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Russia: Facilitating Trade with Africa

Kester Kenn Klomegah

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Interview with Maxim Chereshnev

Russian Export and Investment Fair (REIF) to be held on 19-20 November 2015, for the first time, will gather high level participants from more than 50 countries and 80 regions in Russia. The purpose of the REIF is to create an international platform for professional dialogue of the business community.

The REIF is designed to help government leaders, representatives of ministries, departments, business corporations and industries from across the world to meet new partners. It will also offer participants the opportunity to receive up-to-date information on the current trends, challenges and prospects of development of export and investment activities of world-class professionals as well as to expand the circle of business contacts.

In this exclusive interview, Maxim Chereshnev, the Chairman of the Board of the Council for the Development of Foreign Trade and International Economic Relations, explains to Kester Kenn Klomegah about the significance of the forthcoming corporate business event.

What are the key objectives of the forthcoming Russian Export and Investment Fair scheduled for November in Moscow?

Russian trade and economic development council jointly with Agency of Strategic Initiatives have initiated this Fair as the first platform in Russia for direct business community international dialogue. After examining the experience in events organizations in other part of the world, particularly in China, Hong Kong, Korea and Singapore, the decision was made to adopt the best practices in Russia. Indeed, REIF is aimed at providing business with opportunities for meetings and the beginning of cooperation between Russian and foreign companies. Within REIF it will be possible to present export and import possibilities of Russian and foreign companies, their investment projects, to attend training courses and seminars, to arrange b2b sessions as a way of sharing views and so forth.

Is this an effort directed at promoting Russian export products and services as Vladimir Putin has urged businesses to do?

As President Vladimir Putin noted in his message to the Federal Assembly, raising business development, diversification of economy and non-resource export are key priorities for economic prosperity of Russia. RTEDC as a trade promotion organization is exactly aimed at global communication development and mutually beneficial business relations strengthening in compliance with the governmental politics. RTEDC activity and REIF initiative definitely suit investment promotion, trade facilitation and export support of Russian companies as instruments for new opportunities creating for small and medium enterprises.

Do you think that the Fair can help stimulate export transactions and the flow of corporate business deals abroad?

REIF is a result of long and hard work on strengthening b2b communication between Russian and foreign companies. RTEDC has a range of 20 priority countries for collaboration. RTEDC special representatives and chairmen of profile RTEDC committees for cooperation with these countries assist to different business cases realization which RTEDC deals with. These are examples of private business interest. Without doubts, REIF will lead to growth of general mutual interest, demonstrate facilities of Russian companies and highlight favorable conditions for active business interaction. Prearranged meetings and business matching will allow to find partners and investors for projects realization both abroad and in Russia. REIF is not just fair but also the platform where participants will get opportunity to negotiate and to make agreements with new partners. After REIF, RTEDC will provide companies with full assistance in all communications.

As it shows, so who should attend this Russian Export and Investment Fair? Can we expect something new in terms of foreign participation?

Foreign manufactures and companies which are interested in localization in Russia or in joint production, companies which search for projects and investment to Russia or those business representatives that are looking for export from Russia or would like to present their own products and technologies as well as Russian export companies, Russian regional representatives are invited for participation in this business event. We suppose that matchmaking and working sessions will be really useful for mutual benefits of REIF exponents and guests. REIF would specially welcome companies from Asian and African countries as participants and visitors. Thus, nowadays perspectives of business contacts between Russian and African business are actually underestimated, however, there are a huge number of opportunities for technology exchange, trade promotions, mutual investment between Russia and South Africa, Morocco, Zimbabwe, Namibia, Egypt, Kenya and other African countries.

How important is this corporate business event for Africa?

Import substitution policy in Russia and general course on economic diversification are favorable for other countries to export/import relations development and investment with Russian companies. It includes interests of African countries within their economic development and independence from traditional and new monopolists in African markets. At present African continent with its total economic growth rate 5-5,5% per year on average attracts attention of international business community. It puts Africa on the second place in the world growth rates.

According to forecasts by 2033 African GDP will reach to East Europe figures, including Russia, and by 2039 – to Latin America rate. It’s pleasure to note that Russia and African states have a long story of relations. Import of coffee, cacao, tea, citrus, sea products from African states is important for Russia. At the same time Russia is interested in African market for joint production and export of technical, military, industrial equipment and services in satellite communications, geological survey and power engineering.

Some Russian companies such as Gazprom, ALROS, RusAl, Norilsk Nickel and others are already operating in Africa. Moving on, Russia is the 5th country in total volume of investment among all states in Africa. What is very important today is the fact that new opportunities are arising for small and medium enterprises of Russia and Africa for their collaboration. For instance, agricultural, high-tech, medicine, energy-saving technologies, logistics and infrastructure projects are really perspective for strengthening Russia-African economic cooperation. That’s why we invite participants from Africa for establishing closer contacts and continue cooperating in key sectors of the economy. We call on all interested companies and organizations to register on REIF website (www.rusfair.com) and provide us with information about their needs and requests from this first Russian Export and Investment Fair.

Kester Kenn Klomegah is an independent researcher and writer on African affairs in the EurAsian region and former Soviet republics. He wrote previously for African Press Agency, African Executive and Inter Press Service. Earlier, he had worked for The Moscow Times, a reputable English newspaper. Klomegah taught part-time at the Moscow Institute of Modern Journalism. He studied international journalism and mass communication, and later spent a year at the Moscow State Institute of International Relations. He co-authored a book “AIDS/HIV and Men: Taking Risk or Taking Responsibility” published by the London-based Panos Institute. In 2004 and again in 2009, he won the Golden Word Prize for a series of analytical articles on Russia's economic cooperation with African countries.

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Economy

Economic Growth in Africa Rebounds, But Not Fast Enough

MD Staff

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Sub-Saharan Africa’s growth is projected to reach 3.1 percent in 2018, and to average 3.6 percent in 2019–20, says Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, released today.

The growth forecasts are premised on expectations that oil and metals prices will remain stable, and that governments in the region will implement reforms to address macroeconomic imbalances and boost investment.

“Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” said Albert G. Zeufack, World Bank Chief Economist for the Africa Region. “African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth.”

The moderate pace of economic expansion reflects the gradual pick-up in growth in the region’s three largest economies, Nigeria, Angola and South Africa. Elsewhere, economic activity will pick up in some metals exporters, as mining production and investment rise. Among non-resource intensive countries, solid growth, supported by infrastructure investment, will continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal. Growth prospects have strengthened in most of East Africa, owing to improving agriculture sector growth following droughts and a rebound in private sector credit growth; in Ethiopia, growth will remain high, as government-led infrastructure investment continues.

For many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production,” said Punam Chuhan-Pole, World Bank Lead Economist and the author of the report.  “This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda.”

Public debt relative to GDP is rising in the region, and the composition of debt has changed, as countries have shifted away from traditional concessional sources of financing toward more market-based ones. Higher debt burdens and the increasing exposure to market risks raise concerns about debt sustainability: 18 countries were classified at high-risk of debt distress in March 2018, compared with eight in 2013.

“By fully embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate growth,” said Zeufack.

This issue of Africa’s Pulse has a special focus on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications of achieving inclusive economic growth and poverty reduction. The report finds that achieving universal electrification in Sub-Saharan Africa will require a combination of solutions involving the national grid, as well as “mini-grids” and “micro-grids” serving small concentrations of electricity users, and off-grid home-scale systems. Improving regulation of the electricity sector and better management of utilities remain key to success.

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Multilateral Development Banks Present Study on Technology’s Impact on Jobs

MD Staff

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Rapid technological progress provides a golden opportunity for emerging and developing economies to grow faster and attain higher levels of prosperity. However, some disruptive technologies could displace human labor, widen income inequality, and contribute to greater informality in the workforce. Tapping new technologies in a way that maximizes benefits, mitigates adverse effects, and shares benefits among all citizens will require public-private cooperation and smart public policy.

That is one of the main conclusions of a new study, The Future of Work: Regional Perspectives, released today by four regional multilateral development institutions: the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB).

The study, which was presented at a seminar hosted 19 April at the IDB in Washington, D.C., explores the potential impact of technology in global labor markets and identifies concrete actions countries can take to prepare for the changing nature of jobs and leverage the benefits of emerging technologies.

The Future of Work: Regional Perspectives analyzes the challenges and opportunities presented by artificial intelligence, machine learning, and robotics in what is known as the Fourth Industrial Revolution. Potential challenges include increased inequality and the elimination of jobs, as well as the high degree of uncertainty brought about by technological change and automation. The greatest opportunities come from gains in economic growth that can result from increased productivity, efficiency, and lower operating costs.

The study includes chapters focusing on how new technological developments already are affecting labor markets in each region.

In the case of Asia and the Pacific, ADB research shows that even in the face of advances in areas such as robotics and artificial intelligence, there are compelling reasons to be optimistic about the region’s job prospects. New technologies often automate only some tasks of a job, not the whole. Moreover, job automation goes ahead only where it is both technically and economically feasible. Perhaps most importantly, rising demand—itself the result of the productivity benefits that new technologies bring—offsets job displacement driven by automation and contributes to the creation of new professions.

“ADB’s research shows that countries in Asia will fare well as new technology is introduced into the workplace, improving productivity, lowering production costs, and raising demand,” said Yasuyuki Sawada, ADB’s Chief Economist. “To ensure that everyone can benefit from new technologies, policymakers will need to pursue education reforms that promote lifelong learning, maintain labor market flexibility, strengthen social protection systems, and reduce income inequality.”

The publication was launched with a panel discussion featuring senior officials of the four regional development banks leading the study: Luis Alberto Moreno (IDB President), Charles O. Boamah (AfDB Senior Vice-President), Takehiko Nakao (ADB President), and Suma Chakrabarti (EBRD President). They were joined by Susan Lund (Lead of the McKinsey Global Institute) and Pagés, one of the co-authors.

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Circular economy: More recycling of household waste, less landfilling

MD Staff

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EU Parliament backs ambitious recycling targets, under legislation on waste and the circular economy, adopted on Wednesday.

Improving waste management will not only benefit the environment, climate, and human health. The four pieces of legislation are also part of a shift in EU policy towards a circular economy, i.e. a system where the value of products, materials and resources is maintained in the economy for as long as possible.

By 2025, at least 55% of municipal waste (from households and businesses) should be recycled, says the text, as agreed with Council of Ministers. The target will rise to 60% by 2030 and 65% by 2035. 65% of packaging materials will have to be recycled by 2025, and 70% by 2030. Separate targets are set for specific packaging materials, such as paper and cardboard, plastics, glass, metal and wood.

Landfilling to become an exception

The draft law also limits the share of municipal waste being landfilled to a maximum of 10% by 2035. In 2014, Austria, Belgium, Denmark, Germany, the Netherlands and Sweden sent virtually no municipal waste to landfill, whereas Cyprus, Croatia, Greece, Latvia and Malta still landfill more than three quarters of their municipal waste.

Textiles and hazardous waste from households will have to be collected separately by 2025. By 2024, biodegradable waste will also have to be either collected separately or recycled at home through composting.

Reduce food waste by 50 %

In line with the UN sustainable development goals, member states should aim to reduce food waste by 30% by 2025 and 50% by 2030. In order to prevent food waste, member states should provide incentives for the collection of unsold food products and their safe redistribution. Consumer awareness of the meaning of “use by” and “best before” label dates should also be improved, say MEPs.

“With this package, Europe is firmly committed to sustainable economic and social development, which will at last integrate industrial policies and environmental protection”, said lead MEP Simona Bonafè (S&D, IT). “The circular economy is not only a waste management policy, but is a way to recover raw materials and not to overstretch the already scarce resources of our planet, also by profoundly innovating our production system”.

“This package also contains important measures on waste management, but at the same time goes further, by defining rules taking into account the entire life cycle of a product and aims to change the behaviour of businesses and consumers. For the first time, Member States will be obliged to follow a single, shared legislative framework”, she added.

Background: what is a circular economy?

A circular economy implies reducing waste to a minimum as well as re-using, repairing, refurbishing and recycling existing materials and products. Moving towards a more circular economy will reduce pressure on the environment, enhance security of supply of raw materials, increase competitiveness, innovation and growth, and create jobs.

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