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The African Growth and Opportunity Act (AGOA) has been recognised as the cornerstone of America’s engagement with Sub-Saharan Africa for the past 14 years. It is therefore central to an understanding of the South Africa-US trade relationship. The recent extension of AGOA by a further 10 years presents many opportunities for improving that trade relationship and expanding economic ties. There are, however, areas for caution, as was seen in the debates around the extension of AGOA and the terms of the inclusion of South Africa as a beneficiary of AGOA.
This policy brief considers the three main options available to South Africa in a post-AGOA trade and investment relationship with the United States: to stay in AGOA, negotiate a Free Trade Agreement, or fall back on Most Favoured Nation terms and the Generalized System of Preferences.
The paper examines food price differences across Indian states during 2004-2014 using food consumer prices from household surveys and wholesale/retail prices for selected goods. At the individual product level there are large price differences across states, with prices doubling or trebling across India for a typical case, but with considerable variation across products. Price dispersion is much lower for food on average; measured at this level price dispersion between Indian states is considerably lower than between countries within the same income range, and Indian states are slightly more integrated than countries in Western Europe. At the product level, the most important determinants of price differences across states are limited access to supply from other states, and the extent of own production in the state. Richer states have higher consumer prices, but this income-price link is weaker for wholesale prices. Food price dispersion within India has decreased during the period studied. For policy, the results suggest that India should eliminate obstacles to inter-state trade in order to promote food security and the real income of its citizens. The magnitude and importance of price level differences also suggest that better price level data should be provided in the future, to facilitate further study of India’s regional development.
Despite increasing calls to recognise the intrinsic value of biodiversity, the need to incentivise people to choose conservation as a competitive form of land use through a sustainable use (SU) approach remains the de facto and de jure reality across most of africa today. In a 'second-best' world of corruption and poor governance, consumptive use (CU) policies (eg, ivory trading, trophy hunting, culling) have produced mixed results for elephant and ecosystem conservation, and for human development. The partial ban on ivory trade globally has led to confusion among african policymakers, local and international law enforcement agencies, and ivory consumers. This is causing a perfect storm of increased poaching to meet the increased (speculative?) demand for raw ivory, without the potential solutions from implementing either a controlled legal trade or a permanent global ban. New realities are emerging, namely the closure of the main consumer ivory markets; the poor prospects for further international trade approvals under CITEs; concerns that the biologically constrained supply may not be able to meet uncertain demand under a legal trade scenario; and the questioning of the conservation and community benefits of trophy hunting. african policymakers need to adapt their application of SU policy by:
These adaptions increase the net costs of incentivising community beneficiaries and law enforcement, shifting the burden to african governments. Therefore, if the non-african governments and special interest groups imposing the ivory trade, culling and trophy-hunting restrictions do not support them, they will be complicit in the permanent loss of vast areas of elephant ecosystems. Ultimately, an efficient, global biodiversity tax is required to fund these adaptions, in order to maintain the ecosystem services and/or intrinsic value of African ecosystems for all of humanity.
In 2003, Zimbabwe formally announced the Look East Policy (LEP) in the face of economic sanctions by the West. This, coupled with the Forum on China Africa Cooperation (FOCAC) of 2000, has strengthened trade and bilateral investments between Zimbabwe and China. China is increasingly involved in Zimbabwe's agriculture, mining, construction and tourism industries. There is also an influx of Chinese entrepreneurs in Zimbabwe's retail industry. The repercussions of the LEP have been mixed. In this policy brief, the authors critically engage with three sectors: agriculture, mining and the informal sector; in order to provide an overview of the effects that LEP has had on Zimbabwe focusing on the period 2010-2016. They also propound some recommendations for more positive outcomes in the future.
It is likely that Zimbabwe will continue its strong relationship with China. This is notwithstanding, the fact that it is China that stands to benefit more from interaction with Zimbabwe in terms of natural resource wealth extraction and trade, as compared to the little financial aid being poured into Zimbabwe by Beijing. The evolvement of Sino-Zimbabwe relations will however, remain a matter of strategic interests at play. In this regard, it is noteworthy to highlight that the Chinese government has of late been reluctant to commit to financial investment given the political climate in the country. The recent introduction of the Indigenisation policy in Zimbabwe has also negatively affected Chinese companies particularly in the mining industry.
Increasing the participation of developing countries in global value chains (GVCs) is now an accepted G20 priority. However, there is disagreement over how multinational corporations (MNCs), which drive GVCs, can be persuaded to incorporate small and medium enterprises (SMEs) from developing countries into the GVCs they co-ordinate. The choices range from conscious industrial strategies oriented towards coercive measures designed to force MNCs to integrate SMEs into their value chains, to facilitative approaches designed to attract MNCs to invest and, over time, incorporate domestic suppliers into their value chains.
Nonetheless, there is consensus on the key constraints that inhibit the growth of SMEs in general, and their inclusion into GVCs in particular: transaction costs; access to network infrastructure; and the capacity of firms and supporting institutional arrangements. Accordingly, this brief offer a high-level framework of recommendations for G20 states’ consideration.
Increasing the participation of developing countries in global value chains (GVCs) is now an accepted G20 priority that features prominently on the Chinese government’s agenda for the 2016 summit. However, there is disagreement over a simple question: how can multinational corporations (MNCs), which drive GVCs, be persuaded to incorporate small and medium enterprises (SMEs) from developing countries into the GVCs they co-ordinate?
The debate over this question is first explored in broad outline. It comes down to a decision by each country on whether it wishes to utilise GVCs in its growth strategy and, if so, what measures it wishes to adopt to promote the incorporation of its firms into MNCs’ GVCs. The choice ranges from conscious industrial strategies oriented towards coercive measures designed to force MNCs to integrate SMEs into their value chains, to facilitative approaches designed to attract MNCs to invest and, over time, incorporate domestic suppliers into their value chains where it makes business sense to do so.
Next the paper turns to the analyses and prescriptions being proffered by key international institutions in relation to the evolving G20 agenda on including SMEs in GVCs. What clearly emerges is consensus on a number of key constraints that inhibit the growth of SMEs in general and their inclusion into GVCs in particular. These can be summarised in three broad areas:
Different countries impose export sanctions. Whether these sanctions are effective depends on their goal. This policy brief highlights that, if the goal of export sanctions is to reduce total exports of the targeted country, export sanctions may be less effective as exporters can redirect their exports from one export destination to another. However, if the goal of export sanctions is to put pressure on exporters in the targeted country, then export sanctions can be effective as exporters incur welfare losses while deflecting exports to new destinations.
Latin American and Caribbean (LAC) countries face an urgent need to advance economic develo p- ment and social welfare by enabling progress in priority areas such as health , education and infrastructure. If we add to these needs vulnerabilities in the energy sector, it is difficult to see an obvious path to the enhanced social and economic ambitions of LAC societies. Energy efficiency measures implemented in a strategic manner offer the opportunity to advance societal objectives by transforming the productivity and resilience of country energy systems.
Despite some success stories, such as the mass campaigns to replace incandescent bulbs with compact fluorescent lamps (CFLs) and the growing interest that governments have shown in promoting
energy efficiency in the last ten years, there remains a large untapped potential. Some LAC countries have introduced policy, regulatory and institutional frameworks, with a number of countries already having an Energy Efficiency Act or considering its adoption. However, the implementation of energy efficiency activities has generally been limited in the LAC region, often being prioritized as a response to crises or deficits in energy supply.
This report provides observations on energy efficiency efforts in several countries in the LAC region with the aim of informing and supporting the future development and acceleration of energy efficiency policies and programmes. The status of energy efficiency in 14 LAC countries was considered through highlighting barriers to increased uptake as well as examples of past, present and planned energy efficiency initiatives. This report highlights that there are many common barriers and opportunities
shared by LAC countries.
This report also establishes a set of criteria that could be used to identify the progress of countries on energy efficiency related to the following areas:
The surge in US natural gas production from the shale boom is transforming global gas markets. Less than a decade ago, with natural gas production on the decline, the United States was expected to become a major importer of liquefied natural gas (LNG) and a “last resort” market for surplus cargos around the world. But today, thanks to an increase in shale gas output, the United States is poised to become a significant supplier of gas to international markets. Export pipelines are being rapidly built, and LNG facilities once designed to receive imports are now being converted to export terminals.
Across Latin America and the Caribbean, countries that have faced chronic shortages of natural gas stand to benefit from this surplus. Despite holding significant natural gas reserves, the region remains a net importer.
Gas demand is rising in most countries, fueled by economic growth and subsidized electricity prices that encourage consumption. Many oil-fired power plants are being converted to burn cheaper and cleaner natural gas. Social and environmental opposition to new hydroelectric projects has also hastened the move toward gas. Natural gas is increasingly used to back up intermittent renewable energy sources, including wind and solar.
Increased US gas exports to Latin America and the Caribbean, as well as lower prices tied to the flood of US exports, could contribute to lower electricity prices, reduced carbon emissions and more secure energy supplies in the region. Cheaper and more abundant natural gas could further encourage countries to switch to gas for power generation and advance the transition to natural gas vehicles.
Latin America can hasten the transition to natural gas and exploit the benefits of US gas exports by further expanding energy integration, including pipeline infrastructure and electrical grids. Mexico’s increased imports of US gas will depend on the growth of cross-border pipeline infrastructure, while Central America and the Caribbean can benefit from US gas exports by improving electrical grid integration. As global gas trade grows in the coming decades, Latin American and Caribbean importers stand to benefit from the imminent increase in US natural gas exports.
India and Africa's partnership has entered a new era. Close political relationships are being invigorated by a flourishing trade
and investment relationship. This new trade and investment relationship could be crucial in the struggle to lift millions out of
Africa-India trade has followed the upward trend in South-South trade and investments over the last decade. Bilateral trade has
grown at a robust 31.8% annually between 2005 and 2011, through the economic crisis. There has been a surge in Indian
private investment in Africa with 'big ticket' investments in the telecommunications, IT, energy, and automobiles sectors.
The Confederation of Indian Industry (CII) and the Export Import Bank of India (EXIM Bank) initiatives through the India-Africa Conclave and other Government of India initiatives are spurring on the burgeoning trade and investment relationship. In addition to more traditional development approaches, such as through Indian Technical and Economic Co-operation, the business oriented 'development compact' pioneered by CII and the EXIM Bank seems to be positively impacting directly on bilateral trade.
To understand the dynamics of this vibrant relationship, CII surveyed some 60 key Indian and African companies and business associations - a survey undertaken in collaboration with the WTO. Results highlight a number of factors getting in the way of expanded business and investment ties. Access to Indian buyers and trade finance emerges as major concerns for African traders. Transport and logistics costs and poor business environments are cited as major difficulties by Indian traders - a factor also cited as holding back further investment.
This joint CII-WTO report concludes with a series of recommendation on how development assistance and investments in tandem could help smooth out potential bottleneck towards a more sustainable investment-led trade growth relationship.
The entry of Indian companies into Africa is largely market and resource seeking which offers much more potential in terms of promoting forward and backward linkages and in terms of impacting on competition in the domestic market. The increasing competitiveness of Indian firms and their interest to expand globally, particularly in IT-related services and pharmaceuticals, are driving its outward foreign direct investment (FDI) growth. Indian FDI to Africa is concentrated in oil, gas and mining in the primary commodities market. In the manufacturing sector, a dominance of automobile and pharmaceutical firms can be seen. Most of the Indian FDI in African countries is through greenfield investments (GIs) and joint ventures (JVs) that are desired by the host countries due to their contribution in creating new production capacity and generating employment, transfer of technology, etc. A number of factors have been identified that motivates Indian investors to invest in Africa. The factors are socio-cultural factors, host country policies, regional integration agreements, bilateral investment treaties (BITs), gross domestic product (GDP) growth and political economy factors. There is no denying that language, culture, presence of Diaspora does play a role in attracting FDI. The relationship between India and Africa exists and functions at all these multilateral levels as politics and commerce converge.
The nature of India’s relationship with Africa is clearly evolving into a wider, deeper engagement that, while clearly in India’s advantage, also offers significant potential benefits to its African counterparts. This overview of Indian/African economic collaboration is a joint piece of work from KPMG and the Confederation of Indian Industry. It specifically looks at:
An important caveat pertaining to India’s economic relations with Africa, is that they are not confined to the BRICS and India’s reach in Africa extends beyond the alliance. The surge into Africa is driven mainly by the Indian government, but the private sector has not been lagging and significant economic linkages have arisen due to the interventions of the private sector from India.
The overall conclusion is that Indian-African trade and economic relations are likely to continue to grow, even in the wake of massive increases over a relatively short period of time with no current indication that the relationships are likely to cool anytime soon. While global conditions dictate events, the fact that Indian-African trade and economic relations continued to grow even through periods of some economic crisis suggests potential that has yet to be fully exploited.
This report evaluates the disclosure practices of 100 major emerging market multinationals headquartered in 15 countries and active in 185 countries. The report is part of a series on corporate reporting published by Transparency International since 2008. Initially focused on
the world’s top multinationals, the series was expanded to include a first report on emerging market multinationals in 2013.
To enhance comparability, the company sample for this report is primarily based on the 2013 edition of the Transparency in Corporate Reporting: Assessing Emerging Market Multinationals report. This report assesses the public disclosure practices of emerging market multinationals based on three dimensions: first, the reporting of key elements of their anti-corruption programmes; second, the disclosure of their company structures and holdings; and, third, the disclosure of key financial information on a country-b-ycountry basis. This information was gathered from corporate websites and other publicly available sources by a team of Transparency International researchers.
Despite some scattered signs of improvement since 2013, the overall results of the assessed companies remain weak, a clear indication that emerging market multinationals still practise low standards of transparency.
The overall average score for the 100 companies assessed in this report is 3.4 out of 10, a slightly weaker performance than in 2013 but almost on a par with the 3.8 overall score obtained in our 2014 report assessing
the world’s 124 largest multinationals. It is disconcerting to observe that emerging market multinationals, with an average score of 48 per cent, have barely registered improvement in the disclosure of their anti-corruption programmes since 2013, when their average score was 46 per cent. Once again, they trail behind the top global publicly listed companies assessed in 2014.
Overall index result:
South Africa needs to build an inclusive economy where broad-based
economic growth creates productive jobs for the unemployed; increases
productivity and earnings for the employed; and leads to sustained poverty alleviation. South Africa must simultaneously invest in partnerships with the private sector to establish a knowledge economy, close the skills gap currently constraining development and create an enabling environment for growth, investment and innovation.
Drawing on two associated ISS papers, Economics, governance and instability in South Africa and South African scenarios 2024, this policy brief presents a set of recommendations to extricate South Africa from its middle-income trap and set it on a high-road Mandela Magic growth path.
The European Commission is proposing a new trade and investment strategy for the European Union: "Trade for All". A new strategy that will make trade agreements more effective and that will create more opportunities means supporting jobs in Europe.
The new approach is also a direct response to the current intense debate on trade in the EU - including on the Transatlantic Trade and Investment Partnership (TTIP). It is also an implementation of the Juncker Commission's pledge to listen and respond to EU citizens' concerns.
It will involve trade policy being more effective at delivering new economic opportunities; more transparent in terms of opening up negotiations to more public scrutiny; and address not just interests but also values. The new strategy addresses all these principles. It also lays out an updated programme of negotiations to put them into practice.
Both India and China have been promoting Public Private Partnership in delivering infrastructure in various sectors. This paper examines their current infrastructure condition both in terms of quality and investment and therefore understands the driving factors of them using PPP. It compares and contrasts the characters of PPPs in India and China. India prioritizes in transport and energy while China puts its emphasis in public services. SOEs have a bigger presence in PPPs in China while foreign investors have more space in India.
The main reason for India using PPP is the gap between government fiscal capacity and the increasing infrastructure demand; while in China, the key is innovation, in the sense that private sector has better technology and management skills in tackling sophisticated issues such as water treatment and elderly care. China takes a top-down approach in the promotion of PPP while India, in the national level, also takes a top-down approach but has to take a bottom-up approach in the state level.
The paper also discusses some of the major challenges for both countries including human resources, regulatory and legal framework and financing gap. The author is cautiously optimistic about the future of PPPs in both countries given the fact that both governments having been taking actions to address the challenges although these challenges are quite daunting.
Markets largely dictate how the relationship between international oil companies and host states will play out, with governments attempting to ensure they receive a ‘fair share’ of petroleum revenues. But with no clear definition of what a fair share is, particularly in relation to changes in oil prices, the perception of a fair share remains under near constant review. This results in a pendulum effect, whereby changing market conditions can place either governments or companies in more advantageous positions in negotiations.
In terms of policy-making by the Leanese government, these dynamics suggest that existing market conditions should be taken into consideration when launching the country’s first licensing round but this does not necessarily mean that the government should wait for oil prices to recover to pre-2014 levels, as that might take a while to happen. The fiscal regime should be internationally competitive and balanced.
This version is in both English and Arabic.
India and Myanmar are geographically proximate countries with strong historical, cultural and economic linkages. With recent economic dynamism and changes in their respective political regimes, the overall bilateral relations between India and Myanmar are poised to be taken up to its next higher level.
This study has tried to address the question as to why the situation fails to improve despite the knowledge of the issues. It finds that the ambiguity at the conceptual level, a lack of information trickle-down at the operational level and narrow interests at the stakeholders’ level are primarily responsible for such a
With India’s unilateral Duty Free Tariff Preference (DFTP) Scheme and ASEAN-India Trade in Goods Agreement (AITGA) now in place, the bilateral trade and economic relations face a new reality, especially with important changes in the policy framework relating to Border Trade Agreement.
It is in this context that India-Myanmar border trade assumes a new meaning and significance. It may be emphasised that the issues relating to border trade would have to be situated in a policy framework which is much broader in its canvas so that relevant policy and practical implementation measures could be identified.
China has launched a number of initiatives regarding infrastructural development globally, with a specific focus on scaling up infrastructure throughout the African continent. The BRICS New Development Bank and Chinese infrastructure initiatives such as the China-led Africa Growing Together Fund (AGTF) are expected to play a significant role ranging from financing to technology transfer. In January 2015, China and the Africa Union (AU) signed a memorandum of understanding (MoU) on infrastructural development. China and the AU have agreed to put collective effort into improving Africa’s infrastructure including high speed railways, aviation, and road highways.
Against this background, the Second Forum on China-Africa Cooperation (FOCAC) Summit will be a platform accelerating the co-operation between China and African states at multiple levels in the infrastructure sector. Prior to the Summit, we should scrutinise Sino-African co-operation in infrastructure both in the past and present in order to map out the future relationship and determine what opportunities and challenges lie in the future.
This policy brief offers an overview of Chinese engagement in Africa, with a specific focus on East Africa. In recent years, the East African region in particular has been one of the most prominent beneficiaries of this development, with mega projects including Kenya’s Port Lamu, the Southern Sudan-Ethiopia Transport (LAPSSET) corridor and the construction of a Standard Gauge Railway in Kenya. The brief examines the transport sector and its potential to connect African countries by reducing the costs of moving people and goods, and integrating markets.
Three decades of average double digit growth has helped propel China into the world’s second largest economy with global economies increasingly reliant on China to drive economic growth. As China transits from an investment-based economy to a consumer-based economy, its de-mand for raw materials is declining, affecting commodity prices, impacting on commodity sellers and exerting pressure on currencies around the world. With China’s position as Africa’s biggest trading partner, fears persist that the economic slowdown in China is being widely felt in Africa due to the huge trade volume between China and Africa, thus exposing African econo-mies to spillages from the Chinese economy.
This policy brief examines the current state of the Chinese economy and its impact on African economic growth and recommends a blend of poli-cy measures aimed at curtailing the impact of the Chinese slowdown on Africa's economy.
Given the demographic estimation of Africa’s population growth, with a projected estimate of the labour force (20-65 years) exceeding the rest of the world combined by 2035 (Bloomberg, 2015), China’s economic slowdown can create opportunities for African economies with its comparative labour advantage and abundant resources if properly addressed. Africa's destiny is dependent on its economic structure and more importantly, how it readjusts to China's shift towards a new regime.
To ameliorate the impact of the slowdown, the following measures are suggested:
Since the advent of the World Trade Organization (WTO) over two decades ago, international trade in services has undergone significant transformation, rendering the current regime obsolete. In light of the long-drawn Doha round of WTO negotiations, several countries then floated the idea of a plurilateral agreement to reduce barriers to trade in services: the Trade in Services Agreement (TiSA).
The treaty, once finalised by the group of 50 countries, is intended to be anchored to the WTO system and be open for accession to other members. Following China's request to join the negotiating table, it is expected that other emerging countries will also aim to access the agreement. India, whose services sector has a significant contribution to the country's GDP, has yet to show interest in joining TiSA. This paper analyses India's position towards the agreement, taking into account the trade complementarities it enjoys with the major TiSA players.
Increasing productivity is an essential feature of economic growth and development. A large fraction of productivity growth originates in the manufacturing sector and depends, among others, on the availability of high-quality upstream inputs. These include machinery and intermediate parts and components, as well as a range of services inputs. Trade is an important channel through which firms can improve their access to services inputs, resulting in lower prices and/or higher input variety. Therefore, the extent to which policies restrict foreign access to upstream services markets is relevant for downstream productivity.
This paper studies the effect of services trade restrictions on manufacturing productivity for a broad cross-section of countries at different stages of economic development. Decreasing services trade restrictiveness has a positive impact on the manufacturing sectors that use services as intermediate inputs in production. The authors identify a critical role of institutions in importing countries in shaping this effect. Countries with high institutional quality benefit the most from lower services trade restrictions in terms of increased productivity in downstream industries. The paper shows that the conditioning effect of institutions operates through services trade that involves foreign establishment (investment), as opposed to cross-border arms-length trade in services.
Electronic commerce or e-commerce, as it is more popularly referred to, is defined as any form of trade or exchange of goods, services and information using electronic means. Globally, the application of e-commerce has been rapidly gaining acceptance, particularly since the dot-com boom and bust in the 90s. The level of international acceptance and popularity among businesses, especially small businesses and entrepreneurs, is largely due to the ability of e-commerce to go beyond international boundaries and enable activities within the virtual marketplace. This enables entrepreneurs to do business internationally at relatively low cost.
The e-commerce sector is expected to fare particularly well in developing countries. This is perhaps more inevitable for a developing country like Bangladesh in which traffic jams and consequent restricted physical mobility can constitute a significant barrier to business growth. In the context of Bangladesh, although some e-commerce businesses have risen to prominence, the sector is still considered to be at an embryonic stage, and its contribution to economic growth is expected to increase exponentially, after the ongoing phase of customer familiarisation and comfort with e-commerce increases, and a reasonable market penetration is achieved.
The public stockpiling of staple grains is one of the earliest strategies used to mitigate food supply instability. After many millennia, it remains an important aspect, if not the cornerstone of many national food policies around the world. In the case of the Asia Pacific region this essentially translates to stockpiling and building up rice reserves.
Several objectives can be met through successful public stockpiling policies. Some of these include:
Most of the benefits of public stockpiling are short-term. They can be extremely useful stop-gap measures in ensuring food economy stability and are thus a useful buffer to have in a government’s arsenal of food security policies. There are however numerous negative (both real and potential) implications to pursuing policies of public stockpiling. These implications are caused by a number of factors. Firstly, there are no set norms or directives on how a public stockpiling program me ought to work, what the optimal levels are or how they are to be calculated. Secondly, stockpiling policies are often used to fulfil multiple objectives and because of this, some objectives may result in activities which conflict with other objectives. These points are explored in greater detail in the main text of the report.
One of the most effective global governance regimes of the post-World War II period that has received very little attention over the years is the Antarctic Treaty. Driven by Cold War pressures and a failure to regulate multiple and overlapping land claims in Antarctica, the US initiated a process that led to the 1959 Antarctic Treaty (the Treaty). Of the 50 Treaty members, 29 (including South Africa) are ‘consultative parties’ with voting rights. The Treaty provides for inspections and stipulates, inter alia, that Antarctica should remain a zone of peace and scientific enquiry, setting to the one side existing territorial claims. Furthermore, under the Madrid Protocol (which came into force in 1998), mineral exploration is prohibited until at least 2048. Although the Treaty is regarded as generally successful, it is in need of reform, in particular as regards its two- tier membership structure and the non-applicability of its provisions to non-members. Other threats to the Treaty include possible mineral exploration, biological prospecting, unsustainable levels of commercial fishing (legal and illegal) and mass tourism.
Over the years emerging powers have displayed a growing interest in the Antarctic. India, China and South Korea, to name a few, have all increased their presence and scientific activity there. As a contracting party, South Africa has been involved from the outset in the Treaty and its ancillary frameworks. However, it has concentrated mostly on science. More focus needs to be placed on the evolution of the political debate and on South Africa’s core interests. South Africa should pay more attention to Antarctic matters and continue to play an active part in the deliberations of Treaty agencies that uphold the Treaty’s original intent.
China-Africa ties have expanded beyond trade and investment in extractive industries to engagement in telecommunications, infrastructure, manufacturing, finance, media, agriculture and peace and security issues. This factsheet provides historical background and an overview of contemporary relations between China and Africa.
In particular it looks at:
The view that ‘Africa should learn from China’s development’ has been expressed throughout Africa, from the chairperson of the AU through senior government officials to analysts, scholars and ordinary citizens. China’s 40-fold increase in GDP and its lifting of 500 million people out of poverty in the last 35 years are reason enough, but China has also established itself as a major presence in infrastructure development across Africa.
Asia and the Pacific is a dynamic region. Regional megatrends, such as urbanization, economic and trade integration and rising incomes and changing consumption patterns, are transforming its societies and economies while multiplying the environmental challenges.
These environmental challenges range from growing greenhouse gas emissions, poor air quality, land use change, pressure on marine ecosystems, biodiversity loss and increasing demand for resources, such as energy and water. These megatrends are already shaping the future patterns of resource use and defining who benefits the most and who loses. A basic premise of the 2030 Agenda for Sustainable Development is that trade-offs between environmental protection, shared prosperity and social progress can no longer be viewed as acceptable.
Aligning these trends with sustainable development requires political will and action to reshape the relationships between the economy, society and the environment. This report examines four critical determinants of the relationships between these three dimensions of sustainable development as targets for fundamental transformations—in social justice, resource efficiency, investment flows and economic structures.
China’s business engagement in developing countries has grown rapidly in the past decade through direct investment, contract projects and trade. China was the third-largest foreign investor in the world between 2012 and 2014, and approximately 80% of its investments flowed to developing countries in 2014. Chinese companies are also eagerly bidding for - and winning - contracts for infrastructure and service projects at an unprecedented rate, particularly in developing countries. For example, 80% of newly signed and completed projects undertaken by Chinese companies in 2014 were located in Asia and Africa.
This discussion paper research aims to understand the role that Chinese policies and guidelines play in governing Chinese companies overseas, through exploring the experiences and perceptions of representatives in those companies. The paper presents the key findings of fieldwork in Mozambique, Kenya and Uganda during August–September 2015, including a survey and interviews with fifty-eight Chinese personnel working for Chinese companies in these locations. Findings revealed a complex governance matrix influencing the environmental and social performance of Chinese companies in Africa, in which Chinese policies play only a relatively minor role.
Shifts in the global economy have lead to rapid development across the world, but the Middle East has been largely left behind. The causes of this apparent malaise are a series of interlinked issues comprising economics, politics, and geopolitics. Specifically, this has entailed, among other factors, barriers to adopting a more representative political system, the absence of broad economic diversification, and a lack of intraregional trade. For there to be substantial development in the Arab World, a new political settlement will likely need to be accepted. For such a settlement to be accepted, the interest of elites need to be taken into account and regional linkages need to be strengthened and capitalized on, in addition to securing the assent of regional and global powers in the process.
The discovery and extraction of oil and gas off the shores of Lebanon could ultimately translate into a boom in revenues for the government, which in light of current poor fiscal planning could lead to an uncontrolled expansionary budget policy and eventually a ‘resource curse’. If these revenues are spent with no oversight and proper planning, the country m ay well collect and allocate large streams of cash that make limited contributions to economic development. But the ‘resource curse’ could be avoided if appropriate policy adjustments are implemented in conjunction with the development of offshore hydrocarbon resources.
The successful experiences of a few resource-rich countries like Norway have been largely attributed to properly managing resource wealth and its associated risks. The optimal response that takes advantage of the boom while mitigating its potential negative implications includes a set of fiscal, monetary, exchange rate, and structural reform policies.
As Lebanon stands poised to establish its oil and gas sector and possibly profit from new resource wealth, it has become increasingly critical for this small economy to implement public policies that take advantage of the oil boom while mitigating its potential negative implications. This typically includes a set of fiscal, monetary, exchange rate, and structural reform policies which are required to avoid the resource curse.
Indeed, the government must resist pressures to enjoy all the windfall revenues in the short run and recklessly expand its budget expenditure. On the contrary, it must commit to saving part of the revenue proceeds every period in order to attain a permanent wealth increase. Ideally, the government must direct its spending toward the non-resource tradables sector through subsidizing outputs and/or inputs or investing in physical and human capital to enhance productivity in these sectors. In this case, a budget expansion would not necessarily lead to shrinkage of the productive sectors. It is clear, however, that proper public financial management is central to the above macroeconomic policy framework. Key to the above analysis and recommendations is the political economy and institutional setup, especially the role and proper functioning of fiscal institutions. Increasing accountability and transparency in public institutions is essential, and this ultimately requires political reforms that increase the commitment and engagement of citizens in the actions of their government, through proper electoral representation.
This document contains both the English and Arabic language versions.
Ideological solidarity apart, what has imparted an added traction and resonance to South-South Cooperation is a marked increase in intra-South trade, investment and developmental cooperation. The 2008 global economic slowdown, by default, proved to be a trigger for enhanced SSC due to shrinking of resource and developmental aid/ODI flow from developed countries of the North, propelling emerging economies of the southern countries to step up mutual sharing of funds, knowledge and expertise. The increased South-South cooperation, however, needs a reality check, and has to factor into account the declining growth rates in major BRICS emerging economies, except India.
The overall renaissance of the South has coincided with the relative slowdown in large parts of the developed world, resulting in a marked decline of ODA by North countries. This shifting global situation is leading to a reconfiguration of global development architecture, necessitating enhanced SSC in areas which are pivotal to continued economic flowering of the South. The areas of development include financing and partnership, peace and security, environment, people-centered development, and science, technology and innovation (STI).
Against this backdrop, the South began looking beyond the North-South Cooperation (NSC) and Triangular Development Cooperation (TDC), which had traditionally been fuelled by the Official Development Assistance (ODA) for development cooperation. Refreshingly, the Southern consensus on development cooperation is emerging, which is marked by an equal partnership among sharing countries, unlike the donor-recipient or patron-client relationship that characterised aid giving by OECD. Unlike the Washington/World Bank-IMF consensus, the Southern paradigm is distinguished by development cooperation which is free of external conditionalities and is not based on imposition, but on the requests and priorities of recipient countries. The SSC is underpinned by “Development Compact', which works at five different levels: trade and investment, technology, skill upgradation, lines of credit and grants. The increase in engagement of emerging economies with other countries of the South entails accelerated cooperation across all these areas.
In this context, it should be emphasised that the evolving Southern consensus is not a monolithic construct, but is marked by a plurality of approach vis-à-vis developmental cooperation within the broad ambit of core ideas of solidarity that bind SSC. Over the last few years, South-South Cooperation (SSC) has, therefore, emerged as a sustainable parallel mechanism to support empowerment of developing countries and the global quest for improved quality of life across the world.
The researcher suggests there is no question that the “mega-regional” trade deals in the Pacific and across the Atlantic are big and that if completed and implemented, they will cover a large portion of global trade and investment.
This paper examines the TPP text to identify provisions that are more or less development-friendly, especially for Vietnam, which is the poorest signatory to the deal by far. It concludes with with recommendations for US and EU policymakers that would mitigate potential negative effects for developing countries and for the multilateral trading system, including rules of origin that minimize trade diversion.
[adapted from source]
The health sector assumes special importance in India-Africa development cooperation. It is the major component of the broad-ranging collaborative effort envisaged under the rubric of India-Africa cooperation in social development and capacity building. India is playing a crucial role in extending healthcare cooperation to the African region to fight the scourge of fatal diseases like HIV/AIDS, malaria, TB, and pandemics.
India-Africa development cooperation in healthcare sector assumes added importance in view of the Sustainable Development Goal 3 that calls for ensuring healthy lives and promoting well-being for all.
Apart from the traditional trade and investment route, India has taken some major initiatives in the health care sector in Africa through the Pan-Africa e-Network Project (PAENP). Medical practitioners at the patient end locations in Africa can consult on-line with Indian medical specialists in various disciplines and specialties selected by African Union for its Member States. India’s is the third largest pharmaceutical formulation supplier to Africa.
Considering the current state of global economies, the governments will have to play the role of a facilitator than that of a doer. This could take the form of incentives. Some possible areas for such incentives are:
Government initiatives can also be for:
On the African governments’ side, faster drug marketing approval for generic pharmaceuticals, speedier measures for various clearances required for setting up new ventures in the pharmaceutical sector and also in the health care sector are required.
Indian private and public sector as well as non-governmental agencies could also consider taking initiatives in bringing together philanthropists to contribute towards Africa’s determination to achieve health for all in the shortest possible period.
The concept of Blue Economy is emerging as a new narrative on productive and sustainable engagement with the vast development opportunities that oceanic resources offer. The important sectors of Blue Economy are fisheries, sea-minerals including oil and gas, ports and shipping, marine tourism, marine biotechnology, deep-sea mining, and transport and logistics.
It is believed that by undertaking Blue Economy initiative countries would be able to achieve high economic growth and maintain healthy balance between resource use and its renewability. However, there are few attempts to estimate the gains of Blue Economy. This assumes importance in the light of the fact that the world faces the challenge of restoring a healthy balance between the ambition of high economic growth and the goal of environmental sustainability. With the launch of SDGs, concerns are emerging in favour of sustainable use of natural resources especially in the context of growth-centric development models. In fact the oceans and the ocean related activities are viewed as the greatest source of growth in the post-recession period.
This report presents the synthesis of various conceptual and methodological issues relating to blue economy and the importance of this paradigm to the overall social and economic progress of the Indian Ocean Rim Association (IORA) countries. Since there exist ambiguities over the coverage of blue economy sectors and data availability, empirical estimates of the size of blue economy and related indicators are avoided here.
The intersection of African resurgence and India’s growing economy and global profile has opened up new avenues for deepening the multi-faceted development partnership between the two emerging growth poles of the world. Increasingly, there is an alignment of India’s growth agenda and Africa’s Vision 2063, which is set to unleash new possibilities of partnering in key areas which are central to unfolding African resurgence, including education, health, capacity building and sustainable development.
Against this backdrop, India would have to consider consolidation of its development engagement with the African continent. In the process, the major focus will be on five elements as articulated in the Theory of Development Compact. These elements are: (i) trade and investment; (ii) technology; (iii) capacity building; (iv) lines of credits; and (v) concessional finance. In last several years, India has implemented one or other modalities of development compact. However, a comprehensive view with composite approach is extremely important. Since these engagements have happened through the Indian missions based in different countries, the wider process may be called as the ‘mission approach’ and the mechanism for this is the ‘development compact’, which, in real terms means a development partnership for cohesive and comprehensive engagement.
This volume chronicles and celebrates various dimensions of the India-Africa partnership, pivoted around capacity building, sustainable development and training of Africa’s most precious resource – over one billion people of the continent. As New Delhi hosts the third India-Africa Forum Summit, this multi-dimensional partnership is set to scale new heights in days to come, with profound impact for not just over two billion people of India and Africa, but for the world at large.
Presently, the challenges before the South Asian countries are to identify the ways and means of achieving regional integration on a fast track basis. The move from SAPTA (South Asian Preferential Trading Arrangement) to SAFTA (South Asian Free Trade Area) and now the proposal for South Asia Economic Union is a pragmatic move towards the next stage of cooperation. South Asian countries need to move further from trade liberalization measures alone to regional investment cooperation strategy, production integration, and technology cooperation. In the economic union and common market, macro- economic coordination also assumes greater significance.
The theme of the 7th SAES was “Towards South Asia Economic Union”. Several eminent scholars from India and abroad presented research papers at this Summit, and discussed a number of key issues that are relevant from the point of view of deepening South Asian integration. What emerges out of the deliberations is that the creation of South Asian Economic Union (SAEU) would prove to be a milestone in the regional cooperation efforts. The selected papers of the Summit are now presented in a single volume which will become a valuable reference for scholars and researchers as well. The papers of this volume also provide important policy lessons.
There has been considerable disquiet among Indian policymakers and analysts at the poor performance of the manufacturing sector. The share of manufacturing in GDP is much lower in India than in China and has been almost constant over the past decade or so. The lack of dynamism of the manufacturing sector is held responsible for the slow growth of employment and also of exports as a result of which the trade deficit has ballooned. The current Indian government seeks to give a significant push to this sector and has coined the phrase “Make in India” to attract foreign entrepreneurs to the manufacturing sector.
This Policy Brief analyses the Indian manufacturing sector in the context of the performance of the sector in developing countries in general and in BRICS countries in particular. It then seeks to identify a strategy for raising the growth rate of the sector.
With the Tenth WTO Ministerial Conference in Nairobi, the efforts for trade liberalisation and strengthening of multilateral trading arrangement have come to a full circle. What started in 1995 with graduation from GATT to WTO has come to a point where several challenges for multilateralism are clearly discernible. As a result, it is not surprising that the usual excitement for WTO ministerial meeting is missing this time. The demand to close the Doha Development Round has triggered a deep sense of pessimism across low income and other developing countries. They have also been left outside the Mega-Regionals groupings, which have emerged in all parts of the world. Therefore, lowering of ambition at WTO is a direct outcome of these arrangements.
Signing of Trans-Pacific Partnership (TPP) is an unprecedented development in the annals of the economic history of the world. Along with TPP another three mega regionals, viz. TTIP, RCEP and FTAAP, have made significant headway in their negotiations, and are likely to be formed in the coming years. These four regional groupings are distinct from those of other existing regional grouping in terms of their content, scope and impact on the global economy. There is discussion about another four mega regionals namely, EU-ASEAN, EU-Japan, China-Japan-Korea FTA and Pacific Alliance, which have got similar features to be treated as mega regionals. UN (2015) has treated Trade in Services (TISA) and Tripartite Free Trade Agreement (TFTA) as mega regionals which can have a major hold over the global economic activities in the recent years.
Mega regionals have significant command over several important economic activities in the world economy. Their contributions are felt in several frontiers of economic activities including GDP, FDI, Foreign Exchange Reserves, Saving Ratios, Gross Fixed Capital Formation, etc. among others. In several mega regionals, simultaneous presence of members from developed and emerging countries are seen, stressing on different dimensions of their economic engagement. In many such cases, developed countries have shown their strong base in several macro-economic activities but lacking growth whereas emerging countries have shown their surging growth in these activities.
Major developments in trade policy are currently taking place in the mega-regional trade agreements, in particular in the Trans-Pacific Partnership, the Trans-Atlantic Trade and Investment Partnership, and the Trade in Services Agreement. These agreements are setting new standards and breaking new ground in setting the rules for global commerce. In addition, a large number of other agreements are incorporating state- of-the -art provisions governing at least some aspects of trade and investment. These include the Regional Comprehensive Economic Partnership, the Tripartite Free Trade Agreement, and a large number of bilateral trade and investment agreements.
Complementing and internalizing the recent WTO Trade Facilitation Agreement, these agreements are introducing new WTO-plus rules for services and investment, addressing emerging issues, such as electronic commerce and the role of state-owned enterprises, and introducing whole new subject areas to agreements. There is deep interest in understanding the impact of these new developments, both on the part of policy makers in countries that are party to the negotiations and in countries that are excluded, but which will nonetheless be affected by the new standards and rules. Traditional quantitative trade models are being adapted to provide comprehensive answers.
This paper reviews these models and considers the extent to which they capture the full effects of the new age agreements. We find that the most comprehensive approach to modelling the mega-regionals is to employ a Computable General Equilibrium model of the type used for multi-sector, multi-region trade analysis. These are the only models with sufficient structural features to capture the main focus areas of the mega-regionals, namely services, investment, and the new 'behind the border' issues, while still covering the traditional areas of liberalization, such as tariffs and at least some features of agricultural trade. However, given the wide range of CGE models with different features, inevitably the impact of mega-regionals is probably best captured by meta-analysis of a suite of CGE-based studies, drawing on satellite models for additional structural detail and on sufficient statistics estimates as reality checks.
The discussion of Africa’s so-called blue economy rose to the top of African leaders’ agenda when African union (Au) members started a campaign for a continent-wide renaissance of the African maritime domain.
Cabotage, an element of the broader maritime industry, and a central aspect of this paper, is defined as the voyage of a vesselbetween two points within the borders of a single nation or within an economically unified region (e.g. the european union or north American free Trade Agreement). More precisely, the term refers to a set of industry rules designed to protect a country’s maritime trade by excluding foreign players from intra-state maritime transport services.
International shipping is driven by fierce competition. The history of maritime trade within Africa’s coastal waters has been characterised by foreign exploitation since the early colonial era. Today, the African Union (AU), through its 2050 Africa’s Integrated Maritime Strategy, plans to implement new cabotage laws to finally liberate the continent’s maritime transport industry from foreign dominance. However, certain barriers must first be overcome, including increasing the capacity and efficiency of Africa’s maritime industry.
This paper evaluates the AU’s proposed introduction of pro-African cabotage laws focusing on their economic potential and regulatory implications. It also highlights core challenges posed by Africa’s struggle for greater economic liberation of its coastal waters.
The recent reforms and development in the financial market necessitate the reexamination of the role of Land Bank of the Philippines. This issue argues that LBP should focus on its development function and give up its commercial and investment roles. Once LBP is transformed into a market-based microfinance development institution, the creation of Grameen-type bank is dispensable.
If the LandBank is to meaningfully serve the provi- sions of EO No. 138 and provide financial services to the basic sectors, then it should focus on its development banking function and shed off its commercial and invest- ment banking functions. More specifically, LandBank should be transformed into a real market-based microfinance de- velopment institution, providing financial services to the basic sectors either directly or indirectly through private microfinance institutions. In this way, LandBank can play a more significant role in enhancing employment opportuni- ties both in rural and urban areas and in raising the pro- ductivity and incomes of small farmers, landless farm workers, fisherfolk, cottage industries and SMEs.
Water resource management in many major urban centers has failed to provide an economically efficient, socially equitable, and environmentally sustainable de- velopment, distribution and use of water resources.
In the greater Metro Manila area with more than 11 million people, the Metropolitan Water and Sewerage System's (MWSS) piped water connections reach only about 60 percent of its household coverage while its sew- erage system serves a much lower proportion (9%). MWSS' service is generally characterized by low water pressure and intermittent supply, averaging 16 hours per day.
The Metro Cebu Water District (MCWD), meanwhile, which provides piped water connection to the second most populous urban area in the Philippines, serves less than 40 percent of households in its service area at an aver- age of 18 hours per day. Its rate of nonrevenue water is also relatively high (38%) and although part of its man- date, the problem of sewerage disposal has remained largely unattended to.
This brief offers an optimal pricing scheme, together with suggestions on the improvement of the overall water resource management that could provide the proper environment by which such pricing scheme can succeed.