse gas emissions.” According to the World Bank, approximately 40 nations and 23 cities are using a carbon price, either in the form of emissions trading schemes or carbon taxes.
Some experts have suggested that linking various domestic carbon markets would help deliver mitigation efforts where these are most cost-effective and have expressed concern at the slow pace of UN efforts to develop common rules for international transfers.
Nevertheless, other BioRes sources said last week that they do not expect the Paris agreement to include much on carbon markets beyond some minimal accounting rules, while suggesting that this would not be a major problem for the development and operation of international carbon markets. These experts expect Paris to provide a “hook” that would provide for the use of international emissions transfers, which could then allow interested parties to develop the rules for doing so elsewhere, or at a later date in the climate talks.
Next steps
In preparation for Paris, the UNFCCC Secretariat will soon release a synthesis report evaluating the aggregate contribution of the INDCs towards the two degree Celsius mitigation goal, although the document will not go into detailed analysis on each of the contributions.
Reviewing the INDCs and scaling these up over time are both also expected to be tricky areas to navigate. One report by the environmental group Climate Action Tracker earlier this month found that the contributions so far would bring global warming down to 2.7 degrees Celsius, implying a significant “emissions gap.”
Last Friday’s text outlines several options for reviewing the INDCs, including around transparency of domestic climate action, global stocktaking, and facilitation of implementation and compliance. Parties are considering, among other things, setting up a review of the INDCs every five years and establishing a compliance mechanism.
Each of these areas and proposals, however, will require consensus building on the best approach and the precise mechanics. Questions remain on how the INDC process will function in practice in the coming years, as well as whether the new system will be capable of delivering the required emissions cuts and adaptation efforts. Many climate watchers contend that the answer depends in part on the operative decisions made on topics such as the shape of the review mechanism.
While negotiators will not have a chance to meet again before Paris, a pre-COP meeting between climate ministers will be held in the French capital city from 8-10 November. Key issues might also be addressed by leaders of the world’s major advanced and emerging economies at a G20 gathering in Antalya, Turkey from 15-16 November. At the close of the Bonn talks the French presidency also urged countries to facilitate consultations between themselves ahead of the pivotal Paris meet.
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KRA in race for new cargo scanners, upgrades to seal revenue loopholes
Cargo scanners in all the main ports of entry are set for upgrade and additional ones installed as the Kenya Revenue Authority (KRA) moved to seal tax leaks amid shortfalls in revenue collection.
The taxman said the existing scanners would be upgraded to provide sharper image quality and boost their speed and detection capabilities.
“You will be required to establish a modernised customs management solution having a centralised supervision system with multi-functionalities to realise centralised status monitoring of scanning operations, auditing onsite operation and data mining of the inspection data generated by the scanners,” John Njiraini, KRA commissioner general, said as he invited firms interested in the project.
The targeted new scanner systems will have an interchange with KRA’s supervision centre and the government’s current customs business system.
“Bidders must deliver the entire project within a period of 18 months from the date of award of contract,” Mr Njiraini further said.
KRA introduced scanners as part of a wider strategy to curb tax cheats who often made false declaration of goods handed for processing.
The agency has scanners at key ports of entry including Kilindini port, Jomo Kenyatta International Airport (JKIA), Moi International Airport, Mombasa, Eldoret International Airport, the Inland Container Depot in Embakasi and a few Container Freight Stations (CFSs).
The taxman is under pressure to improve on its collection. Tax revenues have fallen behind targets in the first three months of the fiscal year that began in July, plunging the Treasury into a cash crisis that has left many government workers without pay and disrupted budget plans.
The KRA collected Sh152.7 billion in the first two months of the financial year, an amount that Treasury secretary Henry Rotich has described as unsatisfactory. Overall, Kenya collected Sh182 billion in total revenues, including domestic borrowing and foreign loans in the two months.
That was way below the Sh210 billion that was collected in the first two months of the previous financial year.
Besides the scanners, KRA said in its recently launched sixth strategic plan for 2015-2018 that it would also push on with the implementation of the electronic cargo tracking system (ECTs) to minimise revenue leaks due to diversion of cargo.
Kenya introduced ECTs in July 2009 as it intensified its purge against dumping of transit goods in the local market.
The country is a key gateway to the region in that the Mombasa port handles imports such as fuel and consumer goods for Uganda, Burundi, Rwanda, South Sudan, Democratic Republic of Congo and Somalia and exports of tea and coffee from the region.
The system was particularly set to monitor movement of goods between Mombasa port and Busia and Malaba border points through which goods enter the landlocked Great Lakes Region.
KRA later brought on board export goods and all others under customs control as it broadened the scope to fight tax evasion.
All importers, exporters, clearing agents and transporters conveying goods under customs control are required to install the ECTs equipment, phasing out tamper-prone seals.
Upon the installation of the ECTS equipment, the then cumbersome practices of customs physical escort were phased out and the annual transit goods licence fees waived.
The implementation of the ECTS was, however, hit by litigation by some transporters who mainly cited increased cost of doing business.
“Implementation of the ECTs was hampered by court cases which led to KRA implementing the programme on a voluntary basis to the transporters,” KRA said in its 2015-2018 corporate plan.
The taxman got a boost early this year when Uganda announced it would extend its ECTs into Kenya as part of strategy to curb theft and diversion of goods destined for its market through the Mombasa port.
The main transit routes to Uganda from the Mombasa port have been mapped for coverage by the Internet-based tracking system.
The tracking system is already active in Uganda where it was launched in May last year. It comprises satellites, a central monitoring centre and special electronic seals fitted on cargo containers and trucks, which give the precise location of goods in real time.
The system triggers an alarm whenever there is diversion from the designated route, an unusually long stopover or when someone attempts to open a container.
Besides curbing theft of cargo, the system also helps to seal loopholes that cause the country losses in revenue through suspected under-declaration of the value of exports.
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Regulatory policy: the untapped lever of economic growth
Governments should do more to improve the design and delivery of new laws, as even small efforts to fix regulatory shortcomings can have a tangible positive impact on economic activity and well-being, explains the OECD’s Rolf Alter
Regulation is a much-maligned animal. When we hear about it in the papers it is either not doing enough or doing too much.
In the ongoing debate on whether we need more regulation or less regulation, it turns out the answer is: yes. Yes, we need more quality regulations and yes, we need fewer poorly conceived, irrelevant or marginally effective laws that presently bloat the stock of regulations in every country. But are countries ready to get their regulatory houses in order?
The rules of regulations
The OECD Regulatory Policy Outlook, just published, is the first effort to track how OECD countries develop, implement and review their laws and regulations. It finds that governments have come a long way in ensuring that law-making is accountable and evidence-based. Yet it also reveals that much more could be done to improve the way governments actually regulate.
In fact, it’s surprising just how much of regulation is done “in the dark”, that is, without sufficient checks and balances to ensure that regulations are both fit-for-purpose and accomplishing what they set out to do. Surprisingly, a full third of OECD countries have no policy at all on regulatory compliance and enforcement, and two-thirds have no system for evaluating laws once they’re implemented. This results in unnecessary costs for businesses and society and a missed opportunity to stimulate economic growth.
Luckily, countries recognise that there is a problem and have taken steps to remedy it. The report finds that 33 of the 34 OECD countries have adopted an explicit regulatory policy and require regulatory impact assessments and public consultation for all new regulations, while 29 have a designated minister to promote regulatory reform. But for many, moving beyond statutory requirements remains challenging, as evidenced by the fact that only one country in four has a requirement to systematically evaluate their primary laws once they are in use.
Implementation insights
What can be done? The impact of regulation could be improved by addressing shortcomings in implementation and enforcement and by evaluating systematically whether the objectives of regulation have been achieved. When it comes to improving regulatory quality, the executive branch shouldn’t work in isolation. It must work together with parliaments, sub-national levels of government and regulatory agencies.
At a time when economic recovery is particularly fragile, underperforming regulations pose an unnecessary and detrimental burden. They can be a disincentive for entrepreneurs and investors. Governments must address shortcomings and ensure that laws work as well in practice as they do on paper. Laws need to be well designed, well implemented, properly evaluated and consistently applied.
There are very real incentives for doing this. The Outlook shows that a crackdown on red tape in the United Kingdom saved businesses GBP 10 billion over four years, with the UK set for another round of regulatory simplification. Simplifying regulation in Belgium delivered savings of EUR 1.25 billion for citizens and businesses. And in Australia, reforms to reduce regulatory costs increased GDP by 1.3%. Across the EU, the REFIT programme for reducing regulatory burdens has achieved 41 billion euros of savings since 2006. Clearly, this should qualify regulatory policy for a place along with other policy levers such as tax and spending.
Mapping the next steps
But getting one’s national regulatory house in order isn’t just about national accounts. It’s also a step towards tackling the broader challenge of integrating the globalised economy. As demonstrated by the recent signature of the Trans-Pacific Partnership and the discussions under way in the TTIP and the Pacific Alliance, the world is eager to address the trade and investment frictions inflicted by poorly conceived regulation and unnecessary non-tariff barriers that exist behind the borders more than at the borders. The upcoming COP21 climate change talks constitute another global rendezvous in which the ability to achieve meaningful regulatory cooperation will be decisive.
What must countries do to make regulatory policy an effective lever for growth? Some of the conclusions of the Outlook include using the tools of regulatory policy strategically and effectively. For example, regulations are developed, enforced and evaluated by specific institutions – they should have the means and adequate mandate to carry out their role.
Stakeholders also need to be engaged early in the policy cycle. Governments should seek to use their inputs and give them feedback. Similarly, policymakers should assess the expected impact of regulation before it is adopted and consider alternative options if the costs outweigh the benefits. At the same time, they should not focus solely on the design of new laws and regulations but also on enforcement.
And after laws and regulations have been implemented, they should evaluate whether they have achieved their objectives and what revisions are needed to make them even more relevant. Ultimately, policymakers need to regulate with their eyes wide open.
Rolf Alter is Director for Public Governance and Territorial Development of the Organisation for Economic Co-operation and Development (OECD) in Paris.
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EAC health, safety rules harmonised
Consumers in East Africa will soon have better access to a greater choice of safe foods following an effort by partner states to eliminate barriers to food and animal exports in the region.
The five EAC countries are next year expected to start implementing harmonised rules and procedures on standardisation under the EAC Sanitary and Phytosanitary (SPS) Protocol.
The protocol will help countries reduce costs of implementing the SPS measures by operating regional testing and laboratory facilities. This will reduce the number of inspections for export products and the amount of time cargo spends in bond going through various checks.
SPS measures refer to regulations concerning the safe handling and production of food, plant and animal products. They apply only to measures directly affecting the health of humans, animals and plants.
EAC partner states are currently implementing their Food Security Action Plan (2011-2015) as they prepare to implement the SPS Protocol. At the recent EAC ministers meeting in Arusha, partner states were directed to expedite the ratification process of the protocol before the end of December to enable its implementation.
Rwanda and Uganda have already ratified the SPS measure; Tanzania has presented the Protocol to a parliamentary commission while Kenya, Rwanda and Burundi are still ratifying it.
The EAC SPS Protocol has been developed in line with Article 108 of the EAC Treaty, which requires partner states to harmonise sanitary and phytosanitary measures for pest and disease control.
The measures must be based on scientific evidence as per the World Trade Organisation’s guiding principles.
According to Peter Kiguta, EAC Director-General of Customs and Trade, harmonised SPS measures ensure exporters benefit from the elimination of unjustified barriers for their products.
Efforts to produce safe products for export to other markets should not be thwarted by regulations imposed for purely protectionist purposes under the guise of health or other unjustified policy measures.
“An SPS restriction has been used as an effective barrier to trade and can be misused by some countries to shield domestic producers from competition,” said Mr Kiguta.
He said that under the protocol, if a country such as Tanzania, for example, requires maize imports to only come from farms that practise a certain type of crop rotation, then this measure is not permitted under the SPS Protocol since there is no scientific evidence that crop rotation affects the safety of maize consumers; or if Kenya requires that imported eggs from another EAC country be stored below a certain temperature, this regulation is not permitted under the protocol because it lacks scientific evidence that storage practices affect the safety of eggs.
Under the protocol, before exporting a plant or plant product, an exporter must first obtain a plant import permit from the National Plant Protection Organisation (NPPO) of the country of import and provide the same permit to the NPPO of the exporting country.
“Inspection of the plants or products shall be carried out as prescribed in the import permit. The exporter must then obtain a phytosanitary certificate not more than 14 days prior to shipment,” states the SPS Protocol.
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EU-Southern Africa trade deal to be signed in Botswana in May
The European Union (EU) and five Southern African Development Community states will meet in Botswana in May to sign a trade deal that has taken at least 10 years to complete.
A date for formalizing the Economic Partnership Agreement was agreed during talks in Brussels, Botswana’s Trade and Industry Ministry said in an e-mailed statement Wednesday. Legal processes around the deal were completed on Oct. 23, it said.
Botswana chairs the the SADC Economic Partnership Agreement group, which also includes Lesotho, Mozambique, Namibia, South Africa and Swaziland. Negotiations between EU and SADC states on the EPA started in 2004. While an interim agreement was signed by some regional states in June 2009, a full accord was only reached in July last year.
Background
The EU concluded negotiations on an Economic Partnership Agreement (EPA) on 15 July 2014 with the SADC EPA Group comprising Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. Angola has an option to join the agreement in future.
The other six members of the Southern African Development Community region – the Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe – are negotiating Economic Partnership Agreements with the EU as part of other regional groups, namely Central Africa or Eastern and Southern Africa.
EU and the Economic Partnership Agreement (EPA) with the SADC EPA Group
Development-oriented: the EPA gives asymmetric access to the partners in the SADC EPA region. They can shield sensitive products from full liberalisation and safeguards can be deployed when imports are growing too quickly. A detailed development chapter identifies trade-related areas that can benefit from funding
Improved opportunities for trade in goods: the EPA guarantees access to the EU market without any duties or quotas for Botswana, Lesotho, Mozambique, Namibia, and Swaziland. South Africa will benefit from new market access additional to the Trade, Development and Cooperation Agreement, that currently governs the trade relations with the EU. The new access includes better trading terms mainly in agriculture and fisheries, including for wine, sugar, fisheries products, flowers and canned fruits. The EU will obtain meaningful new market access into Southern African Customs Union (products include wheat, barley, cheese, meat products and butter), and will have the security of a bilateral agreement with Mozambique, one of the LDCs in the region.
Geographical indications: the EPA includes a bilateral protocol between the EU and South Africa on the protection of geographical indications and on trade in wines and spirits. The EU will protect names such as Rooibos, the famous infusion from South Africa, and numerous wine names like Stellenbosch and Paarl. In return, South Africa will protect more than 250 EU names spread over the categories food, wines and spirits.
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Africa-India: Facts and Figures 2015
Africa and India have had a rich distinguished history, first ushered by Indian traders led by the seasonal monsoon winds before they upscaled their presence in the 17th century due to the abundance of spices on the East African coast. The colonial period brought with it a new demand for Indian Labour.
Today, the relationship is vibrant and multilayered. It is one of equal partners focused on prosperity and a quest for mutually beneficial economic development. The result is that annual trade between India and Africa stands at US$ 75 billion making India the third largest trading partner of Africa.
The data in this publication bears testimony to the depth and breadth of the sectors that Africa and India place the greatest levels of engagement. Both entities recognize that the development of micro, small and medium-scale enterprises is a necessary first step towards industrialization. The importance of a robust financial sector for economic development has been acknowledged in the cooperation policy, leading to the development and growth of regulatory frameworks that have spawned new ways of doing business. In addition, regional cooperation and economic integration have generated financial support to mutually agreed integration programmes and projects. Ultimately, the data, which cuts across a remarkable breadth of sectors tells the story of two parties working towards achieving common prosperity and progress.
In the area of science and technology, Africa and India share the common objective of enhancing collaborative research, strengthening science and technology institutions and cashing in on the growth of a south-south dynamic information economy. In this new era of Sustainable Development Goals, Africa and India share a common understanding on many fronts, such as the need to reinforce their cooperation in human resource development, upgrade healthcare systems and improve basic sanitation to stem the spread of diseases resulting from poor hygiene and environmental sanitation.
It is in this backdrop that the Confederation of Indian Industry (CII) in collaboration with the United Nations Economic Commission for Africa (ECA) have come together to produce this publication titled “Africa-India: Facts & Figures 2015”, with a hope that the information presented will provide a much-needed snapshot of the potential for even greater collaboration and investment. By the year 2063, new and vibrant trade winds would have taken Africa and India to new heights of exchange and prosperity whose seeds are only now being sown.
» View the Interactive visualization of Africa-India Facts & Figures 2015
Statistical Highlights
Foreign Direct Investment (FDI)
In 2013, 16% of India’s total foreign direct investment stocks were in Africa. Altogether, India has the second largest FDI stocks in Africa after the United States of America. However, in terms of relative importance of Africa in the countries’ total FDI stocks, India is outstanding.
In the same year, 16% of India’s total FDI stocks were in Africa, while Brazil and China had 9% and 0.8% of their FDI stocks in the continent, respectively. In 2013, 26% of the inward FDI stocks in India came from Africa. Compared to Brazil, China, the Russian Federation and the United States of America, India has the largest inward FDI stocks from Africa, with a total of 65 billion USD in 2013. The importance of African investment is outstanding in India: Africa accounts for 26% of India’s total inward FDI stocks.
Trade
In 2014 Africa accounted for 11% of India’s exports and 9% of its imports. Since 2010, India’s exports to and imports from Africa increased by 93% and 28%, respectively. In the meantime, Africa’s share from India’s total exports has increased from 8.1% to 10.9%. Overtaking the United States of American with 40 billion of US Dollars of imports, India came as third African trade partner, in 2014 just after the European Union and China.
South Africa (17% of total), Kenya (13%), Tanzania (11%), Egypt (9%) and Nigeria (8%) were the top African importers from India in 2014. Meanwhile, the largest exporters from the continent to India were Nigeria (39% of total), South Africa (15%), Angola (14%), Egypt (5%) and Botswana (3%).
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tralac’s Daily News selection: 28 October 2015
The selection: Wednesday, 28 October
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Aid untying: 2015 progress report (OECD)
Better tracking of ODA allocation: assessing multi-country data (OECD)
Potential of India-Africa bilateral trade manifold: EXIM Bank (Business Standard)
Bilateral trade between India and Africa has risen massively in the past decade, from $8.2bn in 2004 to $75bn in 2014. However, India’s imports from Africa grew at an average annual rate of 35% in this period, while exports only rose by an average annual rate of 23%. This has resulted in a rising trade deficit with Africa. Trade surpluses stood at $1.4bn in 2004, and turned deficit at $5.7bn in 2014, according to a working paper by Export Import Bank of India. India currently maintains the largest trade deficit with Nigeria, Angola, Botswana, Gabon, Equatorial Guinea, Morocco, Cameroon, Guinea, South Africa and Côte d'Ivoire. According to the paper, a strategy to address this rising deficit involves the identification of select commodities with high export potential to Africa.
KPMG-CII: India and Africa - collaboration for growth
On the side lines of this event CII and KPMG have released a report which brings out the mutual strengths of both the regions. The report identifies collaboration in the key sectors namely infrastructure, energy and natural resources, agriculture, healthcare. [Download]
Sanusha Naidu: 'Trendsetting the Third India-Africa Summit in Africa’s development trajectory' (SALO)
Doing Business 2016 (World Bank)
Sub-Saharan Africa economies continue to implement reforms to improve the business climate for domestic entrepreneurs, with members of the Organization for the Harmonization of Business Law in Africa (OHADA) particularly active during the past year, says the World Bank Group’s annual ease of doing business measurement. Doing Business 2016: Measuring Regulatory Quality and Efficiency, records a total of 69 reforms in 35 economies in Sub-Saharan Africa. Of these, 14 of OHADA’s 17 member countries implemented 29 reforms. The reforms implemented in Sub-Saharan Africa accounted for about 30% of the 231 reforms implemented worldwide during the past year. The region also boasted half of the world’s top 10 improvers, i.e. countries that implemented at least three reforms and moved up on the global rankings scale, with Uganda, Kenya, Mauritania, Benin and Senegal. The region stood out in implementing reforms under the Getting Credit indicator. Of the 32 reforms made globally, 14 were carried out in Sub-Saharan Africa, with Kenya and Uganda making significant progress. [Downloads include: Regional Profile 2016 for the EAC, COMESA, SADC, ECOWAS]
Nigeria ranks 169 out of 189 in World Bank’s Doing Business Report (ThisDay)
Zimbabwe improves World Bank Doing Business rankings (Zimbabwe Independent)
SA slips in key ranking despite progress (Business Day)
UAE tops Mena region in ease of doing business ranking (Gulf News)
Rwanda: New online portal to ease investment registration, issuance of EIA permits (New Times)
Obtaining investment registration and environment impact assessment certificates will be more efficient and cheaper following the launch of a new online platform. The electronic portal (e-portal) will enable investors to submit applications for the issuance of certificates, and processing of tax exemption requests online. The e-portal is multi-lingual and allows applicants to track the approval process of their application. On other hand, the RDB team is able to verify all submissions online, which enables faster issuance of certificates.
Zimbabwean companies want salary, utility costs cut by law (NewsDay)
The Confederation of Zimbabwe Industries, which represents the country’s biggest industrial companies, wants the government to enact laws to cut salaries and utility costs after the plunging currencies of neighbors South Africa and Zambia made them uncompetitive. “We are trying to have prices of salaries and utilities moved downwards through a legal instrument,” said Busisa Moyo, the president of the CZI, by phone on Tuesday. “Prices of goods and services can be forced downwards by 25% to 30%.” [ ZimTrade: October newsletter]
Sub-Saharan Africa's economic outlook: Dealing with the gathering clouds (IMF)
This October 2015 report discusses the fiscal and monetary policy adjustments necessary for these countries to adapt to the new environment. Chapter 2 looks at competitiveness in the region, analyzing the substantial trade integration that accompanied the recent period of high growth, and policy actions to nurture new sources of growth. Chapter 3 looks at the implications for the region of persistently high income and gender inequality and ways to reduce them.
From Chapter 2: Meanwhile, the drivers of growth since the mid-1990s—improved policies, increased aid, debt relief, abundant global liquidity, and high global commodity prices—have started to dissipate. Moving forward, to sustain rapid growth the region will need to diversify away from commodities, increase export sophistication, and integrate into global value chains. This chapter assesses how competitiveness indicators in sub-Saharan Africa have evolved, and on this basis asks if the region is well placed to diversify its export base and sustain growth. It also discusses policy options to improve competitiveness.
18 million, not 300 million: that’s the size of Africa’s 'real' middle class - and it could disappear (M&G Africa)
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Mega beer merger bets on the rise of African drinkers (AP)
Tanzania: Economy on track to achieve nation’s middle income status (IPPMedia)
South Africa: Economic Sectors, Employment and Infrastructure Development cluster media briefing (GCIS)
African state oil companies must 'shape up and compete' (News24)
EU: Nigeria’s economic policies violating ECOWAS laws (ThisDay)
Arrion assured Nigeria that the EU would not invade the West African market with products that could compete with domestic products of what Nigeria and other countries in the region would be producing, pointing out that the EU has removed all its export subsidies to the West African market. Arrion also stated that a €6.5bn for every four years till 2035 has been agreed upon by the EU to provide financial trade related development assistance for Nigeria’s growth and development. He explained that the move was to demonstrate the Union’s strong belief and confidence in the Nigerian market.
Kenya loses Sh15bn to cyber crime (Daily Nation)
Kenyan firms lost Sh15 billion through cyber crime last year, with the public sector being the most affected, a new report says. The amount lost has tripled since the previous year, raising alarm on the country’s readiness to fight the menace. The 2015 Cyber Security Report released on Wednesday noted that the public sector lost more than Sh5 billion from the attacks, followed by the financial services sector at Sh4 billion.
Yaoundé-Brazzaville Corridor: appraisal report (AfDB)
With a trade volume that represents 0.5 to 1% of the aggregate trade volume of Member Countries, the Central African Economic and Monetary Community (CEMAC) remains the least integrated of the sub-regions in Sub-Saharan Africa, lagging far behind the West African Economic and Monetary Union (WAEMU) which has an intra-community trade rate of 15%. It is also the least connected sub-region due to the extreme fragmentation of the existing land transport networks. Hence, although they share a common border that is 520 km long, Cameroon and Congo are not connected by any permanent all-weather highway. The main highway linking Yaoundé to Brazzaville (1,624 km) comprises 657 km of road segments in good condition, 307 km under rehabilitation, 427 km being paved and 233 km of earth roads. The poor state of this road is a major obstacle to trade between the two countries and even within the Central African sub-region.
African Economic Research Consortium: capacity building project appraisal report (AfDB)
“Research Capacity and Knowledge Enhancement for Africa’s Transformation” is a Bank Group project aimed at enhancing knowledge and research capacity in ADF-eligible countries and Regional Institutions, with a view to fostering structural transformation. The project will be financed through an ADF grant of UA 5 million over three years. The project is also expected to enhance communication and dissemination of knowledge, and to strengthen the capacity of academic institutions in terms of staff skills and equipment.
Exporter Dynamics Database: World Bank releases updated version
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South Sudan: AU releases report of the AU Commission of Inquiry
Tanzania: preliminary statement of EAC Election Observation Mission
SADC reviews the targets of the SADC Protocol on Gender and Development
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Today: the 3rd BRICS Science, Technology and Innovation Ministerial
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Doing Business Report finds more than 60% of world’s economies improved their business rules in past year
Developing economies quickened the pace of their business reforms during the last 12 months to make it easier for local businesses to start and operate, says the World Bank Group’s annual ease of doing business measurement.
Doing Business 2016: Measuring Regulatory Quality and Efficiency finds that 85 developing economies implemented 169 business reforms during the past year, compared with 154 reforms the previous year. High-income economies carried out an additional 62 reforms, bringing the total for the past year to 231 reforms in 122 economies around the world.
The majority of the new reforms during the past year were designed to improve the efficiency of regulations, by reducing their cost and complexity, with the largest number of improvements made in the area of Starting a Business, which measures how long it takes to obtain a permit for starting a business and its associated processing costs. A total of 45 economies, 33 of which were developing economies, undertook reforms to make it easier for entrepreneurs to start a business. India, for example, made significant improvements by eliminating the minimum capital requirement and a business operations certificate, saving entrepreneurs an unnecessary procedure and five days’ wait time. Kenya also made business incorporation easier by simplifying pre-registration procedures, reducing the time to incorporate by four days.
Efforts to strengthen legal institutions and frameworks were less common, with 66 reforms implemented in 53 economies during the past year. The largest number of such reforms were carried out in the area of Getting Credit, with 32 improvements, of which nearly half were undertaken in Sub-Saharan Africa.
“A modern economy cannot function without regulation and, at the same time, it can be brought to a standstill through poor and cumbersome regulation. The challenge of development is to tread this narrow path by identifying regulations that are good and necessary, and shunning ones that thwart creativity and hamper the functioning of small and medium enterprises. The World Bank Group’s Doing Business report tracks the regulatory and bureaucratic systems of nations by conducting detailed annual surveys. For policymakers faced with the challenge of creating jobs and promoting development, it is well worth studying how nations fare in terms of the various Doing Business indicators,” said Kaushik Basu, World Bank Chief Economist and Senior Vice President.
Doing Business data for the past 12 years shows that in 2003, it took an average of 51 days worldwide to start a new business. This has now been more than halved to 20 days. In addition, the data shows encouraging signs of convergence toward best practices, as lower-income economies have shown more improvement than high-income economies over time. The case of Mozambique illustrates this trend. In 2003, it took an entrepreneur 168 days to start a business, but now it only takes 19 days.
The report also notes the increasing use of the internet for entrepreneurs to interact with the government, given the potential economic benefits of providing online electronic services across all areas measured by Doing Business. In the past year, 50 reforms were aimed at providing or improving online tax payment systems, import-export document processing, and business and property registration, amongst others.
This year’s report unveils a two-year effort to significantly add more measurements of the quality of institutions supporting the business environment, to better capture realities on the ground. For example, in the area of Registering Property, a new index on the quality of land administration measures the reliability, transparency and geographic coverage of land administration systems as well as aspects of dispute resolution for land issues.
Regulatory quality matters as much as regulatory efficiency, says the report, to ensure that the regulation achieves the aim of creating an enabling environment that contributes to economic growth and prosperity for people.
“There is persuasive research that shows how efficiency and quality of business regulations go hand-in-hand with producing more competitive, viable companies and firms that help to grow national economies. The increased emphasis on the quality of regulation, to complement the previous focus on efficiency, is aimed at providing greater clarity between well-designed and badly-designed regulations, making it easier to identify where regulation is enabling businesses to thrive and where it has the opposite effect,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group, which produces the report.
Economies of Europe and Central Asia have performed well on the new quality benchmarks, while those in the Middle East and North Africa region have performed less well.
In the global ranking stakes, Singapore retains its top spot. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand, in second place; Denmark (3); Republic of Korea (4); Hong Kong SAR, China (5); United Kingdom (6); United States (7); Sweden (8); Norway (9); and Finland (10).
The world’s top 10 improvers, i.e. economies that implemented at least three reforms during the past year and moved up the rankings scale, are Costa Rica, Uganda, Kenya, Cyprus, Mauritania, Uzbekistan, Kazakhstan, Jamaica, Senegal, and Benin.
By region, Sub-Saharan Africa accounted for about 30 percent of the improved global regulatory reforms and half of the world’s top 10 improvers. Multiple reforms were also implemented n Côte d’Ivoire, Madagascar, Niger, Togo and Rwanda. The region’s highest ranked economy is Mauritius, which has a global ranking of 32.
Europe and Central Asia region was also a major reformer during the past year, with Cyprus, Uzbekistan and Kazakhstan, amongst the world’s top 10 improvers. The region had both the largest share of economies implementing at least one reform and the largest average number of regulatory reforms per economy.
In South Asia, six of the region’s eight economies implemented a total of nine reforms – the second largest share of any region after Europe and Central Asia. Economies that implemented several reforms included India, Bhutan and Sri Lanka. The region’s highest ranked economy is Bhutan, which has a global ranking of 71.
Reform activity continued apace in East Asia and the Pacific, with more than half of the region’s 25 economies implementing a total of 27 reforms in the past year. The region hosts four of the top five ranked economies in the world, including Singapore, the world’s top ranked economy.
In the Middle East and North Africa, reform activity picked up slightly with 21 reforms implemented in 11 of the region’s 20 economies. Economies that undertook more than one reform included the United Arab Emirates (UAE), Morocco, Tunisia and Algeria. UAE is the region’s highest ranked economy, with a global ranking of 31.
Latin America and the Caribbean region had the smallest share of reforms, with less than half of the region’s 32 economies undertaking a total of 24 reforms. Costa Rica and Jamaica were among the world’s top 10 improvers. Mexico is the region’s
highest ranked economy, with a global ranking of 38.
“It is heartening to see so many economies, particularly low-income economies and fragile states, undertaking reforms to improve the business environment for local entrepreneurs. In time, this can result in increased job creation, economic growth and greater prosperity for their people,” said Rita Ramalho, Manager of the Doing Business project.
» Download the full report: Doing Business 2016 (PDF, 11.36 MB)
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Weaker growth in sub-Saharan Africa amid deteriorating global conditions
Economic activity has weakened markedly in sub-Saharan Africa, and the strong growth momentum of recent years has dissipated in quite a few countries, the IMF said in its regional outlook.
While the business and macroeconomic environment has improved considerably over the past decade or so, other factors that underpinned strong growth – particularly high commodity prices and accommodative financing conditions – have become less supportive. The prices of many commodities exported by the region have fallen by around 40-60 percent in the past two years, and borrowing costs have risen amid a reassessment of global risk in anticipation of a U.S. interest rate hike. In addition, larger external and fiscal deficits weigh on some countries.
As a result, while growth in sub-Saharan Africa is still stronger than many other regions, the IMF’s latest Regional Economic Outlook for Sub-Saharan Africa puts growth at 3¾ percent this year, even lower than in 2009 in the aftermath of the global financial crisis. The forecast for 2016 is slightly higher at 4¼ percent.
Variation across region
But despite the difficult overall picture, the report finds that there is considerable variation across the region. In most low-income countries, growth is generally holding up, supported by infrastructure investment and private consumption. Countries such as Cote d’Ivoire, Ethiopia, and Tanzania are expected to grow at 7 percent or more this year and next. Other low-income countries, however are feeling the pinch from commodity prices, even though cheaper oil has eased their energy import bill.
Hardest hit are the region’s oil exporters as falling oil prices have drastically reduced export revenue and forced a sharp fiscal adjustment. The oil producers account for about half of the region’s GDP and include the largest producers, Nigeria and Angola. Several middle-income countries, including Ghana, South Africa, and Zambia, are also facing unfavorable conditions, ranging from weak commodity prices to difficult financing conditions and electricity shortages.
Limited scope to counter drag on growth
Savings have been modest during the recent period of rapid growth, leaving limited room to counter the drag on activity in the region or smooth the adjustment to the recent shocks. Many countries now have weaker fiscal and external balances than at the onset of the global financial crisis in 2008. And while in many cases this situation reflects countries’ efforts to address large infrastructure needs, it leaves them with fewer resources to contain the effects of the current downturn.
For oil exporters in particular, fiscal adjustment is unavoidable in the face of a sharp and seemingly durable decline in oil prices. Fiscal policy in most other countries needs to balance development needs and debt sustainability, which will become increasingly difficult as higher interest rates and lower growth adds to debt burdens.
On the monetary policy front, wherever the terms of trade have worsened sharply and the currency is not pegged, the study recommends that exchange rate should be allowed to depreciate to absorb part of the shock. Exchange rates have also come under pressure in countries where commodity exports do not play such a large role. Given the strong global forces behind these pressures, intervening here, too, would risk depleting scarce foreign exchange reserves. Accordingly, central bank intervention should focus on containing disorderly exchange rate movements. Monetary policy should respond only to second-round effects of exchange rate depreciations on prices and to other upward shocks to inflation.
Improving competitiveness, reducing inequality spurs growth
Beyond these more immediate challenges, the Regional Economic Outlook also discusses, in two background studies, how longer-term growth in the region can be supported by efforts to improve competitiveness and reduce inequality.
The first study suggests that the region’s recent period of high growth and substantial trade integration, has also been accompanied by a widening of trade imbalances and a weakening of competitiveness, especially among commodity exporters.
With some of the past sources of growth dissipating, the region needs to nurture new sources by increasing the sophistication of its exports and integrating into global value chains, which will only happen with greater competitiveness. The policy actions to achieve this objective depend on specific country circumstances, but progress can be facilitated by pursuing sound macroeconomic policies, investing in infrastructure while keeping debt on a sustainable path, continuing to eliminate trade barriers, and improving the business climate.
The second study considers the implications for sub-Saharan Africa of persistently high income and gender inequality. The region has among the highest levels of inequality in the world. With growing international evidence suggesting that persistent inequality can impede macroeconomic stability, the study finds that policies aimed at reducing inequalities to levels seen in some fast growing emerging Asian countries (for example by expanding access to education and health care) could potentially increase growth by one percentage point annually in sub-Saharan Africa. Carefully designed fiscal and financial sector policies and the removal of gender-based legal restrictions could also reduce inequality and improve long-term growth in the region, the study says.
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Strong Indo-Africa business relations present enormous opportunities for trade and economic development: KPMG-CII paper
With their abundant resources, African nations can address India’s growing energy demands
With India focussing on nuclear energy to meet the rising demands, it aims to produce 25 per cent of its electricity through nuclear power by 2050. The country has entered into numerous nuclear deals with African countries, owing to their high growth prospects that present significant business opportunities for corporates and investors to contribute towards the development of this continent which has over a billion in population. Transport, including roads and highways, ports and airports and railways, present immense opportunities in the region’s infrastructure space, according to the KPMG-CII background paper titled – ‘India and Africa – collaboration for growth’.
In recent times, India’s economic partnership with the African countries has been vibrant, extending beyond trade and investment, to technology transfers, knowledge sharing and skills development. India has in-depth knowledge in a range of areas that could benefit Africa, especially small farm mechanisation. Indian investment in agriculture has the potential to exponentially boost production. With growing economic prowess and a shared vision of crafting an inclusive world order, India and Africa are proactively seeking to collaborate on global issues, ranging from combating terrorism and piracy, to close coordination in the global fora over the United Nations (UN) reforms, climate change and the World Trade Organization (WTO) negotiations.
Mr Chandrajit Banerjee, Director General, CII, said, “With our two regions enjoying young populations, abundant natural resources, good connectivity and strong ties, we can progress together on our development journey. Both sides have experienced strong growth in recent years, including in social and physical infrastructure, leading to rising incomes and new sectors of cooperation”. This is reflected in the fact that bilateral trade has multiplied manifold in the last decade, while Indian companies are displaying rising interest in investing in Africa. The sectors of interest include agriculture, infrastructure, education and skill development, healthcare, manufacturing amongst others, Mr Banerjee added.
“India is an emerging economy and many Indian enterprises are investing in Africa, which contributes to Africa’s domestic and export economies. Indian companies are generating employment, transferring technology and building local investments to help boost Africa’s economy. We see India’s economic partnership with African countries blooming. Also, over the years, Indian companies have been actively engaged in major infrastructure projects in Africa, including watershed development, and construction of roads, railways, ports, airports, power plants, dams, etc.,” said Mr Navin Agrawal, Partner, KPMG in India.
Energy trade is one of the major drivers of the India-Africa partnership. India is the fourth largest consumer of electricity, accounting for 4.4 per cent of global energy consumption, and is soon expected to take over Japan as the third-largest consumer. India’s economy is expanding and is expected to grow by 7.7 per cent in 2016. With this trend, it is also projected that, by 2035, India’s energy production could rise by 117 per cent, and consumption by 128 per cent. To the energy requirement and to attain better accessibility to power, India needs an investment of USD250 billion over the next five years. The growing energy supply dependence on Africa is likely to be one of the key influencers in India-Africa trade and investment.
According to one of the agreements signed, India will depend on Namibia for Uranium supplies. Uranium trade is critical for India’s civil nuclear programme, which is focussing on the country’s pressurised heavy water reactors fuelled by this metal.
The paper also talks about Africa’s farm sector, which is expected to grow to USD1 trillion by 2030 from USD280 billion in 2014. This can only happen with growth largely dependent on technology. There is significant scope for the agriculture sector in Africa to benefit from the Indian experience in this sector, as well as co-operation on solutions for common challenges. The paper also mentions that Africa can be a key sourcing destination for pulses, a major source of protein in the diet of the Indian population, especially as the demand for pulses is expected to increase as the country develops. The biggest challenge anticipated for both Africa and India is the gap in food demand and supply.
A number of healthcare organisations from India have established footprints in Africa, with many more planning to penetrate the healthcare sector in Africa. In a nutshell, Indian healthcare organisations are actively looking to establish their presence in the form of greenfield and brownfield expansions, tele-medicine centres to attract medical tourism, etc. Many Indian manufacturers have set up their subsidiaries in this continent and have secured a large market share by supplying antiretroviral drugs to treat HIV, and other drugs that are in demand on a mass scale by the government/NGOs.