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)

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 6 2014 (IPS)

If ever there was a need to prove that we are faced with a total lack of global governance, the U.N. Climate Summit, extraordinarily called by U.N. Secretary-General Ban Ki-moon on Sep. 23, makes a very good case.

The convocation of the climate summit – albeit just for one day – appeared to indicate that it had finally dawned on political leaders that there is a problem, in fact an urgent problem, about the impact that climate change is having on our planet.

And yet, the array of leaders gathered together in New York, although full of general platitudes, gave another impressive display of failure to come up with a concrete answer. While acknowledging the problem, many leaders found a way to duck their responsibility, indicating domestic constraints.

Roberto Savio. Credit: IPS

Thus U.S. President Barack Obama made it clear that the U.S. Congress would not be ready to ratify an international climate treaty. Of course, this line of reasoning applies to the U.S. approach in general – Congress does not accept binding the United States to any international treaty because of its exceptional destiny, which cannot be brought under scrutiny or control by those who are not U.S. citizens.

Furthermore, the United States has become a dysfunctional country, where the judicial, legislative and executive powers cannot cooperate, even on crucial issues.“The array of leaders gathered together in New York [for the Sep. 23 Climate Summit], although full of general platitudes, gave another impressive display of failure to come up with a concrete answer. While acknowledging the problem, many leaders found a way to duck their responsibility”

Anant Geete, India’s new Ministry of Heavy Industries and Public Enterprises, stated that growth in his country has priority over anything else, and therefore India will continue on its path towards industrialisation and energy fully based on coal, while other renewable energies will be brought in progressively, even if this will eventually make India the world’s biggest polluter.

The European Union could not make any commitment, because a new Commission was due to take over the following month (i.e. October) and the person earmarked for the post of Commissioner for Climate Action and Energy was Spanish Conservative Miguel Arias Canete,  who was a major shareholder in two Spanish oil companies – Petrolifera Ducal and Petrologis Canarias – until he sold his shares to garner support for his nomination

No problem, say his critics, Canete’s wife, son and brother-in-law did not follow suit and remain shareholders or even occupy positions on the boards of the companies.

In line with this same political sensibility, the new and more conservative European Commission has brought in a well-known City lobbyist, Lord Jonathan Hill, to the portfolio of Financial Services.

Such a system of political compromises is like bringing Count Dracula in to run a blood bank – hardly a system that is likely to appeal to blood donors!

What is sad is that there was no lack of background papers for the U.N. Climate Summit.

Beside one prepared by the Intergovernmental Council on Climate Change, bringing together 3.200 scientists from all over the world, there was, for example, a report prepared by the Spanish Ministry of Agriculture (clearly not part of a leftist government), based on a detailed study of Spanish coastal areas which found that by 2050 the level of the Mediterranean Sea will increase by a minimum of 30 centimetres (if climate control measures are taken now) up to a maximum of 60 centimetres (if no action is taken).

That means that the coastline will recede by between 20 to 40 metres, with an obvious impact on tourism, ports and costal settlements. One hundred years ago, only 12 percent of the coast was used, rising to 20 percent in 1950, 35 percent in 1988 and 75 percent in 2006. In Spain, 15 million people now live in area which will be affected by the climate change.

Obviously, France, Greece , Italy, Tunisia and all other Mediterranean countries  will share that same destiny.

Another more global study conducted by Climate Central, a U.S. research group, based on more detailed sea-level data than has previously been available, reports that about 1 person in every 40 in the world lives in an area which will be susceptible to flooding in the next 100 years – about 177 million people.

Even if immediate measures were taken for climate control, 1.9 percent of the population of coastal countries would be affected. At worst, the figure would be 3.1 percent. To give a concrete example, four percent of the Chinese population, 50 million people, would be affected. Eight of the 10 large countries most at risk are in Asia.

The voice of Abdulla Yameen, President of the Maldives, who reminded leaders at the Climate Summit that small island countries – which would be the first to suffer from any rise in sea levels – have formed a federation to defend their right to exist, went largely unheeded.

An entire new generation has been born since the debate over climate change started but there are no signs that the situation is improving.

In the decade up to 2012, global emissions of CO₂ rose by an average of 2.7 percent. In 2013, emissions were the highest in the last 30 years. And yet, the energy sector is mounting a strong campaign to deny that there is any climate change.

If anything, say the deniers of climate change, what is happening is part of a normal historical cycle, not the result of human activity. All data demonstrating the contrary are being ignored, and the upshot of this campaign is that many people believe that debate on the issue is still open.

Perhaps what happened a few days ago between Google and the American Legislative Exchange Council (ALEC) is symptomatic of this “normal historical cycle”?

On Sep. 22, Google chairman Eric Schmidt announced that the high-tech company was withdrawing from ALEC, saying: “Everyone understands climate change is occurring and the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people – they’re  just, they’re just literally lying.”

ALEC is a conservative organisation that has urged repeal of state renewable power standards and other pro-renewable policies. It drafts proposals for regulations that it submits to politicians, asking them to make just the effort of passing them into law.

Reacting to Google’s decision, Lisa B. Nelson, CEO of ALEC, said: “It is unfortunate to learn Google has ended its membership in the American Legislative Exchange Council as a result of public pressure from left-leaning individuals and organizations who intentionally confuse free market policy perspectives for climate change denial.”

So, if you are worried about climate change, you are left-wing and against the market!.

The fact is that executives from many large corporations are well ahead of political leaders. They can take decisions unencumbered by political constraint , and they have found out that working in the direction of climate controls makes sense not only in terms of public relations but also economically.

For example, forty major companies, including l’Oreal and Nestlè, issued a declaration on Sep. 23 pledging to help cut tropical deforestation in half by 2020, and stop it entirely by 2030. Some of these companies work with palm oil, profitable production which is at the expense of tropical forests, especially in Indonesia.

In fact, it was only corporations that made any concrete pledges at the New York Summit.

Apple CEO Timothy Cook said that his company was committing itself to focusing on the emissions of its main suppliers, which account for around 70 percent of the greenhouse gases that come from production and use of the company’s products.

Cook rejected the idea that society must choose between economic growth and environment protection, giving as an example a huge solar farm that his company built in North Carolina to help power a data centre there. ”People told us this couldn’t happen, it could not be done, but we did it. It is great for the environment, and by the way it is also good for economics.”

Not to be outdone, Cargill, the huge U.S. commodity processor, pledged to go even further with an existing no-deforestation commitment on palm oil and extend it to cover all its agricultural products. And, together with other companies processing Indonesian palm oil, Cargill called on the Indonesian government to get tougher on deforestation.

In the meantime, it is not that voices worldwide have been silent on the issue. Safeguarding the environment has long been a rallying banner for a large part of civil society worldwide, and a major cause for concern among the younger generations.

The hundreds of thousands of people who took to the streets throughout the world ahead of the New York Summit in solidarity with the need to do something about climate were no mere figment of the media’s imagination. So why were they clearly invisible to the planet’s decision-makers?

The next important date for the climate on their agenda is the U.N. Climate Change Conference (COP21) to be held in Paris in 2015. Will our political leaders again waste the chance to do something concrete – will they continue to stand by and watch as time runs out for the planet, and for humankind?

(Edited by Phil Harris)

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 Yilmaz Akyüz
GENEVA, Mar 24 2014 (IPS)

The United Nations’ Post-2015 Development Agenda should not simply extend the Millennium Development Goals (MDGs), or reformulate the goals, but focus instead on global systemic reforms and secure an accommodating international environment for sustainable development.

The MDGs are based on a donor-centric view of development with a focus on poverty and aid. They do not embrace a large segment of the population in the developing world, notably in middle-income countries, which fall outside the thresholds set in MDGs but still have their development aspirations unfulfilled.

It would be agreed that development is much more than the sum total of MDGs or any such arbitrary collection of a limited number of specific targets. But it is not possible to reach an international agreement on all important dimensions of economic and social development and environmental protection.

Any international agreement on such specific development targets would naturally be selective, leaving out many dimensions to which several countries may attach particular importance.There is no automatic trickle down from economic growth to human and social development.

Thus, instead of focusing on selective specific targets in the areas of economic and social development and environmental protection, we should aim at creating an enabling international environment to allow each and every country to pursue developmental objectives according to their own priorities with policies of their own choice.

Sustained economic growth is absolutely necessary for progress on the social front. No country has ever achieved constant improvements in living standards and human development indicators without sustaining a rapid pace of economic growth.

Without this, progress in human and social development would naturally depend on external and domestic transfer mechanisms – that is, aid and redistribution of public spending, respectively. Since there are limits to such transfers, social progress cannot go very far without an adequate pace of income and job generation.

Industrialisation is essential for reducing income, productivity, technology and skills gaps with more advanced economies since there are limits to growth and development in commodity-dependent and service economies.

We also know that there is no automatic trickle down from economic growth to human and social development. Policies and institutions are needed to translate economic growth to social development.

Job creation holds the key to improvements in living standards and to human development. But economic growth is not necessarily associated with the creation of jobs at a pace needed to fully absorb the growing work force. Thus, active policies are needed to provide secure and productive job opportunities.

Equity is an important ingredient of social cohesion and development. Prevention of widened inequality in income distribution calls for intervention in market forces, targeted policies and correctives.

Industrialisation and development cannot be left to market forces alone and least of all to global markets. Successful development is associated neither with autarky nor with full integration into world markets dominated by advanced economies, but strategic integration in trade, investment and finance designed to use foreign markets, technology and finance in pursuit of national industrial development.

To succeed, developing countries need to have adequate policy space. However, their policy space is considerably narrower than that enjoyed by today’s advanced economies in the course of their industrialisation because of the tendency of those who reach the top to “kick away the ladder” and deny the followers the kind of policies they had pursued in the course of their development.

It is necessary to reform multilateral and bilateral arrangements to allow developing countries as much economic policy space as those enjoyed by today’s advanced economies in the course of their industrialisation and development.

Developing countries also enjoy much less environmental space than that enjoyed by today’s advanced economies in the course of their industrialisation, and hence face greater constraints in attaining growth and development without compromising future generations’ well-being.

Thus, action is also needed at the international level in order to ease the environmental constraints over economic growth and development in developing countries and to compensate the costs inflicted on them by environmental deterioration resulting from years of industrialisation in advanced economies.

Finally, there is a need for a development-friendly global economic environment. We need mechanisms to prevent adverse spillovers and shocks to developing countries from policies in advanced economies or destabilising impulses from international financial markets.

Adequate policy space and a development-friendly global economic environment call for action at the international level on several fronts:

• Review multilateral rules and agreements with a view to improving the policy space in developing countries in pursuit of economic growth and social development.

• Attention to the international intellectual property regime with a view to facilitating technological catch-up and improving health and education standards and food security in developing countries.

• Industrial, macroeconomic and financial policies of developing countries are severely constrained by bilateral investment treaties and free trade agreements signed with advanced economies. These agreements are designed on the basis of a corporate perspective rather than a development perspective and they give considerable leverage to foreign investors and firms in developing countries. They need to be revised or dismantled.

• Remove terms unfavourable to commodity-dependent developing countries in contracts with transnational corporations to enable them to add more value to commodities and obtain more revenues from commodity-related activities.

• Introduce multilateral mechanisms to bring discipline policies in advanced economies to prevent adverse consequences for and spillovers to developing countries, including agricultural subsidies, restrictions over labour movements and transfer of technology and beggar-my-neighbour monetary and exchange rates policies.

• Establish mechanisms to bring greater stability to exchange rates of reserve currencies and prevent competitive devaluations and currency wars.

• Reduce global trade imbalances through faster growth of domestic demand, income and imports in countries with slow growth and large current account surpluses in order to allow greater space for expansionary policies in deficit developing countries.

• Reversal of the universal trend of growing income inequality should be a global goal. This calls for reversing the secular decline in the share of labour in income in most countries.

• Regulate systemically important financial institutions and markets, including international banks and rating agencies and markets for commodity derivatives with a view to reducing international financial instability and instability of commodity prices.

• Establish impartial and orderly workout procedures for international sovereign debt to prevent meltdown in developing countries facing balance-of-payments and debt crises.

• Secure a fair and equitable allocation of usable carbon space between advanced economies and developing countries, taking into account cumulative contributions of advanced economies to atmospheric pollution.

• Introduce international taxes in areas such as financial transactions or energy to generate funds for development assistance as well as for financing the costs of climate change mitigation and adaptation in developing countries.

• Reform international economic governance in ways commensurate with the increased participation and role of developing countries in the global economy. Re-examine the role, accountability and governance of specialised institutions such as the International Monetary Fund, the World Bank and the World Trade Organisation, and the role that the U.N. can play in global economic governance.

Excerpt:

South Africa has pledged to help Nigeria make the automotive sector the West African nation’s flagship industrial target. Currently German car manufacturer BMW has a plant at Rosslyn near Pretoria. About 80 percent of the BMWs produced there are for the international market. Credit: John Fraser/IPS

By John Fraser
JOHANNESBURG, May 22 2013 (IPS)

The lack of economic diversification throughout sub-Saharan Africa means that despite South Africa’s pledges to help Nigeria make the automotive sector the West African nation’s flagship industrial target, it may be difficult to do so, experts say.

Earlier this month, South African Trade and Industry Minister Rob Davies announced the initiative during a visit here by Nigerian President Goodluck Jonathan.

It is a move that is seen as an important milestone in inter-African industrial cooperation. However, Peter Draper, a research fellow at the South African Institute of International Affairs, questioned whether this collaboration would develop into economic integration.

“The real question is whether such cooperation could ultimately evolve into meaningful, broader, economic integration rather than the network of mostly hollow shells that currently masquerade as free trade agreements,” he told IPS.

“I think that Nigeria and the Southern African Customs Union should negotiate a complementary Free Trade Area agreement to promote closer economic relations – as the complementarities are strong, and it would bring the two countries closer together politically.”

Draper said that the African Union (AU) has already developed a number of initiatives for specific sectors, but more needs to be done.

“Actually there are quite a few sectoral policies covering, inter alia, energy, communications, transport, and various other integration initiatives. The problem remains implementation, not a lack of plans,” he said.

He said that it seemed to be commonly accepted that the AU’s role was to develop and coordinate implementation of a continental “master plan” that integrates these various initiatives.

“I think there is a role for a broader continental perspective, but I prefer the notion of ‘subsidiarity’ – pioneered in the European Union – where implementation is left to the lowest possible level of government.”

Draper said that the cooperation between South Africa and Nigeria could be an important mentoring initiative for South Africa.

“South Africa has been (involved in) auto industry policy development since the mid-1920s and has a lot of experience to draw on and share,” he explained.

“It reminds me of cooperation in Latin America, which historically evolved through sectors, involving the auto industry particularly. The European Community (which became the EU) also started out through a network of sectoral collaboration – iron and steel in particular.”

Minister Davies told the Business Day newspaper that discussions on automotive cooperation with Nigeria were still at an early stage.

But while some manufacturers, such as Nissan, might be willing to set up plants in Nigeria, others are more cautious.

Bodo Donauer, the managing director of BMW South Africa, said that in his group “production follows the market” and he does not currently envisage a BMW plant being established in Nigeria.

“Local production plants make it easier to access and develop new markets with long-term growth potential. Having a local plant also makes the company a ‘local player’ and boosts acceptance of the products locally and underscores our good corporate citizen approach,” he said.

“The success of this strategy has been proven by positive sales trends since the ramp-up of production plants, for example in the Unites States, in China, in the United Kingdom and, of course, in South Africa.”

He said that around 20 percent of BMWs produced at the Rosslyn plant near Pretoria are sold on the local market in South Africa “with more than 80 percent exported to markets around the world, including one percent to certain markets in the rest of Africa.”

“Given the current size of the new premium car market in the rest of Africa, we believe the BMW Group is well-placed with its current global production network to meet any additional demand in markets like Nigeria without the necessity for additional production locations,” he said.

Peggy Droidskie, an advisor to the South African Chamber of Commerce and Industry, said that the initiative between South Africa and Nigeria was very welcome, as regional integration in Africa remains high on the development agenda.

“Nigeria is a large market, and it is closer to Europe. This proximity to Europe implies that it would be logical for European connections to be used.

“The fact that South Africa is preferred (as a partner for Nigeria) indicates that South Africa is very competitive and can accommodate the requirements of Nigeria. It also provides South African manufacturers with an additional footprint in Africa,” she said.

Droidskie predicted that some manufacturers who currently operate in South Africa would become interested in setting up in Nigeria.

“Agreements of this nature are driven by politicians,” she noted. “The politicians believe that the agreements that they enter into benefit the private sector, which is often, but not always, the case.”

She said that South African vehicle manufacturers are already exporting a significant number of vehicles to Nigeria.

“Last year, the number was nearly 15,000. Nigeria is therefore currently a lucrative market for South African vehicle manufacturers. It is therefore very likely that the manufacturers will take advantage and come to the party.”

And she predicted that this cooperation could expand to other industrial sectors.

“If the profile of Nigeria’s imports is taken into account, there is considerable room for an increase in South African exports to Nigeria. For instance, there is room for greater trade in electrical and electronic equipment and machinery.

“With the development of the Tripartite Free Trade Agreement between the three regional economic blocs in sub-Saharan Africa, there is considerable potential for cooperation to expand to other countries and to other sectors.”

Though Vitoria-Gasteiz, capital of the Basque Country, was elected the European Green Capital of 2012 – an award presented by the European Union to promote and reward efforts to mitigate climate change – Spain still has a long way to go to earn the label of ‘sustainable’ for others cities around the country.

The air that the citizens of Vitoria-Gasteiz breathe is of the highest quality, according to the score given by the European Union, thanks to campaigns to increase bicycle use around the city and the promotion of a new bus network together with tram routes and new parking regulations.

In contrast, cities such as Madrid, Barcelona, Sevilla or Bilbao have been consistently exceeding standard levels of pollution as a result of a lack of environmental planning and a long drought.

“The necessary ingredients of a sustainable city are social inclusion and environmental quality in a dense, compact and diverse area with (democratic) participation in decision making,” Luís Jiménez, director of the Observatory on Sustainability in Spain (OSE), told IPS.

“In the developed world, cities determine to a great extent (a country’s) consumption pattern of materials and energy as well as territory. (Urban areas) contribute 75 percent of the planet’s pollution and use 70 percent of energy consumed by mankind,” he added.

As economic, cultural and social centres, cities provoke critical internal and external environmental impacts that cause serious ripple effects for other – mostly rural – systems, which, in Spain, comprise 90 percent of the land.

Ignacio Santos, an environmental expert currently working as a technical assistant for the Spanish Agency for International Development Cooperation (AECID), points out two key factors in measuring environmental advances or degeneration in Spanish cities: firstly, residents’ quality of life (which is tied to the quality of the urban environment) and secondly, an ‘ecological footprint’.

In terms of air quality, it is worth noting that approximately 87 percent of the Spanish population breathes ‘polluted air’, as defined by the World Health Organization.

This has resulted in 16,000 premature deaths annuallyand led to the proliferation of various respiratory diseases.

“In Spain, the process of industrialisation and urbanisation has degraded quality, particularly in urban centers. It is crucial to reinforce the public’s capacity for action against atmospheric pollution and to take decisive action to reduce greenhouse gas emissions, with integrated health, environmental and climate change policies,” Jiménez stressed.

According to Luis González, a member of Ecologistas en Acción, the main reason behind air quality degeneration in the cities is increased traffic, which directly emits particles in suspension from precursors (carbon monoxide, nitrogen oxides or methane) that make up tropospheric ozone.

Sadly, “Local authorities have just denied the problem or moved the measure stations. There are no programs aimed at reducing traffic and insufficient awareness of the use of different means of transport, such as the bicycle,” González told IPS.

The ‘ecological footprint’, a reliable methodology designed to measure human impact on the planet, essentially maps humans’ demand for natural resources and contrasts it against the Earth’s ecological capacity to regenerate those resources. According to the Ecological Footprint Atlas (2010), a publication from the Global Footprint Network, Spain has the 19th largest eco-footprint per person in a list of 153 countries.

Spain’s ecological footprint has grown by an annual average of 0.1 global hectares per person since 1995, according to the report Global Change Spain 2020/2050. By 2005 there had been an increase of 19 percent, which meant that the necessary ecological territory to produce resources and assimilate the residue produced by each Spanish person in 2005 was 6.4 global hectares per person.

“Therefore we are living beyond our means. If we want cities with quality of life and minimum impact, we have to ensure that our ecological footprint does not exceed our available biocapacity. Technological measures to improve efficiency in the use and production of resources are not enough to achieve that. The main challenge is to achieve a great change in current consumption habits,” Jiménez concluded.

Some experts believe it is necessary to rethink ‘urban metabolism’ as a means of reducing a country’s ecological footprint and improving air quality as well as other environmental aspects.

In the past few decades, territorial and urban planning based on unlimited and indiscriminate real- estate growth has been promoted.

This programme has been supported by a series of contradictory legislations: several regions’ urban regulations placed an upper limit on building densities, but in no case were these regulations enacted.

“It is important to have a clear idea of what kind of model of city we are talking about,” said Santos. “Sustainable cities are not those which are built with a lot of houses nor those full of big buildings and without green spaces,” he added.

“For example,” Santos told IPS, “Madrid’s metropolitan area is a model of a big city developed in an uncontrolled and dispersed way. New neighborhoods without an underground transport service are still being designed while there are a large number of empty houses in the city centre.”

An expansive city with a low building density and territorial dispersion in urban services needs more transport infrastructure, more energy consumption and takes up more land surface. All those factors affect the environment and increase greenhouse emissions, with a severe impact on air quality, climate change and acoustic pollution, among others – all of which affect the quality of life of citizens and other surrounding social and natural systems.

Also, a city without parks and green belts means a lack of trees to absorb pollution and reduce the impact of noise.

Dealing with all of these issues requires adapting the city to the limits of biocapacity, while aiming for sustainability.

“If we are in a relative situation of sustainability improvement, as a result of the economic crisis, this does not mean that a clear effort to change unsustainable growth (patterns) exists,” Jiménez stressed.

Current development trends in Spain are intrinsically incompatible with the planet on which we live, which has finite resources that are dwindling faster than at any other time in human history.

Stressing the urgency of the situation, Santos urged “not only need political will, but also scientific knowledge. To design and implement policies, it is necessary to have planners, decision makers and citizens with the carbon cycle constantly on their minds.”

(END)