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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).
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Azevêdo: WTO and UNCTAD are united in supporting development
Director-General Roberto Azevêdo, in a speech to the UNCTAD Trade and Development Board on 21 September 2015, said that the WTO and UNCTAD are united in placing development “at the heart of all of our work”. “We are committed to enhancing the partnership between our organizations,” he continued, and “we want to make sure that trade and development go hand-in-hand”. This is what he said:
I am pleased to join you today – and to have the chance to discuss the evolution of the international trading system from a development perspective.
There is no doubt in my mind that trade and development are closely linked.
Rather than being two parallel or independent tracks, I think the international community now recognizes that trade and development are more complementary than ever before.
A look at the global agenda ahead makes this very clear.
I am leaving Geneva tomorrow to attend the UN Summit on the Sustainable Development Goals – where trade is going to be high on the agenda.
In just over two months’ time, we will be holding the WTO’s Ministerial Conference in Nairobi, and development will be at the core of that meeting.
And in March, we will be taking these issues forward again at UNCTAD’s own Ministerial Conference.
It’s a full agenda. There is a lot we can do.
Looking at the recent history, trade has helped to deliver a great deal.
As you know, the Millennium Development Goal to cut extreme poverty by half was reached by 2010 – well before the 2015 deadline.
This was a remarkable achievement.
Around two-thirds of this reduction in poverty came from economic growth in developing countries. And this process was driven, in part, by trade.
The figures tell the story. Developing countries’ share of global trade has grown from 28 to 42 per cent over the last two decades.
In commercial services trade, the share has risen from around 25 to roughly 35 per cent over the same period.
And South-South trade has also grown in importance, accounting for 52% of developing countries’ exports in goods in 2013.
So huge strides have been taken.
We know that trade can be an important driver of development. But we also know that for the benefits to be realised, it must be accompanied by the necessary capacity-building and financing support.
This is something that both UNCTAD and WTO work very hard to tackle.
We have a long history of collaboration in this field. This includes technical cooperation, capacity building and training initiatives, as well as research and analysis.
As a joint WTO-UN agency, the ITC is a good example of this cooperation.
By helping SMEs in developing countries connect to international markets, this initiative allows many to access the benefits of trade.
In fact, when SMEs connect to global supply chains, the gains from trade often go to sectors of the economy that tend to be more easily marginalized.
So work on this area is key.
Another major example of UNCTAD and the WTO’s joint efforts is the Aid for Trade initiative.
To date, more than 245 billion dollars 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.
We are united in doing all we can to support development – and in placing it at the heart of all of our work.
The whole trade and development community increasingly speaks in unison about harnessing the full potential of trade for achieving development objectives.
The debate is more focused and defined than ever before – and this is reflected in the increased co-operation between the WTO and UNCTAD.
I think that Mukhisa and I see eye-to-eye on this. We are committed to enhancing the partnership between our organizations. We want to make sure that trade and development go hand-in-hand.
Because, of course, there is so much to do.
One billion people still live in extreme poverty. And factors such as rural isolation, gender discrimination, conflicts, poor infrastructure, and high trading costs obstruct people’s capacity to join trading flows.
Also, while we have seen the rising participation of developing countries in world trade, there are still some significant imbalances, especially regarding LDCs.
LDCs face big constraints to trade, such as low productive capacities and limited diversification of their production and export structures.
They account for more than 12% of the world’s population, but only for 1.8% of world GDP.
Their participation in global trade has seen gradual improvement over the last twenty years, but the relative share of LDCs in trade remains modest.
In terms of exports, for example, LDCs account for only 1.17% of world exports of goods, and 0.68% of services exports.
We need to respond to this situation and work hard to close these gaps.
Simply providing more trade opportunities is not enough. A broader and more systemic approach is needed.
I think that at the multilateral level, we have three key tasks to support growth and development.
First, we must keep momentum behind the existing initiatives, such as Aid for Trade, the ITC and the Enhanced Integrated Framework, which has been renewed this year.
These initiatives have accomplished a lot, and we must make sure they have the necessary support and resources to continue a successful trajectory.
Second, we must implement the decisions taken in Bali and ensure that the benefits of those decisions are delivered.
In the 2013 Bali Ministerial Conference, very important decisions were taken in terms of development.
Ministers agreed an LDC package that will help the further integration of LDCs into the global economy.
It includes provisions to improve duty-free quota-free market access for LDC goods.
And to facilitate the utilization of these market preferential schemes by LDCs, Ministers adopted for the first time multilateral guidelines on rules of origin.
Bali also provided a potential boost to LDC services trade, through steps to operationalize the LDC Services Waiver.
At a high-level meeting in the WTO earlier this year, some 20 members indicated their intention to offer preferences in sectors and modes of supply of export interest to LDCs. And 15 members have followed through on this commitment already.
Advancing these and other matters would have a great impact for LDCs. And we are working hard to move them forward.
Of course Bali brought us the Trade Facilitation Agreement.
This Agreement is about streamlining border procedures to dramatically cut the costs of trade, which fall most heavily on the poorest.
High trade costs have a negative impact on the economies of developing countries, notably on the LDCs. They price them out of global markets and disconnect their economies.
The Agreement aims to tackle many of these hurdles. And it offers major benefits for developing countries. By cutting red tape and increasing transparency, it could cut the cost of trade by up to 15% in developing countries and create 18 million developing country jobs.
The Agreement also has a unique architecture.
For the first time, it will provide real, practical support to help developing countries implement its provisions.
This is new – it has not been seen before in other WTO agreements.
The Trade Facilitation Agreement Facility was created with this in mind, and it has got off to a good start.
Now, the Agreement is pending ratification by members. Two-thirds of members must ratify the Agreement before it can enter into force.
Some have done so, but we need to increase the pace.
But as well as making the existing trading system work better for developing countries – we also need to change and improve the system.
This brings me to my third task – which is perhaps the biggest challenge that we face.
We must make further progress on multilateral negotiations.
We are now in the run-up to the WTO’s 10th Ministerial Conference in Nairobi, in December – the first time such a conference has ever been held in Africa.
As such, we have to deliver for Africa, and for developing and least-developed countries around the world.
This must be our priority at MC10.
There are some big issues on the table. The whole DDA menu of issues is available.
But so far negotiations have been tough. After extensive engagement this year there are still large gaps in key areas.
In recent months, we have been focusing on the most challenging issues in an effort to find possible solutions. But time is short. I think it is time for us to start working more intensely also on the more promising issues.
From conversations with a wide range of members – and groups of members – I sense that at least a set of deliverables is within reach. And, crucially, there is a broad understanding across the membership that those deliverables must include significant steps on development and LDC issues.
How we move forward now is up to the members.
They must decide on the shape and scope of the outcomes that they want to achieve in Nairobi. Then we can work hard to deliver them.
And we have to move quickly. We have just a few weeks left before the start of MC10. We must make each day count.
So negotiations will continue. And I have no doubt that developing countries will continue to be at the forefront of the debate – just as they were in the lead-up to Bali.
In closing, I think that this is an exciting and challenging time. And with challenges also come opportunities. There is much that we can achieve.
New outcomes in the multilateral trading system – along with a package of outcomes to support LDCs – would be a major step forward in our efforts to ensure that trade supports development.
Also, it would be the biggest contribution the WTO could make to global efforts on development, and to taking forward all of the issues that we are discussing here today.
So in New York, in Nairobi, in Geneva, let’s make sure that trade continues to be an enabler for economic growth, development and prosperity.
I look forward to working together with UNCTAD, ITC – and all of you – in this effort.
Thank you.
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Enhancing linkages between tourism and the sustainable agriculture sectors in the United Republic of Tanzania
The United Republic of Tanzania has vast untapped natural resources, including an abundance of wildlife, unexploited mineral reserves and arable land, which offer a wide range of development opportunities.
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 least developed countries (LDCs) rely on tourism and agriculture as the basis for the livelihoods of most of their inhabitants. It is imperative, therefore, that these sectors receive close attention, especially concerning the economic opportunity relationships that arise from tourism and sustainable agriculture.
The main objective of this report is to enhance the understanding of linkages between these two sectors, as well as propose suggestions for how they could be strengthened with the aim of promoting bottom-up sustainable development in the United Republic of Tanzania.
In order to promote sustainable development, 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.
The thematic strategies are:
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Awareness and capacity building: Raising awareness and building capacity to attain a high level of consciousness, understanding and ability in support of the implementation of linkages between tourism and agriculture are critical.
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Start-up drivers (Utalii na Kilimo Kwanza): Selecting regions that can serve as multipliers based on successful local experiences such as the growth corridors initiative.
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Public-private partnerships and destination level cooperation and action: The private and public sectors and destination stakeholders are key components in the implementation of pro-poor tourism (PPT) practices. Achieving the objectives of this strategy will rely on collective commitment, strategic partnerships, effective institutional arrangements and facilitating processes. The theme also addresses the lack of supportive funding and other mechanisms as a key constraint in improving linkages.
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Effective promotion of pro-poor tourism and branding: This strategic theme focuses on the need for promotion of PPT products, experiences and destinations in the United Republic of Tanzania through an effective and robust marketing plans and branding.
These four themed strategies indicate ways to empower a cooperation platform linking tourism and agriculture in the United Republic of Tanzania. However, they require a detailed action plan, which should be developed by the national government together with local stakeholders, outlining interventions for each type of strategy.
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From ambition to execution: Policies in support of Sustainable Development Goals
Countries should drive their own development, but working together, the international community can turn the picture of sustainable development envisaged by the Sustainable Development Goals from aspiration into reality, says IMF Managing Director Christine Lagarde.
In a discussion at the Brookings Institution on the 17 new Sustainable Development Goals that will be adopted on Friday at the United Nations, Lagarde noted; “countries out of their own determination can make a difference in achieving the SDGs. They do not have to wait for institutions, partners and others to make a difference.”
Meanwhile IMF staff have published a research paper with some policy advice they believe will help countries hit targets set out by the ambitious development agenda over the course of the next 15 years. The study notes that “policies that foster economic transformation, economic and social inclusion, and protect the environment are of paramount importance for sustainable development.”
A holistic approach
While good policy decisions can reinforce synergies between economic, social, and environmental objectives, the authors say the trade-offs and challenges that individual countries face in pursuing their development goals vary significantly, with the right mix of policies depending on such factors as economic structure, levels of income and education, and institutional capacity.
Transform and diversify
The paper, “From Ambition to Execution: Policies in Support of Sustainable Development Goals,” examines the case for promoting economic diversification through structural reforms. “In a stable macroeconomic environment, structural reforms can play a crucial role in facilitating the shift of resources to their most productive uses and help to diversify production and exports.”
By diversifying their economy, the authors say developing countries can shift workers from low productivity agriculture into higher productivity sectors like manufacturing, trade and services, which create higher paying jobs in the long term and help improve living standards.
Most commodity exporting countries however, have been struggling to diversify – especially with the weakening commodity sector – and the paper commends Indonesia, Malaysia, and Mexico for having managed to move away from oil production by improving the business environment and supporting workers in acquiring relevant skills.
Making growth more durable
The study stresses the importance of economic and social inclusion, saying all levels of society – men and women equally – should benefit from economic growth. “Financial inclusion is a key ingredient for reducing income inequality, and for providing women with greater economic opportunities,” the paper notes. It also suggests that by increasing tax revenues, cutting wasteful spending and strengthening the efficiency of public service delivery, developing countries could increase social spending to help them achieve their redistributive goals. The paper says a fair tax system also plays an important role in improving equity.
Investing in a sustainable climate will mitigate risk
The study highlights the potential benefits of reducing poorly-targeted energy subsidies. It notes that raising energy prices to reflect actual cost would cut global carbon emissions by a quarter, air pollution related deaths by three-fifths, and yield revenues of up to 8 percent of GDP on average in some countries. “Pricing policies accompanied by regulations can also play an important role in the more efficient management of water resources, improving both economic prospects and the welfare of populations vulnerable to chronic and crisis-related lack of water access. Finally, financial sector policies can contribute to mitigating the impact and adapting to the consequences of adverse climate-related events,” the paper says.
With the rise in frequency of natural and public health disasters, the IMF recently created the Catastrophe Containment and Relief Trust, and increased access for low-income and developing countries to zero-interest loans to buffer potentially disruptive shocks, while they pursue their sustainable development agendas.
» View tralac’s United Nations Sustainable Development Summit 2015 Resource box
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WTO Sub-Committee on Cotton: Update on the implementation of development assistance aspects of cotton
Implementation of the development assistance aspects of the cotton-related decisions in the 2004 July package and Paragraph 12 of the Hong Kong Ministerial Declaration
Pursuant to paragraph 12 of the Hong Kong Ministerial Declaration, this is the Nineteenth Secretariat Progress Report to the Sub-Committee on Cotton on the Development Assistance Aspects of Cotton. Since the last Progress Report, there have been several developments.
First, on 12 June 2015, the Director-General circulated the 19th version of the Evolving Table on Cotton Development Assistance and the 11th version of the Table on Domestic Cotton Sector Reforms, under cover of his letter addressed to Ambassadors and Permanent Representatives.
Second, the 23rd Round of the Director-General’s Consultative Framework Mechanism on Cotton (DGCFMC) took place on 9 July 2015.
Third, WTO Members have maintained an active interest on all aspects of the cotton dossier, as mandated in the 1 August 2004 General Council Decision and in the 2005 Hong Kong Ministerial Declaration.
Twenty-Third Round of the Director-General’s Consultative Framework Mechanism on Cotton
The Chairman (DDG David Shark) welcomed all participants to the 23rd Round of the DGCFMC, in particular the C4 representatives. He highlighted that the usual briefings on the trade policy aspects of cotton by the Chairman of the Committee on Agriculture in Special Session and of the Sub-Committee on Cotton would henceforth only be taken up in the Dedicated Discussions of the Relevant Trade-related Developments on Cotton, in order to avoid duplication.
Statement by the C4 Coordinator
The Chairman welcomed the new C4 Coordinator, Ambassador Thiam Diallo, from Mali. In doing so, he paid tribute to her predecessor, the outgoing Ambassador of Burkina Faso Mr. Prosper Vokouma, who had been the C4 Coordinator for a good number of years and whose constructive approach and pragmatic negotiating style would be remembered by all participants in the Consultative Framework Mechanism.
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.
She pointed out that the participation of C4 Ministers in a plenary session on “Reducing Trade Costs in the Cotton Value Chain” held recently at the WTO in the framework of the Fifth Global Review of Aid for Trade, showed the high political support that African countries were giving to the cotton sector. That was particularly relevant in light of the difficult context for the sector, where it was becoming crucial to reduce high costs in relation to cotton production, processing and trade.
The ACP representative supported the intervention by the C4 Coordinator and referred to the May 2015 ACP-EU Council of Ministers session, where ACP Ministers had called for an agreement on cotton by MC10 in accordance with the 2005 Hong Kong Ministerial Declaration.
Cotton Production and Trade Trends
The representative of the International Cotton Advisory Committee (ICAC), Ms Rebecca Pandolph, presented a detailed analysis of the current trends in the African cotton sector, pointing to differences amongst regions with respect to production, yields, exports and mill use. She made reference to the devaluation of the FCFA since 2014 which had contributed to higher earnings for African cotton producers, making their exports more competitive in the world markets.
Ms Pandolph underlined the importance of enhancing extension services and delivering inputs in a timely manner as the best means to raising yields in cotton production and avoiding that cotton farmers be tempted to switch to other crops. She forecasted a positive 2015/16 season for the CFA zone countries, with higher production and the possibility of increased exports. She noted that, contrary to the declining mill use in West Africa, Tanzania and Ethiopia had been increasing their cotton processing, thanks to successful partnerships with overseas’ investors.
The representatives of Argentina, Australia Chad and Nigeria asked the ICAC’s representative several questions regarding cotton prices, yields, consumption and the expansion of biotechnology cotton (Bt) in Africa.
Ms Pandolph underscored, in particular, that Burkina Faso and South Africa were the only two countries in Africa where Bt cotton was cultivated. She said that, given the high diversity amongst African countries, a number of implementation issues would have to be considered and some indepth research conducted, in order to introduce Bt cotton successfully.
Director-General’s Evolving Table on Cotton Development Assistance
The Chairman, in introducing item 4 of the agenda, made reference to the 19th version of the Evolving Table (ET). He invited Mr. Gerardo Melogno, from the Secretariat’s Development Division, to highlight the key points of the latest revision of the ET.
Mr. Gerardo Melogno noted that the latest version of the Evolving Table had been prepared on the basis of inputs from Australia, Brazil, the European Union and some of its member States, Japan, Switzerland and the United States. Inputs had also been received from several multilateral organizations, namely: the FAO, the ITC, the IMF, UNCTAD and the World Bank.
He highlighted that in Part I of the ET, concerning the ongoing activities of cotton specific development assistance, the number of beneficiaries had increased to 30 from 27 previously, and the total value of commitments had diminished to US$247 million as did the total value of disbursements, which amounted to US$92 million. He underlined that the ratio of total disbursements to total commitments had improved from 30% to 37%.
With respect to Part II, which shows ongoing activities in the broader framework of agriculture and infrastructure-related development assistance, he noted that the value of commitments had decreased from US$4.85 billion in the previous version to US$4.78 billion in the revised version. The total value of disbursements had increased to US$3 billion and the ratio of total disbursements to total commitments had climbed to 63%.
Regarding information on completed activities, he reported that the total value of commitments in Annex 1, listing activities under cotton specific development assistance, had increased to US$516 million and the actual disbursements related to those activities amounted to US$421 million. Turning to the completed activities in Annex 2 under the framework of agriculture and infrastructure-related development assistance, the total value of commitments and disbursements had increased to reach US$2.27 billion and US$2.23 billion, respectively.
Mr. Melogno commended donors for their latest updates which showed steady progress. He highlighted, in particular, the improvement in the commitments to disbursements ratio in both active parts and encouraged the donor community to continue with that positive trend.
As far as the notification of National Cotton Sector Focal Points was concerned, he underlined that their number had climbed to 15, with one addition. He urged other cotton proponents to communicate the names and coordinates of their national focal points to complete the list.
The focal points of Benin, Burkina Faso and Chad gave details about the increased production in their respective countries in the 2014/15 season and forecasted a slightly higher production in the following season.
The representative of Brazil said his country had launched the second phase of its project to strengthen cotton production and local family farming in Africa and noted that its implementation date had been extended until 2018. He renewed his country’s commitment to providing technical assistance to African cotton-producing countries to promote economic and social development.
The representative of Uganda intervened with questions on the commitments/disbursements gap and the relationship between the amounts of development assistance reflected in the Evolving Table and the declining production on the ground.
The representative of Nigeria enquired about the possibility of funding the participation of other focal points in the Consultative Framework.
Mr. Gerardo Melogno gave some precisions on the inevitable gap in relation to the commitments/disbursements’ ratio, arising from the implementation period of the activities, i.e. between the start of the projects and their completion. He encouraged donors to submit updates to the Secretariat on the progressive implementation and partial disbursements of activities.
The representative of Sudan informed participants that his country would be submitting several projects to develop his country’s cotton sector and for which assistance from the donor community would be requested.
The representative of the European Union referred to the ongoing EU-Africa Cotton Partnership involving three regional strategies on cotton, textiles and clothing. She stressed that regional focal points played a fundamental role in the design of national strategies on the cotton value chain, citing the examples of related projects in Cameroon, Côte d’Ivoire and Zimbabwe.
The representative of the United States reiterated her country’s commitment to support the C4 countries and the cotton sector in Africa. She commended the Evolving Table as a useful tool to shed light on the various ongoing assistance programmes and asked if all support granted by different actors could be listed in the Table.
South-South Cotton Cooperation
The representative of China gave details on extension of cotton-related technology and capacity building activities with francophone African countries in general, and the C4 in particular. He underlined that China had recently provided agriculture machinery and equipment, improved cotton varieties, fertilizers, new irrigation techniques and plantation technology to Benin, Chad and Mali. He highlighted that his country had also contributed to enhance infrastructure, notably in the construction and restoration of highways in Benin (Akassato-Bohicon) and Mali (Bamako-Segou). He commented that China would continue its cooperation with C4 countries to strengthen their capacity in the cotton sector in order to help them attain their development goals.
All C4 representatives acknowledged with appreciation the valuable assistance of Brazil, China and India in the framework of South-South Cooperation.
The Chairman highlighted the important and relevant contributions from Brazil, China and India in the area of South-South Cooperation, stressing that their latest inputs enhanced implementation and reinforced cooperation on that platform. He encouraged developing countries to continue to deepen and extend South-South cotton cooperation.
Domestic Cotton Sector and Other Reforms / National Cotton Sector Focal Points
The Chairman made reference to the eleventh version of the Table on Domestic Cotton Sector Reforms which had been circulated on 12 June 2015, with new contributions from Benin and Mali, as well as the continuation of the prevailing initiatives in Burkina Faso and Chad.
He highlighted that the Secretariat had lately received the name and coordinates of one additional focal point, from Sudan, increasing the total number to 15. He encouraged other cottonproducing countries to notify their National Cotton Sector Focal Points.
The focal point of Mali announced that, following the suspension of the privatisation of the CMDT in 2012, a new privatisation plan was under way. He underlined that there had been a 25% increase in cotton production in the 2014/15 season and for the 2015/16 season a further 20% increase was expected. He asked the financial assistance of development partners to enable the continuation of the Producer Support Fund which administers a price-setting mechanism for seed cotton to help offset price fluctuations.
The focal point of Chad noted the vital role that the cotton sector played in her country, where nearly four million people depended directly or indirectly on cotton for their livelihood. She noted the increase in cotton exports in the current season and the positive forecast for the following season, despite the difficult situation in the country on account of the fall in oil prices and security issues. She stressed that Chad was committed and determined to pursue negotiations with all stakeholders with a view to reaching a satisfactory solution to the cotton issue at the Nairobi Ministerial Conference.
The focal point of Benin gave details of five new projects to enhance his country’s cotton sector, involving the establishment of new cotton zones, the prevention of cotton contamination, the setting up of an agricultural diversification fund and the rehabilitation of the textile industry and fibre classification. Those projects would be submitted to development partners shortly.
The focal point of Burkina Faso made reference to the 8% increase in cotton production in the 2014/15 season from the previous one and to the continuation of the positive trend in the following season. He pointed out that a document was sent to the Secretariat describing the structural organization and administration of the cotton sector in his country and the challenges faced to put in place compensatory measures to neutralize international price fluctuations, enhance production, preserve the soils and develop the local transformation of cotton. The document would be distributed by the Secretariat in due course.
The representative of Nigeria pointed to the economic and social importance of the cotton sector in his country, in particular in the northern region. He commented that around 17 million people were dependent on cotton in Nigeria.
Conclusion
The Chairman concluded the meeting by underscoring the full spotlight that Director-General Roberto Azevêdo was putting on the cotton dossier. He stressed that the importance of the cotton issue was reflected in the recently held 5th Global Review of A4T, during which Ministers from the C4 participated in a plenary session dedicated to cotton. He highlighted that the Secretariat would continue to monitor and report to Members new contributions, disbursements and operational status of activities listed in the Evolving Table as well as progress in relation to domestic cotton sector reforms in proponent countries. He emphasized that South-South Cotton Cooperation was an important aspect of the implementation of the mandate on the development track of cotton and that there was wide recognition of the highly relevant dimension of that aspect in the DGCFMC. The significant contributions of Brazil, China and India in that respect were highly appreciated by all participants in the Consultative Framework.
In concluding, he encouraged Members and participants to expand further the information exchange and constructive engagement to reinforce the development dimension of the work in the WTO. He announced that the next round of consultations would take place before the Nairobi Ministerial Conference and that it would be held back to back with the next dedicated discussion to examine relevant trade-related developments on cotton in the context of the Committee on Agriculture in Special Session. The Secretariat would consult with regard to the specific dates.
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African Union Customs Experts meet to prepare for the 7th Meeting of Director Generals of Customs
The 7th meeting of the African Union Sub-Committee of Directors General (AUSCDGs) of Customs at Experts’ level commenced on 21 September in Kinshasa under the theme: “Co-ordinated Border Management – Enhancing Security and Facilitating Trade.”
During the three-day meeting, experts from Member States, Regional Economic Communities (RECs), World Customs Organization (WCO), United Nations Conference on Trade and Development (UNCTAD), and World Bank, will examine the work done so far, consider the recommendations of the experts and reflect further on the issue of Coordinated Border Management in order to secure Africa’s borders and Boost Intra-African Trade in preparation for the DG Customs Meeting on Thursday and Friday.
The Chairman of the meeting, Mr. Narcisse Milandou, highlighted the slow customs procedures, poor transport infrastructure, roadblocks and stressed the need to promote intra-African trade for the benefit of the African people. He urged the assembly to continue efforts tirelessly and continue to forge contacts to victory over disorder at borders and corridors. He concluded by asking the experts to be imaginative to present to their principals with pragmatic recommendations.
Mrs. Treasure Thembisile Maphanga, Director of the Department of Trade and Industry of the African Union Commission, expressed her sincere thanks and appreciation to the Government and people of DRC for agreeing to host the meeting. She highlighted the relevance of the theme taking into account both regional and global developments. She underscored the low levels of intra African trade due to obsolete infrastructure, inefficient and uncoordinated functions at ports and inaccessible roads, red tape and armed conflicts in some areas which make business in Africa more expensive as compared to other continents. She also underlined the fact that despite robust economic growth on the continent, Africa stills lags behind in terms of competitiveness.
“Although both Africa and South East Asia had approximately the same levels of GDP per capita in the 1960s, South East Asia’s GDP per capita has since risen considerably more rapidly than Sub-Saharan Africa. Most worrying is that, Africa is not benefitting from its human capital potential and the entire region is underperforming significantly in various sectors”, she indicated.
Mrs. Maphanga however also pointed out the positive steps being taken by leaders and experts such as the implementation of the Single Windows, Coordinated Border Management and the organization of the first Forum of customs experts on trade facilitation. She referred to the WTO Agreement on Trade Facilitation that highlights border management as a major component of achieving trade efficiency. She highlighted the fundamental policy direction taken by the AUC towards the actual creation of trade potential by developing a flawless trade facilitation environment through incorporating the Boosting intra-African Trade program in the African Union’s “Agenda 2063”.
In his statement, the Director General of Customs of the Democratic Republic of Congo, Mr. Deo Rugwiza Magera, thanked the audience for the choice of Kinshasa to host the meeting and welcomed all participants in Kinshasa. He reminded the participants that during three days, they will have to consider some very important points regarding customs issues given the negotiations that were launched in June 2015 by the African Union Assembly for the establishment of the Continental Free Trade Area (CFTA).
According to the Director, issues such as Single Window, Co-ordinated Border Management, Trade Facilitation, Private Sector’s Involvement in the negotiations on the CFTA, use of new Communication Technologies in commercial transactions etc. will be discussed in order to come up with strong recommendations. He then pointed out that all these actions can be performed if there is a good coordination among RECs and Member States. Finally, he declared open the proceedings of the meeting.
The Opening Session of the 7th Meeting of the Sub-Committee of Directors General of the African Union at DG’s level, will kick off on 24 September 2015.
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New World Bank survey brings hope to Malawi’s mineral potential
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 (2011-2017). The survey has produced high-resolution data that provides insight into the country’s mineral potential which will continue to be explored.
“The data show there is more below the surface which demands follow-up work,” said Jalf Salima, director of the government’s geological survey department.
During the recent launch of the survey results, Salima cited several formations in Malawi that are similar to those of other neighboring countries, which could signal mining opportunities for Malawi: the Kasungu Dyke has similar qualities to those of the Great Dyke Zimbabwe, which has a number of important metals. Southern Malawi’s Lower Shire Basin has coal deposits, which could be linked to Moatize, a coal-mining area in Mozambique.
Salima said the government will interpret all of the survey data, while the private sector will interpret data in their areas of interest to help focus their exploration efforts. Some areas of focus will include regional relationships such as the terrane boundaries within the basement complex of Malawi and their relation to known or suspected boundaries in Mozambique, Zambia and Tanzania, as well as dykes and their relationship to known or new dyke swarms in the region, and potential sites of kimberlite intrusions and their relation to known diamond occurrences in the region.
Within Malawi, data will be explored for potential sites for gold and base metals mineralization, hydrocarbons, neo-tectonics, rifting structures and the existence of basins of any age that may have potential for oil and/or gas. The analysis will also identify the relationships between geophysical signatures and known mineral occurrences and structures across the whole spectrum of potential mineral resources in the country. The survey data will also be used to update the national geological map of 1996.
“The completion of this survey is a key achievement for Malawi, especially if the detailed interpretation brings about positive results critical for the mining sector to help boost the economic growth that this country needs,” said Laura Kullenberg, World Bank country manager for Malawi, cautioning stakeholders that the time from exploration to the development of a mine could take as many as 10-15 years.
Further, Kullenberg said that the development of resource wealth could be a curse if the country does not have strong institutions and legislation regarding how to invest and share the wealth generated from new discoveries.
“Countries that do not get this right from the outset can descend into conflict,” she said. “Please do not let this happen to Malawi.”
Bright Msaka, Malawi’s minister of natural resources, energy and mining, said the ministry will work to ensure Malawians are the principal beneficiaries of the country’s mineral wealth.
“If this data is properly utilized, it will help realize a modern mining sector and Malawians will no longer be poor,” he said.
The Malawi Government has applied for the Extractive Industries Transparency Initiative candidature to ensure transparency and accountability in managing mineral revenue.
» Launch of the Airborne Geophysical Data: Speech by Laura Kullenberg
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tralac’s Daily News selection: 22 September 2015
The selection: Tuesday, 22 September
Sustainable Development Summit 2015: explore tralac's resource box
OSISA discussion, tomorrow: How SADC member states should align their NDP or National Visions to the SDGs. Case studies: Namibia, Angola, Zambia, Malawi
ACBF discussion on the Mediterranean migrant crisis: roots and implications for Africa (ACBF)
The Knowledge Monitoring and Evaluation Department at the ACBF, through the African Community of Practice on Management for Development Results program, would like to invite you to join the Online Discussion about the ongoing Mediterranean migrant crisis: roots and implications for Africa. African leadership and organizations must not turn a blind eye on this; otherwise it cannot build a prosperous future. Join the discussion:
Co-ordinated border management - enhancing security and facilitating trade (African Union)
The 7th meeting of the African Union Sub-Committee of Directors General of Customs at experts level commenced yesterday in Kinshasa under the theme 'Co-ordinated Border Management - Enhancing Security and Facilitating Trade'. During the next three days, experts from Member States, RECs, WCO, UNCTAD and World Bank will examine the work done so far, consider the recommendations of the experts and reflect further on the issue of Coordinated Border Management in order to secure Africa’s borders and Boost Intra-African Trade in preparation for the DG Customs Meeting on Thursday and Friday.
Africa on the move: experts fashion out ways to ease migration bottlenecks (Rural Reporters)
For the first time, stakeholders concerned with migration management came together to talk about the challenges facing migration in Africa and how to effectively abolish the log jams. Dubbed the Accra Forum on Intra-Regional Consultations on Migration, the first Joint Annual Forum for Intra-Regional Consultations of Africa Regional Frameworks on Migration was held between the 16-18 September. AUC Commissioner for Social Affairs, Mr Mustapha Sidiki Kaloko said that Africa is not doing enough to stem irregular migration. He emphasised that while every country has a right to control the number of people that migrates into its country, migration is not a crime. [Concept note]
Unexpected trade boon for Joburg (Mail and Guardian)
Informal cross border traders contribute up to R4.6bn a year to the economy of Johannesburg alone. But while the women and men from Zimbabwe, Mozambique and elsewhere often manage to drag their families out of poverty, they have to deal with corruption, robberies and sexual assault on a daily basis. These are some of the conclusions of yet-to-be published research by the Gauteng City-Region Observatory, which has completed the largest survey ever undertaken of so-called ICBT traders who travel to Gauteng.
Border management challenges concern SA parliament's peace and security cluster (Parliament)
Malawi: National Migration Profile launched (IOM)
Taxman’s new strategic plan seeks tighter control of border points (Daily Nation)
The Kenya Revenue Authority launched its 6th strategic plan on Friday, with an eye on taking a leading role in border controls. First mooted after the September 21, 2013 Westgate terrorist attack, it is now becoming reality that the revenue agency is taking a commanding role in securing the borders. To effectively take up the role, KRA is to be reorganised into two semi-autonomous but interdependent agencies — the Inland Revenue Agency and the Customs and Border Protection Agency. [Download]
Wider afield: India’s dream of borderless trade grinds to a halt at checkpoints (LiveMint), Phillipines: Customs modernisation can’t wait (The Inquirer)
West Africa/Nigeria: new World Bank appointment
The World Bank has appointed Rachid Benmessaoud as the new Country Director for the Federal Republic of Nigeria and Coordinating Director for West Africa Regional Integration Program. Rachid Benmessaoud joined the World Bank in 1990 as an Energy Planner in the then Europe, Middle East and North Africa Vice-Presidency.
West Africa: implementation of the Action Plan of the Human Rights Strategy for Africa (African Union)
Towards a harmonised African tax system (Accra Report)
The 12th annual Africa Tax Conference (30 Sept-2 Oct) will look at the future megatrends on taxation in Africa, cloud computing and ride sharing programmes, enabled by smart phones that are changing the dynamics of economies. "Tax policy must be defined and aligned to capture appropriate levels of taxes from such economic gains, using rules that are clear and respected across multiple borders," concludes Deiotte.
Intra-continental trade in Africa to feature prominently as Africa’s industry giants gather in Johannesburg (TimesLive)
Arica’s richest man‚ Aliko Dangote‚ together with investment banker Dr Enos Banda‚ Prof Pat Utomi‚ founder and CEO of the Centre for Values in Leadership‚ and Prof Nick Binedell‚ founding director of the Gordon Institute of Business Science‚ are just a few of the African business leaders who will headline the first annual African Business Leaders Forum event to be held in Johannesburg this year, from 9-12 December.
WTO: Istanbul meet next month to seal fate of deliverables (LiveMint)
An informal meeting of the trade ministers of India, China, Brazil, the US, the European Union, Japan and Australia on 5 October in Istanbul, Turkey, will decide the fate of a package of “deliverables” for the World Trade Organization’s 10th ministerial conference in Nairobi, and may end up scuttling New Delhi’s demands for “comprehensive” and “credible” outcomes for poor farmers.
Zimbabwe: Social Market Agenda for Recovery and Transformation (Crisis in Zimbabwe Coalition)
Going forward, Zimbabwe’s civil society submits to the nation a ‘menu of smart economic ideas’ that can help Zimbabwe to resuscitate the economy under the current political situation. The overarching vision is to see a democratic-developmental State and the goal is to create a social market economy; the fundamental idea is based on the progressive principles of a free market economy but augmented by active State intervention in coordinating, facilitating and providing support and supplemented by a caring Government that ensures the social protection of all its citizens. [Download available]
Botswana: Beef export competitiveness deteriorates - BIDPA study (Mmegi)
In a recent working paper titled ‘Export Competitiveness of Botswana’s Beef Industry’ published by the Botswana Institute for Development Policy Analysis, the researchers stated that despite its deteriorating competitiveness, Botswana still outperformed most of the SADC countries. According to the study, Botswana exported about 20% of its beef in 1961 and reached a peak of 75% in 1975, and thereafter its ratios of net trade to domestic production (NP) got eroded until reaching 20% in 2011. The study further says Botswana and Namibia are the most competitive SADC beef exporters, noting that Namibia’s NP rose steadily from 1961, reaching a peak of 68% in 1998 and thereafter fell to reach 26% by 2011. [Download]
Mozambique improves 1% in Africa Integrity Indicators – still 'somewhat weak' (SPEED)
Since 2006, Global Integrity has conducted five rounds of research on Mozambique – including two rounds of the Global Integrity Report, and three rounds of Africa Integrity Indicators research. In the 2015 report Mozambique scored 41% out of a possible 100% and is considered 'somewhat weak' in transparency and accountability. This is an improvement from 40% in 2014 but a significant drop from 58% in 2013. Within the overall ranking Mozambique scored lowest on transparency and accountability of public management (27%) civil service integrity (33%), transparency of elections (40%), and access to information and openness (42%).
IESE researcher says Mozambique is experiencing a 'very troubled' context (Club of Mozambique)
The Director of the Institute of Social and Economic Studies, Luis de Brito, said on Friday that the country is experiencing a "very troubled context," characterised by the tense situation between the two main Mozambican parties and empty talk about peace. "Mozambique is going through a very troubled context, both from the political point of view and the social and economic point of view," de Brito said, speaking in Maputo at the launch of the IESE book, ‘Challenges for Mozambique in 2015’. [Download the book, in Portuguese]
Non-tariff measures and Sustainable Development Goals: direct and indirect linkages (UNCTAD)
The Sustainable Development Goals have multiple and vital linkages to 'non-tariff measures' says UNCTAD in its latest Policy Brief. These non-tariff measures include regulatory policies to protect the environment and human, animal and plant life as well as non-trade barriers that have an effect on developing countries' poverty reduction opportunities.
Switzerland, the UK, Sweden, the Netherlands and the USA are the world’s five most innovative nations, according to the Global Innovation Index 2015, while China, Malaysia, Viet Nam, India, Jordan, Kenya, and Uganda are among a group of countries outperforming their economic peers. The GII 2015 looks at ‘Effective Innovation Policies for Development’ and shows new ways that emerging-economy policymakers can boost innovation and spur growth by building on local strengths and ensuring the development of a sound national innovation environment.
African leaders promote new initiatives on scientific research (Vanguard)
Namibia: Railways need ‘major repairs’ to carry heavy haul trains (New Era)
Modern day standards in the Southern African Development Community require rail systems to be built or upgraded to 18.5 ton/axle loading standard, which require minimum 48kg/metre rails welded in continuous lengths, and concrete sleepers and good ballasts that should last for 100 years under current traffic conditions. Struggle Ihuhua, TransNamib’s executive spokesperson, noted that as a result of the dilapidated infrastructure, trains are reduced to uneconomical speeds of 15, 20, and 40km/h, while the ideal solution would be to upgrade all the 30kg/metre and defective railway network to 18.5 tons/axle. Only about 48 percent of the Namibian network complies with this standard.
Namibia: EOI for FIATA training programme for freight forwarders (AfDB)
Namibia: Why finance is against Kudu (The Namibian)
A report by the finance ministry estimates that government will have to spend more than N$10 billion in cash and provide a further N$32 billion in guarantees between now and 2020 if it opts for the Kudu Gas project. The report that was confirmed by the finance minister Calle Schlettwein also says the project will stretch government debt by about 20% to N$68,3 billion over the next three years. Schlettwein yesterday said the report will soon be submitted to Cabinet. Namibia's current debt stands at N$50,8 billion up from N$30 billion in 2013.
Namibia: Competition policy at final implementation stage (The Namibian)
The National Competition Policy is at the last stage of being finalised. This is according to the board chairperson of the Namibian Competition Commission, Sacky Akweenda. Akweenda also revealed that the NaCC is revising the Competition Act and harmonising it with the National Competition Policy to ensure consistency and capture national objectives.
Tanzania: Call for full exploitation of region's rice market (Daily News)
A Tanzania Private Sector Foundation consultant, Dr Halima Noor, told a news conference during a high level policy dialogue for rice value chain stakeholders that Tanzania was not utilising her potential in producing and selling rice in East Africa. The meeting organised by TPSF and Trade Mark East Africa was attended by members of the private and public sector from within and EA countries. The study found out that several challenges face Tanzanian business persons such as 75% tariff when exporting rice to Uganda and Rwanda which is contrary to EAC laws.
EAC looking into Ugandan VAT on Tanzanian rice (IPPMedia)
Kenya imports milk from Uganda to meet shortfall (Daily Nation)
US bank to invest R5.4bn in SA solar plant (Fin24)
South Africa: Davis homes in on offshore tax evasion (IOL)
Tackling the illicit African wildlife trade (CFR)
Moving African exchanges forward: regional integration in the spotlight (Moneyweb)
China, South America and regional integration (The Diplomat)
Asian Development Outlook 2015 (ADB)
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United Nations Sustainable Development Summit 2015: Resource box
A bold new global agenda to end poverty by 2030 and pursue a sustainable future was unanimously adopted by the 193 Member States of the United Nations on 25 September 2015 at the start of a three-day Summit on Sustainable Development at the UN headquarters in New York. The historic adoption of the new Sustainable Development Agenda, with 17 global goals at its core, ushers in a new era of national action and international cooperation. More than 150 world leaders addressed the Summit, which ended on Sunday.
“The new agenda is a promise by leaders to all people everywhere. It is a universal, integrated and transformative vision for a better world.”
UN Secretary-General Ban Ki-moon
The sustainable development goals (SDGs) follow, and expand on, the Millennium Development Goals (MDGs), which were agreed by governments in 2000, and are due to expire at the end of this year. Recognizing the success of the MDGs – and the fact that a new development agenda was needed beyond 2015 – countries agreed in 2012 at Rio+20, the UN Conference on Sustainable Development, to establish an open working group to develop a set of sustainable development goals.
After more than a year of negotiations, the Open Working Group presented its recommendation for the 17 sustainable development goals. In early August 2015, the 193 member states of the United Nations reached consensus on the outcome document of the new agenda, “Transforming our World: The 2030 Agenda for Sustainable Development”.
There are 17 sustainable development goals with 169 targets. The complex challenges that exist in the world today demand that a wide range of issues is covered. The goals are broad in scope because they will address the interconnected elements of sustainable development: economic growth, social inclusion and environmental protection. The SDGs aim to achieve three extraordinary things in the next 15 years: End extreme poverty, Fight inequality & injustice, and Fix climate change.
» Open Working Group proposal for Sustainable Development Goals
» Report of the Open Working Group of the General Assembly on Sustainable Development Goals
» Sustainable Development Goals Factsheet
» Sustainable Development Goals Booklet (UNDP)
Building on the many successes of the past 15 years and the Millennium Development Goals (MDGs), world leaders have adopted a new set of goals, the Sustainable Development Goals (SDGs), which aim to end poverty and hunger by 2030. Recognizing the connection between people and planet, leaders have set goals for the land, the oceans and the waterways. That future is one where everybody has enough food, and can work, and where living on less than $1.25 a day is a thing of the past.
Summit Outcome Document
» Outcome document of the United Nations summit for the adoption of the post-2015 development agenda, 21 October 2015
Resolution adopted by the UN General Assembly on Transforming our world: the 2030 Agenda for Sustainable Development
This Agenda is a plan of action for people, planet and prosperity. It also seeks to strengthen universal peace in larger freedom. Eradicating poverty in all its forms and dimensions, including extreme poverty, is the greatest global challenge and an indispensable requirement for sustainable development. All countries and all stakeholders, acting in collaborative partnership, will implement this plan.
Reports and studies
Projecting progress: Reaching the SDGs by 2030 | ODI Development Progress, September 2015
This flagship report from the Overseas Development Institute (ODI) offers a first systematic attempt to project progress across the full SDG agenda, showing where – if current trends continue – the world will be in 15 years’ time. The findings serve as a wake-up call on just how much more effort will be needed to reach the new goals. Gathering together the best available projections, we provide a ‘scorecard’ against 17 targets – one per goal. This shows that, without increased effort, none of the goals and examined targets will be met. The scorecard reveals how much faster progress will need to be, classing targets as needing ‘reform’, ‘revolution’ and ‘reversal’. [Download Annex]
As the international community is considering the structure and scope of a post-2015 development agenda, the final report of the MDG Gap Task Force has undertaken the responsibility of extracting lessons from its monitoring of Goal 8 that may be useful in monitoring the future global partnership for development.
The Millennium Development Goals Report 2015
As we reach the end of the MDG period, the world community has reason to celebrate. The data and analysis presented in this report prove that, with targeted interventions, sound strategies, adequate resources and political will, even the poorest countries can make dramatic and unprecedented progress. The report also acknowledges uneven achievements and shortfalls in many areas. The work is not complete, and it must continue in the new development era.
Global Sustainable Development Report 2015 (advance version)
The GSDR brings together a broad range of existing scientific assessments and reviews global progress and future sustainable development pathways in an integrated way, taking into account the perspectives of scientific communities across the globe. 2015 is a historic year. We are set to adopt an ambitious agenda that will move us towards a sustainable future for people and planet. But adopting the agenda is only the first step. Making it a reality will require work and dedication from all of us.
The DATA Report 2015: Putting the Poorest First
2015 is a year that will shape the course of history. A new set of Global Goals – the Sustainable Development Goals – will be launched in September, which will set out the path to a fairer, more prosperous world and an end to extreme poverty. But goals alone are not enough – they need a clear plan of action and the determination to deliver it, ONE Campaign says.
This report serves to review the experiences of recent years in pursuing a global partnership for development, focusing on the gap between commitments made and cooperation delivered, with the ultimate goal of helping the international community bridge the difference.
The Millennium Development Goals Report 2014
This report examines the latest progress towards achieving the MDGs. It reaffirms that the MDGs have made a profound difference in people’s lives. The concerted efforts of national governments, the international community, civil society and the private sector have helped expand hope and opportunity for people around the world. But more needs to be done to accelerate progress. We need bolder and focused action where significant gaps and disparities exist.
Accelerating Action: Global Leaders on Challenges and Opportunities for MDG Achievement
Secretary-General Reports
Mainstreaming of the three dimensions of sustainable development throughout the United Nations system: Report of the Secretary-General, 30 March 2015
This report highlights the role of the sustainable development goals at the core of the post-2015 development agenda and their potential to inject new impetus for embracing integrated approaches to development and to marshal a range of existing policy tools and guidance for collaboration.
Strategic foresight for the post-2015 development agenda: Report of the Secretary-General, 23 February 2015
This report identifies, analyses and presents for discussion key issues concerning the role of strategic foresight for policymakers, particularly in developing countries.
Drawing from the experience of two decades of development practice and from the inputs gathered through an open and inclusive process, the report charts a road map to achieve dignity in the next 15 years. The report proposes one universal and transformative agenda for sustainable development, underpinned by rights, and with people and the planet at the centre.
Trends and progress in international development cooperation: Report of the Secretary-General, 15 May 2014
Post-2015 Process
The process of arriving at the post-2015 development agenda has been member state-led with broad participation from major groups and other civil society stakeholders. This led to the representation of a wide range of interests and perspectives. In Africa, CSOs played an active role in coming up with the Common African Position on the post-2015 Development Agenda (CAP) providing them with full ownership of the process.
In anticipation of the adoption of the post-2015 development agenda at the UN Summit in September 2015, the HLPF discussed how best to prepare for implementing the agenda and to shape its own work to promote and review the implementation of the agenda.
Strengthening integration and implementation: Role of sustainable development bodies after 2015, June 2015
Note prepared by the UN Economic Commission for Africa for the Africa Regional Forum on Sustainable Development, held from 17-18 June 2015 in Addis Ababa.
This document is a compilation of the written contributions of various major groups and other relevant stakeholders that have autonomously established and maintained effective coordination mechanisms for participation in the High-Level Political Forum on Sustainable Development on the theme, “Strengthening integration, implementation and review: the high-level political forum on sustainable development after 2015”.
This technical report is provided by the United Nations Statistical Commission (UNSC) in response to a special request by the Co-facilitators of the intergovernmental negotiations on the post-2015 development agenda for the development of a provisional proposal in relation to indicators for sustainable development goals and targets. The Commission, at its 46th session (3-6 March 2015), endorsed a roadmap for the development and implementation of a global indicator framework.
Report of the Intergovernmental Committee of Experts on Sustainable Development Financing, 15 August 2014
This report presents a “strategic approach” to the flow of funds from sources to uses and considers policy options to strengthen the four basic categories of financial resource mobilization available for financing sustainable development, namely, domestic public, domestic private, international public, and international private finance.
Outcome document of the special event to follow up efforts made towards achieving the Millennium Development Goals, October 2013
Heads of State and Government gathered at UN Headquarters in New York at the special event convened by the President of the General Assembly to review progress made towards the achievement of the Millennium Development Goals and to chart the way forward. The leaders welcomed what has been achieved so far but expressed concern about unevenness and gaps in achievement and about the immense challenges that remain.
Sustainable Development Agenda in Africa
MDG Report 2015: Assessing Progress in Africa Toward the Millennium Development Goals (MDGs), September 2015
This year’s report highlights innovative policies and progammes which countries have adopted to accelerate progress on the MDGs. The report demonstrates that sustaining and advancing beyond the gains made under the MDGs require new approaches which embrace all three dimensions of sustainability – the environmental, economic and social. Progress under the SDGs will be assessed not only by the results achieved, but also by considering how they were achieved. Method will assume greater relevance in the post-2015 development paradigm.
The Africa Regional Forum on Sustainable Development was held from 17 to 18 June, 2015 Addis Ababa, bringing together high-level representatives of African member states together and relevant stakeholders. The main objective of the Forum was to enable African countries to deliberate and agree on Africa’s collective input in the form of key messages to the High-Level Political Forum on Sustainable Development 2015. The agreed key messages are presented herein.
Africa Regional Report on the Sustainable Development Goals, February 2015
The present report is a summary of the Africa Regional Report on Sustainable Development Goals, prepared under the framework of the Africa Rio+20 follow-up, and the post-2015 development agenda consultative processes. It is based on information gathered from consultative processes that were carried out in the five subregions of Africa, and among a number of institutions supporting development in the region, supported by an extensive literature review.
Common African Position on the Post-2015 Development Agenda (CAP), March 2014
The CAP identifies substantive issues of importance to Africa and arrives at a consensus on Africa’s key priorities, concerns and strategies to be reflected in the outcomes of the post-2015 negotiation process. This was achieved by taking into account the wealth of information collected and collated from national and regional stakeholders (the executive and legislative arms of governments, private sector, civil society organizations, youth associations, women groups, trade unions, and academia) African multilateral institutions and selected pertinent UN organizations and agencies.
A Regional Perspective on the Post‐2015 United Nations Development Agenda, June 2013
Reports of the UN System Task Team on the Post-2015 Development Agenda
Statistics and indicators for the post-2015 development agenda, July 2013
In January 2013, the UN System Task Team established a Working Group on Monitoring and Indicators to (a) analyze lessons learned from experience with the Millennium Development Goals (MDGs) monitoring framework, in close collaboration with the Inter-Agency and Expert Group on MDG Indicators (IAEG), and (b) develop recommendations on how the priorities identified in the Realizing the Future We Want for All report might be captured in the monitoring framework, with the objective of informing the formulation of the post-2015 development agenda on the design and criteria of numerical aspects of target setting, and the selection of robust monitoring indicators.
A renewed global partnership for development, March 2013
In this report, the United Nations Task Team Working Group on Strengthening the global partnership for development to support the implementation of a post-2015 development agenda formulates recommendations on desirable features of a renewed global partnership for development that are required for a successful post-2015 global development agenda.
Realizing the Future We Want for All, May 2012
Additional resources
» The new UN Sustainable Development Goals and Regional Integration in Africa, tralac Discussion, September 2015
» Defining a new global development agenda – Sustainable Development Goals and Climate Change, tralac Trade Brief, September 2015
» From Ambition to Execution: Policies in Support of Sustainable Development Goals, IMF Staff Discussion Note, September 2015
» Non-Tariff Measures and Sustainable Development Goals: Direct and indirect linkages, UNCTAD Policy Brief, September 2015
» Trade and Climate Change Policy Beyond 2015, UNCTAD Policy Brief, September 2015
» Report on the Third International Conference on Financing for Development, Addis Ababa, 13-16 July 2015
» From Billions to Trillions: MDB Contributions to Financing for Development, July 2015
» An International Support Programme for Sustainable Investment Facilitation, E15 Task Force on Investment Policy Think Piece, July 2015
» A sustainable development review process, UNCTAD Post-2015 Policy Brief, June 2015
» The role of international trade in the post-2015 development agenda, Note by the UNCTAD Secretariat, February 2014
Related News
Non-tariff measures and Sustainable Development Goals: Direct and indirect linkages
The Sustainable Development Goals have multiple and vital linkages to “non-tariff measures”, says UNCTAD in its latest Policy Brief. These non-tariff measures include regulatory policies to protect the environment and human, animal and plant life as well as non-trade barriers that have an effect on developing countries’ poverty reduction opportunities.
A new UNCTAD Policy Brief argues that the proliferation of non-tariff measures plays a crucial role in shaping global trade patterns and their sustainability.
Non-tariff measures are defined as policy measures – other than ordinary customs tariffs – that can have an economic effect on international trade. They thus include a wide array of policies. Some are traditional instruments of trade policy, such as quotas or trade defence measures. These measures are often termed non-tariff barriers because of their unequivocally discriminatory and protective nature. However, the distinctly neutral definition of non-tariff measures does not imply a direction of impact or a judgement about the legitimacy of a measure.
To understand how non-tariff measures interact with sustainable development, it is helpful to distinguish between indirect and direct linkages.
Indirect linkage means that non-tariff measures influence trade. In turn, trade can foster economic development and spill over to sustainable development.
Direct linkages refer to policies that have an immediate effect on sustainability. While many policies primarily aim at protecting health or the environment, they also have an impact on trade and are therefore considered non-tariff measures.
Key points:
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Trade leads to economic development; trade policy can ensure sustainability.
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Many non-tariff measures are much more than trade policy instruments – they are sustainable development policies.
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Some costs of non-tariff measures can be reduced without compromising policy objectives.
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Regulatory convergence with respect to NTMs is paramount.
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Nations need to work together in the multilateral system and the United Nations to achieve regulatory convergence.
Related News
US Trade Mission seeks to boost investment in Africa
U.S. officials accompanied by representatives from more than 100 U.S. companies are winding up a week-long trade mission to Africa with stops in the continent’s eight leading economies, including South Africa.
With more than 150 representatives from 108 American companies, the delegation is part of the Trade Winds initiative, a program of the U.S. Department of Commerce aimed at exposing U.S. companies to investment opportunities in sub-Saharan Africa.
While U.S. President Barack Obama has made boosting trade ties with the continent a priority, one trade expert says it will take more than a single trip for U.S. companies to clinch lucrative investment deals – especially with Chinese companies already investing heavily in some African countries.
“Africa’s dire financial constraints at the moment present a massive opportunity for investors,” said Theo Josias, head of business development at Sizwe Ntsaluba Gobodo, a South-Africa-based investment advisory firm. “The governments are giving a lot in terms of incentives, a lot in terms of wanting to make sure that they bring in people into the territory.”
By identifying sectors most in need of investment, such as energy and infrastructure, Josias says U.S. companies can capitalize on the weaknesses of their foreign competitors already rooted in Africa.
According to Marcus Jadotte, U.S. assistant secretary of commerce for industry and analysis who is leading the trade mission, the U.S. interest is focused on long-term investments.
“We’re focused on local workforce development, supporting the development of infrastructure and investing in the communities in which we do business,” he said, adding that efforts are being made to boost the sheer number of U.S. companies already invested on the continent.
American companies are already visible in many African countries, with close to 600 of them in South Africa.
The U.S. Commerce Department says it has doubled its presence on the continent and will soon be opening an office in Ivory Coast.
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Tackling the illicit African wildlife trade
Cecil the Lion was a summer media phenomenon. The story of an American dentist killing a Zimbabwe lion illegally after luring him out of a protected reserve generated millions of Google News hits in August and was shared millions of times on sites like Facebook.
Yet while social media has generated popular revulsion at big-game hunting, little attention has been given to Africa’s more serious problem of poaching and the illicit wildlife trade. While big-game hunting and poaching both involve the killing of magnificent creatures, the two activities are different. Big-game hunting is usually legal. It arguably promotes conservation of wild animals because the tourism and hunting fees it generates makes them of greater value to local people than just for their meat. The activity is also often an important source of revenue for African governments that may be devoted to conservation projects.
Africa’s Valuable, Vulnerable Species
Nevertheless, the uproar over Cecil provides an opportunity to focus broader public attention on the illicit wildlife trade. The illicit trade threatens the survival in the wild of species ranging from lions and elephants to pangolins and gorillas. Every year criminal networks stretching around the world traffic millions of animals and animal parts. Driven by the widespread desire for decorative objects, traditional medicinal recipes, and exotic foods, this industry has become the fourth-largest illegal trade in the world, behind narcotics, counterfeiting, and human trafficking.
Africa, with its vast diversity of wild animals and the world’s largest populations of “valuable” species, such as rhinoceros, pangolin, and elephant, has been especially hard hit. On the black market elephant rhino horn is worth more than $65,000 per kg, pangolin scales fetch approximately $3,000 per kg, and elephant ivory is worth more than $2,100 per kg. (A pair of ivory chopsticks in China costs more than $1,000.)
Some thirty thousand African elephants are killed illegally every year, with more than one hundred thousand killed between 2009 and 2012, reported National Geographic in August 2015. Africa’s rhinos now total fewer than twenty-five thousand in the wild. If the current rate of elephant and rhino poaching continues, many scientists believe these species and many others could be extinct in the wild within decades.
The trade thrives on poverty and ignorance. Within many African communities poaching is not viewed as a crime but rather as one of the few ways for local people to make money. Villagers are often unaware of how profitable a resource live animals can be. On the other hand, many consumers of ivory in China are also unaware that obtaining ivory involves killing an elephant. In Vietnam, where rhino horn is often used for medicinal purposes, many do not know that it is made out of keratin, the same material as human fingernails, and has no real medicinal value.
Targeted education programs can have success. Following one campaign against the use of rhino horn in Vietnam, polls showed that the number of people who said they would use rhino horn again fell markedly. In Africa, there are examples of poachers becoming conservationists where they can participate in the economic benefits provided by keeping the animals alive. One example is the Iby’Iwacu Cultural Village in Rwanda, where former gorilla poachers are now working to conserve the species.
A Security Threat?
Illegal animal trafficking is more than an attack on biodiversity. It is also a security and governance threat. Insurgencies, terrorist organizations, and sometimes state security services target wildlife to fund their operations, though it is difficult to get clear figures on how much money they gain from trafficking. Examples include the army of the Democratic Republic of the Congo (DRC), the Sudanese Janjaweed irregulars, and Joseph Kony’s Lord’s Resistance Army (LRA), which originated in Uganda and is now active in the Central African Republic. Some accounts suggest that groups such as Somalia’s al-Shabaab capitalized on the ivory trade by serving as middlemen. National Geographic tracked the movement of a pair of faked elephant tusks from central Africa through a poaching network as far away as Sudan. That particular ivory trade, in which Sudan’s rogue al-Bashir government may be complicit, helps finance a number of armed groups, notably the LRA.
The illicit wildlife trade imposes a high financial cost on Africa’s developing economies. For many of these countries, animals serve as a major driver of travel and tourism, bringing needed money into national and local economies. One such example is Rwanda, where last year tourism from gorilla viewing contributed $300 million to the economy, 5 percent ($15 million) of which is directly invested into local communities. Tanzania’s travel and tourism industry, which relies heavily on wildlife viewing, provides 14 percent of its GDP. Tourism plays a similar role in the GDPs of Botswana, Kenya, Rwanda, South Africa, and Uganda (ranging from 9.1 to 12.1 percent). Tourism directly and indirectly employs 12.2 percent of the Tanzanian work force. One estimate is that throughout the course of its natural lifespan each elephant contributes over $1.6 million to African economies. The negative economic impact of the illicit wildlife trade on countries like Tanzania, where the elephant population has declined by more than 60 percent (from over 109,000 to just over 43,300) over the last five years, is significant, though exact figures are hard to come by.
Counter-Trafficking Efforts
China and the United States are the two largest markets for the illicit wildlife trade, and reduction of demand in both is essential. In May 2015, the Chinese government announced its intention to phase out the legal trade in ivory, which has served as a cover for a much larger illegal trade. However, since the Chinese government’s announcement, it has released no concrete plan for doing so.
On July 1, 2013, President Obama issued an executive order establishing the Presidential Task Force on Combating Wildlife Trafficking to develop and implement a national strategy. The task force’s 2015 implementation plan has three major objectives: strengthening government enforcement of existing law and regulation; reducing the demand for illegally traded wildlife; and building international cooperation, including public-private partnerships.
One step is strengthening law enforcement. In 1989 Congress passed the African Elephant Conservation Act, which banned a commercial market for new ivory. Over time, this legislation grew to include other species and wildlife products. However, these laws have had loopholes now targeted by newer legislation. Most recently, President Obama has called for a ban on interstate ivory trade, excluding specific items such as antique piano keys and antique guns that contain ivory. In addition to federal initiatives, several states are considering legislation restricting the intrastate trade. California, New Jersey, and New York have already passed such legislation.
Beijing and Washington must also work with other nations to combat the trade. The United States should support diplomatically and financially the efforts by the UN Convention on International Trade in Endangered Species (CITES) to combat the illegal trade. There are 181 parties to the convention. The U.S. government should continue to work with CITES to help develop better monitoring systems of known trafficking routes and to make intelligence, training, equipment, and funding available to resource-starved African governments. The United States should also work with CITES to encourage the Chinese government to take the necessary next steps. Washington should continue to hold the position that there should be no legal trade for products from endangered species, such as ivory and rhino horn.
Partners for Africa
In a time of budget austerity, the Obama administration should ensure sufficient funding for the federal agencies responsible for enforcement of the laws and regulations against the illicit wildlife trade. When the administration launched the Presidential Task Force on Combating Wildlife Trafficking, the United States contributed an initial $10 million for training and technical assistance to Kenya, South Africa, and other countries. Over the last year the United States has taken the lead internationally and invested more than $60 million in international programs to address wildlife trafficking. In turn, the Chinese government has also contributed $10 million to support wildlife protection and conservation in Africa. Funding must continue. For their part, conservation activists should press the U.S. states considering legislation against the ivory and rhino horn trade, such as Connecticut and Massachusetts, to pass and enforce these bills. By doing so conservationists can close the loopholes that have allowed the illicit trade to be prosper.
In the longer term, the federal government and conservation bodies should promote stronger partnerships with African governments and with the African tourism industry. By facilitating partnerships among governments, wildlife services, private business, and nongovernmental organizations, the United States could promote practical steps, such as improved training of park rangers and better educational campaigns targeted at villages. Partnerships can also target and expand educational campaigns directed at raising awareness among potential consumers of the illicit trade, as has been done in Vietnam.
More specifically, the executive branch of the U.S. federal government should share relevant intelligence and provide training in intelligence gathering to African governments combating poaching. One ongoing, successful example is the U.S. Customs and Border Protection Service training Tanzanian customs agents to use ivory sniffing dogs. By working with its African, Chinese, and other international partners to protect Africa’s wildlife, Washington has an opportunity to save Africa’s iconic species while also promoting regional security in Africa.
Related News
Range of changes spur pace of growth in Africa’s retail sector
Africa’s retail profile has undergone a tremendous change over the past couple of decades, as an influx of cheap Chinese goods, better technology and increased personal income have changed the way people shop.
Sprawling markets where live chickens, cassava roots and colourful locally made fabrics still thrive but increasingly they must share the terrain with hi-tech vendors and branded football shirts featuring clubs such as the Abu Dhabi-owned Manchester City.
Communication is arguably the most significant long term retail development, universally applicable across Africa. With fixed-line communication spotty at best, the mobile phone revolution has swept the continent.
In 2001, there were fewer than 21 million mobile phones in circulation in Africa; now, 735 million mobile phones are in use, according to a study by M&C Saatchi Mobile, a global mobile marketing agency.
This in turn has created a thriving business in handsets and mobile phone stores have become an indelible part of the African urban landscape.
The growth in mobile phones has also led to fibre-optic submarine cables to Europe, the Middle East and elsewhere, installed to help build up broadband capacity across the continent.
As the internet spreads, so has online shopping.
According to Bidorbuy, the South African version of eBay that dominates the continent, “generator” is the most searched for item.
“Trends include new channels for basics and dry goods, continue on to fresh produce and modern shopping channels, as well as online retailing which already starts to establish in markets like Nigeria,” says Mirko Warschun, an AT Kearney partner and the leader of the firm’s consumer industries and retail practice for Europe, Middle East, and Africa.
China’s vast production of low-cost goods is an unrelenting force influencing price-sensitive African consumers.
China is now Africa’s largest trading partner and the Asian powerhouse sells good worth about US$100 billion a year, mostly in manufactured goods, to the continent, according to the World Bank.
The phenomenon has produced its share of fierce criticism, centred around the claim that Chinese products are pushing out local entrepreneurs who cannot compete on prices.
Yet it has also produced a thriving class of African small businesses that depend on the very same cheap products to thrive.
More than 20,000 Africans are estimated to live in China’s export-oriented Guangdong province, the majority earning a living as middlemen for the thriving cross-continental trade.
It is a trade that can only grow.
Related News
Intra-continental trade in Africa to feature prominently as Africa’s industry giants gather in Johannesburg
Africa’s richest man‚ Aliko Dangote‚ together with investment banker Dr Enos Banda‚ Prof Pat Utomi‚ founder and CEO of the Centre for Values in Leadership‚ and Prof Nick Binedell‚ founding director of the Gordon Institute of Business Science‚ are just a few of the African business leaders who will headline the first annual African Business Leaders Forum (ABLF) event to be held in Johannesburg this year.
Scheduled to take place from December 9-12 at the Sandton Convention Centre‚ the high-level conference has already attracted some of Africa’s most prestigious and influential business leaders.
Participants will address key issues and explore opportunities for growth in various sectors including mining‚ infrastructure‚ ICT and agriculture.
The line-up will also include Angola’s Isabel dos Santos‚ South Africa’s Patrice Motsepe‚ Ethiopia’s Mohammed Al Amoudi‚ Kenyan businessman Chris Kirubi‚ as well as Folorunsho Alakija‚ the richest woman in Nigeria.
The conference will follow hot on the heels of a summit for Africa’s heads of state and the leadership of China‚ which will be held at the same venue.
The summit agenda is expected to include Africa’s trade relationships with China at political level. The forum event‚ on the other hand‚ will seek to debate business-related challenges in order to reach resolution to influence policies on intra-Africa trade.
Head of the ABLF initiative and entrepreneur‚ Ezra Ndwandwe‚ considers the forum a prime opportunity to discuss how African businessmen and women can engage in constructive debates with tangible outcomes around the advancement of intra-continental trade between African countries.
“Africa is host to the majority of the world’s 10 fastest growing economies‚ with more than $1.671-trillion of potential wealth that remains untapped‚” he said.
The last two days of the event will be dedicated to the youth chapter.
Ndwandwe believes that young businesspeople will seek to hold elders accountable for economic development. For the first time‚ African youth will determine their own business path for intra-Africa trade.
Younger speakers such as 25-year-old Sanele Makinane‚ winner of the second season of locally pioneered entrepreneurial reality TV show The Big Break Legacy‚ also feature on the programme. He will co-direct the youth chapter programme on the last two days of the forum (December 11-12) with 27-year-old Nigerian Prince Siddiq Fodio.
Fodio is a business partner in Zircon‚ the largest telecommunication equipment maker in the world and official distributor of Huawei. Currently‚ he is doing his Masters in International Business Management at Middlesex University in London.
“The inclusion of the youth and their contribution to building a thriving economy with innovative perspectives and concepts is essential at such a prestigious event‚” said Ndwandwe.
He said corporates with a passion for development in Africa were also key stakeholders of this forum.
“Stronger intra-continental trade will bring us one step closer to taking ownership of the African economic agenda.
“The ABLF has been structured in a way that it will encourage the kind of engagement and dialogue that is needed to spur the continent towards economic transformation. To that end‚ the forum is expected to come up with tangible and actionable resolutions.”
Ndwandwe said strong business guidance was imperative if the continent’s full potential is ever to be realised.
“The fact that Africa can produce inspiring‚ successful business leaders such as the ones featured in this forum‚ proves that this transformation is well within our reach.”
The event is expected to attract more than 2‚000 attendees from all over the continent.
“The main objective of the event is to acknowledge the need for change‚ start conversations around intra-continental trade and ultimately reinforce the idea that the continent has the ability to develop a competitive and thriving economy‚” said Ndwandwe.
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The selection: Monday, 21 September
Mapping the future of development economics: access the UNU-WIDER conference presentation slides
In preparation: a UNECA report on industrial policy in Africa, compiled by @haugejostein, Ha-Joon Chang
European Parliament Trade Committee meets today, Tuesday: agenda, documentation [Profiled document: draft motion on the state of play of the Doha Development Agenda in the view of the 10th WTO Ministerial Conference]
South Africa: Development Indicators 2014 (GCIS)
The Development Indicators publication is one of our key sources for tracking progress towards achievement of the National Development Plan Vision 2030, on annual basis. Whereas the production of this publication predates the adoption by our country of the NDP 2030, the majority of indicators identified at the outset and tracked since then, remain pertinent to the present. This 2014 publication is useful in many respects. It is the first to be produced since government published the 20-year review in 2014, and thus further enriches the evidence-base that informs the design and delivery of our socio-economic development programmes.
The Development Indicators 2014 include a section on good governance, where we monitor the efficiency of revenue collection, audit outcomes of the different spheres of government, the perceptions of corruption, transparency in budget processes, the public’s opinion on the delivery of basic services and the ease of doing business in South Africa. These measures are useful in assessing the NDP goal to build a capable and developmental state. [The author: Minister Jeff Radebe] [Various downloads available]
Priorities of government: media briefing (RSA Department of Planning, Monitoring and Evaluation)
The importance of reliable data for monitoring and evaluation cannot be overemphasized. Currently, there is a process of upgrading the data collection system to provide real-time data that can be used effectively in monitoring and evaluation of government’s Programme of Action. I have directed DPME and StatSA to work on the most cost effective way of developing real-time and effective data collection systems that will assist effective monitoring of the 14 priority outcomes. [National Planning Commission: new members]
World Bank and Switzerland to support South African cities (World Bank)
The World Bank Group and the Embassy of Switzerland have signed a $9m Trust Fund agreement to support South Africa’s efforts to improve the performance of its large cities by making them more inclusive, productive and sustainable. The CSP seeks to improve targeted areas such as business-enabling environment; public financial management; infrastructure finance; land management and urban regeneration; and integrated urban transport planning over a five year period. This trust fund is the latest in the growing partnership between the World Bank Group and SECO to support South Africa's development priorities.
Ivan Turok: 'Careless, unexamined expansion threatens SA cities' (Business Day)
Lauren Royston, Yahia Shawkat: 'The idea of new cities may be folly' (Business Day)
Ghana: Restructuring the National Development Planning Commission (GhanaWeb)
This is the time to draw up bold and ambitious plans for concrete, accelerated, progressive, and sustained development. I am very pleased that the National Development Planning Commission has drawn up a 40-year National Development plan to guide the various political parties as they ascend to the reign of government. We cannot develop the nation with the disjointed manifestos of the various political parties as they are not seamless and not compatible with each other. They do not complement each other and more often than not, projects and developments by previous governments are often discarded by subsequent governments. There is a complete break in the process of our development every time government changes hands. This is the reason we need the 40-year Development Plan as a standard guide, a developmental blueprint, a framework, which will be flexible enough for the various political parties to align their manifestos with. [The author: Dr. Gabriel Asare Ayisi]
Absence of reliable data Nigeria’s bane – Statistician General (Vanguard)
The Statistician General of the Federation, Dr. Yemi Kale, says lack of comprehensive and harmonized data for monitoring targets contributed in denying Nigeria most of the Millennium Development Goals by 2015. Dr. Kale made the assertion during the stakeholders’ workshop on data mapping for Sustainable Development Goals (SDGs), in Abuja. This he said resulted in serious difficulties and challenges midway through implementation of the MDGs process, most especially in ascertaining Nigeria’s status in the process.
Nigeria: Ageing population set to increase amidst economic downturn (Daily Independent)
The National Population Commission has given indications that the aging population in Nigeria would see a steady increase in the years ahead, despite dwindling economic fortunes. The Commission however noted that life expectancy rates of Nigerians would gradually increase if the prospects for economic recovery by the Federal Government was anything to go by.
Kenya: Social-economic atlas good for planning, counties told (Hivisasa)
County governments have been asked to make use of the recently launched Social-Economic Atlas of Kenya by the Planning and Devolution ministry to help them prioritise key areas of development. Boniface Kiteme, Director of the Centre for Training and Integrated Research in ASAL Development (CETRAD) who co-authored the atlas with Kenya National Bureau of Statistics and Switzerland based Center for Development and Environment, said the atlas combines geographic and social-economic data that can enable policy makers and development experts in counties to understand issues affecting their people. [Highlights of The Socio-Economic Atlas of Kenya]
Rwanda: National Risk Atlas launched (UNDP)
The Government of Rwanda has launched its first National Risk Atlas, the first-ever comprehensive risk profile developed in Africa. In collaboration with UNDP, the World Bank and the European Union, the National Risk Atlas was developed through a comprehensive risk assessment to provide to the Government of Rwanda guidance in national planning and policy-making on disaster risk reduction.
Zambezi River Basin: strategic plan, law review (HydroWorld)
The eight-nation Zambezi Watercourse Commission has renewed calls for expressions of interest from consultants to develop a strategic plan, harmonize national water laws and upgrade the hydro-meteorological system for the Zambezi River Basin Management Project in southern Africa. Responses to three solicitations now are due September 25. [Procurement details]
Taking stock of the Global Partnership for Development (UN)
The “Taking Stock of the Global Partnership for Development” report of the United Nations MDG Gap Task Force monitors the recent achievements and challenges in the implementation of the Millennium Development Goal 8, while looking ahead towards the new sustainable development agenda that will be adopted by world leaders at the Sustainable Development Summit this month (September 25-27), and which will include the launch of a new set of Sustainable Development Goals. [Various downloads available]
Ricardo Meléndez-Ortiz: Reflections on global economic governance at the “start of a new era” (ICTSD)
Kikwete chairs health crises response panel (Daily News)
Third conference on China-Ethiopia production capacity cooperation (Ethiopian Herald)
The Conference on China-Ethiopia Production Capacity Cooperation took place in Zhejiang Provincial State on 6 September. This was third business forum attended by the high-level Ethiopian delegation in China, according to MoFA. Zhejiang Provincial State is known for its small and medium scale industries in textile, leather and agro-processing, and the Prime Minister said these were exactly the areas on which the Government was focused and in which Ethiopia needed quality investment.
Malawi: Public finance management institutional support project (AfDB)
The project adds value to Government and other development partners’ efforts to address the PFM challenges faced by the country. It will contribute to: (i) addressing the weaknesses in the PFM institutions, as a priority for the GoM and its partners; (ii) strengthen the fiduciary systems in government institutions, by promoting transparency and tackle corruption and leakage in public funds; (iii) strengthen revenue mobilisation efforts of Government thereby reduce financing risks arising from delayed, reduced or suspended foreign aid; and (iv) help consolidate and sustain the gains realised through the Bank’s previous and the on-going operations and interventions by other DPs.
Swaziland must repay SACU E1 billion (Swazi Observer)
The finance minister explained that SACU receipts continued to be the country’s major revenue source. However, in 2016/17 SACU receipts would decline by about 33% from E6.9 billion in the current financial year to about E4.5 billion. He said this decline comes as a result of the fact that SACU CRP under collected by E7.6 billion in 2014/15. “Emanating from this under collection and in line with the 2002 SACU agreement, Swaziland will pay back to the CRP above E1 billion. The Other SACU partners will also pay back to the CRP varying amounts,” he said. Dlamini said the under collection for 2014/15 has to be made up in 2016/17 in line with the SACU agreement. This stipulated that the CRP forecast used to calculate the size of the revenue shares for the member states in the year must be reconciled with the actual and any adjustments be done two years after the year of under collection.
West Africa: Harmonizing policies for the management of mining resources (UNECA)
The meeting (6-7 October) will assemble the experts of the ministries in charge of mines and natural resources of the Member states of the ECOWAS, country-level officials of the Extractive Industries Transparency Initiative, mining experts of the ECOWAS and WAEMU Commissions, as well as experts from other structures of the UN and international development institutions working in the field of natural resources in West Africa. The participants will discuss the problem of the effective consideration of the African Mining Vision, the Directives of the ECOWAS and the EITI Standards and Principles in the main policies, laws and regulations on mining in the ECOWAS countries.
Rwanda Civil Society Agriculture Forum: update (New Times)
At least 60 civil society organisations yesterday inaugurated a joint forum to harmonise their voice in advocating for development of the agriculture sector in the country. Among the priorities of RCAF include advocacy to ensure effective participation of non-state actors in the formulation of agriculture policies and the agriculture budget making processes, coordination of efforts in the sector, and advocating for changes in some of the current agriculture policies in the country.
Alternative futures for global food and agriculture: developing robust strategies (OECD)
The global food system faces a range of challenges which will shape developments towards 2050. Feeding a growing and more affluent population while preserving sensitive ecosystems, competing for access to limited land, water and other natural resources, increasing agricultural productivity growth while both adapting to and mitigating climate change and other threats, and contributing to rural area well-being: the future for food and agriculture poses numerous trade-offs, challenges and opportunities. Three contrasting scenarios are developed to sketch different views on how the world may unfold towards the middle of the century:
Kenya to hold international investment conference (Global Post)
Kenya is planning to host an international investment conference from Nov. 22 to 25 to attract investors for projects, including expansion of airports, railway, tourism, roads, dams and energy projects. Kenya Investment Authority Managing Director Moses Ikiara said the investment summit would present investors with "business unusual plans" in wind energy, solar power, nuclear power plants and long-term projects in the oil, gas and geothermal sectors.
Infrastructure investment demands in emerging markets and developing economies (World Bank)
The authors have assembled 1960–2012 infrastructure stock data from 145 countries to estimate the demand for infrastructure services in emerging markets and developing economies. This paper identifies that the required resource flows to satisfy new demand while maintaining service for existing infrastructure amounts to $836 billion or 6.1 percent of current gross domestic product per year over the period 2014–20. The annual infrastructure investment gap for emerging markets and developing economies is $452 billion per year, which implies that emerging markets and developing economies should almost double their current spending.
PIDA: AU Infrastructure and Energy Department concludes preparatory meeting (SomalilandPress)
Inaugural Africa Islamic Finance Forum: update (Saudi Gazette)
ARMFA: ‘Bridge financial gaps for road works' (Times of Zambia)
US Chamber of Commerce partners with West African business group (The Hill)
Migration and fragility: briefing paper (OECD)
South Africa takes measures to tackle fallout from China slowdown (SCMP)
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Global partnership needs to be revitalized to tackle inequality and implement the new sustainable development agenda, says new UN report
The Millennium Development Goals (MDGs) achieved significant progress over the past 15 years, but persistent gaps in official development assistance and an insufficient access to markets, affordable medicines and new technologies have highlighted the need for a rejuvenation of the global partnership for development, according to a new report launched on 18 September by United Nations Secretary-General Ban Ki-moon.
The “Taking Stock of the Global Partnership for Development” report of the United Nations MDG Gap Task Force monitors the recent achievements and challenges in the implemen-tation of the Millennium Development Goal 8, while looking ahead towards the new sustainable development agenda that will be adopted by world leaders at the Sustainable Development Summit this month (September 25-27), and which will include the launch of a new set of Sustainable Development Goals.
“Transitioning from the Millennium Development Goals to the Sustainable Development Goals presents a once-in-a-generation opportunity to advance prosperity, secure the planet’s sustainability for future generations”, said Secretary-General Ban Ki-moon in the preface to the report. “Achieving the SDGs will require an even stronger global partnership, complemented by multi-stakeholder partnerships to mobilize and share knowledge, expertise, technology and financial resources”.
Key report findings reveal official development assistance flows have increased remarkably by 66 per cent from 2000 to 2014. In merchandise exports, developing countries’ access to developed-country markets has improved from 30.5 to 43.8 per cent over the same period. Debt burdens have been reduced in most highly indebted poor countries. Mobile phone penetration in developing countries is estimated to reach 92 per cent at the end of 2015, compared to less than 10 per cent in 2000.
Nevertheless, the Report also finds that major gaps persist in development aid flows to the least developed countries and in eliminating trade barriers for developing countries. Additionally, many people cannot access essential medicines and the Internet at affordable prices.
Market access for developing countries expanded
Developing countries received duty-free treatment on only 65 per cent of their exports to developed countries in 2000, but on 79 per cent in 2014 (excluding arms). Duty-free imports from least developed countries increased from 70 per cent to 84 per cent of their trade over the same period. South-South trade has become an important source of trade expansion.
But, the merchandise exports of least developed countries accounted for only 1.17 per cent of world trade in 2013. According to the Report, there is the need for developed countries to eliminate more barriers to trade, while the remaining Doha Round issues need to be tackled.
Debt relief progressed in 36 out of 39 eligible countries
Debt relief has reduced financial pressures in 36 out of 39 highly indebted poor countries, and only three countries – Eritrea, Somalia and Sudan – have yet to start the debt-relief process. The overall ratio of external debt to gross domestic product (GDP) of developing countries has declined over the past decade, but it has been increasing in some countries in recent years.
However, a number of developing countries, particularly small States, continue to face some of the highest debt-to-GDP ratios in the world, and their underlying economic problems warrant further attention. An urgent need remains for the international community to assist countries to enhance their policies towards debt-crisis prevention and to facilitate resolution of crises.
Access to affordable essential medicines still limited
The availability of essential medicines is still low in developing countries. According to the data on medicine availability and prices, collected in 26 surveys from 2007 to 2014 in a sample of low- and middle-income countries, generic medicines were available on average in 58.1 per cent of public sector facilities and in 66.6 per cent of private sector facilities.
Nevertheless, there have been efforts to increase treatment access, in particular for some diseases such as HIV, tuberculosis and malaria, largely owing to a massive influx of national and international funding, such as from the Global Fund.
Mobile phone signals reach 95 per cent of the world’s population
The Task Force estimates that the number of mobile-cellular subscriptions in the world is estimated to grow to just over 7 billion by the end-2015 and more than 95 per cent of the world’s population will be covered by a mobile-cellular signal. Forty-three per cent of the world’s population uses the Internet today.
The growth of Internet users is robust in developing countries, but only 32 per 100 inhabitants are estimated to be using the Internet, as compared with 80 per cent of people in developed countries in 2014. Access to information and communication technologies (ICTs) can be an important enabler of broader development objectives such as “e-governance” services so that greater efforts must be undertaken, especially in the economies that most need ICTs but which are least able to access them.
Background
The United Nations MDG Gap Task Force is an inter-agency initiative that includes more than 30 organizations with specialised competence in the five core domains of the global partnership for development: official development assistance (oDA), market access (trade), debt sustainability, access to affordable essential medicines and access to new technologies.
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SA economy needs to be labour absorbing: 2014 Development Indicators
While unemployment continues to plague South Africa, reducing it requires the economy to be on a labour absorbing growth path.
“Reducing South Africa’s high levels of unemployment requires the economy to be on a labour-absorbing growth path, as well as the development of entrepreneurship amongst our youth, in terms of interest, skills and creation of opportunities.
This depends on a successful reorientation of the economy to raise labour demand, with matching improvements on the supply side,” said Minister in the Presidency responsible for Planning, Monitoring and Evaluation Jeff Radebe.
The Minister was speaking at the launch of the 2014 Development Indicators in Pretoria on Sunday. The data in the 2014 report reflects that one in four working age adults actively seeking employment remained unemployed during the period under review.
In 2014, youth unemployment reached a peak of 48.8% amongst the 15-24 year age group and 29.6% amongst the age group 25-34 years of age.
Whereas unemployment is exacerbated by lack of appropriate skills, this is also compounded by the shortage of suitable post-school education opportunities, noted the Minister.
Re-industrialisation and economic diversification are also necessary to boost job creation, and these factors are at the heart of the National Development Plan 2030 (NDP), the New Growth Path and the Industrial Policy Action Plan.
“The stark unemployment figures I have just outlined have continuously spurred government into action, and not into despondency,” said Minister Radebe.
Expanded Public Works Programme (EPWP)
Investments in infrastructure have boosted youth employment in construction with the Expanded Public Works Programme (EPWP) having expanded the intake and participation of young people.
The goal of the programme is to provide six million work opportunities by 2019 through the labour intensive delivery of public and community assets and services.
According to the report, employment in the EPWP continues to expand steadily.
“Short-term employment opportunities through the EPWP remain an important intervention to support unemployment working-age adults. In the year 2013/14, the EPWP created more than 1 million work opportunities. Infrastructure has created more work opportunities than other sectors,” noted the report.
While the EPWP has grown substantially with more than three-fold growth in four years, given the country’s focus on decent jobs, this is not sufficient to ensure a skilled, qualified and capable workforce, said Minister Radebe.
The Minister further added that it is not the primary role of government to create jobs, but rather to create an enabling environment for crowding in investments, in terms of the legislative and regulatory dispensation, stimulating economic growth and ensuring a peaceful labour environment, free of exploitation and disruption.
“Jobs created in the public sector are therefore largely a bi-product of successful service delivery, which is our main goal.”
As part of interventions to address the skills deficits, at least 30 000 young people have benefited from internships and learnerships in the public service since the decision to systematically implement this programme in 2009.
Meanwhile, the Industrial Development Corporation and the Small Enterprise Finance Agency have committed a combined R2.7 billion to finance youth-owned enterprises.
The National Youth Development Agency (NYDA) has also supported a range of youth-owned enterprises and cooperatives with more than1 000 youth-owned enterprises having benefited from the support of the NYDA.
The Development Indicators are an initiative by the Department of Performance Monitoring and Evaluation and tracks progress made in various areas of development.
There are 86 indicators in all which are clustered in 10 themes ranging from economic growth and transformation, employment, education and safety and security among others.
These indicators are used as criteria to measure progress and assist government to track, using quantitative measures, the effectiveness of government policies and interventions towards achieving the national goals in areas of development.
Address by Minister Jeff Radebe on the occasion of the release of Development Indicators 2014: Extracts
On this blessed Sunday morning, let me first express my appreciation to you all for your presence here as we release to the people of South Africa the Development Indicators 2014. These indicators play a crucial role in assisting government and the public to track the effectiveness of government policies and interventions using aggregate data. They employ quantitative measures to track progress made in implementing policies against national targets based on data sourced from research institutions, government databases and official statistics.
The purpose of today’s panel discussion with industry and sector experts is to stimulate public discourse and ensure that these Development Indicators are understood in context by the stakeholders and the public. It also seeks to unpack the indicators in detail and get expert opinion and input from the target audience on what is working and how we could improve the reporting in future.
The launch of the Development Indicators occurs against the backdrop of yet another proud milestone in South Africa’s rich history – the discovery of Fossil Naledi. Many of the series we track in this publication date back to 1994 – not quite as far back as the Naledi fossils – but very useful in assessing how we have progressed from 1994. The government and the people of our country and indeed the entire world speak with one loud voice in congratulating the University of the Witwatersrand for this colossal achievement. May this pioneering work grow from strength to strength, and continue to place our country at the epicentre of the global map.
The Development Indicators publication is one of our key sources for tracking progress towards achievement of the National Development Plan (NDP) Vision 2030, on annual basis. Whereas the production of this publication predates the adoption by our country of the NDP 2030, the majority of indicators identified at the outset and tracked since then, remain pertinent to the present. This 2014 publication is useful in many respects. It is the first to be produced since government published the 20-year review in 2014, and thus further enriches the evidence-base that informs the design and delivery of our socio-economic development programmes.
The socio-economic development programmes implemented in partnership with all key stakeholders, and therefore have to be monitored and evaluated jointly with all our partners. Your presence here today fellow South Africans, to join hands with us as we take stock of milestones recorded to date, is of utmost importance.
Consistent with the Labour Force Surveys published by Statistics South Africa, the Development Indicators 2014 reflect that one in four working age adults actively seeking employment remained unemployed during the period under review. In 2014, youth unemployment reached a peak of 48,8% amongst the 15-24 year age group and 29,6% amongst the age group 25-34 years of age. Whereas unemployment is exacerbated by lack of appropriate skills, this is also compounded by the shortage of suitable post-school education opportunities.
Reducing South Africa’s high levels of unemployment requires the economy to be on a labour-absorbing growth path, as well as the development of entrepreneurship amongst our youth, in terms of interest, skills and creation of opportunities. This depends on a successful reorientation of the economy to raise labour demand, with matching improvements on the supply side. Re-industrialisation and economic diversification are also necessary to boost job creation, and these factors are at the heart of the NDP 2030, the New Growth Path and the Industrial Policy Action Plan.
The stark unemployment figures I have just outlined have continuously spurred government into action, and not into despondency. Measures undertaken by the public sector, such as investment in infrastructure, have boosted youth employment in construction. The Expanded Public Works Programme has expanded the intake and participation of young people. The recently launched employment tax incentive has encouraged private-sector employment of new entrants to the labour market.
As the NDP 2030 firmly asserts, it is not the primary role of government to create jobs, but rather to create an enabling environment for crowding in investments, in terms of the legislative and regulatory dispensation, stimulating economic growth and ensuring a peaceful labour environment, free of exploitation and disruption. Jobs created in the public sector are therefore largely a bi-product of successful service delivery, which is our main goal.
As is known, the global economic recovery since the downturn of 2008 has been slow and uneven across continents. The GDP growth rate in South Africa averaged 3.7% in the past 10 years, while annual growth rate averaged 1.5% in 2014. Our target, embodied in the NDP target is 5.4%. Key risk factors include poor global economic conditions which continue to impact on our export markets. Our mining sector is facing an acute crisis partly as a result of the dramatic drop in commodity prices. Current initiatives to stimulate growth include the government’s infrastructure build programme, the war room on electricity, the Operation Phakisa on the Ocean Economy and on Mining, and the 9-Point Plan.
Despite some fluctuations, our overall total investment in fixed capital as a percentage of GDP increased over the last 5-years, and reached 20,3% in 2014. The NDP target is 30% of GDP by 2030. This has resulted from the focused delivery on the government’s Strategic Infrastructure Projects, which included the upgrading of roads, schools and hospitals, with the provincial governments and local authorities in particular stepping up their expenditure. At the same time the level of real fixed capital expenditure is mainly reflecting ongoing spending by the electricity and transport sectors. Lower than expected private sector investment as a percentage of GDP remains a challenge to increasing overall investment. South Africa has not yet recovered to the 2008 level, which was driven largely by preparations for the 2010 Soccer World Cup.
Employment in the Expanded Public Works Programme (EPWP) continues to expand steadily, and reached 6 million at the end of 2012/13. Short-term employment opportunities through the EPWP remain an important intervention to support unemployed working-age adults. In the year 2013/14, the EPWP created more than one million work opportunities, the majority in infrastructure. The Community Work Programme has grown substantially from its modest roots in 2009/10 with more than three-fold growth in four years. However, given the country’s focus on decent jobs, this is not sufficiently crowding to ensure a skilled, qualified and capable workforce.
The National Development Plan envisages rural communities with greater opportunities to participate fully in the economic, social and political life of the country, supported by good-quality education, health care, transport and other basic services. An inclusive rural economy will be achieved through successful land reform, job creation and rising agricultural production.
The medium term strategic framework contains actions to grow and diversify the economy and reduce economic concentration. It focuses on ensuring growth in the core productive sectors of manufacturing, mining and agriculture, including stimulating new areas of economic growth such as the oceans economy. It includes actions to ensure that small business makes a much larger contribution to growth and employment creation.
Current initiatives to create jobs in agriculture are yet to manifest in the employment numbers. In 2014, however, the agriculture sector gained 28,000 jobs, followed by a 200,000 year-on-year increase in the first quarter of 2015.
Current economic conditions affect all sectors, but the agriculture sector is further constrained due to severe drought conditions.
Maintaining good agricultural practices is critical to improving the competitiveness of SA products in the markets, and as such Government has instituted the Good Agriculture Practice (GAP) audits.
South Africa must increase its investment in Research and Development (R&D). Although R&D expenditure as a percentage of GDP has increased over the years, it was only 0,76% of the GDP in 2011/12. A silver lining in this cloud is that there have been some shifts in the overall composition of Gross Expenditure on R&D (GERD) compared to five years ago, primarily as a result of the fact that the government has become the largest source of funds for R&D, and that the bulk of such funds are expended in the higher education institutions and science councils. Notwithstanding, increased investments in R&D are required to ensure that the country remains abreast of other nations in the production and application of scientific knowledge. In our vocabulary, this includes indigenous knowledge systems.
The Development Indicators 2014 include a section on good governance, where we monitor the efficiency of revenue collection, audit outcomes of the different spheres of government, the perceptions of corruption, transparency in budget processes, the public’s opinion on the delivery of basic services and the ease of doing business in South Africa. These measures are useful in assessing the NDP goal to build a capable and developmental state.
According to the Open Budget Index (OBI), South Africa continues to be in the top six of countries that institutionalise transparency initiatives in the budgetary processes. Notably, South Africa maintained the second position both in 2008 and 2013, an impressive record indeed.
South Africa’s corruption perception score improved in 2014. Despite the slight improvement, the perception of corruption in South Africa and our consequent poor performance when compared to other countries are not what they should be. Corruption in both the public and private sectors impedes service delivery, undermines public confidence in the state and the economy, and reduces economic growth, competitiveness and investment. A range of institutions and measures have been put in place since 1994 to counter corruption. These are being strengthened by mechanisms such as preventing public servants from doing business with the state and better management of the risks related to government procurement processes. A culture of zero tolerance needs to be developed across society, with businesses and citizens also playing their part.
Government departments must utilise the taxpayers’ resources, appropriated through Parliament, judiciously and ethically. Financial audit outcomes across national and provincial departments, municipalities and public entities have improved but are still not ideal. The MTSF target for municipalities is that at least 75% of municipalities should have unqualified audit opinions by 2019. Intense support is being provided to municipalities to develop and implement audit action plans through a dedicated initiative by the Department of Cooperative Governance. To date 167 municipalities have plans of action to prepare and submit Annual Financial Statements.
Tax revenue has grown significantly due to economic growth, a broader tax base and more effective revenue collection. The income tax register has been expanded from 3 million taxpayers in 1996 to almost 20 million in 2013. National Treasury’s 2015 Budget Review indicates that there is broad acceptance that South Africa’s tax system is fair and efficient. It forms a part of the country’s social compact, raising the revenue necessary to support public services. Over the past decade, the public finances have supported a large-scale redistributive effort to support national development and reduce poverty. National income, adjusted for inflation, is 50 per cent larger than it was 10 years ago. Over the same period, spending per citizen grew by 80 per cent in real terms, and real expenditure on social services doubled.
Since the global financial crisis began in 2008, however, increasing expenditure has been sustained by a large accumulation of debt. Rising debt-service costs threaten the sustainability of social gains achieved over the past decade. Government is aware that improving the quality of public spending, combating corruption, and eliminating waste and inefficiency are vital to maintaining the goodwill that sustains revenue collection.
The past decade has seen the rise of the black middle class. There was a significant shift in the country’s living standards measure between 2001 and 2013. Despite rising average income levels and the rise in the black middle class, levels of inequality have remained high, with the richest 10 percent of households capturing over half of the national income.
Fellow South Africans and distinguished guests, the key areas of good performance in 2014, as embodied in the Development Indicators 2014 Report are as follows:
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South Africans’ life expectancy increased by 8.5 years from 52.7 years in 2004 to 61.2 years in 2014
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Infant mortality improved from 58 to 34 deaths per 1 000 live births between 2002 and 2014. Over the same period under-5 mortality decreased from 85 to 44 deaths per 1 000 live births.
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South Africa contributed to halting and reversing the spread of HIV (Millennium Development Goal 6). The number of HIV positive persons on antiretroviral treatment in South Africa was at 2.8 million in 2014, which is a significant portion of the global target of 15 million. The number of people on antiretroviral treatment has now reached 3.5 million. The global target was achieved ahead of schedule in 2015.
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The percentage of households in low living standards (LSM 1 to 3) decreased from 40% to 11% over the period 2000 to 2013
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The number of households has expanded from 10.8 million to 15.6 million between 2002 and 2014. Over the same period, the share of households accessing basic services increased from 77% to 86% in the case of electricity, from 80% to 86% for water infrastructure, which exceeded RDP standards. The proportion of households accessing sanitation went up from 62% to 80%.
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The share of 5-year olds attending early childhood development facilities more than doubled from 39% in 2002 to 87% in 2014.
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In 2014, 84% of adults in South Africa were literate, up from 73% in 2002. South Africa compares favourably to other African and Middle Eastern countries in international comparisons.
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Combating the unacceptably high levels of crime remains a priority. Between 2002 and 2013, the number of serious crimes reported was reduced from over 5 thousand to 3.5 thousand per 100 000 population.
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Since first assessed in 2006, South Africa persistently performed well in terms of the public having access to budget information and provided with the opportunity to participate in budget process at national level. In 2012 we were rated second out of one hundred countries.
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Tax revenue has grown significantly due to economic growth, a broader tax base and more effective revenue collection. The income tax register has been expanded from 3 million taxpayers in 1996 to almost 20 million in 2014.
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Almost 15 million international travellers arrived in South Africa in 2013, double the number in 2005. Tourism generated 4.6% of total employment in 2012, up from 4% in 2005 and contributed R93 billion to GDP in 2012, more than double the R45 billion in 2005.
The indicators are, as their name suggests, numerical indications of changes in highly complex and interrelated systems. They should be interpreted jointly, beyond the number and within the broader, socio-economic and historical context.
The two fundamental objectives of eradicating poverty and reducing inequality have been the central focus of government policy since 1994. The Twenty Year Review provided a comprehensive overview and analysis of South Africa’s progress since 1994. The Twenty Year Review has shown that South Africa has emerged from its deeply divided and violent past into a robust and vibrant democracy that has made major strides in improving the lives of its citizens.
Poverty has declined since 1994, but society remains highly unequal. In addition, while there has been progress in addressing the legacy of apartheid, inequality is still largely defined along racial lines. Going forward, a number of challenges will have to be addressed to eradicate poverty and reduce inequality. These include employment creation, improving labour relations, overcoming economic infrastructure constraints, improving the capability of the state and the quality of service delivery, and overcoming the challenges related to basic education, public health services, crime and corruption.
The Development Indicators are a collation of data extracted from many sources, including official statistics, government databases and research institutions. I would like to thank all the institutions and agencies that provided data for their support.
It is my wish that a broad range of institutions and individuals should engage with this publication and should be inspired to work together to achieve our long and medium-term goals as articulated in the National Development Plan (NDP) Vision 2030 and the Medium Term Strategic Framework (MTSF).
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US Chamber of Commerce partners with West African business group
The U.S. Chamber of Commerce is forming a potentially powerful new business partnership with West Africa to strengthen trade and investment ties.
The alliance links the Chamber with the 15-nation Economic Community of West African States (ECOWAS), creating the U.S.-ECOWAS Business Initiative (USEBI) – the first effort of its kind in the region – as part of an effort to churn up large-scale economic growth and improve security throughout the burgeoning area.
“By bringing new jobs to the market, you alleviate a lot of concerns and will help bolster security and peace in the region, and that’s part of what we’re thinking through as we engage there,” Scott Eisner, the Chamber’s vice president of African Affairs, told reporters Friday.
The U.S. and African trading relationship can blossom through improved trade facilitation, supply-chain and transportation development and growing the manufacturing base, Eisner said.
He said the U.S. and West African private-sector business groups, including the Federation of West Africa Chamber of Commerce and Industry, agreed that now is the time to take the reins and promote far-reaching investment ahead of government efforts to jump-start the region's massive economic potential or risk losing a global competitive edge.
In turn, business and the U.S. government will work “hand-and-glove” to develop these regional markets with the goal of lowering trade barriers and increasing competition, Eisner said.
One of the aims is to bring more stability to the region and provide an economic framework that mutes government corruption and bureaucratic red tape that can make U.S. investment difficult.
Burkina Faso, one of the countries in the group, experienced a coup Wednesday that has led to demonstrations and riots and has been condemned by the United States and France, among other nations.
Earlier this summer, President Obama signed the 10-year African Growth and Opportunity Act (AGOA), which provides 39 African nations with tariff-free access to U.S. markets.
Passage of that bill spurred the Chamber and its partners to pick up the pace of their efforts in West Africa, Eisner said.
U.S. Trade Representative Michael Froman said recently that the elimination of tariffs under AGOA won’t be enough to fully stoke the U.S.-Africa trading relationship.
The future of the partnership will depend more on “programs that can support Africa’s own priorities and help build the continent’s capacity to trade competitively in the 21st century global economy,” Froman said during the AGOA trade summit in Gabon in August.
Other goals in West Africa include developing the retail and agricultural sectors, expanding access to the Internet and generating a consistent power supply.
The formal kick-off for the partnership will be held Sept. 29 in New York.
The ECOWAS countries beside Burkina Faso are Benin, Cabo Verde, Cote D’Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.
The Obama administration has ramped up its outreach to Africa over the past six years.
This summer, President Obama made his fourth trip to sub-Saharan Africa, likely solidifying the future of the U.S. presence on the continent.
Last summer, he held the U.S.-Africa Leaders Summit, hosting more than 50 African leaders to discuss a wide variety of pressing issues from trade and investment to health issues such as stopping the spread of Ebola.
National Security Advisor Susan Rice on Friday said the view of Africa has dramatically changed in the global economic equation and, in response, the United States has stepped up its commitments to the continent.
“No longer do we view Africa through the prism of poverty and crisis,” she said at the Congressional Black Caucus Foundation Annual Legislative Conference in Washington.
“We see Africa for what it is – a dynamic, diverse region brimming with economic potential and boundless possibility,” she said.
“Africans are driving their own development, building their own capacity to feed and care for their people and doing more to prevent and resolve African conflicts.”
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Reflections on global economic governance at the “start of a new era”
With the adoption of the post-2015 development agenda on the horizon and negotiations on a new climate regime, what’s changed for governance of the global economy in the last two decades, and what have we learned? This article maps the shifting context for trade, investment, and sustainable development.
Governments around the world are gearing up to adopt a new post-2015 development agenda including 17 Sustainable Development Goals (SDGs) during a summit scheduled to be held later this month at UN headquarters in New York. The new roster of international priorities has been billed as an effort to integrate economic, environmental, and social aspects of development for the next 15 years in a way that is universally applicable while taking into account different realities and capacities, as well as respecting national policies and priorities. The post-2015 development agenda outcome document is also set to include a declaration by world leaders on shared principles and commitments for multilateral cooperation in today’s context, a section on means of implementation, and another on follow-up and review processes at national, regional, and global levels.
A few months later in Paris, France, UN members will come together again in a bid to secure a new, universal climate regime for the post-2020 period. Countries have agreed that the planned deal will be made up of self-defined individual national pledges for cutting greenhouse gas (GHG) emissions, although critics have warned that current submissions will not add up to enough to keep the world below an internationally agreed limit of two degree Celsius average warming above pre-industrial levels, and that arrangements for verification and a continuous upscaling of efforts over time will be needed.
Following hot on the heels of the Paris meet, WTO members will gather in Nairobi, Kenya, for the global trade body’s 10th Ministerial Conference. The possibilities of effective outcomes for that occasion remain unclear, in the face of continued difficulties around wrapping up the Doha Round, and promising, more ambitious parallel mega-regional efforts to ink deep 21st century economic integration deals. Luckily for Nairobi, negotiators from select WTO members have secured an expansion of WTO’s plurilateral Information Technology Agreement (ITA) slashing tariffs on an additional 200 or so high-tech products valued at US$1 trillion in annual trade. Efforts are also underway to deliver a plurilateral tariff liberalising Environmental Goods Agreement. The latter, in particular, might be a potential meaningful contribution to the grand objectives of New York and Paris.
This coincidence of global governance decision-making resembles the “summitry” that characterised 1990s and early 2000s including among others the 1992 UN Conference on Environment and Development (UNCED) dubbed the “Earth Summit,” the 1994 conclusion of the Uruguay Round under the General Agreement on Tariffs and Trade (GATT) that led to the establishment of the WTO a year later, as well as international conferences on social development, least developed countries (LDCs), human rights, women, food, financing for development, and the information society. A year hailed by UN Secretary-General Ban Ki Moon as “a new era” for global governance is a good time to ask pertinent questions.[1] How has the global governance context changed over the past two decades? What have we learned? And what role should the trade and investment regimes play in the years ahead to continue to move sustainable development from an agenda on paper to a concrete reality?
Where have we come from?
It is critical to put global governance efforts into the right historical context. In 1992 the world was emerging from a period of economic fragmentation organised by at least three separate development models, namely centrally-planned economies, closed economies by and large in the global South characterised by import substitution coupled with controls, and the transatlantic and transpacific spaces driven by a pungent US post-war economy into an amalgamated liberal economy. Motion was set towards a new world, one that could turn into a globalised economy – as it gradually did – with the integration of national economies into international markets through an aligned set of economic policies, and the frameworks to enable that integration. It was a critical moment of seeds sewn for a better future, unleashing vast forces of change, and with them respective tensions. Wealth was created in unprecedented forms and millions were lifted out of poverty. A triumph of sorts, at a significant cost, to a great extent due to the lesser attention paid to questions of equity and social inclusion, and an underestimation of persistent and deep-rooted asymmetries in capabilities among countries at different levels of development. As a result, today we face perilous levels of inequality among and within most countries around the world.
A high price has also been paid as a result of insufficient consideration for the natural environment and the now-coined concept of planetary boundaries. In hindsight, the Earth Summit held in Rio de Janeiro, Brazil was the first opportunity for the international community to think comprehensively about the intricacies of acting on a platform of shared values around a number of vital issues, and on the terms of engagement in this new world. Moreover, with good cause, Rio was also labelled as an opportunity to re-examine the relationship between environment and development.
Twenty years on from the 1972 UN Conference on the Human Environment held in Stockholm, Sweden, it had become clear that siloing environment and development priorities would always play against the environment. The Rio Declaration with its 27 principles and Agenda 21 was a forward-thinking proposal for transforming global governance, requiring a re-think of fundamentals of economic management and economic governance. It was an extremely ambitious attempt at reconciling environmental protection and economic growth, and setting a broad common direction for policy. But it was also a vision developed at the turbulent moment mentioned above. Concerns abounded on global inequality, the terms of trade, anxiety from developing economies about their role in a new globalised world, the predatory behaviour of unbridled multi-national corporations in global markets, and rules of the game inadequate for a globalised market. This all gave rise to an anti-globalisation movement to which the intergovernmental machinery of the UN and the development community partly responded with the Millennium Development Goals (MDGs). Yet, albeit their critical coverage, the MDGs were notable for their lack of focus on environmental issues and did not seem to have been affected by UNCED, prompting disarray between governments on the concept of sustainable development and backlash from the environmental community.
Rio did succeed in having an effect on global economic governance, while world economies moved swiftly in the direction of integration. At the time of the Earth Summit, the multilateral trade system was in interregnum, transforming itself from the limited 1947 GATT into the quasi-universal World Trade Organization, practically doubling its membership and expanding itself way beyond borders into issues such as services, investment, and intellectual property. Trade and trade rules up until that time were the purview of a smaller club of countries, geared towards regulating transatlantic and transpacific commerce, with the few developing countries participating in the system not bound by the same level of commitments. Transformation into the WTO was partly a manifestation of the changes in policies happening at that time. The new WTO design embraced the Rio principles by inserting these into its new constitution – the first paragraph of the Marrakesh Agreement referring to sustainable development, standards of living, and environmental protection – and making environment concerns operational through a number of other institutional mechanisms such as a Committee on Trade and the Environment (CTE).
Convergence and divergence
The three global governance endeavours this year are each, in their own context, trying to balance the benefits of convergence behind a universal agenda with the realities of natural divergences in national situations and development pathways. What have we learned in this area since Rio?
The first important change from Rio is substantive and has to do with the international community’s understanding of the complex relationships between economics and the environment. The prevailing view at Rio in 1992 was one based on the Kuznets curve, which suggests that in early stages of economic growth environmental degradation increases, and then declines beyond some level of income per capita. This seemed to give license to those that were under-developed to continue to pollute and mistreat natural resources. We are wiser now 20 years later, in some respects, and there has been an incredible amount of work done to boost our knowledge base in this area. The introduction of sustainability in the global trade architecture, and subsequently in other instruments of trade governance, proved wise. Although many tensions have surfaced since Rio, most have been handled by the appellate level of dispute settlement at the WTO, referring to non-trade treaties or applying principles of sustainability. It’s not all rosy, some key environmental issues continue to challenge the systems of economic integration, not least steering the world away from climate change and fatal pollution and destruction of habitats and oceans.
The second important change is the real and practical impact of the principle of subsidiarity, which began to gain traction around the time of Rio. It was a period when civil society first really started to engage in UN processes, culminating in over 17,000 people and 2,400 non-governmental organisation representatives attending an NGO Forum held on the side-lines of UNCED, and the establishment of the Major Groups in recognition that achieving sustainable development required comprehensive engagement from all sectors of society. At the same time the EU was also going through the negotiation of the Treaty of Maastricht which, among other changes, formally enshrined the principle of subsidiarity into the bloc’s law-making. These projects were all connected to and feeding global conversations. Global and regional governance set common direction, but increasingly was based on input from those on the ground, and implemented through institutions closer to this level.
Finally, two decades ago the WTO was envisaged as a universal, top-down structure. At its dawn, it emerged as a pyramid-like architecture for trade policy, with GATT principles, norms, and institutions at the top, prevailing over all other regional trade agreements, regional, bilateral or otherwise, and domestic policy settings. However, in the last few years, this centrality of the WTO has been forcibly altered as the locus of trade policy decision-making has moved in a variety of different directions. In a quest for deeper or lesser integration, many countries have selectively positioned themselves in new arrangements, opting for different speeds of interaction with global markets. Opportunities driven by changes in information and communication technologies and transportation, and seizing the opening of markets, resulted in new forms of organising production in international networks. As a result a regime complex for trade and investment with coverage beyond the WTO has emerged for the governance of economic interdependence.
Today the post-2015 development agenda, and accompanying outcome from the Third International Conference on Financing for Development held in July, arguably appear to be calling for a single compass for national policies and economic policies without being too prescriptive. General guidance is provided but room is left to accommodate different paths for moving forward. Among the complex challenges of implementing the new sustainable development agenda will be differentiating between aspects intended as references for national policies and those that pertain to the new terms of engagement for international cooperation. The former include, for instance, whether a country will meet these targets and then adjust policies where it does not. The latter has to do with the international obligations and roles played to ensure that every nation, collectively and individually, reaches those targets while also addressing global issues.
The UN Framework Convention on Climate Change (UNFCCC) regime – one of the three conventions born out of the Rio summit – has particularly evolved in structure. It was unclear in 1992 exactly what would happen on climate and the science was still not well understood. The articulation at the first conference of the parties to the UNFCCC in Berlin in 1995 of the principle of common but differentiated responsibility through the artificial division of the world into Annex I and Annex II, influenced by Kuznets curve reasoning, held back cooperation on climate matters for years. Now that the science is firmer, and more widely accepted, it is much clearer that broad participation in tackling climate change is necessary, and new forms of managing the differentiated historical responsibility for the accumulation of greenhouse gasses needs to be found. The dynamics of Chinese growth and significant emissions from other developing nations mean that a Kyoto Protocol-type divide between the developed and developing world is no longer possible.
The road so far has made it clear; it’s not money, but policies, their frameworks and the institutions needed to implement them, that constitute the most powerful lever for change.
More importantly, the challenge is to find ways in which a blend of command and control policies, market mechanisms and behavioural change, deliver the transformation to a low or zero carbon economy. A very difficult aim and one that will need a supportive global economic architecture. For the moment, we are now moving towards a new post-2020 regime to be defined in Paris that will likely be composed primarily of bottom-up, voluntarily outlined, national climate action pledges. The real question is whether this bottom-up process driven by subsidiarity will be enough to achieve our common goal.
Securing future progress
A key part of dealing with the tension between convergence and divergence, or between universality and subsidiarity, is establishing good monitoring, follow-up, and review systems at all levels. Getting the metrics right, those that are able to cope with complexity and disaggregate to the global level, will be important, and can help to enable governance based on shared principles but articulated by disciplines, agreements, and cooperation between countries applied in a very subsidiary manner. The monitoring and review of commitments is the only real tool to ensure delivery on international pledges and the newly agreed terms of engagement.
The post-2015 development agenda will require good indicators to track progress and help governments deal with the complexity of implementing a framework that weaves together the three dimensions of sustainable development across multiple policy areas. Fortunately, theory and academic work on development measurement has changed the way countries think about measuring human wellbeing, in the context of social priorities and the natural environment. The last few decades have seen increased efforts to look beyond gross domestic product per capita as a singular measure of development. The Human Development Report, published annually since 1990 by the UN Development Programme (UNDP), introduced the Human Development Index (HDI) synthesising a dashboard of indicators for countries’ development such as unweighted averages of education, income, and life expectancy. The original HDI did not, however, take into account measures of environmental sustainability reflecting scepticism of its founding economist. This has now evolved under new leadership and a host of other multi-dimensional measurement efforts have joined the fray, including the OECD’s wellbeing index, Jeffrey Sachs-led World Happiness Report, the Genuine Progress Indicator (GPI), the Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI), and Yale’s Environmental Performance Index.
At the WTO, arguments have been made that special and differential treatment (S&DT) must be approached, and measured, from a sustainable development perspective. Simply granting developing countries a few extra years for policy implementation or preferential market access might not take into account the multi-faceted challenges facing a particular economy, trade impacts on domestic natural resources, or the trade effects of diverse environment policies.[2] Implementing the post-2015 development agenda will ultimately require trade rules to be organised around sustainable development outcomes. Here again it will be useful to provide indicators on the extent to which rules are oriented in the right direction or not using some sort of composite of indices. Establishing such a system is, however, very challenging.
The beauty of the new climate regime is that measurements and indicators exist for much of what countries are proposing to do. The international community has fairly sophisticated ways of understanding where and when GHG emissions are generated as well as how they contribute to hikes in global temperatures, ocean acidity, and so on. Countries will individually pledge certain cuts by specific dates for the post-2020 period, in most cases with varying baselines, but nonetheless capacity broadly exists to understand how these efforts add up.
It is extremely likely, however, that the current national climate pledges will not add up to enough mitigation action to keep the world within the two degree warming ceiling. Countries may also not stick to their pledges. And what happens if a situation dramatically changes in a major emitter? A significant economic crash, for example, could trigger a re-think of climate policies. Safeguards need to be put in place to help countries deal with changes in circumstances. Alongside a close monitoring of what policies countries are pursuing to implement their pledges, some sort of “coaching” should occur, to help individual economies understand and manage the low carbon transition. Many stakeholders often attribute the “success” of the trade system to its contractual nature, the mechanics of the dispute settlement understanding, and regular trade policy monitoring. But another, powerful dynamic is also at play. The trade system works and is enforceable because it is firmly anchored in the self-interest of players. If the logic is applied in the climate arena, efforts need to be made to ensure that policymakers understand the win-win outcomes of continuing to implement climate commitments, even if other circumstances change.
Getting the systems right
Global governance will continue to be a matter of striking the balance between global direction-setting, monitoring the ongoing leadership role of government policy, and supporting the subsidiary implementation of commitments at ground level. Aligning national policies will require absorbing the transaction costs of negotiating broad international agreements. In an interconnected economy, implementation of those agreements will also depend at least in part on business, technology, and harnessing the power of well-regulated global markets. Moreover, ensuring trade and investment systems work for sustainable development will take more time, but arguably stands to achieve far more than funding discrete projects.
The trade and investment systems could play two important roles in the years ahead. Trade and investment rules can be the biggest catalyst for transformation due to their ability to change the way economies work and the way millions of people live their lives. We will need to continually ensure that trade rules, whether established at global or regional levels, are clearly in favour of sustainable development outcomes. Solid metrics and indicators will be required, with a sustainable development lens, to monitor the impact of those rules not just on economic activity but on the environment and society.
Moving from words to action on the UN financing for development outcome, post-2015 framework, and climate regime will require continued efforts to get the trade and investment systems right, and to support a well-functioning economy that delivers social, environmental, and economic goods. Ultimately it is the policies that serve to drive the necessary systemic shifts in the global economy, rather than funding in its own right, that will play a crucial role in supporting sustainable, inclusive growth in the coming decades. The road so far has made it clear; it’s not money, but policies, their frameworks and the institutions needed to implement them, that constitute the most powerful lever for change.
Ricardo Meléndez-Ortiz is the Chief Executive, International Centre for Trade and Sustainable Development (ICTSD).
This article is published under BioRes, Volume 9 - Number 7, by the ICTSD.
[1] UN Secretary-General Ban Ki-moon’s remarks at General Assembly Plenary Meeting to adopt the draft resolution to transmit the Agenda 2030 Outcome Document, New York, 1 September 2015. Available at http://www.un.org/sg/statements/index.asp?nid=8944
[2] Meléndez-Ortiz, Ricardo, and Ali Dehlavi. “Sustainable Development and Environmental Policy Objectives: A Case for Updating Special and Differential Treatment in the WTO.” Trade, Environment and Sustainable Development: Views from Sub-Saharan Africa and Latin America. A Reader, ICTSD, Geneva (1998).
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South Africa takes measures to tackle fallout from China slowdown
The South African government is initiating special measures to cope with the fallout from the slowdown in China, which has severely hurt its mining industry, said Ngoako Ramatlhodi, the country’s minister of mineral resources.
In Hong Kong to promote the diamond trade, Ramatlhodi said: “We have been affected by China’s slowdown. Exports have dropped, diamond prices are going down. About 19,000 jobs in the mining industry are at risk.”
China has been South Africa’s biggest trade partner since 2009 and is the second-largest diamond consumer in the world. South Africa is one of the world’s biggest exporters of gold, platinum group metals and diamonds.
“All we are focusing on now is how to mitigate the impact from China,” Ramatlhodi said. “As a member of BRICS, we are looking to convince China to give us preferential treatment in the mining trade. We will have a dialogue at the government level soon.
“What we are hoping is that China will maintain the same level of purchase price and volumes so that we can save the jobs in our industry.”
BRICS refers to the leading emerging market economies of Brazil, Russia, India, China and South Africa.
South Africa’s mining authorities meet their Chinese counterparts twice a year as part of an institutionalised dialogue mechanism.
“We are eliminating blood diamonds from the supply chain by strengthening regulation,” said Ramatlhodi, alluding to diamonds mined in war zones and used to finance conflicts. “The president is encouraging the development of special industrial zones for the business. We are also finding ways to cut production costs.”
China’s overall investment in Africa, however, had maintained a steady growth despite the slowdown, he said.
“China’s investments are very aggressive, the money is still coming in,” said Ramatlhodi, adding that investments in chromium had been the most popular, followed by iron ore and platinum, but added that the diamond sector had been attracting less investment.
Bilateral trade last year amounted to US$61.6 billion.