Youth at the Grand Médine town hall in Dakar, Senegal. Senegal has a large youth population, half of which is under the age of 18. By 2025, 376,000 youth are expected to enter the job market that offers only 30,000 jobs. And this number will rise to 411,000 in 2030, according to the Wilson Centre. Credit: Samuelle Paul Banga/IPS

By Mantoe Phakathi
MBABANE, Feb 4 2020 (IPS)

Africa’s inability to produce adequate skills is negatively impacting its economic growth.

In fact, the continent is not getting a good return even on the minimal investment it is making in education, says Thembinkosi Dlamini, an economist and senior extractives lead at Oxfam South Africa.

He was responding to one of the main findings in the African Development Bank’s (AfDB) 2020 Africa Outlook Report, released last week. Titled Developing Africa’s Workforce for the Future, the report  notes that most African countries at all levels of income exhibit lower educational attainment, both in quantity and quality.

Thembinkosi Dlamini told IPS that education in Africa remains untransformed to meet the skills of the future. He attributed this to lack of foresight and dwindling public investments in education.

The report notes that many African countries’ student expenditure is the lowest in the world, at $533 for primary and $925 for high school. This is despite the fact that African countries allocated an average of 5 percent of GDP and 16 percent of government budget to education – just above the United Nations recommended lower limit of 4 and 15 percent, respectively from 2010-17.

As a result, Africa’s growth has not been inclusive because of the lack of jobs in high-productivity sectors such as manufacturing. Moreover, large swaths of the population are stuck in low-productivity, low-paying jobs in traditional agriculture and informal sectors.

“The slow pace of structural transformation stems from shortcomings in human capital reflecting low skills and education levels,” reads the report. 

Only about a third of African countries have achieved inclusive growth. The report observes that countries with better education outcomes and higher rates of structural change are more likely to achieve inclusive growth.

“Countries with active inequality-reducing policies have better prospects of reducing extreme poverty more by 2030,” states the report.

The report also points out that there is a lack of complementarity between physical and human capital in African countries resulting in a limited contribution of education to increasing labour productivity growth at the macro level.

“Public investments in both education and infrastructure can yield greater benefits in promoting long-term growth than investing only in education or only in infrastructure because both types of investment strongly complement each other,” reads the report.

Speaking at the launch of the report in Abidjan, Cote d’Ivoire, AfDB president, Dr Akinwumi Adesina, said physical infrastructure, while important, is not enough to drive much needed greater growth and productivity of African economies.

“African countries should accelerate investments as well as the development of human capital,” said Adesina.

Unemployable with a master’s in engineering

The lack of investments or available job market is a case in point for Mkhonzeni Dlamini’s [no relation to Thembinkosi Dlamini]. 

Mkhonzeni Dlamini (32) graduated with a BA in Electrical and Electronic Engineering from the University of Eswatini six years ago. He thought getting a job would be easy because Eswatini’s government had classified his qualification as one of the priority courses owing to the shortage of engineers in the country. However, Mkhonzeni Dlamini failed to get a job the following year. He then decided to pursue a Master’s Degree in Electrical Engineering in Taiwan, hoping that this would improve his chances. He graduated in 2018 and returned home.

“Even now, I’m unemployed,” he told IPS, adding: “I don’t understand why a person with my skill is failing to get a job considering that the country needs engineers to develop.”

The visibly frustrated Mkhonzeni Dlamini blamed this situation to the “government’s poor planning”, saying that there are many other young graduates, including doctors, who are idling at home because there are no jobs.

“The government doesn’t seem to have a training plan to match available jobs. In fact, the government doesn’t seem to know how many students are on training and plan to create jobs for those graduates,” said Mkhonzeni Dlamini.

Having searched for a job since his return in 2018, he is now considering leaving the continent.

“Like many African graduates who are frustrated like me, we’re now thinking of going back to the countries that colonised us,” he said. Mkhonzeni Dlamini is exploring possibilities of getting a job in the United Kingdom.

Educating Africa’s youth for jobs of the future

Meanwhile, Adesina said youth unemployment must be given top priority. With 12 million graduates entering the labour market each year and only three million of them getting jobs, the mountain of youth unemployment is rising annually.

He said given the fast pace of changes, driven by the 4^th industrial revolution – from artificial intelligence to robotics, machine learning, quantum computing – Africa must invest more in re-directing and re-skilling its labour force and, especially the youth, to effectively participate.

“The youth must be prepared for the jobs of the future – not the jobs of the past,” said Adesina.

Thembinkosi Dlamini agreed.

“We haven’t seen academic papers recently testing the relevance of the education to current and future needs of the economy,”Thembinkosi Dlamini told IPS, adding: “The report correctly points out the high skills mismatch particularly amongst youth employees [saying] that Africans are miseducated.”

Leave no country, no youth behind

Despite the limitations in the workforce, the report notes some success stories on the continent.

In 2019, East Africa was the fastest-growing region, and North Africa continued to make the largest contribution to Africa’s overall GDP growth, due mainly to Egypt’s strong growth momentum. Moreover, six African countries are among the world’s 10 fastest-growing economies: Rwanda at 8.7 percent, Ethiopia 7.4 percent, Côte d’Ivoire 7.4 percent, Ghana 7.1 percent, Tanzania 6.8 percent, and Benin 6.7 percent.

Former Liberian President, Ellen Johnson Sirleaf, who attended the launch together with ministers and other dignitaries, described these six economies as the “stars among us”.

“We want to see more, particularly countries like mine, which have been left behind, so that more can be done to give them the support that they need,” she said.

• Economic growth in Africa is estimated at 3.4 percent for 2019, about the same as in 2018. Although stable, this growth rate is 0.6 percentage point less than the rate projected in the 2019 African Economic Outlook. It is also below the decadal average growth for the region (5 percent).
• The slower than expected growth is due partly to the modest expansion of the continent’s “big five” — Algeria, Egypt, Morocco, Nigeria, and South Africa — which jointly grew at an average rate of only 3.1 percent, compared with the average of 4.0 percent for the rest of the continent’s economies, notes the report.
• Africa’s GDP growth is marginally above the world average of 3.0 percent for 2019 and well above the average for advanced economies at 1.7 percent.
• It also exceeds that of emerging and developing economies outside Africa, excluding China and India. 

While the statistics matter, AfDB’s Adesina said the faces behind the figures should be prioritised.

“And every single day we work, let’s look at the real lives behind the statistics. Let’s hear their voices. Let’s feel their aspirations,” said Adesina.

By Jomo Kwame Sundaram
ROME, Dec 8 2015 (IPS)

The world today faces a crisis of climate and a crisis of development. Both are consequences of the nature of growth of the world economy over the last two centuries, especially during the recent period.

Jomo Kwame Sundaram. Credit: FAO

It has, however, been a failure in two other respects. First, it often widened inequality, both among and within nations, leaving much of the world’s population with crumbs. Second, it worsened the relationship between humanity and nature, rendering human existence, including economic growth itself, unsustainable.

The problems of climate and development must be addressed together. Protection of the Earth’s climate requires the cooperation of all; it cannot be imposed on an unequal world by an affluent minority.

Meanwhile, development has to acknowledge and progress in a climate-constrained environment, mitigating global warming with low-carbon economic growth while adapting to the irreversible consequences of climate change.

These interrelated challenges should frame the economic agenda for our times. Yet, they have received far too little attention from economists as inter-connected phenomena.

Climate economics, in particular, frequently ignores questions of international equity, assuming little or no change in the relative positions of rich and poor nations. Economic models which presume “inequality as usual” cannot address the related problems of climate and development, let alone propose viable and acceptable solutions.

Analysis and solutions must integrate and address climate and development concerns; its “optimal” policy scenarios provide climate protection while rapidly reducing global inequality. Indeed, inclusive and rapid development is supportive of and essential to the best sustainable climate solutions.

Global warming is threatening people and development in many countries. The vicious circles generating climate change are becoming stronger, with the emergence of new threats and the intensification of existing threats, such as the water challenge.

Hence, solutions to the climate threat are not acceptable if they fail to address these challenges, or worse still, widen existing gaps between rich and poor. A good deal of the current policy discussion sees the problem in incremental terms and ignores the different challenges faced by rich and poor countries.

The climate problem cannot simply be addressed by across-the-board uniform greenhouse gas (GHG) emission cuts by all countries from their present levels. The required response needs to be tailored, with a better sense of the size and nature of economic adjustments involved in moving to low-GHG emission development pathways. Such pathways will have to be combined with the goals of full employment and energy security in the North as well as catch-up growth and improved energy access in the South.

Long-term management of economic and natural resources in a more inclusive and sustainable manner is key. We cannot rely purely on markets, especially when changes are expected to be large-scale, returns are uncertain and complementarities are significant.

We need a vital public policy and public investment agenda, with strong multilateral support built around a global investment programme to fight climate change. Many investments will have to be front-loaded (i.e., scaled up now, rather than by 2030 or so) and undertaken by the public sector.

More integrated policy responses, at both domestic and multilateral levels, to tackle the interrelated threats will be needed. A range of possible multilateral measures in support of a global investment programme will be necessary, including a global clean energy fund, a global feed-in tariff regime in support of renewable energy sources, a climate technology programme and a more balanced intellectual property regime to facilitate the transfer of clean technologies. A global green New Deal will have to be built around a global investment programme and more integrated policy responses.

(End)

Excerpt:

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

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.

(End)

Excerpt:

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. Credit: Tommy Trenchard/IPS

By Jomo Kwame Sundaram and Rudi von Arnim
ROME, Jun 23 2015 (IPS)

After the turn of the century, growth in sub-Saharan Africa (SSA) picked up again after a quarter century of near stagnation for most, mainly due to increased world demand for minerals and other natural resources.

The region became second only to East Asia in recovering from the global slowdown following the 2008-2009 financial crisis.Thanks to the failure of development over the preceding quarter century, SSA was the only region not to make any progress in reducing the population share in poverty, with the number of poor people actually rising significantly.

During the decade 2003-2013, growth was faster, averaging 2.6 percent per capita annually. The SSA growth acceleration of the past decade fueled hopes that growth on the continent had finally begun to accelerate and catch up.

Annual SSA per capita real GDP growth had averaged a respectable two percent in the 1960s, but had slowed down from the late 1970s. Over the next two decades, real per capita income for sub-Saharan countries shrank by about three quarters of a percentage point annually on average.

While SSA growth resumed in the last decade, reliance on natural resource extraction has compromised its developmental impact. Such economic activity, especially in mining, has few linkages to the rest of the national economy, thus limiting its growth and employment creation impacts as well.

As its economic performance has closely followed the vagaries of the global commodity price cycle, SSA growth in the last decade was largely driven by the minerals boom on the continent.

But the high commodity prices of the past decade have been reversed by the spreading global economic slowdown and the Saudi decision to drastically reduce oil prices.

However, natural resource extraction does not have the same potential to accelerate development as manufacturing. No country has successfully developed without substantially increasing manufacturing or high-end services. Sub-Saharan Africa has not done well on this score in recent decades.

While the manufacturing share of GDP for all developing countries has risen over 23 percent, it has fallen in SSA to 8 percent from 12 percent in the 1980s. Meanwhile, the primary commodities’ share of total SSA exports reached almost 90 percent in the past decade.

Premature and inappropriate trade liberalisation has damaged SSA’s limited export capacities. The region’s share of world merchandise exports fell from 5 percent in the 1950s to 1.8 percent during 2000-2010. Meanwhile, its share of world manufactured exports stands at a paltry one-fifth of one percentage point.

Trade liberalisation has also undermined the fiscal capacities of many governments in poor countries, with dire consequences for development and social progress.

Since many transactions in developing countries are informal, and hence untaxed, poor developing country governments have traditionally relied on trade tariffs to raise revenue.

Thus, trade liberalisation has reduced their ability to raise revenue, without providing alternate sources. As a consequence, the share of government spending in GDP has fallen from an average of around 16 percent during 1980-1999 to 13 percent during recent years.

Thus, neither trade nor financial liberalisation has helped accelerate economic growth in SSA. Growth requires investments, but investment as a share of SSA GDP has fallen in recent decades, to only 17 percent before the crisis.

External financial liberalisation from the 1980s was supposed to draw in foreign resources, but portfolio investments in SSA are negligible, and more crucially, ill-suited to facilitate sustainable growth.

Instead, there have been net outflows of capital from the world’s poorest region to international financial centres, including tax havens.

Appropriately targeted ‘greenfield’ foreign direct investment (FDI) has more potential to make a positive impact. However, Africa’s share of FDI to all developing economies has fallen from 21 percent in the 1970s to only 11 percent in recent years, or from 5 percent to 3 percent of global FDI.

To make matters worse, FDI in SSA overwhelmingly involves natural resource extraction, with few developmental spillovers from such investments.

According to World Bank estimates, the share of the SSA population living in extreme poverty rose from 50 percent in 1980 to 58 percent in 1998 before falling back to 50 percent in 2005.

Thanks to the failure of development over the preceding quarter century, SSA was the only region not to make any progress in reducing the population share in poverty, with the number of poor people actually rising significantly.

A decade ago, in 2005, the G8 summit at Gleneagles committed to increasing Official Development Assistance (ODA) by 50 billion dollars by 2010. The Gleneagles summit also promised to increase ODA to Africa by 25 billion dollars to 64 billion. Actual delivery fell short by 18 billion dollars, or by 72 percent!

In 2012 dollars, annual ODA to SSA hovered around 50 billion during 2006-2013, up from about 42 billion in 2005, but well short of what was promised. G8 aid to Africa falls well short of promised levels, even below the contributions from the small Nordic countries.

Not surprisingly, the recent G7 summit made no reference to the Gleneagles promises. Instead, it focused on addressing climate change, and it seems likely that climate finance conditionalities will undermine the principle of common, but differentiated responsibilities.

The struggle leading to the Conference of Parties in Paris will be to ensure that climate finance will be additional to the longstanding ODA promises, and will promote climate justice and development.

Edited by Kitty Stapp

Excerpt:

By Sipho Mthathi
JOHANNESBURG, Jun 12 2015 (IPS)

Africa is known as the ‘paradox of plenty’. How can a continent so rich in natural resources be so poor?

Economic growth is predicted to increase by 4.5 percent across the continent this year, despite falling oil prices and the Ebola crisis. South Africa’s economy, the second biggest in Africa is expected to continue to grow by 3.5 percent this year; Nigeria will grow by an enviable 5.5 percent.

Sipho Mthathi, Executive Director of Oxfam South Africa

However, millions across Africa are struggling.  Economic inequality is on the rise, and public coffers are insufficient due to an increasing demand for public services like health, education and housing.

Recently, Thomas Pogge and other distinguished academics have written about the cost of progress. Surprisingly, history provides us with examples of countries where, if there is a balance between economic growth and public spending, it is possible to address inequality.

There is no time to waste in looking for ways to address this widening gap across Africa.

It is urgent that, collectively, African nations look at the billions of dollars flowing out of the continent every year, most of which can be attributed to corporate tax dodging.

In January, the report of the High Level Panel on Illicit Financial Flows (IFFs) from Africa, chaired by former South African President Thabo Mbeki, contended that IFFs from Africa increased from about 20 billion dollars in 2001 to 60 billion in 2010 in the merchandise sector alone.

According to Global Financial Integrity’s 2014 report on IFFs from developing countries, South Africa alone may have lost more than 122 billion dollars between 2003 and 2012 in IFFs.

This is a lost opportunity for money that could have been reinvested in advancing Africa’s development and increased access to public goods for her Africa’s people.“It is urgent that, collectively, African nations look at the billions of dollars flowing out of the continent every year, most of which can be attributed to corporate tax dodging”

But this is only the half of the story. Multinational companies are gaining at the expense of African people through other ‘legal’ forms of corporate tax dodging, and through negotiated tax breaks. This is happening because of a lack of fair global tax rules, and behind-closed-door deals between corporations and governments, rushing to seal deals under pressure.

Africa’s astounding growth is affecting human development. And these losses in tax revenue come at a time when the role of official development assistance to Africa is declining.

Fair and progressive tax systems should be providing financing for well-functioning government programmes to enable governments to uphold citizens’ rights to basic services (such as healthcare and education), and cement trust between citizens and governments.

Establishing an effective tax system is critical if Africa is going to mobilise the resources it needs to tackle poverty and inequality.  Africa is home to six out of ten of the world’s most unequal countries – South Africa, Lesotho, Namibia, Botswana, Zambia, and Central Africa Republic.  Some estimates on Africa’s financing needs include 40-$60 billion dollars per year to finance the post-2015 development agenda.

This is not just Africa’s problem. Around the world, many lower-income countries have been subject to harmful tax practices, including transfer pricing, whereby a transfer price may be manipulated to shift profits from one jurisdiction to another, usually from a higher-tax to a lower-tax jurisdiction.

After revelations of how multinational enterprises (MNEs) such as Starbucks, Google and Apple deliberately structured themselves to minimise their tax bills, the Organisation for Economic Cooperation and Development (OECD) launched an effort to reform this base erosion and profit shifting (BEPS) practice. This reform is expected to wind up by the end of 2015.

However, since the launch of the BEPS Action Plan, developed countries have not had a real voice or influence in the process.  Just four African countries, including South Africa as a G20 member country, have been invited to participate as observers.  These countries are bringing attention to the many mining corporations which are offered lucrative tax incentives which must be addressed in the BEPS plan.

The African Tax Administration Forum (ATAF) is a regional tax body that has been invited by the OECD/G20 to participate in the BEPS reform process.  This should provide further scope to influence the BEPS process with an African perspective.

At the same time, the South Africa Revenue Services (SARS) is going after billions lost through wasteful incentives and trade mispricing. SARS has recovered 5.8 billion rand (460 million dollars) over the three-year period 2011-2014, 55 percent (3.4 billion rand or 274 million dollars) of which is attributed to the mining industry.

South Africa’s membership in the G20 (and its role as co-Chair of the G20 Development Working Group) provides an enormous opportunity to insist on broad inclusion of all nations in the BEPS reform process.

At a recent conference convened by ATAF, South African Finance Minister Nhlanhla Nene called for “Africa to protect its own tax base, and advance domestic resource mobilisation through a common voice, a common concern and a common action plan.”

It is time that all African finance ministers wake up to the possibility that tax revenues for financing essential services for their citizens, or investment in small-holder agriculture or infrastructure, could come from the recovery of billions of dollars lost from corporate tax dodging and unfair tax competition.

Tax breaks provided to six large foreign mining companies in Sierra Leone, for example, are equivalent to 59 percent of the total budget of the country – or eight times the country’s health budget.

It is time for a global inter-governmental body on international tax cooperation to allow for a more inclusive and coordinated approach to ongoing tax reform, beyond BEPS.

All countries should be able to participate in tax negotiations on an equal footing, which guarantees one country, one vote, and where representatives will have the political mandate to speak on behalf of their governments.  Simply relying on the BEPS process to re-write tax rules will not be enough to end international tax dodging.

Through the BEPS reform process and this new tax body, there would be real potential for an African taxation renaissance.

Edited by Phil Harris

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

There has been robust growth in Internet access and usage over the past few years and Africa is now primed to take advantage of the social and economic opportunities that Internet can bring to people across the continent, according to Kathy Brown, President and CEO of the Internet Society.

Speaking at the Africa Internet Summit (AIS) being held in the Tunisian capital from Jun. 2 to 5, Brown highlighted the progress made in recent years to bring improved Internet access and availability to more people in Africa, noting how this growth has provided a strong foundation for stimulating opportunity through an enabling environment defined by inclusion, innovation and entrepreneurship.

“Africa’s recent economic growth rates and growing entrepreneurial spirit are combining to create a climate of opportunity,” said Brown.

“Advances in Internet infrastructure and the meteoric rise of the mobile Internet have already transformed the African technology landscape. I believe that Africa’s Internet is now at a tipping point, poised for further positive change and expansion as the continent looks forward with confidence to the future.”

However, she noted that there are still barriers which must be overcome in order to capture the full economic and social promise of the Internet. While connectivity is on the rise and available bandwidth in Africa has increased significantly, challenges for the African Internet business ecosystem still include factors such as the cost of broadband, online fraud, lack of local content and fragmented markets.

“Africa is now the frontier for the next wave of Internet progress,” said Brown. “While there is huge potential for Africa to continue building an Internet that will best serve its needs and its people, it is critical that true collaboration across Africa’s technical community, a culture of innovation and a spirit of entrepreneurship form part of this process.

The Internet Society stands with Africa to continue the great momentum under way to overcome challenges and enable the economic and social possibilities that only a truly open, trusted Internet can deliver.”

The Internet Society is an international, non-profit organisation founded in 1992 to provide leadership in Internet-related standards, education and policy.

Edited by Phil Harris   

By Christian Guillermet Fernández and David Fernández Puyana
GENEVA, Apr 18 2015 (IPS)

The international community will have a great opportunity to jointly advance on the world peace agenda when a United Nations working group established to negotiate a draft U.N. resolution on the right to peace meets from Apr. 20 to 24 in Geneva.

In July 2012, the Human Rights Council (HRC) of the United Nations adopted resolution 20/15 on the “promotion of the right to peace” and established the open-ended working group to progressively negotiate a draft United Nations declaration on the right to peace.“Present generations should ensure that both they and future generations learn to live together in peace and brotherhood with the highest aspiration of sparing future generations the scourge of war and ensuring the maintenance and perpetuation of humankind”

High on the agenda of the working group has been giving a voice to victims of war and conflict.

Chaired by Ambassador Christian Guillermet, Deputy Permanent Representative of Costa Rica to the United Nations in Geneva, the working group has been conducting informal consultations with governments, regional groups and relevant stakeholders to prepare a revised text on the right to peace.

This text has been prepared on the basis of the following principles:

• the principles of the Charter of the United Nations, such as the peaceful settlement of disputes, international cooperation and the self-determination of peoples.
• elimination of the threat of war.
• the three pillars of the United Nations – peace and security, human rights and development.
• eradication of poverty and promotion of sustained economic growth, sustainable development and global prosperity for all.
• the wide diffusion and promotion of education on peace.
• strengthening of the Declaration and Programme of Action on a Culture of Peace.

Christian Guillermet Fernández, Deputy Permanent Representative of Costa Rica to the United Nations in Geneva and Chairperson/Rapporteur of the Working Group on the Right to Peace

The draft Declaration on the right to peace solemnly invites all stakeholders to guide themselves in their activities by recognising the supreme importance of practising tolerance, dialogue, cooperation and solidarity among all human beings, peoples and nations of the world as a means to promote peace through the realisation of all human rights and fundamental freedoms, in particular the right to life and dignity.

To that end, it recognises that present generations should ensure that both they and future generations learn to live together in peace and brotherhood with the highest aspiration of sparing future generations the scourge of war and ensuring the maintenance and perpetuation of humankind.

The main actors on which the responsibility rests to make reality this highest and noble aspiration of humankind are human beings, states, United Nations specialised agencies, international organisations and civil society. They are the main competent actors to promote peace, dialogue and brotherhood in the world.

It follows that everyone should be entitled to enjoy peace and security, human rights and development. In this case, entitlement is used to refer to the guarantee of access of every human being to the benefits derived from the three U.N. pillars – peace and security, human rights and development.

This draft Declaration could not have been achieved without the extensive cooperation and valuable advice received in recent years from academia and civil society. In fact, this process has involved consultations with prestigious professors of international law from over ten universities and research centres.

In particular, the Chairperson-Rapporteur has written papers – some of which will be published in the near future – in cooperation with other experts in prestigious journals of international relations and law on the different aspects on peace. He has also contributed to the Research Guide on Peace recently prepared by the Library of the United Nations in Geneva.

Since the beginning of the negotiation process, the working group has based its approach on the TICO approach – transparency (T), inclusiveness (I), consensual decision-making (C) and objectivity (O) – and a little realism.

Consensus is a process of non-violent conflict resolution in which everyone works together to make the best possible decision for the group. Consensus is the tendency not only in international relations, but the United Nations.

For important issues affecting the life of millions of people, the United Nations, including its multiple entities and bodies, works on the basis of multilateralism with the purpose of reaching important consensual decisions.

The working group on the right to peace will meet as the United Nations is commemorating its 70^th anniversary and the most important message that should be given is the adoption by consensus of a declaration which, among others, pays real tribute to all victims of war and conflict. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

* Christian Guillermet Fernández is Deputy Permanent Representative of Costa Rica to the United Nations in Geneva and Chairperson/Rapporteur of the Working Group on the Right to Peace.
* David Fernández Puyana is Legal Assistant of the Chairperson/Rapporteur, Permanent Mission of Costa Rica in Geneva.

Excerpt:

By Carlos M. Correa
GENEVA, Feb 3 2015 (IPS)

Industry’s demands and political pressures exerted by developed countries to expand and strengthen patent protection worldwide have been based on the argument that patents promote innovation and thereby contribute to achieve social, political and economic well-being, independently of the level of development of the country where they are granted and enforced.

This view ignores the fact that patents do not have the same impact in countries with different industrial bases, research and development (R&D) capabilities and availability of capital to finance innovation, among others.

Carlos M. Correa

Significantly, there is a growing body of academic studies challenging the belief that patents are essential to incentivise innovation, even in advanced countries, or to enhance economic growth.

While many scholars call for a substantial reform of the patent system, others go as far as suggesting its abolition.

In a working paper entitled The case against patents, Michele Boldrin and David K. Levine have argued that “in spite of the enormous increase in the number of patents and in the strength of their legal protection we have neither seen a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development (R&D) expenditure. There is strong evidence, instead, that patents have many negative consequences.”

“Both of these observations are consistent with theories of innovation that emphasise competition and first-mover advantage as the main drivers of innovation and directly contradict theories postulating that government-granted monopolies are crucial in order to provide incentives for innovation.”

The role of the patent system is thus controversial, particularly in developing countries.“Patents do not have the same impact in countries with different industrial bases, research and development (R&D) capabilities and availability of capital to finance innovation, among others”

In the last 25 years, much emphasis has been put on the concept of intellectual property as ‘truly property’. Different variants of natural rights-based approaches have been articulated to justify developed countries’ relentless efforts to increase the scope and levels of intellectual property protection, notably for patents.

The idea that patents are a piece of property has provided ideological support for an expansion of the protectable subject matter, the extension of the term of protection, the reinforcement of the exclusive rights, and the strengthening of enforcement measures.

Patents confer exclusive rights. They limit the use of knowledge – a public good by its very nature – and competition, which promotes consumer well-being and innovation.

Nobody can produce or commercialise the protected invention during the lifetime of the patent, unless authorised by the patent holder or under compulsory licences, which are rarely granted. Given the exclusionary effects of patents, they have often been characterised as ‘monopolies’.

Yet, the rights conferred by patents are based on partial and often imperfect factual determinations. The examination process does not allow patent offices to reach definitive
judgments on patentability.

There is also uncertainty regarding the validity of patents in the boundaries of what is protected under individual patents. The patent claims are in many cases ambiguous and it is unclear what the actually protected subject matter is. Australian academic Peter Drahos asserts that “patents, unlike blocks of land, do not come with settled boundaries.”

Thus, it is fuzziness rather than definitiveness that characterises patent grants. This is not accidental, but deliberately sought by patent applicants to discourage competitors.

In addition to imprecise disclosures of what is deemed to be the invention, courts interpret patent claims with different theories and methodologies that lead to diverse outcomes with regard to what is deemed protected and eventually infringed.

Another fundamental problem with the patent regime is that it operates on the basis of a limited capacity to examine the patentability of claimed inventions and on a number of legal fictions created by legislators, patent offices or courts.

Such legal fictions are often dogmatically applied, without a critical assessment of their justification and implications.

A patent is granted in most countries after a substantive examination is conducted to determine whether it meets the patentability standard established by national laws which generally require novelty, inventive step (or non-obviousness) and industrial applicability (or utility).

However, some countries (such as Luxembourg and South Africa) confer patents without such a substantive examination or without assessing inventive step (for example, Switzerland and France).

While patent offices in developing countries (except China) receive a number of patent applications much lower than developed countries, some (such as Argentina, India and Thailand) have introduced legislative or other regulatory changes to tighten the application of the patentability requirements and reduce, through a rigorous examination, the proliferation of patents, particularly in the pharmaceutical field.

The intervention of patent offices through substantive examination in the process of creating patent rights gives them an appearance of validity. However, such intervention offers no guarantee in this respect and the public and uninformed business actors may be grossly misled.

The case of South Africa, where no substantive examination is currently made, is illustrative.

Thousands of patents have been registered in South Africa to cover minor or trivial developments that can block local production or importation of lower-priced generic medicines. However, the government of South Africa recently announced its intention to introduce a system of substantive examination, at least for pharmaceutical patents.

This proposal raised stiff opposition from pharmaceutical multinational companies, which were eventually found to finance a covered lobbying operation aimed at derailing the government’s initiative.

On the one hand, it is to be expected that the introduction of such a system would discourage patent applications that may not survive a serious substantive analysis; hence, the number of applications will presumably diminish over time, especially if fees are established at a level that discourages speculative patenting.

On the other, the available information on patent offices in other developing countries suggests that the number of examiners required to review pharmaceutical patent applications is manageable for South Africa even if it opted to rely on internal examiners only.

Unfortunately, many patent offices have tended to work under the assumption that their role is to grant as many patents as possible, and to decide in favour of the applicant in case of doubt. Applicants are often treated as ‘clients’.

As noted by Dominique Foray, patent offices have become extremely pro-patent since the early 1980s. The applicant, formerly considered with suspicion, has become a ‘client’ whose needs must be satisfied by quick, cheap procedures. The result is a total deterioration of examination procedures.

The patent office should function as a steward of the public interest, not as a servant of patent applicants and must protect the public against the issuance of invalid patents that add unnecessary costs and may confer market power. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

* This column is based on South Centre Research Paper No 58 of December 2014. A full version of the paper is available here.

Excerpt:

Markets are critical to the success of Zimbabwe’s smallholder farmers. Credit: Busani Bafana/IPS

By Busani Bafana
BULAWAYO, Zimbabwe, Jan 29 2015 (IPS)

With agriculture as one of the drivers of economic growth, Zimbabwe needs to invest in the livelihoods of smallholder farmers who keep the country fed, experts say.

Agriculture currently contributes nearly 20 percent to Zimbabwe’s gross domestic product (GDP), due largely to export earnings from tobacco production. More than 80,000 farmers have registered to grow the plant this season.

But, even as tobacco harvests expand, food shortages continue to plague Zimbabwe, most dramatically since 2000 when agricultural production missed targets following a controversial land reform that took land from white farmers and distributed it to black Zimbabweans.Food shortages continue to plague Zimbabwe, most dramatically since 2000 when agricultural production missed targets following a controversial land reform that took land from white farmers and distributed it to black Zimbabweans

Depressed production has been blamed on droughts, but poor support to farmers has also contributed to food deficits and the need to import the staple maize grain annually.

Last year, the World Food Programme (WFP) reported that “hunger is at a five-year high in Zimbabwe with one-quarter of the rural population, equivalent to 2.2 million people, estimated to be facing food shortages …”

The report was dismissed by Zimbabwe’s deputy agricultural minister, Paddington Zhanda, who said that “the numbers [of those in need] are exaggerated. There is no crisis. If there was a crisis, we would have appealed for help as we have in the past. We are in for one of the best harvests we have had in years.”

WFP had planned to reach 1.8 million people out of the 2.2 million hungry people during the current period, but funding shortages meant that only 1.2 million were helped.

Last year, the government stepped in with maize bought from neighbouring countries. That year, Zimbabwe topped the list of maize meal importers, with imports from South Africa at 482 metric tons between July and September 2014. Only the Democratic Republic of Congo imported more maize meal during that time.

Agricultural economist Peter Gambara, who spoke with IPS, estimated that over one billion dollars is required to reach a target of two million hectares planted with maize.

“It costs about 800 dollars to produce a hectare of maize, so two million hectares will require about 1.6 billion dollars,” he said.

“However, the government only sponsors part of the inputs required, through the Presidential Inputs Scheme, the rest of the inputs come from private contractors, the farmers themselves, as well as from remittances from children and relatives in towns and in the diaspora.”

These inputs include fertilizer and maize seed. Zimbabwe Commercial Farmers’ Union president Wonder Chabikwa said he was worried that many farmers could fail to purchase inputs on the open market due to liquidity problems. Totally free inputs were ended in 2013.

Linking agriculture to the reduction of poverty was one of the first Millennium Development Goals (MDGs) with a target of cutting poverty in half by 2015. In fact, all MDGs have direct or indirect linkages with agriculture. Agriculture contributes to the first MDG through agriculture-led economic growth and through improved nutrition.

In low-income countries economic growth, which enables increased employment and rising wages, is the only means by which the poor will be able to satisfy their needs sustainably.

Smallholder farmers in Zimbabwe need adequate and appropriate inputs to improve their productivity. Credit: Busani Bafana/IPS

“Government should invest in irrigation, infrastructure like roads and storage facilities,” Gambara told IPS. “By supplying inputs through the Presidential Inputs Scheme, Government has done more than it should for small-scale farmers. This scheme resulted in the country achieving a surplus 1.4 million tonnes of maize last year.”

The surplus was linked, explained Agriculture Minister Joseph Made, to good rainfall.

Marketing of their produce is the biggest challenge facing farmers, said Gambara, who recommended the regulation of public produce markets like Mbare Musika in Harare through the Agricultural Marketing Authority (AMA).

Gambara maintains that the government should provide free inputs to the elderly, orphaned and other disadvantaged in society and consider loaning the rest of the small-scale farmers inputs that they will repay after marketing their crops.

“That will help the country rebuild the Strategic Grain Reserve (SGR), managed by the Grain Marketing Board,” he said. “However, the government has not been able to pay farmers on time for delivered produce and this is an area that it should improve on. It does not make sense to make farmers produce maize if those farmers fail to sell the maize.”

In the Maputo Declaration on Agriculture and Food Security in Africa of 2003, African heads of state and governments pledged to improve agricultural and rural development through investments. The Maputo Declaration contained several important decisions regarding agriculture, but prominent among them was the “commitment to the allocation of at least 10 percent of national budgetary resources to agriculture and rural development policy implementation within five years”.

Only a few of the 54 African Union (AU) member states have made this investment in the last 10 years. These include Burkina Faso, Ghana, Guinea, Mali, Niger, Ethiopia, Malawi and Senegal.

According to Gambara, as a signatory to the Maputo Declaration, Zimbabwe should have done more to channel resources to agriculture since 2000 when the country embarked on the second phase of land reform.

“Most of these (new) black farmers did not have the resources and knowledge to farm like the previous white farmers and such a scenario would demand that the government invests in research and extension to impart knowledge to the new farmers as well as provide schemes that empower these farmers, for example through farm mechanisation and provision of inputs,” he said.

Everson Ndlovu, development researcher with the Institute of Development Studies at Zimbabwe’s National University of Science and Technology, told IPS that government should invest in dam construction, research in water harvesting technologies, livestock development, education and training, land audits and restoration of infrastructure.

Ndlovu said there were signs that European and other international financial institutions were ready to assist Zimbabwe but a poor political and economic environment has kept many at a distance.

“The political environment has to change to facilitate proper business transactions, we need to create a conducive environment for business to play its part,” said Ndlovu. “Government should give farmers title deeds if farmers are to unlock resources and funding from local banks.”

Economic analyst John Robertson asked why the government should finance farmers which would be unnecessary if it had allowed land to have a market value and ordinary people to be land owners in order to use their land as bank security to finance themselves.

“Ever since the land reform, we have had to import most of our food,” Robertson told IPS. “Government should be spending money on infrastructural development that would help agriculture and other industries.”

Before the land reform, continued Robertson, Zimbabwe had nearly one million communal farmers, a number that increased by about 150,000 under Land Reform A1 and A2 allocations.

‘A1’ farms handed out about 150,000 plots of six hectares to smallholders by dividing up large white farms, while the ‘A2’ component sought to create large black commercial farms by handing over much larger areas of land to about 23,000 farmers.

“Only a few farms are being run on a scale that would encompass larger hectarage and that is basically because the farmers cannot employ the labour needed if they cannot borrow money,” Robertson said.

“Loans are needed to pay staff for the many months that work is needed but the farm has no income, so most smallholders work to the limits of their families’ labour input. That keeps them small and relatively poor.”

Edited by Lisa Vives/Phil Harris   

David Kamau on his farm in Nyeri County, Central Kenya. Although he now grows carrots for sale in addition to maize, he says his efforts are yet to pay off. Credit: Miriam Gathigah/IPS

By Miriam Gathigah
NAIROBI, Dec 17 2014 (IPS)

David Kamau is a small-scale maize farmer in Nyeri, Central Kenya, some 153 kms from the capital Nairobi. He recently diversified into carrot farming but is still not making a profit.

He says that inputs cost too much and if this trend continues he will sub-divide and sell his five hectares.

This is the story of many small-scale farmers in this East African nation, where agriculture accounts for about one-quarter of the Gross Domestic Product (GDP). But small-scale farmers – accounting for about 75 percent of total agricultural produce – barely break even.

“A 150 kg bag of carrot is now going for about 27 dollars, up from 22 dollars, but as prices go up, so does the cost of inputs,” says Kamau.“The growth of both urban and rural slums is an indication that more people are falling on hard times” – Dinah Mukami of the Bunge la Mwananchi pro-poor social movement

According to the Ministry of Agriculture, an estimated five million out of about eight million Kenyan households depend directly on agriculture for their livelihoods. Yet agriculture fails to provide an adequate return to farmers because their sector is significantly underfunded, explains Jason Braganza, an economic analyst based in Nairobi.

The percentage of the budget for the agricultural sector is 2.4 percent, down 0.6 percent from the 3 percent in the 2012/2013 budget and well below the threshold of the 2003 African Union Maputo Declaration on Agriculture and Food Security, which mandated that at least 10 percent the national budget should be allocated to agriculture.

The result, says Kamau, is that “farmers are slowly moving out of the farms and trying other economic ventures, Central Kenya used to be a breadbasket but farmlands are being replaced by residential and commercial complexes.”

Farming is not the only sector feeling an economic downslide. Small businesses in Kenya are faced with a lack of essential business support services, especially financial services. Two-thirds of Kenyans do not have access to basic financial services such as banking accounts.

“The growth of both urban and rural slums is an indication that more people are falling on hard times,” according to Dinah Mukami of the Bunge la Mwananchi [People’s Parliament] pro-poor social movement.

She says that the group is planning to hold the government responsible regarding the use of the information in the ‘Socio-Economic Atlas of Kenya’ which the government released last month. The report exposes significant disparities in poverty levels across the country.

“The Atlas is a powerful tool, but whether the government will use the information to change lives and improve living standards remains to be seen,” she says.

Felix Omondi, a resident of Kibera, a division of Nairobi considered the largest slum in Africa, and a member of the Unga Revolution, a local activist group, is one of those who believes that the Atlas is doing some good.

He told IPS that that a programme is under way to upgrade slums and said that this is “one of the ways that the government is using the Atlas to improve the lives of people in the slums.”

In the last three months, the government has been working with residents of the slums to establish income-generating projects and provide basic amenities such as toilets, lighting and drainage.

At least 3,000 youths in Kibera will benefit from these projects. Omondi, a beneficiary, says that he is running one of the posho (corn meal) mills set up by the government to generate income.

Kenya now officially a “middle-income country”

Meanwhile, in autumn the news came out that Kenya had seen its economy grow 25 percent after statistical revision and is now officially a “middle-income country”. A few months ago, a similar type of revision brought Nigeria’s economy to the top of African countries in terms of the size of the economy, surpassing South Africa for the first time.

A growing middle class population is an important driver of this growth, but what does that middle class look like? The recently revised Kenyan figures indicate that the Gross National Income (GNI) per capita is 1,160 dollars against the World Bank’s “middle income” threshold of 1,036 dollars.

The latest income-distribution indicators for Kenya (which date back to 2005) show the following:

• 45.9 percent of the population was at the national poverty line;
• The income share held by the top 10 percent was 38 percent.

This out-of-date, official information excludes the informal economy, observes Africa Arino, professor of strategic management at the IESE Business School in Spain.

“A taxi driver makes KES 15,000 a month (about 178 dollars or 132 euro), and pays KES 3,500 (close to 25 percent of his income) to rent a room where he lives with his wife and two children,” Arino explains.

“They don’t have a kitchen or a bathroom: these are facilities shared with others in the same building lot. His income is pretty much the average salary of a driver, according to the Kenya Economic Survey 2014. Is he middle class?”

According to Braganza, one of the main challenges facing Kenya is that while the country’s economic growth is real and sustainable, the structure of the economy has remained unchanged. Resources have not shifted into the most productive sectors of the economy which would increase overall productivity and an increase in remunerative employment.

Braganza says that for people to feel the trickledown effect of the economic growth, there must also be structural transformation. “There is a need for more investment in the more productive sectors, as well as investment in emerging sectors. This will contribute towards a reduction in unemployment and poverty.”

(Edited by Phil Harris)

The inclusive and sustainable industrial development (ISID) initiative of the U.N. Industrial Development Organisation to promote industrial development for poverty reduction, inclusive globalisation and environmental sustainability is gaining momentum in the countries of the African, Caribbean and Pacific (ACP) group. 

A concrete sign of this trend came on the occasion of last week’s ACP Council of Ministers meeting in the Belgian capital where UNIDO Director-General Li Yong met with ACP representatives to explore how to further promote inclusive and sustainable industrialisation in their countries and possible ways of scaling up investment in developing countries.

UNIDO Director-General Li Yong at the !00th ACP Council of Ministers meeting in Brussels, where he explored how to further promote inclusive and sustainable industrialisation in ACP countries. Credit: Courtesy of ACP

During the opening session of the ministers’ meeting, outgoing ACP Secretary-General Alhaji Muhammad Mumuni had already highlighted the key role of the ISID programme in promoting investment and stimulating competitive industries in African, Caribbean and Pacific countries.

In December last year in Lima, Peru, the 172 countries belonging to UNIDO – including ACP countries – unanimously approved the Lima Declaration calling for “inclusive and sustainable industrial development”.

The Lima Declaration clearly acknowledged that industrialisation is an important landmark on the global agenda and, for the first time, the spectacular industrial successes of several countries in the last 40 years, particularly in Asia, was globally recognised.

According to UNIDO statistics, industrialised countries add 70% of value to their products and recent research by the organisation shows how industrial development is intrinsically correlated with improvements in sectors such as poverty reduction, health, education and food security.“We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people” – UNIDO Director-General Li Yong

One major issue that the concept of ISID addresses is the environmental sustainability of industrial development. “We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people,” said Li.

Economic growth objectives should be pursued while protecting the environment and health, and by making business more environmentally sustainable, they become more profitable and societies more resilient.

ISID in the Post-2015 Agenda

“For ISID to be achieved,” said Li, “appropriate policies are essential as well as partnerships among all stakeholders involved.” This highlights the importance of including ISID in major development frameworks, particularly in the post-2015 development agenda that will guide international development in the coming decades.

With strong and solid support from the ACP countries, ISID has already been recognised as one of the 17 Sustainable Development Goals (SDGs) proposed by the U.N. Open Working Group on SDGs – to take the place of the Millennium Development Goals (MDGs) whose deadline is December 2015 – and confirmed last week by U.N. Secretary-General Ban Ki-moon in ‘The Road to Dignity By 2030’, his synthesis report on the post-2015 agenda.

In fact, goal 9 is specifically devoted to “building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation.”

In this context, Mumuni told the Brussels meeting of ACP ministers that “in building the competitiveness of our industries and facilitating the access of ACP brands to regional and international markets, UNIDO is regarded by ACP Secretariat as a strategic ally.”

ACP-UNIDO – A Strategic Partnership

A Memorandum of Understanding approved in March 2011 and a Relationship Agreement signed in November 2011 represent the solid strategic framework underlying the strategic partnership between ACP and UNIDO, and highlight how the two partners can work together to support the implementation of ISID in ACP countries.

Key is the establishment and reinforcement of the capacity of the public and private sectors in ACP countries and regions for the development of inclusive, competitive, transparent and environmentally-friendly industries in line with national and regional development strategies.

On the basis of these agreements, ACP and UNIDO have intensified their policy dialogue and concrete cooperation. One example reported during the ministers’ meeting was the development of a pilot programme entitled “Investment Monitoring Platform” (IMP), funded under the intra-ACP envelope of the 9th European Development Fund (EDF) with the support of other donors.

This programme is aimed at managing the impact of foreign direct investments (FDI) on development, combining investment promotion with private sector development, designing and reforming policies that attract quality investment, and enhancing coordination between the public and private sector, among others.

This programme has already reinforced the capacity of investment promotion agencies and statistical offices in more than 20 African countries, which have been trained on methodologies to assess the private sector at country level.

Implementing ISID in ACP Countries

In Africa, the strategy for the Accelerated Industrial Development of Africa (AIDA) prepared with UNIDO expertise, is a key priority of Agenda 2063  – a “global strategy to optimise use of Africa’s resources for the benefit of all Africans” – and of the Joint Africa-European Union Strategy.

In the Caribbean, high priority is being given to private sector development, climate change, renewable energy and energy efficiency, and value addition in agri-business value chains, trade and tourism.

The CARIFORUM-EU Business Forum in London in 2013 clearly articulated the need for more innovation, reliable markets and private sector information, access to markets through quality and the improvement of agro-processing and creative industries.

In the Pacific, the 2nd Pacific-EU Business Forum held in Vanuatu in June this year called for stronger engagement in supporting the private sector and ensuring that innovation would produce tangible socio-economic benefits.

Finally, in all three ACP regions, interventions related to quality and value chain development are being backed in view of supporting the private sector and commodity strategies.

(Edited by Phil Harris)

Peddlers in Mazar-e-Sharif, Balkh province, North Afghanistan. Concern is being expressed in Afghanistan about the country’s future after Western disengagement. Credit: Giuliano Battiston/IPS

By Giuliano Battiston
KABUL, Dec 11 2014 (IPS)

The U.S./NATO International Security Assistance Force Joint Command lowered its flag for the last time in Afghanistan on Dec. 8, after 13 years. The ISAF mission officially ends on Dec. 31, and will be replaced on Jan. 1, 2015 by “Resolute Support”, a new, narrow-mandate mission to train, advise and assist the Afghan National Security Forces.

However, despite U.S. Secretary of State John Kerry’s recently pledged continuing assistance for years to come,here in Kabul many fear that donor interest in the country may now start waning and that Afghanistan will likely drop out of the spotlight because history has already shown that, when troops pull out of a country, funds tend to follow.

“We are very concerned about the Western financial disengagement. The country is still fragile, thus we believe that the international community should be committed over the whole ‘Transformation Decade’, spanning from 2015 to 2024, until the country is able to stand on its own,” Mir Ahmad Joyenda, a leading civil society actor and Deputy Director of the Afghanistan Research and Evaluation Unit (AREU), told IPS.“We are very concerned about the Western financial disengagement. The country is still fragile, thus we believe that the international community should be committed over the whole 'Transformation Decade’, spanning from 2015 to 2024, until the country is able to stand on its own” – Mir Ahmad Joyenda, Deputy Director of Afghanistan Research and Evaluation Unit

Afghanistan’s gross domestic product (GDP) increased more than four-fold between 2003 and 2012, but economic growth was largely driven by international investments and aid.

Since the U.S.-led military intervention of 2001, Afghanistan has been the focus of large international aid and security investments, being the world’s leading recipient of development assistance since 2007, Lydia Poole notes in Afghanistan Beyond 2014. Aid and the Transformation Decade, a briefing paper prepared for the Global Humanitarian Assistance (GHA) programme which provides data and analysis on humanitarian financing and related aid flows.

According to data collected by the author, “the country received 50.7 billion dollars in official development assistance (ODA) between 2002 and 2012, including 6.7 billion dollars in humanitarian assistance”, and ODA “has steadily increased from 1.1 billion dollars in 2002 to 6.2 billion in 2012.”

On Dec. 4, delegations from 59 countries and several international organisations gathered for the ‘London Conference on Afghanistan’, co-hosted by the governments of the United Kingdom and Afghanistan, to reaffirm donor humanitarian and development commitments to the war-torn country.

The London Conference served as a follow up to the Tokyo Conference on Afghanistan in 2012, where the international community pledged 16 billion dollars to support Afghanistan’s civilian development financing needs through 2015, based on an agreement known as the Tokyo Mutual Accountability Framework (TMAF).

In London, the international community reaffirmed its Tokyo commitment and the vague willingness to “support, through 2017, at or near the levels of the past decade”.

However, the London Conference “produced no new pledges of increased aid, so the drop in domestic revenues to 8.7 percent of gross domestic product, down from a peak of 11.6 percent in 2011, leaves Afghanistan with a severe and growing fiscal gap”, John F. Sopko, Special Inspector General for Afghanistan Reconstruction, remarked in a meeting at the Carnegie Endowment for International Peace.

With the imminent withdrawal of NATO troops, the Afghan economy is already under strain, “We estimate that growth has fallen sharply to 1.5 percent in 2014 from an average of 9 percent during the previous decade”, Sri Mulyani Indrawati, Managing Director of the World Bank, stated on Dec. 4 in London.

Furthermore, many indicators from the 2015 Afghanistan Humanitarian Needs Overview Report of the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) show that there is still a considerable humanitarian emergency: “1.2 million children are acutely malnourished; approximately 2.2 million Afghans are considered very severely food insecure; food insecurity affects nearly 8 million people with an additional 2.4 million classified as severe, and 3.1 million are moderately food insecure.”

Despite the many risks associated with Western disengagement, Joyenda prefers to emphasise the opportunities, advocating a fundamental shift of attitude: “The international community should use this opportunity to have a rebalancing of priorities: ‘less money for security and weapons, more money for civilian cooperation and reconstruction’,” he told IPS.

Since 2011, the primary focus of international expenditure in Afghanistan has been overwhelmingly security. When international troop levels were at their peak at 132,000 in 2011, “spending on the two international military operations – the NATO-led International Security Assistance Force (ISAF) and U.S.-led Operation Enduring Freedom (OEF) – reached 129 billion dollars, compared with 6.8 billion dollars in ODA, of which 768 million dollars was humanitarian assistance”, writes Poole.

“We also need a proper alignment of funds with the State’s economic planning,” Nargis Nehan, Executive Director and founder of Equality for Peace and Democracy, a non-governmental organisation advocating equal rights for all Afghan citizens, told IPS.

According to Nehan, “the international community made the State a less legitimate actor through the creation of parallel structures. Millions of dollars for example have been directed to development and humanitarian projects via the Provincial Reconstruction Teams”, which consisted of a mix of military, development and civilian components, conflating development/humanitarian aid with the agendas of foreign political and security actors.

“The political framework was never adequate,” Thomas Ruttig, co-director and co-founder of the Kabul-based Afghanistan Analysts Network, told IPS. “Over the past few years the international community was busier – at least at the government level – with preparing the withdrawal and designing a positive narrative, rather than with the Afghans left behind.”

“Afghanistan has been a rentier-State for one hundred and fifty years, and will be dependent on external support for quite a while. In this phase we have to lighten the country’s donor dependency, we cannot just walk away. We have the political responsibility to keep to our commitments,” he noted.

(Edited by Phil Harris)

Novice monks beg for alms near the Sule Pagoda in downtown Yangon. The barbed wire barricades behind them were once a permanent feature on this busy road, but have been pushed aside to make way for peace. Credit: Amantha Perera/IPS

By Amantha Perera
YANGON, Nov 23 2014 (IPS)

Myanmar is never out of the news for long. This has been the case since a popular uprising challenged military rule in 1988. For over two decades, the country was featured in mainstream media primarily as one unable to cope with its own internal contradictions, a nation crippled by military rule.

Since 2011, with the release of pro-democracy icon Aung San Suu Kyi from house arrest, as well as democratic reforms, the country experienced a makeover in the eyes of the world, no longer a lost cause but one of the bright new hopes in Asia.

U.S. President Barack Obama has visited the country twice since 2011, most recently this month for the 9^th annual East Asia Summit (EAS).

But beneath the veneer of a nation in transition, on the road to a prosperous future, lies a people deep in poverty, struggling to make a living, some even struggling to make it through a single day.

The commercial capital, Yangon, is in the midst of a construction boom, yet there are clear signs of lopsided and uneven development. By evening, those with cash to burn gather at popular restaurants like the Vista Bar, with its magnificent view of the Shwedagon Pagoda, and order expensive foreign drinks, while a few blocks away men and women count out their meagre earnings from a day of hawking home-cooked meals on the streets.

The former likely earn hundreds of dollars a day, or more; the latter are lucky to scrape together 10 dollars in a week.

The World Bank estimates that the country’s 56.8-billion-dollar economy is growing at a rate of 8.5 percent per year. Natural gas, timber and mining products bring in the bulk of export earnings.

Still, per capita income in this nation of 53 million people stands at 1,105 dollars, the lowest among East Asian economies.

The richest people, who comprise 10 percent of the population, control close to 35 percent of the national economy.

The government says poverty hovers at around 26 percent of the population, but that could be a conservative estimate.

According to the World Bank’s country overview for Myanmar, “A detailed analysis – taking into account nonfood items in the consumption basket and spatial price differentials – brings poverty estimates as high as 37.5 percent.”

The country’s poor spend about 70 percent of their income on food, putting serious pressure on food security levels.

But these are not the only worrying signs. An estimated 32 percent of children below five years of age suffer from malnutrition; more than a third of the nation lacks access to electricity; and the national unemployment rate, especially in rural areas, could be as high as 37 percent according to 2013 findings by a parliamentary committee.

Over half the workforce is engaged in agriculture or related activities, while just seven percent is employed in industries.

Development banks call Myanmar a nation in ‘triple transition’, a nation – in the words of the World Bank – which is moving “from an authoritarian military system to democratic governance, from a centrally directed economy to a market-oriented economy, and from 60 years of conflict to peace in its border areas.”

The biggest challenge it faces in this transition process is the task of easing the woes of its long-suffering majority, who have eked out a living during the country’s darkest days and are now hoping to share in the spoils of its future.

Edited by Kanya D’Almeida

Detail from the cover of ‘Degrowth: A Vocabulary for a New Era’

By Justin Hyatt
BUDAPEST/BARCELONA, Nov 22 2014 (IPS)

For anyone who recently attended the Fourth International Conference on Degrowth in Leipzig, Germany, listening in on conference talk, surrounded by the ecologically savvy, one quickly noticed that no one was singing the praises of sustainable development.

Nonetheless, development per se and all that this entails did take centre stage, as a crowd of three thousand participants and speakers debated ongoing trends in the fields of environment, politics, economics and social justice.

Given that it may not be immediately clear why a rallying cry anchored to ecological principles would call for the demise of sustainable development – which in generic terms could be described as the environmentalist programme dating back several decades – it seems that a clarification or two would be in order.

As is the case with social movements, they evolve and go through periods of transformation like anything else does. When the term sustainable development came into use in the 1970s and 1980s, it did support the assumption that general environmental principles and minimum ecological limits should be respected when going about the everyday business of development.From the vantage point of economic realism, development is inextricably connected to economic growth. However, degrowthers carry the deeply-held belief that economic growth simply does not deliver what it promises: increased human welfare

The term sustainable development rapidly gained wide-scale acceptance, with the U.N. Commission on Sustainable Development just one of the many (inter)governmental or top-down bodies that have set up in the past three decades to include environmental goals in planning and policy.

However, according to Federico Demaria, author and member of Research & Degrowth in Barcelona, the idea of sustainable development is based on a false consensus. Once this term and its underlying situations are properly deconstructed, Demaria tells IPS, “we discover that sustainable development is still all about development. And that is where the problem lies.”

Development is indeed a dirty word in degrowth circles. From the vantage point of economic realism, development is inextricably connected to economic growth. However, degrowthers carry the deeply-held belief that economic growth simply does not deliver what it promises: increased human welfare.

“Thus we find ourselves at a place where we need to readdress the flaws of sustainable development with a fresh perspective,” says Demaria.

It is with the hopes to do just that in a clear and powerful way that Demaria, along with Giorgos Kallis and Giacomo D’Alisa, have produced the new book Degrowth: A Vocabulary for a New Era, which has just been released by Routledge.

This volume includes 50 entries that all touch on specific aspects of degrowth and go a long way towards elucidating the distinguishing factors of degrowth, as well as properly defining concepts ranging from conviviality to bioeconomics, societal metabolism and many others.

The historical development of the degrowth movement is also spelled out. Thus we learn that in the 1970s, at the time of the first phase of the degrowth debate, when The Limits to Growth by Dennis and Donella Meadows and others was published, resource limits was the talk of the town. Yet now, in what can be called the second stage, criticism of the hegemonic idea of sustainable development has come to the forefront.

It was Serge Latouche, an economic anthropologist, who defined sustainable development as an oxymoron in A bas le développement durable! Vive la décroissance conviviale!  (‘Down with sustainable development! Long live convivial degrowth!’) at a conference in Paris in 2002, affiliated with the U.N. Educational, Scientific and Cultural Organisation (UNESCO) and concerned with the issues of development.

Latouche and others in the French-speaking world began to give shape to the French movement, which called itself décroissance and eventually spread to other countries, entering Italy as decrescita and Spain as decrecimiento. Eventually, by 2010, degrowth emerged as the English-language term, well suited for universal applicability.

For many of the attendees of the degrowth conference in Leipzig, the set of vocabulary of the degrowth movement and even the very name degrowth begged to be dealt with carefully. There were a few proposals to switch to a name carrying positive connotations, instead of defining a movement based on opposition to something – growth in this case.

But Latouche and Demaria both argue that the word degrowth most concisely defines one chief objective of the movement – the abolition of economic growth as a social objective. Referred to as a missile word, it is disturbing for some, exactly because it intends to be provocative; as such, this has borne fruit.

There are certainly positive concepts to highlight in the degrowth movement. These include voluntary simplicity, conviviality and economy of care. Yet none of these terms are broad enough to be inclusive and representative of the breadth of ideas that make up the entirety of degrowth.

Perhaps Francois Schneider, another of the degrowth pioneers, put it best when he defined degrowth as: “equitable downscaling of production and consumption that will reduce societies’ throughput of energy and raw materials.”

The goal in all of this, according to the authors of the new book, is not simply to have a society that can manage with less, but to have different arrangements and a different quality. That is where the idea of societal metabolism (that is, energy and materials within the economy) comes into place, because it explains how a degrowth society will have different activities, rearranged forms or uses of energy, and significantly different allocations of time between paid and non-paid work.

Taking social relations as well as the time-work relationship a step further, the theory of dépense, also described in the new book, comes in handy. Dépense signifies the collective consumption of ‘surplus’ in a society.

Nowadays, surplus time and energy is often re-invested in new production or used in an individualistic manner. This follows the dictum of capitalism whereby there should not be too many wasteful expenses; at the most individuals can employ their own all-too-brief methods to unwind from stressful life in the rat race.

Yet degrowth advocates point to the habits of older civilisations where surplus was dedicated to non-utilitarian purposes, be they festivals or celebrations. Degrowthers prefer to see an application of dépense to community-based uses that place conviviality and happiness-inducing activities above economic factors.

While no one can predict when and how the degrowth transition will take place, Demaria stresses that examples of this transition are already here. “Look no further than the transition town movement in the United Kingdom or Buen Vivir in South America,” says Demaria.

Demaria and others also hope that one specific effect of the Leipzig conference, as well as the brand new volume on degrowth, will be to re-politicise environmentalism. Sustainable development de-politicises real political oppositions and underlying dissonance, contributing to the false imaginary of decoupling: perpetuating development without harming the environment.

“Once we decide that we are not afraid to talk about the full implications of development, be they economic, social or political,” says Demaria, “then we begin to see that it is actually utopian to think that our societies can be based on economic growth for ever. Degrowth, by contrast, really offers the most common sense of all.”

(Edited by Phil Harris)

Though Kenya has posted a strong economic performance, resulting in a recent middle income bracketing, experts say that achieving the targeted double-digit economic growth rate will not be easy. Credit: Isaiah Esipisu/IPS

By Miriam Gathigah
NAIROBI, Nov 11 2014 (IPS)

Each year on Dec. 10, Lucy Mwende and her two children hop aboard a night bus and travel to the white sandy beaches and warm waters of Kenya’s Indian Ocean, some 441 km from the capital, Nairobi.

But this year they will miss that bus because Mwende says, “crowded places increase the risk of terror attacks.”

The most recent attacks were on Nov. 2 when an army barracks in the port city of Mombasa and a police station in the tourist resort of Malindi, both in Coastal region, were attacked by suspected separatist group the Mombasa Republican Council.

Kenya’s coast is a leading tourist destination and attacks there have hit the tourism sector hard. Earnings from tourism have fallen for three years in a row.

Last year, 1.09 million international visitors came to Kenya. It was a 11.3 percent drop from 1.23 million who visited in 2012.

The country earned 1.05 billion dollars from tourism in 2013, down from 1.06 billion dollars in 2012. Even though the drop appears marginal, government statistics show that a poor performance by the tourism sector in the second quarter of the year slowed down economic expansion to 5.8 percent compared to 7.2 percent in a similar period last year.

Though Kenya has posted a strong economic performance, which resulted in its recent reclassification to a middle income country, experts say that achieving the targeted double-digit economic growth rate, an increase from the current 5.7 percent, will not be easy.

All sectors are required to contribute in catapulting this East African nation’s economic growth, and there is increasing concern on the impact of insecurity on this growth.

“[The government] must become more proactive in addressing security lapses in a manner that will instil investor confidence,” David Owiro, from local think tank Institute of Economic Affairs, tells IPS.

Some sectors are more sensitive to insecurity and the impact to the economy is immediate, he says.

Danson Mwangangi, an economist in East Africa, tells IPS that insecurity, low rainfall and fiscal expansion are also some of the key challenges that the country will “first have to overcome”.

While grappling with insecurity, Mwangangi says, the government must also find ways to overcome its fiscal expansion challenges.

Fiscal policy is a plan that the government sets in regard to taxation and spending and fiscal expansion occurs when the government “decides to either spend more or lower on taxes.”

Although there are several fiscal policies in place to attract foreign direct investment, Owiro says that they are largely in-operational because they were not properly designed.

These policies were designed to ensure that the revenue received by the government is more than what is foregone in taxes.

For instance, capital allowance allows foreign investors to deduct the sum capital that they invested in the country from their tax payments, so that they are taxed less.

“For investors to qualify they had to invest outside Nairobi yet infrastructure connectivity and markets are best in Nairobi. This requirement has discouraged investors,” Owiro says.

Further, tax holidays, where foreign investors are exempted from paying taxes for a period of time have also not worked.

“Foreign investors were required to set up in the Export Processing Zones (EPZ), to manufacture for export. The main idea was to profit from the African Growth and Opportunity Act (AGOA),” Owiro says.

AGOA provides trade preferences for quota- and duty-free entry into the United States for certain goods.

These goods, however, fall within the textile industry. “We do not grow any textile, our cotton industry is dead, most of the textiles we do are re-exports, such as importing cotton with a view to export,” Owiro says.

Kenya therefore ended up with an EPZ that has only a handful of firms as opposed to an industry, he says.

Dinah Mukami of the local lobby group Bunge la Wananchi tells IPS that the government must address the country’s high unemployment rates so that “more people have money in their pockets.”

According to the Institute of Economic Affairs, open unemployment (where people who are unable to find work) is at 12 percent. When you look at the number of people who are underemployed or in seasonal employment, the figure is as high as 44 percent of the workforce.

“Nearly half of the workforce is not fully employed. We have to begin finding opportunities for these people,” Owiro explains.

Young people are adversely affected by unemployment. According to Owiro, for every adult beyond the age of 35 without a job, Kenya have two youthful persons who are unemployment.

But the government can only create a limited number of jobs.

What the country needs is a critical mass of competitive entrepreneurs with an interest in the domestic, regional and international markets “who can create a class of jobs that the government cannot,” Owiro says.

According to Mukami, the system of governance here has a direct impact on the economy.

Since 2013, the country has been implementing a devolved system of governance “bringing the government closer to the people as opposed to a single central national government that sits in the capital, Nairobi,” Mukami says.

Devolution held great promise for ordinary people as it was expected to foster inclusive growth, address inequality and unemployment.

“Human resource and technical support were meant to be devolved from the national to the county governments or the grassroots where they are most needed,” Mukami says.

But instead there is a duplication of jobs, a bloated wage bill, corruption as well as low absorption rates, Owiro says.

Mwangangi says that to cushion the agricultural sector from severe climate changes, the government needs to raise about 12.76 billion dollars —  equivalent to the 2013/2014 national budget — to finance a five-year climate change adaptation and mitigation plan.

Without these needed interventions, Mwangangi says, the challenges various sectors are facing could negate the country’s strong economic performance.

Edited by: Nalisha Adams

UNIDO Director General LI Yong at the Second ISID Forum, Nov. 4-5, 2014. Credit: Courtesy of UNIDO

By Ramesh Jaura
VIENNA, Nov 6 2014 (IPS)

The United Nations Industrial Development Organisation (UNIDO) has come a long way since 1997, when it faced the risk of closure in the aftermath of the end of the Cold War.

At that time, it was threatened with the withdrawal of Canada, the United States – its largest donor – as well as Australia on the grounds that the private sector was better suited to foster industrial development than an inter-governmental organisation.

Nearly one-and-a-half year after UNIDO’s 53-member Industrial Development Board appointed LI Jong – who had served as China’s Vice-Minister of Finance since 2003 – as Director General, the organisation is set to respond to post-2015 global development priorities by treading the path to inclusive and sustainable industrial development (ISID).

“We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success" – U.N. Secretary-General Ban Ki-moon
It was not surprising therefore that some 450 participants from 92 countries, including Heads of State and government, ministers, representatives of bilateral and multilateral development partners, agencies of the United Nations system, the private sector, non-governmental organisations and academia, joined hands to interact at UNIDO’s Second ISID Forum on Nov. 4 and 5 at the United Nations headquarters in Vienna.

The first Forum was convened in June 2014, at which government officials and key policy-makers exchanged views on policies and ISID instruments and examined what had worked in one country and could inspire another.

“The promotion of inclusive and sustainable industrial development is a very clear mandate given by our Member States at the General Conference of UNIDO in Lima, Peru, last December,” LI told the Forum on Nov, 4.

“Since then, we have been implementing the new mandate in various ways … Today we send a strong statement: technical assistance cannot remain isolated from the main forces that shape the course of progress in your countries. We have to combine our efforts to enhance the developmental impact of our endeavours. Together we will grow; the partnership will make us stronger.”

The rationale behind the UNIDO Director General’s thinking is obvious. Strategic partnerships are the best response to increasingly complex development challenges because there is no single development strategy and no single actor that can address all the social, environmental and economic challenges the world faces today.

“Integrated and multi-actor responses are required to tackle problems like climate change, economic recovery, rising youth unemployment, conflict, and emerging problems such as global health pandemics,” argues Ll.

U.N. Secretary-General Ban Ki-moon also believes that “the overarching imperative for our planet’s future is sustainable development.” In opening remarks to the Second Forum, Ban said:  “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

Amid applause, Ban added that among the main area of action – climate change – presents an opening for inclusive and sustainable industrial development.

“Smart governments and investors are exploring innovative green technologies that can protect the environment and achieve economic growth. For industrial development to be sustainable it must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources,” he said.

The UNIDO forum closely examined and endorsed new pilot programmes for country partnerships to promote inclusive and sustainable industrial development in Ethiopia and Senegal.

The programmes are based on close analysis and insights gained by UNIDO experts during visits to the two countries in the course of the previous months. They have identified a number of strong partners, both local and international, and accordingly designed the two partnership programmes.

From left to right: Ethiopia’s Prime Minister, U.N. Secretary-General Ban Ki-Moon, UNIDO Director General LI Yong and Senegal’s Prime Minister at UNIDO’s Second ISID Forum, Nov. 4-5, 2014. Credit: Courtesy of UNIDO

UNIDO’s work in the field of inclusive and sustainable industrialisation in Africa was lauded by Ethiopian Prime Minister Hailemariam Desalegn and Senegalese Prime Minister Mahammed Dionne.

Commending the creation of the new partnership approach, Prime Minister Desalegn said that inclusive and sustainable industrialisation would help his country develop. He said Ethiopia was looking forward to enhancing its economic transformation and that such a partnership model will help implement this vision.

Prime Minister Dionne said economic growth must lead to the eradication of poverty and address the problem of unemployment, adding that inclusive and sustainable industrialisation would help implement Senegal’s development plan by providing the collective action needed to make it happen.

Director General Ll assured the two prime ministers that “UNIDO is fully committed to supporting the governments of Ethiopia and Senegal in implementing the two programmes.”

“These pilot programmes,” he said, “mark the beginning of a larger, more comprehensive and ambitious approach to how UNIDO undertakes technical cooperation with and for Member States to support their industrialisation agenda.”

“If we want to achieve the scale of development needed, we have to explore the full potential of inclusive and sustainable industrial development,” Ll added.

“We have to strengthen productive capacities. We must build enterprises. We must reach out to farmers and entrepreneurs, and promote economic diversification and structural transformation based on adding value to the natural resources of these countries.”

The need for moving away from activities that are low value-added and low-productivity to activities that add more value and boost productivity was explained by the U.N. Secretary-General at the high-level thematic roundtable of the United Nations Conference on Landlocked Developing Countries (LLDCs) on Nov. 3 in Vienna.

There, Ban said: “Think of a coffee bean, just a simple coffee bean. All LLDCs can sell just a coffee bean as it is. But more developed creative countries … grind this coffee bean and sell as a manufactured product at a much higher price.

“The same with unprocessed minerals. Lots of developing countries … sell minerals just as they are. Many foreign companies come and bring all these minerals, and then they sell back with processed manufactures, [at a] much higher [price]. Then with their own mineral resources they have to buy, they have to pay a lot of money.”

ISID takes into account factors such as the structural and knowhow bottlenecks faced by developing countries by “the mobilisation of partners and their resources to synergise with UNIDO’s technical cooperation”, LI told the ISID Forum.

Commenting on the agreed cooperation with Ethiopia and Senegal, he said: “I would say that these two pilot programmes for country partnership mark the beginning of a larger, more comprehensive and more ambitious approach of how UNIDO undertakes technical cooperation with and for Member States to support their industrialisation agendas.”

“Together with our partners, we will finalise the planning of the partnership country programmes, based on the inputs we receive in this Forum.”

Those inputs included recognition that the concerns and development objectives of countries seeking international support must be taken into account and that there is no alternative to public-private partnerships.

These partnerships, participants agreed, must aim at eradication of poverty and not maximisation of the profits of the private corporations involved in such partnerships.

(Edited by Phil Harris)

With annual economic growth rates of over 10 percent and attractive investment conditions due to low infrastructural and labour costs, Ethiopia is eagerly trying to rise from the status of low-income to middle-income country in the next 10 years.

Ethiopia, with some 94 million inhabitants, is the second most populous country in Africa after Nigeria, but it remains a predominantly rural country. Only 17.5 percent of the population lives in urban areas, mainly Addis Ababa.

It is also one of the continent’s fastest growing economies. Between 2015 and 2018 growth is expected to average 7.3 percent, according to a recent study by the United Nations Industrial Development Organisation (UNIDO).

While economic growth since 2006/2007 doubled per capita income to 550 dollars in 2012/13, and the percentage of people living below the national poverty line dropped from 38.9 in 2004 to 29.6 in 2011, government sources admit that eradication of poverty remains a compelling issue.“There is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector” – UNIDO Director General Li Yong

The official target of rising to a middle-income country is considered to be realistic, but an East Asian diplomat accredited to the African Union in Addis Ababa says there is reason to be sceptical, partly because although the amount of foreign direct investment (FDI) rose from 0.5 percent in 2008 to 2 percent in 2013, investors continue to face trade constraints.

According to UNIDO, these are mainly related to border-logistics. Djibouti, the main import-export seaport used by Ethiopia, is situated 781 km from Addis Ababa, which makes the cost of land transportation a critical factor.

It is against this backdrop that UNIDO has chosen Ethiopia, along with Senegal, as a pilot country for its ambitious inclusive and sustainable industrial development (ISID) programme, which aims to achieve industrialisation in developing countries in order to eradicate poverty and create prosperity.

According to UNIDO Director General Li Yong, “there is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector”.

What distinguishes the ISID programme is that “current modes of industrialisation are neither fully inclusive nor properly sustainable”, he added. UNIDO is therefore not merely promoting industrialisation but trying to approach the needs and challenges of the globalised world that demand future-oriented concepts.

Promoting the sustainability that should be inherent to industrialisation, UNIDO says that the ISID programme takes into account environmental factors together with its partner countries and organisations.

It also fosters an industrialisation that is inclusive in sharing the benefits of the generated prosperity for all parties involved, thereby promoting social equality within populations as well as an equal distribution between men and women to ensure that nobody is excluded from the benefits of growth.

To show how these objectives can be met and to promote ISID, UNIDO organised the Second Forum on ISID from Nov. 4 to 5 in Vienna. In an opening statement, U.N. Secretary-General Ban Ki-moon said: “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

The Secretary-General, who is a strong advocate of the sustainable development agenda, also said that in order to achieve this objective, “industrial development must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources.”

Prime Minister Hailemariam Desalegn of Ethiopia and Prime Minister Mahammed Dionne of Senegal – representing the two pilot countries chosen for ISID – commended UNIDO for implementing a partnership programme, and Ethiopia’s State Minister of Industry, Mebrahtu Meles, emphasised that building industrial zones will accelerate industrialisation, as has been done by Asian countries such as China.

Forum participants expressed optimism about Ethiopia achieving economic growth through inclusive and industrial sustainable development provided that leadership and vision focused on the country’s comparative advantages while improving infrastructure.

They said that regional integration could be key for the development of the country, and called for further exploration of UNIDO’s role as a catalyst of transformational change.

In particular additional efforts were required to enhance the productivity in existing light industries such as agro-food processing, textiles and garments, leather and leather products. There was also a need to diversify by launching new industries such as heavy metal and chemicals and building up high-tech industries like packing, biotechnology, electronics, information and communications.

The ambassadors of China, Japan and Italy to Ethiopia – Xie Xiaoyan, Kazuhiro Suzuki and Giuseppe Mistretta respectively – as well as business stakeholders and development banks assured their continued support in helping Ethiopia take the path towards inclusive and sustainable industrial development, mainly through UNIDO.

(Edited by Phil Harris)

By Roberto Savio
ROME, Oct 22 2014 (IPS)

The new European Commission looks more like an experiment in balancing opposite forces than an institution that is run by some kind of governance. It will probably end up being paralysed by internal conflicts, which is the last thing it needs.

During the Commission presided over by José Manuel Barroso (2004-2014), Europe has become more and more marginal in the international arena, bogged down by the internal division between the North and the South of Europe.

Roberto Savio

We are going back to a new Thirty Years’ War – which took place nearly five centuries ago – between Catholics and Protestants. Catholics are considered profligate spenders, and there is a moral approach to economics from the Protestant side.

The Germans, for example, have transformed debt into a financial “sin”.  The large majority of Germans support the stern position of their government that fiscal sacrifice is the only way to salvation, and the looming economic slowdown will only strengthen that feeling. As a result, the handling of Europe’s internal governance crisis has largely pushed Europe to the side lines of the world.

It is a mystery why it is in the interests of Europe to push Russia into a structural alliance with China and, in such a fragile moment, inflict on itself losses of trade and investment with Russia which could reach 40 billion euro next year.“We are going back to a new Thirty Years’ War – which took place nearly five centuries ago – between Catholics and Protestants. Catholics are considered profligate spenders, and there is a moral approach to economics from the Protestant side.”

The latest issue of the prestigious Foreign Affairs magazine – the bible of the U.S. elite – carries a long and detailed article on “Why the Ukraine Crisis is the West’s Fault” by Chicago academic John J. Mearsheimer, who documents how the offer to Ukraine to join the North Atlantic Treaty Organisation (NATO) was the last of a number of hostile steps that pushed Russian President Vladimir Putin to stop a clear process of encroachment.

Mearsheimer wonders how all this was in the long term interests of the United States, beyond some small circles, and why Europe followed. But politics now has only a short-term horizon, and priorities are becoming conditioned by that approach.

A good example is how European states (with the exception of the Nordic states), have been slashing their international cooperation budgets. Not only have Spain, Italy and Portugal – and of course Greece – practically eliminated their official development assistance (ODA) budgets, but France, Belgium and Austria have also been following suit. Meanwhile China has been investing heavily in Africa, Latin America and, of course, Asia where the term ‘cooperation’ would not be the most appropriate.

But the best example of Europe’s inability to be in sync with reality is the last cut in the Erasmus programme, which sends tens of thousands of students every year to another European country. Has it been overlooked that one million babies have been born to couples who met during their Erasmus scholarships, and that this programme is being cut at a moment when anti-Europe parties are sprouting everywhere?

In fact, education – and especially culture (and medical assistance) – are under a continuous reduction in spending. As Giulio Tremonti, Finance Minister under Italian Prime Minister Silvio Berlusconi, famously said, “you don’t eat with culture”.

The per capita budget for culture in southern Europe is now one-seventh that of northern Europe. Italy, which according to UNESCO holds 50 percent of Europe’s cultural heritage, has just decided in its latest budget to open up 100 jobs in the archaeological field with a gross monthly salary of 430 euro. In today’s market, this is half what a maid receives for 20 hours of work a week.

Italian politicians do not say so explicitly, but they believe that there is already such rich heritage that there is no need for further investment and, anyhow, the tourists continue to arrive. The budget for all Italian museums is close to the budget of the New York Metropolitan Museum … in the real world, this is like somebody who wants to live by showing the mummified body of his great grandmother for the price of a ticket!

It can be said that, in a moment of crisis, the budget for culture can be frozen because there are more urgent needs. But no need is more urgent than to keep Europe running in the international competition in order to ensure a future for its citizens. And yet, the budget for research and development, which is essential for staying in the race, is also being cut year by year.

Let us look at the situation since 2009. Spain has reduced investment in R&D by 40 percent, which has led to a 40 percent cut in financing for projects and a 30 percent cut in human resources. Italian universities have witnessed a total cut of 20 percent in spending which has meant a reduction of 80 percent in hiring and 100% in projects, while 40 percent of PhD courses have disappeared.

France has cut hiring in centres of research by 25 percent and in universities by 20 percent. Less than 10 percent of demand for projects receives financing because funds are no longer available.

Greece has cut budget for centres of research and universities by 50 percent since 2011, and has frozen the hiring of any new researchers.

In the same period in Portugal, universities and research centres have suffered a cut of 50 percent, the number of scholarships for PhDs has been cut by 40 percent and post-doctoral courses by 65 percent.

It is important to recall that the Lisbon Strategy, the action programme for jobs and growth adopted in 2000,  aimed to  make the European Union “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion” by 2010. Not only were most of its objectives not achieved in 2010, but Europe continues to slide backwards. The Lisbon Strategy had set 3 percent of GNP for R&D, but southern Europe is now below 1.5 percent.

A notable exception is the United Kingdom. The current government, which works in strong synchronicity with the City and its industrial constituency, has funded a 6 billion euro “Innovation and Research Strategy for Growth” plan to the applause of the private sector.

China is steadily increasing steadily its R&D budget, which is now 3 percent (what the Lisbon Strategy had set for Europe), but it aims to reach 6 percent of GNP by 2020 and, in just seven years, China has become the largest producer of solar energy, bankrupting several U.S. and European companies.

Is cutting Europe’s future in international competition really in the interests of Germany? Or it is that politics are losing the view of the forest while they discuss how many trees to cut, to reach a compromise between the Catholics and the Protestants?

We are now making of economics a moral science, which makes of Europe an unusual world. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

Excerpt:

Putting the spotlight on culture. Credit: A.D. McKenzie/IPS

By A. D. McKenzie
FLORENCE, Oct 4 2014 (IPS)

International experts working in the creative sector are calling for governments to recognise the integral role that culture plays in development and to ensure that culture is a part of the post-2015 United Nations development goals, to be discussed next year.

At UNESCO’s Third World Forum on Culture and Cultural Industries, which took place Oct. 2-4 in Florence, Italy, representatives from a range of countries discussed the contributions that culture can make to a “sustainable future” through stimulating employment, economic growth and innovation.

The United Nations cultural agency pointed out that the global trade in cultural goods and services has doubled over the past decade and is now valued at more than 620 billion dollars, although there is some disagreement on this figure.

But, apart from the financial aspects, culture also contributes to social inclusion and justice, according to UNESCO Director-General Irina Bokova, who inaugurated the forum at Florence’s Palazzo Vecchio.“Countries must invest in culture with the same determination they bring to investing in energy resources, in new technologies … In a difficult economic environment, we must look for activities that reinforce social cohesion, and culture offers solutions in this regard” – UNESCO Director-General Irina Bokova

“I believe countries must invest in culture with the same determination they bring to investing in energy resources, in new technologies,” she said. “In a difficult economic environment, we must look for activities that reinforce social cohesion, and culture offers solutions in this regard.”

Bokova told IPS that the forum wanted to show that culture contributes to the “attainment” of the various development goals, which include ending extreme poverty, achieving universal primary education and gender equality, and ensuring environmental sustainability.

Many governments, however, are not investing enough in the cultural or creative sectors even when these industries have proven their worth. Some states prefer to build sports stadiums that are rarely used rather than to support the arts, said Lloyd Stanbury, a Jamaican lawyer in the music business who participated in the forum.

“In the case of Jamaica, we’ve shown that we can compete and win globally at the highest levels in culture,” he told IPS. “Reggae and Rastafari have put Jamaica on the world map and the debate is happening right now about what the government can do to invest more in culture.”

Stanbury said that arts education should have the same status as traditional curricula. “Students are sometimes told, ‘oh, you can’t do maths? Go and draw something’ but their drawings aren’t considered valuable,” he said.

In some developing countries, the arts are seen as a peripheral sector, not a “real” industry and that must change, he argued.

In addition, Stanbury said in his presentation to the forum, in many developing countries, “segments of the music and entertainment community do not enjoy harmonious relationships with government and government institutions, particularly where there is evidence of government corruption that artists speak out against in the creation and presentations of their work.”

For many governments, meanwhile, investing in culture naturally comes a long way behind providing proper health, sanitation and electricity services and developing transportation infrastructure. Yet, culture can help in poverty alleviation, job creation and peace building, experts said.

Peter N. Ives, Mayor pro tem of the U.S. city of Santa Fe, New Mexico, detailed how the city had invested in the arts, through allocating one percent of hotel-bed taxes (or lodger taxes) for cultural activities, among other measures.

“Santa Fe now has more cultural assets per capita than any other city in the United States,” he said, adding that “inclusion” of all groups was a key element of the policy, in which “everyone brings their creative gifts to the table”.

The city has an Arts Commission, appointed by the mayor, that “recommends programmes and policies to develop and promote artistic excellence in the community” and it has followed a multi-cultural route.

The result is that Santa Fe has increasingly drawn writers and visual artists, as well as tourists, because of its growing number of museums, performances and outdoor sculptures – also one of the reasons behind its designation as a UNESCO Creative City.

Such “success stories” may seem far-fetched for many poor or middle-income countries, faced with a variety of crises including conflict. But experts at the conference described grassroots schemes where intra-community violence, for instance, decreased when community members were actively encouraged to produce art about their lives.

Other representatives examined how creating film and literary festivals had contributed to a sense of national pride and cohesion. In the Caribbean and in parts of Africa and Asia, for example, the growth of festivals and cultural prizes has given a general boost to the arts in some countries, reflecting what wealthy countries have known for some time.

The forum, jointly organized by UNESCO, the Italian government, the Tuscany region and the Municipality of Florence, also examined how culture can be preserved in war-affected regions, with a focus on recent UNESCO cultural heritage preservation projects (funded by Italy) in Afghanistan, Mali and other states.

Denmark and Belgium, meanwhile, provided a look at how overseas development aid to cultural activities can promote employment, training and youth involvement in society, especially within a human rights context.

“We’re living in a very hostile environment for development cooperation and also for culture and development, but I’m launching an appeal for more cooperation in this area,” said Frédéric Jacquemin, director of Africalia, a Belgian organisation that sees culture as “a motor for sustainable human development”.

Participants in the forum produced a ‘Florence Declaration’ calling for the “full integration of culture into sustainable development policies and strategies at the international, regional and local levels.”

The Declaration said that this should be based on standards that “recognise fundamental principles of human rights, freedom of expression, cultural diversity, gender equality, environmental sustainability, and openness and balance to other cultures and expressions of the world.”

(Edited by Phil Harris)

Degrowth demonstrators marching through the streets of Leipzig, September 2014. The placard reads: Exchange Share Give. Credit: Klimagerechtigkeit Leipzig (http://klimagerechtigkeit.blogsport.de/)

By Justin Hyatt
LEIPZIG, Sep 22 2014 (IPS)

From the mid-20th century onwards, economic growth has come to count as a self-evident goal in economic policies and GDP to be seen as the most important index for measuring economic activities.

This was the premise underlying the recent Fourth International Conference on Degrowth for Ecological Sustainability and Social Equityheld in Leipzig to take stock of the “degrowth” movement’s progress in efforts to debunk the mantra of growth and call for a fundamental rethink of conventional economic concepts and practices.

Many followers of the movement, who argue that “anyone who thinks that growth can go on endlessly is either a crazy person or an economist”, base their philosophy on the findings of a 1972 book – The _Limits_to_Growth – which reports the results of a computer simulation of exponential economic and population growth with finite resource supplies.“In China, which is touted as a success story of economic growth, 75 percent of the results of this growth serves only 10 percent of the population, while the enormous Chinese urban centres have become so polluted that even the government would like to build eco-cities” – Alberto Acosta, economist and former President of the Constitutional Assembly of Ecuador

After Paris (2008), Barcelona (2010) and Venice (2012), this was the fourth such conference but, with some 3,000 participants, the largest so far. Hundreds of workshops, roundtable discussions and films or presentations were organised for the scientists, researchers, activists and members of non-governmental organisations (NGOs) who gathered to discuss economic degrowth, sustainability and environmental initiatives, among others.

Internationally acclaimed Ecuadorian economist Alberto Acosta, who was President of the Constitutional Assembly of Ecuador in 2007-2008 told participants that in China, which is touted as a success story of economic growth, 75 percent of the results of this growth serves only 10 percent of the population, while the enormous Chinese urban centres have become so polluted that even the government would like to build eco-cities.

Acosta, who developed the Yasuní-ITT initiative, a scheme to forego oil exploitation in Ecuador’s Yasuní National Park, is also an advocate of buen vivir, arguing that extractivism is one of the most damaging practices linked to latter day capitalism, as more and more non-renewable natural resources are taken from the earth and lost forever, while producing gigantic quantities of harmful emissions.

To counter extractivism, Acosta calls for the adoption of buen vivir, which is based on the Andean Quechua peoples’ sumak kawsay (full life) – a way of doing things that is community-centric, ecologically-balanced and culturally-sensitive – and loosely translates as “good living”.

For Giorgos Kallis, an environmental researcher and professor at the University of Barcelona, degrowth needs to provide a space for critical action and for reshaping development from below, in an attempt to divert more time away from a capitalist and towards a care economy.

When asked if the concept of degrowth was not too radical or uncomfortable a message, Kallis said: “Yes, perhaps degrowth doesn’t sit well, but that is precisely the point, to not sit well – it is time to make this message relevant.”

Canadian author and social activist Naomi Klein, known for her criticism of corporate globalisation and author of No Logo – which for many has become a manifesto of the anti-corporate globalisation movement – joined the conference by Skype to tell participants that radical change in the political and physical landscape is our only real possibility to escape greater disaster and that reformist approaches are not enough.

One of the main driving forces behind the degrowth movement is Francois Schneider, one of the first degrowth activists who promoted the concept through a year-long donkey tour in 2006 in France and founded the Research and Degrowth academic association.

“Systemic change involves whole segments of society,” Schneider told IPS. “It doesn’t involve just one little part and we don’t expect a new decision from the European Parliament that will change everything. Dialogue is the key. And putting forward many different proposals.”

Taking the example of transport and mobility, he explained that it is useless to tackle the transformation of transport alone because “transportation is linked to energy and advertising is linked to the car industry.”

Vijay Pratap, Indian activist from the Gandhi-inspired Socialist youth movement era and member of South Asian Dialogues on Ecological Democracy (SADED) pleaded for the inclusion of marginalised majorities in the degrowth movement. Pratap told IPS that “unless we initiate the processes so that they can become leaders of their own liberation, no real post-growth society can come into being.”

While he was satisfied with what he said as a very egalitarian and democratic approach to the organisation of the conference, Pratap said that inclusion should be guaranteed for those who do not speak English, those who do not know how to navigate social networking sites and those who do not have access to international philanthropic donor agencies.“

According to Pratap, who participated as an organiser in the World Social Forum (WSF) gathering in Mumbai in 2004, this was one major lesson of the WSF process.

On the final day, Lucia Ortiz, a programme director for Friends of the Earth International and active in Brazilian social movements, did not mince her words in the closing plenary when she proclaimed that “degrowth is the bullet to dismantle the ideology of growth.”

The movement to dismantle this ideology will now continue in preparation for the next degrowth conference in two years’ time.

And Kallis is convinced that it will be even more successful than this year’s event. Commenting on the increase in participation from a few hundred in Paris in 2008 to the 3,000 in Leipzig, he quipped: “At this pace, in twenty years, we’ll have the whole world at our conference.”

(Edited by Phil Harris)

By Julitta Onabanjo, Benoit Kalasa, and Mohamed Abdel-Ahad
JOHANNESBURG, Sep 21 2014 (IPS)

Different issues will be competing for the attention of different African leaders attending the 69th United Nations General Assembly Special Session on International Conference on Population and Development (ICPD) Beyond 2014 in New York on Sep 22.

But the central question for Africa’s development today is this: How do we harness the dividend from the continent’s current youthful population?

Solving this issue has never been more fundamental to Africa’s development than it is today.

For decades many, African countries have come up with a variety of ‘development’ plans. But often missing in these documents is how best to harness the potential of the youthful population for the transformation of the continent.

Therefore, strategic investment to harness the potential of the youth population can no longer wait.“African governments must know that efforts to create a demographic dividend are likely to fail as long as vast portions of young females are denied their rights, including their right to education, health and civil participation, and their reproductive rights”

The groundswell for change

Africa is undergoing important demographic changes, which provide immense economic opportunities. Currently, there are 251 million adolescents aged 10-19 years in Africa compared with 1.2 billion worldwide, which means that around one in five adolescents in the world comes from Africa.

Africa’s working age population is growing and increasing the continent’s productive potential. If mortality continues to decline and fertility declines rapidly, the current high child dependency burden will reduce drastically. The result of such change is an opportunity for the active and employed youth to invest more.  With declining death rates, the working age population in Africa will increase from about 54 percent of the population in 2010 to a peak of about 64 percent in 2090.

This increase in the working age population will also create a window of opportunity  that, if properly harnessed, should translate into higher economic growth for Africa, yielding what is now termed a ‘demographic dividend’ – or accelerated economic growth spurred by a change in the age structure of the population.

Reaping the demographic dividend requires investments in job creation, health including sexual and reproductive health and family planning, education and skill and development, which would lead to increasing per capita income.

Due to low dependency ratio, individuals and families will be able to make savings, which translate into investment and boost economic growth. This is how East Asian countries (Asian Tigers) were able to capitalise on their demographic window during the period 1965 and 1990.

The impact of such a demographic transition on economic growth is no longer questionable – it is simply a fact.

But this transformation requires that appropriate policies, strategies, programs and projects are in place to ensure that a demographic dividend can be reaped from the youth bulge.

Seizing the moment

Without concerted action, many African countries could instead face a backlash from the growing numbers of disgruntled and unemployed youth that will emerge.

In the worst-case scenario, such a demographic transition could translate into an army of unemployed youth and significantly increase social risks and tensions.

To seize the opportunity, African states will need to focus their investments in a number of critical areas. A priority will be the education and training of their youth.

African governments must know that efforts to create a demographic dividend are likely to fail as long as vast portions of young females are denied their rights, including their right to education, health and civil participation, and their reproductive rights.

If these efforts are to succeed, this will demand addressing gender disparities between today’s boys and girls especially, but more specifically, addressing the vulnerabilities of the adolescent girl.

Beyond rhetoric

As we move toward the post-2015 development agenda, unleashing the potential and power of Africa’s youth should be a critical component of the continent’s developmental strategies, as reflected in the Addis Ababa Declaration on Population and Development – the regional outcome of ICPD beyond 2014 – and the Common African Position on the post-2015 development agenda.

This can no longer be reduced to election or political polemics. It requires urgent action.

Young people are central to the realisation of the demographic dividend. It is therefore important to protect and fulfil the rights of adolescents and youth to accurate information, comprehensive sexuality education, and health services for sexual and reproductive well-being and lifelong health, to ensure a productive and competitive labour force.

Africa cannot afford to squander the potential gains of the 21st Century offered by such an important demographic asset:  its youthful population.

Edited by Ronald Joshua

Excerpt:

By Roberto Azevêdo
GENEVA, Jul 29 2014 (IPS)

In the 1960s, there were high hopes for the development of the newly-independent sub-Saharan African countries but these hopes were quickly dashed following a series of shocks which began in the mid-70s, with the first oil price spikes, followed by a severe decline in growth and increase in poverty in the 80s and early 90s. However, by the mid-1990s, economic growth had resumed in certain African countries. Economic reform, better macroeconomic management, donor resources and a sharp rise in commodity prices were having a positive effect.

WTO Director General Roberto Azevêdo. Credit: WTO/CC BY SA-2.0

In the 2000s, many African countries witnessed high economic growth performance and during that period some of the world’s fastest growing economies were in sub-Saharan Africa. Angola, Nigeria, Chad, Mozambique and Rwanda all recorded annual growth of over 7 percent.

In 2012 Africa’s exports and imports totalled 630 billion dollars and 610 billion dollars respectively, ­ a fourfold increase since the turn of the millennium. And the long term prospects for growth are good. The Economist Intelligence Unit has forecast average growth for the regional economy of around 5 percent yearly from 2013-16.

Despite all this, the continent still plays a marginal role in the global market, accounting for barely 3 percent of world trade. One significant reason – although, of course there are others – is that African economies are still narrowly based on the production and export of unprocessed agricultural products, minerals and crude oil.“There is little doubt that the regional [African] market offers good scope for African firms to diversify their production and achieve greater value addition”

Now, due to relatively low productivity and technology, these economies have low competitiveness in global markets – apart from crude extractive products. The low productivity of traditional agriculture and the informal activities continue to absorb more than 80 percent of the labour force. And growth remains highly vulnerable to external shocks.

This story of half a century of struggle, set-backs and progress shows two things:

One, the road to meaningful and inclusive development still seems long.

Two, we are in a better position than ever to make real, sustainable progress.

Many countries are striving to do more in turning their strength in commodities into strengths in other areas,­ using commodities as a means of spurring growth across various sectors. The United Nations Economic Commission for Africa’s 2013 Economic Report echoes this ­ calling for the continent’s commodities to be used to support industrialisation, jobs, growth and economic transformation.

In line with this, I think there are a number of essential steps to take:

– diversification of economic structure, namely of production and exports;

– enhancement of export competitiveness;

– technological upgrading;

– improvement of the productivity of all resources, including labour; and

– reduction of infrastructure gaps.

Only by delivering in these and other areas can policymakers ensure that growth enhances human well-being and contributes to inclusive development. But how can we take these steps?

Of course I should say that although African countries share some common features, no unique set of policies, including those on trade and industrial policy, could ever fit for all in a uniform way. Even among the least-developed countries (LDCs), some are already exporters of manufactured products, although often they rely on a single product  while others are more dependent on commodities. Nevertheless, I think it is clear that some preconditions of success are universal.

African regional integration is of course very high on the policy agenda. There is little doubt that the regional market offers good scope for African firms to diversify their production and achieve greater value addition. Already now, manufactures constitute as much as 40 percent of intra-African exports, compared with 13 percent of Africa’s exports to the rest of the world.

The Bali Package, which World Trade Organisation members agreed in December last year, will help to resolve some problems. Inclusive, sustainable development was at the heart of the whole Bali project ­ and our African members played a crucial role in making it a success. It brought some progress on agriculture. It delivered a package to support LDCs. It provided for a Monitoring Mechanism on special and differential treatment.

And, in addition, Bali delivered the Trade Facilitation Agreement and this is a direct answer to some of the problems of fragmentation. Costly and cumbersome border procedures, inadequate infrastructure and administrative burdens often raise trade-related transaction costs within Africa to unsustainable levels, creating a further barrier to intra-African trade.

This Agreement will help to address some of these bottlenecks. It will support regional integration, and therefore complement the African Union’s efforts to create a continental free trade area. And it will begin to remove some of the barriers which prevent full integration into global value chains. As such it will create an added impetus for industrialisation and inclusive sustainable development.

And it is worth noting here that the Trade Facilitation Agreement broke new ground for developing and least-developed countries in the way it will be implemented.

Another vital issue here is the importance of agricultural development in industrialisation, and the role of industrial collaboration through regional cooperation. The contribution of the agriculture sector is of utmost importance for the establishment of a sound industrial base. It can provide a surplus to invest in industrial capacity building, and supply agricultural raw materials as inputs to the production process, especially for today’s highly specialised food processing industry.

Moreover, it can also significantly contribute to industrialisation by providing an ample supply of food products. This is because food constitutes a large share of what wage earners in African countries spend their money on. Its availability at low prices contributes to increase the purchasing power of wages, and therefore raise the competitiveness of a country in international markets. (END/IPS COLUMNIST SERVICE)

Excerpt:

By Roberto Savio
ROME, May 15 2014 (IPS)

Not a day goes by without news on the growing inequality that is the telling indicator of the kind of economic model in which we have put ourselves, following the neoliberal binge unleashed by the Washington Consensus. The idea that economic growth is “a rising tide lifting all boats”, as the late Margaret Thatcher declared when she announced war on the welfare state, and its twin “capital will trickle down to everybody”, are now totally discredited. Facts, as it has been said, are stubborn.

Last year, 23 bankers received retirement entitlements of 22.7 million euros and salary increases of 27 percent, against a backdrop of deflation.
And the facts have been demonstrated in an extensive statistical analysis by French economist, Tomas Piketty, (author of Capital in the Twenty-First Century) who, on the basis of the data from the last two centuries, proves that capital obtains a greater reward than work. So, in any country, economic growth is distributed in an unequal way between salaries for all and what goes to the rich.

Over time, the capital of the rich will grow more than everything else, and finally the very rich will see their capital grow continuously, much more than general wealth; those who inherit capital will eventually have the largest part of growth: in other words, they will suck away from the general population its increase in wealth. And this means that we are going back to the times of Queen Victoria.

This is due, in fact, to a new reality: financial capitalism is doing much better than productive capitalism. The last issue of U.S. magazine Alpha lists the 25 best paid hedge fund managers. Last year, these managers – all male – earned the staggering amount of over 21 billion dollars. This beats the combined national incomes in the same year of the African countries of Burundi, Central African Republic, Eritrea, Gambia, Guinea, Sao Tomé, Seychelles, Sierra Leone, Niger and Zimbabwe.

Or, to stay in the United States, Nobel Prize-winner Paul Krugman writes that the 0.1 percent with the most income has gone back to the 19th century.

Roberto Savio. Credit: IPS

According to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 wealthiest individuals, they increased their wealth last year by 524 billion dollars – more than the combined revenues of Denmark, Finland, Greece and Portugal.

Just go to Wikipedia, click on National Budgets around the world, and see how many poor countries you can add, with their millions of people, to reach 524 billion dollars.

The same goes for Europe. We have similar statistics from Spain. Last year, 23 bankers received retirement entitlements of 22.7 million euros and salary increases of 27 percent, against a backdrop of deflation.

This is a trend which is happening everywhere in Europe, even in the Nordic countries, but also in Brazil, China, South Africa and any other part of the world. Of course, this has come to be considered a normal trend in the “new economy”, where work is now considered just a variable of production, and permanent unemployment’ is considered inevitable and structural.

Meanwhile, the United Nations claims that extreme poverty worldwide has been halved. The number of people living on less than 1.25 dollars a day fell from 47 percent in 1990 to 22 percent in 2010. There are still 1.2 billion people living in extreme poverty, but a new middle-class is emerging worldwide, even if the success in the numbers is due basically to Brazil, China and India.

So, the argument from the defenders of the present economic model is “if there are a few super rich, why do we ignore the enormous progress that has created 1 billion new middle-class citizens?

This argument has three obvious problems. The first is that this kind of economic growth is already shrinking the middle class in rich countries, and this contraction is bound to have serious effects in the long term. The consumption of the super-rich cannot substitute the consumption of a large number of middle-class citizens. Production of cars is already greater than demand, and this is happening for many products. Global poverty is declining, but in country after country, inequality is on the increase.

The second problem is that the rich are not paying taxes as before, because of a large number of fiscal benefits that were introduced at the time of U.S. President Ronald Reagan – “wealth produces wealth, and poverty produces poverty”. French President Francois Hollande discovered at his own expense that today you cannot tax capital because it is sacred.

There are at least 300 billion dollars in tax revenues which are being lost through a combination of corporate tax incentives and corporate tax dodging. Today, there are estimates of 4 trillion dollars in fiscal paradises. And history is not abundant in examples of voluntary redistribution and solidarity by the rich and the super-rich.

And the third problem is very serious. It is redundant to quote here one of the innumerable examples of how politics has become subservient to economic interests. An ordinary citizen does not have the same power as a super-rich citizen.

It is ironic that the U.S. Supreme Court has eliminated any limits to donations to parties because all men are equal. Now that elections for a U.S. president are in the vicinity of 2 billion dollars, is an ordinary citizen really equal to a Sheldon Adelson, the U.S. business magnate who has officially donated 100 million dollars to the Republican Party? No big effort, his wealth increased last year by over 14 billion dollars!

So is this trend good for democracy? Are the super-rich not of concern? Well, this is what we are told, and this is what we are asked to believe…

Excerpt:

People washing clothes on the shore of the Niger River in Mali’s capital, Bamako. Mali’s recent conflict destroyed the economy and created pressure on households. But the economy is slowly improving. Credit: Marc-André Boisvert/IPS

By Marc-Andre Boisvert
BAMAKO, Feb 6 2014 (IPS)

Under the harsh Sunday afternoon sun, Daouda Dicko washes his client’s clothes on the shore of the Niger River, which runs through Mali’s capital, Bamako. “I started doing this to survive two years ago. Now, I am used to it and I don’t mind the extra money it brings,” Dicko, who also works as a gardener, tells IPS.

Dicko struggled to feed his family during Mali’s political crisis in March 2012 when Tuareg rebels and then Islamists took control of the country’s north, which comprises almost two-thirds of this West African nation. But military intervention from France liberated the north in January 2013 and led to elections here in July that year. “The economy is not in shambles. It is dead.” -- member of parliament Aicha Belco Maiga

The conflict destroyed Mali’s economy and created pressure on households. But the country’s economy is slowly showing signs of improvement.

Binetou Diarra arranges plump tomatoes on her wooden stall in the Quartier du Fleuve, a market in Bamako.

“Prices increased a lot a year ago. But now they are back to almost normal,” 37-year-old Diarra, who is wearing a T-shirt from last year’s presidential campaign, tells IPS.

Cooking oil, which had risen to a high of 1,200 CFA (2.47 dollars) in September 2012, has now come down to 850 CFA (1.75 dollars). But in Bamako, it is not only in consumers’ pockets where one can find visible signs of economic recovery.

Hotels, which were all closed between 2012 to 2013, have now reopened. However, they are no longer filled with the 250,000 tourists whom, according to the Mali Tourism Office, would flock to the country back in 2009.

The Hotel de l’Amitié, one of the tallest buildings in the capital, has now become the seat of the United Nations mission here. Other hotels are filled with staff from NGOs and from other missions to help get Mali back on track. Restaurants and business are also busy with the return of expatriates.

Fatoumata Coulibaly and her friends have stalls close to several expatriate neighbourhoods. And the return of the expats has had a direct effect in their wallets. “There is more money coming in. It is not easy to survive, but we are positive. We know the worst is behind. Inshallah,” Coulibaly tells IPS.

Heading Towards Growth

In January, Christine Lagarde, managing director of the International Monetary Fund, said that Mali’s GDP growth will increase by 6.6 percent in 2014, which is a higher growth than the 5.7 percent predicted  a couple of months earlier.

Lagarde told the press in Mali that the country now has to move from an economic crisis to recovery. “We now have to strengthen economic fundamentals to increase growth, job creation and to decrease poverty.”

But it will be a challenge.

When sanctions were imposed here after the 2012 coup, the country lost the 30 percent of its 3.5-billion-dollar budget that was foreign-aid dependent.

The government’s centralised offices in the Cité Administrative, a Sahelian-inspired complex on the Niger River’s shore, became a phantom district for over a year because of the money shortage.

“We have been totally paralysed during the crisis. I received my salary, but it was late. And we had no budget to pursue operations. But now things are back to normal. We are paid and we have the tools to work,” Fofana Daouda, a civil servant from the ministry of family, tells IPS.

The North Remains in Economic Crisis

But while the country’s capital is experiencing a slow recovery, Mali’s north still lacks economic opportunities and many are still living in extreme poverty, says Dedeou Traore, a member of parliament for the northern region of Niafunke.

“The economy is bad,” Traore tells IPS. Northerners, whose livelihoods were largely dependent on subsistence agriculture, have lost everything.

“In Niafunké, the Prefect is back, but the Justice and other state institutions [have not returned]. People feel that they are abandoned,” Traore says.

In May 2013, international donors offered almost 3.5 billion dollars to reconstruct Mali. But this week donors are meeting in Brussels as only half of the funds have been received.

Meanwhile, Oxfam International has called for better governance and the better distribution of state resources, in a report released on Feb. 5.

The report denounces “the combined impact of weak decentralisation, corruption, and a lack of transparency regarding budget allocation and the distribution of aid has led to a widely-held belief that the country’s citizens are not receiving their fair share from the government.”

“The situation in northern Mali remains fragile. Donors must not forget that more than 800,000 people need immediate food assistance due to the impact of conflict, weak harvests, and poor rains.  Mali needs a comprehensive response to the many challenges it faces,” says Mohamed L. Coulibaly, country director for Oxfam International in Mali.

Aicha Belco Maiga is a member of President Ibrahim Boubacar Keita’s Rally for Mali party, which has the majority seats in parliament. She represents the region of Tessalit, one of the most remote and arid places in Mali near the Algerian border.

“In Tessalit, all economic activities have stopped. The town is empty. People who stayed had to sell their belongings for food. There is nothing to eat. There is no functioning administration. It is so bad that you see more Algerian dinars being exchanged than CFA Francs [Mali’s currency],” she tells IPS.

“This population needs our help. The economy is not in shambles. It is dead.”

Women in the Middle East and North Africa have made significant strides in health and education but not in workforce participation. Credit: Rebecca Murray/IPS

By Katelyn Fossett
WASHINGTON, Mar 20 2013 (IPS)

As countries in the Middle East and North Africa adjust to profound political changes and economic difficulties, development experts on the region have increasingly turned their attention to the social and economic potential of incorporating more female workers into the labour market.

Not only would more employed women stimulate economic growth, but a more inclusive labour market has also been thought to encourage political participation among women. But the World Bank is warning that Middle Eastern and North African (MENA) countries are lagging on bringing more women into the workforce.

At the core of these findings is a puzzle in development indicators that is largely unique to the region: as women in the Middle East and North Africa have made unprecedented strides in health and education, female workforce participation has struggled to make commensurate gains.

“MENA countries have wisely invested in women’s education but they are not yet fully tapping into their potential to contribute to growth and prosperity,” Manuela Ferro, director for poverty reduction and economic management in MENA at the Washington-based World Bank, said in a statement.

A bank report released last week points to a wide and interrelated set of economic, legal and social factors that help to explain these findings. In most MENA countries, female-to-male enrolment ratios are close to or above one-to-one, and eight countries even have a “reverse gender gap” in post-secondary education, in which women enrol in greater numbers than men.

Likewise, maternal mortality fell by 59 percent between 1990 and 2008, the largest decline in the world.

Such impressive gains have not been matched in the labour markets in the region, however. Female participation hovers at just 25 percent, compared with 50 percent worldwide.Middle Eastern countries are not fully tapping into women's potential to contribute to economic growth and prosperity.

Of course, trends vary greatly by country, demographic and education level.

In Tunisia, for instance, the number of tertiary-educated women in the workforce has grown modestly. In Egypt, less-educated women have actually entered the workforce in greater numbers, even while labour participation by their more educated counterparts has declined.

The MENA puzzle

Although the report repeatedly mentions norms and customs that stress rigid ideas of women’s roles in society, the authors caution against attributing too much of the findings to Islam. They cite the diversity of women’s status across Muslim countries as evidence of a greater system of factors at work.

Current scholarship typically considers “variations in economic structures and policies among countries, or differences in pre-existing cultural values within a given country” more important, the report said.

This idea stands in contrast to another World Bank report from 2004, which looked at gender and development in the MENA region. At the time, researchers cited ideas of the woman as central to family honour in Islamic societies and the Muslim code of modesty, or mahram, as some of the strongest barriers to female participation in public life.

Yet it is impossible to escape the centrality of the law – and the uneven enforcement of anti-discrimination laws – as one of the most important and immediate avenues for bringing more women into the workforce.

“In principle, it can work both ways,” Tara Vishwanath, the lead author of the new report, told IPS. “But many would argue that without equality in the letter of the law, its interpretation and its implementation, it would be hard to ensure a level playing field for women.”

The structure of oil-dominated economies could also be to blame for squeezing job markets typically dominated by women.

Low-wage, export-oriented industries such as textiles are one typical way through which women have entered the workforce in developing countries. But during oil booms, academics have found that economies tend to shift away from female-heavy “traded” sectors and instead towards male-dominated non-traded sectors, such as construction and retail.

“The benefits of educating girls are many, and I believe families in the MENA region are aware of that,” Mayra Buvinic, a senior fellow with the U.N. Foundation, a Washington think tank, and former director of gender and development at the World Bank, told IPS.

She pointed to the relatively high income of MENA countries to explain the gender education-workforce mismatch.

“Because of their high income levels, they are able to afford educating all of their children, male and female,” she says. “They do not have to make hard choices.”

In this sense, the education-workforce mismatch is a sign of relative luxury, of an economy in which women have not yet had to enter the workforce in large numbers out of sheer necessity. The World Bank suggests that this could be one reason many other lower-income developing countries are outpacing the MENA region in this regard.

Policy solutions

Aside from the job markets of oil-dominated economies, policies of generous food, fuel and electricity subsidies also lower women’s incentives to work.

In Kuwait, for instance, subsidies account for as much as 20 percent of government spending. Such practices generally lower household costs and make the prospect of working outside the home less attractive for women, especially because doing so is often accompanied by, for example, additional costs for childcare.

Vishwanath and her co-authors propose reforms to such policies based on the fear that they dampen incentives to work. They also suggest tweaking other policies that may encourage more female labour force participation, lauding the effects of two tax credits (for earned income and child care) that have encouraged U.S. women to participate in the workplace.

They also say that political quotas can challenge deep-seated gender stereotypes.

“Although there is little consensus on the use of quotas, recent evidence finds that even temporary or short-term quotas can play an important role in changing attitudes and stereotypes,” Vishwanath says.

To this end, many are closely watching the effects of a December 2012 decision by the UAE government to implement gender quotas in corporate boardrooms.

Industry is the ailing sector of the Brazilian economy, with production falling 2.7 percent in 2012 in spite of government incentives, and in contrast with the strong expansion of retail trade and the lowest unemployment rate in history.

The enigma of a stagnant economy that nevertheless has symptoms of growth that is happening too fast for the country to handle, including a shortage of labour and rising inflation, appears to be explained in several recent publications.

Some of the causes mentioned by economists are a fall in the number of young people joining the labour market and accumulated excess inventory.

The slowing of manufacturing activity is the chief concern of the government of President Dilma Rousseff and economic operators, because it accentuates a trend that calls into question the future of the country. Deindustrialisation, recognised years ago by industrialists and a few economists, is now hard to ignore.

Improved forecasts for this year are raising expectations. But low levels of investment, reflected in the 11.8 percent fall in production of capital goods in 2012 and the surge in inflation, which may cause the Central Bank to take measures to curb demand, do not support the promise of a vigorous recovery.

Results at the close of 2012 were “a bucket of cold water,” frustrating hopes of resuming the path of growth and indicating that “the crisis is deeper” in Brazilian industry, and not just a circumstantial effect attributable to the severe problems facing the global economy, said Julio de Almeida, a consultant at the Institute for Industrial Development Studies (IEDI).

Brazil “has not kept up with the development of global industry” in the last 20 years, as China, South Korea and India have done, he told IPS. As it has not developed the most dynamic sectors, like electronics and the pharmaceutical industry, it has not advanced enough in technological innovations, either, he added.

For the past 15 years, industry and certain “organised services” have also been suffering from an accumulation of costs, whether logistical, financial or energy-related, which have harmed their competitiveness, he said.

To cap it all, wages have increased in the last five years at a rate much higher than productivity. Only last year they rose by an average of 5.8 percent, while productivity fell by 0.8 percent, according to IEDI.

It is possible for less competitive countries to survive if the world economy is growing at a good rate, but problems appeared with the crisis that broke out in 2008 in the United States and then spread mainly to Europe, which “shrank the industrial market” worldwide and created intense competition in the domestic Brazilian market, de Almeida said.

In spite of it all, de Almeida believes that this year there may be some recovery, thanks to government measures to reduce electricity costs, cut taxes for some industrial sectors, lower interest rates and stabilise exchange rates, as well as its announcement of large forthcoming investments in transport infrastructure.

However, it will be necessary to boost productivity by investing heavily in technological innovations, especially because Brazil’s industrial base is “aged,” he said.

In fact, the mechanical engineering industry, especially the automotive industry, is increasingly predominant in the country.

With its long production chain, ranging from automobile parts to agricultural machinery, the automotive segment represented 21 percent of industrial production in 2011, according to the National Association of Automobile Manufacturers (ANFAVEA).

This proportion has doubled in the last 20 years, while the contribution of manufacturing as a whole to GDP has declined, falling to 14.6 percent in 2011. In other words, the importance of automobiles in the Brazilian economy is still rising.

As a result, the main government measure to reduce the recessionary effects of the international financial crisis was to cut taxes on vehicles, from December 2008, after three months of a sharp decline in sales. The strategy had been used before in other crises.

Oil and steel are also key elements in Brazilian efforts to reverse deindustrialisation.

Recovery is being sought in the shipbuilding industry, taking advantage of the oil discovered under a salt layer deep below the sea bed of the Atlantic ocean, close to the Brazilian coast.

In order to bolster national production, legislation was designed to demand variable and increasing proportions of Brazilian-made components, that may reach up to 70 percent of every ship, platform, depth sounder and other equipment constructed for oil extraction.

All these state interventions, such as tax or financial incentives for specific sectors and measures seen as protectionist, including customs barriers and requirements for a high national content for products like automobiles, as well as oil tankers, are rejected by many free market analysts, who have a keen following among operators and media specialised in economics.

Deindustrialisation is not necessarily a “sickness,” since “industry is doing badly, but Brazil is doing very well,” with high employment and high wages, said economist Edmar Bacha in interviews last year when he announced a book he edited, titled “O Futuro da Indústria no Brasil” (The Future of Industry in Brazil), published in February 2013.

According to the book, the manufacturing sector in Brazil lost competitiveness mainly due to the rise in wages, which drove up costs.

The average wage in Brazil grew 14.4 percent a year between 2006 and 2011, a global record seconded at a great distance by Australia, which had nine percent wage growth, according to co-authors Beny Parnes and Gabriel Hartung.

Bacha, who took part in previous governments that implemented more free market economic policies, maintained that competitiveness is not built by protectionism, but by more open trade, allowing integration into international production chains. Mexico is cited as an example.

Taking a broader range of expert views, the only point of agreement about the loss of industrial capacity is that it is caused by lack of competitiveness. But there are broad differences in interpretations of its origins and solutions.

Analysts in the commodities sector, for instance, question the primacy attributed to industry as the driver of progress and innovation. They argue that agriculture today adds a great deal of technology and knowledge, involving scientific research and mechanisation.

But the Brazilian government is led by so-called “developmentalists,” for whom economic growth is paramount, and chief among them is President Rousseff herself.

It is ironic, then, that industrial decline continues while the country is administered by leaders who prioritise the sector and, to recover its competitiveness, have adopted measures accused of being overly interventionist by the partisans of free market solutions.

Santo Antônio hydropower station under construction, October 2010. Credit:Mario Osava/IPS

By A. D. McKenzie
PARIS, Dec 13 2012 (IPS)

As governments struggle to find ways out of the persistent global financial crisis, Brazil’s development model offers an alternative path to recovery and growth, according to some economists and politicians.

“Brazil provides hope for African as well as European nations because Brazil has shown that you can succeed at globalisation by opting resolutely not only for growth but also for a better distribution of wealth,” Togolese economist Kako Nubukpo told IPS.

The former head of economic analysis and research for the West African Economic and Monetary Union (WAEMU) was in Paris to participate in a two-day ‘Forum for Social Progress’ that took place here this week, headed by Brazil’s ex-president Luiz Inácio Lula da Silva, current president Dilma Rousseff and French president François Hollande.

Focusing on how to ‘choose growth’ and ‘exit the crisis’, the forum was also a space for progressive experts to call for a new kind of global governance that “puts people first” and ensures environmental sustainability.

“Brazil has shown us that the challenge is to take people’s aspirations into account as much as possible, because with enlightened leadership we can win in the development process,” Nubukpo said.

“In Africa today we have the impression that our leaders are more accountable to the International Monetary Fund and the World Bank than to their own people.”

Nubukpo and other participants praised the “usefulness” of the forum, but Lula himself said he was tired of meetings held simply to discuss the crisis. In a passionate speech, he called on governments to find the courage to adopt “obvious” solutions, especially regarding the poor.

“If a ruler cannot offer democracy, dignity and hope to his people, what do we need governments for?” he asked.

Describing how he embarked on plans to make Brazil a respected player on the world stage, Lula described policies that have been both lauded and criticised. His administration notably instituted the ‘bolsa familia’ (family grant) programme, a national system of cash transfers for poor families to assist them in keeping their children in school.

The government also set up a ‘pro-uni’ (pro-university) programme in which low-income students receive scholarships for university, with the aim of providing the country with more skilled workers.

Some critics say that the measures have had unintended consequences, such as families sending children to school just to get the funds, but Lula defended the policies.

“I had the conviction that it was necessary to do something different than what had been done (before) in Brazil,” he said at the forum, which was co-hosted by the French Jean-Jaurès Foundation and by the Instituto Lula, an organisation Lula founded after leaving the presidency in 2011.

“We decided to pay the bolsa familia through bank branches, (using) magnetic cards that were given to the women in each household (not to the men, who could go out and spend the money on beer) and…this was a revolution for building bank accounts for low-income brackets,” he added.

One of Instituto Lula’s goals is to “bring Brazil and Africa closer together” and to “improve Brazil’s integration with Latin America” – two objectives that the former president said would change the global status quo.

“It’s necessary to build new paradigms so that we can discuss trade issues and not be locked in the traditional gaze of looking to the United States or the European Union to solve our problems for us,” he said.

According to Lula, if industrialised countries did more for Africa, they would also reap benefits in the future. “Why doesn’t the developed world, which is facing a consumption problem, extend long-term funding to African countries at lower interest rates so that Africa can develop their own industries and agriculture?” he asked.

He said that the ocean between Latin America and Africa should be seen as a conduit for, rather than a barrier to, trade.

African anti-poverty activist Bruno Ondo Mintsa, president of the Association Printemps du Quart-Monde, told IPS that the “Brazilian miracle” was a source of motivation for Africans.

For Africa, which has immense natural wealth but continues to be plagued by abject poverty, “Brazil shows that the problem is one of democracy, of governance and wealth distribution,” Mintsa said. “It’s scandalous that such a rich continent as Africa should have people living in such poverty.”

For some European socialists, Brazil exemplifies a middle way between what French president Hollande called the “outright rejection of globalisation and the gullible acceptance of even its (most) extreme consequences”.

“Although we’re looking for growth, we know all too well that the kind of growth we had before the crisis is no longer sustainable,” Hollande told participants at the forum.

The solution will not be found by looking back, he added. Instead, “We have to create a new era.”

According to Hollande, the priorities have to be growth, jobs for young people, energy transition and fighting inequality. He is all too familiar with the perils of ignoring these key areas – French unemployment rose to 10.3 percent in the third quarter of this year, the highest in 13 years, and youth unemployment is close to 25 percent.

On Tuesday, just as the Forum for Social Progress began, the French government’s own National Conference for the Fight Against Poverty drew to a close with the announcement of an ambitious two-billion-euro plan for moving forward.

The roadmap includes increasing income support, extending free national healthcare, creating emergency housing and providing an allocation of funds for unemployed young people aged 18 to 25. Some opposition politicians criticised the plan as a handout, but activists said it was time real political attention was given to the poor.

“France can learn a lot from Brazil,” retired French medical doctor and professor Alain Goguel told IPS. “We prop up the banks with trillions, but re-launching the economy by helping the poor is an original idea. It should be imitated if it works.”

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The rate of female entrepreneurship is higher in Africa than in any other region of the world. Credit: Mantoe Phakathi/IPS

By Sabine Clappaert
DEAUVILLE, France, Oct 25 2012 (IPS)

The international financial crash of the late 2000s created more than a global economic recession: it accentuated popular doubts about the paradigms on which our economies are built and prompted a closer look at two crucial drivers of economic growth: women and entrepreneurship.

At the recently concluded Women’s Forum held in France earlier this month, a pivotal point on the agenda was how to promote sustainable economic and social development in the world’s second fastest growing region: Africa.

Recent research from the McKinsey Global Institute (MGI) shows that natural resources account for only about a third of Africa’s growth. The rest is the result of internal structural changes that have stimulated domestic economies: telecommunications, banking and retail are flourishing and construction is booming.

Trade between Africa and the rest of the world has increased by 200 percent since 2000 and the continent is also gaining increased access to international capital, with the annual flow of foreign direct investment (FDI) into Africa increasing from nine billion dollars in 2000 to 62 billion dollars in 2008.

With a population that is set to more than double from one to two billion by 2050, Africa’s potential is enormous – if it can create the conditions for women-led, sustainable development by opening up the formal economy to female entrepreneurs.

Turning the spotlight on human capital and innovation

Members of the 40-strong African delegation attending the meeting agreed on one thing: Africa must learn to take better advantage of its human potential to boost the kind of economic development that benefits a broader expanse of society.

In particular, attitudes toward entrepreneurship need to undergo a radical change.

“Many Africans today still aspire to become doctors or lawyers, but entrepreneurs only if they can’t find jobs. There has to be a rapid change in this mind-set. Young people don’t know what it means to become entrepreneurial. We need to show that it is a real option,” according to Anne Amuzu, a businesswoman from Ghana.

Inspirational role models of successful African entrepreneurs are important.

Women such as Bethlehem Tilahun – founder of SoleRebels, one of Africa’s best-known shoe brands – who was counted among the top ‘100 women to watch in 2012’ by Forbes magazine, are examples of the impact women can make in the global landscape.

African women also represent a vast pool of potential that could drive broad, sustainable growth in Africa.

An estimated two-thirds of African women participate in the labour force and, according to the World Bank, the rate of female entrepreneurship is higher in Africa than in any other region of the world.

Many of these women are active entrepreneurs in their countries’ informal economies.

The message that women can make a real difference to the continent’s future has made its way beyond Africa’s shores.

“Women in the private sector represent a powerful source of economic growth and opportunity,” said Marcelo Giugale, the World Bank’s director for poverty reduction and economic management for Africa.

The European Commission too has recognised that women are powerful drivers of sustainable development.

As part of achieving its commitments to the Millennium Development Goals, the EU has supported the enrolment of roughly 85,000 female students in secondary education, in 10 sub-Saharan African countries over the past five years.

“(Encouraging) women entrepreneurs can fuel growth. But this will depend on having appropriate training and opportunities for young people. Education can help achieve this, but we also need to inspire with role models,” Nigest Haile of the Centre for African Women Economic Empowerment told participants at the conference.

Better access to financial markets can help bring more women entrepreneurs into the formal sector and enable them to expand their businesses.

Training and other forms of education with an emphasis on improving business and financial skills will also help spur growth.

Many leaders firmly believe entrepreneurial training should start in schools if young people are to become financially literate and seriously consider starting their own businesses as a viable option for building a solid future.

A recent report by Ernst & Young suggests that dedicated training dramatically improves student perceptions of a career as an entrepreneur.

Africa’s recent growth spurt has already made life more rewarding for many of its inhabitants. Business opportunities abound and governments are showing an increasing willingness to get out of their way.

According to the World Bank’s annual ranking of commercial practices, 36 out of 46 African governments made things easier for business in the past year.

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