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At UN Economic and Social Council, ministers commit to ‘people-centred’ post-2015 development agenda
The United Nations Economic and Social Council (ECOSOC) on Wednesday committed itself, through a Ministerial Declaration, to establishing a new set of inclusive sustainability goals that build on the successes of and the lessons learned from the landmark Millennium Development Goals (MDGs), which are set to wrap up at the end of 2015.
“We, the Ministers, are committed to establishing a strong, universal, ambitious, inclusive and people-centred post-2015 development agenda that will build on the foundations laid and experiences gained by the Millennium Development Goals, complete the unfinished business and respond to new challenges,” reads the declaration which was adopted by ECOSOC at the opening of its Annual Ministerial Review.
Since Monday, the Council has been holding the Ministerial portion of the High-level Political Forum (HLPF) on sustainable development, under the auspices of ECOSOC.
Speaking on the behalf of the ECOSOC President, Martin Sajdik, Vice President Mohamed Khaled Khiari reminded delegations that a smooth transition from the MDGs to a transformative post-2015 development agenda will be “critical” for the future of global development.
But what does that mean for citizens around the world? What is their connection to the MDGs, or will be their relationship to this new agenda? Mr. Khiari asked.
“The answer is simple: they mean change – tangible and real change that must improve people's wellbeing and that of our planet.”
It is those conditions, the Council Vice-President continued, that Member States cannot lose sight of the importance of putting in place the enabling environment for people to thrive, with sound policies, strong institutions and a respect for the rule of law.
“Good leadership and resilient populations create conditions that enable change, transforming the lives of individuals and their communities across the globe.”
The emerging post-2015 development agenda, including a proposed set of sustainable development goals (SDGs) that are to be adopted at a summit at UN Headquarters in September, strive to reflect lessons learned from the largely anti-poverty based MDGs, build on the successes and put all countries, together, firmly on track towards a more prosperous, sustainable and equitable world.
The next two days of the Annual Ministerial Review will be marked by an intense discussion on how to successfully transition from the MDG to the SDG era, Mr. Khiari explained. For him, ECOSOC is well placed to provide policy guidance on how global challenges can be addressed and how sound policies can be translated into “real life results.”
The High-level segment of ECOSOC is a key venue for the global dialogue on sustainable development, he stressed, adding that he is encouraged that this year's Review will include four National Voluntary Presentations, by the Governments of Kyrgyzstan, Mongolia, the Philippines and Zambia.
It will also include a “mandated review” of implementation of the Programme of Action for Least Developed Countries for the Decade 2011-2020. There will be a special session dedicated to this review, and the opportunities and challenges of those countries face in the transition will also be addressed in several other sessions, Mr. Khiari stressed.
“Let us unite to identify the most innovative paths forward for managing the transition from the MDGs to the post-2015 development agenda, keeping in mind who we have committed to: the people of this world, each and every one of them, and planet Earth itself. This period of transition is a vital part of what is to come. You may say: The future is now.”
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tralac’s Daily News selection: 8 July 2015
The selection: Wednesday, 8 July
Tax inspectors shrug off borders to track multi-national evasion (Bloomberg)
Step aside, Doctors Without Borders. A new class of professionals is ignoring national frontiers to come to the aid of economically struggling nations. A team called Tax Inspectors Without Borders will begin helping developing countries deal with the flood of income to low-tax jurisdictions once it’s established next week by the United Nations and the Organization for Economic Cooperation and Development. The UN and OECD, which represents rich nations, will draw up a list of several dozen tax inspectors from advanced countries who could be summoned to help local agencies understand what anomalies to look for and what documents they need. Of special concern are transfer-pricing cases involving assets moved among a corporation’s units in multiple countries.
Africa’s collective input to the 2015 Meeting of the High Level Political Forum on Sustainable Development (Common Africa Position)
The Africa Regional Forum on Sustainable Development, convened from 17-18 June, brought together high-level representatives of African member states together with all 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 HLPF 2015. The agreed key messages are presented as follows.
Development financing conference to agree 'concrete' action on social protection, aid delivery (Common Africa Position)
BRICS trade strategy: time for a rethink (VoxEU)
This year’s BRICS summit occurs during tougher times for the leading emerging markets – each of the BRICS’ exports are falling and when only India is expected to see faster economic growth in 2015 and 2016. The exposure of BRICS commercial interests to discrimination by foreign governments revealed in this report calls for a rethink of BRICS trade strategy. At best, current BRICS trade strategy is incoherent. On the one hand, the BRICS have sought to bolster trade between them with more generous credit lines for exporters and the like. On the other, the BRICS are responsible for a third of all of the harm done to each other’s commercial interests. This cannot make sense.
Moreover, BRICS Trade Ministers may want to rethink the wisdom of them excusing protectionism imposed by developing countries on the grounds that their economies are deserving of special and differential treatment. This report showed that four-fifths of the 2,733 trade distortions harming the BRICS were implemented by developing countries. There isn’t much evidence of BRICS solidarity either as one third of the hits to BRICS commercial interests come from another BRICS member. [The author: Simon J Evenett] [Download]
Book launch: Structural change and industrial development in the BRICS (UNIDO)
Alexander Gabuev: 'Another BRIC(S) in the Great Wall' (Carnegie Moscow Centre)
Trade turnover between BRICS countries reached $291bln in 2014
Increased complexity of trade driving demand for good data (WTO)
Trade Data Day is a collaborative effort of the International Trade Centre (ITC), the United Nations Conference on Trade and Development (UNCTAD), the World Bank and the WTO. This year's seminar examined the main advances in trade and market access statistics and looked ahead to future challenges. Two issues were of specific focus at the seminar: the monitoring and analysis of non-tariff trade policy measures; and trade and market access information systems on commercial services.
Profiled reports from 'Trade Data Day':
NTMs today, progress and statistical challenges
Data and statistics for analysing trade in services
Trade in services statistics: the joint efforts of Geneva-based agencies
Emerging issues and challenges ahead
SADC-PF conference: speeches delivered on the opening day (RSA Parliament)
SADC seeks to review regional energy programme (BH24)
Uganda: Staff Report for the 2015 Article IV Consultation (IMF)
Backed by sound policies, economic performance since the 2013 Article IV Consultation has been positive. In response to fiscal stimuli and credit recovery, growth is picking up from the low levels that followed the credit-boom-and-bust-cycle. Careful central bank policies kept inflation low and the financial sector stable, despite shilling volatility. Lower export demand and high infrastructure-related imports widened the current account deficit, but reserves and debt remain at comfortable levels.
Progress towards East African Community (EAC) regional integration is gradually taking place and has the potential to further enhance trade and structural transformation. Uganda ratified the Monetary Union Protocol, and has been actively participating in work to establish EAC regional institutions and to create a fiscal surveillance process. The Ugandan authorities plan to achieve greater integration by continuing progress towards the reduction of nontariff barriers; implementing common-market agreements; integrating payment systems; and harmonizing policies in the context of the medium-term convergence program. These improvements would allow Uganda to reap its comparative advantages and maximize efficiency of production, raising prospects for attracting investors.
Uganda’s ambitious infrastructure plan set to boost economy (IMF)
Rwanda: Logistics sector players upbeat as govt, DHL sign Rwf2.5b deal (New Times)
The cost of cargo transport and other logistical support services could reduce following the signing of a deal between government and DHL Express to construct a world-class logistics facility at Kigali International Airport. Under the deal, DHL, a subsidiary company of Deustche Post DHL and one of the leading global logistics firms, will invest €3 million (about Rwf2.5 billion) in the modern logistics facility. Charles Brewer, the DHL Express managing director for sub-Saharan Africa, said the facility will operate as an airside transit gateway, adding that the company wants to use Rwanda as a hub for its operations in East African region.
How Kenya lost bid for top global shipping job (Business Daily)
State of Safety Nets 2015 (World Bank)
More than 1.9 billion people in 136 low- and middle-income countries benefit from social safety net programs. The combined spending on social safety nets amounted to about US$329 billion between 2010 and 2014. Some 718 million people are enrolled in cash transfer programs, including public works, and constitute 36 percent of social safety net globally. Cash transfers constitute the highest share of spending in all regions except in Sub-Saharan Africa, where food and other in-kind transfers dominate. [Download]
Congo: Investment climate and forest governance support project - appraisal report (AfDB)
Rolling out CVTFS in DR Congo (COMESA)
Nigeria takes critical legal steps to launch as Africa's financial hub (BusinessDay)
Nigeria: Importers groan as Customs returns to 100% manual cargo inspection (BusinessDay)
WTO: Impasse in agriculture trade reform continues at over benchmarks (LiveMint)
Kenyan firms cry foul as Chinese company building $3.8-bn railway imports cement into country (M&G Africa)
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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BRICS Trade Strategy: Time for a Rethink
This week the leaders of the BRICS nations and their trade ministers meet for their annual summit in Ufa, Russia. In 2014 as far as commerce was concerned, they focused on promoting commercial ties, establishing a New Development Bank, advocating steps at the World Trade Organization (WTO) and cautioning that mega-regional free trade deals, such as the Trans-Pacific Partnership, should not harm non-members. Is this still the best trade strategy for these emerging economic powers? The evidence published in the latest report of the Global Trade Alert suggests not.
At a time when each of the BRICS’ exports are falling and when only India is expected to see faster economic growth in 2015 and 2016, this report argues that the trade strategy of the BRICS should be rethought. Greater attention should be placed on the unilateral actions taken by governments that limit imports and that artificially inflate exports. The report will show that, on average, every day since the Global Crisis began the commercial interests of at least one BRICS nation have been harmed by the imposition of a foreign trade distortion. The BRICS ought to have a strong interest in discouraging and unwinding protectionism.
Moreover, BRICS trade ministers may want to rethink the wisdom of their excusing protectionism imposed by developing countries on the grounds that their economies are deserving of ‘special and differential treatment’. This report will show that ‘only’ a fifth of the trade distortions harming the BRICS were implemented by the leading industrialised countries. There isn’t much evidence of BRICS solidarity either, as one third of the hits to BRICS commercial interests come from another BRICS member. There is an opportunity here for the BRICS members to show global leadership on protectionism by exercising restraint both individually and collectively.
BRICS exports have stalled
At the end of May 2015, the OECD published data on the first quarter’s exports and imports of leading trading nations, including those for BRICS. This data showed that in US dollar terms the total value of each BRICS nation’s exports was falling. Worse, the exports of Brazil, India, Russia, and South Africa have essentially stagnated over the past four years or deteriorated significantly. China’s exports appear to have plateaued at the end of 2014.
Figure 1. Only China’s exports are now worth more in US dollar terms than four years ago – and even there Q1 2015 data is disturbing.
Source: OECD (2015). For each series the data was normalised to 100 in Q2 2011.
Stalled exports matter not just because of its growth implications. Rising exports are used frequently to dismiss trade distortions as a policy concern. In fact, the GTA’s latest report reveals the substantial exposure of the BRICS to foreign trade distortions.
Fighting the wrong enemy?
Using data collected by the independent Global Trade Alert (GTA), whose database now contains 134% more entries for government policies taken since the crisis began than the WTO’s Trade Monitoring Database, the number of times the commercial interests of each of the BRICS have been harmed by trading partners can be calculated. Taken together, 2,733 measures taken by trading partners have harmed one or more members of the BRICS. In fact, since the Crisis began, 60% of the protectionist measures implemented worldwide have harmed at least one member of the BRICS.
No country in the world has seen their commercial interests hit as often as China, whose interests have been harmed a total of 2,153 times. South Africa, the least hit of the BRICS, has seen its commercial interests hit 649 times. Any notion that the BRICS have been able to escape beggar-thy-neighbour policies since the Crisis began should be set aside.
Which trading partners are responsible for the significant number of hits to their commercial interests? This matter takes on particular significance for the BRICS. Not only are these countries signatories to the various G20 pledges to eschew protectionism, but, in their condemnation of protectionism, BRICS trade ministers often excuse measures taken by developing countries on the grounds that they amount to ‘special and differential treatment’. It may come as a surprise, therefore, to find that just 20% of the 2,733 measures harming the BRICS were implemented by the industrialised members of the G20. This, of course, does not imply that such industrial-country protectionism is inconsequential or irrelevant. Rather it suggests that, while it may be diplomatically convenient to frame Crisis-era beggar-thy-neighbour activity in North versus South terms, the reality is quite different.
Figure 2. “Special and differential treatment” for developing countries – at the expense of the BRICS.
Distribution of responsibility for crisis-era hits to BRICS commercial interests
The reality is that the developing country members of the G-20 are responsible for more than half of the hits to the commercial interests of the BRICS. Furthermore, notions of BRICS solidarity on protectionism should be set aside – almost a third of the time a BRICS commercial interest is harmed it is because of actions taken by another member of the club. The BRICS ought to put greater weight on discouraging and unwinding trade distortions worldwide, taking a hard line against all perpetrators of protectionism.
Time to clean up their own act as well
To be fair, since the Crisis began the record of BRICS commercial policy has been mixed. For sure, the BRICS’ share of the global total of discriminatory measures has risen year by year from 20% in 2008 to just under 40% in 2014 and 2015. However, it must be acknowledged that the BRICS’ share of the global total of liberalising measures has risen to one half in 2014 and 2015. Moreover, for much of the reporting period, half of the BRICS measures introduced each year liberalised trade or foreign investment. While the latter are to be applauded, such findings are tempered by the fact that 28% of BRICS trade reforms were temporary and have already lapsed (the comparable percentage for the rest of the world is much lower at 15%).
When the spotlight is pointed on the steps taken by BRICS governments to tilt the playing field against foreign commercial interests, the extent of their retreat from open borders becomes clear. India and Russia have taken almost 450 harmful measures since the Crisis began. Only a fifth of the BRICS’ harmful measures have been unwound.
Figure 3. Together the BRICS have implemented 1,450 trade disortions since the crisis began, only 20% has been unwound.
Since the global economic crisis began three of the BRICS (Brazil, India, and China) have introduced dozens of additional incentives to inflate exports. These incentives harm the interests of trading partners that compete in the same markets abroad, boosting market shares of goods shipped by these three BRICS. Foreign subsidiaries operating in the BRICS may be eligible for these state incentives as well – so these incentives cannot be justified as giving a hand to emerging market firms taking on Western rivals.
Using detailed product and bilateral trade data, for many of the BRICS trading partners the percentage of exports harmed by BRICS export incentives is significant. In an analysis of the impact of such export incentives, Evenett and Fritz (2015) found that they were largely responsible for holding back LDC exports by 31% over the years 2009 to 2013.
Map 1. Artificial export incentives by the BRICS threaten large shares of trading partner’s exports.
Taken together, these findings imply that there is much the BRICS could do to improve the own commercial policy credentials. While the mix of trade distortions introduced by each of the BRICS differs, the reality is that the BRICS have repeatedly discriminated against foreign commercial interests, harming not only industrial countries and each other, but also more vulnerable developing countries. That harm is not only done by import restrictions but also by the many steps taken by the BRICS to artificially lift their exports.
The BRICS trade strategy: Time for a rethink
This year’s BRICS summit occurs during tougher times for the leading emerging markets – each of the BRICS’ exports are falling and when only India is expected to see faster economic growth in 2015 and 2016. The exposure of BRICS commercial interests to discrimination by foreign governments revealed in this report calls for a rethink of BRICS trade strategy.
At best, current BRICS trade strategy is incoherent. On the one hand, the BRICS have sought to bolster trade between them with more generous credit lines for exporters and the like. On the other, the BRICS are responsible for a third of all of the harm done to each other’s commercial interests. This cannot make sense.
Moreover, BRICS Trade Ministers may want to rethink the wisdom of them excusing protectionism imposed by developing countries on the grounds that their economies are deserving of special and differential treatment. This report showed that four-fifths of the 2,733 trade distortions harming the BRICS were implemented by developing countries. There isn’t much evidence of BRICS solidarity either as one third of the hits to BRICS commercial interests come from another BRICS member.
The BRICS ought to have a strong interest in discouraging and unwinding protectionism. The frequency with which BRICS commercial interests are harmed by beggar-thy-neighbour interests ought to turn the BRICS into champions of the monitoring of protectionism by international organisations and of renewing the G-20 pledge on eschewing protectionism.
Lastly, the amount of global commerce that competes with BRICS-based firms that are eligible for state-provided export incentives, that was revealed in this report, won’t go unnoticed by trading partners of the BRICS. The BRICS would be advised to clean up their own commercial policy act before trade tensions rise.
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Restrictions hurting E Africa trade – AfDB
Restrictive legal and regulatory policies coupled with poor infrastructure and logistic services are holding back East Africa’s manufacturing sector, says the Africa Development Bank. The East Africa’s manufacturing sector report released on Friday shows manufacturers continue to experience problems in cross border trading and starting and closing a company.
It shows productivity remains inhibited by a problematic energy supply and costly transport due to poor road network, limited availability of rail transport and poor logistics in ports. “From a regional perspective... the poor performance on trading across borders is particularly detrimental to the prospects for achieving rapid industrialisation,” it reads.
The countries that were covered include Kenya, Rwanda, Burundi, Ethiopia, Uganda, Tanzania and Seychelles. According to the report, the contribution of manufacturing in the economies of these countries is relatively small, ranging from 3.8-11 per cent of the gross domestic product, compared to the levels between 30-40 per cent in industrialised countries like China and South Africa.
The report shows manufacturing in East Africa is dominated by food and beverages, largely basic processing of agricultural output and the production of more refined consumer products such as soaps, perfumes and cosmetics.
It shows Kenya has a comparative advantage in food and beverages, leather products, textiles and clothing, and in non-metallic mineral products including cement and ceramics. Rwanda has an edge in processed tea, Tanzania in textiles, Uganda in cement, clay and ceramics and the Seychelles in processed fish products, mainly tuna.
According to the report, the limited role that manufacturing currently plays in Eastern Africa should be a potential source of concern for policy makers and their development partners.
It shows the seven countries will need to address the multiple binding constraints in the legal and regulatory operating environment and in the infrastructure and logistics services in a bid to expand manufacturing to other sectors like electronics and vehicles.
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Manufacturing, tourism hurt growth
Continued poor performance of manufacturing and tourism industries could derail Kenya’s plans of attaining over 6.5 per cent growth this year.
The two sectors were the only ones that registered negative growth in the first quarter of this year in comparison to a similar period in 2014.
Kenya’s gross domestic product (GDP) rose to 4.9 per cent in the first three months this years from 4.7 per cent recorded in a similar period in 2014.
Tourism and hospitality posted a negative growth for the fifth consecutive quarter. The once vibrant industry contracted by 7.5 per cent during the first quarter of 2015 compared to 14.1 per cent suffered in the same quarter last year due to insecurity in parts of Kenya’s Coast and the north east.
Similarly, the poor run of the manufacturing industry, which accounts for 11 per cent of the GDP, has persisted, hitting a five-year low last year. By March, the sector’s contribution to growth hit 3.5 per cent compared to a 6.4 per cent posted over a similar period last year. This is attributed to the decline in the processing of canned fruits, maize meal, tobacco and sugar.
The industry was, however, boosted by assembly of motor vehicles, beer production, manufacture of galvanised iron sheets and the production of soft drinks as well as cement.
“We need to up our game by fast-tracking development of special economic zones, raising the share of value addition to agricultural commodities and elevating the standards of our products so that we stay ahead of the competition,” said Industrialisation PS Wilson Songa.
The influx of cheap goods from countries such as India and China have hampered local manufacturing, which is also grappling with high cost of energy.
VAT exemption
Ambitious plans such as the setting up of industrial centres targeting the small and medium enterprises in Nairobi, Nakuru, Kisumu, Mombasa and Eldoret have received a boost through exemption from VAT on goods and services for use in the development of infrastructure in industrial and recreational parks of at least 100 acres. About Sh3 billion has been set aside to facilitate the establishment of these parks and special economic zones.
A multi-billion shilling food processing industrial park in Dongo Kundu, Mombasa, is also in the pipeline.
The zone, which is projected to add $300 million to Kenya’s wealth and create 60,000 jobs, banks on the farm produce from the one-million-acre Galana irrigation scheme. The country is set to market the plan during the year to international investors, starting with Japan.
“If the food processing industrial park in Dongo Kundu can add $300 million to GDP, it will significantly ramp up manufacturing’s contribution to the economy from the current level of 11 per cent,” Dr Songa said.
New road, rail, and ports as well as power plants are expected to improve the overall business environment and attract foreign direct investments.
Agriculture is expected to be the main attraction due to low levels of value addition of farm produce currently. Only about 16 per cent of Kenya’s agricultural produce is processed.
“We have had a poor record in processing and adding value to our agricultural produce. This is now the time to address this,” Dr Songa noted.
The ministry is finalising work on Kenya’s industrial transformation strategy, which gives priority to the assembly of motor vehicles, domestic appliances and computers.
The strategy also targets labour-intensive, low-technology industries such as textiles and leather in a bid to tap into the African Growth Opportunity Act (Agoa) and other global markets.
In June, fresh tax measures aimed at protecting the local manufacturing sector from cheap imports were unveiled. For instance, the import duty on plastic tubes for packing toothpaste and cosmetics was increased from 10 to 25 per cent while import duty on aluminium milk cans was raised to 25 per cent from 10 per cent.
To protect local sugar millers, the Treasury raised duty on imported sugar from $200 to $460 per tonne.
Even as efforts to spur industrialisation gets underway, small and micro enterprises, which are critical to economic transformation, are hindered by inadequate financing as banks consider them high risk.
They are also constrained by limited access to market, poor infrastructure, inadequate knowledge and skills, rapid technology changes and unfavourable laws and regulations.
“These challenges have curtailed the growth of many SMEs, contributed to low export product diversification and undermined the national efforts towards graduating from commodities trade to high-end goods,” said Treasury CS Henry Rotich when reading the 2015/16 budget.
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Uganda’s ambitious infrastructure plan set to boost economy
A ten-year, multibillion-dollar plan to upgrade Uganda’s transportation network and power generation is poised to benefit the East African nation’s citizens and those of neighboring countries, IMF economists said.
In their regular review of the Ugandan economy, IMF staff said that the planned infrastructure overhaul – an $11 billion program over the next ten years through public investment and public-private-partnership arrangements – will have positive spillovers on agro-processing, manufacturing, and trade.
Upgrading the transportation network and electricity generating capacity is now Uganda’s top economic priority. Over three fourths of Ugandans live in rural areas with most involved in agriculture, and only 14 percent of households use electricity. A comprehensive road network and widespread access to electricity will connect farmers to trading centers, add value to production, and improve the population’s welfare.
Upcoming oil production, expected to come on stream around 2021, requires new infrastructure that will be led by government investment with participation of the private sector, and will include the construction of roads, a crude oil pipeline, a small-scale refinery, and product pipelines.
Electricity surplus
Infrastructure improvements will also allow Uganda to maximize the benefits of regional integration with other East African Community partner states. Uganda’s expected electricity surplus will be exported to neighboring countries; and better roads, bridges, railways, and new pipelines will facilitate the movement of citizens across countries and the transportation of goods to seaports.
The question of how to scale up infrastructure investment while maintaining strong and sustainable economic growth, enhanced inclusion, and price stability was analyzed by the Ugandan authorities and IMF staff in preparation for the 2015 review of the economy known as the Article IV consultation.
The review concluded that favorable existing conditions should allow Uganda to embark safely on its ambitious infrastructure plan. To ensure success, however, consistent policy implementation, sound project management, and a business-friendly environment will be required.
Strong safeguards
The report found that Uganda has been able to gradually build buffers that have put the economy on a sound footing from which to launch the infrastructure program and secure its financing.
At less than 5 percent in May, the country enjoys low and stable inflation. With the help of an inflation targeting regime, the central bank successfully lowered inflation from a peak of 33 percent in 2011, by effectively influencing market interest rates and credit performance.
Uganda has low external debt and high international reserves. The authorities have prudently limited external debt’s increase to 4 percent of GDP since 2007. At 18 percent of GDP now, there is space for new borrowing to finance infrastructure investment with a low risk of creating distress.
Furthermore, international reserves cover 4 months of imports, 70 percent of broad money, and 500 percent of short-term debt, and support the envisaged foreign currency needs for infrastructure imports.
Clear fiscal principles
The economic review noted that the success of the infrastructure investment plan depends critically on fiscal policy consistency and effective project management. Infrastructure investment of 4¼ percent of GDP, on average, is projected for the construction period (see chart). To create space for this investment, the authorities plan to continue to increase tax revenue and constrain less productive spending.
Improving the quality of expenditure is crucial for budget credibility and enhanced compliance since a change in the tax-paying culture will occur only once citizens are convinced that revenues are being put to good use.
Other important principles relate to project selection and management, pace of execution, and financing terms, the report said. The authorities are selecting projects based on thorough and independent feasibility analyses that demonstrate their commercial viability. They are also determined to phase in projects properly, balancing the risk of slow implementation resulting in unnecessary costs and lower growth impact, against the risk of rapid construction that could overheat the economy.
In addition, the authorities plan to secure project financing on the best possible terms once they exhaust their domestic savings. While concessional debt is not available for all these projects, given their size, the government is securing nonconcessional loans at better-than-market financial terms.
Business-friendly environment
The report notes that to support medium-term growth, the infrastructure effort is to be accompanied by higher private sector contributions to development and a targeted focus on inclusiveness.
Private investment requires a stable and business-friendly commercial environment. Preserving economic and financial stability is therefore important to fully reap the benefits of infrastructure improvements.
Policy flexibility to quickly respond to the impact of global and regional developments on Uganda’s small and open economy is crucial. Ongoing governance improvements – including better fiduciary controls of government operations and strengthened public investment guidelines – are expected to attract further foreign and domestic investment.
Successful infrastructure improvements will increase potential economic growth and go a long way in benefiting the poor, but will need to be supplemented by efforts in other areas – namely sustained health and education investment and a well targeted social protection system – to shield those segments of the population that are too vulnerable to benefit from infrastructure upgrades.
Significant actions in all these areas are under way in Uganda, heralding a positive impact from infrastructure upgrades on the economy and on the well being of Uganda’s citizens.
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High Level Policy Dialogue on Development Planning in Africa: The impact of the Data Revolution on development planning
Context and Rationale
Remarkable economic progress has been made in Africa since the early 2000. Economic estimates for Africa for 2014 and 2015 project an average growth rate of 5.8 and 6% respectively, making the continent one of the fastest growing regions in the world. According to the African Development Bank (AfDB), in 2013, African economies grew an average of 4%, and in rapidly growing regions like East and West Africa, the growth rate was 6%, well above the global level of 3%. These remarkable growth rates are in line with the continent’s performance over the last decade, and can be attributed largely to improved macroeconomic and political governance, successful business policy reforms, increased domestic demand, and high commodity prices.
While there is good reason to be optimistic about the continent’s future, important challenges remain. A major issue facing policy makers in Africa is that of the sustainability of the growth performance; second, the diversification of the economy away from primary products towards manufacturing remains a strong concern for African policy-makers in light of the structural transformation agenda; third is the issue of inclusive growth, so as to not marginalize important segments of the population, including women and the youth. Another challenge regards the environmental impact of this growth performance in the long run, including its effect on climate change.
Addressing these and other important challenges requires careful planning on the part of States, as they put in place policies to affect economic growth, and reduce poverty through employment creation, and this, through the structural transformation of their economies. Historically, structural transformation has required an active State, and capable institutions that have the ability to set a strategic vision for their national development, and the capacities to plan for pathways to reach that vision.
Furthermore, it is important to note that to achieve the development planning goals of sustainable and employment-generating economic growth through structural transformation, will require evidence-based and data-driven policy-making approach, which relies on building and integrating credible data into the planning process, with specific milestones and targets that can be verified, measured, and monitored.
The ability to generate, collect, manage, and analyze its own data is necessary for the success of development planning in Africa. The continent needs to build strong statistical systems which would serve as a platform for realistically identifying those national and continental development indicators required to guide the social and economic development efforts. This is also necessary for the pursuit of the region’s development objectives and goals as laid out in the Common African Position (CAP) on the post-2015 agenda, and the African Union (AU) Agenda 2063. The overall goal is to ensure that Africa owns, plans, manages, and ultimately funds its own development. Accomplishing this requires greater ownership, at the national level, by African Development Planners and proper allocation and targeting of resources to make informed choices. And this cannot be achieved today without a strong involvement of Africa in the Data Revolution.
The concept of the data revolution was emphasized and expounded upon in previous reports that culminated in the UN Secretary General’s Synthesis Report. The latter recommends that a comprehensive programme of action on data should be established under the UN Statistical Commission, which would include “the building of a global consensus, applicable principles and standards for data, a web of data innovation networks to advance innovation and analysis, a new innovative financing stream to support national data capacities, and a global data partnership to promote leadership and governance”.
Similarly, at their 23rd Ordinary Session of the African Union held in Malabo, Equatorial Guinea in June 2014, African Heads of State and Governments instructed the Economic Commission for Africa (ECA), the African Union Commission (AUC), the African Development Bank (AfDB) and United Development Programme (UNDP) to organize a High Level Conference to discuss the Data Revolution in Africa and its implications for the AU Agenda 2063 and the post‐2015 development agenda. This High Level Conference was held in Addis Ababa, Ethiopia from 27 to 29 March 2015, culminating in the Africa Data Consensus, which defines the data revolution in terms of its main purpose: “a shift in the way that data is harnessed to impact on development decision-making, with a particular emphasis on building a culture of usage.”
The challenge for the continental institutions and African policy-makers remains how to integrate the recommendations of the Africa Data Consensus into countries’ national planning processes. It is in this context that the Capacity Development Division (CDD) of ECA, in collaboration with the African Centre for Statistics (ACS), has organized this High Level Policy Dialogue. The theme of the meeting is: ”The Impact of the Data Revolution on Development Planning in Africa”, and it will assemble Senior Planning Officials from all 54 African countries. The meeting will be held in Cotonou, Benin on 7-8 July 2015.
Objectives of the Policy Dialogue
The objective of the current High Level Policy Dialogue is threefold:
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One, it will provide an opportunity for African Planners and Chief Executives of planning bodies to discuss and identify the strategies, instruments, and mechanisms that can be adopted by member States to promote evidence-based decision-making, through the integration of the recommendations of the Africa Data Consensus in national planning processes.
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The second objective of the Policy Dialogue is to provide a forum for participants to share knowledge on the policy implications of the Data Revolution to national planning, and ultimately, the structural transformation agenda.
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The third objective is to provide a platform for African Planners and Chief Executives of planning bodies to harmonize and coordinate their actions as they move forward with the integration of the Africa Data Consensus in national planning processes.
Expected outputs
At the conclusion of this High Level Policy Dialogue, it is expected that:
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African Development Planners from all 54 African countries are informed, aware and do share a common understanding of the Africa Data Consensus as a tool to maximize the effectiveness, efficiency, and impact of the Data Revolution in the overall framework of development planning;
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National Development Planners from all 54 African countries make clear recommendations on:
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Structural and programmatic integration of the Data Revolution to drive, add considerable value to, and radically transform existing development planning initiatives according to well-defined targets and milestones at the continental, sub-regional and national levels;
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Establishment of a “community of practice” of development planners (interacting with policy-makers, partners and stakeholders) to collectively share experiences and learning on the integration of the data revolution on national planning;
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Identifying different alternative means of promoting coordination and coherence for efficient implementation of the Data Revolution in development planning in Africa.
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Increased complexity of trade driving demand for good data
The increasing complexity of global trade, manifest in the rise of global value chains, is driving demand for better trade data. At the “Trade Data Day” on 3 July, WTO Deputy Director-General Xiaozhun Yi underlined the importance of good data for good policymaking.
“Trade and development policies at national level require good statistics; similarly, the WTO cannot fulfil its negotiation and transparency mandates without good data,” DDG Yi said in his welcoming remarks to the seminar. “Indeed, the increased complexity of trade and the resulting greater interconnection of domestic firms within a globalised economy have fuelled demand for more information on trade statistics and trade policy measures.”
Trade Data Day is a collaborative effort of the International Trade Centre (ITC), the United Nations Conference on Trade and Development (UNCTAD), the World Bank and the WTO. This year’s seminar examined the main advances in trade and market access statistics and looked ahead to future challenges.
Two issues were of specific focus at the seminar: the monitoring and analysis of non-tariff trade policy measures; and trade and market access information systems on commercial services.
Speakers noted the increasing share of global GDP accounted for by trade – 50 per cent in 2013 compared to 39 per cent in 2000 – which means that more areas of economic activity are affected by trade. Trade has become complex and fragmented with the rise of global value chains, resulting in a growing emphasis on measuring and analysing trade in value added.
Measuring trade in services is particularly difficult, given the different modes of supply for services, the speakers added. Border policies have also become increasingly intertwined with domestic policy through non-tariff measures, making trade policy overall more complex.
Emphasis was put on the need to improve the details and quality of trade statistics and to further work in new areas such as Trade in Value Added (TiVA) as well as Trade by Enterprise Characteristics (TEC). The former considers the value added by each country in the production of goods and services that are consumed worldwide, while the latter links trade statistics to the business register at the micro-level.
Further information on Trade Data Day is available here.
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Rolling out CVTFS in DR Congo
The COMESA Virtual Trade Facilitation System (CVTFS) has been launched in DR Congo. Secretary General Sindiso Ngwenya and the Deputy Director-General of the Department of Customs and Excise, Mr Gabriel Mwepu Numbi conducted the launch of the system in Lubumbashi, Katanga on Friday, 19 June 2015.
Mr Numbi described the introduction of the CVTFS as a major turning point in doing business, which was consistent with the DR Congo government’s commitment to modernize its operations especially its customs authorities.
“The Customs authorities are in the process of implementing a reform and modernization programme whose main thrust is the simplification of procedures and their harmonization with those of the rest of the world,” he said.
He said that these reforms had been specifically concretized by the transposition of the international convention on the facilitation and harmonization of customs procedures, known as the revised Kyoto Convention into the national legal instruments.
He appreciated COMESA’s participation in the introduction of ASYCUDA ++ version which was first introduced in Katanga before being rolled out in the rest of the DRC. To date, he said commendable progress had been made in reforming and modernizing the DRC customs department.
In his remarks, Mr Ngwenya hailed the leadership of DR Congo and expressed gratitude to His Excellency, Mr Joseph Kabila Kabange who oversaw the implementation of ground breaking projects that include the CVFTS during his tenure as Chairman of the COMESA Authority.
He concurred with the Deputy Director General that the CVFTS would further enhance the efficiency of revenue collection and expedite transit at border posts because of the COMESA Regional Customs Bond Guarantee and the ability of customs and other stakeholders to track both means of transport and goods in real time.
“The CVFTS, which is a regional single window, will contribute to the realization of the single customs territory between DR Congo on one hand and other Member States including Tanzania which was already participating in the RCTG and CVTFS initiatives,” Mr Ngwenya said.
To achieve a seamless logistics supply chain that is essential for trade competitiveness, he called for the containerization of cargo for both imports and exports.
“This would enable exports destined to international markets to be issued with one bill of lading that eliminates transshipment of cargoes at ports which increases trade costs, among others through unloading and loading of shipments resulting in damages of goods and high insurance premiums,” he said.
He called for speedy establishment of the One Stop Border Post at Kasumbalesa border between DR Congo and Zambia and reiterated the commitment of the Secretariat to work with both governments to ensure this goal is attained before the end of 2015. Further, he called for the establishment of a National Surety for issuing the RCTG to make the single customs Territory a reality.
Mr Ngwenya and Mr Numbi also paid a courtesy call on the Governor of the Katanga Province His Excellency Moise Katumbi Chapwe. The Secretary General briefed him on the status of implementation of the CVFTS in different corridors of the DR Congo and its benefits for realization trade efficiency in the transport and logistics supply chain.
The Governor welcomed the CVTFS initiative citing his personal experience in the past as a transporter which he said was not encouraging.
“There was low productivity as a truck would make one round trip a month to and from the ports in the region due to delays at border posts and multiple road blocks and licenses that are charged by transit countries,” the Governor recalled.
He assured the Secretary General that he would liaise with the Ministry of Finance to expedite the establishment of a National Surety to make the SCT a reality at the earliest opportunity.
The Government of DRC and COMESA signed a Memorandum of Understanding on 06 October 2014 on the establishment of the CVTFS system. Under the MoU, Customs authorities are responsible for implementing the system. Other stakeholders include banks, transport operators, insurance companies, freight forwarders, importers among others.
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tralac’s Daily News selection: 7 July 2015
The selection: Tuesday, 7 July
Featured tweets:
@Francismangeni: There are no similarities between the Greek crisis and regional integration in Africa now, but important lessons
@TomBowk: Mozambique lost 8000km of roads in this year's rainy season, according to the national roads administration
@pewglobal: BRICS views of US 2015, % favorable
Driving African economic integration: penetrating the political economy obstacles (Building Bridges)
The objective of the policymakers’ roundtable on African Economic Integration, which is part of GSDPP’s Building Bridges programme, was to identify some of the key obstacles to African Economic Integration, and strategies to address them. The roundtable brought together policymakers to identify and engage effectively with the levers of change using a political economy approach in order to move the integration agenda forward. It engaged with the following questions: [Download]
Steps to entrench gender in regional integration (COMESA)
COMESA has begun building the capacity of its staff and member States to mainstream gender in regional integration programmes. The first Training of Trainers workshop started Monday 6 June 2015 in Nairobi, Kenya and focused on four member States including Ethiopia, Kenya, Mauritius and Swaziland and COMESA professional staff. Participants will be trained on how to identify gaps in gender equality through the use of sex-disaggregated data; analyzing the underlying causes; developing strategies to close those gaps; putting resources and expertise into implementing strategies for gender equality; monitoring implementation; and holding individuals and institutions accountable for results.
Nonetheless, we know that there are some significant activities that require our deliberate efforts. First among these is to ensure that the political harvest of the signing of the TFTA will now be translated into effective implementation. This will require, amongst others that we get the remaining Member States, some of whom are major players, to also sign the Tripartite Agreement. At the same time, we will need to ensure that ratification of the TFTA by the required majority of Member States is completed expeditiously so that the Agreement enters into force. It is clear that if these processes are overly delayed, this may have implications on the promise and potential of this grand project, not only for the Tripartite region but also for the Continental Free Trade Area. The second area follows directly from the above:
SADC: The AU's orphaned REC? (The Namibian)
Given these realities SACU could force a rethink at the AU headquarters in Addis Ababa, Ethiopia, with regards to the recognised RECs on the continent. With an effective strategy it could turn the political chess game in its favour and outwit SADC as the recognised REC for Southern Africa. Then it could negotiate the CFTA in its own right and not as “a sub-group within SADC”. [The author, Wallie Roux, is head of research and development at the Namibia Agricultural Union]
Kenyan manufacturers seek EAC import levy exemption (Daily Nation)
The Kenya Association of Manufacturers now wants an exemption on the 1 per cent levy on all imports into the EAC introduced by the chairperson of the EAC Council of Ministers during the EAC 2015/16 budget speech. While appreciating the government for creating many incentives for the local manufacturers in the 2015/2016 budget, KAM Chief Executive Phyllis Wakiaga said challenges in the EAC market need to be addressed to spur further growth in the local manufacturing sector. “We are keen on making Kenya a manufacturing hub especially in light of the new Tripartite Free Trade Area . A lot of new steps have been made towards making our investment easier here but more still need to be done to ensure we produce more efficiently and remain competitive in this market,” Ms Wakiaga said.
SADC Parliamentary Forum: speech by Jacob Zuma (GCIS)
Engagement with the SADC Secretariat on policy harmonisation should remain a critical focus for the SADC Parliamentary Forum. South Africa appreciates the initiative taken by the SADC Secretariat and the SADC Parliamentary Forum to elevate this issue which will be discussed at the forthcoming SADC Ministers of Justice and Attorney’s-General Meeting in Harare.
SADC: Anti-Corruption Committee update
EAC: Emergency Summit statement on Burundi
Why did Sisi back out of African Union Summit? (ALMonitor)
Namibia: IMF staff completes 2015 Article IV Mission (IMF)
Namibia’s growth prospects are increasingly clouded with downside risks. The main near-term risk is associated with the highly volatile Southern African Customs Union revenues. In the coming years, the SACU revenues are expected to decline, reflecting the slowdown in the South African economy. Further increase in the current account deficits would continue to erode already low international reserves (currently at 9¼ percent of GDP or 1¾ months of imports) at end-April 2015.
Kenya: CBK chief faces first test as shilling hits 100 to dollar (Business Daily)
The shilling has plummeted to a three-and-a-half-year low against the US dollar, underlining the Herculean task before the newly appointed Central Bank of Kenya (CBK) governor Patrick Njoroge as he chairs his first Monetary Policy Committee (MPC) meeting Tuesday morning.
Global Entrepreneurship Summit: Kenya engages high gear (Daily Nation)
Does Uganda need to rethink the liberalisation policy? (Daily Monitor)
As more people continue to wonder whether full liberalisation can deliver Uganda to economic prosperity, they have been joined by critical voices such as President Museveni, who has recently shown frustration, especially in the banking sector, wondering why interest rates continue to be high amid competition. Mark Keith Muhumuza & Jonathan Adengo sounded out experts with a view of measuring whether full economic liberalisation is still relevant to Uganda.
TAZARA suspends operations in Zambia after workers stage strike (IPPMedia)
Conrad Simuchile, the company's head of public relations, said operations have been suspended on the Zambian side following a strike by workers which started on Monday this week, according to the state broadcaster -- Zambia National Broadcasting Corporation. The suspended operations involve both passenger and freight services from the Zambian town of Kapiri Mposhi to the border town of Nakonde, he added. The official however said operations will continue on the Tanzanian side of the railway line built in the 1970s with the assistance of the Chinese government.
Mchinji railway line soon to be joined to TAZARA - President Lungu (Lusaka Times)
Tanzania: Businesses say Chinese logistics centre won't benefit locals (IPPMedia)
A section of members of the business community in the country are up in arms over a major trading centre project planned for construction at Kurasini area in Dar es Salaam, saying the complex is not intended to benefit local traders. They have therefore urged the government to stop the construction of the project, claiming that it does not specifically focus on benefiting natives but Chinese traders. Billed to be the largest in East and Central Africa and to serve as a common entry point for China imports, the centre will be run under a public private partnership arrangement with the government of China represented by Yiwu Pan-Africa International Investment Corporation and that of Tanzania by the Export Processing Zone Authority.
Tanzania, Chinese, Zambian firms win deals in 11 projects in Blantyre (IPPMedia)
Tanzania: IMF Executive Board completes second PSI Review (IMF)
Angola: Visit by François Hollande results in orders for French companies (MacauHub)
The visit by the President of France, François Hollande, to Angola resulted in the signing of letters of intent to order hundreds of millions of euros of shipbuilding and infrastructure construction from French companies. These agreements were reached during the Angola/France business forum.
Assessment of economic benefits generated by the EU Trade Regimes towards developing countries
The study demonstrates that EU trade policy has had a positive impact in terms of policy coherence for development. Using advanced econometric techniques and large databases the study also leaves no doubt that trade preferences – such as the Generalised Scheme of Preferences (GSP) initiative – granted by the EU have significantly increased the exports and the economic diversification of developing countries and in particular of the Least Developed Countries. Another interesting result from the study is that the full impact of preferences on exports has arisen within two years after the preferences were granted. Finally, the study also indicates that in part these exports had a measurable positive effect on poverty reduction. [Download: Vol I, Vol II]
Underway at the WTO: European Union Trade Policy Review
India: Government looks to rework FTA strategy (Times of India)
The government is set to rework the way it does free trade agreements (FTAs), moving to a more liberal regime on routing of third-country goods, as it revives its push for bilateral deals to corner a greater share of the export market. But a revamped strategy is seen to be crucial as the government is ready for the next wave of trade agreements — from Australia to RCEP on the east, and the European Union and Peru on the West.
Policy coherence of the Sustainable Development Goals: a natural resource perspective (UNEP)
As the world prepares to adopt a new set of Sustainable Development Goals, UNEP's International Resource Panel cautions that unless prudent natural resources management becomes an integral part of policy packages, the SDGs will not fulfill their fundamental purpose - of ending extreme poverty by 2030 and addressing all aspects of sustainable development.
Lessons from Millennium Development Goals ‘springboard’ for future UN agenda – Ban (UN News Centre)
This is according to the final assessment of the MDGs, which range from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015. Data and analysis prove that even the poorest countries can make dramatic and unprecedented progress with targeted interventions, sound strategies, adequate resources and political will, says the report, which reflects the global and regional progress of the eight MDGs over the past 15 years that has been monitored and analyzed annually by data compiled by more than 28 UN and international agencies. [Download]
Wanted: Chief Executive Officer for the AFRICA50 Infrastructure Fund (AfDB)
Why developing countries need to toughen up on taxes (The Guardian)
Interview with Ben Kiregyera on the Data Revolution (Paris21)
BRICS could sign economic cooperation in 5 years – minister (RT)
South Africa: State, private sector can forge industrialists together (Business Day)
Zimbabwe considers bid for KP chair (The Herald)
South Africa-Benin: signing of MoU on transport matters and development of Glo-Djigbe (GCIS)
South Africa: Critics of travel laws are circling the truth (Business Day)
America just chose a talented, qualified diplomat to bring hope to war-torn Congo Basin (Huffington Post)
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WTO report applauds the EU’s positive role in maintaining an open and transparent global trading system
In its assessment of the European Union’s trade policy, the WTO Secretariat pays tribute to the critical role played by the EU in the Organization. It highlights the EU’s remarkable openness at a time of timid economic recovery. WTO Member countries and the WTO Secretariat will discuss the report on Monday 6 July and Wednesday 8 July in Geneva in the framework of the EU’s 12th Trade Policy Review.
The main points highlighted by the report and expected to be discussed include:
- The EU’s role in the multilateral trading system
The report makes clear that the EU trade policy matters not only to the EU, but also to the world. The EU is among the top three trade partners of no less than 107 countries. According to the report, “the EU remains an open and transparent economy and, as one of the biggest economies and trading entities in the world, plays a critical role in the multilateral trading system”.
- Impact of EU’s trade on jobs within and outside the EU
31 million jobs in the EU are supported by its participation in global trade. While exports are important, imports are just a necessary to the EU’s economy. In today’s world of global value chains, in order to export, companies need also imported inputs. The EU sources inputs from the rest of the world, and this also supports jobs elsewhere in the world.
- The EU’s role as a major investor and recipient of foreign direct investment
The EU remains the preferred choice for foreign investors: 45% of total outflows of foreign direct investment in 2013 came from the EU. Equally, the EU is open to foreign investment: it hosted about 48% of world inflows (not including investment flows between the EU Member States).
To remain an attractive destination for foreign direct investment, the EU takes steps towards further consolidation and completion of its internal market. A more integrated European single market of over 500 million consumers will benefit both European and foreign companies. The Digital Single Market initiative launched in May 2015 has been pointed out as an area of interest and opportunity.
- A link between growth of innovation
The EU’s economic growth rests on its capacity to innovate. This makes protection of intellectual property rights – domestically and abroad – essential to the EU.
- Impact of EU trade policies on exports from developing countries
EU imports under its Generalised System of Preferences scheme amounted to €217 billion in 2014. The Least Developed Countries (LDCs) alone exported to the EU goods worth €38 billion, i.e. nearly 5 % more than a year before. The LDCs benefit from the EU’s duty-free quota-free scheme known as “Everything but Arms’ and the reformed, more flexible, rules of origin.
- EU’s role in global trade of agricultural products
The EU imports of agricultural products amounted to €104 billion in 2014. A significant part of these imports came from the developing countries. The EU is the leading importer of agricultural products from developing countries. For about two years now the EU have not granted any refunds to its exporters of agricultural products but the EU’s reformed Common Agriculture Policy (CAP) raises still much attention in the Review.
- EU’s high level of consumer and environment protection
The report underlines that the vast majority of EU sanitary and phytosanitary regulations are based on international standards representing middle-way solutions. The EU’s legislation seeks to ensure the functioning of the internal market and a high level of consumer and environment protection – frequently higher than in other WTO Members.
- Positive developments in the EU’s fishery regime
The EU’s fishery policies reform is presented in the report as a positive element addressing concerns raised in past reviews.
Background
The Trade Policy Review Mechanism is the most important transparency exercise of the WTO. It systematically and regularly analyses and assesses the trade policies of the WTO member countries and thus shows how well they comply with the rules, disciplines and commitments initially made. It outlines the trade policies and practices of WTO members and, by doing so, promotes a smoother functioning of the multilateral trading system.
The policies of the four WTO Members having the largest trade volume are reviewed every two years. Currently, these Members are the EU (last review in July 2013), the US (last review in December 2014), Japan (last review in March 2015) and China (last review in June 2014). The next 16 Members are reviewed every four years (Canada very recently for example). All other countries are subject to a review every six years. A longer period may be fixed for Least Developed Countries.
The review of the EU’s trade policy is based on a report presented by the WTO Secretariat, a report from the EU and written questions from Members, to which the EU replies in writing. The EU has received about 1400 advance written questions.
BRICS could sign economic cooperation in 5yrs – minister
The BRICS countries may sign an agreement on economic integration in the next 5 years, says Russia’s Deputy Economic Development Minister Alexei Likhachev. Russia will offer a ‘road map’ at the BRICS summit in Ufa this week, he said.
Although the group of 5 BRICS countries was initially designed as a “group of allies,” it has started to look like an economic block, Likhachev told TASS Monday.
“Of course, it is premature to talk about a BRICS economic agreement. But if the approach and the crystallization of our association as an international group takes place at the same pace as now, then an economic agreement within a few years will be quite timely and inevitable. I think it can happen within five years,” he said.
There’s no rush for a free trade zone agreement because the countries are not yet ready for it psychologically, according to Likhachev. The terms of an agreement are already being discussed, he added.
There’s already a joint research team to develop a preferential trade regime between India and the Eurasian Economic Union (EEU), the minister said. Russia is ready to discuss the issue of a free trade zone with South Africa as the counties’ economies do not compete in key areas but rather complement each other, according to Likhachev. As for Brazil, there could be some difficulties as the country’s economy competes with Russia. When it comes to a preferential regime with Brazil, Russia rather needs it than not, Likhachev said. He added that Russian companies have expressed an interest in the Brazilian market, and it could lead a way to Latin America as a whole.
The BRICS economic agreement will develop in several stages, Likhachev claimed. At first it will be a declarative document, guiding countries to more active cooperation. Then it could be non-preferential agreements that optimize regulatory systems, simplify customs and investment procedures and create the so-called “green corridors” for goods. The third, preferential regime phase will consist of concessions that BRICS countries will make in terms of commodity trading.
He also assumed that the idea of a preferential trade agreement could be discussed at the upcoming BRICS summit in Russia’s Ufa.
Russia will offer BRICS partners a “road map”, closely linked with the strategy of economic cooperation project, according to Likhachev. This will help finance projects from the New Development Bank (NDB), established by the group of emerging economies last July.
The strategy of economic cooperation has been discussed by Russia and its BRICS partners since 2013. It covers areas such as power, manufacturing, mining, agribusiness, and innovative technologies. These areas develop in the ”road map” in a form of multilateral projects of major companies like Rosneft or Inter RAO, along with medium-sized companies, according to Likhachev. Scores of Russian companies’ projects currently participate in it as well, he said.
“We believe that the strategy will be adopted this week in Ufa as a medium-term program of action.”
Russia’s Republic of Bashkortostan will host the 7th BRICS summit and the Shanghai Cooperation Organization (SCO) summit in the capital Ufa on July 8-10. 10,000 visitors are expected during the two summits.
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Lessons from Millennium Development Goals ‘springboard’ for future UN agenda – Ban
The United Nations Millennium Development Goals (MDGs) galvanized the world to produce the most successful anti-poverty movement in history, helped lift more than one billion people out of extreme poverty, made inroads against hunger and enabled more girls to attend school than ever before. However, despite remarkable gains, it will take more to ensure the poorest and most vulnerable people are not left behind.
This is according to the final assessment of the MDGs, which range from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015.
“The report confirms that the global efforts to achieve the Goals have saved millions of lives and improved conditions for millions more around the world,” Secretary-General Ban Ki-moon said at the launch of the report in Oslo, Norway.
“These successes should be celebrated throughout our global community. At the same time, we are keenly aware of where we have come up short,” he added.
Data and analysis prove that even the poorest countries can make dramatic and unprecedented progress with targeted interventions, sound strategies, adequate resources and political will, says the report, which reflects the global and regional progress of the eight MDGs over the past 15 years that has been monitored and analyzed annually by data compiled by more than 28 UN and international agencies.
“The MDGs worked at all levels – global, national and local, rallying not just diplomats and technocrats in conference buildings but communities gathering in village squares,” said Mr. Ban, who was joined at the launch by MDG Advocates Erna Solberg, Prime Minister of Norway, and Paul Kagame, President of Rwanda.
“The MDGs measured what mattered to people. As we look ahead, we must do more to reach those who are most vulnerable, are not counted and have not shared the improvements of the past 15 years.”
The report – whose launch coincides with the opening in New York of the high-level segment of the 2015 session of the UN Economic and Social Council (ECOSOC) and the three-day Ministerial Meeting of the High-level Political Forum on Sustainable Development – found that the 15-year effort to achieve the Goals was largely successful across the globe, while acknowledging shortfalls that remain.
“Enormous progress has been made towards achieving the MDGs. Global poverty continues to decline,” the report said. “More children than ever are attending primary school. Child deaths have dropped dramatically. Access to safe drinking water has been greatly expanded. Targeted investments in fighting malaria, HIV/AIDS and tuberculosis have saved millions.”
“The MDGs,” it added, “prove that goal setting can lift millions of people out of poverty, empower women and girls, improve health and well-being, and provide vast new opportunities for better lives.”
The report drew attention to climate change and environmental degradation that undermine progress achieved, and noted that conflicts remain the biggest threat to human development and the greatest obstacle to progress in achieving the MDGs.
The emerging post-2015 development agenda, including the set of sustainable development goals that will be adopted at a summit at UN Headquarters in September, strives to reflect these lessons, build on the successes and put all countries, together, firmly on track towards a more prosperous, sustainable and equitable world.
“As we reflect on the MDGs and set our sights on the next 15 years, I am confident that we can deliver on our shared responsibility to end poverty, leave no one behind and create a world of dignity for all,” Mr. Ban said at the launch.
Breaking down the progress made on each of the eight MDGs, the report found that:
On Goal 1 – eradicate extreme poverty and hunger – the world has seen the most successful anti-poverty movement in global history, which has contributed to a reduction in the absolute number of people living in extreme poverty by more than half in 2015 since 1990;
On Goal 2 – to achieve universal primary education – in sub-Saharan Africa, the implementation of the MDGs has helped increase the primary school net enrolment rate by 20 percentage points since 2000, compared to only 8 percentage points between 1990 and 2000, and the MDGs achieved ground-breaking success in the number of out-of-school children of primary school age, from 100 million in 2000, to 57 million in 2015;
On Goal 3 – which sought to promote gender equality and empower women – women are now having significantly stronger representation both in parliaments around the world and as a workforce outside of the agricultural sector and substantial achievements have been made in gender equality in education. For instance in southern Asia, there are now even more girls than boys enrolled in primary school, as compared with 74 girls for every 100 boys in 1990;
On Goal 4 – to reduce child mortality – the MDGs were most successful in the reduction of child mortality. Between 1990 and 2015, the annual rate of reduction of under-five mortality has more than tripled globally;
On Goal 5 – to improve maternal health – with the help of the MDGs, more mothers can rely on the assistance and treatment they need during pregnancy and after, and the maternal mortality ratio has been reduced by nearly half worldwide. Nowadays three-quarters of births are assisted by skilled health personnel globally;
On Goal 6 – to combat HIV/AIDS, malaria and other diseases – lower infection rates of HIV of 40 per cent, an immense increase in antiretroviral therapy, tremendous declines in malaria deaths and incidence rates as well as superior success in tuberculosis treatment prove that the MDGs work to defeat diseases;
On Goal 7 – to ensure environmental sustainability – the MDGs have significantly increased access to improved drinking water for more than 90 per cent of the global population, and since 1990, ozone protection efforts have virtually eliminated ozone depleting substances;
And Goal 8 – to cultivate a global partnership for development – official development assistance (ODA) from developed countries increased by 66 per cent in real terms between 2000 and 2014.
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New study: Assessment of economic benefits generated by the EU trade regimes towards the developing countries
It is a well-known fact that EU trade policy is a significant tool for development policy. Indeed, the EU has a long tradition of granting preferential access into its market for exports from developing countries. Ultimately, an increase in the exports of developing countries should result in a stimulus to their global economic activity and development.
However, it is not unusual to hear criticism of EU trade policy vis-à-vis the developing countries – calling into question its effectiveness in fully respecting the principle of policy coherence for development.
A major new study assessing the true economic benefits generated by the EU trade regimes towards developing countries has recently been carried out. The study report was publicly launched on 6 July 2015 by European Commissioner for International Cooperation and Development Neven Mimica and DG DEVCO Director General Fernando Frutuoso De Melo.
The study demonstrates that EU trade policy has had a positive impact in terms of policy coherence for development. Using advanced econometric techniques and large databases the study also leaves no doubt that trade preferences – such as the Generalised Scheme of Preferences (GSP) initiative – granted by the EU have significantly increased the exports and the economic diversification of developing countries and in particular of the Least Developed Countries (LDCs).
Another interesting result from the study is that the full impact of preferences on exports has arisen within two years after the preferences were granted. Finally, the study also indicates that in part these exports had a measurable positive effect on poverty reduction.
Scope of the Study
Part I of Volume I provides a descriptive analysis of the evolution of exports from developing countries to the EU over the last 40 years across trade regimes, regions and sectors as well as a descriptive analysis of FDI flows.
Parts II and III of Volume I apply a new and advanced micro-econometric technique to an extremely large data set of more than 12 million observations, containing detailed tariff information at the 6-digit product-level, to measure the causal impact of preferences on the export’s growth and on the number of products exported by developing countries to the EU over the period 1995-2012. To the best of our knowledge, this is the first time ever that an analysis of this kind has been done in the EU context.
Finally, Volume II assesses empirically the impacts of exports on poverty reduction in developing countries, based also on an econometric analysis. Volume II is presented separately from Volume I.
Key Results
The EU is, by far, the largest market for imports from the LDCs
In 2012, the EU27, USA and Japan (jointly referred to as the TRIAD), imported goods worth more than €2.000 billion from developing countries. Thereof, the EU27 alone imported goods worth €860 billion, equivalent to 42% of all goods imported into the TRIAD. And the EU is, by far, the largest market for imports from the Least Developed Countries to the TRIAD (almost 60% of the LDCs total exports).
Over time, EU imports from developing countries have grown steadily. The introduction of EBA and GSP+ had a visible impact on the growth of imports of the group of countries under these schemes.
EU trade policy increased the exports and the economic diversification of developing countries and LDCs
The econometrics results are highly robust and leave no doubt that GSP preferences have significantly increased the exports and the economic diversification of Developing Countries and Least Developed Countries to the EU over the period 1995-2012.
Exports have a significant impact on poverty outcomes but only if combined with appropriated domestic policies
While the results are somewhat less robust than those presented above, the econometric analysis suggests that exports when combined with other policies (for instance, better access to credit for domestic producers) had a significant impact on poverty reduction in developing countries.
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Relaunch productivity to boost growth and well-being
The slowdown in productivity over the past decade has added to concerns about the long-term economic outlook. But new OECD research shows that policy reforms can revive the diffusion of innovation and make better use of human talent to clear the path for higher and more inclusive productivity growth.
Productivity is about “working smarter,” rather than “working harder,” and reflects the ability to produce more output by better combining inputs, thanks to new ideas, technological innovations and new business models. The OECD’s latest work on The Future of Productivity identifies impediments to future growth and then proposes policies to address them.
“Slower innovation is not the root cause of the current productivity slowdown,” OECD Secretary General Angel Gurría said while launching the new research in Mexico City. “The problem is the pace at which innovations spread throughout the economy, which we refer to as a breakdown of the diffusion machine. To relaunch productivity and reduce inequality, governments should act to help firms to better harness the forces of knowledge diffusion. They also need to focus on skills development and facilitate a more effective allocation of human talent to jobs,” Mr Gurría said.
The new OECD research shows that the gap between high productivity firms and the rest has been increasing over time, suggesting that there are barriers to the diffusion of new innovations. Labour productivity of the most advanced firms increased at an average annual rate of 3.5% in the manufacturing sector over 2000s, compared to just 0.5% for other less advanced firms within OECD economies.
This gap is even larger in the services sector, and is of particular concern since the weight of services in most economies is rising, and services such as logistics, finance and communication are critical to firms’ participation in global value chains.
Diffusion is facilitated by global connectedness, experimentation with new ideas, knowledge-based capital and efficient resource allocation, but comes easier to firms in some economies than others.
Since the knowledge economy increasingly requires skills that many education systems are struggling to provide, countries will reap greater growth and equity benefits through policies that more effectively allocate skills. Around one-quarter of workers in OECD economies report a mismatch between their existing skills and those required for their job. A better use of human talent supports the growth of innovative firms and could boost labour productivity by up to 10% in some economies, according to the report.
The OECD identifies a number of policies to sustain productivity growth, including:
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Product market reforms and bankruptcy laws that do not excessively penalise failure, to improve firms’ incentives to experiment with new technologies, allocate resources more efficiently and maximise the benefits of participation in global value chains.
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Policies that make labour mobility easier. These include housing market policies that facilitate residential mobility, the promotion of adult and lifelong learning, and employment protection legislation that does not impose too heavy or unpredictable costs on hiring and firing. These policies can underpin the growth of productive firms, partly via lower skill mismatch.
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More public investment in basic research, to support the continued emergence of breakthrough innovations and knowledge diffusion.
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Innovation policies that ensure a level playing field between incumbents and new entrants, which is often missing in existing incentive schemes. R&D tax incentives should be equally accessible and beneficial to incumbent, young firms and start-ups.
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tralac’s Daily News selection: 6 July 2015
The selection: Monday, 6 July
SADC's Executive Secretary, Dr Stergomena Tax, has joined Twitter: follow her on @DrTaxs
EAC: 3rd Emergency Summit on Burundi takes place today in Dar es Salaam
SADC: statement of Extra Ordinary Summit of the Double Troika on Lesotho
Out today in Brussels: Assessment of economic benefits generated by the EU trade regimes towards the developing countries
Starting today in Geneva: Competition policy - UN member states to review the “UN Set” for seventh time
United Nations member States are meeting from 6-10 July 2015 in Geneva to reaffirm the validity of the only multilateral instrument adopted by the UN General Assembly in the area of Competition Policy, the so-called UN Set on competition. This instrument was adopted in 1980 and member States have reaffirmed its validity six times. In particular, member States will decide to adopt the main cluster of issues that UNCTAD Secretariat will be addressing at the IGE deliberations until the Eighth Review Conference to be held in 2020. The novelty of this review conference is that member States will also decide to revise the UN Guidelines on Consumer Protection adopted in 1985 and reviewed in 1999. This review will include important updates related to consumer protection issues in e-commerce and financial services. [Downloads]
This week: BRICS 2015 Summit - a collection of links
BRICS economy, foreign trade ministers to meet in Moscow on 7 July
BRICS plan to trade in local currencies (The Telegraph)
Peter Draper, Mzu Qobo: SA needs a concrete BRICS strategy (Business Day)
WPS Sidhu: BRICS is finally shaping a new world order (LiveMint)
Justin Yifu Lin: China’s G-20 agenda - call for a multilateral investment framework for development
BRICS experts workshop on the New Development Bank: video (Observer Research Foundation)
$100bn BRICS monetary fund to be operational in 30 days (The BRICS Post)
How well did BRICS members comply with their Fortaleza Summit commitments? (BRICS Research Group)
The BRICS Academic Forum: a preview of issues for the 2015 BRICS Summit (SAIIA)
Reducing trade costs to support Africa’s transformation: the role of aid for trade (UNECA)
Touching upon the specific theme of this Fifth Global review – trade facilitation – Mr. Karingi warned against the risk of limiting the trade facilitation agenda to those specific measures that respond to the interests of large traders and transnational corporations. He instead argued that Aid for Trade support to Africa should also focus specifically on the needs of small and medium enterprises, as well as informal traders. Moreover, it should support efforts to streamline procedure while enhancing the effectiveness of custom controls, with a view to strengthen domestic resource mobilization and curb illicit financial flows through trade mispricing. Echoing some of the concerns raised also in the African region, other panelists noted that there is scope for reducing the volatility and unpredictability of Aid for Trade support, and improving the degree of alignment with recipient countries’ development strategies. They also mentioned the need to facilitating access to Aid for Trade funds by harmonizing procedures and strengthening the coordination across donors, as well as enhancing the dissemination of information about funding opportunities. [The author: Stephen Karingi] [Download]
Restructured EIF, strong focus on trade in services at WTO Aid for Trade Review (ITC)
Services need to play a stronger role in contributing to trade-led growth in LDCs, according to business leaders and policymakers at an afternoon session on the topic of reducing trade costs for LDCs’ services trade development. ‘Trade facilitation in Africa means boosting services,’ said Alioune Sarr, Minister of Commerce, Entrepreneurship and the Informal Sector, Senegal. ‘Forty percent of investments in Africa are in services.’ Businesses that provide services can increase their productivity through participation in global value chains, as services account for more than half of overall trade in LDCs. An increase in trade in services should be aligned with that of trade in goods – as even trade in goods is made up of trade in services – through the reduction and elimination of trade barriers.
Commonwealth Trade Symposium, 23-24th June 2015, Johannesburg, South Africa: presentations
New Petroleum Producers Discussion Group, 30 June - 2 July, Dar es Salaam: discussion summary
Indicators to monitor deeper regional trade integration in Africa (World Bank)
Countries in Africa have committed to a process of deeper integration, but have made little progress in implementing commitments and removing barriers. This report looks at the monitoring of regional integration in Africa and argues that more effective monitoring processes for existing integration arrangements could help to raise the profile of the prevailing implementation deficits and provide policy makers and civil society with the necessary information to push for corrective action. Currently, most integration monitoring systems are scorecard-based compliance assessments. These processes are useful in determining which member countries have transposed their regional-level reform commitments into national law, but say little about changes in trade practices on the ground. [The author: Paul Brenton] [Download]
Export diversification in Africa: the importance of good trade logistics (World Bank)
This note seeks to contribute to a review of progress in achieving export diversification through greater exports of light manufacturing products. It looks at recent trends in the exports of the five categories of light manufacturing identified as having strong potential in Africa. The note reviews progress in improving trade logistics in Sub-Saharan Africa, with a focus on the three countries highlighted in the light manufacturing study: Ethiopia, Tanzania, and Zambia, and additionally Kenya and Uganda. [The authors: Ankur Huria, Paul Brenton] [Download]
Northern Corridor: EOI for a study on the implementation of a regional cargo tracking system (AfDB)
The consulting firm will under the overall supervision of the NC-TTCA Secretariat, provide technical assistance in undertaking the study including stakeholder consultations and dissemination of the report findings. The firm will be responsible for, inter alia:
* analysis of the existing national electronic cargo tracking systems in the Northern Corridor countries to evaluate their effectiveness and how the development of RECTS could leverage these systems and the possibility for interfacing the same for the purpose of a continuous cargo tracking from first port of entry to destination
* review of current transit and border management approaches in the Northern Corridor countries.
* analyse the challenges faced by both governments and traders on the corridor and makerecommendations on how the RECTS and other Transit management instruments may be used to address the challenges.
ECOWAS: EOI for a consultancy to prepare an analytical study of non-tariff measures (AfDB)
Given their growing importance, there is an urgent need to develop a better understanding of existing NTMs – especially as they represent a barrier for intra- and extra-African trade. Identifying their impact will go a long way in creating many more trade opportunities.
Swaziland: Govt to add more and raise taxes (Swazi Observer)
Amidst the continued decline in the country’s SACU receipts, government has decided to enhance domestic revenue which will see the introduction of new taxes and a possibility of increasing some. Minister of Finance Martin Dlamini speaking during breakfast meeting hosted by the Federation of Swaziland Employers and Chamber of Commerce said the ministry was proposing three domestic revenue enhancing strategies. Dlamini said the ministry was working tirelessly on improving the ratio of domestic revenue vis-a-vis SACU receipts. He said amongst the revenue generating plans, government contemplated introducing a levy on alcohol and tobacco products at a five percent rate for locally produced alcohol and tobacco goods and 10% for imports of alcohol and tobacco products. The minister said this would yield an estimated E90 million of domestic annual revenue for the country.
Why should Tanzanians pay taxes? (World Bank)
Tanzania’s economy is on a positive trajectory with a 7 percent growth rate, yet the Government’s revenue levels are too low to finance the country’s ambitious public investment program, according to the latest Tanzania Economic Update published by the World Bank. To meet its development agenda, the Government must take steps to increase its revenue, but success will come only if a comprehensive approach is adopted. Despite good progress in the late 2000s, the current level of tax revenues in Tanzania remains one of lowest in the world. The Government collected US$6 billion worth of revenues or approximately 12 % of GDP in 2014, enough to cover almost three-quarters of government expenditure, but insufficient to fund much needed investments in infrastructure and social services. This seventh Economic Update provides a number of suggestions, with the objective of stimulating debate on possible approaches to increase tax revenue. [Download]
Kenya: May remittances resilient (Central Bank of Kenya)
The remittances inflow was resilient through May 2015. It increased by 7.9% to USD 129.1m compared to USD 119.7m in May 2014 and by 3.7% when compared to inflows in April 2015. Remittance inflows from North America accounted for 44.4% of total inflows. The balance was shared by Europe (30.8%) and the Rest of the World (24.8%). In terms of growth, remittances from the North America declined by 5.3% to USD 57.3m in May 2015 from USD 60.5m in April 2015. Over the same period, inflows from Europe increased by 20.9% to USD 39.8m from USD 32.9m, while inflows from rest of the world also increased by 3% to USD 32m from USD 31.1m.
Nigeria: Dangote backs Central Bank's forex restrictions on rice, toothpicks, others (ThisDay)
Zimbabwe: 'Grain reserves below expectations’ (The Herald)
Appellate Body issues annual report for 2014 (WTO)
Seychelles moves to World Bank’s rich list as income per capita increases (Seychelles News Agency)
President Kenyatta roots for increased Kenya-Zambia trade (Capital FM Kenya)
New rules for new horizons: reshaping finance for sustainability (UNEP)
UN hails cooperatives as vehicle to make sustainable development a reality for all (UN News Centre)
France and China sign deal to work together in emerging economies (France24)
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Aid for Trade stakeholders discuss reducing trade costs for inclusive, sustainable growth
In one of the side events organized in the framework of the 5th Global Review of Aid for Trade, Mr. Stephen Karingi, Director of ECA’s Regional Integration and Trade Division, was invited to speak as a panelist at a stakeholder consultation on “The Future of the European Union Aid for Trade strategy”.
Mr Karingi started his intervention by recalling some of the key findings of a joint ECA-WTO report titled “Reducing Trade Costs to support Africa’s Transformation – the Role of Aid for Trade”, which contained a detailed monitoring of Aid for Trade flows to Africa. He recalled that it is encouraging to see the increase in Aid for Trade funds to Africa, as well as the focus on countries with special needs (namely Least Developed Countries, Landlocked countries and Small Island Developing States). However, he pointed out that one source of concern from Africa’s point of view is that recent growth has not translated meaningfully into structural change and industrialization. Aid for Trade strategies should ideally contribute to redressing this situation; yet, over the 2011-2013 period, industry only accounted for 6 percent of Aid for Trade disbursements to Africa.
A related point emphasized by Mr. Karingi was that African countries show relatively high participation in global value chains, but this is driven mainly by exports of raw materials and intermediate goods embodying limited domestic transformation. Accordingly – he argued – one way in which Aid for Trade could have greater impact is to support the emergence of regional value chains, harnessing the regional market to foster economic diversification and domestic value addition. In this context, the establishment of the Continental Free Trade Area and the implementation of the African Union Action Plan for Boosting intra-African Trade warrant the adequate support as key avenues to achieve authentic regional integration in the continent.
Mr Karingi also pointed out the critical role played by the services sector in terms of employment creation and contribution to value addition along the value chain. In line with this consideration, he contended that Aid for Trade should target in a more pronounced way those high-end services which promise to exert positive spillovers on the rest of the economy; that is the case of business and financial services, logistics and distribution, as well as infrastructure-related services such as transport and energy provision.
Touching upon the specific theme of this Fifth Global review – trade facilitation – Mr. Karingi warned against the risk of limiting the trade facilitation agenda to those specific measures that respond to the interests of large traders and transnational corporations. He instead argued that Aid for Trade support to Africa should also focus specifically on the needs of small and medium enterprises, as well as informal traders. Moreover, it should support efforts to streamline procedure while enhancing the effectiveness of custom controls, with a view to strengthen domestic resource mobilization and curb illicit financial flows through trade mispricing.
Echoing some of the concerns raised also in the African region, other panelists noted that there is scope for reducing the volatility and unpredictability of Aid for Trade support, and improving the degree of alignment with recipient countries’ development strategies. They also mentioned the need to facilitating access to Aid for Trade funds by harmonizing procedures and strengthening the coordination across donors, as well as enhancing the dissemination of information about funding opportunities.
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United Nation member States to review the “UN Set” on competition for the seventh time
United Nations member States are meeting from 6-10 July 2015 in Geneva to reaffirm the validity of the only multilateral instrument adopted by the UN General Assembly in the area of Competition Policy, the so-called UN Set on competition. This instrument was adopted in 1980 and member States have reaffirmed its validity six times.
The General Assembly of the United Nations adopted this set of norms and principles and has been the source of inspiration for many developing countries and countries in transition in adopting competition laws and regulations.
Back in 1980, there were no more than 20 countries that had competition laws in place in the world. Today, there are more than 130 countries that have adopted competition laws with corresponding agencies to enforce them.
The UN set on competition has been the main mandate of UNCTAD’s work on competition law and policy, which includes an annual intergovernmental group of experts (IGE) meetings that takes place within the five year period between the UN review conferences.
During the course of the week, member States will meet in Geneva to consider once again the validity of the UN Set on competition; and consider the extension of the mandate to UNCTAD in order to strengthen work on competition law and policy for the next five years.
In particular, member States will decide to adopt the main cluster of issues that UNCTAD Secretariat will be addressing at the IGE deliberations until the Eighth Review Conference to be held in 2020.
The novelty of this review conference is that member States will also decide to revise the UN Guidelines on Consumer Protection adopted in 1985 and reviewed in 1999.
This review will include important updates related to consumer protection issues in e-commerce and financial services.
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Seychelles moves to World Bank’s rich list as income per capita increases
The Seychelles archipelago of 90,000 people has been accepted into an exclusive club of 83 nations on the World Bank’s ‘high income’ list.
The Seychelles, together with Argentina, Venezuela, and Hungary, have all graduated to the top earners list this year.
In a press statement issued on Thursday afternoon, the Seychelles President, James Michel, welcomed the recognition of Seychelles’ economic progress from the international institution.
“A combination of factors has enabled us to achieve this graduation, not least, the successful economic reform programme undertaken since 2008, the diversification of our economy and the growth of investment in tourism,” said President Michel, who had in June 2014 spoken publicly about the prospect of Seychelles joining the high-income group, which was reinforced by a US-based analyst’s report that this was ‘highly likely.’
“The hard work, resilience and innovation of the Seychellois people has brought results and we are committed to continue on this path. We have achieved this together, and if we all continue to work together we can achieve much more for our country and people.”
However, the president also took pains to point out that assessing a country’s wealth by GDP per capita alone was not always relevant, particularly when it comes to small island developing states (SIDS), which remain particularly vulnerable to external shocks and face their own unique development challenges.
The president reiterated a call he made in 2014 for more targeted support from the international community for SIDS through measures such as a vulnerability index, to allow small island states to adapt and build resilience against both climate change and economic shocks.
Seychelles, already at pains to access development and climate change adaptation and mitigation funding from the international community, could now see funding for such measures closed off.
“We have reached an income status equivalent to many OECD countries – but we don’t have the same access to developmental tools including affordable finance as these countries have. As we recognise this milestone I call on all our development partners not to penalise us for our success,” concluded President Michel.
Seychelles is top in Africa for GNI per capita
In 2012, the gross national income (GNI) per capita of Seychelles was calculated by the World Bank at $12,180 per year, which was already extremely close to the $12,736 upper limit of the ‘upper middle income’ classification, and Seychelles’ GNI per capita has increased to $13,990 for 2014.
As an assessment tool, the World Bank uses the GNI per capita method, which takes a country’s final annual income and divides this amount by its population to arrive at the average income per citizen. The GNI per capita model is also linked with other indicators that measure the social, economic, and environmental wellbeing of the country and its people.
With its recent accession to the World Trade Organisation, an upswing in tourism and steady progress towards ocean-floor oil and gas exploration, the Seychelles could soon be on the verge of even more when it comes to its domestic earnings.
According to the World Bank’s country profile on Seychelles, the island nation earned $1.4 billion dollars in GDP last year, with the majority of its income coming from tourism, fisheries and the offshore financial industry.
Seychelles is the second African country to join the ‘high-income group’ after Equatorial Guinea graduated in 2007.
The Seychelles is now sub-Saharan Africa’s top earner in terms of GNI per capita.
Equatorial Guinea in 2013 had a GNI per capita of $14,320, but the oil-rich West African country’s earnings dropped in 2014, leaving it with a GNI per capita of only $13,340.
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Restructured EIF, strong focus on trade in services at WTO Aid for Trade Review
Trade leaders focus on the new, more results-based phase of the EIF and the role of trade in services in global trade on day two of the event.
Trade-led development of least developed countries (LDCs) will be led by a leaner, more efficient Enhanced Integrated Framework (EIF) and renewed focus on services, according to government and business leaders participating in the World Trade Organization’s (WTO) Fifth Global Review of Aid for Trade.
Phase two of the EIF – a partnership supporting economic growth and poverty reduction in LDCs – was launched on 1 July at WTO headquarters in Geneva on the second day of the event, following talks on inclusive and sustainable growth on the first day. Reducing trade costs for inclusive and sustainable growth is the theme of the WTO’s biennial review of trade-related development assistance.
A more efficient, effective EIF
‘The EIF is a very important initiative which has delivered real and concrete support to the LDCs in recent years, helping them to use trade as a tool for growth, sustainable development and poverty reduction,’ said WTO Director-General Roberto Azevêdo, who opened the event and confirmed WTO’s commitment to the new EIF.
This new phase, with the tagline ‘Trade for LDC Development’, is designed to be more efficient and cost-effective, focusing on results delivery and on stronger programme management to better respond to country conditions and priorities.
Arancha González, Executive Director of the International Trade Centre (ITC), spoke on behalf of EIF partner agencies at the session, saying that the EIF would have an instrumental role to play in the post-2015 development agenda.
‘The agencies are confident that we will see a more dynamic and responsive EIF which takes advantage of its unique position to leverage additional resources and support for trade development in LDCs,’ she said.
During the event, Norway announced it would donate NOK 150 million (US$ 19 million) for EIF’s work in its second phase. Donors will have the opportunity to pledge their contributions during a pledging conference at the WTO's 10th Ministerial Conference in Nairobi in December.
The second phase of the EIF will be operational on 1 January 2016.
Fuelling trade in services
Services need to play a stronger role in contributing to trade-led growth in LDCs, according to business leaders and policymakers at an afternoon session on the topic of reducing trade costs for LDCs’ services trade development.
‘Trade facilitation in Africa means boosting services,’ said Alioune Sarr, Minister of Commerce, Entrepreneurship and the Informal Sector, Senegal. ‘Forty percent of investments in Africa are in services.’
Businesses that provide services can increase their productivity through participation in global value chains, as services account for more than half of overall trade in LDCs. An increase in trade in services should be aligned with that of trade in goods – as even trade in goods is made up of trade in services – through the reduction and elimination of trade barriers.
For growth in trade in services to be sustainable, women and youth need access to business and entrepreneurial opportunities in key sectors, such as tourism in Myanmar. Women operate more than 50% of tourism companies in the country, according to Myat Su, Managing Director, Silk Road to Asia Travels and Tours Company Limited.
Participants at the session said that increasing trade in services and reducing related costs for LDCs require capacity building to enable LDCs to identify their priority services sectors, as well as the development of monitoring mechanisms through integrated policy frameworks. Partnerships between the private sector and government will help to ensure these steps are taken.