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The Agenda of G20 Summit 2017

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Amid clashes between police and protesters, the top advanced nations known as Group of 20, or simply ‘G-20’ summit is getting underway on 7-8 July in the German port city of Hamburg with terrorism, global trade and climate change among the major issues on the agenda. From Paris Climate Accord to North Korean Nuclear threat, US-Russian ties to Indo-China strain, this G20 summit will witness the global superpowers in their worst, trying to make their best.

Germany’s G20 Presidency with three main focuses: Ensuring stability; improving viability for the future and Accepting responsibility.

 The city of Hamburg has boosted its police with reinforcements from around the country and has 20,000police officers on hand to patrol Hamburg’s streets, skies and waterways. The meeting follows skirmishes between police and protesters elsewhere in Germany’s second-biggest city. Police said that at least 76 officers were hurt, one of whom had to be taken to a hospital with an eye injury after a firework exploded in front of him. On Friday morning, dozens of protesters attempted to block cars from accessing the summit, being held at the trade fair grounds in downtown Hamburg, but they were quickly thwarted by police. Further away in the city’s Altona district, police said people set several parked cars alight and attacked a police station, though the situation quickly calmed down.

 The G-20 comprises Argentina, Australia, Brazil, China, Germany, France, Britain, India, Indonesia, Italy, Japan, Canada, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United States and the European Union. Also attending the summit are the Netherlands, Norway, Spain, Guinea, Senegal, Singapore and Vietnam.

 The G20 is the main forum for international cooperation among the 20 leading industrialized nations and emerging economies in the fields of finance and economics. The G20 nations are together home to almost two thirds of the world’s population, as well as generating more than four fifths of global GDP, and accounting for three quarters of global trade.

 The host, German Chancellor Angela Merkel, says she hopes to find “compromises and answers” on a range of issues at the two-day meeting of leading industrial and developing nations. The G20 finance ministers will be focusing on achieving progress on the stricter regulation of financial markets, especially in the field of shadow banking.

In the run up to the G20 summit, numerous line minister meetings were held, in order to explore individual G20 issues in greater depth. Between January and May 2017, ministers responsible for finance, foreign affairs, labor affairs, health, agriculture and digital policy met. As was the case during the G7 Presidency, Angela Merkel met with representatives of civil society between March and June 2017; several dialogues took place, including events for the business community (Business20), non-governmental organisations (Civil20), trade unions (Labour20), the science and research community (Science20), think tanks (Think20), women (Women20) and youth (Youth20). The civil society organisations themselves are responsible for these meeting as well as for recommendations for Presidency, which will pick up on relevant G20 issues.

The G20 Summit, being hosted this year on July 7 and July 8 in Germany, which will see the coming together of 20 of the World’s biggest economies to discuss, debate and resolve various issue of global and continental importance. Many of the G20 nations have developed differences ranging from environmental issues to prevailing tensions or war-like situations, and are expected to use this platform to at least find a resolution acceptable to all.

While main issues to focus, given the global-political scenario, can be broadly divided into two general categories, primarily as Environmental and Political, here we will look at these in a bit detailed fashion. While the G20 Summit in its definition aims to strengthen the resilience of the global financial system and proper regulation of all financial markets, it also organizes bilateral talks among the members to discuss and if needed resolve differences, at the disposal of the two nations involved. The first meeting was hosted by Germany as well after the formation of the group in 1999.

Among the nations which are expected to directly take part in this metaphorical intervention of President Trump are British Prime Minister Theresa May and German Chancellor Angela Merkel. While May will reportedly express Britain’s full commitment towards the Paris agreement and in her one-on-one talks with him will stress how the accord should not be renegotiated, Chancellor Merkel who said that the US’s withdrawal from the agreement was ‘extraordinarily regrettable’ said that her sentiments will remain similar to what it was during her last meet with Trump.

The decision to exit the European Union is irreversible now and it has been accepted by all, citizens of Britain and the European Union alike. Given that this decision to exit the Union by Britain, popularly called BREXIT, will have obvious impact upon the economical set-up and future of both Britain and the Union, G20, which is primarily an economic platform might resolve a few issues which they may encounter. While it is true that the main focus might not be upon the BREXIT phenomenon, but ignoring the economic decisions might not be possible for either of the parties here.

 Top Issues likely to dominate Geopolitics at Hamburg would be as follows:

Stability of the global economy

Germany is happy to assume the G20 Presidency as of 1 December, and to host the G20 summit in July, declared Chancellor Angela Merkel in a video podcast on the German G20 Presidency. She cited the stability of the global economy as the “top issue”. a number of issues “related to development” will be given a very high profile, in particular fighting pandemics.

Ensuring stable and resilient national economies

The first pillar involves strengthening stable environments for the global economy and the financial system, but also promoting dynamic economic growth. Structural reforms are the lynchpin here. Germany’s G20 Presidency will continue cooperation on international financial and fiscal issues, employment, and trade and investment. The aim is to strengthen free and fair trade around the globe. The German government will also be working for sustainable global supply chains.

Fit for the future

Germany not only aims to ensure the stability of the global economy, but also, and this is the second pillar, to make it more fit for the future. One main concern is to make progress on realising the goals of the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change.

It is every bit as important to discuss viable energy and climate strategies for the future. And the growing importance of digitalization for the global economy will play a prominent part in the discussions of the G20. To be fit for the future will also mean improving health care. The worldwide fight against antimicrobial resistance is part of this, as are efforts to put in place the mechanisms to prevent the outbreak of pandemics. And empowering women in the economy, in particular improving the quality of women’s jobs, is on the agenda. Angela Merkel will be working to give women in developing countries easier access to information and communication technologies.

Accepting responsibility – especially for Africa

Germany also intends to strengthen the G20 as a community of responsibility – and that is the third pillar. A priority concern is to achieve sustainable economic progress in Africa. German Presidency aims to take concrete steps to improve people’s living conditions in the long term and to put in place a stable environment for investment. And it aims to promote infrastructure development on the African continent. In June a separate conference entitled “Partnership with Africa” will be held in Berlin. The G20 also aims to accept responsibility in other fields. Migration and refugee movements, the fight against terrorism, money laundering and corruption will also be addressed during Germany’s G20 Presidency.

The beef over Syria, North Korea and climate

 The issues which we can expect the nations to touch upon in this meet are the US pulling out of the Paris Climate Accord, Britain’s drift from the European Union, Syria, North Korea nuclear tensions and although off the table, but possible mentions of the rising tension between India and China.

 The long standing issue of Syria and its future, threatened by, on one hand the Assad regime and its alleged atrocities on the people and the rebels on the other, and worsened by the presence of the Islamic State terrorists. While primarily it has been speculated and confirmed by US Secretary of State Rex Tillerson that US President Trump and Russian President Vladimir Putin will seek to find a common ground over Syria, the most important decision both countries may arrive could be regarding establishing no-fly zones and on the ground ceasefire norms.

The G20 and world at large looked at the decision of US President Donald Trump with an expression of predictable horror, when he declared that the USA will no longer be part of the Paris Climate agreement. While his decision was censured by citizens of the US and other nations alike, this G20 platform will be reportedly used by a couple of nations to show President Trump that in this issue, the USA is isolated from the rest and as Greenpeace Director Jennifer Morgan would say,’ The only game in town.’

Indian Hindutva agenda of anti-beef issue would not even be mentioned in the summit although such grave issues that are detrimental to normalcy and prosperity of a nation need to be debated and such nations promoting fanaticism as their key ploy as policy should be warned against the dangerous drama just for majority votes. . 

Will G20 achieve anything?

Like UN, the G20 and other such forums only promote multilateral trade and do not think about the future of poor nations and poor populations in real terms. World Bank and IMF impose economic measures to weaken the poor people. They and all governments promote ah and help  the rich and MNCs, corporate lords and their  wealthy trade outfits.

With the global political dynamics changing over the period of one year severely and more so in the last few months, perhaps the Summit is well-timed to resolve the differences which have visibly surfaced within several members and non-members of the G20 nations.

No one is sure about the outcomes as the US led Syria war is in the minds of every leader attending the summit.  While there’s little disagreement on fighting terrorism, prospects of finding common ground on climate change and trade look uncertain.

The illegal war in Syria led by USA and joined by Russia must be stopped and the remaining Syrians must be saved as the first action priority of G20 and UNSC.  Israel and India must be brought to negotiating tables to discuss the burning issue of reestablishment of Palestine and Kashmir as soverign nations as they had existed before.

Remaining Palestinians and Kashmiris must be saved. Only Big powers can make the genuine dreams of Palestinians and Kashmiris a reality as quickly as possible. 

However, since the veto powers control everything including the UN and G20, no one is yet sure if the communique that would be drafted at G20 would sternly warn the colonialist and imperialist powers destroying peace in the world, destroying climate, destroying poor people in every country, destroying nations and people; These should be warned against the crimes they perpetrate against humanity by attacking and killing the native people living in them.  Apart from helping the poor and weak nation in economy and development programs, the G20 should also make suitable recommendations to arrest the climatic change taking place globally that would make many island nations disappear from the face of our earth.

Looking forward to the best possible outcomes from the G20 summit in Germany!

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Convergence Of Competitive Markets And Indian Elections

Joseph Abraham

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If competition is a key component of a flourishing economy, it is equally true that competition in electoral politics and elections is a powerful force for the healthy growth of a vibrant democracy enhancing legitimacy of political parties and their responsiveness to the aspirations of the electorate.

Viewed from the Indian perspective, there is a striking identity between the rights of consumers in the free market economy and the rights of voters in our political democracy. Equally noteworthy is the identity of the fundamental principles governing the rule of law in the free market system, the institutional arrangements for safeguarding consumer rights and the rule of law of elections and the regulatory environment for monitoring the functioning of a free and fair electoral democracy. The free market system ensures the best available goods and services are offered to the consumer at the optimal price following the principles of free market competition without restrictive and unfair trade practices enforced through the Consumer Protection Act1986 and the Competition Act 2002. 

 In the democratic system, the voters are given the right to elect the best available persons as people’s representatives through conducting elections in a free and fair manner which forms the bedrock of democracy. This is ensured by the Election Commission through the enforcement of the Guidelines of Model Code of Conduct for political parties and candidates during elections mainly with respect to speeches, polling day, polling booths, portfolios, election manifestos, processions and general conduct. Thus, while the role of a Referee in the free market system in India is played by the Consumer Disputes Redressal Forum and Competition Commission of India, the rules of  free and fair elections in  political democracy are enforced by the Election Commission of India.    

In a market economy, competition facilitates a host of benefits: awareness and market penetration, higher quality at same prices, increase in demand and consumption through competitive pricing, product differentiation, upgradation and innovation, improvements in efficiency of production at optimal levels by minimising cost and losses and increasing customer service and satisfaction. Competition in politics and elections elevates the voter to a pivotal role in democracy as that given to the consumer in a market driven economy. Electoral candidates vie for votes by promising reforms such as better governance, greater socio-economic equity and positive measures for poverty alleviation.

Each political party through its campaigns, manifesto and other propaganda machinery strives hard to win the maximum number of voters in electoral democracy transforming it as a political free market system with fierce competition  between the players similar to the efforts of sellers in the  free market economy to attract the maximum number of customers.

A   free market system across the globe,  is characterised by the existence of not only the  most efficient firms but also several  inefficient ones who are unable to produce the best quality goods and services  at lowest prices and even  those resorting to fraudulent ,  restrictive and unfair trade practices. Similarly, in political democracy and elections around the world,  besides politicians and parties with high degree of integrity and democratic values, there are those with criminal records, adopting ideologies prejudiced by notions of  race,  caste, colour, gender and religion based politics, and those charged with allegations of vote buying etc. which continues to undermine the democratic process.

Consumer Rights in a Free Market Economy

In India,  the interests of the  consumer in the market economy from restrictive, unfair and anti-competitive trade practices by firms  is safeguarded through several strong legal provisions which inter alia includes  the enactment of the  Consumer Protection Act 1986  and the Competition Act 2002. In addition, consumers rights in the economy are further protected through The Indian Contract Act, 1872, The Sale of Goods Act, of 1930 and  The Agriculture produce Act of 1937.   This is further strengthened by the establishment of supportive quasi-judicial institutional arrangements i.e the Consumer Disputes Redressal Commission at the National, State and District level as well as the Competition Commission of India.

The main objective of the competition law of India is to promote economic efficiency using competition as one of the means of assisting the creation of market responsive to consumer preferences. The advantages of perfect competition are three-fold: allocative efficiency which ensures that costs of production are kept at a minimum and dynamic efficiency which promotes innovative practices.

To achieve its objectives, the Competition Commission of India endeavours to do the following:

  • Make the markets work for the benefit and welfare of consumers
  • Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of the economy.
  • Implement competition policies with an aim to effectuate the most efficient utilization of economic resources.
  • Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of sectoral regulatory laws in tandem with the competition law.
  • Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish and nurture completion culture in Indian economy.

Voters Rights in a Political Democracy

As a free market economy cannot sustain consumer rights without supportive legal and institutional framework, there is little doubt that for the survival of a free and fair democracy, the rule of law should prevail and it is necessary that the best available persons should be chosen as people’s representatives for proper governance of the country (Gadakh Yashwantrao Kankararao v Balasaheb Vikhepati lAIR 1994 SC 678). India isa sovereign, socialist, secular democratic republic. Democracy is one of the inalienable basic features of the Constitution of India and forms parts of its basic structure (Kesavanand Bharati v State of Kerala and Others AIR 1973 SC 1461). The concept of democracy, as visualised by the Constitution, pre-supposes the representation of the people in Parliament and State Legislatures by the method of election (N.P.Punnuswami v Returning Officer Namakka lAIR 1952 SC 64).

 Accordingly, in India,  in the  realm of political democracy and elections, the interests of the voters and electorate  is safeguarded through the Constitution of India,  Representation  of the People’s Act 1950 and 1951,Presidential and Vice Presidential Elections Rules 1974, Registration of Electors Rules 1960 and Conduct of Elections Rules 1961.

In India, the above legal provisions of elections and voting under political democracy    are administered and further supplemented by the Election Commission’s directions and instructions on all aspects. The underlying principle of  parliamentary democracy enforced by the Election Commission of India  is to ensure free and fair elections for which there are three pre-requisites: (1) an authority to conduct these elections, which should be insulated from political and executive interference, (2) set of laws which should govern the conduct of elections and in accordance whereof the authority charged with the responsibility of conducting these elections should hold them, and (3) a mechanism whereby all doubts and disputes arising in connection with these elections should be resolved. The Constitution of Indi has paid due attention to all these imperatives and duly provided for all the three matters.

The Constitution has created an independent Election Commission of India in which vest the superintendence, direction and control of preparation of electoral rolls for, and conduct of elections to, the officers of president and Vice President of India and Parliament and State Legislatures (Article 324). A similar independent constitutional authority has been created for conduct of elections to municipalities, panchayats and other local bodies (Articles 243 K and 243 ZA) along with legal and institutional provisions for  settlement of disputes relating to elections.

Model Code of Conduct in India

Election Commission of India  has laid down a set of guidelines for conduct of political parties and candidate during elections. The main points of code of conduct are:

  1. The government may not lay any new ground for projects or public initiatives once the Model Code of Conduct comes into force.
  2. Government bodies are not to participate in any recruitment process during the electoral process.
  3. The contesting candidates and their campaigners must respect the home life of their rivals and should not disturb them by holding road shows or demonstrations in front of their houses. 
  4. The election campaign rallies and road shows must not hinder the road traffic.
  5. Candidates are asked to refrain from distributing liquor to voters.
  6. The Code hinders the government or ruling party leaders from launching new welfare programmes like construction of roads, provision of drinking water facilities etc or any ribbon-cutting ceremonies.
  7. The code instructs that public spaces like meeting grounds, helipads, government guest houses and bungalows should be equally shared among the contesting candidates. These public spaces should not be monopolized by a few candidates.
  8. On polling day, all political party candidates should cooperate with the  poll-duty officials at the voting booths for an orderly voting process. Candidates should not display their election symbols near and around the poll booths on the polling day. No one should enter the booths without a valid pass from the Election Commission.
  9. There will be poll observers to who any complaints can be reported or submitted.
  10. The ruling party should not use its seat of power for the campaign purposes.
  11. The ruling party ministers should not make any ad-hoc appointment of officials, which may influence the voters in favour of the party in power.
  12. Before using loud speakers during their poll campaigning, candidates and political parties must obtain permission or license from the local authorities. The candidates should inform the local police for conducting election rallies to enable the police authorities to make required security arrangements. 

Conclusion

In a wider sense, both free markets and democratic elections are run on the basis of a set of rules with respective regulatory bodies enforcing the rules of the game. While there is a strong element of political centralization in the decision making process of elections, free market system is tilted more towards the principle of economic decentralisation. However, the consumer and the voter whose rights are legally and institutionally safeguarded remain as the principal beneficiaries of both systems- the economic and political. Thus free markets and democracy have identical underlying objectives of maximising welfare of the people. The convergence of the political economy of free markets and elections therefore highlights the democratic principles governing the welfare of citizens.

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Euro – 20 years on: Who won and who lost?

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The common European currency – the euro – came into being 20 years ago. Since January 1, 1999, the euro has been widely used in cashless money transfers. On January 1, 2002, banknotes and coins were introduced into circulation. How did the European countries benefit from the single currency? How many profited from its introduction?

In the early 1990s, the European Community entered a new stage of development which was characterized by a transition to a higher level of integration within it and expansion to include more members. This was provided by the Treaty on European Union, which was signed on February 7, 1992 in the Dutch city of Maastricht and entered into force on November 1, 1993. The Maastricht agreements and the subsequent decisions of the EU’s governing bodies – the European Council and the Council of the EU –formed a groundwork for a gradual, stage-by-stage creation of a monetary union and the introduction of a single currency, the euro.

At the time the decision on the introduction of the euro came into effect it was believed that the main objectives of the transition to a single monetary policy and the replacement of national banknotes with a single European one were the following. First of all, a monetary union was supposed to put the finishing touches to the formation of a common market and was to transform the EU territory into an economic space with equal opportunities for all players. A single currency was expected to facilitate the transition of the EU to a common economic policy, which, in turn, was seen as indispensable for moving to a new level of political integration. Many also viewed a single currency as vital for cementing European integration and a symbol of the economic and political integrity of the region. It was assumed that the euro would keep European countries “in the same harness” even in times of crisis and would help them to overcome differences and even resist outbursts of nationalism.

The second goal was to prevent losses caused by continuous fluctuations in the rates of Western European currencies. Once the euro was established, risk payments for possible losses in different-currency transactions became a thing of the past. It was assumed that stable and low interest rates would bring down inflation and stimulate economic growth. Thirdly, it was thought that fixed exchange rates within the euro zone with no more fluctuations would boost investment activity and, as a result, would improve the situation on the labor market. In addition, a better economic performance was to make it easier for countries to enter the EU and adapt to the new reality. A better economic performance was supposed to make European products more competitive in world markets.

Fourth, a single currency was supposed to significantly cut circulation costs. At the end of the 1990s, the existence of various national currencies cost the EU countries 20-25 billion ECU (26-33 billion dollars) annually, including the cost of keeping records of currency transactions, insuring currency risks, conducting exchange operations, drawing up the price lists in various currencies, etc. Finally, fifthly, the initiators of the single currency hoped that the euro would become one of the international reserve currencies. The introduction of the euro was supposed to change the balance of strength between the United States and united Europe in favor of the latter. In the long run, it boiled down to ensuring more independence of the EU economic policy since interest rates on long-term loans would be less dependent on American ones.

What is happening at present? Not surprisingly, the greatest difficulties emerged  while grappling with the most pressing and large-scale agenda involving the ambitious plans of the political and economic transformation of the EU and the strengthening of its global geo-economic role. Indeed, since the late 1990s, the economic and financial spheres of the EU have undergone dramatic changes. In 2004 and 2007, the majority of Central and Eastern European countries joined the Union (an increase in social dumping). The current EU “bears little resemblance” to that of 20 years ago. “Not only the currency has become different, but the entire European economy has changed.”

Nevertheless, as predicted by those who criticized the approved version of transition to a single European currency, chances for meeting the criteria of eurozone membership in case the global economy followed an unfavorable scenario are pretty slim for most countries of the eurozone. As economic and financial crises sweep Europe one after another, the presence of the euro and the unprecedentedly high level of the European Central Bank’s autonomy and its extensive powers are restricted by the “possibility of influencing the economy” of separate states. Since inflation rates vary from country to country, the interest rate suggested by the ECB (about 2%) turns out to be too low for countries with high inflation (which leads to financial bubbles) and too high for countries with low inflation (which has a negative impact on investments).

As a result, the economic slowdown in European economies in the 2000s through 2010s led to increases in budget deficits. According to the requirements of the eurozone, governments have to raise taxes or cut spending, even if it damages national economy. Formally, there exists a procedure to tackle economic upheavals in this or that country of the eurozone to minimize their consequences for other members. From the point of view of abstract macroeconomic indicators this procedure is functioning well. But, judging by what happened in Spain, and then in Greece and Italy, its social, economic and subsequently, political costs are too high. In the first place, we talk about social upheavals, which became one the main reasons for the rise of “right-wing populists” across Europe.

The euro is running into problems mainly because it hinges on politics, rather than economics. On the one hand, it is this that largely keeps it from the collapse. The EU leadership is ready to sustain any financial or economic losses to preserve the single currency.  However, from the economic viewpoint, the ECB’s readiness for currency interventions has ruined market discipline. In March this year the German Wirtschafts Woche stated that the euro had failed to become either an effective currency or an EU stability enhancing tool. What proves it is the fact that without “billions and billions in financial injections on the part of the European Central Bank and European governments to save the euro the single currency would have long sunk dead”. The 2008 financial crunch quickly triggered the crisis of the eurozone which culminated in the Greek debt crisis of 2010. As a result, “the dispute over how to save the single currency laid bare purely political differences across Europe”.

As skeptics forecast, membership in the eurozone, sought by countries with different levels of economic development regardless of the tough requirements and selection criteria, resulted in a situation in which a setback in the global economic performance hit weaker members the hardest. Citing the IMF, Le Figaro points out that “the euro exchange rate is too high for France and Italy (which deals a blow on their competitiveness), and is too low for Germany (by about 20%)”.  This provided the German economy with a clear edge over other EU members and secured a “huge foreign trade proficit”. Moreover, in the course of the eurozone crisis in 2009 there emerged a vicious circle: Germany’s domineering position in the EU enabled Berlin to dictate its policy of austere budgetary measures to the greater part of the rest of Europe, which, in turn, gave rise to an outburst of anti-German sentiment in a whole range of countries, including Greece and Italy.

Therefore, in 20 years of its existence the euro has made Germany yet more powerful economically than it used to be. Simultaneously, it has become a major factor that contributed to Germany’s isolation in Europe. Critics say that while drafting the euro project its authors meant to weaken Germany. Instead, the single currency “strengthened it, providing it with competitive advantages through a “weak” euro”. Central Europe has become a supplier of spare parts for German businesses thereby putting into practice the Mitteleuropa Doctrine in the 21st century. The rest of the EU countries have become a market for German goods. Meanwhile, Germany has to pay for economic failures of an ever greater number of its EU partners. In such a way, Germany’s economic might has all but become a major threat to European integration. Pessimists fear the current economic and geopolitical trends will sooner or later push the Germans into pursuing a more “egoistic” and “aggressive” policy, in every sense of the word. Everyone remembers what this kind of policy ended with in a period from the mid19th to the mid20th century.

As for the second and third points of the objectives of a single currency, the results are contradictory. Inflation in the eurozone is indeed at an all-time low. There has occurred a unification of the common market of goods, capitals and workforce. At the same time, measures which are being taken by the European Central Bank to fight low inflation have more than once driven a number of EU countries into recession and sovereign debt crises. Living standards in EU countries have not been growing steadily over the past few years. A rise in wages has turned out to be much smaller than predicted in the late 1990s.  Most European banks still prefer holding debt obligations of their countries only, which, in case of financial crisis, is fraught with banking problems and could ruin national economy. As for competitiveness, the appearance of a single market “in the first place, aggravated competition between  EU countries”. Simultaneously, the introduction of the same standards and requirements for all countries of the eurozone “cemented their differences, rather than brought them together”.

The fourth point can be considered fully implemented. Economic transactions have been simplified, cost less and have got rid of exchange-related risks. According to the British The Economist, three out of five residents of eurozone countries consider the euro useful for their country. And 75% of Europeans are sure that the single currency benefits the EU. Meanwhile, the removal of barriers to capital movements has led to a significant imbalance in investments, especially in the industrial sector. The main benefits went to countries located in the center of the EU while the geographical “periphery” of the eurozone has lost some of its former investment attractiveness. But the presence of the euro makes it impossible for the less fortunate countries to stimulate the economy by bringing down the currency value.

As for the fifth point, some of the ambitious plans have been implemented. The euro has already made a significant contribution to the weakening of the position of the US dollar in the global economy. According to the European Commission, one-fifth of the world’s currency reserves are denominated in the single European currency. “340 million citizens use it daily, 60 countries and territories link their currency to it”. On the other hand, 10 years of 20 years of its history the eurozone has devoted to the struggle against an “unprecedented crisis”. By now, experts say there has been a “fragile recovery.” Nevertheless, unlike its main competitors, the dollar and the yuan, the euro has no solid foundation. The EU budget is used mainly for paying subsidies to member countries, while the years-long disputes over prospects for creating a common EU ministry of finance all but fuel differences between 19 eurozone governments.

Thus, according to optimists, criticism of the euro is first of all the result of profound differences on the fundamental issues of European economic policy. The single currency consolidated the leaders of Europe, provided them with the common goal of creating a more integrated, a more attractive for trade and business, and a globally competitive, economy. However, a further stable existence of a single currency mechanism in Europe calls for urgent reforms, which European politicians are either not ready for or are not capable of. According to critics, the single currency has driven the different economies of the EU countries into the Procrustean bed of all-fitting standard format. The single currency mechanism completely ignores, if not completely denies, the geographical, historical and cultural specifics of the member states. Overall, the current model of economic and monetary integration in the EU mindlessly forces countries whose national economies do not match the general format “to carry out endless reforms,” which all but aggravate their long-standing inherent problems.

 First published in our partner International Affairs

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Afreximbank Meets Ahead of Russia-Africa Summit

Kester Kenn Klomegah

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The African Export-Import Bank (Afreximbank) plans to hold its 26th annual meeting in Moscow on 18-22 June. A series of closed sessions will be held as part of the event including the meeting of Board of Directors of Afreximbank and a meeting of Shareholders of Afreximbank, as well as the open Russia-Africa Economic Conference.

The African Export-Import Bank, the Roscongress Foundation, the Ministry of Finance of the Russian Federation, and the Russian Export Centre are the key organizers of this event. The Afreximbank Annual Meetings is a high-level event, bringing together political and business leaders from across Africa to discuss the issues of trade, industrialization, export, and financial stability and efficacy.

Key themes planned for the economic conference are: State of Russia-Africa Relations: An Overview; Mining Industry: An Integrated Approach to the Fields Development; Prospects for Multilateralism in an Era of Protectionism; Railways Infrastructure as the Key Element for Development in Africa; South-South Trade: Path for Africa Integration into the Global Economy.

The other topics are Emerging Trends in Sovereign Reserves Management; Reflections on the Transformative Power of South-South Trade; Launch Afreximbank ETC Strategy; Cyber Solutions and Cyber Security for Solving Governmental and Municipals Tasks; Financing South-South Trade in Difficult Global Financing Conditions; The Future of South-South Trade and Infrastructure Financing.

Over 1,500 delegates are expected to attend the economic conference, including shareholders and bank partners, government representatives, members of the business community and media representatives. The conference will be a crucial stage in preparation for the full-scale Russia-Africa political summit and the accompanying economic forum, scheduled for October 2019 in Sochi.

“Russian and African countries are basically on the track of bilateral strategic partnership and alliance based on openness and trust. The fact that the Afreximbank Annual Meeting is to be held in our country gives a positive momentum for the mutually beneficial cooperation of the parties ahead of the full-scale Russia-Africa Political Summit that will take place in Sochi in October, and will add to the inclusive nature of the events,” emphasized Anton Kobyakov, Advisor to the President of Russian Federation.

Following the setup of the Organizing Committee for the Russia – Africa summit and other Russia–Africa events in Russia in 2019, Russian officials have described that this year truly as a year of Africa for Russia.

“We witness the clear growing interests from the both sides to establish the new level of relationships, which means a perfect timing to boost the economic agenda. All economic events planned for this year will become a platform to vocalize these ideas and draw a strong roadmap for the future,” Russian Export Center’s CEO, Andrei Slepnev, argued in an emailed interview with Buziness Africa.

In December 2017, Russian Export Center became a shareholder of Afreximbank. Russian Export Center is a specialized state development institution, created to provide any assistance, both financial and non-financial, for Russian exporters looking for widening their business abroad.

On March 19, the Organizing Committee on Russia-Africa held its first meeting in Moscow. President Vladimir Putin put forward the Russia-Africa initiative at the BRICS summit (Russia, Brazil, India, China, and South Africa) in Johannesburg in July 2018.

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