Coronavirus a challenge, and opportunity, to fix remittances system than funnels billions home from abroad
#UN; #MigrantWorkers; #SDGs; #Poverty; #IFAD
Geneva, Jun 2 (Canadian-Media): With a euro here and a dollar there, remittances – the money that migrant workers send home to their families – have been adding up in a big way to contribute to the Sustainable Development Goals and lift tens of millions out of extreme poverty, UN reports said.
The small amounts of $200 or $300 that each migrant sends home make up about 60 per cent of the family’s household income.
Image credit: IFAD/Christine Nesbitt
Then came the COVID-19 pandemic – and, ironically, a chance to improve a unique segment of the global financial system that accounts for more than five per cent of gross domestic product for at least 60 low- and medium-income countries – more than the total of foreign direct investment or official development assistance handed out by governments.
Vulnerabilities exposed“Regardless of whether nor not the (post-coronavirus) recovery will be faster than expected, the global pandemic has exposed the vulnerabilities of the global remittances system,” said Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD), a specialized agency of the UN in Rome.
“That is why now is the time to fix these vulnerabilities no matter what the economic scenario will be”, he told UN News in the run-up to the International Day of Family Remittances on 16 June.
Last year, remittances to low- and medium-income countries hit a record $554 billion, according to the World Bank, with 200 million migrant workers in 40 rich countries sending home funds to support 800 million relatives in more than 125 developing nations.
Half of those receiving families live in rural areas where remittances count the most, Mr. Houngbo said.
$110 billion drop offBut with the onset of the novel coronavirus pandemic, the World Bank projects that cross-border remittances will fall by 20 per cent, or $110 billion, to $445 billion, potentially pulling tens of millions below the poverty line while undermining progress towards fulfilling the 2030 Agenda for Sustainable Development.
With no V-shaped recovery likely in 2021, savings will be depleted, and local conditions will worsen, as remittances are not expected to return to pre-pandemic levels for some time, Mr. Houngbo explained.
“While the reduction in remittances will not fall evenly on all families, nor across all continents, societal impacts will be substantial and sustained”, he told UN News via e-mail.
In response, Switzerland and the United Kingdom – joined by several other Member States, the World Bank, the United Nations Development Programme (UNDP) and other UN agencies and industry groups –issued a global “call to action” on 22 May to ensure that migrant workers and diaspora communities can keep sending back money in ways that can also improve the remittance system.
Essential public service
It urges policymakers not only to declare the provision of remittances as an essential public service, but also to support the development of more efficient digital remittance channels.
To regulators, it asks that they provide guidance for “know-your-customer” requirements, that are critical for scaling up digital financial services, particularly for undocumented persons with no access to a bank account.
And it encourages remittance service providers to explore ways to ease the burden on their migrant customers by lowering transaction fees, which now average 6.8 per cent worldwide, more than half the target set in the Sustainable Development Goals, according to the World Bank’s most recent Migration and Development Brief.
‘A lifeline in the developing world’“Remittances are a lifeline in the developing world – especially now,” said Secretary-General António Guterres on 19 March. “Countries have already committed to reduce remittance fees to 3 percent…The crisis requires us to go further, getting as close to zero as possible.”
For its part, the IFAD says it is partnering with financial technology firms, mobile operators, commercial banks and postal networks, to integrate digital solutions to improve remittance transfers to rural areas.
In addition to its Financial Facilities for Remittances initiative, it is strengthening the ability of rural families to weather tough times through financial literacy and planning programmes, among other capacity-building efforts.
Mr. Houngbo, a former Prime Minister of Togo who has led IFAD since 2017, said that for the past 15 years, the focus of international attention on remittances has been on the “sending side”, particularly high transaction costs.
“We need to emphasize, however, that the development impact of remittances is really on the receiving end – where, at this time, families are struggling with the sudden disruption of their economic lifelines,” he said.
#IOM; #DevelopingCountires; #Covid19PandemicImpact; #UNDP; #HumanDevelpment; #LabourMobility
Geneva, May 22 (Canadian-Media): As the world faces the economic and broader development repercussions of COVID-19, remittances to low- and middle-income countries are projected to fall sharply in 2020 - by about 20 percent or US $110 billion. A reduction in remittances, in particular for remittance dependent countries, communities and households, can have substantial socio-economic impacts, IOM reports said.
IOM. Image credit: Twitter handle
Today, the International Organization for Migrations joins a global Call to Action, Remittances in Crisis – How to Keep Them Flowing, which draws the attention of the international community to the issue of the socio-economic effects of the COVID-19 pandemic on remittances and the financial situation of migrants and their families. This member state initiative led by Switzerland and the United Kingdom, is now open for all countries and like-minded partners to join. The Call is also supported by the World Bank, the United Nations Capital Development Fund (UNCDF), the United Nations Development Programme (UNDP), the International Association of Money Transfer Networks and the International Chamber of Commerce. The Call to Action highlights the ripple effects of the COVID 19 pandemic on remittance flows to migrant families, local economies and communities in countries of origin. It also proposes a set of concrete measures that can be taken in this regard.
“While we are anticipating a strong economic downturn globally, our concern is that there will be an even stronger knock-on effect for remittance dependent economies, communities and families, in terms of worsening access to education, health and nutrition, and broader poverty outcomes,” said IOM Director General António Vitorino.
“We call upon policy makers, the private sector and civil society to focus on specific measures we can take in this regard to support migrants and their families.”
The world-wide Call to Action, aims to raise awareness and calls on different stakeholders in the remittances sector to undertake mitigation measures to decelerate the pandemic-caused drop in remittances and facilitate their flow between migrants and their families in low and middle-income countries.
Governments and central banks, for instance, are encouraged to, among other things, declare remittance transfer services an essential service, establish economic support measures that benefit migrants and remittance service providers, support greater access to and use of digital technologies, facilitate implementation of financial regulation linked to remittances. Remittance service providers are called upon to provide relief to migrants by reducing transaction costs, investing in financial education and literacy and enabling easy access to remittance transfer channels.
The implementation of these gestures of solidarity towards migrants and their families taken by stakeholders in the remittance sector will prevent millions of people from falling into poverty as well as avoid a roll back on several Sustainable Development Goals achievements. Facilitating and improving the continued flow of remittances is also vital for the resilience and recovery of the local economies and communities in many low- and middle-income countries heavily affected by the health and socioeconomic crisis caused by the spread of COVID-19.
“The key objectives and messages of this Call to Action reinforce the long-standing work of our organization on remittances and financial empowerment,” stated Marina Manke, Head of Labour Mobility and Human Development at IOM.
“In addition to improving broader knowledge and research on remittance usage and impacts on families and communities, IOM has been engaging in partnerships with governments, the private sector and other UN organizations in initiatives across the globe to help reduce remittance transfer costs, enhance financial literacy and develop policies which strengthen the important contributions that migrants are making to their families and societies alike.”
#ILO; #Covid19Pandemic; #Multilaterism; #GoodHealth; #CleanWater; #Education
ILO, May 10 (Canadian-Media): It is the nature of crises to expose new faults in a system or widen existing ones. The COVID-19 pandemic is no exception to this, and as it has taken hold some countries have been driven to look inwards for solutions, ILO reports said.
ILO. Twitter Handle
This is not just a result of some groups exploiting domestic political opportunities. We must accept that general discontent with the multilateral system may have played a role in the idea that policy goals are best advanced through unilateral action, rather than collective efforts.
The trend is particularly ironic in the case of COVID-19, because a virus by its nature knows no geographic boundaries and recognizes no national sovereignty. However, it is exceptionally good at revealing the inherent weaknesses of each individual countries’ social and economic systems, and their ability to respond. It also challenges the capacity of individual multilateral agencies, as well as the collective power of the multilateral system to come together and deliver as one when under pressure.
COVID-19 should – and can – remind us why international institutions like the ILO were created. The particular relevance of the ILO is clear from the principles outlined in the ILO Centenary Declaration on the Future of Work, agreed in 2019, 100 years after the Organization’s foundation. The preamble states that, “persistent poverty, inequalities and injustices, conflict, disasters and other humanitarian emergencies in many parts of the world constitute a threat to those advances and to securing shared prosperity and decent work for all.”
The Declaration calls for better engagement and cooperation within the multilateral system, to strength policy coherence. It reaffirms that decent work is vital for sustainable development, including addressing income inequality, ending poverty, and paying special attention to places affected by conflict, disaster and other forms of humanitarian emergency.
Importantly, it also reminds us that, “the failure of any country to adopt humane conditions of labour is more than ever an obstacle to progress in all other countries.” This lesson on the futility of isolationism has been starkly reiterated by COVID-19.
Looking at a broader canvas, the virus has also reinvigorated the political and pragmatic imperative for the Sustainable Development Goals and the UN Agenda 2030. It has confirmed that all the SDGs are important to fast-track progress for people and planet, but COVID-19 is particularly consequential for some:
#UN; #FoodAgency; #FAO; #Hunger; #Fatalities; #UrbanAreas; #Covid19Pandemic; #FoodHubs
New York, May 10 (Canadian-Media): The UN food agency, FAO, warns that hunger and fatalities could rise significantly in urban areas, without measures to ensure that poor and vulnerable residents have access to food. In Latin America, cities are finding ways to keep food supplies flowing, despite the current restrictions on movement and supplies, UN reports said.
The Lo Valledor main wholesale market in Chile during the COVID-19 pandemic.
Credit: © FAO/Max Valencia
Several Latin American municipalities have been taking action to minimise the consequences of lockdown measures, and ensure that food systems do not break down, as work dries up.
In Quito, Ecuador, for example, authorities are using municipal buses as mobile food hubs, following the example of the Chinese city of Wuhan, where the pandemic is believed to have originated. Quito local government has also partnered with food banks, and mapped vulnerable areas, to make sure the food is distributed effectively.
In Lima, Peru, the supply of food products has been affected by the onset of the crisis, with restrictions on the movement of farmers put in place locally by city managers and leaders of rural communities.
There are fears that if these restrictions remain in place, the food supply chain in the city could be badly disrupted. For now, market prices have remained stable, but they are being monitored to counter speculation and price gouging on the black market, and a mobile wholesale market is distributing food to various districts of the metropolitan area.
And, in Montevideo, Uruguay, the mantra has become, stay local, with citizens and organizations returning to “ollas populares”; a traditional model of home deliveries of fruit, vegetable and other foodstuffs, some directly from producers, with special attention paid to the needs of vulnerable people.
Feeding the system
These kind of initiatives reflect the warning from the Food and Agriculture Organization (FAO), that the health risk for many urban citizens is high during the pandemic, particularly the 1.2 billion who live in slums, and other informal settlements.
Responses to the pandemic by city authorities worldwide, have included closing markets and small shops – making it harder for poorer citizens, who can’t afford supermarket prices or delivery services, to buy food, and for those dependent on jobs in the food industry to make ends meet. Spikes in food prices can also occur, says the FAO, leading to civil unrest, as seen in many African cities during the 2007-2008 food crises.
Scale up support
To mitigate these side-effects of lockdown measures, FAO recommends scaling up support for schemes that distribute food to vulnerable people; improving access to nutritious food for all; and promoting education campaigns to help citizens reduce food waste and buy food responsibly.
In addition, the UN Food agency makes a series of recommendations to improve the food supply situation in the short-term. For example, cities should use technology to map vulnerable people and their access to food, in order to develop more effective programmes.
And, whilst food stores are often named as essential services, strategies should be put in place to allow markets to stay open; and food chains should also be designated as essential, so that workers and producers can continue circulating, whilst respecting health regulations.
Important questions to answer
But what lessons will be learned, once the worst of the crisis is behind us? For the FAO, the pandemic has exposed several severe, underlying failings of urban food systems, and the paper proposes a number of improvements that should be put in place, to ensure that cities are much better prepared for the next potential health crisis.
One example, which chimes with environmental concerns, is the promotion of local food suppliers. The pandemic has made sourcing food from international sources more difficult, providing local suppliers with an opportunity to coordinate better and fill gaps in food distribution, and make cities more resilient.
Other recommendations include maintaining initiatives such as food hubs (which could have the added advantage of reducing congestion and carbon emissions), and studying ways to scale up e-commerce, in a way that facilitates access to food for all.
In these ways, hopes the FAO, the COVID-19 pandemic could turn out to be a catalyst for positive transformation of the way that food systems are managed in urban areas.
#Bangladesh; #IOM; #COVID19; #RohingyaRefugees; #PPE; #NGO
Bangladesh, Mar 31 (Canadian-Media): The COVID-19 pandemic poses a major threat to hundreds of thousands of Rohingya refugees and local community members In Cox’s Bazar, one of the world’s largest and most crowded refugee camps, IOM reports said.
Local communities make protective masks for frontline workers combating the coronavirus in Cox’s Bazar. Image credit: IOM
The rapid spread of the disease, which has infected over 785,000 people and left over 37,800 dead worldwide, has led to a global shortage of personal protective equipment (PPE), particularly surgical and other masks, which are needed by health workers, patients and people coming into close contact with those who are sick.
IOM has initiated a project in Cox’s Bazar to produce 6,000 washable cloth masks for frontline Cyclone Preparedness volunteers and Fire Service and Civil Defence personnel who have been working with UN Migration to raise awareness of the disease and communicate ways to avoid infection.
The masks will also be given to Village Development Police from Cox’s Bazar Sadar, Ramu, Moheshkhali, Ukhiya and Teknaf subdistricts, known as upazillas.
The initiative, launched by IOM and its NGO partners, Prottyashi and Nongor, which have set up operations at Ukhiya and Teknaf, Cox’s Bazar respectively. Prottyashi and Nongor were approved by the Directorate General of Health Services and Cox’s Bazar Civil Surgeon. The masks will be distributed in coordination with upazilla administrators.
IOM has provided 14 sewing machines to the Nongor hub at Shamlapur, Teknaf while Prottyashi has own set up at Ukhiya. About 35 local people, including 25 women, are now making masks at the two hubs.
“These cloth masks, by minimizing person-to-person exposure, also support the efforts of the Government and need to be combined with other measures such as regular hand washing and maintaining social distancing,” said Patrick Charignon, IOM’s Head of Transition and Recovery in Cox’s Bazar. “This initiative is also a much-needed livelihood activity which supports vulnerable, households headed by women, who are making the masks.”
Cox’s Bazar Deputy Commissioner Md. Kamal Hossain welcomed the effort and has asked IOM to coordinate with respective upazilla administration offices and keep his staff up to date on distribution.
IOM, with other UN agencies and NGOs, is working with the Government to raise awareness and prepare the response to potential COVID-19 cases across Cox’s Bazar. It is engaging with the District Commissioner and the Civil Surgeon to ensure that the right messages are being shared with both Bangladeshi and Rohingya communities.
In addition to hygiene promotion, soap distribution and the installation of hand-washing stations will also be key in preventing people from becoming infected.
IOM is also working to ensure that the health facilities that it supports in Cox’s Bazar are equipped to cope with an expected influx of patients. It is increasing the number of isolation beds in its two Primary Health Care centres (to 44), procuring PPE for health workers, stockpiling medicine and training health workers.
#UNCTAD; #HealthPandemic; #GlobalRecession; #SDGs; #DevelopingCoutries; #COVID19
Geneva, Mar 31 (Canadian-Media): The consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt their progress towards the Sustainable Development Goals, UNCTAD reports said.
Image credit: Facebook
$1 trillion should be made available through the expanded use of special drawing rights; $1 trillion of debts owed by developing countries should be cancelled this year; $500 billion needed to fund a Marshall Plan for health recovery and dispersed as grants.
With two-thirds of the world’s population living in developing countries (excluding China) facing unprecedented economic damage from the COVID-19 crisis, the UN is calling for a US$2.5 trillion package for these countries to turn expressions of international solidarity into meaningful global action.
The speed at which the economic shockwaves from the pandemic has hit developing countries is dramatic, even in comparison to the 2008 global financial crisis, says a report published on 30 March by UNCTAD, the UN trade and development body.
“The economic fallout from the shock is ongoing and increasingly difficult to predict, but there are clear indications that things will get much worse for developing economies before they get better,” UNCTAD Secretary-General Mukhisa Kituyi said.
Mounting economic damage
The report shows that in the two months since the virus began spreading beyond China, developing countries have taken an enormous hit in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings, including from falling commodity prices and declining tourist revenues.
On most of these measures the impact has cut deeper than in 2008. And with domestic economic activity now feeling the effects of the crisis, UNCTAD is not optimistic about the kind of rapid rebound witnessed in many developing countries between 2009 and 2010.
Portfolio outflows from main emerging economies surged to $59 billion in a month between February and March, calculations show. This is more than double the outflows experienced by the same countries in the immediate aftermath of the global financial crisis ($26.7 billion).
The values of their currencies against the dollar have fallen between 5% and 25% since the beginning of this year – faster than the early months of the global financial crisis (see the chart below).
The prices of commodities, on which many developing countries heavily depend for their foreign exchange, have also dropped precipitously since the crisis began. The overall price decline has been 37% this year, according to the report.
Currency movements against the dollar 2008Q3 vs 2020Q1 (percentage)
Source: UNCTAD secretariat calculations based on Thomson Reuters Eikon database.
Notes: Negative values refer to a depreciation of the domestic currency against the dollar. Data for 2020Q1 go until 25 March.
No magic money tree for developing countries
In recent days, advanced economies and China have put together massive government packages which, according to the Group of 20 leading economies (G20), will extend a $5 trillion lifeline to their economies.
This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically.
The full details of these stimulus packages are yet to be unpacked, but an initial assessment by UNCTAD estimates that they will translate to a $1 trillion to $2 trillion injection of demand into the major G20 economies and a two percentage point turnaround in global output.
Even so, the world economy will go into recession this year with a predicted loss of global income in the trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India.
Given deteriorating global conditions, fiscal and foreign exchange constraints are bound to tighten further over the course of the year. UNCTAD estimates a $2 trillion to $3 trillion financing gap facing developing countries over the next two years.
Lacking the monetary, fiscal and administrative capacity to respond to this crisis, the consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt their progress towards the Sustainable Development Goals.
Even as advanced economies are discovering the challenges of dealing with a growing informal workforce, this remains the norm for developing countries, amplifying their difficulties in responding to the crisis.
“Advanced economies have promised to do ‘whatever it takes’ to stop their firms and households from taking a heavy loss of income,” said Richard Kozul-Wright, UNCTAD’s director of globalization and development strategies.
He added: “But if G20 leaders are to stick to their commitment of ‘a global response in the spirit of solidarity,’ there must be commensurate action for the six billion people living outside the core G20 economies.”
In the face of a looming financial tsunami this year, UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action:
The proposed package is similar in size to the amount that would have been delivered to developing countries over the last decade if countries in the Development Assistance Committee of the Organisation for Economic Co-operation and Development had met their 0.7% ODA target.
#ILO; #ILORegionalOfficeforLatinAmericaandCaribbean; #LabourMarket
LIMA, Peru, Jan 29 (Canadian-Media): A modest rise in unemployment at 8.1 per cent marks a labour outlook that is not positive, and could deteriorate this year if economic growth remains weak, says a new report from the ILO Regional Office for Latin America and the Caribbean.
More than 25 million seek employment and do not find work in a region that faces growing demands for greater opportunities and equality.
The labour markets of Latin America and the Caribbean are going through a moment of uncertainty, which can be seen in a slight rise in the regional unemployment rate and these signs of instability could get worse in 2020. These key findings were presented today during the launch of the 2019 Labour Overview of Latin America and the Caribbean.
"The labour market situation is complex," said Mr Juan Hunt, Regional Director a.i. of the ILO Regional Office for Latin America and the Caribbean, while speaking during the report launch event in the Peruvian capital.
The estimated average regional unemployment rate for the end of 2019 is 8.1 per cent, compared to the 8.0 per cent rate for 2018. While the increase is small, it still means that more than 25 million people are actively looking for employment and they are not finding work.
This upward trend in unemployment could increase and reach 8.4 per cent in 2020 if the region continues to experience moderate economic growth. The latest Economic Commission for Latin America and the Caribbean (ECLAC) estimates place the average growth of 2019 at 0.1 per cent and forecast a low level for 2020 of 1.3 per cent.
The report emphasizes that there is an upward trend behind the regional average unemployment rate. The rise in unemployment was predominant in nine of 14 Latin American countries. In the English-speaking Caribbean, on the other hand, there was a decrease in unemployment by 0.7 percentage points.
The Labour Overview also highlights the relevance of Brazil and Mexico in the regional average. It notes that without including these two countries, the average unemployment rate would register a more pronounced increase of 0.5 per cent, according to the data as of the third quarter of 2019.
The report adds that despite the continuous increase in women's labour participation, which reached 50.9 per cent in the third quarter of 2019, it is still more than 20 percentage points below that of men, which is 74.3 per cent.
In 2019, female unemployment rose 0.2 percentage points in the regional average, to 10.2 per cent, while that of men remained unchanged at 7.3 per cent. This indicates that the increase in regional unemployment disproportionately affected women.
The situation of youth in the region is alarming. In the third quarter of 2019, the regional unemployment rate was 19.8 per cent, which implies that one in five young people in the labour force cannot find employment. This is the highest level recorded of that rate in the last decade.
“The lack of decent work opportunities for young people causes great concern because it is a source of discouragement and frustration. This has been reflected in the front line of recent protests in the region, calling for changes to aim for a better future,” said Mr Hunt.
Social demands and instability
The ILO Regional Director also emphasized that recent demonstrations in the region by citizens calling for better opportunities and greater equality are evidence of the persistence of decent work deficits.
“Opportunities to access decent and productive employment, with fair wages, social inclusion, social protection and labour rights, are key to responding to social demands. They also ensure that the benefits of growth reach everyone and guarantee good governance,” said Mr Hunt.
Speaking on the employment quality findings included in the report, Mr Hugo Ñopo, the ILO Regional Economist who coordinated the Labour Overview, explained that, “the dynamics of economic slowdown since mid-2018 have had an impact on the structure and quality of jobs.”
Ñopo stressed that since 2018 there is a lower growth in salaried employment compared to self-employment, especially non-professional employment. He also emphasized that these are signs of “a relative instability of the jobs that are being created in Latin America and the Caribbean.”
The report also states that there is a tendency to increase in the indicators of under-occupation due to insufficient working time. The percentage of employed people who work less than 35 hours and want to work more increased in 10 of the 11 countries with available data.
Referring to the economic slowdown experienced by the region in the last year, Ñopo warned that "the impacts on the labour market are not yet fully reflected", due to the lag in the demand for employment.
The ILO specialist stated that the challenge for the countries of the region is clear: “integrate the more than 25 million unemployed and give decent employment to an even greater and diverse number of people who are hoping to benefit economically.”
#OnlinePlatform; #UNCTAD; #AfricanUnion; #NonTariffBarriers; #tradebarriers.africa; #AfCFTA
Africa, Jan 19 (Canadian-Media): An online platform developed by UNCTAD and the African Union to help remove non-tariff barriers to trade in Africa became operational on 13 January, UNCTAD news reports said.
AfCFTA. Image credit: Twitter handle
Traders and businesses moving goods across the continent can now instantly report the challenges they encounter, such as quotas, excessive import documents or unjustified packaging requirements.
The tool, tradebarriers.africa, will help African governments monitor and eliminate such barriers, which slow the movement of goods and cost importers and exporters in the region billions annually.
An UNCTAD report shows that African countries could gain US$20 billion each year by tackling such barriers at the continental level – much more than the $3.6 billion they could pick up by eliminating tariffs.
“Non-tariff barriers are the main obstacles to trade between African countries,” said Pamela Coke-Hamilton, director of UNCTAD’s trade division.
“That’s why the success of the African Continental Free Trade Area depends in part on how well governments can track and remove them,” she said, referring to the agreement signed by African governments to create a single, continent-wide market for goods and services.
The AfCFTA, which entered into force in May 2019, is expected to boost intra-African trade, which at 16% is low compared to other regional blocs. For example, 68% of the European Union’s trade take place among EU nations. For the Asian region, the share is 60%.
The agreement requires member countries to remove tariffs on 90% of goods. But negotiators realized that non-tariff barriers must also be addressed and called for a reporting, monitoring and elimination mechanism.
The online platform built by UNCTAD and the African Union is a direct response to that demand.
Complaints logged on the platform will be monitored by government officials in each nation and a special coordination unit that’s housed in the AfCFTA secretariat.
The unit will be responsible for verifying a complaint. Once verified, officials in the countries concerned will be tasked with addressing the issue within set timelines prescribed by the AfCFTA agreement.
UNCTAD and the African Union trained 60 public officials and business representatives from across Africa on how to use the tool in December 2019 in Nairobi, Kenya.
They practiced logging and responding to complaints, in addition to learning more about non-tariff barriers and their effects on trade and business opportunities.
“The AfCFTA non-tariff barriers mechanism is a transparent tool that will help small businesses reach African markets,” said , a senior official at Nigeria’s trade ministry, who will manage complaints concerning Africa’s largest economy.
Justin Bayili, a business representative who heads the Ghana-based Borderless Alliance, agreed. “The online tool will play a key role in helping my organization effectively and efficiently tackle the challenges faced by the companies we represent,” he said.
UNCTAD and the African Union first presented tradebarriers.africa in July 2019 during the launch of the AfCFTA’s operational phase at the 12th African Union Extraordinary Summit in Niamey, Niger.
Following the official presentation, they conducted multiple simulation exercises with business and government representatives to identify any possible operational challenges.
Lost in translation
One of the challenges was linguistic. Africa is home to more than 1,000 languages. So the person who logs a complaint may speak a different language from the official in charge of dealing with the issue.
Such would be the case, for example, if an English-speaking truck driver from Ghana logged a complaint about the number of import documents required to deliver Ghanaian cocoa to importers in Togo – a complaint that would be sent to French-speaking Togolese officials.
“For the online tool to be effective, communication must be instantaneous,” said Christian Knebel, an UNCTAD economist working on the project.
The solution, he said, was to add a plug-in to the online platform that automatically translates between Arabic, English, French, Portuguese and Swahili – languages that are widely spoken across the continent. More languages are being added.
UNCTAD’s work on the AfCFTA non-tariff barriers mechanism is funded by the German government.
#Bolivia; #EconomicDiversification; #StructuralTransformation; #promotingProduction
Bolivia, Nov 29 (Canadian-Media): Promoting structural transformation and productive capacities, including economic diversification, can help countries overcome disadvantage, UNCTAD reports said.
One of Bolivia's top exports is Petroleum Gas. Image credit: UNCTAD
Landlocked Bolivia has made impressive economic gains in recent years.
Its gross domestic product (GDP) grew at an average annual rate of 4.9% from 2004 to 2014, one of the best economic performances in South America.
Bolivia also cut extreme poverty from 35% to just 18% between 2006 and 2015. Boasting a positive external balance, reduced public debt and efficient taxation, it has achieved significant progress in human and social development.
However, the Bolivian economy remains highly commodity dependent. Commodities accounted for 95% of its merchandise exports in 2017, with natural gas accounting for 33% of the exports.
As a result, the recent fall in commodity prices has slowed the country’s economic growth from a peak of 6.8% in 2013 to about 4.0% in 2019.
One of Bolivia's top exports is Petroleum Gas
This vulnerability to fluctuations in commodity prices is replicated in another landlocked country, Botswana, which is heavily dependent on the mineral sector.
On average, the sector has contributed to more than 22% of Botswana’s total GDP in recent decades, diamonds being the leading mineral.
In recent years, Botswana produced 28% of global diamonds in value terms and sales amounted to US$3.9 billion, according to the latest data.
Although it has used diamond earnings to improve the welfare of its citizens, Botswana’s heavy dependence on the mineral sector has left it highly vulnerable to price shocks.
Bolivia and Botswana exemplify one of the perils facing many landlocked developing countries (LLDCs) – dependence on commodities, said Mussie Delelegn, chief of UNCTAD’s landlocked developing countries' section.
Across the world, 32 countries are landlocked, with a population of about 440 million.
“These countries face special trade and development challenges, arising from their lack of territorial access to the sea and geographical remoteness from international markets,” Mr. Delelegn said.
Exports and imports of LLDCs are required to transit through at least one neighbouring state and often have to change the mode of transport frequently.
This substantially increases the cost of trade for LLDCs and is a key factor in preventing their effective integration into the global trading system.
The geographical challenges of LLDCs are often compounded by weak transit-transport infrastructure, inefficient customs operations, and over-dependence on exports of primary commodities.
Programme of action
In recognition of the complex challenges facing LLDCs and their special development needs, the international community adopted the Vienna Programme of Action (VPoA) for these countries for the decade 2014-2024.
The programme seeks to help the LLDCs achieve sustainable and inclusive growth and eradicate poverty.
A comprehensive high-level midterm review on the implementation of the programme is scheduled for 5 and 6 December in New York. It will analyse the status of implementation of the programme.
The review meeting will be a forum to share best practices and lessons learned. It will also identify remaining obstacles and actions needed to accelerate the implementation of the programme.
UNCTAD will organize an event on impact investing and innovative resource mobilization to foster productive capacities and structural economic transformation in LLDCs on 5 December.
It will co-organize another event on how trade facilitation and transit systems can assist LLDCs reduce trade costs by more than 15% and create win-win opportunities with their transit partner countries on 6 December.
Progress falls short
Five years into the VPoA’s implementation, UNCTAD’s assessments show that progress has fallen far short of what is needed to meet the programme’s goals.
In some areas, LLDCs have regressed.
Average GDP growth fell sharply from 5.2% in 2014 to 3.1% in 2016. While growth recovered to 4.4% in 2018, it remains below the average of 6% achieved in the decade prior to the VPoA.
LLDCs continue to be heavily commodity-dependent, and their average share of manufacturing in total value added has decreased.
“The commodity-driven path to inclusive and sustainable economic growth is not helping LLDCs make progress towards achieving the VPoA and the Sustainable Development Goals,” Mr. Delelegn said.
According to UNCTAD, with the current pace of progress in implementing the VPoA, LLDCs are neither likely to achieve the targets of the VPoA by its 2024 deadline nor the global goals by 2030.
“A new generation of development policies and strategies are urgently needed,” Mr. Delelegn said. “LLDCs should focus on fostering productive capacities and structural economic transformation.”
Bolivia: Need to build productive capacities
Besides commodity dependence, Bolivia is also experiencing premature deindustrialization and limited structural transformation.
Its competitiveness is constrained by high trade costs that limit the country’s capacity to attract foreign direct investment, especially for trade-oriented firms.
To overcome these challenges, Bolivia needs to formulate policies and strategies that are anchored in fostering productive capacities and structural economic transformation, according to UNCTAD’s analysis.
Such efforts could include targeted policies and programmes to build public sector capabilities in policy formulation and implementation, improve trade and transport facilitation and increase private investment.
The country also needs to develop a modern and dynamic manufacturing sector (with higher value-added goods) and harness its rich biodiversity to produce niche products such as nutraceuticals (nutritional and healthy foodstuffs).
Botswana: Time to diversify into non-extractive sectors
The government in Botswana has pursued the beneficiation of diamonds as part of its economic diversification strategy and charted a development path with reduced diamond resource income.
The strategy seeks to create downstream competencies in the areas of cutting and polishing, the manufacture of jewellery, diamond trading and ancillary businesses.
Although Botswana’s economic diversification policies have been relatively successful, the country still doesn’t have a fully diversified economy.
UNCTAD’s analysis shows that Botswana needs to ramp up efforts to diversify into non-extractive sectors. This would involve bolstering small and medium-sized enterprises to enable the country to compete in the global economy.
E-commerce strategies required
UNCTAD’s e-trade readiness assessments conducted in LLDCs have shown non-existent or weak legal frameworks for the regulation of online transactions.
Apart from Nepal, none of the 22 assessed LLDCs have adopted a dedicated e-commerce strategy.
The lack of up-to-date legal frameworks for e-commerce affects the ability of LLDCs to engage with global business partners, attract investors, increase the domestic uptake of e-commerce.
In LLDCs, like in many other developing countries, policymakers/lawmakers and entrepreneurs are often not fully aware of the complex legal issues regarding e-commerce nor about latest global legal developments.