Inter Press Service » Southern Aid & Trade http://www.ipsnews.net News and Views from the Global South Wed, 07 Dec 2016 19:16:32 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.13 Will the World’s Largest Single Market Transform Africa Fortunes?http://www.ipsnews.net/2016/09/will-the-worlds-largest-single-market-transform-africa-fortunes/?utm_source=rss&utm_medium=rss&utm_campaign=will-the-worlds-largest-single-market-transform-africa-fortunes http://www.ipsnews.net/2016/09/will-the-worlds-largest-single-market-transform-africa-fortunes/#comments Fri, 09 Sep 2016 12:00:20 +0000 Busani Bafana http://www.ipsnews.net/?p=146852 Africa is not trading enough with Africa to boost economic development, but a new free trade area could change all that. Credit: Busani Bafana/IPS

Africa is not trading enough with Africa to boost economic development, but a new free trade area could change all that. Credit: Busani Bafana/IPS

By Busani Bafana
BULAWAYO, Zimbabwe, Sep 9 2016 (IPS)

Getting just a sliver of the global trade in goods and services worth more than 70 trillion dollars, Africans have every excuse to decide to trade among themselves.

Many argue that it is the only way to leverage trade to secure a better life for the continent’s more than a billion people who need food and jobs.The prospects of a single market are appetizing: 54 countries, over a billion people and a combined GDP in excess of 3.4 trillion dollars, nearly double the current annual value of traded goods and services in Africa.

The Africa rising narrative might be getting the much needed validation to tackle widening inequality, joblessness, generalized poverty, food and nutritional insecurity that eclipse successes in meeting some of the development targets included in the newly agreed Sustainable Development Goals (SDGs).

A rich but poor Africa

The narrative of a poor Africa is about to change. That is, if Africa stands together as much as it did in fighting for its political independence. This time the fight is for a place on the global trade stage. After years of negotiations and the establishment of several free trade blocs, the signing of the Continental Free Trade Area (CFTA) agreement targeted for December 2017 could set Africa on a new development path.

Africa has more to gain than lose in creating the CFTA, which will rival trade agreements like the EU-US Transatlantic Trade and Investment Partnership (TTIP) and the 16-member Regional Comprehensive Economic Partnership (RCEP). Africa already has the Tripartite Free Trade Area (TFTA) signed in June 2015 combining three largest trading blocs: The East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC).

The three regional economic communities have a combined GDP in excess of 1.3 trillion dollars and a population of 565 million. However, the TFTA, which has been signed by 16 of the 26 member countries, is yet to be ratified to come into force, a blow for the journey to the CFTA.

In their paper on the adoption of the TFTA, Calestous Juma, Professor of the Practice of International Development and Director of the Science, Technology, and Globalization Project at the Belfer Center for Science and International Affairs at  Harvard University, and Francis Mangeni, COMESA Director of Trade, Customs and Monetary Affairs, view regional trade as part of a broader strategy for long-term economic transformation.

They argue that African trade integration measures combine the facilitation of free movement of goods and services, investment in infrastructure, and promotion of industrial development as part of the long-term political vision to unleash the continent’s entrepreneurial potential through regional trade culminating in the African Economic Community by 2028.

Market in Kivu, DRC. A Continental Free Trade Area could transform Africa's economic fortunes. Credit: Busani Bafana/IPS

Market in Kivu, DRC. A Continental Free Trade Area could transform Africa’s economic fortunes. Credit: Busani Bafana/IPS

Global trade is an undisputed source of economic development and a decider between the rich and the poor as it facilitates wealth creation and spurs innovation in every sector.

According to United Nations Conference on Trade and Development, global trade is on the rise but developing countries, many in Africa, account for a small share of this global commerce. Foreign direct investment has gone up in Africa from 9 billion dollars in 2000 to 55 billion in 2014, but rich countries have benefitted more, a situation the first target of the expired Millennium Development Goal 8 sought to address through the development of an open, rule based, predictable and nondiscriminatory trading and financial system.

While an equitable trade system is a global ideal, Africa has the potential to turn the trade tide in its favour by transforming political will into action. Africa has a wide range of natural and mineral resources making beneficiation industries a viable investment option that will help cut unemployment and eliminate poverty which dog many countries in Africa.

Prospects and problems

The prospects of a single market are appetizing: 54 countries, over a billion people and a combined GDP in excess of 3.4 trillion dollars, nearly double the current annual value of traded goods and services in Africa.

“The proposed Continental Free Trade Area will expand the continent’s regional investment to West Africa which is currently not covered by the tripartite consolidation of COMESA, EAC and SADC,” Juma told IPS. “This will enlarge investment opportunities for Africans to invest across the continent. A larger continental market will also make African more attractive to foreign investors.”

Juma, who is writing a book on the CFTA to be published to coincide with signing of the agreement in 2017, believes that a larger single market will enable African factories to operate at full capacity, which will in turn stimulate greater technological innovation.

“The impact on innovation will include greater movement of skills to the continent from outside and across the continent between countries. Africans will be able to learn new skills from their foreign counterparts which will help to strengthen the continent’s technological base,” he said.

Africa has as many trade opportunities as it has obstacles to realizing the free movement of goods, services and people. One of the major obstacles to the CFTA identified by Juma is adjusting national laws and practices to enable countries to implement the agreement. Resistance will come from firms that have been previously protected from external competition. A solution, Juma is convinced, lies in balancing corrective measures with incentives.

“The agreement needs to include remedies and incentives that help countries to adjust to the new regime,” he said. “In this regard, the agreement should not be about free trade but it should also have provisions for infrastructure and industrialisation. It should be an economic development agreement, not just a free trade arrangement.”

Africans not trading with Africans

Statistics from COMESA indicate that inter-Africa trade is a paltry 12 percent compared to trade with Europe and Asia, at nearly 60 percent. At the heart of the poor intra-African trade are prohibitive national trade measures. It is easier to buy products from Europe than for African countries to sell to each other.

Trade policy harmonisation and reducing export/import duties are critical to freeing the movement of goods and people. Last month, the African Union launched the electronic Pan African passport, paving the way for free movement across borders and an important step towards a free trade zone. The passport, initially for African heads of state, foreign ministers and diplomats, will be available to African citizens by 2018.

African governments under the African Union have established the Continental Free Trade Agreement Negotiating Forum which has met several times to hammer out modalities of the continent wide free trade zone mooted in 2012. African Union Commissioner for Trade and Industry, Fatima Haram Acyl, told the first meeting of the negotiating forum in February 2016 that the Continental Free Trade Area will integrate Africa’s markets in line with the objectives and principles of the Abuja Treaty.

It remains for Africa to up investments in road, rail and air infrastructure, communications and seamless service delivery and agriculture which are disproportionate among the 54 member states creating unease as to what a single market will mean for both poor and rich economies.

Economic disparities present a hurdle Africa must overcome as many of Africa’s 54 countries are small, with populations of less than 20 million and economies under 10 billion dollars. National markets would be insufficient to justify investments as adequate supply of inputs and sufficient demand would be too expensive or out of reach that a bigger market will achieve.

The consulting firm McKinsey predicts consumer spending in Africa will rise from 860 billion dollars to 1.4 trillion by 2020, potentially lifting millions out of poverty should a single market be inaugurated.

The United Nations Economic Commission for Africa (UNECA) has calculated that the CFTA could increase intra-African trade by as much as 35 billion dollars per year over the next six years.

Concluding CFTA negotiations this year in good time for the 2017 deadline could open a new chapter in African trade and chart a new path towards economic independence and growth. The only question that remains is, will it happen?

This story is part of special IPS coverage of the United Nations Day for South-South Cooperation, observed on September 12.

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India and China, a New Era of Strategic Partners?http://www.ipsnews.net/2016/09/india-and-china-a-new-era-of-strategic-partners/?utm_source=rss&utm_medium=rss&utm_campaign=india-and-china-a-new-era-of-strategic-partners http://www.ipsnews.net/2016/09/india-and-china-a-new-era-of-strategic-partners/#comments Thu, 08 Sep 2016 12:49:02 +0000 Neeta Lal http://www.ipsnews.net/?p=146839 Over the next decade, China will be home to the world's largest elderly population, while India -- because of its demographic dividend – will require jobs for the world's largest workforce. This offers both nations opportunities to work together. Credit: Neeta Lal/IPS

Over the next decade, China will be home to the world's largest elderly population, while India -- because of its demographic dividend – will require jobs for the world's largest workforce. This offers both nations opportunities to work together. Credit: Neeta Lal/IPS

By Neeta Lal
NEW DELHI, Sep 8 2016 (IPS)

Despite bilateral dissonances and an unresolved boundary issue, India and China — two of the world’s most ancient civilisations — are engaged in vigorous cooperation at various levels. The Asian neighbours’ relationship has also focussed global attention in recent years on Asia’s demographically dominant, major developing economies engaged in common concerns of poverty alleviation and national development.

As the world’s two most populous nations, making up nearly 37 percent of humanity, India and China are committed to improve the lot of their people. These complementarities offer the scope to work in synergy and strengthen ties. Over the next decade, China will be home to the world’s largest elderly population while India — because of its demographic dividend — will require jobs for the world’s largest workforce. This area offers both nations opportunities to work together.With Western economies remaining skittish, India - with its 1.25 billion people and bubbling entrepreneurial energy - offers Chinese investors enormous scope for growth.

As neighbours, China and India have also shared a long history of cultural, scientific, and economic linkages. Following a brief border war in 1962, bilateral trade and investment suffered. However, the last decade the economic relationship of the two giant nations has gained traction. And from just about 3 billion dollars in trade at the turn of the century, the countries are now eyeing 100 billion dollars worth of merchandise trade. This will mean tremendous opportunities for traders and investors in both countries.

Apart from sharing a new extroversion and enthusiasm in their economic policies, Delhi and Beijing have also tightened their economic embrace with the rest of the world. China and India are also members of the World Trade Organization, India as a founding member and China since 2001.

Analysts say that robust economic ties between China and India will also play a stellar role in one of the most important bilateral relationships in the world by 2020. Even conservative estimates suggest that, by 2020, China-India trade could surpass US-China trade.

There is a plethora of business opportunities for India and China, in sectors such as agriculture and food processing, asset management, construction and infrastructure, pharmaceuticals, electronics and information technology, and transport and logistics. The pharmaceutical sector also offers gargantuan business potential for both countries.

China also has a vast underused manufacturing capacity, plus capital surpluses in need of new markets. With Western economies remaining skittish, India – with its 1.25 billion people and bubbling entrepreneurial energy – offers Chinese investors enormous scope for growth.

India, a nation of 1.2 billion people, shares common concerns of poverty alleviation and nation-building with China. Credit: Neeta Lal/IPS

India, a nation of 1.2 billion people, shares common concerns of poverty alleviation and nation-building with China. Credit: Neeta Lal/IPS

China is also seeking greater economic cooperation with India on the Bangladesh-China-India-Myanmar corridor and the New Silk Route programme. Beijing could help accelerate India’s economic take-off by focusing on the key areas of manufacturing, roads, railways and industrial parks, which can form the bedrock for bilateral ties.

Beijing and New Delhi’s attempts to build a strategic and cooperative partnership while expanding trade and economic cooperation has resulted in China emerging as India’s biggest trading partner. However, a few wrinkles need to be ironed out on this front. India’s trade deficit with China has ratcheted up from 1 billion dollars in 2001-02 to 48.43 billion in 2014-15. This asymmetry has raised issues of sustainability.

However, bilateral engagements in this sphere have raised hopes of a more sustainable trade trajectory. Towards this end, the Commerce Ministries of both the countries have also signed a Five-year Development Programme for Economic and Trade Cooperation in September 2014 to lay down a medium-term roadmap for promoting balanced and sustainable development of economic and trade relations.

signs of cooperation are also visible in recent bilateral agreements inked for railway cooperation, smart cities, and skill development. Although the two countries are considered political rivals, in October 2013, China and India inked the Border Defence Cooperation Agreement. The Agreement acknowledges “the need to continue to maintain peace, stability and tranquillity along the line of actual control in the India-China border areas and to continue implementing confidence building measures in the military field along the line of actual control.”

China and India are also among 21 Asian countries to sign on to a new infrastructure investment bank — the Asian Infrastructure Investment Bank — which will offer the region a counterpoint to West-dominated financial institutions like the World Bank. China and India’s combined resources and talents can power regional and global economic growth.

Despite being critical of China’s expansionist policies, and increasing assertiveness in the Indian Ocean Region and the South China Sea, India is keen on robust ties with China. As well as pursuing bilateral cooperation in areas like infrastructure, industry, communications and energy, both India and China are also forging Sino-Indian cooperation at multilateral forums like the G20, the East Asia Summit and BRICS.

The two sides have strengthened strategic dialogue on such major international issues as climate change and global action, and safeguarded the common interests of emerging markets and developing countries. Delhi and Beijing are also keen to augment cooperation in such fields as railway and industrial park construction, security, anti-terror and anti-extremism, and to expand communication and exchanges in education and tourism, and facilitate more exchanges among regional governments of both countries, and jointly safeguard their common interests as well as those of all developing countries.
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Given that India and China have many shared goals and areas of convergences, a bilateral relationship premised on a balanced economic engagement, along with some inventive and bold thinking on the political front, can benefit both nations while jumpstarting an Asian revolution.

This story is part of special IPS coverage of the United Nations Day for South-South Cooperation, observed on September 12.

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The Economic Partnership Agreement has never made much sense for Tanzaniahttp://www.ipsnews.net/2016/08/the-economic-partnership-agreement-has-never-made-much-sense-for-tanzania/?utm_source=rss&utm_medium=rss&utm_campaign=the-economic-partnership-agreement-has-never-made-much-sense-for-tanzania http://www.ipsnews.net/2016/08/the-economic-partnership-agreement-has-never-made-much-sense-for-tanzania/#comments Tue, 16 Aug 2016 17:02:17 +0000 Benjamin W. Mkapa http://www.ipsnews.net/?p=146567

Benjamin William Mkapa is a former President of Tanzania and the Chair of the South Centre Board

By Benjamin W. Mkapa
GENEVA, Aug 16 2016 (IPS)

The EPA issue has once again re-emerged when, in early July, Tanzania informed East African Community( EAC) members and the European Union (EU) that it would not be able to sign the Economic Partnership Agreement (EPA) between European Union (EU)  and the six EAC member states.

The European Commission reportedly proposed signature of the EAC EPA in Nairobi, on the sidelines of the 14th session of the UN Conference on Trade and Development (UNCTAD XIV).

Benjamin William Mkapa

Benjamin William Mkapa

This is a major quadrennial event where all United Nations member states negotiate guidance for UNCTAD. For the European Commission, it would have been a propitious place for a signature ceremony as it would have projected the EPA as a “trade and development” agreement to the benefit of EAC.

Nevertheless, the agreement is antithetical to Tanzania’s as well as the region’s trade and development prospects.

The EPA for Tanzania and the EAC never made sense. The maths just never added up. The costs for the country and the EAC region would have been higher than the benefits.

As a least developed country (LDC), Tanzania already enjoys the Everything but Arms (EBA) preference scheme provided by the European Union.

In other words, we can already export duty-free and quota-free to the EU market without providing the EU with similar market access terms. If we sign the EPA, we would still get the same duty-free access, but in return, we would have to open up our markets for EU exports.

The EPA is a free trade agreement. Under it, Tanzania would have to reduce to zero the tariffs on 90 per cent of all its industrial goods trade with the EU, according duty-free access for almost all the EU’s non-agricultural products into the country.

Such a high level of liberalisation vis-à-vis a very competitive partner is likely to put our existing local industries in jeopardy and discourage the development of new industries.

Research using trade data shows that Tanzania currently produces and exports on 983 tariff lines (at the HS 6 digit level.) The EU produces and exports on over 5,000 tariff lines. If the EPA were implemented, 335 of the 983 products we currently produce would be protected in the EPA’s “sensitive list,” but 648 tariff lines would be made duty-free.

So the existing industries on these 648 tariff lines would have to compete with EU’s imports without the protection of tariffs. Will these sectors survive the competition?

These 648 tariff lines include agricultural products (maize products, cotton seed oil cake); chemical products (urea, fertilisers); vehicle industry parts (tyres); medicaments; intermediate industrial products ( plastic packing material, steel, iron and aluminium articles, wires and cables); parts of machines and final industrial products (weighing machines, metal rolling mills, drilling machines, transformers, generating sets, prefabricated buildings etc); parts of machines (parts of gas turbines, parts of cranes, work-trucks, shovels, and other construction machinery, parts of machines for industrial preparation/ manufacturing of food, aircraft parts etc).

We can already export duty-free and quota-free to the EU market without providing the EU with similar market access terms. If we sign the EPA, we would still get the same duty-free access, but in return, we would have to open up our markets for EU exports
The list does not stop here. Liberalisation (zero tariffs) also applies to the many industrial sectors that Tanzania and the EAC do not yet have existing production/exports ­ about 3,102 tariff lines for Tanzania.

Statistics show that in fact, for the EAC region, the African market is the primary market for its manufactured exports. In contrast, 91% of its current trade with the EU is made up of primary commodity exports (agricultural products such as coffee, tea, spices, fruit and vegetables, fish, tobacco, hides and skins etc).

Only a minuscule 6% or about $200,000 of EAC exports to the EU is composed of manufactured goods.In contrast, of the total EAC exports to Africa, almost 50% is made up of manufactured exports – about $2.5 billion – according to 2013 ­ 2015 data. Of this, $1.5 billion are EAC country exports to other EAC countries.

These figures tell two stories: One; the importance of the African market for EAC’s aspirations to industrialise. In contrast, the EU market plays almost no role in this. Two the EAC internal market makes up 60% of EAC’s manufactured exports to Africa, i.e., the EAC regional market is extremely valuable in supporting EAC’s industrialisation efforts.

The EPA would threaten this regional industrialisation opportunity that is currently blossoming since most EU manufactured products would enter the EAC market dutyfree. Just as our manufactured products are not competitive in the EU market, even though they can be exported dutyfree, might it not be the case that when EU manufactured products can come duty-free into the EAC market, EAC manufactured products may also not sell? The EPA could in fact destroy our economic regional integration efforts.

The pains EAC has taken to build a regional market may instead help serve EU’s commercial interests by offering the EU one EAC market, rather than ensuring that that market can be accessed by our own producers.

The other area where EPA hits the heart of our industrialisation aspirations are its disciplines on export taxes. At the World Trade Organization, export taxes are completely legal.The logic of export taxes is to encourage producers to enter into value-added processing, hence encouraging diversification and the upgradation of production capacities. Developed countries themselves had used these policy tools when they were developing.

The EU has a raw materials initiative aimed at accessing non-agricultural raw materials found in other countries. According to the European Commission, ‘securing reliable and unhindered access to raw materials is important for the EU. In the EU, there are at least 30 million jobs depending on the availability of raw materials.’ In implementing this initiative, the EU has used trade agreements to discipline export taxes.

The EPA prohibits signatories from introducing new export taxes or increase existing ones. For Tanzania and the EAC region with its rich deposits of raw material, including tungsten, cobalt, tantalum etc; such disciplines in the long-run would be incongruent with our objective to industrialise and add value to our resources.

The other area of loss resulting from the EPA is tariff revenue, and the numbers are not small. Conservative estimates (assuming import growth of 0.9% year on year) show that for the EAC as a whole tariff revenue losses would amount to $251 million a year by the end of the EPA’s implementation period Cumulative tariff revenue losses would amount to USD 2.9 billion in the first 25 years of the EPA’s life.

For Tanzania, the losses based on 2013/­2014 import figures are about $71 million a year by year 25. Cumulatively, just for Tanzania, they come up to $700 million over the first 25 years.

Where is the Promised Development Aid?

EU has made many promises that the EPA would be accompanied by development assistance. Hence the EAC EPA incorporates a ‘Development Matrix’ containing a list of economic development projects for the EAC. The price tag of implementing this Development Matrix is $70 billion.

The Matrix and assistance is to be reviewed every 5 years. For the time-being, the EU has pledged to contribute a paltry $3.49 million, which translates into 0.005% of the total required funds!This is also a far cry from the tariff revenue losses the region faces ­the $251 million a year mentioned above.

The only area where the EPA is supposed to serve the interest of the EAC is by providing duty-free access to Kenya. As a non-LDC, Kenya does not have duty-free access via the EU’s EBA. Kenya’s main export item to the EU is flowers ­ just over $500,000 a year.

Without the EPA, Kenyan’s flowers would be charged a 10% customs duty. There are other Kenyan exports also ­vegetables, fruit, fish – that will face tariffs. However, the flower industry has thus far been the most vocal. Nevertheless, all in all, Kenyan exports to the EU market (including the UK) amounts to about $1.5 billion.

If no EPA is signed, the extra duties charged to Kenyan exports amounts to about $100 million a year. Is this worth signing an EPA for? — The avoidance of duties of $100 million? The tariff revenue losses as the EPA is implemented (and more tariff lines are liberalised) would be comparable.

This does not even include the tariff revenue losses of the other EAC LDCs, nor the challenges posed to domestic/ regional industries. In addition, the Brexit development is further reason for the region to pause and reconsider.

The UK is a major export market for Kenya, absorbing 28% of Kenya’s exports to the EU. This reduces the EPA’s supposed ‘benefits’ by a quarter for Kenya. There is a possible solution for Kenya ­ to apply for the EU’s Generalised System of Preferences Plus scheme (GSP+). Under this, almost all of Kenya’s current exports could enter EU duty-free including flowers and fish.

This option could be explored. Alternatively all EAC countries would do well to attempt to diversify production and exports away from primary commodities towards value-added products, and also to diversify our export destinations. Africa is a critical market for EAC’s manufactured goods. Regional integration and trade is the most promising avenue for EAC’s industrial development. The EPA would derail us from that promise.

This article was published firstly in Daily News of Tanzania

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UNCTAD’s Roles Reaffirmed, but Only after Significant Wranglinghttp://www.ipsnews.net/2016/08/unctads-roles-reaffirmed-but-only-after-significant-wrangling/?utm_source=rss&utm_medium=rss&utm_campaign=unctads-roles-reaffirmed-but-only-after-significant-wrangling http://www.ipsnews.net/2016/08/unctads-roles-reaffirmed-but-only-after-significant-wrangling/#comments Wed, 03 Aug 2016 14:24:56 +0000 Martin Khor http://www.ipsnews.net/?p=146374 By Martin Khor
PENANG, Aug 3 2016 (IPS)

The United Nations’ leading development organisation UNCTAD recently obtained a renewed mandate for its work, but not without difficulty.

This is because the developed countries are now much more reluctant to give concessions to the developing countries, thus showing up the present shaky state of North-South relations and of development cooperation.

Martin Khor

Martin Khor

The 14th session of the United Nation Conference on Trade and Development (dubbed UNCTAD 14) concluded in Nairobi on 22 July with an agreed declaration on global economic issues.

It also gave UNCTAD another four-year mandate for its activities of research, intergovernmental meetings, and technical assistance.

Reaching this consensus was hailed as a success in multilateral cooperation on trade, development, and related issues. However, an agreement was reached, on what should have been non-controversial issues, only after a lot of difficult wrangling between the developed and developing countries.

Formed in 1964, UNCTAD is the UN’s premier economic development organisation. In its hey- day from the 1960s to the 1980s, it was the world’s most important negotiating forum on trade issues, specialising in global commodity agreements.

It helped lead the developing countries’ initiative for a “new international economic order”. It was also designated the UN’s focal point for the integrated treatment of trade and development and with areas of finance, technology, and investment.

For over half a century, UNCTAD has championed the cause of developing countries. But in recent decades, under the influence of developed countries, its role was downgraded. Many of its important issues were passed on to other organisations over which the developed countries have more control, such as the OECD, World Trade Organisation, IMF and World Bank.

The developing countries have had to fight continuously to slow down or stop the decline of the UNCTAD and the UN in general.

At UNCTAD 14, the delegations spent hectic days and sleepless nights to thrash out hundreds of disputed paragraphs which could not be agreed on even after many months of negotiations in Geneva.

Principles or even phrases that have long been agreed to as part of global cooperation are now challenged or even made taboo by the developed countries.

They had previously been amenable to place on record the need to transfer technology and provide financial resources and special treatment to developing countries.

Now it is considered almost too sensitive to propose language on “additional financial resources”and “technology transfer”, while big battles have to be waged to reaffirm the long-accepted principles of “common but differentiated responsibility” and “special and differential treatment for developing countries.”

The developed countries have become less secure in their domination over the global economy and thus they are no longer willing to recognise many of the rights of and concessions to the developing countries that are embedded in the global development system.

It was thus a big challenge for the developing countries, led by their umbrella group, The G77, and China, to get their developed-country partners to reach a consensus at UNCTAD 14, as illustrated by the following examples.

First, the developing countries fought to re-affirm the need for countries to have “policy space”. This concept agreed to at an earlier UNCTAD conference, implies that developing countries should be given the right to make use of policies and instruments required for their development.

Many trade and investment agreements have been identified as containing provisions that restrict or even eliminate the ability of developing countries to pursue pro-development policies.

The developing countries proposed language on policy space in many parts of the document, but they faced resistance. Eventually only a mild and conditioned reference was accepted, as follows: “….and respecting each country’s policy space while remaining consistent with relevant international rules and its commitments.”(Para 3 of the Declaration).

Second, the developing countries wanted an expanded mandate for UNCTAD’s important work on external debt issues. UNCTAD has been the UN system’s main organisation on debt; it has championed debt relief for poor countries, and the need for an international debt restructuring mechanism to resolve debt crises.

Developing countries wanted to stress that UNCTAD has a role in the prevention and resolution of debt crises and not just debt management, but this faced objections. Further, language was introduced to narrow the scope of UNCTAD’s debt work to one of complementing the work of the IMF and World Bank, which would have curbed its independence.

At the last minute, developing countries managed to add “as appropriate”, implying that the “complementing” function would be used only at UNCTAD’s own discretion.

Third,the developing countries wanted to mention the need to rapidly conclude the Doha Round at the World Trade Organisation. This is hardly a radical idea since the need to conclude the Doha trade negotiations has been a longstanding mantra for many years in international discussions and many declarations on development.

However, the developed countries have recently decided to give up on the Doha Round altogether, to the frustration of developing countries. Thus, at their insistence, work on the Round was not even mentioned in the UNCTAD14 outcome.

Fourth, in many other fora, including the UN climate change convention, “technology transfer” has become a taboo phrase, and even its mention has been opposed, especially by the US.

It is to the credit of developing countries that this term appears several times in the UNCTAD 14 declaration, including that UNCTAD should assist developing countries to identify ways to operationalize technology transfer (Para 40f).

Fifth, the need for international cooperation on tax issues (including how to deal with tax evasion, tax avoidance and tax havens) has become a hot topic recently. Most developing countries have been excluded from the international discussions on these issues as they are mainly held at the OECD (the club of developed countries) of which they are not members.

They asked during the UNCTAD negotiations for the setting up a UN committee on tax issues at which all countries could discuss and make decisions, but this was not acceptable to the developed countries.

However the final document but does mention taxation a number of times, thus providing UNCTAD a mandate, though limited, in pursuing the issue.

There were other positive elements too at UNCTAD 14. The role of UNCTAD as the focal point in the UN system dealing in an integrated manner with trade and development and inter-related areas of finance, technology, and investment, was reaffirmed.

Also reaffirmed is the importance of UNCTAD’s “independent development oriented analytical work”. And the conference gave a fresh mandate for UNCTAD’swork in the next four years.

These reaffirmations of UNCTAD’s roles and mandates were hailed as a victory, for it was uncertain until the last hours whether an overall agreement could be reached on the Declaration.

This situation depicts the underlying conflicting positions, with the South desiring that UNCTAD expand its mission to champion the cause of development and the North attempting to restrict the role of UNCTAD to a bare minimum.

As UNCTAD 14 neared conclusion, UNCTAD Secretary General Mukhisa Kituyi remarked: “I’m delighted that our 194 member states have been able to reach this consensus, giving a central role to UNCTAD in delivering the sustainable development goals.”

It is to the credit of the developing countries and the G77 and China, that they succeeded in having many of their main points, although in diluted form, included in the UNCTAD 14 outcome.

Although it may not have the same clout as during its high years some decades ago, UNCTAD lives on to fight another day.

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Beyond Rhetoric: UN Member States Start Work on Global Goalshttp://www.ipsnews.net/2016/07/beyond-rhetoric-un-member-states-start-work-on-global-goals/?utm_source=rss&utm_medium=rss&utm_campaign=beyond-rhetoric-un-member-states-start-work-on-global-goals http://www.ipsnews.net/2016/07/beyond-rhetoric-un-member-states-start-work-on-global-goals/#comments Fri, 22 Jul 2016 17:05:23 +0000 Lyndal Rowlands http://www.ipsnews.net/?p=146182 Ministerial Segment of the High-level Political Forum on Sustainable Development Goals. Credit: UN Photo/Manuel Elias.

Ministerial Segment of the High-level Political Forum on Sustainable Development Goals. Credit: UN Photo/Manuel Elias.

By Lyndal Rowlands
UNITED NATIONS, Jul 22 2016 (IPS)

UN member states “are going beyond rhetoric and earnestly working to achieve real progress” towards the Sustainable Goals, the members of the Group of 77 and China said in a ministerial statement delivered here on 18 July.

The statement was delivered by Ambassador Virachai Plasai, Chair of the Group Of 77 (G77) and China during the High Level Political Forum (HLPF) which took place at UN Headquarters in New York from 18 to 20 July.

During the forum, the 134 members of the G77 and China reaffirmed the importance of not only achieving the Sustainable Development Goals but also the driving principle of leaving no one behind.

“We must identify the “how” in reaching out to those furthest behind,” said Plasai who is also Ambassador and Permanent Representative of the Kingdom of Thailand to the UN.

“To make this real, we cannot simply reaffirm all the principles recognised in the (2030) Agenda, including the principle of common but differentiated responsibilities, but must earnestly implement them in all our endeavours,” Plasai added.

The UN’s 193 member states unanimously adopted the 2030 Development Agenda, including the 17 Sustainable Development Goals, in September 2015. The goals reflect the importance of the three aspects of sustainable development: economic, social and environmental, and countries will work towards achieving them by the year 2030.

However more still needs to be done to ensure that developing countries have access to the resources they need to meet the goals, said Plasai.

“We reiterate that enhancing support to developing countries is fundamental, including through provision of development financial resources, transfer of technology, enhanced international support and targeted capacity-building, and promoting a rules-based and non-discriminatory multilateral trading system,” he said.

“To make this real, we cannot simply reaffirm all the principles recognised in the (2030) Agenda... but must earnestly implement them in all our endeavours." -- Ambassador Virachai Plasai

“We urge the international community and relevant stakeholders to make real progress in these issues, including through the G20 Summit in China which will focus on developing action plans to support the implementation of the 2030 Agenda.”

At a separate meeting during the High Level Political Forum the G77 and China noted some of the specific gaps that remain in financing for development.

During that meeting the G77 and China expressed concern that rich countries are failing to meet their commitments to deliver Official Development Assistance (ODA) – the official term for aid – to developing countries.

“We note with concern that efforts and genuine will to address these issues are still lagging behind as reflected in this year’s outcome document of the Financing for Development forum which failed to address (gaps in ODA),” said Chulamanee Chartsuwan, Ambassador and Deputy Permanent Representative Of The Kingdom of Thailand to the UN, on behalf of the Group of 77 and China.

Speaking during the forum on July 19, UN Secretary-General Ban Ki-moon underscored the importance of the High Level Political Forum, “as the global central platform for follow-up and review of the Sustainable Development Goals.”

Ban presented the results of the first Sustainable Development Goals report released by the UN Department of Economic and Social Affairs on July 20. The report used “data currently available to highlight the most significant gaps and challenges” in achieving the 2030 Agenda, said Ban.

“The latest data show that about one person in eight still lives in extreme poverty,” he said.

“Nearly 800 million people suffer from hunger.”

“The births of nearly a quarter of children under 5 have not been recorded.”

“1.1 billion people are living without electricity, and water scarcity affects more than 2 billion.”

Leaving No One Behind

Ban also noted that the importance of collecting data about the groups within countries that are more likely to be “left behind”, such as peoples with disabilities or indigenous peoples.

Collecting separate data about how these groups fare is considered one way for governments to help achieve Sustainable Development Goal 10 which aims to decrease inequality within countries.

However SDG 10 also aims to address inequalities between countries, an important objective for the G77, as the main organisation bringing together developing countries at the UN the G77 wants to make sure that countries in special circumstances are not left behind.

Countries in special circumstances include “in particular African countries, least developed countries, landlocked developing countries and Small Island Developing States, as well as countries in conflict and post-conflict situations,” said Chartsuwan.

However while the world’s poorest and most fragile countries have specific challenges, many middle income countries also have challenges too, the G77 statement noted.

Climate Change Agreement Needs Implementation

Developing countries, and particularly countries with special circumstances, are among those that are most adversely affected by climate change, and therefore wish to see speedy adoption and implementation of the Paris Climate Change Agreement alongside the 2030 Agenda.

Ban told the forum that he will host a special event during the UN General Assembly at 8am on September 21 for countries to deposit their instruments of ratification.

“We have 178 countries who have signed this Paris Agreement, and 19 countries have deposited their instrument of ratification.”

“As you are well aware, we need the 55 countries to ratify, and 55 percent of global greenhouse gas emissions accounted.”

“These 19 countries all accounted is less than 1 percent of greenhouse gas emissions.”

“So we need to do much more,” he said.

The G77 Newswire is published with the support of the G77 Perez-Guerrero Trust Fund for South-South Cooperation (PGTF) in partnership with Inter Press Service (IPS).

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What is Missing on the Global Health Front?http://www.ipsnews.net/2016/06/what-is-missing-on-the-global-health-front/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-missing-on-the-global-health-front http://www.ipsnews.net/2016/06/what-is-missing-on-the-global-health-front/#comments Tue, 21 Jun 2016 13:54:49 +0000 Martin Khor http://www.ipsnews.net/?p=145722 Martin Khor is the Executive Director of the South Centre.]]>

Martin Khor is the Executive Director of the South Centre.

By Martin Khor
GENEVA, Jun 21 2016 (IPS)

The last World Health Assembly (WHA) in Geneva (23-28 May) discussed the manifold global health crises that require urgent attention, and adopted resolutions to act on many issues. We are currently facing many global health related challenges, and as such multiple actions must be taken urgently to prevent these crises from boiling over.

Martin Khor

Martin Khor

The WHA is the world’s prime public health event and this year 3,500 delegates from 194 countries took part, including Health Ministers of most countries. World Health Organization (WHO) Director-General, Dr. Margaret Chan gave an overview of some of the successes and further work needed on the global health front.

The good news includes 19,000 fewer children dying every day, 44% drop in maternal mortality, 85% of tuberculosis cases that are successfully cured, and the fastest scale-up of a life-saving treatment in history, with over 15 million people living with HIV now receiving therapy, up from just 690,000 in 2000. As a result, aid for health is now far more effective, and the issue of health has become an investment for stable and equitable societies, not just a drain on resources.

The recent Ebola and Zika outbreaks showed how global health emergencies can develop very quickly. There is a dramatic resurgence of emerging and re-emerging infectious diseases, which the world is currently not prepared to cope with. Dr. Chan gave three examples of the emerging global health emergencies: climate change, antimicrobial resistance, and the rise of chronic-communicable diseases as the leading causes of death worldwide.

Many of the issues addressed are largely anthropogenic, created by policies that place economic interests above health and environmental concerns. Fossil fuels power economies, medicines for treating chronic conditions are more profitable than a short course of antibiotics, and highly processed foods provide longer term profit than fresh fruits and vegetables.

Unchecked, these emergencies will eventually reach a tipping point and become irreversible and as regards antimicrobial resistance, “we are on the verge of a post-antibiotic era in which common infectious diseases will once again kill.” On moving ahead, Dr. Chan highlighted universal health coverage as an essential aspect of the Sustainable Development Goals. It is the ultimate expression of fairness that ensures no one is left behind, and to provide comprehensive care for all.

A question however, was not covered by Dr Chan in her speech; how can some governments- especially in underdeveloped countries, obtain enough funds to finance the idealistic goal of providing healthcare for their citizens?

The Assembly agreed that WHO set up a new Health Emergencies Programme, enabling it to provide rapid, consistent, and comprehensive support to countries and communities facing or recovering from various emergencies, disease outbreaks, disasters or conflicts.

The WHO has produced a new paper to set up a global stewardship framework to support the development, control and appropriate use of new antimicrobial medicines and diagnostic tools to counter the threat of a global increase in antimicrobial resistance. The Secretariat has made quite a lot of progress, but action on the ground is still slow, in the Asia-Pacific region so far, only six countries have completed their national plans and another five have plans that are being developed.

WHO assistant Director-General, Keiji Fukuda said that focus in the upcoming year will include: making progress on the Global Action Plan (established in 2015), further developing the global stewardship framework, and involving political leaders by meeting in the United Nations headquarters in New York in September.

There were two issues on childhood nutrition that highlighted the need to put health concerns above corporate interests. The first of these issues was childhood and adolescent obesity. In 2014, an estimated 41 million children under 5 years were affected by being overweight or obese, and 48% of them lived in Asia and 25% in Africa.

The Commission on Ending Childhood Obesity recommended the promotion of healthier foods, reducing the consumption of highly processed foods and sugar-sweetened beverages by children and adolescents. It proposed more effective taxation on sugar-sweetened beverages and curbing the marketing of unhealthy foods.

On the second issue, the Assembly welcomed WHO guidance on ending the inappropriate promotion of foods for infants and young children. According to the guidelines, to support breastfeeding, the marketing of “follow-up formula” and “growing-up milks” targeted for babies aged 6 months to 3 years should be regulated in the same manner as infant formula for babies below 6 months.

On access to medicines and vaccines, the WHA agreed on measures to address the global shortage of medicines and vaccines, including monitoring supply and demand, improving procurement systems and improving affordability through voluntary or compulsory licensing of high-priced medicines.

An interesting and well-attended side event was organised by India on behalf of the BRICS countries (Brazil, Russia, India, China and South Africa) on the effects of free trade agreements on access to medicines. After remarks from the health ministers of these, the main speaker, American law professor Frederick Abbott, spoke about why the Trans Pacific Partnership Agreement (TPPA) could make it very difficult for the TPPA members to have access to affordable medicines.

His warning was complemented by the head of UNAIDS Michel Sidibé who estimated that the annual cost of treating 15 million AIDS patients could increase from US$2 to US$150 billion without the availability of generic drugs, costing about US$10,000 per patient annually.

Air pollution and the use of chemicals were other important environmental issues highlighted by the Assembly. Every year, 8 million deaths are attributed to air pollution – 4.3 million indoor and 3.7 million due to outdoor air pollution. The Assembly has also welcomed a new WHO roadmap to respond to the adverse health effects of increasing air pollution.

Since 1.3 million deaths worldwide are caused by exposure to extremely harmful chemicals, among them lead and various pesticides. WHA would like to ensure that the use and production of chemicals is regulated to minimize adverse health and environmental effects by 2020. Some agreed actions include the transfer of expertise, technologies and scientific data, and exchanging good practices to manage chemicals and waste between cooperating countries. WHO will develop a roadmap to meet the 2020 goals and the associated SDG targets.

A controversial issue that has taken two years of negotiations was how WHO should cooperate with non-state actors. The WHA finally adopted the WHO Framework of Engagement with Non-State Actors (FENSA), which provides WHO with policies and procedures to engage with NGOs, private sector entities, philanthropic foundations and academic institutions.

On the one hand, there is the aim to strengthen WHO’s engagement with non-state stakeholders. On the other hand, there is the need for WHO to avoid conflicts of interest that may arise when corporations and their foundations, associations and lobbies wield large and undue influence if they are allowed to get too close to WHO. Many NGOs and several developing countries are concerned about how this corporate influence is undermining WHO’s public health responsibilities, and that FENSA will worsen rather than reverse this trend.

On the health-related Sustainable Development Goals, the Assembly agreed to prioritize universal health coverage; to work with actors outside the health sector to address the social, economic and environmental causes of health problems, including antimicrobial resistance; to expand efforts to address poor maternal and child health, infectious diseases in developing countries; and to put a greater focus on equity within and between countries.

The WHA also adopted many other resolutions on international health regulations including; tobacco control, road traffic deaths and injuries, HIV, viral hepatitis and sexually transmitted infections, Mycetoma, integrated health services, the health workforce, the Global Plan of Action on Violence, Prevention and Control of Non-communicable Diseases, the Global Strategy for Women’s, Children’s and Adolescents’ Health, and healthy ageing.

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Progress of The World’s Least Developed Countries to be Reviewedhttp://www.ipsnews.net/2016/05/progress-of-the-worlds-least-developed-countries-to-be-reviewed/?utm_source=rss&utm_medium=rss&utm_campaign=progress-of-the-worlds-least-developed-countries-to-be-reviewed http://www.ipsnews.net/2016/05/progress-of-the-worlds-least-developed-countries-to-be-reviewed/#comments Fri, 13 May 2016 01:05:36 +0000 Aruna Dutt http://www.ipsnews.net/?p=145105 Progress for Least Developed Countries could be a mixed blessing. Credit: Amantha Perera/IPS.

Progress for Least Developed Countries could be a mixed blessing. Credit: Amantha Perera/IPS.

By Aruna Dutt
UNITED NATIONS, May 13 2016 (IPS)

The United Nations will undertake a major review of progress made in the world’s 48 Least Developed Countries (LDCs) later this month.

“Many positive steps have been made by the world’s most vulnerable countries, demonstrating what they can do with the right support, but much more needs to be done given the persistent challenges and structural bottlenecks”, Gyan Chandra Acharya, High Representative for Least Developed Countries and Small Island Developing States said at a press conference here Tuesday.

The Midterm Review of the Istanbul Programme of Action for the Least Developed Countries will take place in Antalya, in the south of Turkey, from 27 to 29 May.

The countries defined by the UN as Least Developed Countries (LDCs) represent the poorest and under-developed segment of the international community. Two thirds of the 48 countries are in Africa, with the remaining one-third in the Asia-Pacific region, with Haiti the only LDC in the Americas. They comprise more than 880 million people – 12 per cent of the global population – half of which currently lives below the poverty line.

“We do not want to see a situation where a country graduates [from the LDC category] and then comes back again." -- Gyan Chandra Acharya.

In the past five years, the LDCs have made progress, including through access to the internet and telephone networks, infrastructure expansion, access to energy, reduction of child and maternal mortality rates, access to primary education, and women’s representation in parliament.

However development for the LDCs can be considered a mixed blessing, since many special forms of development assistance are directly targeted at these countries.

According to Acharya, this is why so-called graduation from the LDC category is more of a transition which takes place over a period of several years.

“We do not want to see a situation where a country graduates [from the LDC category] and then comes back again as an LDC,” he said.

He pointed to examples of recently graduated countries such as the Maldives and Samoa which are still receiving many of the facilities provided to the LDCs.

Acharya also said that consideration of when a country will graduate from LDC status was not only based on income.

To constitute a country as an LDC, three aspects of development are looked at, Gross National Income (GNI), Human Assets Index (HAI) and the Economic Vulnerability Index (EVI).

This reflects other aspects of an LDCs development, including their resilience to set-backs such as conflict, climate change and natural disasters.

According to the Group of 77 plus China (G77) which represents developing countries at the United Nations, “LDCs are the major victims of climate change.”

They are also vulnerable to “major health crises, natural calamities, price fluctuations of commodities, and external financial shocks,” the group said in its most recent statement on the upcoming review.

The G77 says that although the Istanbul Programme of Action stressed the importance of building the resilience of developing countries to withstand such shocks, “no visible international support has been devoted to build resilience of the LDCs.”

Acharya is hopeful for the meeting in Turkey, the review “provides an important opportunity for the global community to reaffirm its commitment to the world’s most vulnerable nations,” he said.

“Now is the time for action to ensure that no one is left behind as we build new and transformative partnerships, forging an inclusive and empowering future for millions of people living in Least Developed Countries.”

 

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Opinion: Africa, the Need for Greater Integrationhttp://www.ipsnews.net/2016/04/opinion-africa-the-need-for-greater-integration/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-africa-the-need-for-greater-integration http://www.ipsnews.net/2016/04/opinion-africa-the-need-for-greater-integration/#comments Tue, 12 Apr 2016 15:17:13 +0000 Roberto Azevedo http://www.ipsnews.net/?p=144577 Roberto Azevêdo is WTO Director-General ]]>

Roberto Azevêdo is WTO Director-General

By Roberto Azevêdo
CAPE TOWN, South Africa, Apr 12 2016 (IPS)

There is a misconception, by some, that the World Trade Organization (WTO) is a barrier to regional integration. It is one of a number of misconceptions that do not match up with the facts like the perception that the WTO is a rich man’s club. Today the WTO has 162 members and rising at all stages of development. 43 of those members are African countries and rising. The organization now covers around 98% of world trade. It is a truly global organization, one where everybody has an equal say. And it is an organization which supports regional integration in Africa. Indeed, I would say that the need for better integration across the continent is indisputable.

Roberto Azevêdo

Roberto Azevêdo

It’s clear in the fact that intra-African trade remains just a tenth of Africa’s total trade. Or in the fact that the cost of moving goods within Africa is twice the global average. Or in the fact that an African company faces an average tariff of 8.7% when selling within Africa, against 2.5% elsewhere.

We need to tackle these barriers. And I would argue that doing this will help drive Africa’s integration globally. The statistics I just quoted show that the vast majority of Africa’s trade is with the rest of the world. And existing WTO rules give a great deal of flexibility for members to pursue regional agreements. This is plain in the proliferation of such agreements that we have seen in recent years. But they are not a new phenomenon.

Indeed, regional initiatives such as the Southern African Customs Union predate the multilateral system by some decades. Different kinds of trade initiatives have always co-existed with the multilateral system. It is important that they are coherent and compatible, so that they can all help to spread the benefits of trade.

The economic map of Africa today is defined by these efforts: from Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA), Economic Community of West African States (ECOWAS), and the East African Community (EAC) to the Tripartite Free Trade Agreement and, in due course, the Continental Free Trade Area.

The WTO supports these efforts. And the WTO’s Trade Facilitation Agreement provides a very practical mechanism for taking them forward. This Agreement, finalised in 2013, is about simplifying and standardising customs procedures, thereby reducing the time and cost of moving goods across borders. We expect that, when fully implemented, the Agreement could reduce trade costs by an average of 14.5%.

The East African Community has already applied a range of trade facilitation reforms, which have delivered remarkable results in cutting the time and expense of moving goods between countries. Rolling out such measures would unlock the potential of many traders across the continent especially small and medium-sized enterprises. But, in order to benefit from the Agreement, first it must be ratified.

The Trade Facilitation Agreement is notable for the benefits it will deliver but also because it was the first multilaterally agreed deal in the WTO’s history. We held another ministerial conference in December last year, in Nairobi and WTO members agreed to eliminate agricultural export subsidies. This helps to level the playing field, so that farmers in developing countries may compete on better terms.

Of course domestic subsidies still exist, so there is much work still to do. But that doesn’t change the fact that abolishing export subsidies is a big step. This is something which developing countries have been fighting for over many years.

In fact, it is the biggest reform of agricultural trade rules for 20 years. And it is a key target of the United Nations’s new Sustainable Development Goals delivered just three months after the goals were agreed. In the context of regional integration it is important to recognise that results like this could only be delivered at the global level. That’s why we need trade initiatives on all levels to be working well.

And this brings me to the other topic before us today the Doha round of world trade negotiations. This action on export competition was part of the Doha round as were other elements that were delivered in Nairobi, relating to food security and Least Developed Countries (LDCs).Notwithstanding these outcomes, clearly progress on the round as a whole has been too slow. It has not delivered as we had hoped when the round was launched in 2001.

The future of Doha was a major feature of the debate in Nairobi, and in the end members could not agree on a common position. Members are committed to keeping development at the centre of our work. They are also committed to addressing the remaining Doha issues, such as agriculture (particularly domestic subsidies), market access for industrial goods and services.

But, they do not agree on how to tackle them. And, at the same time, some members would like to start discussing other issues, in addition to the remaining Doha issues. Members have wisely decided to reflect on how these differences might be overcome and how we might collectively move the agenda forward.

So we are in a very important period right now. Members are talking to each other about how to advance the Doha issues and, potentially, how to move forward on other issues as well. Of course the economic outlook is tough at present, not least given the slump in commodity prices.

To recall Nelson Mandela’s words, there is much ’wise work’ to be done.

(End)

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OPINION: Ignore Standard Good Governance Prescriptions To Accelerate Developmenthttp://www.ipsnews.net/2016/03/opinion-ignore-standard-good-governance-prescriptions-to-accelerate-development-2/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-ignore-standard-good-governance-prescriptions-to-accelerate-development-2 http://www.ipsnews.net/2016/03/opinion-ignore-standard-good-governance-prescriptions-to-accelerate-development-2/#comments Thu, 31 Mar 2016 12:09:13 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=144423 Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development. Anis Chowdhury held various senior positions in the United Nations Secretariat in New York and Bangkok.]]>

Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development. Anis Chowdhury held various senior positions in the United Nations Secretariat in New York and Bangkok.

By Anis Chowdhury and Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Mar 31 2016 (IPS)

Many well-meaning people believe that “good governance” is key to inclusive development. But research claiming that “good governance” is essential for rapid growth suffers from serious methodological or conceptual limitations. Existing definitions are extremely broad, suffer from functionalist tautology, or mainly refer to corruption.

Defining Good Governance

Invoking a functionalist definition (such as ‘good governance’ is “good-for-economic-development”), one cannot define a country’s ‘quality of government’ without measuring its effects. As The Economist (June 4, 2005) noted, defining ‘good governance’ as “good-for-economic-development” may generate tautological explanations and meaningless policy implications: “What is required for growth? Good governance. And what counts as good governance? Whatever promotes growth. And what is required for growth?”

Attempts to define Quality of Governance (QoG) as multi-faceted also suffer from tautology: “What is required for the quality of life enjoyed by citizens? Quality of governance. What is quality of governance? That which promotes the quality of life. . . .”.

If good governance or “QoG is everything, then maybe it is nothing”. Those who have defined ‘good governance’ as what can be shown to be “good for economic development” illustrate this problem. Many important non-economic attributes of good governance, such as trust and subjective measures of well-being, are left out by such definitions.

Thus, ‘good governance’ cannot be defined precisely, and hence, cannot be meaningfully or usefully monitored. Of course, the dire conditions typically associated with failed states probably preclude most economic or social progress, and cause declining living standards. Even recent World Bank research has been sceptical about the World Bank’s own frequently cited World Governance Indicators (WGIs), observing “there is little if any evidence on the concept validity of the six WGI indexes”.

The WGIs do not take into account country-specific challenges and environments, which could be different, not only between developing and developed countries, but also among developing countries. They also suffer from the typical biases of perceptions-based subjective measures. There is also no historical evidence that limited government is better for development — a premise of the WGIs. The view that the existence of government failures implies that minimalist government is best for development has no factual basis.

Growth

Many countries that have performed well in terms of growth, structural transformation and equity, have fallen short on the most widely used “good governance” indicators. Also, not all good governance reforms are similarly feasible or beneficial, let alone necessary or desirable in all circumstances.

For example, the United States and the Republic of Korea did not improve governance significantly until they had become quite affluent. Contrary to the often exaggerated claims about how much ‘institutions matter’, greater transparency, accountability and participation are often a consequence, rather than a direct cause of faster development.

Instead, all the ostensible evidence actually links good governance indicators to income levels. Observing the absence of any strong evidence relating standard good governance criteria to growth, Dani Rodrik notes that “the incontrovertible long-run association between good governance and high incomes provides very little guidance for appropriate strategies to induce high growth”.

Poor countries suffer a multitude of constraints, and effective growth acceleration interventions must address the most binding growth bottlenecks. Thus, as a rule, broad good governance reforms are neither necessary nor sufficient for growth.

Corruption

The popular governance focus on corruption presumes that government policy discretion and interventions necessarily lead to corruption and abuse even though there is no factual basis for this presumption. Small governments are not synonymous with the absence of corruption while countries with very low levels of corruption have relatively large governments, as in Scandinavia and the Netherlands.

Also, defining good governance simply in terms of the absence of corruption is not very useful. While corruption is antithetical to good governance, good governance implies much more than merely the absence of corruption, clientelism, nepotism, cronyism, patronage, discrimination, and regulatory or policy capture.

If good governance indicators suffer from measurement problems, and if the causality from good governance to economic growth cannot be ascertained, is there any causal link between economic growth and corruption? This is relevant, as in practice, the good governance agenda often focuses mostly on anti-corruption measures.

Conceivably, corruption adversely affects development in many different ways, especially if it diverts resources that would otherwise be invested productively. However, the evidence does not show anti-corruption measures accelerating economic growth. Rather, while all corruption is damaging in some way, and is hence undesirable, some types of corruption are much more damaging than others.

Claiming to fight corruption in developing countries generally — by implementing a laundry list of desired governance reforms — seems laudable, impressive and deserving of support, but such efforts typically ignore more feasible and targeted policies that can improve economic performance.

Necessary?

The World Bank’s 1997 World Development Report advised developing countries to pay attention to 45 aspects of good governance. By 2002, the list had grown to 116 items. Countries wanting to improve their governance must undertake a great deal more as good governance advocates continue to extend their indicators lists. And the longer they wait, the more they will need to do!

Unfortunately, the long and lengthening agenda often means that a multitude of governance reforms need to be undertaken urgently, typically with little thought to their sequencing, interdependence, or relative contributions to reforming governments to be more efficient, effective and responsive, let alone to accelerate development and alleviate poverty.

Among the multitude of governance reforms deemed necessary, there is typically little guidance about what is considered essential and what is not, what should come first and what should follow, what can be achieved in the short term and what can only be achieved over the longer term, what is feasible and what is not.

The presumption that good governance accelerates growth, and hence, that comprehensive institutional reform is a pre-requisite for development continues to lose support. Large-scale institutional transformation of the type envisioned by the good governance agenda has never been a prerequisite for accelerating economic growth or poverty reduction.

(End)

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Food Insecurity in the Far Northhttp://www.ipsnews.net/2016/03/food-insecurity-in-the-far-north/?utm_source=rss&utm_medium=rss&utm_campaign=food-insecurity-in-the-far-north http://www.ipsnews.net/2016/03/food-insecurity-in-the-far-north/#comments Fri, 18 Mar 2016 06:52:41 +0000 Mbom Sixtus Yaounde http://www.ipsnews.net/?p=144237 http://www.ipsnews.net/2016/03/food-insecurity-in-the-far-north/feed/ 0 Improving Rural Livelihoods Boost Agrarian Economieshttp://www.ipsnews.net/2016/03/improving-rural-livelihoods-boosts-agrarian-economies/?utm_source=rss&utm_medium=rss&utm_campaign=improving-rural-livelihoods-boosts-agrarian-economies http://www.ipsnews.net/2016/03/improving-rural-livelihoods-boosts-agrarian-economies/#comments Wed, 16 Mar 2016 06:30:37 +0000 Miriam Gathigah http://www.ipsnews.net/?p=144198 http://www.ipsnews.net/2016/03/improving-rural-livelihoods-boosts-agrarian-economies/feed/ 0 Groundwater Crisis Worsens Food Insecurityhttp://www.ipsnews.net/2016/02/groundwater-crisis-worsens-food-insecurity/?utm_source=rss&utm_medium=rss&utm_campaign=groundwater-crisis-worsens-food-insecurity http://www.ipsnews.net/2016/02/groundwater-crisis-worsens-food-insecurity/#comments Tue, 23 Feb 2016 07:16:39 +0000 Ignatius Banda http://www.ipsnews.net/?p=143957 Not abundant anymore. Women queue at a borehole in Bulawayo as the country faces a groundwater crisis in the absence of rain.  Credit: Ignatius Banda/IPS

Not abundant anymore. Women queue at a borehole in Bulawayo as the country faces a groundwater crisis in the absence of rain. Credit: Ignatius Banda/IPS

By Ignatius Banda
BULAWAYO, Zimbabwe, Feb 23 2016 (IPS)

Sijabuliso Nleya has been kept busy in the past few weeks digging up sand. He is not a sand poacher like scores of people who local district councils across the country say are digging along dry river beds for sand used in the construction of houses. “The situation is terrible,” said Nleya, who owns a plot in Douglasdale, a small farming community on the outskirts of Bulawayo.

Together with other men, he has been filling up dry wells and boreholes, as groundwater increasingly becomes an unforeseen casualty of climate change, thanks to the absence of rainfall for long periods across the country. “The dry wells have become dangerous when in the past they were a source of our livelihood. It’s better to fill them with sand than dream that they will provide us with water one day,” Nleya told IPS.

Underground water sources sustained farming activities here earlier with maize, tomatoes, cabbages and a range of vegetables, including paprika, being sold in the city. “Only a few boreholes now are functioning and we have watched our source of income evaporate,” he explained. Zimbabwe has always considered irrigation fed by groundwater as the bulwark against low rainfall, but the climate ministry says thousands of boreholes have dried up across the country, putting a further strain on the poorly funded agriculture sector that has long relied on the rains.

In Bulawayo, hundreds of community gardens that provide economic safety nets for low-income households use borehole water. Now, with thousands going dry across the country, authorities have raised concerns about the far-reaching implications not only for incomes but health, especially as HIV/AIDS patients rely on produce from these gardens for their nutritional requirements. According to the environment, water and climate minister Oppha Kashiri, more than 12,000 boreholes across the country have gone dry, in a country that is experiencing its worst drought in recent years. “Our water sources are drying up in all the seven catchment areas,” he told journalists on February 4.

President Robert Mugabe has declared drought as a national disaster as more than a quarter of the population face food shortages. Aid agencies report that up to 2.5 million people require food assistance.” The agriculture ministry says up to 90 per cent of the rain-fed maize crop planted last year has been a write off.

According to the Southern African Development Community’s groundwater and drought management programme, up to 70 per cent of the population in the region relies on groundwater, and in a 2015 assessment noted that climate change was exacerbating the groundwater crisis. The Zimbabwe National Water Authority (ZINWA), a government department under the water ministry, says up to 70 per cent of the population resides in the rural areas where the primary sources of water are boreholes and wells. Scarcity is now forcing humans and livestock to share water sources.

More urban residents are using groundwater. Although the drilling of new boreholes is banned, the haphazard sinking of boreholes continues and is exhausting the water table. “It is vital to highlight that groundwater is a very finite resource which can easily run out if there is no balance between replenishing of groundwater stock and extraction,” warned this agency. “Due to increasing water shortage and the growing reliance of urban communities on borehole water, minimum groundwater utilisation standards have been disregarded and this has seen a prompt decline in the water table with boreholes in some suburbs dying,” the water authority added.

Measures to introduce taxes on groundwater users has failed to stem the widespread domestic use of borehole water as the capital city struggles to provide potable water from household faucets. The absence of rainfall only worsens groundwater management. Amidst the groundwater crisis, the Vice-President Emmerson Mnagagwa on February 10 launched a US$1.5 billion appeal for drought relief, with about US$350 million expected towards the rehabilitation of irrigation infrastructure largely fed by boreholes. A countrywide assessment by the agriculture ministry says more than 16,000 cattle have died because of drought. In the past, farmers relied on groundwater to ensure the availability of pastures throughout the year. Not any more

However, Peter Makwanya, a climate change researcher at the Zimbabwe Open University believes the solution could lie in building more reservoirs to harvest rainwater as many part of the country experience flash floods where millions of litres go to waste: “there are quite a number of sustainable ways to save water through rainwater harvesting. Now that groundwater levels are getting depleted, it’s not favourable to encourage people to continue exploiting underground water,” he told IPS. According to him, “farmers can also re-use grey water (water that has been used before) and this can go a long way in achieving water security. This water can be used on a small-scale basis to achieve household sustainability.”

Nleya and millions of subsistence farmers, residents and villagers, who rely on groundwater, are the human face of the ravages of climate change. “We never thought water could actually disappear in the ground as we have always had functioning boreholes and wells, we hope we get rains soon,” he said.

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Evolving Nature of China’s South-South Cooperationhttp://www.ipsnews.net/2016/02/evolving-nature-of-chinas-south-south-cooperation/?utm_source=rss&utm_medium=rss&utm_campaign=evolving-nature-of-chinas-south-south-cooperation http://www.ipsnews.net/2016/02/evolving-nature-of-chinas-south-south-cooperation/#comments Fri, 19 Feb 2016 05:57:15 +0000 Pratyush Sharma http://www.ipsnews.net/?p=143924 Participants at a recent workshop on South-South Cooperation in Xiamen, China.  Credit: Pratyush Sharma/IPS

Participants at a recent workshop on South-South Cooperation in Xiamen, China. Credit: Pratyush Sharma/IPS

By Pratyush Sharma
NEW DELHI, Feb 19 2016 (IPS)

China’s strength in South-South Cooperation (SSC) lies in its carrying out big-ticket infrastructure projects in diverse developing countries. It is remarkable in terms of project scale, speed and cost-effectiveness and has been playing a positive role in promoting partner’s nation-building, economic development and social progress. However, the swift completion of China’s infrastructure projects also has its sets of problems like little or no paper-work leading to lack of transparency, oversight and post-project monitoring. The backlash against Chinese labourers employed by Chinese companies in developing countries has been routinely highlighted by the international media with allegations of skirmishes with the local population, corruption coupled with resource theft.

Another important feature is the government-to-government and demand-driven nature of China’s SSC. However, this too has resulted in claims that it dispenses its development projects in partner countries at the behest of political elites rather than the general population. China is conscious of these accusations. It has taken active steps to mend its image and intends to adopt a more inclusive approach for its SSC. These include seeking social appraisal of their infrastructure projects, elucidation of outcomes and not just its output. Chinese projects not only aspire to create local jobs (output) but are also mindful of the nature of jobs (outcome) projects create for local residents in partner countries.

Other outcomes may include gender parity and pay parity of the workforce till the time the management of projects is in Chinese hands. Also, they now pay more emphasis on capacity-building and ‘direct aid’ (scholarships and fellowships), are now more forthcoming in working along with civil society organisations (CSOs) and they now focus on soft resource development. China encourages its state-owned firms to conduct social and environmental impact assessments and shoulder more social responsibility to enhance transparent management. They are now more open to coordinate with international stake-holders for carrying its development work in the global South.

Two cases in point are the coordination of Chinese humanitarian workers with the teams of multilateral humanitarian organisations in the aftermath of Cyclone Komen in Myanmar in 2015 and coordinated efforts of Chinese restoration experts with their French and Japanese counterparts in restoration projects of Ankor temples in Cambodia. Equality and mutual respect are the core values – when providing assistance, China adheres to the principles of non-interference in the internal matters of its partner, non-conditionality (both economic and political) and respecting partner’s right to independently choose their own paths and models of development.

China provides assistance to the best of its ability to other developing countries within the framework of SSC to support and help, especially the least developed countries (LDCs) to reduce poverty and improve livelihoods. For instance, the TAZARA Project, rail link between Dar-es-Salaam in Tanzania to Kapiri Mposhi (near Lusaka) in Zambia was constructed by China on demand by the leaders of the respective countries through a turn-key project worth US $500 million. The project was deemed financially unviable by Western lenders when Julius Nyerere of Tanzania approached the West to help reduce Zambia’s economic dependence on Rhodesia (now Zimbabwe) and South Africa (then apartheid-ridden) through this railway line.

At the China-Africa Forum Summit 2015, China identified five major pillars for bilateral cooperation in 10 major areas. These include consolidating political mutual trust, striving for win-win economic cooperation, enhancing exchanges, learning from each other’s cultures, helping each other in security, and cementing unity and coordination on international affairs. While the 10 sectors identified for priority cooperation are wide-ranging, they include the areas of industrialisation, agricultural modernisation, infrastructure, financial services, green development, trade and investment facilitation, poverty reduction, public health, people-to-people exchanges, and peace and security.

Chinese projects, especially in Africa and elsewhere, have been embroiled in different controversies and have attracted a bad press, internationally and locally. China has included justice, openness, inclusiveness and sustainability as new pillars and security and terrorism issues are the new sectors where China’s SSC is venturing for the first time. China, recently brokered reconciliatory talks between the Afghanistan government and the Taliban. Also, the proposed triangular development cooperation between China and France; and between China and UK for Africa’s development is a never-tried-before phenomenon and remains to be seen as to how it would pan out. This particular proposal was received with a lukewarm response from African leaders.

In this regard, the role of platforms like China Agricultural University’s China International Development Research Network assumes special significance as it tries to fill the knowledge gap by sharing knowledge on international development with outstanding individuals and institutions, both within China and abroad. It aspires to develop a knowledge pool on international development in China, to facilitate the exchange between China and the international development community. An Indian counterpart Forum for Indian Development Cooperation set up in 2013 has undertaken a similar inclusive stance.

China’s strengths in SSC include prioritisation to aid payment and delivery over transparency and post-project monitoring. Financing for infrastructure projects is primarily done by China Exim Bank, which also provides concessional loans for infrastructure building and supporting the trade of Chinese goods. The China Exim bank is increasingly making use of a deal structure – known as the “Angola mode” or “resources for infrastructure” – whereby repayment of the loan for infrastructure development is made in terms of natural resources (for example, oil). On average, Chinese loans are offered at an interest rate of 3.6 per cent with a grace period of 4 years and a maturity of 12 years. Overall, this represents a grant element of around 36 per cent, which qualifies as concessional loan according to official definitions. However, the variation around all of these parameters is considerable across countries. The interest rate varies from 0.25 per cent to 6 per cent, grace period from 2 to 10 years, maturities from 5 to 25 years and overall grant element from 10 to 70 per cent.

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Gulf migration at an inflexion pointhttp://www.ipsnews.net/2016/02/gulf-migration-at-an-inflexion-point/?utm_source=rss&utm_medium=rss&utm_campaign=gulf-migration-at-an-inflexion-point http://www.ipsnews.net/2016/02/gulf-migration-at-an-inflexion-point/#comments Mon, 15 Feb 2016 06:39:50 +0000 N Chandra Mohan http://www.ipsnews.net/?p=143879 By N Chandra Mohan
NEW DELHI, Feb 15 2016 (IPS)

The steep fall in global oil prices has hit Gulf economies severely. Saudi Arabia, United Arab Emirates (UAE), Qatar, Bahrain are expected to run huge budget deficits as shrinking revenues from selling cheaper oil cannot fund their mounting expenditures. As they tighten their belts, the brunt of adjustment will be felt by migrants, who constitute the bulk of the labour force. Reforms include cutting fuel, power, water, education subsidies and a value-added tax (VAT). This will affect migrants and reports indicate family members are returning home.

N Chandra Mohan

N Chandra Mohan

As oil prices are likely to remain depressed — as global markets “drown in oversupply”, to borrow an expression of the International Energy Agency — the Gulf economies are looking to a future beyond oil. Saudi Arabia, for instance, is looking to diversify into mining and subsidy reforms. In an interview to The Economist, Muhammad bin Salman, Saudi Arabia’s deputy crown prince and defence minister stated “there were unutilised assets: expanding religious tourism, like increasing the numbers of tourists and pilgrims to Mecca and Medina will give more value to state-owned lands in both cities”.

Other Gulf economies are thinking on similar lines. Among other options, UAE is investing big time into the India growth story. The crown prince of Abu Dhabi and deputy supreme commander of the UAE armed forces, Sheikh Zayed Bin Sultan Al Nayan made a three day- visit to India in February and inked many agreements including investing in the country’s infrastructure, energy and aviation. India intends to tap investments of nearly $75 billion from the sovereign wealth fund of this Gulf economy, besides intensifying greater cooperation on the security front.

However, the crash in oil prices is not the only challenge confronting the Gulf. At an IISS Bahrain Bay Forum meeting last November, Bahrain’s minister for industry, commerce and tourism, Zayed Al Zayani stated that economic disorder and lack of opportunity are contributing to instability in the region. He emphasised the need for “unprecedented” economic reform across the Gulf in the wake of the lower oil revenues. These policies include the generation of millions of jobs for the youth in these economies that continue to depend heavily on expatriate labour from India, Pakistan, Bangladesh and Philippines.

All of this is not good news for expatriate workers in the Gulf. The steep increase in fuel and utility charges will hit their living standards. For instance, Qatar doubled these charges in September 2015. Saudi Arabia and Oman cut subsidies in December 2015. Saudi Arabia is thinking of a VAT by end-2016. In Bahrain, the expatriate workers also face the gradual loss of subsidies. These reforms in question also include replacing expatriate with local workers — Saudi Arabia, for instance, might soon start with the 10 million jobs being occupied by non-Saudi employees.

For such reasons, migration to the Gulf is at an inflexion point. In an earlier period, when oil prices were high and rising, these economies had booming revenues to build airports, highways and ports. Since the 1970s, those who constructed such infrastructure are the 16-odd million migrants from South Asian countries like India, Pakistan, Bangladesh, Nepal and Sri Lanka. As this oil-financed construction boom is over, there is less need for unskilled expatriates. As noted earlier, the Gulf economies now have the compulsion to employ their own young and increasingly educated work force.

There is thus a troubling shadow over the sustainability of private transfers or remittances to South Asian economies. In Nepal, remittances from all sources constitute 30 per cent of GDP. The consequence of return migration thus is bound to be serious for the Himalayan kingdom’s external profile. In Sri Lanka and Bangladesh, remittances are equally important amounting to 9.4 per cent of GDP and 8.6 per cent of GDP respectively according to the World Bank. In India, the share is less at 3.4 per cent of GDP but the problem will be serious in states like Kerala that is the ground zero for Gulf emigration.

Research has established that remittances augment savings and investments of recipient households and help in poverty reduction. If such inflows reduce over the near-term, they would worsen these distributional outcomes. While remittances contribute to better economic performance, they are also a source of output shocks when they turn volatile – see a discussion paper on the effect of remittances for 24 Asia/ Pacific economies by Katsushi S Imai, Raghav Gaiha, Abdilahi Ali and Nidhi Kaicker for the Asia-Pacific Division of the International Fund for Agricultural Development.

In this context, Kerala’s experience is relevant since it vitally depends on private transfers, which amount to one-thirds of its net state domestic product. The Thiruvananthapuram-based Centre for Development Studies (CDS) has been doing pioneering work on emigration and the impact of remittances on Kerala’s economy. CDS has, in fact, completed six large-scale surveys on migration — in 1998, 2003, 2007, 2008, 2011 and 2014. These surveys point to a decreasing trend in emigration from Kerala, bulk of which is to the Gulf economies. The era of large scale emigration is over.

If more South Asian expatriates return home, there is bound to be an adverse impact on the labour market. The rate of joblessness would spike upwards. With questions as to how long the good times will last on the remittances front, there is bound to be an adverse impact on South Asian economies. With less remittances inflows, they would register higher current account deficits, which is the broadest measure of the trade imbalance in goods and services with the rest of the world. Lower remittances, in turn, would lower per capita income, all of which contribute to social tensions. The challenge for policy is to cope with such inflows becoming less important in the region.

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Costa Rica, UAE Cement Relations with Energy and Tourismhttp://www.ipsnews.net/2016/02/costa-rica-uae-cement-relations-with-energy-and-tourism/?utm_source=rss&utm_medium=rss&utm_campaign=costa-rica-uae-cement-relations-with-energy-and-tourism http://www.ipsnews.net/2016/02/costa-rica-uae-cement-relations-with-energy-and-tourism/#comments Fri, 12 Feb 2016 23:23:10 +0000 Diego Arguedas Ortiz http://www.ipsnews.net/?p=143870 Costa Rican President Luis Guillermo Solís (centre-right) received United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan (centre-left) in the presidential palace in San José on Friday Feb. 12. Credit: Diego Arguedas Ortiz/IPS

Costa Rican President Luis Guillermo Solís (centre-right) received United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan (centre-left) in the presidential palace in San José on Friday Feb. 12. Credit: Diego Arguedas Ortiz/IPS

By Diego Arguedas Ortiz
SAN JOSE, Feb 12 2016 (IPS)

A visit by United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan to Costa Rica paved the way for closer trade ties between the two countries, especially in the areas of tourism and sustainable energy.

During the first official visit ever to this Central American nation by a UAE foreign minister, Al Nahyan and his Costa Rican counterpart and host, Manuel González, signed two agreements.

One of them refers to air services, and will boost visits by Emirati tourists to Costa Rica.

They also agreed to immediately begin the process of negotiating and promoting investment in tourism.

“This agreement opens up opportunities to take better advantage of air services between the two countries,” Al Nahyan said in Costa Rica’s presidential palace, after an official meeting with this country’s president, Luis Guillermo Solis, at the start of his one-day visit to San José on Friday Feb. 12.

“I think you have a wonderful, beautiful country,” the minister said in a press conference at the end of his meeting with the president. “Of course, there is the problem of the distance between us, but I believe that after opening the air route between Dubai and Panama City, it will be easier to get back and forth between our countries.”

He was referring to the new Emirates airlines route that will begin to operate on Mar. 31 as the world’s longest flight – nearly 18 hours – according to the company.

Al Nahyan also announced that mechanisms would be sought to facilitate visas between the two countries, in order to expedite trade.

“We have a lot of work to do with my colleague, Costa Rica’s foreign minister, to talk to the airlines and make sure things work out,” he said.

A flight between Panama City and San José takes less than one hour, and more and more airlines are connecting the two cities.

United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan (left) and his host, Costa Rican Foreign Minister Manuel González, in the Costa Rican Foreign Ministry after signing the agreements reached during the Emirati minister’s visit. Credit: Foreign Ministry of Costa Rica

United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan (left) and his host, Costa Rican Foreign Minister Manuel González, in the Costa Rican Foreign Ministry after signing the agreements reached during the Emirati minister’s visit. Credit: Foreign Ministry of Costa Rica

“Emirates will fly from Dubai to Panama; this strengthens potential ties, not only between the UAE and Panama but with the entire Central American region, and particularly Costa Rica,” Foreign Minister González told IPS in an exclusive conversation about the visit.

The other agreement signed on Friday afternoon in Costa Rica’s Foreign Ministry provides a framework for cooperation, accompanied by a mechanism for formalising bilateral political consultations, which will facilitate diplomatic relations between the federation of seven emirates and this Central American nation.

Costa Rica was the fourth and last country on Al Nahyan’s official Latin America tour, which began Feb. 4 in Argentina before taking him to Colombia and Panama.

The Emirati minister said a key area of cooperation between the two countries would be energy, where both countries are pioneers in complementary niches.

“I know Costa Rica wants and plans to use more renewable energy, and I know they have done a great deal in terms of legislating to strengthen that sector,” he said.

This country does not depend on fossil fuels for electricity, because 97 percent of its electric power comes from renewable sources. But the use of fossil fuels in transportation means they still represent around 80 percent of the total energy mix.

The UAE has committed nearly 840 million dollars to help other countries of the developing South produce clean energy.

“That’s why we’re in Costa Rica: to see what has been done in this area, and to create a legal foundation with respect to how we can cooperate,” Al Nahyan said in the news briefing.

Solís, of the centre-left Citizen Action Party, said the UAE invited this country to take part in an annual energy conference held early in the year in the Gulf nation.

“Costa Rica will be represented there with the highest-level technical teams, precisely to seek opportunities for cooperation in energy,” the president said.

In an opinion piece published by the La Nación newspaper, Al Nahyan explained that his country is “an important investor in a series of international commercial clean energy projects. And we are proud to be the host country for the International Renewable Energy Agency (IRENA).”

The Emirati minister also stressed that “like Costa Rica, we recognise that turning to clean energies is the most promising solution. The United Arab Emirates has been a major investor in clean energy sources for many years, both within the country and abroad.

“Costa Rica has been one of the most ambitious and progressive-thinking countries in the issues of climate change and sustainable development at the international level,” the minister concluded in his article.

Minister González explained in his dialogue with IPS that there are three major areas where his country and the UAE find points in common: human rights, the fight against climate change, and the struggle against people trafficking and in favour of associated labour rights.

With respect to ties in the field of energy, he explained that the Emirates have “an economy very focused on oil and gas, and with the drop in prices of fossil fuels, they have seen the need to focus on other sectors of the economy.”

This new openness and their traditional leadership in renewable energy “opens up opportunities for Costa Rica, which does not depend on oil and gas,” González said.

The Costa Rican minister sees the UAE as a key actor in the Middle East, a region “with which we are seeking closer ties.”

González said his guest “has expressed interest in Latin America, as demonstrated by this tour,” and noted that he was one of the promoters of the Global Forum on the Relationships between the Arab World, Latin America and the Caribbean Region.

“I met with him in the context of the United Nations General Assembly, in September of last year, and suggested that he consider making a visit to the region, and specifically to Costa Rica,” González added.

Costa Rica has consulates in Lebanon and Jordan and an embassy in Qatar. But it does not yet have a consulate or embassy in the UAE.

“We hope to boost to their maximum expression our relations with the Arab world,” González said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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United Arab Emirates Strengthens Ties with Argentina’s New Governmenthttp://www.ipsnews.net/2016/02/united-arab-emirates-strengthens-ties-with-argentinas-new-government/?utm_source=rss&utm_medium=rss&utm_campaign=united-arab-emirates-strengthens-ties-with-argentinas-new-government http://www.ipsnews.net/2016/02/united-arab-emirates-strengthens-ties-with-argentinas-new-government/#comments Mon, 01 Feb 2016 17:20:02 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=143740 The Four Seasons hotel in the upscale Buenos Aires neighbourhood of Recoleta was remodeled this decade with a multi-million dollar investment by the Dubai-based Albwardy Investment Group. This is just one example of investment in Argentina by the United Arab Emirates, which is expected to increase in different sectors as a result of the visit here by the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan. Credit: Fabiana Frayssinet/IPS

The Four Seasons hotel in the upscale Buenos Aires neighbourhood of Recoleta was remodeled this decade with a multi-million dollar investment by the Dubai-based Albwardy Investment Group. This is just one example of investment in Argentina by the United Arab Emirates, which is expected to increase in different sectors as a result of the visit here by the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
BUENOS AIRES , Feb 1 2016 (IPS)

The new government of Argentina and the United Arab Emirates (UAE) are strengthening the relationship established by the previous administration, at a time when this South American country is seeking to bring in foreign exchange, build up its international reserves and draw investment, in what the authorities describe as a new era of openness to the world.

Bilateral ties will be boosted during a visit to the Argentine capital by the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan, on Feb. 4, the start of his Latin America tour which will also take him to Ecuador, Colombia, Panama and Costa Rica before he flies out of the region on Feb. 12.

After several high-level meetings on Feb. 5, the minister’s visit will end with the signing of five agreements on taxation, sports, cooperation between the state news agencies Telam (Argentina) and WAM (UAE), and an Emirati loan to the southern province of Neuquén.

Mauricio Macri, who was sworn in as president of Argentina on Dec. 10, already indicated his interest in stronger ties when he met on Jan. 20, during the World Economic Forum in Davos, Switzerland, withHamad Shahwan al Dhaheri, executive director of the private equities department of the Abu Dhabi Investment Authority (ADIA).

ADIA, considered the second-largest sovereign wealth fund in the world, manages the excess oil revenues of the UAE, a federation of seven emirates: Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain.

The centre-right Macri, of the Cambiemos coalition, and Al Dhaheri“discussed the prospects opening up for Argentina and were enthusiastic about this new era for the country,” Telam reported from Davos.

The news agency was referring to the end of 12 years of government by the late Néstor Kirchner (2003-2007) and his widow and successor, Cristina Fernández (2007-2015), of the Front for Victory, the Justicialista (Peronist) Party’s centre-left faction, which defines itself as anti-neoliberal.

“Argentina has to position itself as a serious, predictable interlocutor,” this country’s foreign minister, Susana Malcorra, said in Davos.

“The question of economic opening, the search for investment and business opportunities is essential in our agenda,” she stressed.

According to a report from its embassy in Buenos Aires, the UAE has a significant presence in international capital markets through different investment institutions, such as ADIA, Dubai Ports World, Dubai Holding and Abu Dhabi’s International Petroleum Investment Co.

The then president of Argentina, Cristina Fernández, with her host, United Arab Emirates President Khalifa bin Zayed Al Nahyan, at a January 2013 meeting in Abu Dhabi during her official visit to the Gulf nation when bilateral relations were given a major boost. Credit: Government of Argentina

The then president of Argentina, Cristina Fernández, with her host, United Arab Emirates President Khalifa bin Zayed Al Nahyan, at a January 2013 meeting in Abu Dhabi during her official visit to the Gulf nation when bilateral relations were given a major boost. Credit: Government of Argentina

The UAE is a timely interlocutor for Argentina, Luis Mendiola, an expert on the Middle East, the Arab world and Africa with the Argentine Council for Foreign Relations (CARI), underlined in an interview with IPS.

“Their biggest problem is the extraordinary abundance of capital…the question is where to put it to get the best returns on the extraordinary surplus capital they produced during nearly a decade and a half of high oil prices,” added Mendiola, who served as ambassador to Saudi Arabia from 1996 to 2005.

New opportunities

As part of its strategy of strengthening ties with Latin America, the foreign ministry of the United Arab Emirates held a workshop in Abu Dhabi in December with diplomats from Argentina, Colombia, Ecuador and Panama, with the participation of some 70 UAE governmental, semi-governmental and private organisations.

At the workshop, the director of the foreign ministry’s department of economic affairs and international cooperation, Fahad al Tafaq, stressed the UAE’s interest in taking ties with Latin America “to a higher level” in order to serve common interests, WAM, the Emirates news agency, reported from Abu Dhabi.

The participants in the workshop discussed opportunities for investment and strategic alliances in sectors like energy, environment, technology, tourism, agriculture, mining, peaceful uses of nuclear energy, infrastructure and natural resources.

These funds, he said, could go into major infrastructure projects in areas like housing, energy, transport and communications.

In January 2015, the authorities in the southern Argentine province of Neuquén reported that they had secured an 18 million dollar loan from the Abu Dhabi Fund for Development, to finance the Nahueve Hydroelectric Project for the promotion of irrigation in new productive areas, among other aims.

The two countries established diplomatic ties in 1975 and opened embassies in 2008. But relations moved to a new plane when President Fernández visited Abu Dhabi in January 2013, where she met with UAE President Khalifa bin Zayed al Nahyan.

During that visit, cooperation agreements were signed in the area of food, with the opening of the Emirati market to non-traditional Argentine products, and this country opened its first business office in the UAE.

In 2014, as the Argentine-Arab Chamber of Commerce informed IPS, trade between Argentina and the UAE amounted to 228 million dollars, with this South American country enjoying a surplus, exporting 198.9 million dollars in mainly foodstuffs and steel pipe and tube products.

But Mendiola believes there is greater potential to tap because besides boasting one of the highest per capita incomes in the Gulf, the UAE is a business hub which re-exports products to third countries and large markets, such as Saudi Arabia, India, Iran and Pakistan.

Bilateral ties were reinforced in April 2014, with a visit to Argentina by Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and emir of Dubai.

A memorandum of understanding for cooperation in the peaceful use of nuclear energy was signed during that visit.

On that occasion, Fernández emphasised the Argentina forms part of the “exclusive club” of nations “that can produce nuclear energy, but that do so on a non-proliferation basis.”

The then president also referred to the UAE’s “enormous interest” in investing in Argentina and financing projects aimed at bolstering food security.

In November 2015, with support from the local government, five family farming cooperatives from Argentina took part in an international specialty food festival in Dubai.

During the meeting in Buenos Aires, agreements were also reached to promote tourism initiatives and projects in renewable energy – an area in which the UAE, despite its status as one of the world’s largest oil producers, is considered a pioneer among the Gulf countries and even at the international level, Mendiola noted.

“The Emiratis are very good at forging ahead and moving into new areas, and in that sense they are a model, at least in the Gulf region,” he added.

During his visit to Argentina, Al Maktoum remarked that his country did not invest “according to preferences or political motives, but based on economic questions.”

For that reason Mendiola said he was not “surprised” by the UAE’s interest in Latin America “because the Gulf countries in general have always had extremely pragmatic foreign policies which are at the same time modest, in terms of maintaining a low profile.”

“I think the difference now is they are taking advantage of the fact that there is a new government in Argentina, which presents itself to the world as very different from the last one, and that is raising a lot of interest because they have an extraordinary level of reserves as well as investment abroad,” he said.

Mendiola pointed out that the UAE did not have a “clear” presence in Latin America until recently, unlike in Africa and Asia.

“Up to now, South America was a caboose for the Gulf countries, from the point of view of their economic interests. And the change in government without a doubt awakened curiosity and interest in seeing how to best take advantage of these opportunities,” he added.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Mexico to Export Nixtamalisation of Grains to Africahttp://www.ipsnews.net/2015/12/mexico-to-export-nixtamalisation-of-grains-to-africa/?utm_source=rss&utm_medium=rss&utm_campaign=mexico-to-export-nixtamalisation-of-grains-to-africa http://www.ipsnews.net/2015/12/mexico-to-export-nixtamalisation-of-grains-to-africa/#comments Fri, 18 Dec 2015 03:12:23 +0000 Emilio Godoy http://www.ipsnews.net/?p=143385 The corn is cooked with limewater to eliminate aflatoxins that cause liver and cervical cancer. Here a worker at the Grulin company is stirring the corn before it is washed, drained and ground, in San Luís Huexotla, Mexico. Credit: Emilio Godoy/IPS

The corn is cooked with limewater to eliminate aflatoxins that cause liver and cervical cancer. Here a worker at the Grulin company is stirring the corn before it is washed, drained and ground, in San Luís Huexotla, Mexico. Credit: Emilio Godoy/IPS

By Emilio Godoy
TEXCOCO, Mexico , Dec 18 2015 (IPS)

Every day in the wee hours of the morning Verónica Reyes’ extended family grinds corn to make the dough they use in the tacos they sell from their food truck in Mexico City.

Sons, daughters-in-law and nephews and nieces divide the work in the family business that makes and sells cecina (dried, salted meat) tacos, longaniza (a kind of Spanish sausage), quesadillas and tlacoyos (thick stuffed oval-shaped corn dough tortillas).

“We cook the corn the night before and we grind it early in the morning, to serve people at 8:00 AM,” said Reyes, who has made a living selling food for years.

The family loads up the metal countertop, gas cylinders, tables, chairs, ingredients and over 60 kg of corn dough in their medium-sized truck before heading from their town of San Jerónimo Acazulco, some 46 km southwest of Mexico City, to whatever spot they have chosen that day to sell their wares.

When the taco truck packs up, it has sold just about all the food prepared that day.

The cooked corn dough takes on a yellow tone, an effect caused by a process called nixtamalisation – the preparation of corn or other grain, which is soaked and cooked in an alkaline solution, usually limewater, and hulled.According to the United Nations Food and Agriculture Organisation (FAO), 25 percent of world food crops are contaminated with aflatoxins.

This technique dates back to before the arrival of the Spanish conquistadors in Mexico in the 15th century, when local indigenous people cooked corn this way.

Nixtamalisation significantly reduces aflatoxins – any of several carcinogenic mycotoxins produced by molds that commonly infect corn, peanuts and other crops.

“In Mexico aflatoxins are a serious problem,” Ofelia Buendía, a professor at the department of agroindustrial engineering at the Autonomous University of Chapingo, told IPS. “A major effort has been made to eliminate them. The most effective is the traditional nixtamalisation technique.”

She has specialised in “nixtamalising” beans, quinoa, oats, amaranth, barley and other grains, and in producing nutritional foods.

Mexico’s corn dough and tortilla industry encompasses more than 78,000 mills and tortilla factories, over half of which are concentrated in just seven of the country’s 31 states.

Nearly 60 percent of the tortillas sold were made with nixtamalised dough.

Corn is the foundation of the diet in Central America and Mexico, where the process of nixtamalisation is widely used.

But consumption of tortillas has shrunk in Mexico, from 170 kg a year per person in the 1970s to 75 kg today, due to the inroads made by fast food and junk food.

Mexico is now cooperating with Kenya in east Africa to transfer know-how and technology to introduce the technique, to help that country reduce aflatoxins.

Mexico and Kenya signed two cooperation agreements, one of which offers technical support and involves the sending of mills by Mexico’s International Development Cooperation Agency.

Kenya needs 45 million 90-kg bags of corn a year, and only produces 40 million.

According to the United Nations Food and Agriculture Organisation (FAO), 25 percent of world food crops are contaminated with aflatoxins, and the U.S. Centers for Disease Control and Prevention estimate that more than 4.5 billion people in the developing world have chronic exposure to them.

Studies by the International Food Policy Research Institute (IFPRI) suggest that approximately 26,000 people in sub-Saharan Africa die every year of liver cancer associated with chronic exposure to aflatoxins.

At 3:00 AM, the machines are turned on in the processing plant of the Comercializadora y Distribuidora de Alimentos Grulin food processing and distribution company in the town of San Luís Huexotla, some 50 km east of Mexico City.

The work consists of washing the corn cooked the night before, draining it, and grinding it to produce the dough for making tortillas and toast, which are packaged and distributed to sales points in the area.

“Nixtamalisation respects the nutrients in the corn, although some are lost in the washing process,” José Linares, director general of Grulin, told IPS. “There are faster systems of nixtamalisation, but they’re more costly. The technology is shifting towards a more efficient use of water and faster processing.”

His father started out with one tortilla factory, and the business expanded until the Grulin company was founded in 2013.

Grulin processes between 32 and 36 50-kg balls of dough a day. One kg of corn produces 1.9 kg of dough.

The corn is cooked for 90 minutes and then passes through a tank of limewater for 30 seconds before going into tubs with a capacity of 750 kg, where it remains for 24 hours. It is then drained and is ready for grinding between two matching carved stones.

Officials from the Kenya Agricultural and Livestock Research Organisation (KALRO) have visited Mexico to learn about nixtamalisation and test corn products.

The experts who talked to the Kenyan officials said the technique could be adopted by nations in Africa.

“In Africa they want to know about the process, because of its tremendous uses for food. Some variables can be influenced, such as texture and taste,” said Buendía. “The Chinese eat tortillas, so this technique could be adopted. These opportunities cannot be missed.”

Besides cultural questions, the availability of water and generation of waste liquid – known as ‘nejayote’ – can be problems. For every 50 kg of corn processed, some 75 litres of water are needed. The nejayote, which is highly polluting because of its degree of alkalinity, is dumped into the sewer system.

Academic researchers are investigating how to make use of the waste liquid to produce fertiliser, to reuse it in washing the corn, and to make water use more efficient.

“It would be necessary to overcome the cultural barriers, and make sure the taste of lime isn’t noticeable….The technique is replicable,” said Grulin’s Linares.

In 2009, the International Institute of Tropical Agriculture (IITA), the African Agricultural Technology Foundation (AATF), and the U.S. Department of Agriculture – Agricultural Research Service developed a biological control technology called AflaSafe, to fight aflatoxins in corn and peanuts. It is so far available in Nigeria, Burkina Faso, Gambia, Kenya, Senegal and Zambia.

Edited by Estrella Gutiérrez and Verónica Firme/Translated by Stephanie Wildes

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Not Yet Curtains for BRICshttp://www.ipsnews.net/2015/11/not-yet-curtains-for-brics/?utm_source=rss&utm_medium=rss&utm_campaign=not-yet-curtains-for-brics http://www.ipsnews.net/2015/11/not-yet-curtains-for-brics/#comments Tue, 24 Nov 2015 15:50:16 +0000 N Chandra Mohan http://www.ipsnews.net/?p=143102

Chandra Mohan is an economics and business commentator.

By N Chandra Mohan
NEW DELHI, Nov 24 2015 (IPS)

With Goldman Sachs folding up its haemorrhaging BRIC fund, is it curtains for the acronym that defined the investment bankers’ fancy for emerging markets? It certainly appears so after China’s stock market crash and a fast slowing economy triggered fears that the dragon will set off the next global recession.

N Chandra Mohan

N Chandra Mohan

Brazil’s economy is experiencing its deepest recession in 25 years. Russia, too, is contracting due to the crash in oil prices and sanctions. India remains a haven of stability. South Africa’s growth is sluggish with very high unemployment. Against this dismal backdrop, what are the prospects of BRICs playing a vital role in the world economy?

Fourteen years ago, BRICs was very much an idea whose time had come. Goldman Sachs projected them as the future growth engines of the world economy. This acronym soon became a self-fulfilling buzz word with a life of its own. A focus on these leading emerging economies, especially since 2006, provided handsome returns that peaked five years ago. Since 2010, however, BRIC Fund assets plunged from $842 million to $98 million in end-September 2015 according to Bloomberg. With no hope for “significant asset growth” in the near future, Goldman Sachs threw in the towel on October 23, the last trading day for this fund.

These financials clearly reflect the fast-deteriorating growth prospects of the BRIC economies. They were expected to overtake the US in size by 2015. But this isn’t likely to happen. A decelerating Chinese economy, in fact, threatens the first global recession in 50 years without help from the US, says a rival investment bank. Russia and Brazil are doing much worse as they are highly dependent on commodity exports to drive their growth. As China is the biggest importer of oil, iron ore and other raw materials, this is bad news for their commodity-driven prospects. Only India’s track record is creditable as the fastest growing economy in the world.

Such concerns can only make this grouping – which globally accounts for one-fifths of GDP, 42 per cent of population, 17.3 per cent of trade, 41 per cent of forex reserves and 45 per cent of agricultural production – less cohesive to have geo-economic significance in the world economy. Analysts consider the BRICs to represent an alliance of middle -sized economies that could lead to a serious attempt to counter-balance the US, the most powerful economy in the world. This is far from obvious except, perhaps for Russia, that has faced the full brunt of US-led sanctions due to its intervention in Ukraine. This is less true of India that is deepening its relations with the US.

But the BRICs are far from happy with the US-led global financial architecture. A striking feature of all the seven statements issued at BRIC summits from 2009 to 2015 is that this grouping aims to promote peace, security, prosperity and development in a multi-polar, equitable and democratic world order. The grouping seeks a greater voice and participation in institutions of global governance like the IMF, World Bank, WTO and UN. The Durban summit in 2013, for instance, indicated that the WTO required a new leader who demonstrated a commitment to multilateralism and that he or she should be a representative of a developing country.

The formation of a New Development Bank (NDB) is in fact a concrete expression of the desire of BRICs to set up its own alternative to the US-led World Bank and IMF. NDB President KV Kamath has indicated that the bank would blaze a different trail than the Bretton Woods twins who impose an unacceptable conditionality on their loan assistance. In sharp contrast, the NDB is expected to place a greater priority on borrowers’ interests instead of the lender’s interests; that it would better reflect the expectations and aspirations of developing countries. BRICs, however, are not keen to position the NDB as a rival to the World Bank or IMF.

At a BRICs meeting ahead of the recent G-20 summit in Turkey, India’s PM Narendra Modi stated that India will guide the NDB to finance inclusive and responsive needs of emerging economies. India will assume the chairmanship of BRICs in February 2016 and the theme of its chairmanship will be Building Responsive, Inclusive and Collective Solutions – the acronym lives on! PM Modi added for good measure that there was a time when the logic of BRICs and its lasting capacity were being questioned. But group members have provided ample proof of its relevance and value through action at a time of huge global challenges.

The good news is that the BRICs are cooperating and competing with one another for a place under the global sun. The seven summits from St Petersburg to Ufa testify to this. BRICs are the new growth drivers for low-income countries, especially in Africa, considering the growing importance of their trade and foreign direct investments in such economies. The BRICs may be passing through troubled times, but they do constitute a major consumer market. Incomes have grown as more and more people have joined the ranks of the middle class, resulting in greater demand for oil, cars and commodities in leading member countries like China and India.

But the grouping must seriously address the serious challenges of kick-starting its pace of expansion to power global growth as before. The BRICs may not be yielding returns to investment banks but they are in no immediate danger of fading into the sunset. Member countries after all take it seriously enough to set up a potential rival to the World Bank and IMF dominated by the US and Europe. Even if its creator has pulled the plug on the BRIC fund, the acronym will remain relevant in the future as well. Its resilience only exemplifies the profound truth of what the famous economist John Maynard Keynes stated long ago that the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else!

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Opinion: Economic Slowdown Threatening Progresshttp://www.ipsnews.net/2015/11/opinion-economic-slowdown-threatening-progress/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-economic-slowdown-threatening-progress http://www.ipsnews.net/2015/11/opinion-economic-slowdown-threatening-progress/#comments Wed, 11 Nov 2015 15:16:35 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=142969

Jomo Kwame Sundaram is the Coordinator for Economic and Social Development at the Food and Agriculture Organization and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

By Jomo Kwame Sundaram
ROME, Nov 11 2015 (IPS)

Slower economic growth since 2008, and especially with the commodity price collapse since the end of last year, threatens to reverse the exceptional half-decade before the financial crash when growth in the South stayed ahead of the North. From 2002, many developing countries – including some of the poorest– had been growing much faster after a quarter century of stagnation in Africa, for example.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

But this has not been their delayed reward for sticking to policies prescribed by conventional wisdom as claimed by some latter-day apologists for the structural adjustment programmes of the last two decades of the 20th century. Instead, a more favourable international environment, including higher commodity prices, low interest rates and renewed aid flows, along with accelerated growth in China and India, have been the main reasons.

Recent trends need to be seen in a longer historical context if the right lessons are to be drawn. Economic growth in the 1980s and 1990s was generally slower than in the preceding two decades. But despite the spectacular growth of several developing countries, sub-Saharan Africa lost due to stagnation for more than two decades from the late 1970s and Latin America lost at least the 1980s.

Government policies from the 1980s – ostensibly to conform to ‘market expectations’ – often cut public spending on primarily social expenditures. As national-level inequalities grew in most countries from the 1980s, inter-national inequalities among countries continued to grow. Economic welfare in developing countries has been further squeezed by demographic pressures including rapid urbanization.

Nascent industrialization in many countries was aborted by structural adjustment and economic liberalization. Premature trade liberalization has thus exacerbated de-industrialization, unemployment and fiscal deficits without generating alternative sources of economic growth. Low income countries as well failed and failing states are generally characterized by modest industrialization which, in turn, retards structural transformation and more inclusive sustainable development.

The negative developmental implications of policies and programmes forced on developing countries, regardless of historical circumstance and economic context, are now well known. There is a world of difference between measured liberalization from a position of economic strength, as in newly industrialized East Asia from the 1980s, and their forced adoption, to meet World Trade Organization or loan obligations. Despite pious official rhetoric claiming the contrary, multilateral rules are far from supportive of sustainable development and need to be reformed accordingly.

Since the late 19th century, adverse terms of trade movements – favouring manufactures over primary commodities, temperate compared to tropical agricultural products, or manufactures from developed countries against those from developed countries – have meant that many developing countries have been producing and exporting much more, but earning relatively less from doing so.

International financial liberalization was supposed to attract private capital to fill financing gaps. But instead, it has resulted in net capital flows from the ‘capital poor’ to the ‘capital rich’, increased financial volatility and slower economic growth. Bitter experience has also shown that ‘shock therapy’ – often involving financial system ‘big bangs’ – has generally caused more harm than good.

Considering their greater vulnerability to external vicissitudes, developing countries must have greater fiscal space to ensure countercyclical capacity as well as sustained public spending for needed investments in physical and social infrastructure and human resources. Strengthening the tax base, ensuring more reliable sources of international finance and channelling aid through national budgets can be crucial.

Instead of the current fetish with eliminating fiscal deficits, a more balanced and appropriate approach to macroeconomic stabilization is needed, to minimize disruptive swings in economic activity and external balances, while fostering a virtuous cycle of greater macroeconomic stability, investment, growth and employment generation. Developing countries need to strengthen their capacities and capabilities and to ensure sufficient ‘policy space’ in order to pursue appropriate reforms favouring sustainable development.

It has often been claimed that development could only be attained through retrenchment of the state. In much of the developing world, however, this has left choice-less illiberal democracies and frustrated disenfranchised citizens. Instead, democratically accountable governments should consult widely among their citizens to promote investments for structural transformation and better employment.

The global economy now risks continuing its downward spiral into protracted stagnation. The International Monetary Fund’s improved surveillance mechanisms have not led to better international macroeconomic coordination, as touted. Instead, the path to sustainable development remains blocked by self-imposed deflationary policy constraints and a refusal to provide needed aid or to cooperate to increase taxation for all.

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United Arab Emirates and Cuba Forge Closer Tieshttp://www.ipsnews.net/2015/10/united-arab-emirates-and-cuba-forge-closer-ties/?utm_source=rss&utm_medium=rss&utm_campaign=united-arab-emirates-and-cuba-forge-closer-ties http://www.ipsnews.net/2015/10/united-arab-emirates-and-cuba-forge-closer-ties/#comments Tue, 06 Oct 2015 19:10:19 +0000 Patricia Grogg http://www.ipsnews.net/?p=142609 The United Arab Emirates foreign minister, Abdullah bin Zayed Al Nahyan, shakes hands with his opposite number in Cuba, Bruno Rodríguez, after raising the UAE flag at the opening of the Emirati embassy in Havana on Oct. 5, 2015. Credit: Jorge Luis Baños/IPS

The United Arab Emirates foreign minister, Abdullah bin Zayed Al Nahyan, shakes hands with his opposite number in Cuba, Bruno Rodríguez, after raising the UAE flag at the opening of the Emirati embassy in Havana on Oct. 5, 2015. Credit: Jorge Luis Baños/IPS

By Patricia Grogg
HAVANA, Oct 6 2015 (IPS)

Cuba and the United Arab Emirates agreed to strengthen diplomatic ties and bilateral cooperation during an official visit to this Caribbean island nation by the UAE minister of foreign affairs, Sheikh Abdullah bin Zayed Al Nahyan.

During his 24-hour stay, Al Nahyan met on Monday Oct. 5 with Cuban authorities, signed two agreements, and inaugurated his country’s embassy in Havana, which he said was a clear sign of the consolidation of the ties established by the two countries in March 2002.

“I am sure that the next few years will witness the prosperity of our ties,” he added during his official meeting with his Cuban counterpart, Bruno Rodríguez, with whom he signed an agreement on air services “between and beyond our territories” which will facilitate the expansion of opportunities for international air transport.

In the meeting, Rodríguez reaffirmed his government’s support for Arab peoples in their struggle to maintain their independence and territorial integrity.

According to official sources, the two foreign ministers concurred that the opening of the UAE embassy is an important step forward in bilateral ties and will permit closer follow-up of questions of mutual interest.

Al Nahyan also met with the first vice president of the councils of state and ministers, Miguel Díaz Canel. The two officials confirmed the good state of bilateral ties and the possibilities for cooperation on the economic, trade and financial fronts, Cuba’s prime-time TV newscast reported.

The foreign ministers of Cuba and the United Arab Emirates, Bruno Rodríguez (left) and Abdullah bin Zayed Al Nahyan, during the Oct. 5, 2015 agreement-signing ceremony in Cuba’s ministry of foreign affairs in Havana. Credit: Jorge Luis Baños/IPS

The foreign ministers of Cuba and the United Arab Emirates, Bruno Rodríguez (left) and Abdullah bin Zayed Al Nahyan, during the Oct. 5, 2015 agreement-signing ceremony in Cuba’s ministry of foreign affairs in Havana. Credit: Jorge Luis Baños/IPS

Cuba’s minister of foreign trade and investment, Rodrigo Malmierca, signed a credit agreement with the Abu Dhabi Fund for Development, to finance a solar energy farm that will generate 10 MW of electricity.

Al Nahyan first visited Havana on Oct. 1-2, 2009 in response to an official invitation from minister Rodríguez. On that occasion they signed two agreements, one on economic, trade and technical cooperation, and another between the two foreign ministries.

“We have great confidence in Cuba’s leaders and in our capacity to carry out these kinds of projects,” Al Nahyan told the local media on that occasion.

United Arab Emirates, a federation made up of seven emirates – Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain – established diplomatic relations with Cuba in March 2002, in an accord signed in Cairo.

The decision to open an embassy in the Cuban capital was reached in a June 2014 cabinet meeting presided over by Sheikh Mohammed bin Rashid Al Maktoum, the UAE vice president and prime minister, and the ruler of Dubai.

In late February 2015, Al Maktoum received the letters of credentials for the new ambassador of Cuba in the UAE, Enrique Enríquez, during a ceremony in the Al Mushrif Palace in the Emirati capital.

The United Arab Emirates foreign minister, Abdullah bin Zayed al Nayhan, unveils a plaque commemorating the official opening in Havana of the new UAE embassy, together with his opposite number in Cuba, Bruno Rodríguez. Credit: Jorge Luis Baños/IPS

The United Arab Emirates foreign minister, Abdullah bin Zayed al Nayhan, unveils a plaque commemorating the official opening in Havana of the new UAE embassy, together with his opposite number in Cuba, Bruno Rodríguez. Credit: Jorge Luis Baños/IPS

Later, UAE Assistant Foreign Minister for Political Affairs Ahmed al Jarman and Enríquez discussed the state of bilateral relations and agreed to take immediate concrete steps to expand and strengthen ties in different areas.

Enríquez also met with Cubans living in Abu Dhabi with a view to bolstering relations between them and their home country. They agreed on periodic future gatherings.

In May 2014, the UAE and Cuba signed an open skies agreement to allow the airlines of both countries to operate in each other’s territories, as well as opening the door to new plans for flights between the two countries, the UAE General Civil Aviation Authority (GCAA) reported.

The accord formed part of a strategy to boost trade with other countries, said Saif Mohammed al Suwaidi, director general of the GCAA, who headed a delegation of officials and representatives of national airlines during a two-day visit to Cuba.

The UAE signed similar agreements with other Latin American countries, including Argentina, Brazil, Chile, Colombia and Mexico, as part of its effort at closer relations with this region, which is of growing interest to the Gulf country.

Talks have also been announced between the UAE and Russia to build a giant airport in Cuba, which would serve as an international airport hub for Latin America, the Abu Dhabi-based National newspaper reported in February.

The proposal is being discussed by the Russian government and the Abu Dhabi state investment fund Mubadala, mandated to diversify the emirate’s economy.

In 2013 and 2014, UAE was named the world’s largest official development aid donor in a report released by the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD). In 2013, the Gulf nation provided five billion dollars in ODA to other countries.

Last year, according to OECD data, the only Gulf country to have a Ministry of International Cooperation and Development spent 1.34 percent of their gross domestic product in development cooperation.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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