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$1.2 Billion to Help Finance Second Phase Upgrade of Bangladesh International Road Corridor

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The Asian Development Bank’s (ADB) Board of Directors has approved $1.2 billion in finance for the second phase upgrade of the Dhaka-Northwest international trade corridor in Bangladesh.

“Bangladesh has good prospects of becoming a regional trade hub, if the country’s transport infrastructure can be improved to bring down transport costs and make the sector more competitive,” said Dong Kyu Lee, Unit Head of Project Administration in ADB’s South Asia Department. “To further these aims, the project is expected to significantly boost trade and prosperity along the trade corridor route, the second busiest artery in the country.”

Transport infrastructure is the centerpiece of the ADB-supported South Asia Subregional Economic Cooperation (SASEC) program, which promotes regional prosperity. Since 2001, SASEC members have invested more than $9.17 billion in projects with a regional dimension, including 31 transport projects worth $7.3 billion. SASEC transport investments in Bangladesh focus on developing highway corridors. Road travel accounts for 70% of all passenger traffic and 60% of freight in Bangladesh, where traffic has been growing at a rate of 8% a year.

ADB has been a partner of the government in improving the Dhaka-Northwest corridor since 1994, when the landmark Jamuna Bridge Project was approved. A first ADB loan of $198 million was approved in 2012 for what is now considered phase 1 of the international corridor project. This increased road capacity on 70 kilometers (km) of the Joydeypur-Elenga section of the road. It also improved operational efficiency of two of the land ports—Burimari and Benapole—that provide gateways to Bhutan and India, respectively.

Phase 2 continues ADB’s support to the corridor by improving the 190-km section from Elenga through Hatikurul to Rangpur. Road operation and management in the Roads and Highway Department will also be strengthened. There will be further work on issues such as road safety and gender responsive features to make the highway user friendly to women. Studies have shown that women particularly use the route on foot or slow-moving vehicles such as rickshaws, so the project will include footbridges, footpaths, and lanes for slow moving traffic to make their travel safer.

The total cost of the project is $1.67 billion, of which the government will meet $472.6 million. ADB’s financial assistance will be delivered through a multitranche financing facility, with the first tranche comprising a regular loan of $250 million and a concessional loan of $50 million. Work will be carried out over 10 years to August 2027, with funding from three more tranches from the facility at intervals.

Accompanying the assistance package is an ADB technical assistance (TA) grant of $2 million to support the government in updating its Road Master Plan, and enhancing planning and monitoring activities associated with roads. The TA is to be carried out from January 2018 to December 2023.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.

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Finance

Going Digital is Necessary for Small Businesses to Survive

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APEC member economies must work together to promote and encourage the transition of the region’s micro, small and medium enterprises (MSMEs) to the emerging digital economy, urged Malaysia’s Minister of Entrepreneur Development and Cooperatives, Dato Sri Dr. Haji Wan Junaidi Bin Tuanku Jaafar.

“Going digital is not an option, it has to be done. It is a necessity to survive,” he said in his opening remarks of the APEC 26th Small and Medium Enterprises Ministerial Meeting held virtually on Friday.

APEC ministers in charge of small and medium enterprise policy exchanged views to address the severe economic impact of the pandemic to MSMEs and detailed steps to build more resilient, inclusive and sustainable environment for the sector.

MSMEs play a significant role in the region’s economic growth, contributing around 40 to 60 percent to the growth domestic products of most APEC economies. As a response to the pandemic, APEC members have been providing support measures for the sector ranging from tax reliefs, wage subsidies, interest rates reduction, soft loans and refinancing, so that business owners and managers can sustain their operations and continue to contribute to the global economy.

“In the new normal, businesses must pivot their strategies and business models to adapt to the digital economy and incorporate innovation and technology in order to remain resilient,” he added. “Besides all the fiscal stimulus, it is equally imperative to support MSMEs to go digital while helping them to adjust and overcome the challenges.”

He cautioned members of the multi-faceted challenges and concerns of going digital, including data privacy, cybersecurity, digital fraud and the digital divide. He highlighted the importance of strengthening cooperation and collaboration within APEC member economies “during and beyond this pandemic.”

APEC has been consistent in acknowledging the significant contribution MSMEs give to the region’s economy and employment. In her remarks at the meeting, Dr Rebecca Fatima Sta Maria, Executive Director of the APEC Secretariat, highlighted that policy work undertaken by other APEC groups can contribute to helping MSMEs in the region.

“Support for MSMEs in APEC is cross-cutting and requires close partnership within our fora and the private sector,” she said. “We need to advance progress in structural reforms, trade facilitation and digital initiatives such as the single window implementation to make it easier, faster and cheaper to do business in the region and to ensure seamless flow of good and services within economies and across the borders.”

During the meeting, ministers endorsed a joint statement focusing on member economies’ commitment to support MSMEs in restarting and reviving their businesses through digitalization, innovation and technology.

Ministers also endorsed a new five-year vision to reinforce business ethics and integrity in health-related sectors called Vision 2025 launched earlier this month at the 2020 APEC Business Ethics for SMEs Virtual Forum under the world’s largest ethics pacts to strengthen ethical business practices in the medical device and biopharmaceutical sectors.

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Finance

Socially Responsible, Low-Carbon Capitalism Can Ensure ‘Job-Full’ Recovery From COVID-19

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COVID-19 has caused a jobs crisis but, if we are to recover from the pandemic, two more fundamental crises need tackling: climate change and the nature of capitalism itself. This was the view of leaders taking part in the World Economic Forum’s Jobs Reset Summit, which opened today.

“The low-carbon revolution will be a booming space for jobs,” said Alan Jope, Chief Executive Officer, Unilever, United Kingdom. Jope said he hopes the recovery from the pandemic will prove a turning point in the battle with climate change, because a greener business can drive both revenues and job creation.

According to the European Union, investments in renewable energy could create three times as many jobs as investing in fossil fuels. “One of the most dangerous mindsets in the world,” said Jope, “is to set up a false dichotomy between sustainability and economic growth.” Unilever has saved 800 million euros in sustainable sourcing, while attracting more customers through low-carbon products. A business that is trying to be responsible is a magnet for talent, he said, adding: “We see purpose as a pathway to better profits.”

Environmental and social pressures have exposed fault lines in the structure of global capitalism, which tends to perpetuate inequalities, said Ray Dalio, Founder, Co-Chairman and Co-Chief Investment Officer, Bridgewater Associates – one of the US’s leading hedge funds. “The profit-pursuing system won’t change educational disparity, for example, because profit is a self-reinforcing system,” he said, adding: “Capitalism by its nature tends to create greater wealth gaps.” Dalio pointed out that the wealthiest 40% of US citizens spend five times more money educating their children than the bottom 60%, accelerating inequalities in wealth and job opportunities. “There needs to be a coordinated effort to restructure how the machine works,” he said. Jope agreed the world needs to shift to a more “evolved model of capitalism” to create a job-full recovery. “We must change the measures of success,” he said, criticizing the preoccupation with measuring only GDP and profit.

Over half the global workforce will need to reskill in the future of work, according to the World Economic Forum. Businesses, civil society and governments all have to cooperate in reskilling their people, said Rania A. Al-Mashat, Minister of International Cooperation of Egypt. This is easier in countries such as Egypt, as its largely young population is tech-savvy. However, as well as reskilling people, governments must invest in the digital infrastructure needed to enable the new generation of technology entrepreneurs to thrive. The minister emphasized the need for building inclusive societies, pointing out that Egypt was the first country in Africa and the Middle East to launch the Forum’s Closing the Gender Gap Accelerator project, launched a year ago.

Governments have an increasingly prominent role in directing financial flows, as the world emerges from the pandemic. The rate at which governments are borrowing and central banks are printing money means that decisions on where money and credit flow are becoming increasingly political, said Dalio. Decisions on state stimulus packages, for example, will have a major impact on job creation. Dalio also hailed ESG (environmental, social and governance) investing as a “very powerful force now.” He does not have high confidence in shareholders putting social good above financial gain, he said, “but with ESG investing and with governments redirecting funds in a totally different way, it’ll happen.”

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Human Rights

ILO and IOM sign agreement to strengthen collaboration on migration governance

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image source: ILO

The International Labour Organization (ILO) and the International Organization for Migration (IOM) have signed an Agreement to create a framework for cooperation and collaboration to enhance the benefits of migration for all.

The framework includes joint support for improved migration governance, capacity building and policy coherence at national, regional and global levels. Other areas of work may also be developed.

The Agreement was signed by Guy Ryder, ILO Director-General, and António Vitorino, the IOM Director-General, on Friday 23 October, at the ILO Headquarters in Geneva.

Speaking after the signing ceremony, Ryder said: “This Agreement seals an important alliance between our two organizations. Together, we will be stronger and more effective in both fulfilling our individual mandates and in collaborating on areas that are crucial for reshaping the world of work so that it is more inclusive, equitable and sustainable.”

“The COVID-19 pandemic is having a brutal impact on economies and societies. Vulnerable groups, particularly migrant workers and their families, are being disproportionately hit. There could be no better time to reinforce our partnership and combine our strengths, so that we can help countries and our constituents build back for a better future.”

Vitorino said: “The agreement that we are signing today will help us further solidify our collaboration at the time when joint solutions are so much needed, with a pandemic that is hitting the most vulnerable the hardest. As we move towards post-pandemic recovery, we fully embrace the call to build a better world together, tapping into the added value of each partner. With ILO, we have much to co-create and we look forward to future cooperation within the broader UN family, with our partner governments, private sector and civil society.”

The new ILO-IOM Agreement builds on the agencies’ comparative advantages, expertise, and respective constituencies. By encouraging joint initiatives, the Agreement aims to strengthen international migration governance and boost cooperation, capacity building and joint advocacy to promote migrants’ rights and decent work opportunities.

By encouraging social dialogue, it will allow workers’ and employers’ organizations – who sit equally with governments in the ILO’s tripartite membership structure – to contribute to policy discussions.

A workplan will be developed in the next six months to push forward the collaboration at global, regional and country levels and, more importantly, facilitate the implementation of the Agreement in the field, where both agencies are working directly with affected populations.

It will seek to enhance the agencies joint contribution to their member states, UN country teams, and societies to achieve the goals of the 2030 Sustainable Development Agenda .

The Agreement will also allow the ILO and IOM to strengthen support for their respective constituencies in implementing the Global Compact for Safe, Orderly, and Regular Migration (GCM), and contribute to other global and regional migration policy fora and debates.

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