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World Investment Prospects Survey 2014-2016
UNCTAD’s World Investment Prospects Survey 2014-2016 provides an outlook on future trends in foreign direct investment (FDI) by the largest transnational corporations (TNCs) and investment promotion agencies (IPA).
As reported in the World Investment Report 2014 (WIR14), UNCTAD projects FDI flows to rise in 2014-2016, mainly driven by investments in developed economies as their economic recovery starts to take hold and spread wider. However, the fragility in some emerging markets and risks related to policy uncertainty and regional conflict could still derail the expected upturn in FDI flows. Moreover, this prediction does not take into account megadeals such as the $130 billion buy-back of shares by Verizon (United States) from Vodafone (United Kingdom) in 2014, which will reduce the equity component of FDI inflows to the United States and affect the global level of FDI inflows.
Results from the World Investment Prospects Survey 2014-2016 (WIPS) support this cautiously optimistic scenario. According to this year’s WIPS, transnational corporations (TNCs) are aware of persistent downturn risks to the global economy and thus expressed uncertainty about the investment outlook for 2014 but had a bright forecast for the following two years. For the year 2016, almost half of the respondents had positive expectations and virtually none felt pessimistic about the investment climate.
As TNCs adopt a cautious optimism for the global outlook, FDI could rise in 2014-2016. However, the fragility in some emerging markets and risks related to policy uncertainty and regional conflict could still derail the expected upturn in FDI flows.
Responses to this year’s survey revealed that firms − mostly based in developed economies − are still cautious about recovery prospects in home economies and possible political uncertainties in emerging markets. This translated into a high share of investors (68 per cent) stating that they were neutral or undecided about the state of the international investment climate for 2014. However, almost half of the respondents (46 per cent) were confident about a positive global climate already for the year 2015, and 48 per cent of them expressed themselves as optimistic for the year 2016. The very low share of pessimistic answers suggests that while investors take into account possible risks in their investment plans they do not believe risks of a global recession can effectively upset the investment climate.
Investment promotion agencies (IPAs) were more optimistic in their assessment of the global investment climate and followed a similar pattern. While for 2014, IPAs also showed a high degree of uncertainty, with 45 per cent of respondents selecting neutral or undecided for the year, for the medium-term years, their expectations turned decidedly positive with almost 90 per cent of respondents being optimistic for 2016. Although the different perspectives on global investment climate largely reflect differences in the geographical coverage of the two surveys, IPAs tend to be more confident of their economic growth perspectives in spite of fragilities and recent political uncertainties.
The positive outlook on the investment climate is backed by confidence in the economic recovery. When asked about the principal factors positively and negatively affecting FDI flows in the medium term, TNCs in the survey put the state of the economy of both developed and emerging economies at the top of their list of positive factors. The state of the economy in the United States tops the positive factors list, followed by the economic conditions in BRICS (Brazil, Russian Federation, India, China, and South Africa) and other emerging economies, and in the 28 European Union economies (EU-28). This marks a big turnaround in investor sentiment especially with respect to the state of the European economy that last year was, in fact, at the top of their concerns. Other factors ranked among the most positively affecting FDI flows are the process of outsourcing and offshoring of manufacturing functions, regional integration, and changes in corporate tax regimes.
At the same time, uncertainty among investors about the global investment climate is related to a number of risks and political factors such as the rise of trade and investment protectionism, sovereign debt concerns, natural disasters, the threat of terrorism and the unwinding of quantitative easing measures that is behind much of the financial volatility in emerging economies (WIR14). The fact that political factors such as sovereign debt concerns are at the top of investors’ negative factors list corroborates the idea that firms are still not fully confident about the solidity and sustainability of the economic recovery, especially in their home countries.
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Success of development now tied to world leaders’ agendas at home
As the UN’s Sustainable Development Summit closed in New York on Sunday with a bold new global sustainability roadmap, world leaders now need to focus on fulfilling that vision. The task ahead is clear, but not easy – world leaders must go home and make the necessary administrative, legal, regulatory and fiscal decisions, and spend the next 15 years implementing and enforcing this agenda.
“Most importantly in the coming months, countries need to figure out how they’re going to contribute to achieving these goals and set benchmarks and indicators so they can report on their efforts,” said Yolanda Kakabadse, President of WWF International. “We’re in the race and can finally see the finish line – but we need some runners at the starting line if we’re going to make this happen in 15 years.”
Every country is required to develop national indicators and programmes of implementation through individual development plans. In March, countries will crucially agree a set of indicators that will allow the UN to report annually on global progress in coming years.
“Setting these indicators means striking a delicate balance between what is manageable and what will actually demonstrate progress toward holistic goals,” explained Kakabadse. “For example, for ending hunger it might be tempting for a country to use an indicator like tons of food produced: the data is more or less available, and the statistics are easy to measure. However using only an indicator like this would undercut the linkages built into the SDGs by not tracking the health of soils, genetic diversity and water systems vital for long-term food production and issues such as labor conditions, land access and market prices that also influence food security.
“The indicator question will be challenging, but if countries can unite to solve the financial crisis, they can figure this out. The crucial part will be working together and being as transparent with data as possible,” said Kakabadse.
In the short-term, delivering on these new global goals will require a complementary climate agreement in Paris. Anything less than a strong, science-based global agreement in Paris to rapidly slash carbon emissions would deflate the buoyant spirit of this week’s development plan.
“You cannot have economic security without food and water security, but you cannot have any of these without combatting climate change,” said Kakabadse. “If 193 governments can unify around how to address dozens of the world’s most difficult and complex challenges, they should be able to show that same collaborative spirit in the Paris climate talks and put us on a path to a clean energy future.”
With strong targets to protect the ocean, freshwater and forests now agreed as part of the 2030 Agenda, targeting climate change should be a top priority in the global effort to protect people and the planet. World leaders must complete a climate deal that is equally as fair and ambitious as the development package.
“By including climate change throughout the new deal, climate action becomes a driving force behind future development,” said Samantha Smith, leader of WWF International's Global Climate and Energy Initiative. “Governments must now carry forward the momentum generated around the new sustainable development deal to the climate negotiations in Paris.”
Critical climate measures in the new sustainable development deal include calls for a substantial increase in renewable energy use and a rise in global energy efficiency. The deal also puts the responsibility on wealthy countries to provide assistance against climate-related hazards in vulnerable countries and their promise to raise $100 billion annually by 2020 to support developing countries cutting carbon emissions through the Green Climate Fund.
Sustainable development plan gives the globe a chance
World leaders unanimously approve historic deal
It’s not often that the entire globe can agree on a deal that is politically challenging and technically complex. That is what happened today when the UN unanimously approved a new sustainable development deal. The deal is our best chance to eliminate poverty, promote prosperity and protect the environment.
The world is facing urgent issues that threaten the well-being of communities and the long-term health of the environment. This historic 15-year plan is the right deal at the right time that commits all countries to ensuring food, water and energy security for generations to come.
“Game-changing government decisions that benefit both people and the environment come along very rarely and never before at this scale and level of ambition,” said Yolanda Kakabadse, President of WWF International. Today’s decision is about survival. It’s a history-making moment that could fundamentally change how we treat our planet and all of its people.”
With global issues requiring global attention, it is only fitting that the agreement – Transforming our World: The 2030 Agenda for Sustainable Development – became official at a gathering of so many world leaders.
Sustainability and the environment are at the centre of the plan. With most people that live in extreme poverty relying on nature for their livelihoods, the 2030 Agenda and its 17 Sustainable Development Goals and 169 targets can help improve lives by protecting the ocean, freshwater and forests. This is a better agreement than we ever would have expected, and it gives us hope we can make the significant changes needed to help people and the planet.
“This plan is about survival and prosperity,” continued Kakabadse. “By accepting nature’s central role in supporting human well-being, the deal will ensure that people around the world will live happier, healthier, more prosperous and hopeful lives.”
In order to give the deal any chance of helping the 8.5 billion people that are expected to be living on the planet when the plan comes due in 2030, countries must now move quickly toward implementation. Leaders must show the same level of commitment to accomplishing the plan as they did toward reaching the initial agreement.
“Now world leaders must sustain this political courage at home and make the right choices, committing to a total economic, social and environmental overhaul. Today’s celebration must translate into delivery and quickly. For these goals to become a reality, decision-makers must demonstrate their intention to implement the 2030 Agenda and its Sustainable Development Goals is real and make their efforts transparent through careful follow-up and review,” said Kakabadse.Just as much as the sustainable development plan is meant to benefit the entire world, all countries have responsibilities to make the plan a reality. Countries from the North, South, East and West must play their part. Completion of a new global climate agreement is also necessary for the development deal to reach its goals.
Getting countries to provide the trillions of dollars in funding will be difficult, but just as important is making sure that the money is spent in smarter ways by making different choices. It is critical that money moves away from wasteful, harmful practices – like reliance on fossil fuels – and moves toward sustainable policies that help the environment and support livelihoods.WWF has worked from the beginning of the process to make certain that the plan puts the planet on the path toward truly sustainable development and that it includes the environmental elements that give it the best chance for success. WWF will work to ensure that leaders live up to their commitments while also partnering with governments, business and communities to see the job through.
“Bottom line: the world came together today and demonstrated that real solutions are both conceivable and attainable when we work as one and put politics aside. Now let’s make this happen together,” Kakabadse concluded.
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The fortunes of Africa will determine the success of the Sustainable Development Goals
Much of the focus of the UN Summit to chart a way forward on global development will be on Africa. As the wider world looks beyond the expiry of the Millennium Development Goals to the new Sustainable Development Goals, poverty eradication remains a gigantic challenge for Africa. Over 400 million people in Africa live in extreme poverty – that’s about 4 in 10 of its population – comprising a third of the world’s poorest people. The success or failure of the New York Summit will ultimately be measured by whether the new Sustainable Development Goals are making a difference in Africa in the years to come.
Africa’s economies are growing at an average of 5% per year, yet inequality is increasing all over our continent. The success of the fortunate few is obscured by the sense of exclusion by the majority. Hundreds of millions of people are left behind. Most of them are women and young people. They do not feel the impact of economic growth in their lives. Our collective challenge is to drive inclusive growth – growth that will lift millions out of poverty.
The Sustainable Development Goals which will emerge from the New York Summit accurately reflect Africa’s development priorities. They target a comprehensive and ambitious development agenda. Our task is not just to implement them, but to respond to a continent’s aspirations, too.
In my new role at the helm of the African Development Bank, I am implementing a ten-year strategy designed to bring about nothing less than the economic transformation of this continent, built on growth that is both inclusive and green. The strong growth we have seen across the continent since the Millennium counts for nothing if it is neither shared nor sustainable.
Here are the five pillars of the vision I set before the Bank at my swearing in on the first day of this month.
First, we have to light up and power Africa.
Energy is the engine that powers economies and creates a prosperous society. We must do more to power Africa. Africa cannot stand by with such massive resources for both conventional and renewable energy and yet be known for the darkness, not the brightness, of its cities and rural areas. Factories lie idle for lack of power. The lack of energy has impeded Africa’s industrialization. Hundreds of thousands, especially women and children, die every year from the effects of smoke, simply trying to cook meals for their families. Potential is wasted on our streets as small businesses owners, all hard-working Africans, spend most of their hard-earned incomes paying for energy.
Second, we have to integrate Africa.
Our aspirations are to deliver more equitable, quality growth and development to see all Africans prosper. The Bank will foster regional integration through smart regional infrastructures, including development of regional energy markets, transnational railways and highways to link economic activities among countries. We must work with regional member countries to improve policies and regulations that will facilitate the deepening of regional financial markets. These actions will expand the size of Africa’s regional markets and reduce the costs of movement of goods, services, and people, sparking a phenomenal boost in intra-African and global trade, and reducing inequalities between regions and countries.
Third, we have to feed Africa.
It is inconceivable that a continent with abundant arable land, water, diverse agro-ecological richness and sunshine is a net food-importing region. We must transform the perception of agriculture, so that it is seen as a wealth-creating, viable business option. Through the development of agro-allied industrial zones, Africa can move away from exporting primary commodities, and transition towards producing value-added products. Africa will expand its ability to export processed cocoa not cocoa beans, processed coffee not coffee beans, and textile instead of cotton. Africa will move up the value chain of wealth, diversify its economies, expand foreign exchange earnings, and reduce food import bills, boosting the fiscal and macroeconomic stability of its countries.
Fourth, we have to industrialize Africa.
We must build the African private sector to create wealth. By developing financial markets and leveraging private capital markets, businesses will be able to access long-term financing crucial to invest in the machinery, equipment and working capital we need. Unlocking the potential of small, medium and large businesses, Africa will fast-track industrial growth and development. As businesses pay taxes, domestic resource mobilization will grow to support national and regional development from within Africa.
Fifth, we have to improve the quality of life of the people of Africa.
Africa must use the skills of its people to transform its “demographic dividend” into “economic dividends.” Africa is the youngest continent, with an estimated 60% of its population between the ages of 15 and 24. But by some estimates, more than half of Africa’s youth are unemployed, underemployed, or inactive. This serves as a stark reminder that Africa is rapidly losing its future growth by underinvesting in education and quality job creation. We must invest in Africa’s youth to build skills and encourage entrepreneurship, while providing access to the financial resources necessary to unlock their creativity and unleash the power of their enterprises. We will embark on innovative programs and financing approaches to accelerate job creation and unlock economic prosperity from Africa’s greatest demographic asset.
The High 5s, I call them. They are achievable. They are fundamental to Africa, and Africa in turn is fundamental to the SDGs. This continent is their testing ground.
Akinwumi Adesina is the new President of the African Development Bank.
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WTO members tussle over size and shape of Nairobi package
With WTO members still divided on farm subsidies and market access issues, Director-General Roberto Azevêdo last week called for negotiators to start focusing their efforts on “the most promising issues” for the global trade body’s upcoming ministerial conference in Nairobi, Kenya this December.
However, negotiators from both developed and developing countries expressed unease at proposals to refocus talks on a narrow package of relatively uncontroversial “deliverables” for the Nairobi event.
A statement from the WTO explained that Azevêdo was referring to “LDC and development outcomes, outcomes on export competition in agriculture, and a number of provisions to improve transparency in several issues being negotiated.” There is widespread consensus that – at a minimum – the ministerial must contribute to progress on issues of concern to least developed countries (LDCs).
Trade sources told Bridges that they would be disappointed if the trade talks failed to make progress on controversial topics such as farm subsidies or tariffs for agricultural and industrial products.
“Most members want a comprehensive package addressing everything,” one developed country official said.
Negotiations aimed at just such a package were launched as part of the WTO’s Doha Development Agenda (or DDA) in 2001, but hit an impasse after talks broke down in 2008. The organisation’s Bali ministerial conference two years ago gave a boost to the struggling trade round with a commitment to agree to a work programme on the remaining Doha issues, but the talks since have shown continued divides.
US proposes farm subsidy cuts
Azevêdo’s call for members to refocus talks on a small package of less controversial measures was echoed by US Ambassador Michael Punke at an informal consultation on 17 September.
“The United States continues to believe that we have a good possibility of achieving a package of meaningful outcomes for Nairobi and the DDA, centered around the export competition pillar of agriculture, meaningful steps forward on issues important to LDC members, and potentially some advances in transparency in several areas,” Punke told the meeting.
In previous years, the EU has insisted that any concessions on export subsidies and similar measures under the WTO’s “export competition” pillar should form part of an overall Doha deal rather than being fast-tracked as a separate accord.
But trade sources told Bridges that the 28-nation bloc might be willing to reconsider its long-standing opposition to an “early harvest” that included elements on export competition, in light of evolving market trends and the negotiating context.
Punke nonetheless told negotiators that the US had prepared a new proposal on agricultural domestic support, which he said took account of the “red lines” – or non-negotiable issues – that trading partners had told them about previously.
In contrast, the US said that WTO members “are simply nowhere near achieving multilateral consensus” on market access for agricultural and manufactured goods, nor on services.
Market price support and input subsidies
The informal US proposal – a copy of which has been seen by Bridges – was shared at a small-group consultation among chief negotiators from seven major trading powers on 15 and 16 September in Geneva.
Brazil, Canada, China, the EU, India, Japan, and the US attended the meeting, which was called by the WTO Director-General, trade sources said.
The document proposes that it is particularly important to strengthen disciplines on two kinds of trade-distorting domestic support, namely market price support and input subsidies.
The proposal does not suggest taking specific action on other kinds of payments, such as non-product specific support payments that would also fall into the WTO’s “amber box” – the organisation’s category for the most trade-distorting types of payments.
The draft text explicitly states that the proposed accord would be without prejudice to WTO members’ rights and obligations under Article 6.2 of the Agreement on Agriculture. This clause provides greater flexibility to developing countries to use input and investment subsidies – types of support which are particularly important in India.
Standstill commitment
Members would agree that they “should avoid using market price support and input subsidies for agricultural products,” the new submission suggests.
They would also undertake a “standstill” commitment on either market price support or input subsidies. This could include agreeing not to increase the applied administered price for any farm products receiving market price support; not increasing the number of farm products benefitting from this kind of support; or not increasing product-specific input subsidies for agricultural products above existing levels.
Punke said the new proposal would not require any member to make changes to existing programmes that are WTO-consistent under current rules.
He also said that major subsidisers would have to answer one key question: “are [these countries] willing to search for any area where they can make a contribution to progress on this issue?”
In recent months, Washington has consistently argued that large developing countries such as China will need to agree to undertake cuts as part of any multilateral deal involving agricultural domestic support.
Sceptical reactions
New Zealand Ambassador Vangelis Vitalis, the chair of the WTO agriculture negotiations, held a follow-up meeting with a larger number of negotiators yesterday afternoon, officials told Bridges.
However, trade officials told Bridges that they did not believe the proposal would receive a warm welcome from other countries.
“It won’t fly,” said one developing country negotiator, adding that China and India did not accept the US approach.
A developed country official concurred, suggesting that it was “no surprise” that these members had reacted critically to a proposal that focused on their own trade-distorting support programmes without also addressing the types of schemes in use in other major subsidisers.
A number of delegates also questioned whether introducing a new approach to disciplining trade-distorting support so soon before the ministerial conference would be helpful in garnering consensus among members.
“I think it makes it more difficult,” one official told Bridges.
An LDC package?
An African official also cautioned that many developing country groups would be reluctant to accept a Nairobi outcome built around “deliverables” for least developed countries, but with little to offer other developing countries that did not fall into this category.
The coalitions that were concerned about this included the G-33 group of developing countries with significant populations of small farmers, as well as the African, Caribbean and Pacific Group (ACP) and the African Group, the negotiator said.
Negotiators are now hoping that trade ministers from the G-20 group of major economies will give further guidance to the talks when they meet in Istanbul on 5 October.
The G-7 major trading powers were expected to meet in the margins of the event to try to identify ways forward in the talks, trade sources said.
However, trade officials were conscious that few weeks remain to identify the contours of a possible deal and start filling in the details.
“Time is short,” Azevêdo told negotiators late last week. “It is essential that we have an answer to this question within the next month.”
This article is published under Bridges, Volume 19 - Number 31 by the ICTSD.
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UN adopts new Global Goals, charting sustainable development for people and planet by 2030
The 193-Member United Nations General Assembly on 25 September 2015 formally adopted the 2030 Agenda for Sustainable Development, along with a set of bold new Global Goals, which Secretary-General Ban Ki-moon hailed as a universal, integrated and transformative vision for a better world.
“The new agenda is a promise by leaders to all people everywhere. It is an agenda for people, to end poverty in all its forms – an agenda for the planet, our common home,” declared Mr. Ban as he opened the UN Sustainable Development Summit which kicked off on Friday and wraps up Sunday.
The UN chief’s address came ahead of the Assembly’s formal adoption of the new framework, Transforming Our World: the 2030 Agenda for Sustainable Development, which is composed of 17 goals and 169 targets to wipe out poverty, fight inequality and tackle climate change over the next 15 years.
The Goals aim to build on the work of the historic Millennium Development Goals (MDGs), which in September 2000, rallied the world around a common 15-year agenda to tackle the indignity of poverty.
The Summit opened with a full programme of events, including a screening of the film The Earth From Space, performances by UN Goodwill Ambassadors Shakira and Angelique Kidjo, as well as call to action by female education advocate and the youngest-ever Nobel Laureate, Malala Yousafzai along with youth representatives as torch bearers to a sustainable future.
The adoption ceremony was presided over by Danish Prime Minister Lars Løkke Rasmussen and Ugandan President Yoweri Kaguta Museveni, who stressed the successes of the MDGSs and the need for the full implementation of the new Agenda.
Speaking to the press after the adoption of the Agenda, Mr. Ban said: “These Goals are a blueprint for a better future. Now we must use the goals to transform the world. We will do that through partnership and through commitment. We must leave no-one behind.”
In his opening address to the Assembly, which also marks the Organization’s 70th anniversary, the UN chief hailed the new framework as an agenda for shared prosperity, peace and partnership. “It conveys the urgency of climate action. It is rooted in gender equality and respect for the rights of all.”
Mr. Ban urged the world leaders and others convened at the event to successfully implement the Global Goals or Agenda 30 by launching ‘renewed global partnership.’
“The 2030 Agenda compels us to look beyond national boundaries and short-term interests and act in solidarity for the long-term. We can no longer afford to think and work in silos.
Institutions will have to become fit for a grand new purpose. The United Nations system is strongly committed to supporting Member States in this great new endeavour,” said Mr. Ban.
“We must engage all actors, as we did in shaping the Agenda. We must include parliaments and local governments, and work with cities and rural areas. We must rally businesses and entrepreneurs. We must involve civil society in defining and implementing policies – and give it the space to hold us to account. We must listen to scientists and academia. We will need to embrace a data revolution. Most important, we must set to work – now,” added the Secretary-General.
“Seventy years ago, the United Nations rose from the ashes of war. Governments agreed on a visionary Charter dedicated to ‘We the Peoples’. The Agenda you are adopting today advances the goals of the Charter. It embodies the aspirations of people everywhere for lives of peace, security and dignity on a healthy planet,” said Mr. Ban.
General Assembly President Mogens Lykketoft called the 2030 Agenda on Sustainable Development “ambitious” in confronting the injustices of poverty, marginalization and discrimination.
“We recognize the need to reduce inequalities and to protect our common home by changing unsustainable patterns of consumption and production. And, we identify the overwhelming need to address the politics of division, corruption and irresponsibility that fuel conflict and hold back development,” he said.
On the adoption of the new agenda, UN Economic and Social Council President (ECOSOC) Oh Joon said action on Sustainable Development Goals must start immediately. “The Economic and Social Council stands ready to kick-start the work on the new agenda,” he added.
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International financial institutions back new global development agenda with stepped-up support
Multilateral Development Banks (MDBs) and the International Monetary Fund (IMF) hailed the adoption of a sustainable development agenda for the next generation and are fully committed to stepping up their support to ensure its success.
At the United Nations General Assembly in New York taking place from September 25-27, world leaders endorsed new Sustainable Development Goals on Friday, September 25, an ambitious agenda that aims to end poverty, promote prosperity and to protect the environment.
Leaders of the MDBs – the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, World Bank Group – and the IMF described the agreement as an historic landmark.
“The well-being of our planet and its people are at the heart of the new goals. They point the way towards greater prosperity and equality and will ensure more robust and sustainable economic growth,” the leaders said.
In July this year, at a Financing for Development Conference in Addis Ababa, the institutions unveiled plans to scale up their finance and support for countries seeking to achieve the development goals, pledging to increase their financial contribution to more than $400 billion over the next three years.
They vowed to examine how they could increase their own financing and also to work to ensure a greater mobilization of domestic resources and expanded funding from the private sector.
Quotes from the Heads of Multilateral Development Banks and the IMF
Akinwumi Adesina, President, AfDB
“The African Development Bank is fully committed to the successful implementation of the SDGs. We will work with our member countries, the private sector, civil society and other partners to deliver on the SDGs for Africa. The SDGs must work – and they must work for Africa.”
Takehiko Nakao, President, ADB
“We are committed to supporting the 2030 agenda and helping our member countries in achieving these ambitious new goals in Asia and the Pacific. We will increase our support for inclusive and sustainable development by up to 50% from 2017 to around $20 billion a year. By 2020, ADB will double its climate financing to $6 billion a year, about 30% of its overall financing. We will also increase co-financing with other development partners, catalyze private sector investment, and help mobilize greater domestic resources.”
Sir Suma Chakrabarti, President, EBRD
“The new goals overlap with core areas of the EBRD’s operations and with its strategic priorities. As a development bank specialised in working with the private sector, the EBRD is well placed to support the delivery of an agenda in which private firms will play a key role.”
Werner Hoyer, President, EIB
“The adoption of the SDGs shows our collective determination to safeguard the future of our planet. At the EIB we stand ready to work with our peers, other public authorities, and the private sector, and put our finance and expertise at work to support the implementation of the new goals.”
Luis Alberto Moreno, President, IDB
“The Sustainable Development Goals are ambitious, but the citizens of our countries expect no less than our full commitment to end poverty, promote sustainable and equitable economic development, and protect the environment. The IDB pledges to work closely with governments and with the private sector throughout Latin America and the Caribbean to ensure a prosperous future for all.”
Christine Lagarde, Managing Director, IMF
“The SDGs are ambitious, but achievable with determined implementation. We all have a responsibility to achieve these goals, at the country level and through our collective action at the global level. The IMF, with its 188 member countries, will play its part.”
Jim Yong Kim, President, World Bank Group
“The international community showed wisdom and courage fifteen years ago in adopting the Millennium Declaration, which set out eight ambitious goals to improve the lives of billions and bring the world together in closer cooperation and partnership. We cut poverty in half five years earlier than the declaration’s deadline, so I am confident we can achieve the great aspirations of these new global goals – particularly the first, which is to erase the scourge of extreme poverty from our planet by 2030. We can, and must, end this terrible blot on our collective conscience.”
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All eyes on UN as world body prepares to adopt new Sustainable Development Goals
World leaders, heads of global financial institutions and other dignitaries are heading to New York, where, after months of intense negotiations, the United Nations is set to launch a landmark new framework for sustainable development that will aim to end poverty and build a life of dignity for all, leaving no one behind.
The UN’s top development officials are keenly focused and enthusiastically preparing for the moment Friday afternoon when the Organization’s 193 Member States formally adopt the new framework, Transforming Our World: the 2030 Agenda for Sustainable Development, composed of 17 goals and 169 targets to wipe out poverty, fight inequality and tackle climate over the next 15 years.
In a series of interviews with the UN News Centre, the officials forecast 2015 as “a watershed year” for the United Nations for having reached an agreement that will “change the paradigm about development,” while “leaving no one behind” and giving a boost for a global climate change accord later this year.
Already this week, the likes of pop star Shakira and footballer David Beckham, both Goodwill Ambassadors of the UN Children’s Fund (UNICEF), have made appearances to preview the importance of these Global Goals: the UN Headquarters complex was lit up one night with colourful, massive projections of the new Sustainable Development Goals for all to see, and for those who missed that, New York City cabs are running mini lessons on taxi TV about the Goals to which world leaders will commit.
The three-day UN Sustainable Development Summit kicks off Friday with a record number of top world leaders expected to attend, as well as heads of multilateral bodies like the World Bank and the International Monetary Fund (IMF).
Joining them will be Pope Francis, who will be making a historic address to the UN General Assembly during a visit timed for the global gathering. The Summit will then open with a screening of the film The Earth From Space and that will be followed by performances from Shakira and fellow UN Goodwill Ambassador singer Angelique Kidjo, as well as call to action by female education advocate and the youngest-ever Nobel Laureate, Malala Yousafzaii, along with youth representatives as torch bearers to a sustainable future.
UN Deputy Secretary-General Jan Eliasson has said: “People have the right to have expectations because there is a need to make sure that the former goals, the MDGs [Millennium Development Goals] are truly achieved.”
The MDGs grew out of the 1992 UN Conference on Environmental and Development better known as the Earth Summit held in Rio de Janeiro, Brazil, where the concept of sustainable development began to gain momentum. With 2015 set as the target year for the MDGs, the new sustainable development agenda emerged from three years of negotiations to address the three interconnected elements of economic growth, social inclusion and environmental sustainability.
UN Secretary-General Ban Ki-moon described the agenda as “a clarion call” to “share prosperity, empower people’s livelihoods, ensure peace and heal our planet for the benefit of this and future generations” while his deputy, Jan Eliasson, said the UN leadership attaches “enormously high priority” to mobilizing the UN system, member states, civil society, the private sector and the scientific community to ensure the “transformative changes” take place to make the vision a reality on the ground.
Deputy Secretary-General Eliasson told the UN News Centre that 2015 could turn out to be a historic year for the United Nations if the world can also agree on a bold agenda to combat climate change in Paris this December.
At a press conference earlier this week, Amina J. Mohammed, the Secretary-General’s Special Adviser on Post-2015 Development Planning, described the agreement on the Goals as “really meaningful.”
“It's universal so it applies to everyone,” she explained. “We will no longer have a North-South conversation about what the North is doing for the South, but what we are doing for each other. Clearly anything that happens anywhere in this world has that fallout in many other places – from the global financial crisis to conflict and migration, we feel it everywhere – to natural disasters and climate change.”
Helen Clark, the Administrator of the UN Development Programme (UNDP), has said the new agenda “means doing development differently.”
The new goals “leave no one behind – not people, not groups and not whole countries. That’s a powerful message that we need to work in ways that to support the poorest and most vulnerable to succeed in development as well,” Miss Clark said.
“UNDP is totally committed to working alongside all developing countries to achieve the SDGs and to work with developed countries on making it possible through getting the funding which will help support us to help build and develop the capacity of countries to fly,” she said “That’s what we are dedicate to.”
Another senior UN development official eagerly looking forward to the formal adoption and implementation of the Goals was UN Assistant Secretary-General for Economic and Social Affairs Lenni Montiel.
“This year, 2015, is a watershed year,” said Mr. Montiel, describing the new agenda as “a unique agreement that will change the paradigm about development in the world.”
He drew attention to the fact that there was unprecedented involvement of young people from all countries throughout the negotiating process.
Jan Pasztor, the Secretary-General’s advisor on climate change, hailed the adoption of the global goals as “a really a very important development, in order to help and be ready to combat climate change.”
The new agenda gives a “very positive” momentum for governments who are negotiating a new, meaningful and universal agreement on climate change in Paris this December, Mr. Pasztor said.
Mr. Ban hopes the visit to the UN by Pope Francis will also bolster support for action on climate change, his advisor said.
And Wu Hongbo, Under-Secretary-General for Economic and Social Affairs, whose department is responsible for the development pillar of the United Nations, encouraged everyone to watch.
“We hope you will be an eyewitness to this historic moment,” Mr. Wu said.
» Visit tralac’s United Nations Sustainable Development Summit 2015 Resource box
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tralac’s Daily News selection: 25 September 2015
The selection: Friday, 25 September
Today, in New York: the Committee of African Heads of State and Government on Climate Change
On Monday, in New York: From the MDGs to the SDGs - Africa at a crossroads
Concluded, yesterday in Sandton: Agenda 2063 AUC/ECA/AfDB and RECs meeting on M&E convergence (AU)
Overall, whilst results based planning and budgeting has permeated almost every level within the AU and the RECs, there is still an evident lack of an overarching results based M&E system and rationalized resource mobilization strategy. The establishment of the COMESA, EAC, SADC Tripartite REC, as well as the recent adoption of the AU Agenda 2063 First Ten Year implementation Plan at the June 2015 Summit in Johannesburg present a great opportunity for the African Union to design, build and implement an overarching results based M&E system and a Balanced Score Card that will help track the levels of implementations of initiatives within the AU, between the AU and RECs up to Member States level, particularly with regard to following up on the levels of implementation of the targets and goals set out in the first ten year implementation plan for Agenda 2063. In the same vein, mechanism for mobilization of Africa’s own resources for financing of Agenda 2063 need be created and maintained by Pan-African institutions, including the African Development Bank. The specific objectives of the meeting include among others:
What future scenarios for the Southern African Customs Union? (tralac)
The Southern African Customs Union is in an impasse; and has been so for some time now. The Council of Ministers, which is SACU’s “supreme decision making authority”, is not meeting; no common policies are discussed; and no decisions on how to deepen integration among the Member States are taken. It is against this background that the present paper has been written and is disseminated for comments and responses. It discusses a number of possible scenarios for SACU’s future; which were debated at a recent tralac workshop attended by participants from the SACU Member States. We believe that SACU’s future should be looked at in terms of the bigger regional picture. [The author: Gerhard Erasmus]
Trade facilitation in SACU: Namibia (New Era)
The Minister of Finance Calle Schlettwein has urged local businesses to support trade facilitation initiatives and to inculcate a culture of compliance across all sectors to reduce the need for controls by government at ports of entry and exit. “Trade facilitation should not and cannot be allowed to merely become popular jargon. We should rather design and package it as a toolbox that would allow speedy delivery of best practices that impact our national and regional development agenda, be it our Growth at Home Strategy, the ACCESS Namibia Programme, the Industrial Upgrading and Modernisation Programme, our SME and Entrepreneurial Programme, as well as our relevant investment and tax incentive schemes,” said Schlettwein yesterday during a SACU breakfast meeting.
Amina Mohamed: statement to Kenya's parliament on 10th WTO Ministerial Conference (WTO)
To me and to many other Ministers, it is important that the WTO and the trade agenda respond to development concerns, and at the same time also reply to current challenges in world trade. Having said that, we also need to keep in mind that the outcomes need to be acceptable to ALL. The WTO, as you recall, takes decisions by consensus. Therefore, a large dose of realism is required, if we are to make progress in this Conference. We must also remember that this is not the last round of negotiations. This is not the end of history. Surely the WTO will still be there and other negotiations will take place in thin future. At the same time, we do need to make sure that the results of MC10 represent an advancement over what is currently on the table.
Roberto Azevêdo: speech to Peterson Institute (WTO)
Group of 77+China: statements by Helen Clark, Maite Nkoana-Mashabane
The new UN Sustainable Development Goals and regional integration in Africa: tralac discussion
William Mwanza, tralac Researcher, comments on the 2015 UN Summit for the adoption of the post-2015 development agenda and the relevance of regional integration frameworks when considering the agreed Sustainable Development Goals. tralac invites comments on the posting.
Joint Africa-EU Partnership Strategy: communiqué of the 4th Annual African CSO Continental Forum
More significantly the Forum conclusion went beyond JAF to emphasize the need for effectively mainstreaming of CSO interventions in larger framework of the Africa-EU Joint Strategy. As part of this process, it stressed the need for civil society actors in Africa (as in Europe) to be involved in and contribute to the outcomes of the Africa-EU Summit on Migration scheduled to be held in Valetta, Malta, from 11-12 November 2015. The Forum observed that migrants were mostly from civil society and it is essential that civil society actors from developing countries, including Africa, should be an integral part of the search for solutions on attendant problems of state-society. The Forum in particular underlined the need for an Africa Continental CSO Consultation on the Migration prior to the Summit as distinct from the side event that is being organized by Europeans organizations and the University of Malta. It stressed the need for assimilation of such issues effectively within the framework of the Intercontinental CSO dimension of the JAES process.
Marcelo M. Giugale: 'Let’s not cut aid for poor countries' (World Bank)
Europe's lingering economic troubles are at the centre of global attention and of much heated debate in Poland. Can the European Central Bank print enough money to jump-start the continent's economy? Or should that be done through a blast of public investment financed with new debt? How should Greece be helped? What does the sudden appreciation of the Swiss franc mean for the Eurozone? Will Russia's financial distress spill over to its neighbours? How those questions are answered will affect many rich countries of the world -- the likes of France, Germany, and now also Poland. Usually ignored, it will also affect some of the poorest. [The author is General Director, Macroeconomics and Public Finance]
Business Call to Action (UNDP)
At its Sixth Annual Forum on 24 September 2015, BCtA announced commitments by 33 companies in support of the new Sustainable Development Goals. This is the largest number of new members in a single year and represents a significant increase in the scope of commitments by companies to use viable businesses ventures that include those at the base of the economic pyramid as suppliers, distributors, retailers or customers. And it brings to 137 the number of businesses that have joined BCtA’s leadership platform since it launched in 2008.
Heads-up: This is how SABMiller is conquering Africa (City Press)
Localisation has been key to the success in SABMiller’s African expansion drive. Bowman explained that while SABMiller initially developed its footprint in Africa through the acquisition of assets and developing local markets using South African expertise, the group has spent a significant amount of money on new production lines, breweries and malting facilities in order to encourage localisation of the value chain. Localising costs has reduced foreign exchange exposure, while smaller, modular breweries are able to better serve markets because of unreliable logistics in rural areas. “We have a core belief in local management running operations, and we always defer to them,” Bowman said.
UNIDO to support industrial upgrading and modernization in Southern Africa
The industrial sector in countries of the Southern African Development Community is set to benefit from support provided by UNIDO. An initiative to support industrial upgrading and modernization in Southern Africa was presented by UNIDO representative to the European Union, Christophe Yvetot, during the SADC Business Forum hosted by the SADC Group of Ambassadors in Brussels. During the Forum, Yvetot said that UNIDO has already successfully implemented an Industrial upgrading and modernization programme at national and regional levels in a number of countries in the Middle East and North Africa region, and in the sub-regions of West, Central and East Africa. He said that the programme has had immediate impacts on the acceleration of the growth of industrial sectors, thereby contributing to overall economic growth and employment creation.
Zimbabwe: NECF working on competitiveness report (The Herald)
During the focus group meetings, NECF will present a draft NCAR report for discussion. Focus group meetings were held on Wednesday in Masvingo and Bulawayo while Mutare and Gweru had their meetings yesterday. More meetings will be held in other centres while the Harare discussion is scheduled for the first week of next month. The report is expected to be launched on October 29. Zimbabwe will join Tanzania, Egypt and Senegal among African countries to compile national competitive assessment reports with a view to improving the business environment in a manner that makes them competitive.
Zimbabwe: New policy set to transform industry (NewsDay)
“The Industrial Development Policy itself envisages transforming Zimbabwe from a producer of primary goods into a producer of processed value-added goods for both the domestic and export market through the promotion of viable industrial and commercial sectors,” he said. The overall objective for the government under the IDP (2017-2021) will be to restore the manufacturing sector’s contribution to gross domestic product doubling to 30% and its contribution to exports increased to 50% from 26%.
Tapiwa Mashakada: 'Addressing the ease of doing business' (Zimbabwe Independent)
Sugar in Mozambique: balancing competitiveness with protection (SPEED)
Going forward, Mozambique has many opportunities that can lead to a positive outcome for the sugar industry. Untapped interregional trade represents a major opportunity, particularly as traditional markets become uncertain (e.g., EU). Improving the business environment and encouraging diversification into other sectors though backward and forward linkages and increased value added activities. Weaning Mozambique from dependence on protection of the sugar industry could be key for more broad agricultural transformation, as was the case of Mauritius. Mozambique should carefully study the path of Mauritius and consider moving in that direction. [Downloads available]
The 2015 Mozambique Country New Alliance and Grow Africa report (SPEED)
Regional forum on up-scaling fertilizer usage (COMESA)
Hippo Valley to grow regional exports (Zimbabwe Independent)
Mozambique and Guinea-Bissau want to cooperate in the cashew sector (MacauHub)
Namibia: Pick n Pay commits to selling locally grown veggies (New Era)
South African Cereal and Oil Seed Trade Association: regional integration strategy (AgBiz)
Nigeria's FG partners China on agricultural development, woos Chinese investors (ThisDay)
Namibia: IMF concludes 2015 Article IV Consultation (IMF)
Namibia’s growth outlook is clouded with downside risks, while facing significant policy challenges. The main near-term risks are associated with (i) highly volatile SACU revenues, (ii) rapid growth of house prices, and (iii) external environment.
Malawi attempts to resurrect Shire-Zambezi shipping project (AIM)
The transport ministers of Malawi, Zambia and Mozambique have met in the Malawian capital Lilongwe to discuss the feasibility of using the Shire and Zambezi rivers for international merchant shipping. The ministers are considering a report by consultants on the navigability of the Shire-Zambezi Waterway (SZW) project. The proposed route is from Nsanje in Malawi to Chinde, the small Mozambican town at the mouth of the Zambezi. Most of the 343 kilometre long route is through Mozambican territory.
Portuguese firm Mota-Engil to construct $200m dry port (StarAfrica)
Central Africa to network against corruption (UNECA)
OECD's Global Forum on Competition: postings by Mexico, United Kingdom
Sipho Moyo lands top AfDB post (AfDB)
African Statistical Journal: September 2015 edition (AfDB)
Ethiopia, Benin, Côte d’Ivoire to benefit from African Trade Insurance membership programme (AfDB)
Trade Advocacy Fund Advisory Toolkits: various downloads available
This week in the news
Catch up on tralac’s daily news selections for the past week:
The selection: Wednesday, 23 September 2015
The selection: Tuesday, 22 September 2015
The selection: Monday, 21 September 2015
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Structural transformation should underpin Africa’s priorities – ECA Chief
As the curtains close on the Millennium Development Goals, Mr. Carlos Lopes has stressed that the intense participation of Africa in defining the new sustainable development agenda paves the way for governments to make critical structural changes in response to socio-economic inequality.
Speaking at the ECA ahead of the UN General Assembly this September, Mr. Lopes stated that the new Sustainable Development Agenda must take on board Africa’s development goals and priorities, in particular, the need for innovative ways to finance our future.
“The financing imperatives for a sustainable future are immense; and a policy paradigm, centred on among others, Africa’s trillions of dollars in savings is the way forward,” he emphasized.
The landmark UN General Assembly is seen as a watershed moment that ushers in a new sustainable development agenda. Mr. Lopes will participate at severalhigh-level events aimed at consolidating the critical issues underpinning the implementation of the Sustainable Development Goals. He notes that while the high-level events will touch on the significant progress that has been achieved on the MDGs, there will be a greater focus on lessons and implications for the next 15 years.
He also expressed great appreciation for the work done by Liberian President Ellen Johnson-Sirleaf in her role as Co-Chair of the High Level Panel on Sustainable Development Goals and for steering Africa’s priorities, together with the African Union, towards a Common African Position that now completes the MDGs and transitions the focus on Africa’s priorities in the context of the SDGS.
Mr. Lopes will participate in the launch the last of a series of yearly reports co-published by the African Union (AU), the United Nations Economic Commission for Africa (ECA), the African Development Bank (AfDB) and United Nations Development Programme (UNDP) entitled, “Assessing Progress Toward the Millennium Development Goals in Africa”.
In addition to speaking at other events on environment, natural resource management and the investment climate in Africa to be held during the UN General Assembly, Mr. Lopes will participate in a major event organized jointly by the United Nations Industrial Development Organization (UNIDO), the African Union, the Economic Commission for Africa and the Office of the Special Advisor on Africa on the theme ‘Operationalization of the post-2015 Development Agenda for African Industrialization.’
These events are being preceded by a retreat of the African Permanent Representatives to the United Nations in New York held on 12 September at which Mr. Lopes emphasized the need for linkages between Africa’s Agenda 2063, the new Sustainable Development Agenda, the Climate Change negotiations and the centrality of financing Africa’s development.
The Common African Position recognizes rising trends such as population growth and the youth bulge, urbanization, climate change and inequalities. It reiterates the importance of prioritizing structural transformation for inclusive and people-centred development in Africa. It is an African Union (UN)-sponsored document. It received technical support from the New Partnership for Africa’s Development (NEPAD) Agency, the African Development Bank (AfDB), the Economic Commission for Africa (ECA), the United Nations Development Programme (UNDP), Regional Bureau for Africa, and the United Nations Population Fund (UNFPA).
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Statement by Kenya’s Cabinet Secretary for Foreign Affairs, Ambassador Amina C. Mohamed, on the 10th WTO Ministerial Conference – Nairobi
Statement by Ambassador Amina C. Mohamed, Cabinet Secretary, Ministry of Foreign Affairs and International Trade, at the Kenyan Parliament, 14 September 2015, Nairobi – Kenya
Within exactly three months, Trade Ministers of more than 150 nations will be gathered here in Nairobi, at the 10th WTO Ministerial Conference. This will be the first WTO Ministerial to be held in Africa – and Kenya is proud to host it.
This conference is key to the future of the WTO and for the advancement of the Multilateral Trading System. The central issues of the current Round of negotiations, the Doha Development Agenda, will be on the table for discussion and decision by Ministers.
At the outset, let me say that the Government – and myself in particular – are totally committed to making this conference a success.
Let me take this opportunity to brief you on the substantive side of the Conference and on its preparations.
As of today, in Geneva, Director-General Roberto Azevêdo is resuming an intensive process of consultations with WTO Members. He is starting this process with a meeting of LDC, ACP and African Group representatives. The objective of this meeting is to hear from these representatives their main concerns and their expectations for the Conference.
Development, as you may know, is central to all discussions in the WTO. This Round of negotiations was predicated on the reaffirmation of development as the main goal to be achieved through further opening and regulation of international trade.
At the previous Ministerial Conference in Bali, in 2013, Ministers took several decisions in favour of LDCs. Representatives in Geneva are now discussing how to strengthen and broaden the scope of those decisions. An important proposal was tabled in late July by the so-called G90 group of developing countries to help advance the discussions. The ACP countries also tabled a proposal with several concrete suggestions and calling for a constructive spirit in the negotiations.
And as we speak of development, the area of Agriculture will be central to any outcomes in December here in Nairobi. A new chairperson – the incoming ambassador of New Zealand – has been selected for the negotiating group on Agriculture, and intensive discussions are continuing in several configurations in Geneva, covering the three areas of Export competition, Domestic Support and Market Access.
Progress in the discussions on Agriculture will be the main parameter and determining factor of progress in other areas.
These other areas – and mainly Non-Agricultural Market Access (NAMA, in the WTO jargon) and Services are also central to the negotiations. Rules (or trade defence issues such as Antidumping), Intellectual Property and Trade and Environment are additional chapters in the negotiations.
The Director-General is of course keeping all Members constantly informed of the consultations which he is holding and to which he is invited.
The next weeks will be crucial to determine the results for Nairobi – and all WTO Members will be called to take tough political decisions rapidly. A quick flow of information and a smooth dialogue between representatives in Geneva and governments in capitals – including parliaments – will be key to the progress in these talks.
Several trade ministers will be meeting in Turkey in early October, on the margins of a G20 meeting. Other opportunities may arise for ministers to meet in different formats before the Conference here in Nairobi.
To me and to many other Ministers, it is important that the WTO and the trade agenda respond to development concerns, and at the same time also reply to current challenges in world trade.
Having said that, we also need to keep in mind that the outcomes need to be acceptable to ALL. The WTO, as you recall, takes decisions by consensus. Therefore, a large dose of realism is required, if we are to make progress in this Conference.
We must also remember that this is not the last round of negotiations. This is not the end of history. Surely the WTO will still be there and other negotiations will take place in thin future. At the same time, we do need to make sure that the results of MC10 represent an advancement over what is currently on the table.
The Conference we are hosting can deliver that – but we must all work hard – and fast.
One word on the logistical arrangements: we continue to work hand-in-hand with the WTO Secretariat and the team at the KICC to make sure the logistics for the Conference run smoothly. Several WTO teams have visited Nairobi – the most recent in late August – and some WTO officials are here this week too. From now on, we will be on a count-down mode, to make sure everything is ready when the Director-General, Ministers and delegates, as well as NGOs and invited guests arrive in December.
The WTO and the multilateral trading system have been an instrument of growth and stability since their creation. It is extremely important that the system is strengthened and continues to progress in the future.
At a moment of high fluctuations in the markets, of uncertainty as to the economic outlook in some large trading partners, at a moment when the whole world is interconnected and when whatever one government (or monetary authority) does has effects on so many other countries, it is imperative that we retain and care for the safety net which the WTO and its body of regulation represent.
Our Conference in Nairobi in December can help Ministers in doing just that.
We will need all the support we can get to make that conference a landmark in advancing the WTO and multilateral trading system.
I count on all of you for that. Thank you.
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Communiqué of the 4th Annual African CSO Continental Forum on the Joint Africa-EU Partnership Strategy (JAES)
AU-CSO Continental Forum: Towards Preparation for the Joint Annual Forum (JAF) of the Africa-EU Partnership, Djibouti, 18-20 September 2015
The 4th Annual African CSO Continental Forum on the Joint Africa-EU Partnership Strategy (JAES) has just been concluded in Djibouti. The consultation lasted for three days from 18-20 September 2015. The Forum began with a meeting of the African Steering Committee on 18th September 2015 followed by the Continental Forum of African Civil Society Organizations on 19-20 September 2015.
The Forum was attended by about 40 leaders and representatives of civil society organizations across the five regions of the African continent. The Citizens and Diaspora Organizations Directorate of the AU Commission (CIDO) facilitated the Forum with support from the Economic, Social and Cultural Council of the African Union (ECOSOCC) and the Partnership Management and Coordination Division (PMCD) of the Bureau of the Chairperson.
The main focus of the Forum was to define Africa CSO priorities and framework of action within the current cycle of the Africa-EU partnership process with emphasis on preparation for the Joint Annual Forum (JAF) as the only comprehensive stakeholder platform for civil society participation. The Forum was concerned with reviewing the concept note that is being developed by state actors for this purpose and making appropriate recommendations and proposals to ensure that JAES remains people-centred and people-driven in the aftermath of the Brussels Summit of April 2014 and its outcomes.
The official opening ceremony was held on 18th September 2015 and received 5 main addresses from the Director of CIDO, Dr. Jinmi Adisa, Mr. Joseph Chilengi, the ECOSOCC Presiding Officer, Professor Dipo Kolawole, the Chairperson of the African Steering Committee and Mr. Ismail Sanalasse Said, the President of Djibouti Civil Society Associations. Subsequently, Mr. Hassan Omar Mohammed Bourhan, the Minister of Interior and Decentralization of the Republic of Djibouti formally declared the consultation open.
In his official opening remarks, the Minister praised the AU Commission, particularly CIDO and ECOSOCC for taking serious measures to ensure strong and effective CSO participation in the JAES process. He conveyed the greetings of the President of the Republic and pledged Djibouti’s support for the outcomes of the Forum. He observed that Djibouti has always respected and encouraged effective contribution of civil society in the development process of the state system and that the decision of Djibouti to support the same processes in relations across the Mediterranean is simply a logical extension of Djibouti’s desire to build a comprehensive stakeholder community in Djibouti, within Africa, in Africa’s relation with the world and in global affairs.
On the Outcomes of the Brussels Summit of April 2014, the Forum observed that the implementation mechanisms and structures contained in the two Outcome Documents of the Africa-EU Summit of April 2014 (the Roadmap and Declaration) were essentially state-centred, noting that the main exception was the framework of Joint Annual Forums (JAF) which replaces the Joint Task Force of the previous partnership cycle and will gather together all actors of the partnership. The Forum recognized the JAF will serve therefore, as the only comprehensive stakeholder Forum for driving the people-centred aspirations of the Africa-EU partnership Process. Consequently, the Forum embraced JAF as the appropriate mechanism for channelling, promoting and sustaining the activities of non-state and non-governmental actors.
The Forum however, regretted the undue delay in activating the JAF process in view of its peculiar importance. It observed that it is almost one and half years since the Brussels Summit of April 2014 and a process intended annually had not yet taken place and even now only has a remote chance of happening this year. The meeting called on all parties and structures responsible for the planning process, particularly the two Commissions, to accelerate the process of implementing JAF. It further underlined the need for actors in civil society to play a critical role in lending content to JAF, defining its agenda and work program, its modalities of operation, execution of its mandate and outputs.
Regarding the relations with State Actors in the JAF Process, the Forum noted the important profile of state actors in the current efforts to define JAF Agenda, content and modus operandi. The participants concurrently agreed with the general objectives being proposed for JAF and the concept paper being developed by the two Commissions as a baseline working document. Moreover they added that in order to perform its functions as designed by the Summit the orientation, constitution and working methods of JAF and use of its outputs must be people-centred and civil society actors must be fully integrated within its framework. In conclusion and as part of this process, the Forum decided to review the JAF concept paper of the two Commissions and make appropriate recommendations to the paper which remains work in process.
Furthermore, some recommendations were made in relation to the JAF Concept Paper. The Forum emphasized the need for the JAF to be held as soon as possible, preferably in the last quarter of 2015 or very early in the first quarter of 2016 to be followed by another in a time frame preceding the 2015 Summit and recommended that the location of JAF meetings should be rotated among the two continents with the first in Africa and a second in Europe in line with the two JAF model proposed by the Forum.
The Forum underscored that as the only comprehensive stakeholder platform of JAES, JAF must be open to all stakeholders particularly civil society actors and agreed that the context of such inclusive participation must be in a continuum that includes preparation, consultation, definition of purpose, goals and execution of outputs. Each of contributing parties should also select its own representatives that will work with other stakeholders to define collective results.
On the civil Society Interventions, the Forum agreed that civil society interventions should assume a coordinate and collaborative structure. This will include autonomous CSO action to popularize and extend the reach and impact JAES to the grassroots, interconnectivity across the Mediterranean and the holding of regional conferences and regional platforms to disseminate information and build grassroots support for JAES. The Forum also recommended upwards and downward mainstreaming of civil society contributions within JAF and the alignment and use of the Pan-African civil society envelope to support these processes across the two continents.
The Forum proposed a duration of 2-3 days for JAF as required to produce meaningful outcomes. It also requested that the definition of the JAF agenda be based on wider stakeholder agreement and that the working sessions should have chairs and rapporteurs (from civil society). It further recommended that conclusions should be adopted by plenary sessions. Inputs of seminars and regional conferences must also feed into the agenda and work programs of JAF, concluding that outputs of JAF should include assessment and progress reports on
a) challenges, options and possible solutions as well as methods to address challenges;
b) discussion of thematic and strategic issues;
c) agreement on reporting frameworks to assess the implementation of the roadmap;
d) timetable of operation, feedbacks and corrective mechanism;
e) effective employment of outputs to strengthen the framework of operations.
The Forum observed that the importance of JAF notwithstanding, the people-centred aspirations of the architects of the Africa-EU Partnership requires that CSO involvement in JAES must go beyond JAF and should be mainstreamed in all aspects and forms of the partnership endeavor particularly its key and important elements.
As part of this process, the Forum stressed the need for civil society actors in Africa (as in Europe) to be involved in and contribute towards the outcomes of the Africa-EU Summit on Migration scheduled to be held in Valetta, Malta, from 11-12 November 2015. The Forum observed that migrants are mostly from civil society and it is essential that civil society actors from developing countries, including Africa, should be an integral part of the search for solutions on attendant problems. The Forum, in particular, underlined the need for an Africa Continental CSO Consultation on the Migration prior to the Summit as distinct from the side event that is being organized by Europeans organizations and the University of Malta on the eve of the Summit. It stressed the need for assimilation of such issues effectively within the framework of inclusive continental and Intercontinental CSO dimension of the JAES process to guarantee the integrity of inputs within the process.
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Statements at the 39th Annual Meeting of the Ministers of Foreign Affairs of the Group of 77+China
The 39th Annual Meeting of Ministers for Foreign Affairs of the Group of 77+China took place at the United Nations Headquarters in New York on 24 September 2015. Statements from the meeting appear below.
Remarks by Ms Maite Nkoana-Mashabane, South African Minister of International Relations and Cooperation and Chair of the Ministers of Foreign Affairs of the G77+China
After the immense misery and social disintegration as a result of the Second World War, the establishment of the United Nations provided nations the means to foster peace, build democracy and create a just society on a global scale. The creation of the organisation was also a pathway for the independence of many of the members of this Group. 70 years after its establishment, we should use this occasion to evaluate the UN’s history and its many achievements and challenges and assess its effectiveness in addressing the specific interests and needs of developing countries.
The future of developing countries lies in a strong and robust multilateral system, based on the principles of international law. We must secure the restructuring of international political and economic systems in order to rectify the inherent asymmetries of power. This would safeguard developing countries, which make up the majority of countries across the globe, having a voice in global governance.
The Group of 77 and China has made notable contributions over the years to the effective functioning of the United Nations. As the largest grouping of States within the UN system, the Group of 77 and China, has played a fundamental role in crafting international economic policies and relations, narrowing the gap between developing and developed countries. The Group has also been a major actor in developing initiatives to advance development and international economic cooperation among developing countries. The Group can therefore legitimately claim a large part of the credit for advancing the interest of marginalised people of the world within the UN system.
Today’s meeting provides us with an opportunity to reaffirm our commitment to the continuing validity and relevance of the objectives and principles of our Group. In this regard, this meeting will adopt a declaration that will include strategies of action underpinning and supporting the processes in which we have been involved during the past year and in which we remain involved.
During the past nine months, we have witnessed the finalisation of the negotiations on the 2030 Agenda for Sustainable Development. The outcome document that the Summit will adopt build on the Millennium Development Goals and covers all three dimensions of sustainable development. This global development agenda recognises and responds to the triple challenges of poverty, inequality and unemployment that most of us continue to face.
It has been our Group’s active engagement of the negotiation process that has ensured that the key interests of developing countries are reflected in the outcome document.
The realisation of the new Agenda will only be achieved if the Global Partnership focuses on adequate means of implementation as identified under Goal 17 and under each individual goal. It is imperative that the follow-up and review process for the goals should also focus on whether the means of implementation have been achieved and whether developed countries have kept to their commitments.
Of major importance in the outcome document is the inclusion of the Principle of Common but Differentiated Responsibilities (CBDR) which recognises our different national realities, capacities and levels of development and respects our national policies and priorities.
Another major achievement has been the reference to the right to development; and, removing the obstacles to the full realisation of the right of self-determination of people living under colonial and foreign occupation.
The 3rd International Conference on Financing for Development (FfD3) resulted in the adoption of the Addis Ababa Action Agenda.
While the Addis Agenda emphasises the importance of financing for development, it is disappointing that there is little in the way of new funds to fill the existing development financing gap. Developed countries merely repeat their 45-year-old commitment to allocate 0.7% of their Gross National Income (GNI) to Official Development Assistance (ODA). The problem is that only a handful of developed countries have ever met this target.
South Africa welcomes the work carried out by the Ad Hoc Committee on Debt Restructuring Processes. South Africa, within the Group of 77 and China, will continue considering improved approaches to restructuring sovereign debt, taking into account the newly adopted Basic Principles and work carried out by the international financial institutions, in accordance with their respective mandates.
The 10th Ministerial Conference of the World Trade Organisation (WTO) will be held for the first time in Africa, in Nairobi, Kenya this December. South Africa urges the international community to work tirelessly to conclude the Doha Development Round of negotiations and give priority to issues that address the imbalances and inequities of the current global trading system by agreeing on legally binding outcomes that will allow developing countries to effectively engage in equitable global trade.
In December at the upcoming Paris Climate Conference, we hope to adopt a new legal agreement which we are currently negotiating under the Durban Platform for Enhanced Action.
It is important that this multilateral process on climate change be respected and lead to the adoption of an ambitious and fair agreement in Paris. This agreement should serve our twin objectives of ensuring environmental integrity, whilst protecting the development space of developing countries. To be successful, the new legal agreement must be fair.
Fairness would imply respect for the Convention’s principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR&RC). There should be differentiation between the actions required of developed and developing countries based on different capacities and historical responsibility for climate change. Respect for CBDR&RC also means the provision of the financial and other support from developed countries that developing countries require to enable them to undertake their best efforts to address the climate challenge.
The new legal agreement must accord adaptation the same priority as mitigation. Since adaptation is a global responsibility, we should call for the adoption of a global goal on adaptation.
Means of Implementation and support for developing countries (public sector finance, technology transfer and capacity building) will be of central importance to the Paris outcome.
Developed countries should commit to a goal of jointly mobilising US$ 100 billion per year by 2020 to address the needs of developing countries. Funds provided to developing country Parties may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources.
A significant share of new multilateral funding for adaptation should flow through the Green Climate Fund.
It is essential that existing commitments covering the pre-2020 period are honoured and that the second commitment period to the Kyoto Protocol comes into force preferably before COP21/CMP11. The new legal agreement covering the post-2020 period will have limited credibility if there is insufficient action in the pre-2020 period.
The 70th anniversary of the UN is also an opportune time for us to evaluate and discuss ways in which to strengthen South-South cooperation. South-South cooperation remains important for strengthening the economic independence of countries of the South and is not a substitute, but rather a complement to North-South cooperation.
We should also look at ways in which we could strengthen the institutions of the Group of 77 and China. We must ensure that the Secretariat of the Group is adequately funded to ensure that it carries out the Group’s objectives in an effective and efficient manner. Similar support should also be extended to institutions that promote and contribute to the unity and solidarity of the Group, including the South Centre, in order to be our power houses for service delivery, knowledge sharing, information, professionalism and excellence.
During this session, we will approve both the biennial budget for 2016-2017 and the scales of assessment. The Group should continue to stress that the level of resources approved by the General Assembly must match the increase in mandates and activities approved by Member States. It is essential that arbitrary cost-cutting not be used as an excuse to shift funding from developing country programmes to the detriment of the South.
In conclusion, and in view of our ongoing endeavours for a fair and just world, the Group of 77 and China should remain involved and relevant in all multilateral processes, specifically at this important juncture when the international community is considering our collective development aspirations beyond 2015. From our own experience, it is clearly evident that the G77 is most powerful when it is most united. Let us harness the diversity of our group to fortify our unity.
I thank you.
Statement by Helen Clark, Chair of the United Nations Development Programme (UNDP)
It is a pleasure to address this Ministerial Meeting of the Group of 77 and China. I thank the Permanent Representative of South Africa for his leadership and his work with the United Nations in New York.
Can I take this opportunity to wish the people of South Africa a happy Heritage Day today – a day established in recognition of the diverse cultural heritage of the country.
A new era for sustainable development: Agenda 2030
As the UN marks its 70th anniversary this year, Member States are also launching a new era for sustainable development.
“Transforming our world: the 2030 agenda for sustainable development” is due to be adopted tomorrow. This new agenda is bold, ambitious, and visionary, and will guide our work together for the next generation. At its centre is the urgent task of eradicating poverty.
The process of formulating and adopting the seventeen Sustainable Development Goals (SDGs) has been inclusive and participatory. G77 and China has played a central and crucial role, as the Group does in all the work of the United Nations through its commitment to multilateralism and to finding enduring solutions to the world’s most pressing challenges.
As attention now turns to implementation of the sustainable development agenda, ever deeper engagement of the Global South is essential. UNDP stands ready to support implementation of the SDGs, at national request and in line with national priorities.
Eradicating poverty is a necessary condition for sustainable development. Thus it is important that the integrated nature of the 2030 Agenda directs us to the root causes of poverty. That means addressing vulnerability and exclusion, and providing opportunities for all. In supporting the new agenda, UNDP will also focus on reducing risks from shocks, on rapid and effective recovery from conflict, and on helping countries to prepare for and deal with the consequences of climate change and natural disasters.
Our support for the implementation of the new agenda will be based on an approach we are calling “MAPS” – Mainstreaming, Acceleration, and Policy Support:
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First, under mainstreaming, we will, at national request, work with countries to reflect and incorporate the SDGs into national development plans, policies, and budgets. This work is already underway in a number of countries.
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Second, we will support countries to accelerate progress on SDG targets they have identified as priorities for action. Here we will draw on our experience with the MDG Acceleration Framework, which over the past five years has helped many countries to remove bottlenecks and accelerate progress on lagging targets.
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Third, the policy expertise of the whole UN development system will be available to governments as they pursue integrated policy solutions to sustainable development challenges.UNDP is committed to working with the Group of 77 and China to meet the aspirations of the new development agenda. We will be guided by our mandate, and strengthened by our universal presence, our extensive knowledge network, and our role as co-ordinator of the UN development system. We can contribute to the design and implementation of the kinds of integrated solutions so urgently needed for sustainable development.
Financing the new agenda requires big partnerships
The financing requirements for achieving the internationally agreed development goals and meeting national aspirations are large. All sources of finance – domestic and international, public and private – must be drawn on. The different sources of finance need to complement and reinforce each other.
The Addis Ababa Action Agenda, agreed in July, updated the financing for development framework, set important priorities for investment, and agreed on new mechanisms to finance technology and infrastructure needs.
The Addis Agenda rightly highlights the vital and continued need for Official Development Assistance (ODA), and for its more catalytic use to build national capacities for domestic resource mobilization. UNDP will continue to advocate for this.
ODA remains particularly vital for many countries, especially for LDCs, LLDCs, SIDS, and other countries in special development situations.UNDP will continue to prioritize support for the poorest and most vulnerable countries. In 2014, ninety per cent of our core programme resource was allocated to low-income countries, and 74 per cent to LDCs.
UNDP will continue to support countries to secure the resources they need to pursue development, manage risk, and build resilience to shocks.
Our ability to do all this and more, as effectively as possible, depends on a strong base of core funding.
That is why we have launched the ‘100 Partners’ campaign, to expand the number of contributors to our core budget from 56 Member States last year to one hundred by 2017. This is also important for reinforcing UNDP’s universal and multilateral character: it is not financially or politically sustainable to rely on just fifteen partners for 97 per cent of our Core funding.
We therefore greatly value the core budget contributions we receive from a number of G77 and China members. I invite all members of the Group to support the campaign, and to consider whether they can make a core contribution from 2016. A more diverse funding base will add great impetus to our work to advance human and sustainable development.
South-South Co-operation vital to the new global agenda
South-South Co-operation has become a vital source of innovation, knowledge, expertise, and solutions in tackling development challenges. It will play a central role in implementation of the new global agenda – not as a substitute for, but as a complement to traditional North-South ODA.
G77 and China itself is illustrative of South-South Co-operation at work – bringing together a diverse array of Southern perspectives for collective decision making. UNDP recognizes and values the importance of South-South Co-operation which the G77 helps to promote and foster.
UNDP has made South-South and Triangular Co-operation central to its work, placing it at the heart of our Strategic Plan for 2014-17. Our global and regional programmes prioritise support for South-South and Triangular Co-operation, which are fully integrated in guidelines for our Country Programme Documents.
A centerpiece of UNDP support is its hosting of the UN Office for South-South Co-operation. The Office plays a lead role in strengthening system-wide efforts on SSC. UNDP highly values its hosting role, which works in synergy with its broader role as a knowledge broker, a builder of capacity, and a facilitator of exchanges among developing countries.
50th Ministerial & Conclusion
Next year UNDP turns 50. Our five decades of development practice in over 170 countries and territories have had a lasting impact around the world. Yet, there is much more to be done.
We will be hosting a high-level Ministerial Meeting on February 24 next year to mark UNDP’s 50th anniversary. We will also take this opportunity to recognize our long term relationships with programme countries. I hope senior country representatives of G77 and China will join us on this important occasion in New York.
As UNDP embarks on the new era of sustainable development support and our next half-century, we look to build new partnerships and strengthen existing ones, to continue our mission to eradicate poverty in all its forms, to promote inclusive growth, and to protect the environment.
We look forward to working closely with G77 and China to realize our mission. Thank you all for your goodwill and support.
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Azevêdo: “Our record in recent years shows that we can deliver”
In a speech delivered at the Peterson Institute in Washington D.C. on 24 September 2015, Director-General Roberto Azevêdo said that over the past 20 years, the WTO has firmly established itself as part of the architecture of global economic governance. Looking ahead, he said that the WTO “must build on recent success in order to deliver even more in the future” and that the prospects for global cooperation in trade are encouraging. This is what he said:
It’s a pleasure to be in Washington once again.
I want to thank our friends at the Peterson Institute for organizing this event.
In 1995, 128 governments came together to create a global organization to govern trade.
Now, 20 years later, I think it is a good time to assess the progress made so far, and also to think about what the next 20 years might hold.
The US has played a leading role throughout the history of the multilateral trading system. And that leadership will be as important as ever as we shape its future.
Yet, often, in the active trade debate in Washington nowadays, the WTO does not feature very strongly. You are more likely to hear about the TPP or TTIP negotiations.
And this is no surprise. The WTO has faced big challenges over its 20 years, some of which have shaken people’s faith in the system. The slow progress of the Doha Round is an obvious background in any such conversation.
There is no denying this – and I will come back to the negotiating function of the WTO in a moment. But it is important to remember that the WTO is about more than its negotiating function alone.
The organization is much broader, and so I think we should also remember the significant contribution that the WTO makes to global economic governance.
Achievements over 20 years
Trade is now governed by a robust organization, with a much broader scope than in the GATT years, and backed-up by a fully-functioning, automatic and mandatory dispute settlement system.
As a result, the cause of liberalised, inclusive, rules-based international trade has been advanced significantly.
In these two decades, 33 members have joined the WTO, including big players such as China and Russia. So today, the WTO covers 98% of global trade flows.
It is no coincidence that, over this period, average tariffs have fallen dramatically – in fact they have been cut in half. Average applied tariffs were 15 per cent in 1995. Today they stand at less than 8 per cent.
And trade volumes have more than doubled.
In addition, social issues have come to the fore in the trade debate over this period. The impact of trade policy on people’s lives is something which is always on my mind – largely because it can be such a powerful tool in the fight against poverty.
The new Sustainable Development Goals which are being agreed this week in New York are a reminder of this as they place significant emphasis on the role that trade can play.
And of course the visit of Pope Francis is another reminder. His Holiness has delivered important messages on the role of multilateralism in providing an equitable trading system which supports small and poor countries.
I think the debate at the WTO now puts much more emphasis on these important issues – and of course, the voices of developing and least-developed countries are heard in that debate as never before.
It is also worth remembering that much of the day-to-day work of the organization goes unseen, but it is vital in administering the global trading system, and keeping commerce flowing.
On a daily basis, WTO members monitor each other’s practices and regulations to ensure that agreements are being observed.
The regular activities of WTO committees and bodies, for instance, enable members to exchange information, raise concerns and suggest new approaches on a range of standards and regulations. They deal with all sorts of real-life issues – from the use of chemicals in toys or toxins in food, to the labelling of products. Hundreds of issues are raised and discussed each year.
Moreover, our regular monitoring exercises, examining countries trade policies and trade restrictive measures, help to improve transparency and avoid protectionism.
In this way the system helped to avoid an outbreak of protectionism after the financial crisis. We have stepped-up our monitoring work since then.
Our latest report shows that trade protectionism remains of concern to the global economy. However, there has also been some more positive news in the most recent reporting period showing that the number of trade liberalizing measures has also been improving.
When disagreements arise in these monitoring activities – as they often do – the WTO offers a platform for dialogue that very often results in mutually acceptable understandings.
If disagreements prove unbridgeable, we offer a dispute settlement mechanism that has a solid track record on the international stage.
In just 20 years we have successfully dealt with almost 500 trade disputes, helping members settle differences in an open and transparent manner.
This is a phenomenal level of demand.
It has put pressure on the dispute settlement system. But I think that pressure is a result of its success.
And the topics that are being handled in our disputes show that the WTO is in tune with current issues.
Recent disputes touch upon: the relationship of trade and renewable energy; policies to discourage tobacco consumption; packaging information for consumers; preservation and management of exhaustible resources; and many other issues.
In this way the jurisprudence arising from these cases can help to update trade rules in an incremental way.
Indeed, the fact that the bulk of the WTO rulebook is now 20 years old is not, in itself, a problem.
When they founded the WTO and agreed the legal texts, our members provided the equivalent of a constitution for global trade.
That constitution enshrines the basic principles of trade – such as non-discrimination, or national treatment – which will stand the test of time.
But of course, we do need to negotiate new rules as well. Especially where we need more clarity or where we have no disciplines at all.
Overall, I think the organization has helped to enhance global cooperation on trade in a range of ways.
But our underperformance on the negotiating front has become our Achilles heel and is something we cannot ignore if we are seeking to improve the overall health of the organization.
Negotiations and RTAs
Of course there have been some real negotiating successes in the WTO over the past 20 years.
We have negotiated new agreements and improvements in Telecommunications, Financial Services, and Government Procurement.
In fact, we had a major breakthrough in the expansion of the Information Technology Agreement this July.
This is the first tariff-cutting deal at the WTO in 18 years – and it is a big one.
It will eliminate tariffs on over 200 IT products. Trade in those products is valued at over 1.3 trillion dollars each year. So that means the deal will eliminate tariffs on approximately 7% of global trade.
Now, these are examples of agreements that were negotiated by groups of members.
But we have also shown we can deliver multilaterally.
The Bali Package – negotiated two years ago, and including the Trade Facilitation Agreement – is clear proof of that.
Again this will deliver real economic benefits – providing a boost of up to 1 trillion dollars each year to the global economy, once the agreement is implemented.
So promising steps have been taken.
But clearly, we need to deliver more, and to deliver it more quickly. And we cannot naively expect that market access negotiations would move as fast multilaterally as they do regionally and bilaterally.
This is illustrated by the emergence of the major Regional Trade Agreements that we are seeing today.
And we must consider how these agreements fit with WTO rules in particular.
This is something that the G20 has asked us to take a detailed look at.
What we have found so far is that WTO rules provide the basis for many RTAs. When RTAs deal with issues covered by WTO disciplines, those disciplines are maintained. This is mostly the case in anti-dumping provisions, safeguards, technical barriers to trade, sanitary and phytosanitary measures, and rules of origin in services.
However, RTAs also go beyond WTO rules in some areas. And we need to think about the implications of this into the future, as RTAs tackle new subjects. A proliferation of different rules and standards would be a drag on business, so this is an important area of work.
But of course, we shouldn’t overstate the issue. The multilateral trading system has always coexisted with regional agreements – and proved to be mutually reinforcing.
Indeed, there are many issues which RTAs cannot address, such as agriculture or fishing subsidies. These are issues that need to be discussed collectively, with a multilateral approach.
And so this puts the spotlight back on the WTO – and our capacity to negotiate.
Future of negotiations
We need to have a firm, honest look at the current situation.
Right now, we are working hard to deliver meaningful outcomes in our next Ministerial Conference in Nairobi, this December. This will be the first time such a meeting has been held in Africa.
But as things stand today – and this won’t come as a surprise – it doesn’t look like there will be big breakthroughs in the issues that have been stalled for so long, such as domestic support in Agriculture and market access in Agriculture, NAMA and services.
The gaps in these areas are still very big. The situation may change, but there are few signs of this at present.
And if there are no prospects for a major advance on these issues, members will need to face the reality. They will need to think about what they want the WTO to be and how it should work in the future.
It’s a very important debate. The paper prepared by the Peterson Institute earlier this year, on the future of the WTO, was a welcome contribution to the discussion. Indeed it is a debate receiving attention at the highest political levels. At the Brisbane meeting last year, G20 leaders discussed what can be done to make the international trading system work better. And they plan to return to it at their Summit in Turkey in November.
Despite differences on major issues, I think there is still potential for a meaningful agreement in Nairobi. And indeed delivering a successful Nairobi meeting is perhaps the best thing we can do to make the system work better.
From conversations with a wide range of members – and groups of members – I sense that a set of deliverables in Nairobi is within reach.
These include outcomes on export competition in agriculture, as well as a number of provisions to improve transparency in several areas.
And crucially, there is a broad understanding across the membership that those deliverables must include significant steps on development and LDC issues.
We must continue our efforts in domestic support and market access, but we also need to start some serious work on these promising issues.
So that is our immediate challenge.
Looking at our negotiating prospects more broadly, I think a look at our history can provide some important clues on possible ways forward.
We have proven that we can negotiate at the WTO, and we’ve often had success where we’ve taken more innovative approaches.
I see this work as following two broad tracks.
The first track is where all members are involved.
In these cases we are talking about a very diverse group. So the approach must reflect that.
This means that we can’t have a monolithic, rigid outlook. In my opinion, the days of the ‘one size fits all’ approach are gone.
We need to have flexibilities inbuilt into agreements, which allow members to take on obligations at an appropriate pace according to their capabilities, and providing assistance to help them to do so when necessary.
Bali – especially the Trade Facilitation Agreement – provides precisely this type of template.
This provided a new attitude to the way we look at negotiations, and proved that we can find common ground.
So I think this is food for thought.
Now, the second track to advance negotiations is one that embodies less than the full membership – for example, in pursuing sectoral agreements.
These kinds of approaches have provided an important avenue for groups of members to tackle specific issues of importance to them.
And this is a format we know how to work with, and where we’ve had many achievements.
Just look at the breakthrough we had in negotiating the expansion of the Information Technology Agreement.
And this is also the template followed by the prospective Environmental Goods Agreement – which again tackles a very important, emerging sector.
Of course, this track can be more rigid and demanding in its application, and demands much effort and commitment. Thus, not all members might be equipped to join them.
But because the agreements are negotiated in the WTO, their benefits are available to the other members as well.
So we have at least two possible ways to explore negotiations. And let’s not ignore the possibility of hybrid approaches.
Of course, major trade rounds are very important. But the trading system has never been limited to that.
When progress is more difficult, we need to use the full range of tools available to us. We need to be innovative and keep an open mind to new formats and approaches.
Conclusion
The question posed in the title of this event today is: what are the future prospects for global co-operation in trade?
I think that the answer, based on WTO’s track record in the last 20 years, is that the prospects in most areas are encouraging. Indeed I am positive about the future of the Organization. I certainly do not agree with some of the doomsayers who would say the best years are behind us. It is quite the opposite!
Today the WTO is firmly established as part of the architecture of global economic governance. The rule of law in trade is spread wider than ever before. And the daily work of administering the system – monitoring trade policies and settling disputes – provides an invaluable framework for members.
Yes, we need to look at how we can restore the negotiating function to a more positive footing – but I think we made a good start to that in Bali and again earlier this year, and I want to ensure that we continue this in Nairobi.
While I would not deny that we face real challenges, if you expect to be a truly relevant institution for global economic governance, the challenges and the stakes are always going to be very high.
Our record in recent years shows that we can deliver – and that we can do so in a variety of ways.
We should not lose sight of that. We must build on recent success in order to deliver even more in future.
And we have some clear next steps ahead of us to make it happen.
This starts with delivering the expanded Information Technology Agreement, implementing the Trade Facilitation Agreement and other Bali outcomes, pushing forward the Environmental Goods Agreement, and – most important of all – delivering meaningful outcomes in Nairobi.
In fulfilling this mission, your involvement and contributions will be as important as ever.
I hope we can continue to rely on your support – and welcome your views on the way ahead.
Thank you.
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Inclusive business a key contributor to the new global development agenda
Business Call to Action sees strong increases in membership, commitments to improve lives and livelihoods for world’s poor people
From small social entrepreneurships to large national and multinational companies, from urban neighborhoods to remote communities, from the farmyard to the schoolhouse, an increasing number of companies have rallied around the Business Call to Action (BCtA) by committing to inclusive business models designed to support the new sustainable development agenda and drive growth.
At its Sixth Annual Forum on 24 September 2015, BCtA announced commitments by 33 companies in support of the new Sustainable Development Goals (SDGs). This is the largest number of new members in a single year and represents a significant increase in the scope of commitments by companies to use viable businesses ventures that include those at the base of the economic pyramid as suppliers, distributors, retailers or customers. And it brings to 137 the number of businesses that have joined BCtA’s leadership platform since it launched in 2008.
“The private sector is a valuable – and valued – partner in our collective efforts to support sustainable development around the world. We have seen major increases in the private sector’s interest and involvement in development over recent years,” said Magdy Martínez-Solimán, UNDP Assistant Administrator and Director of Bureau for Policy and Programme Support. “Companies cannot advance inclusive business alone, they need support from many stakeholders which brings us back to the importance of partnerships in realising this new global development agenda.”
New BCtA member companies have made commitments to 10 of the 17 new SDGs. These include commitments to SDG 2 (Zero Hunger) to help 5.4 million farmers experience better agricultural yields; SDG 3 (Good Health and Well-being), to ensure health and promote well-being for 100.5 million people; SDG 5 (Gender Equality) to achieve ender equity and empowerment for 3.2 million women through increased productivity and revenue generating activities; and SDG 8 (Decent Work and Economic Growth), by creating 100,000 full time jobs. The new members, 68 percent of which are small- to medium-sized and social enterprises, are working in 37 locations in 19 countries (including not previously part of BCtA’s network) with 57 percent in Africa, 30 percent in Asia and 14 percent in Latin America. Six are led by women.
“The advantages of inclusive business are tangible, spurring the increase in the number of companies engaging in these innovative models and joining BCtA. For businesses, our newest members’ initiatives are helping to drive product innovation (Banka BioLoo, Basic Water Needs), open new markets (AccuHealth, Bata), strengthen supply chains (Lal Teer, Equator Kenya,) uncover new sources of profitability (CrediFamilia, Ignitia), and enhance long-term competiveness (Novo Nordisk, Access Afya),” said Sahba Sobhani, Office in Charge, Business Call to Action and Global Programme Advisor, Private Sector, BPPS. “As a result, people at the base of the economic pyramid are enjoying the benefits of higher productivity, sustainable earnings and greater empowerment. Engaging in Inclusive business offers the potential to unleash the economic power of the private sector to realise the SDGs.”
BCtA’s Sixth Annual Forum showcased the potential for and evidence of inclusive businesses aligning their core business activities with the SDGs and featured leaders from BCtA member companies, as well as senior representatives from governments, bilateral donors, civil society and the United Nations.
New Business Call to Action Members 2015
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AACE Foods: Combating malnutrition in Nigeria while engaging smallholder farmers in value chains.
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Access Afya: Bringing affordable health care to low-income families in Kenya
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AccuHealth: Expanding tele-monitoring of chronic non-communicable disease in Latin America.
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aWhere: Providing agricultural intelligence to smallholder farmers for better decision making.
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Banka BioLoo: Improving health and dignity in India through sustainable and affordable sanitation solutions.
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Basic Water Needs: Expanding access to safe drinking water for communities at the base of the economic pyramid in Malawi.
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Bata Shoe Company: Empowering women in Bangladesh, Latin America and Africa through the Rural Sales Program.
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BIDCO Africa: Building the livelihoods of smallholder farmers and entrepreneurs along the value chain.
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Centurion Systems: Building technical capacity and increasing the employability of low-income youth in Kenya
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Contigo: Providing financial services to bottom-of-the-pyramid customers in Mexico.
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Credifamilia: Increasing access to mortgage financing for low-income customers in Colombia.
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DDD Kenya: Enabling Kenyan youth to bring their families out of poverty through employment, skills and education.
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Equator Kenya: Increasing smallholder farmers’ productivity in Kenya through technology.
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GE Healthcare: Delivering sustainable, affordable healthcare through education, training and low-cost technologies.
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Ignitia: Providing reliable weather forecasting for informed decision making by farmers in the tropics.
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Ilumexico: Expanding solar energy solutions in off-grid rural communities in Mexico.
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Lal Teer Seed: Enhancing the sustainability of Bangladesh’s agricultural sector.
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Lotus Foods: Cultivating markets for sustainably produced rice in Asia and Africa.
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Medtronic Surgical Technologies, Inc.: Preventing hearing loss and empowering women in India through the Shruti Program.
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Mozambikes: Improving living standards in Mozambique through access to transportation.
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Nairobi Techpharm: Pharmnet®: a network of trusted pharmacies in Kenya.
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Novo Nordisk: Facilitating access to diabetes care for bottom-of-the-pyramid communities in Kenya.
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ONergy: Providing rural communities with access to clean energy in India.
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Pamoja Cleantech: Providing off-grid productive power from sustainable biomass for rural Ugandans.
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Pronaca: Strengthening the supply of domestically sourced corn in Ecuador
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Sanofi: Providing diabetes care for low-income people in Colombia
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salaUno: Providing accessible eye care for the bottom-of-the-pyramid communities in Mexico.
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Sevamob: Increasing access to primary healthcare in India via mobile clinics and a tele-health marketplace.
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Shiseido: Empowering women and improving hygiene in rural Bangladesh.
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Shubham Housing Development Finance Company: Building communities through access to home financing in India.
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Sompo Japan Nipponkoa Holdings, Inc.: Enhancing the resilience of small-scale farmers across Southeast Asia.
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Tolaro Global: Building the cashew nut value chain with smallholder farmers in Benin
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Vava Coffee: Expanding access to credit and financial training for smallholder coffee farmers in Kenya.
About Business Call to Action (BCtA): The Business Call to Action challenges companies to advance core business activities that are inclusive of poor populations and contribute to the achievement of sustainable development goals. Worldwide, 137 companies, from SMEs to multinationals, have responded to the BCtA by making commitments to improve the lives and livelihoods of millions through commercially-viable business ventures that engage low-income people as consumers, producers, suppliers, and distributors of goods and services.
The Business Call to Action is a unique multilateral alliance between key donor governments including the Dutch Ministry of Foreign Affairs, Swedish International Development Cooperation Agency (Sida), UK Department for International Development (DFID), US Agency for International Development (USAID), and the Ministry of Foreign Affairs of the Government of Finland, and the United Nations Development Programme – which hosts the secretariat – in collaboration with leading global institutions, such as the United Nations Global Compact, and the Inter-American Development Bank’s Opportunities for the Majority Initiative.
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Luwellyn Landers: “Strengthening the African Agenda through the AU, BRICS and FOCAC”
DIRCO and ACCORD Public lecture delivered by the Deputy Minister of International Relations and Cooperation, Mr Luwellyn Landers, at the University of KwaZulu-Natal, Howard College Campus, on 21 September 2015
I am humbled by your attendance of this public lecture which seeks to reflect on South Africa’s foreign policy engagements.
We have decided to base our interaction today on the important topic of South Africa’s foreign policy, which is “Strengthening the African Agenda through the AU, BRICS and FOCAC”.
It is within this context that I will share with you some of the key outcomes of the 25th African Union (AU) Summit we hosted in June 2015 and the 7th Brazil, Russia, India, China and South Africa (BRICS) Summit which took place in July 2015. We will also reflect on South Africa’s hosting of the upcoming 2nd Summit of the Forum on China-Africa Cooperation (FOCAC), scheduled for December 2015.
South Africa’s African Agenda is premised on the Pan Africanist vision of creating a peaceful, stable and prosperous continent. Since the attainment of democracy, we have continued to premise our foreign policy on the inherent African identity and collective aspirations.
The African Union
We undertook to place the interests of the continent at the centre of democratic South Africa’s foreign policy. South Africa viewed the transformation of the Organisation of African Unity (OAU) into the current AU as an important and required shift in focus. Our hosting of the inaugural AU Summit in July 2012 here in Durban was one of the milestones in the country’s contribution towards advancing the African Agenda. We wanted to ensure that a ‘better life for all’ that we seek for ourselves, is translated into concrete actions that would lead us to a better Africa.
Africa took it upon itself to ensure that we are liberated from the shackles of colonialism and apartheid. Former President Nelson Mandela reflected in a Statement at the OAU Meeting of Heads of State and Government on 13 June 1994 when he said:
“Africa shed her blood and surrendered the lives of her children so that all her children could be free. She gave of her limited wealth and resources so that all of Africa should be liberated. She opened her heart of hospitality and her head so full of wise counsel, so that we should emerge victorious. A million times, she put her hand to the plough that has now dug up the encrusted burden of oppression accumulated for centuries”.
South Africa’s role in the conception of the New Partnership for Africa’s Development (NEPAD) gave meaning to the concept and the pursuit of African solutions to African problems. We sought to move from a developmental approach prescribed by international actors. NEPAD remains a frame of reference for all our interactions with Africa’s international partners, including FOCAC, which I will reflect on later.
We have championed the establishment of the African Peer Review Mechanisms (APRM) as a voluntary mechanism to deepen democracy and good governance on continent.
Our role in peace and security initiatives on the continent is well documented. We therefore continue playing a very active part in the Prevention, Management and Resolution of conflict in Africa. South Africa has assumed a leading role in the establishment of the AU’s Peace and Security Architecture.
Since the advent, we have deployed resources both directly and through our multilateral institutions such as SADC, AU and the UN to strengthen our mediation efforts in Zimbabwe, Burundi, Madagascar, Sudan, Cote d’Ivoire and Libya to mention but a few. South Africa’s commitment to post conflict reconstruction and development has yielded good results as evidenced in countries such as Sudan; Somalia, the DRC, Lesotho, Madagascar, Comoros and CAR amongst others.
South Africa has strived to improve working relations between the United Nations Security Council and the AU Peace and Security Council. In this regard, we have contributed personnel to multinational peace and security initiatives in support of regional AU and UN peace missions in amongst others Lesotho, Burundi, Comoros, Ethiopia and Eritrea, Sudan and the Democratic Republic of the Congo.
In the recent past, South Africa contributed to the establishment of the African Capacity for the Immediate Response to Crises (ACIRC), which is the precursor of the African Standby Force (ASF). We will later in 2015 host the Amani Africa II Field Training Exercise, comprising forces from the region and ACIRC to test the readiness of the ASF.
We have spared no energy in pursuing of the African dream. South Africa contributed to the development and adoption of Africa’s Agenda 2063 – a 50-years shared strategic framework for people-centred, inclusive growth and sustainable development. This vision is rooted in the Pan African drive “for self-determination, freedom, progress and collective prosperity,” which seeks to realise the following seven aspirations:
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A prosperous Africa based on inclusive growth and sustainable development;
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An integrated continent, politically united, based on the ideals of Pan-Africanism; including free movement of people, capital, goods and services;
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An Africa of good governance, respect for human rights, justice and the rule of law, including the entrenchment of democratic values, universal principles of human rights and gender equality;
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A peaceful and secure Africa, inclusive of the capacity to protect its citizens and interests, through a common defence, foreign and security policy;
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An Africa with a strong cultural identity, values and ethics; where our diversity in culture, heritage, languages and religion shall be a cause of strength;
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An Africa whose development is people-driven, especially relying on the potential offered by its women and youth; characterized by empowered women and youth; and
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Africa as a strong, resilient and influential global player and partner, through being an active and equal participant in global affairs; and financing its own development.
I indulge you in the details of Agenda 2063 because it is a vision which will be guiding us towards the Africa we seek to achieve. In the same vein the 25th Session of the AU Heads of State and Government was held in South Africa in June 2015 under the theme “Women’s Empowerment and Development Towards Agenda 2063.”
The Summit adopted the First Ten-Year Implementation Plan of Agenda 2063, which identifies those absolutely key projects that have to be attained by 2023.
Further, the Continental Free Trade Area (CFTA) negotiations were launched by the Summit. This will go a long way in integrating Africa’s markets and facilitating free movement of goods and means of production. The CFTA will contribute towards economic connectivity in Africa and bolster Intra-African Trade.
BRICS
South Africa participates in BRICS to advance its own interests, the interests of Africa and the global South. We share a common vision with other members of BRICS. It is a vision which we will continue to pursue through economic cooperation, sharing of technical expertise, knowledge and experiences.
You will recall that when we hosted the 5th BRICS Summit in 2013 here in Durban, selected African leaders participated in the BRICS Retreat. This approach is informed by our continued commitment to utilise different forums and partnerships to advance the African Agenda as a thrust of South Africa’s foreign policy. BRICS leaders committed to cooperate and support Africa to diversify its economies through infrastructure development, knowledge exchange, building and investing in the continent’s human capital.
The Seventh BRICS Summit was held in July 2015 in Ufa, the Russian Federation. The Summit marked a new era for BRICS engagement, as well as South Africa’s engagement with BRICS. In this regard, the Agreement on the New Development Bank (NDB) and the Treaty Establishing a Contingent Reserve Arrangement, which was signed during the Sixth BRICS Summit in Fortaleza, Brazil entered into force in Russia.
South Africa subsequently undertook the necessary steps to honour our obligations to support the operationalisation of the Bank’s Headquarters in Shanghai and to open the African Regional Centre in Johannesburg concurrently. Mr Leslie Maasdorp was appointed as South Africa’s Vice President to the Bank while Mr Tito Mboweni was appointed our Non-Executive Director of the Bank. The Minister of Finance Mr Nene will represent South Africa in the NDB Board as Governor.
In line with our BRICS commitment we are seconding South African government officials and experts to Shanghai to assist with the drafting of the Bank’s legal, strategic and financial policies.
We are also sourcing and preparing a new generation of experts to assume permanent positions at the Headquarters and our own African Regional Centre.
The Executive Management Team of the NDB is busy finalising the required policies, legal requirements and modalities in order to commence with its core business. Once completed we envisage the bank to approve and announce its first loans for projects in early 2016. South Africa will submit its own project proposals when the time is right, which will also include a regional project.
The BRICS Bank is not a replacement to any of the Bretton Woods institutions. Rather, the Bank will enable developing countries to fund large-scale projects on their own terms. These are complementary institutions to the existing global financial architecture to ensure a more direct response to the needs of developing countries.
The Summit endorsed a Strategy for BRICS Economic Partnership aimed at deepening of trade and investment ties within BRICS. The Strategy will contribute towards increasing value-added exports, as well as promoting investments among BRICS.
Allow me to briefly reflect on the number of Agreements and/or Frameworks that were concluded at the Summit, including:
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Agreement among the Governments of the BRICS Member States on Cooperation in the Field of Culture;
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Memorandum of Understanding on the Creation of the Joint BRICS Website;
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Memorandum of Understanding on Cooperation with the New Development Bank by the members of the BRICS Interbank Cooperation Mechanism (for South Africa it is the Development Bank of Southern Africa); and
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BRICS Framework Programme for funding multilateral joint research projects under the auspices of the Science, Technology And Innovation track during a meeting of experts prior to the Summit.
The Summit also witnessed the inaugural formal meetings of the BRICS Parliamentary Forum, BRICS Civil Forum, Youth Summit/Forum and the Business, Academia and Trade Union fora.
FOCAC
The relationship between China and Africa has experienced an immense trajectory of growth over the last ten years. China has become Africa’s largest trading partner, and Africa is now one of China’s major import sources. The continent is considered China’s second largest overseas construction project contract market and fourth largest investment destination.
I should state from the onset that the gains that have been realized are mutually beneficial to Africa and China. FOCAC is therefore an important structured mechanism for our engagement with China. Its intention is to strengthen equal and harmonious partnership, grounded in the pursuit of economic development and catalysing Africa’s industrial revolution. Much of the structured interaction between China and Africa has been through the FOCAC Ministerial meetings.
South Africa assumed the role of Co-chair of the Forum on China-Africa Cooperation (FOCAC) during the 5th Ministerial Meeting of the Forum, which took place in Beijing in July 2012. South Africa will continue in this role until 2018, when it will hand over to the next Co-chair on the African side. It is against this backdrop that South Africa will be hosting the 2nd Summit of FOCAC in Johannesburg in early December 2015.
The Johannesburg Summit is an extra-ordinary activity that can only be convened with the consent of all members of the Forum. The decision for South Africa to host this meeting was first mooted by President Xi Jinping and President Jacob Zuma during their bilateral discussions on the margins of the 6th BRICS Leaders’ Summit in Fortaleza, Brazil in March 2014.
This will be the 2nd such Summit, following the convening of the inaugural in 2006 in Beijing. The Beijing Summit was a seminal event in the life of FOCAC which gave real impetus to the partnership. It was during this Summit when President Hu Jintao announced the Six New Measures for China-Africa Cooperation. These included the creation of the China-Africa Development Fund to assist in driving China’s manufacturing investment on the continent.
The theme for the upcoming 2nd FOCAC Summit is “Africa-China Progressing Together: Win-Win Cooperation for Common Development”. This theme is designed to take into account the aspirations of both the African continent and China. It also seeks to ensure increased focus on Agenda 2063 and its First Ten-Year Implementation Plan as a driving force of Africa’s partnerships with the rest of the world.
South Africa will utilise the occasion of the Summit to advocate for the centrality of the AU in all African development partnerships. We will collectively seek to bring in key elements of Agenda 2063 and its First Ten-Year Implementation Plan as Africa’s guiding vision for its development into the FOCAC Plan of Action.
The Summit will focus on a number of key areas critical to the growth of African economies. The pursuit of Africa’s integration agenda is central to the continent’s developmental aspirations. In this regard, President Zuma plays a significant role as an AU champion for infrastructure development.
We are confident that China will continue to be a partner on regional infrastructure development. This ties in with the work of NEPAD in the context of the Programme for Infrastructure Development in Africa (PIDA), and President Zuma’s role as the Chair of the Presidential Infrastructure Championing Initiative (PICI) and Champion of the North-South Corridor.
The following issues will undoubtedly dominate our discussions:
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Improving railway connectivity, in particular networks that can facilitate intra-regional trade;
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Developing a suitable road infrastructure that enables regional trade and the movement of people, goods and services;
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Improving sea shipping and air transport; and
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Investing in a well-developed ICT and digital economy.
China has the unique distinction of being the only country in the world to achieve full industrialisation within a 30-year period. This has been achieved determination to invest in people and technology, and to adopt best practice from pioneer countries. The Chinese experience can hold many lessons for Africa. Skills and technology transfer, as well as agro-processing are amongst the sectors that could be of benefit to Africa.
I would like to reiterate that democratic South Africa embraces the spirit of good neighbourliness. It seeks to contribute towards regional stability and development through cooperation with its neighbours.
Our identity is not merely on a geographical bases but we fully embrace African values and identity as an African country. In this regard, South Africa will continue to prioritise the development of the African continent through the creation of a peaceful and stable continent as an important impetus for prosperity.
In conclusion we must remember that our foreign policy is intrinsically linked to our domestic priorities. All our international engagements seek to address the triple challenges of poverty, inequality and unemployment and our objectives as set out in the National Development Plan. South Africa’s foreign policy remains an extension of our domestic policy.
We know our future well-being remains inextricably linked to the future of our continent. We know full well that we cannot address our own triple challenges of poverty, inequality and unemployment without full and inclusive growth and development in our country. We also know that our inclusive growth and development is dependent on the inclusive growth and development of our entire region and continent. Equally so, we know that there can be no growth and development of our continent without peace and stability, good governance and integrated regional and continental infrastructure development to ensure inter-regional and continental trade and economic development.
This is why we do what we do in Africa. This is why we focus on:
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Conflict resolution and conflict prevention;
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Post-reconstruction and development;
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Humanitarian support;
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Strengthening good governance architectural and institutional capacity support;
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Peace and security architectural and institutional support;
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Infrastructure development support; and
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Creating alternative global and continental financial support and institutions.
I thank you.
Related News
‘Something fishy’ about Investment Bill, says Sakoschek
There is something fishy about the Promotion and Protection of Investment Bill, which Trade and Industry Minister Rob Davies sees as a “guideline for negotiating future international commitments”.
This is according to Stefan Sakoschek, chairman of the EU Chamber of Commerce and Industry in Southern Africa, who believes “the government has a hidden agenda”.
He said: “The sentiment is that there is something happening that we [the European Chamber of Commerce and the American Chamber of Commerce in South Africa] are not aware of.”
According to Sakoschek, policy changes seem to be biased towards the Brics bloc – Brazil, Russia, India, China and South Africa; these countries have raised no concerns about the bill.
Sakoschek claimed that there is “preferential dealing with Russia and China”, which is a worry for his chamber.
His chamber was concerned that South Africa may go the way of other African countries that fall victim to the “Chinese vacuum cleaner, which is plundering [Africa’s] resources”.
He took issue with sub-standard Chinese goods being imported into South Africa, saying the playing field needed to be levelled.
He said that since it cost the National Regulator for Compulsory Specifications hundreds of millions to dispose of dangerous and counterfeit goods in South Africa, “we urge trade and industry to implement pre-import verifications of certain goods”.
“This would ensure a fair and equitable market, as well as compliance of imports to South African standards, protect consumers, help industrialise the nation, increase customs duties collections, and be in accordance with World Trade Organisation, which South Africa is a member of.”
The Promotion and Protection of Investment Bill, which is expected to ultimately replace bilateral investment treaties between South Africa and various countries, aims to create an all-encompassing investment framework for the country.
Davies wrote in a column, published in the Business Times this month, that the underlying philosophy of the bill is to “clarify” the protection that an investor may expect in South Africa, and to promote investments by creating a predictable business environment.
“Unlike the bilateral investment treaties that only provide protection to investors from countries with which South Africa signed and ratified these treaties, the bill protects both foreign and domestic investors,” he wrote. The minister added that the bill sought to “balance the rights and obligations of investors, to provide adequate protection to foreign investors, to ensure that South Africa’s constitutional obligations are upheld, and that the government retains the policy space to regulate in the public interest”.
But the business community finds the bill vague. The EU Chamber of Commerce is not the only one kicking up a fuss.
The Banking Association South Africa said the bill provided foreign investors less protection than bilateral investment treaties.
“Certain clauses of the bill are vague. This could impact negatively on the attractiveness of South Africa Inc as a destination for foreign investment and threaten the protection of South African investments abroad,” the association’s MD, Cas Coovadia, told parliament’s portfolio committee on trade and industry last week.
The American Chamber of Commerce in South Africa said the bill in its current form would have a disastrous effect on foreign investment in the country, which would cripple growth and job creation.
It said the bill would create “flight of investment out of South Africa” because it “does not promote investment”. The chamber said investment flight was happening already, and the bill was “another nail in the coffin” of the country‘s economy.
These views are supported by Geordin Hill-Lewis, the DA’s shadow minister of trade and industry, who said the bill did not address the many valid concerns that international investors had about the direction of government policy. “It is poorly drafted and ambiguous, and it needs to be extensively rewritten,” he said.
The European and American chambers are concerned that their investments maybe jeopardised under the new bill.
Sakoschek said the chamber was a long-term investor in South Africa.
Europe is the country’s largest trading partner, with more than 2000 companies invested in the country – representing 77% of total foreign direct investment. These companies have created more than 300 000 direct jobs and about 150 000 indirect jobs. Total annual trade between South Africa is estimated to be R460-billion, according to the European Chamber of Commerce.
The American chamber said it represented R278-billion worth of investment and 220 000 jobs in South Africa.
Sakoschek said it was not blackmailing the government or threatening it, but because of the uncertainty “some investors have started divesting and reinvesting elsewhere on the continent”.
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Going digital: Bank Payment Obligation stands to boost African trade
Bank Payment Obligation (“BPO”) stands to boost Africa’s trade partnerships, increase SMEs’ access to trade finance and reduce costs and risks in trade transactions. Banks and regulators need to work together to speed up adoption.
Trade and technology have fundamentally changed Africa’s economic fortunes and its profile as an investment destination for global businesses.
In recent years, the continent’s commercial relationships with the rest of the world have evolved away from a reliance on traditional partners in Europe and North America, towards a more balanced arrangement, where emerging economies in Asia and the Middle East feature more prominently. While total trade has grown by an average of 13 percent each year over the last decade, China-Africa trade has increased at 25 percent per annum, Africa-India trade by 32 percent and Africa-Indonesia trade by 29 percent.
Advances in technology have also allowed Africa to leap-frog interim development steps and break new grounds in critical growth sectors – such as mobile banking, where African innovators are leading the world.
A similar, game-changing experience is now possible in Africa’s trade finance sector, with the emergence of a digital trade settlement system, called Bank Payments Obligation or “BPO”.
BPO is an undertaking between banks that a payment will be made on a specified date after electronic matching of data on SWIFT’s Trade Services Utility (TSU) or any other acceptable transaction matching application. In providing an end-to-end, automated trade finance solution for corporates, BPO increases the speed, reliability and convenience of international trade while mitigating risks and reducing costs for the buyer and seller. The technology offers the best of both worlds for corporates: the security of paper-based letter of credit transactions with the flexibility of open account trade.
Currently, a large proportion of export trade is conducted on ‘open account’ basis, meaning that goods are shipped and delivered before payment is due – an attractive option for importers, but less so for exporters, who carry a lot of the risk in the transaction. Letters of credit – bank documents guaranteeing payments to exporters on delivery – reduce the risk, but can be inefficient, costly and inflexible, entailing at least five separate documents which need to be manually evaluated and reviewed for compliance.
This can be worse for commodity exporters, who are an important component of Africa’s trade. The technical and payments procedures for a single cargo by sea may demand the use of about 36 original documents, 240 copies and as many as 27 parties, placing an enormous burden on commodity companies to seek out more cost-effective ways of trade .
BPO could transform this process, removing the inefficiency of manually checking documents, improving the quality of verification and reducing the time taken from days to minutes.
The BPO concept is still relatively new internationally. To transact on BPO terms, both trading parties would require their respective banks to be signed up with SWIFT’s TSU. Standard Chartered was the first bank to go live with a fully automated BPO deal involving our clients BP Aromatics in Singapore and Octal in Oman in 2012. We were also the first bank to execute a BPO transaction under the International Chambers of Commerce (ICC) ratified Uniform Rules for BPO (URBPO) for our client, the PTT Group.
When BPO started out, it had some shortcomings, notably the obligation for the seller to extract data from the original documents for matching on the TSU. For larger companies with long trading histories, this was no barrier, but for SMEs and companies without track records, the potential for fraud slowed adoption in Africa. Today, however, e-solution providers have made big strides in integrating electronic documentation into the platform, creating the possibility for a much more independent and secure process for transferring data from shipping documents directly into the BPO system, and for integrating it into regulated document escrows or single window environments. A single, integrated, digitised platform like this should be transparent and efficient enough to accelerate adoption of BPO by trade finance participants in Africa.
Africa stands to benefit from the developments in the BPO space. But it must make bold and swift commitments to adopt technology and build the necessary infrastructure. Much depends on how governments and business collaborate to establish clear rules and institutional frameworks to facilitate adoption.
We have seen great progress in some countries, who have seen the benefits of using new technology to streamline their trade processes. In 2012, Nigeria established a single window portal for trade – an online electronic trade platform connecting public and private sector entities – with the objective of becoming a “one-stop-shop” for paperless trade and e-governance, positioning the country as a leading nation in Africa for electronic trade.
Nigeria and other African countries can leverage on the recent developments in the BPO space to enhance their single window propositions and achieve the objectives they set out for themselves. They can also explore possibilities of exchanging information on single window systems with their trading partners to improve the transparency and integrity of trade documents flowing between both countries. Such efforts can reduce fraud and boost cross border trade significantly.
The ICC Banking Commission, SWIFT and Standard Chartered Bank have been working together to promote the benefits of BPO to regulators, banks and businesses in Nigeria. More of such engagements are needed if digital trade is to gain traction in the continent.
Indeed, the upside for African businesses accessing BPO could be profound. By nature, small and medium enterprises (SMEs) in Africa tend to focus their efforts on securing post-shipment finance, as adequate security for pre-shipment finance can be challenging to secure. With BPO, pre-shipment finance will be more accessible given the greater visibility of transactions, electronic verification of data and third party authentication in the BPO workflow. By easing access to financing, BPOs have the potential to finance larger trade flows and boost existing trade partnerships, ultimately benefiting much needed economic growth and job creation for the continent as a whole.
In conclusion, BPO can make African economies more competitive by driving efficiencies in international trade. An efficient international trade environment can fuel economic opportunities and improve living standards even in smaller countries with limited domestic markets.
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Comesa electronic payment system to ease transactions
Uganda is one of the eight countries which are benefiting from the use of the Regional Payment and Settlement System (REPSS), which eases transfer of funds within the Common Market for Eastern and Southern Africa (Comesa) in conducting business.
This system, which was introduced to facilitate the settlement of trade and services payments among member states, has so far facilitated 54 US dollar transactions amounting to $1,690,387.26 (about Shs6.2 billion). Also a total of 11 euro transactions worth €63,656 (about Shs260 million) were conducted in the period between January and June 2015.
In a communication, Comesa secretary general Sindiso Ngwenya said: “REPSS’s operationalisation by the respective central banks of participating member states will go a long way in easing the payment of goods and services.”
The other member states using this service are DR Congo, Kenya, Malawi, Mauritius, Rwanda, Swaziland and Zambia.
Some of the key benefits of using the REPSS platform are that it guarantees prompt payment for exports as well as other transfers.
The system eliminates mistrust among traders as there is central bank involvement. This in turn should increase trade within the region.
REPSS allows transactions using local currencies thus reducing dependency on dollars and euros. “This cuts on collateral requirements as central banks are directly involved in the system and trade is amongst members,” Mr Ngwenya said.
Mode of operation
Under the system, the importer’s payment to the exporter is channelled through the central bank of the exporter using the REPSS platform. Hence, importers and exporters deal with their local commercial banks for trade documentation.
The credibility of the central banks and pre-funding of the account by commercial banks provide guarantee of payment.
REPSS is built on open standards and is also accessible to non-member states.
Related News
tralac’s Daily News selection: 23 September 2015
The selection: Wednesday, 23 September
Today, in Brussels: SADC Day Business Forum
Next week: Namibian-German Centre for Logistics (NGCL) conference
Recently launched: the Netherlands-African Business Council's African Corridors platform
Ambassador Thiam Diallo, speaking on behalf of the C4 countries and other cotton-producing countries from Africa, LDCs and ACP, stressed her preoccupation at the lack of progress on the cotton issue in the agriculture negotiations. She noted that despite the increasing trend of assistance to the cotton sector, African cotton-producing countries remained vulnerable to declining international prices and high production costs. In view of the economic and social importance of the cotton sector in Africa, she underscored the need to address meaningfully all aspects of the cotton issue in the run-up to the Nairobi Ministerial Conference (MC10) for a successful resolution of the dossier. [Various downloads available]
Angola: Trade Policy Review (WTO)
The second review of the trade policies and practices of Angola started yesterday and continues on 24 September. The basis for the review is a report by the WTO Secretariat and a report by the Government of Angola. Extract from Government's report (4.1.1): Despite the autonomous liberalization and integration efforts in world trade, Angola registered a large delay in implementing the Uruguay Round Agreements. This is due to the particular political developments that occurred during the last decades. In this regard, Angola needs a longer period of transition to adjust its national legislation to WTO agreements guidelines and an appropriate technical assistance in order to strengthen its institutional capacity and financial technological means.
Uganda needs robust AGOA strategy - analysts (Daily Monitor)
Among those calling for the development of a strategy so as to take full advantage of AGOA, is the chairman of National Planning Authority, Mr Kisamba Mugerwa. According to him, it is time Uganda got a strategy before it ends up playing another cameo role as it has been in the last 15 years yet it has the potential to take up a leading role in the scheme. “We need an AGOA strategy. It will ensure that things like standards, quality and supply market are met,” Mr Mugerwa told participants attending the National Stakeholder Consultative meeting on the Agoa Extension and Enhancement Act of 2015, in Kampala last week. He added: “Supplying just one US supermarket is not a joke. That is why I will support an AGOA strategy because if we can meet the US standards, then we can export anywhere else.”
A technology bank for LDCs by 2017? (UN)
Two important global development frameworks, agreed upon in July, mention the establishment of a Technology Bank for LDCs: the outcome document of the Third International Conference on Financing for Development and the 2030 Agenda for Sustainable Development. The fact that the bank is mentioned in both documents and will be discussed during the UN General Assembly in September might create momentum to make significant strides in the process of establishing the bank. Turkey proposed to host the Technology bank for LDCs.
Tanzania: Enhancing linkages between tourism and sustainable agriculture sectors (UNCTAD)
Tourism and agriculture are important contributors to the development of the local economy. Many developing nations that are now experiencing rapid tourism growth have agrarian societies and tourism is the first or second source of export earnings. For example, 20 out of the world’s 48 LDCs rely on tourism and agriculture as the basis for the livelihoods of most of their inhabitants. This report proposes a set of potential thematic strategies that can be used as stepping-stones for building an institutional framework able to link the tourism and agriculture sectors at multiple levels – country, regional, local and community. [Download]
In Kinshasa: Rwanda, DRC, Uganda sign the Greater Virunga Transboundary Collaboration Treaty
How is Rwanda positioning tourism sector to fetch home more revenues? (New Times)
Lesotho-South Africa: details of the Lesotho Special Dispensation (GCIS)
The Minister, Malusi Gigaba, has said repeatedly that agreements on migrants between countries cannot be generic. They must be defined by specifics and dynamics of negotiation between respective countries. South Africa and Lesotho share a very different dynamic and therefore require measures that would take cognizance of these dynamics. It is in this context that Minister Gigaba announced the Lesotho Special Dispensation to regularise the status of undocumented Basotho in South Africa. The Ministers agreed also to explore the feasibility of implementing a trusted traveller system. Both Countries need a secure, convenient and fast cross-border movement control system for frequent travellers. This will assist to facilitate legitimate cross border business, trade and travel.
South Africa: Visa rules drive 11% slide in tourist arrivals (Business Day)
China to invest $2.8bn in Northern Cape (IOL)
China has committed to investing $2.8bn in the Northern Cape during the signing of trade agreements between the Hunan Province and the Northern Cape on Tuesday at the start of Friendship Week between the two provinces. The investment will be in the form of economic development including machinery, transport, infrastructure and engineering in the province. It also includes an investment of $40 million in the Port Nolloth harbour.
Investment protection bill changes name, not substance (Business Day), Promotion and Protection of Investment Bill: DTI's presentation to Parliament (AgBiz)
Mozambique: Government wants private sector in roads and water (Club of Mozambique)
According to the incumbent minister of Public Works, Housing and Water Resources, the road sector is attractive for private investment because it can get feedback through the tolls, for example. "We have a good example of TRAC, which operates on the N4. We are in the establishment phase of a concession in Tete province with the "Roads Zambeze", where there was a great investment. The "Maputo Ring Road" (Circular de Maputo) will also be complemented by the bridge to Catembe and the road to Ponta do Ouro, a large investment to be recovered in tolls," he said.
Mozambique: FinScope Consumer 2014 report (FinMark Trust)
The survey showed that 20% of the adult population of Mozambique are banked, indicating an increase from 12% in 2009. The level of financial exclusion has decreased from 78% in 2009 to 60% in 2014.
Malawi's mining potential (World Bank)
New areas showing potential of mineral deposits have been discovered in Malawi, boosting opportunities to develop the country’s mining industry, attract investors and diversify the country’s agricultural-based economy. The potential mineral deposit discovery comes at the end of a year-long geophysical survey co-financed by the World Bank and the European Union through the Bank’s Mining Governance and Growth Support Project. The survey has produced high-resolution data that provides insight into the country’s mineral potential which will continue to be explored.
COMESA's Regional Payment and Settlement System: update
Eight Member States are now using the Regional Payment and Settlement System (REPSS) which allows easier transfer of funds within COMESA in conducting business. These are DR Congo, Kenya, Malawi, Mauritius, Rwanda, Swaziland, Uganda, and Zambia.
Rwanda: Mixed fortunes for agents as customers embrace direct cross-border mobile money transfer service (New Times)
This direct service, especially between MTN Rwanda and MTN Uganda, has created uncertainty among mobile money agents who have been collaborating with their counterparts in Ugandan towns like Kabale, Mbarara and Kampala to send money on behalf of Rwandans at a fee. This, therefore, means that MTN Mobile Money subscribers are the big winners. So what will happen to the whole chain of agents who these people previously relied on? Statistics show that at least 6.4 million Rwandans now have a mobile money account, way higher than the banked population.
SADC multi-stakeholder water dialogue
The 7th SADC multi–stakeholder water dialogue, 29-30 September, will also serve as a platform to validate the fourth Regional Strategic Action Plan which details the 5 year programme for the water sector (2016–2020) and supports the implementation of the RISDP and Industrialisation Roadmap and Strategy.
Trade in sustainable fisheries (UNCTAD)
The UNCTAD, Commonwealth Secretariat Ad Hoc Expert meeting on Trade in Sustainable Fisheries [next week] aims to provide a platform for discussion of possible approaches and options within the trade policy toolbox to mainstream sustainable fishing practices, and trade fish and fish products in the multilateral trading system, trade negotiations, and relevant UN and Commonwealth processes, while enabling the conservation of fisheries resources, marine ecosystems for the livelihoods of current and future generations. [Downloads available]
Kenya shrugs off growing competition for Ethiopian cargo (Business Daily)
The government has downplayed concerns that Ethiopia’s growing interest in the port of Berbera could affect a new gateway currently being constructed in Lamu. Lapsset Corridor Development Authority Director General Silvester Kasuku on Tuesday said most of the regional ports are too small and that Lamu could handle bigger ships. “The studies that we have undertaken indicate that there is a level to which Berbera Port remains in business and there is a level at which the Lamu Port also remains in business—and they complement each other,” he said. “They each have what we call the effective demand corridor length and they have a meeting point beyond which each of them does not interfere with one another.”
Lapsset investors urge government to tame rocketing land prices (Daily Nation)
AUC, Gulf of Guinea Commission relations are intensifying (MENA FM)
Two issues were raised during the meeting: the cooperation on maritime and blue economy issues and the formalization of the relationship between the Commission and the Gulf of Guinea Commission within the ambit of the GGC Treaty and the AU African Integrated Maritime Strategy 2050. Mr Samuel Kam-Domguia, coordinator of the 2050 Aim Strategy taskforce, also suggested that the maritime code of conduct signed/ratified by ECOWAS and ECCAS is a good example and consideration should be given to its adoption by all AU members States.
West Africa Gateway: NewsBrief
African Poultry Wrap: West African producers fret over imports (The Poutry Site)
Azevêdo: WTO and UNCTAD are united in supporting development (WTO)
Another major example of UNCTAD and the WTO’s joint efforts is the Aid for Trade initiative. To date, more than $245bn have been disbursed through its programmes, helping developing and least-developed countries improve their trading ability and tackling their infrastructure constraints. Research has found that one dollar invested in aid for trade results in nearly 8 dollars of exports from developing countries in general – and in 20 dollars of exports for the poorest countries. When we join forces I think we can achieve a great deal. And let me be really honest – I think there used to be a perception that UNCTAD and the WTO had quite different agendas. But that is not the case today.
First US-India Strategic and Commercial Dialogue: statement (Department of State)
The Sides applauded the focus on Innovation and Entrepreneurship as an area for cooperation. They agreed to facilitate an innovation forum in 2016, a platform for U.S. and Indian entrepreneurs to share best practices in promoting a culture of innovation and the creation of sister innovation hubs. The Sides launched a joint work stream on Ease of Doing Business. They agreed to continue exchanges of information and best practices on cross- border trade, and to continue commercial law-related initiatives on issues like insolvency and contract enforcement, and transparency.
India-EAC relations to be strengthened (EAC)
Mr Arya, India's High Commissioner to Tanzania and Representative to the EAC, said he would work closely with the Confederation of Indian Industries and the Indian Exim Bank in these initiatives, noting that these partnerships should for a start be between these two institutions and the East African Development Bank and the East African Business Council. Dr Sezibera also cited the support granted to the Community by India in the preparation of the East African Railways Master Plan the implementation of which he said would revolutionize the transport sector in the region. He disclosed that that one of the challenges faced by the EAC in relation to the free movement of goods across the region was the porous borders with non-EAC neighbours, adding that this issue was being addressed.
Regional cooperation on development finance: Namibia has benefitted (New Era)
Vale shuns path of equity sales, "working hard" to close Moatize coal financing (Club of Mozambique)
South Africa rail plans would cost a bank-breaking $110 billion, Transnet says (M&G Africa)
KEBS sets new rule for vehicles imported from UAE (Daily Nation)
Rwanda: EU suspends funding for cross-border road project (New Times)
Multinationals should pay full taxes, African MPs say (Daily Monitor)
Uganda to benefit from EU Shs7 trillion migrant cash (Daily Monitor)
Kenya: Maize farmers face a crisis on East Africa import rules (Daily Nation)
Multi-dimensional poverty in Ethiopia: changes in overlapping deprivations (World Bank)
Taffere Tesfachew: 'Unlocking the trade and growth potential of Africa’s services sector' (IDS)
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Trade Policy Review: Angola
The second review of the trade policies and practices of Angola took place on 22 September and 24 September 2015. The basis for the review is a report by the WTO Secretariat and a report by the Government of Angola.
Report by the Secretariat: Executive Summary
From 2006, when Angola underwent the first review of its trade policy, to 2008, the country recorded vigorous (double-digit) economic expansion, boosted by high oil prices and its position as the second largest oil producer in sub-Saharan Africa. Nevertheless, with the world crisis in 2008 and the collapse of oil prices, Angolan economic growth plummeted to 2.4% in 2009 before staging a gradual recovery to 6.8% in 2013 and standing at 3.9% in 2014. This performance enabled Angola to reduce its poverty rate from 62% in 2001 to 37% in 2009, with an estimated per capita income of US$5,706 in 2012 as compared to US$1,000 in 2001, just before the country emerged from the social and political crisis in 2002. Owing to marked inequalities, however, social indicators have not improved significantly.
Indeed, the UNDP’s Human Development Index ranked Angola 149th out of 187 countries in 2014 and, of 221 countries, among the ten with the highest infant mortality rate. Driven by highly capital-intensive offshore oil production, Angola’s growth has also failed to generate jobs, and unemployment remains high at around 25%. Efforts are now being geared towards diversification, as oil products still account for some 40% of GDP, over 95% of export earnings and close to 75% of government revenue. The overriding aim is to boost agricultural production, which only makes up about 5% of GDP, although it employs over half of the workforce; Angola was self-sufficient in food before gaining independence in 1975 and has immense potential for meeting this challenge. The development of manufacturing (about 4% of GDP) is relying on agribusiness and the processing of mineral resources (1% of GDP), consisting mainly of diamonds, of which Angola is Africa’s second-largest producer. Services (generating some 22% of GDP and 39% of all jobs) are expanding, although the country is still a net services importer.
Continued implementation of the stabilization programme supported by the IMF between November 2009 and March 2012 helped reduce consumer price inflation to 7.3% in 2014, the lowest level in 20 years. The reforms also aim to increase the competitiveness of the economy, where prices have remained very high for too long. Infrastructure investment over recent years is expected to be a contributing factor. Trade policy, which falls mainly under the Ministry of Trade (MINCO) and involves other ministries and state agencies as well as the private sector on an ad hoc basis, supports the aim of diversifying the economy towards fast-moving consumer goods (food products in particular). Given the continuing decline in oil revenues and the accompanying contraction in imports, boosting Angola’s trade, which fell from over 100% of GDP until 2011 to around 77% in 2013, calls primarily for diversification, which is also expected to help alleviate poverty over the long term. The country is pinning its hopes on the market openings that would result from the conclusion of the Doha Development Agenda. For now, Angola’s main suppliers are Portugal, China, the Republic of Korea and Brazil, and the leading destinations for its exports, chiefly oil products, are China, the European Union, the United States and India.
Angola became an original WTO Member on 23 November 1996. It is not party to the Plurilateral Agreements on Government Procurement and on Trade in Civil Aircraft. Angola grants at least MFN treatment to all its trading partners. Despite participating actively in the Trade Facilitation Agreement negotiations, Angola has not yet ratified the Agreement or notified its Category A commitments. Angola belongs to two of the eight regional economic communities recognized by the African Union, namely the Economic Community of Central African States (ECCAS) and the Southern African Development Community (SADC). Angola has neither ratified the SADC Trade Protocol nor signed the SADC draft Protocol on Trade in Services. Angola withdrew from COMESA in 2007. Angola has supplemented its network of bilateral trade agreements, which has increased from 30 to 38 framework or cooperation agreements. Angola participated, as part of the SADC group, in the negotiations for an Economic Partnership Agreement (EPA), but did not initial the Agreement concluded by the European Union with six other SADC members in July 2014. Angola is a beneficiary of the United States’ African Growth and Opportunity Act (AGOA) and as a least developed country, of the GSP schemes of other countries. Under the Global System of Trade Preferences among Developing Countries (GSTP), Angola has conducted negotiations with Mozambique and Cuba. For the time being, however, Angola accords no trade preferences.
A 2011 law provides for equal treatment of domestic and foreign investors. The petroleum, gas, diamond and financial institution sectors are subject to special regimes, which include tax and customs benefits. Angola has signed agreements on the promotion and reciprocal protection of investments with 13 States. It is also party to the various United Nations conventions guaranteeing the rights of foreign investors. It is a member of the Multilateral Investment Guarantee Agency (MIGA) but not a member of ICSID. Investors are eligible for tax benefits, customs benefits and exchange control benefits, negotiated on a case-by-case basis under a contract with the authorities, within ranges set by the law in accordance with various criteria, in particular geographical and sectoral ones. In return for these benefits, companies and enterprises formed for the purposes of private investment are required to employ Angolan staff, provide them with the necessary vocational training and offer them salaries and benefits commensurate with their qualifications.
A regime governing public-private partnerships (PPP) was also introduced under a 2011 law. These partnerships cover areas previously reserved for the State, where investment and private management under a concession regime have been deemed conducive to accelerating infrastructure development. All land holdings belong to the State, which may, however, assign the right to use land under a concession or long-term lease.
According to data notified to UNCTAD, in 2014 Angola was the second highest recipient of foreign direct investment inflows in the whole of Africa – up five places from the previous year, with investment totalling US$16 billion. Nevertheless, in the same year Angola was ranked only 181st out of 189 in the World Bank’s Doing Business rankings.
Businesspersons must be registered in the Register of Exporters and Importers administered by the MINCO. Since 2011, importers and exporters of goods exceeding a value of US$5,000 also have to obtain an import/export licence. From March 2012 onwards, import, export and re-export licences have been managed electronically. All goods imported or exported through Angolan sea ports must have a cargo tracking note; the associated charges may vary from one shipment to another. A customs declaration is required for both imported and exported goods under any customs regime, if their value exceeds AOA 475,288. The declaration may only be submitted through an approved customs clearing agent (or forwarding agent), who must be an Angolan national.
Angola has introduced a risk management mechanism used to process customs declarations. There is also a deferred control mechanism, but goods may not be withdrawn until the amount owing in duties and taxes has been paid; only oil industry operators may post security for the purpose of removing goods. During the period under review, Angola put an end to its preshipment inspection system, computerized the main customs posts and merged all tax administrations into the General Tax Administration (AGT). There is an accelerated customs clearance procedure for authorized (“trusted”) operators; an accelerated procedure is also available for goods requiring priority customs clearance because of their nature.
To diversify its economy, Angola has taken several import substitution measures. Customs tariff rates (especially those on agricultural products) have risen considerably and fall within a range of 2% to 50%, with an average of 10.9% (compared to 7.4% in 2005). Hence, for 31 tariff lines the applied MFN rates often exceed the bound rates by as much as 35 percentage points. Imports are subject to various other duties and taxes, often ad valorem, even though Angola bound them at 0.1%. Some imported or domestically produced products are subject to a consumption tax, mostly at a rate of 10% (which may be as high as 30% in some cases). This tax has a knock-on effect that is prejudicial for competitiveness and consumers. There is a ban on cement imports, and various agricultural products are now eligible for an import quota regime, which is awaiting implementation.
Duty and tax concessions may be accorded for some goods or economic operators. During the period 2009-2014, revenue foregone as a result of these concessions for import and export duty and taxes ranged from 24.7% to 40.9% of annual customs revenue. Most of the customs duty exemptions are for imports intended for the oil and gas industries.
Other than a general framework, Angola has no anti-dumping, countervailing or safeguard legislation and has never adopted such measures. The SPS and TBT regimes are not coordinated. For example, some imports are subject to several inspections by different institutions, which collect the associated fees. The import of bovine animals from Namibia has been suspended for the time being because of foot-and-mouth disease. Food and consumer products may not be imported into Angola if less than one quarter of their shelf life remains; for pharmaceuticals and cosmetics, the threshold is 50% of their shelf life, with a minimum of six months.
Export duty is payable on some products, including minerals exported in the rough state, and is based on the f.o.b. value. Goods in transit by land must be escorted. According to the authorities, the State is not involved in export financing and does not grant any export subsidies. Activities are reportedly under way to set up a National Export Promotion Agency (ANPEX) and to draw up an export promotion strategy.
Angola has not yet notified the WTO of its state-trading enterprises within the meaning of Article XVII of the GATT. Yet State involvement in the economy remains extensive. State-owned enterprises operate in almost all areas of economic activity, particularly in the oil, diamond and electricity industries, which for the most part are still under State monopoly. Consumer subsidies are granted for several products, including fuel, electricity and water, which are subject to price control. A new government procurement management framework introduced in late 2010 stipulates a preference for goods produced in Angola and/or services provided by Angolan or Angola-based suppliers. No competition policy has been adopted to date, and Angola’s intellectual property regime dates back to 1992.
With a young and growing population, vast expanses of land suited to agriculture and extensive hydraulic resources, Angola has the potential once again to become a major agricultural producer and exporter. Yet, with an estimated 5.4% share of GDP in 2013, agriculture (including forestry and fishing) is slow in becoming a driving force of diversification in the national economy and in the fight against poverty. Industrial fishing (tuna, shrimp, prawns and crabs) is reserved exclusively to Angolans or to foreign vessels leased to or jointly owned with Angolans. Angola remains a net importer of agrifood products.
Agriculture in Angola is still dominated by small-scale family farms, and the low level of mechanization is limiting productivity in a number of sectors. The fragmentation of the domestic market, caused mainly by poor infrastructure and the lack of marketing platforms, tends to reduce producer profit margins. Outreach services are still rudimentary and the lack of a legal framework is a disincentive to setting up agricultural associations and cooperatives. Moreover, a monetary policy that results in overvaluation of the national currency is tending to erode the competitiveness of the agricultural sector, for which most inputs and equipment are imported.
Agriculture and food processing receive the highest levels of tariff protection. The average rate of 23.3% applied to agricultural products (WTO definition) is more than twice the 2005 level; it is also more than twice the 2015 average rate on non-agricultural and non-oil products (9.1%). Based on the ISIC (Rev.2) definition, agriculture remains the most protected sector with an average tariff of 23.8%. Besides, some products may be imported free of duty and consumption tax if they have been included in the “basic basket” or in the event of a shortage on the domestic market. Domestic support for the agricultural sector takes various forms, including subsidized credit, the lending of material and equipment, subsidies for draught power and irrigation costs, and the provision of veterinary services free of cost to small producers. According to the authorities, agriculture does not receive more than 5% of the national budget.
The oil industry is still the mainstay of the Angolan economy, despite the negative shocks that affected its performance in 2014. The test phase of natural gas production in Angola began in 2013 and full production should be under way by the end of 2015. As the State’s sole concessionaire, the government-owned company Sonangol (Sociedade Nacional de Combustíveis de Angola) controls all activities relating to oil and natural gas. Sonangol held financial stakes in 165 other enterprises in 2013, operates a vertically integrated conglomerate in the subsector, and is active in several other fields. Domestic demand for refined oil products is met chiefly with imports; through a subsidiary, Sonangol holds exclusive import rights for oil products (except for lubricants).
Angola’s subsoil is rich in a wide variety of mineral resources that have not yet been properly identified and assessed. Recent mining exploration and exploitation have focused on diamonds, of which Angola is one of the world’s leading producers. The mining subsector is facing a number of problems, including a lack of suitable infrastructure and the continuing presence of anti-personnel mines; the very limited domestic supply of inputs and services indispensable to geological and mining activities; and the lack of financing and credit mechanisms geared to the mining industry on the Angolan market. In exchange for the granting of mining rights, the State receives a share of the proceeds from mining through joint ventures, in which at least 10% of the equity is held by a state-owned enterprise, and/or through production sharing in proportions that vary throughout the production cycle. A new Mining Code in force since September 2011 introduced the possibility of a foreign majority stake (up to 90%) in joint ventures set up to work strategic minerals; the adoption of a standard investment contract; and the award of mining rights by open competition (mandatory for all strategic minerals).
The National Diamond Company of Angola (ENDIAMA) is a state-owned enterprise that holds exclusive diamond mining rights throughout Angola; it represents the State in the granting of those rights and coordinates prospecting and mining. ENDIAMA holds financial stakes in several companies and is engaged in activities across the diamond subsector, including marketing, and in various other fields (industrial security, air transport, hotels, and medical services).
Substantial State investment has led to steady growth in electricity output, especially from thermal power generation. The potential of hydraulic and natural gas reserves and that of other renewable energy sources has not yet been fully exploited. Despite the progress made, the estimated 30% rate of electrification is still below the average for African countries, and random power cuts are still a major problem. Electricity transmission and distribution are still fragmented and too limited to cover the entire national territory. A programme to restructure the subsector, aimed at attracting private investment, has been in progress since 2013. The State will nevertheless retain a monopoly over transmission.
The inadequacy of basic infrastructure and insufficient skilled labour are still dampening the dynamism of industrial activity. Angola remains a net importer of manufactures, mainly consisting of machinery and rolling stock, non-electrical machinery and other semi-finished goods. The considerable growth and diversification potential of Angola’s manufacturing sector would be better harnessed through more effective use of the available resources and stronger links with other sectors of the economy, particularly agriculture and the extractive industries.
Angola has four fixed telephony and two mobile telephony providers. The share of fixed telephony is negligible, while mobile telephony is booming. The historical operator Angola Telecom is still 100% government-owned and has been recapitalized under a plan granting it autonomous management. It is being outperformed on the mobile telephony market by a private operator with majority Angolan capital. There are plans to award a third mobile licence. The regulatory framework was recently overhauled and is largely liberalized. The wireless local loop, cable modems, fixed wireless broadband and international gateways are nonetheless still subject to a monopoly.
Banking services are one of the three sectors, along with tourism and recreational, cultural, and sporting services, in which Angola has undertaken commitments under the GATS. With the restoration of civil peace and the ensuing oil boom, Angola’s banking system expanded vigorously and today ranks third in sub-Saharan Africa. Similarly, from a handful of state-owned banks, the number of banks in the market has now reached 24, of which only three are government banks; the others belong either to local private interests or, in the case of nine of them, to foreign interests. The country is still largely underbanked, and lending is mainly short-term, at relatively high interest rates. Foreign banks are not allowed to establish subsidiaries in Angola. Since the 2009-2012 crisis, the central bank has undertaken extensive regulation to remedy the structural weaknesses in Angola’s banking system and align it with international standards.
In 2000, Angola began deregulating its insurance sector, which has since expanded from a single state-owned insurer (ENSA) to 17 insurance companies, most of them private, in 2014. The sector is still fairly concentrated, with the three leading insurance companies accounting for a market share of 83% (ENSA (38%), AAA Seguros (23%) and GA Seguros (21%)) in 2014. The sector’s penetration rate is still a very low (0.8%), which would suggest that there is enormous scope for development. Insurance companies must take the legal form of limited companies and at least 30% of the capital must be domestic. In essence, the pension funds manage the retirement savings of employees of the large industrial companies operating in Angola, particularly but not exclusively in the oil sector.
The bulk of the containers imported and oil products exported are carried by foreign shipowners under third-party flags, even though there is a complex cargo-sharing scheme designed to promote the Angolan flag. In practice, interested foreign shipowners must register with Angola’s National Shippers’ Council, which delivers a cargo tracking note against payment of a fee. The container terminals at two of Angola’s six main ports are run under a 20-year concession by a private Angolan-Danish company. Traffic has risen substantially, although it is hampered by problems relating to infrastructure, costs and customs clearance times.
As pertains to air transport, TAAG Angola Airlines is still fully state-owned but has signed a ten-year management agreement with Emirates Airlines. By and large, the air transport agreements signed by Angola resemble the relatively restrictive “Bermuda 2” model. The principal airports are managed by a state-owned company, but some airport services have been contracted out. A new international airport is being built in Luanda. Self-handling and mutual assistance are not allowed, but there are third-party providers that are independent of the airport authorities and the national airline.
Angola’s rail network is still being refurbished. An ambitious plan has been adopted with a view to interconnecting the three existing networks, linking them up with neighbouring countries, merging the three existing state-owned companies, separating the rail transport management company from the infrastructure management company and putting the operation of lines out to concession. The plan is still awaiting implementation.
Development of the road transport sector is hampered by ongoing infrastructure refurbishment work, and the sector is largely informal and domestic in nature. A modern regulatory framework has been adopted, involving the award of quota-free licences based on quality criteria, and road transport agreements are being negotiated with neighbouring countries.
Tourism development is still constrained by transport service problems (infrastructure problems in particular), the high cost of living in Angola and the remnants of the social and political crisis (such as anti-personnel mines).