The Russian economy has returned to modest growth – amidst positive global growth, a recovery in trade, rising oil prices, and growing macroeconomic stability – according to the World Bank’s latest Russia Economic Report (no. 38 in the series), launched today in Moscow.
These shoots have allowed consumer demand and consumption to rise, as the business environment improved, and underpin projections that Russia’s economy will grow 1.7% in both 2017 and 2018, and 1.8% in 2019.
Supported by a rebound in domestic demand in the first half of 2017, the growth momentum of the second half of 2016 spilled over to 2017, and was especially strong in the second quarter. However, due to sluggish investment demand, this growth momentum seems to have slowed down in the third quarter, contributing to uneven growth dynamics overall in 2017.
The importance of growing macroeconomic stability is highlighted in the report. The Russian authorities continue to adhere to a path of fiscal consolidation and introduced a new fiscal rule, which comes into effect in 2019, that is expected to smoothen the impact of external volatility on the budget and the real exchange rate.
“Based on a fixed benchmark oil price, Russia’s new fiscal rule is a major structural reform,” said Apurva Sanghi, World Bank Lead Economist for Russia and main author of the report. “Combined with a move towards inflation-targeting, the fiscal rule underscores the Russian authorities’ strong commitment to deepening macroeconomic stability.”
The Central Bank of Russia has continued its gradual approach to monetary easing and reduced its main interest rate from 10% in annual terms at the beginning of 2017 to 8.25% at the end of October. The report points out that, although banking sector fundamentals have improved since the crisis years, the bail-out of two large private banks in August and September 2017 points to continued fragility in Russia’s banking system.
The report finds that unemployment rates are at a historical low, but due to low labor mobility, unemployment across regions remains uneven. The lowest level of unemployment was registered in Moscow (1.3% in the third quarter of 2017) and Saint Petersburg (1.7%), while the highest levels were recorded in Ingushetia (27%) and Tuva Republic (18.7%).
“Declining inflation and growing real wages led to a modest decline in Russia’s poverty rate in the first half of 2017, compared to the same period last year,” said Andras Horvai, World Bank Country Director and Resident Representative in the Russian Federation “However, the current poverty rate at 14.4% remains elevated and the share of vulnerable people, who may fall back to poverty, is still on the rise. Preserving growth-enhancing investments and strengthening the efficiency of the social safety net, will be key to reducing both poverty and vulnerability.”
The special topic of the 38th edition of the Russia Economic Report examines the country’s agriculture sector, which plays an important role in the economy. Over the past five years, Russia has not only become the world’s largest exporter of wheat, but it has reached self-sufficiency in pork and poultry. However, policies that broaden productivity, improve market infrastructure, and expand research and development could lead to stronger competitiveness of the sector in the long-term.
New Study Offers Pathways to Climate-Smart Transport
A two-volume study laying out a pathway to a low-carbon and climate-resilient transport sector in Vietnam was released at a workshop on Addressing Climate Change in Transport, held in Hanoi today.
This analytical work comes at a critical time when the Government of Vietnam is updating its Nationally Determined Contribution on reducing carbon emissions and set out its next medium-term public investment plan for 2021-2025.
“A resilient transport system is critical to the continued success of Vietnam’s economy, which relies heavily on external trade and seamless connectivity,” said Ousmane Dione, World Bank Country Director for Vietnam. “We hope that the findings and recommendations of this new report will help Vietnam in its efforts to achieve a resilient and sustainable transport sector.”
The first volume demonstrates that by employing a mix of diverse policies and investments, Vietnam can reduce its carbon emissions in the transport sector up to 9 percent with only domestic resources by 2030, and 15-20 percent by mobilizing international support and private sector participation.
Currently, the transport sector contributes about 10.8 percent of the total CO2 emissions. In a business-as-usual scenario, these emissions are projected to grow at an annual rate of 6-7% to nearly 70 million tons CO2e. The most cost-effective measures to boost the resilience of the transport sector include shifting traffic from roads to inland waterways and coastal transport, deploying stricter vehicle fuel economy standards, and promoting electric mobility.
The second volume provides a methodological framework to analyze critical and vulnerable points of the transport network, and presents a strong economic case for investing in building the climate resilience of Vietnam’s transport networks. A vulnerability assessment looks at the potential impact of different hazards on the transport corridor or network, and the criticality assessment considers such questions as which links and routes along transport networks are the most critical for the unimpeded flow of transport across a particular transport network.
The study identifies systemic critical issues and hazard-specific, high-risk locations in Vietnam’s transport network. Considering climate change, it is estimated that 20 percent of the network is most critical in terms of its exposure to future disaster risks. Meanwhile, road failures can result in very high daily losses of up to US$1.9 million per day, while railway failures can result in losses as high as US$2.6 million per day.
To prepare for the increasing intensity and frequency of extreme hazards due to climate change, it is imperative to make investments to overhaul existing road assets to higher climate-resilient design standards.
Given the vulnerability of land-based transport, a shift to waterborne transport offers a good resilience strategy. A 10-percent shift in that direction could reduce climate risks by 25 percent, according to the report.
This report is a collaborative effort among the Vietnamese Ministry of Transport, the World Bank and Deutsche Gesellschaft für InternationaleZusammenarbeit GmbH (German Development Cooperation GIZ) under the commission by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). It is sponsored by the Australian Government through the Australia-World Bank Group Strategic Partnership in Vietnam – Phase 2 (ABP2) program.
UN General Assembly celebrates 20 years of promoting a culture of peace
Just as the greatest global challenges cannot be solved by a single country, peace cannot be pursued in isolation, outgoing UN General Assembly President María Fernanda Espinosa said on Friday.
Ms. Espinosa was speaking at a high-level forum to mark the 20th anniversary of the General Assembly’s adoption of a Declaration and Programme of Action on a Culture of Peace.
“Because peace is more than the absence of war, it needs constant nurturing through the pursuit of dignity and equality, of human rights and justice, of respect and understanding, and of cooperation and multilateralism”, she said.
As UN Chef de Cabinet Maria Luiza Ribeiro Viotti pointed out, although peace is at the heart of the work of the United Nations, it is something that must be addressed daily.
“A culture of peace is inseparable from human rights, respect for diversity, and fairer societies,” she said.
“One main challenge as we strive to achieve the Sustainable Development Goals is to build more preventive and inclusive approaches that ensure the participation of women, young people and vulnerable, marginalized and non-represented groups.”
The Chef de Cabinet said working to achieve peace not only covers traditional notions of security but also challenges such as social injustice, the normalization of hate speech, terrorism, violence against women, and conflict.
Leymah Gbowee from Liberia knows many of these issues first-hand. She won the 2011 Nobel Peace Prize for her role in uniting Christian and Muslim women to help end her country’s 14-year civil war.
She said peace is seen as the absence of bad, rather than the presence of good. However, instead of being “a fairytale of bland happiness”, she views it as quite radical.
“If we dig a little deeper into what a culture of peace actually looks like, it pushes us beyond understanding peace as the absence of conflict and being a positive state itself”, Ms. Gbowee told the gathering.
“A culture of peace creates an environment where people thrive and have their needs met. It looks like a population of satisfied people: healthy children, educated children, a functional health system, responsive justice structure, an empowered, recognized, appreciated and fully compensated community of women; food on the table of every home, and a lot more. It is the full expression of human dignity.”
The high-level commemorative event marked Ms. Espinosa’s final session presiding over the General Assembly, where all 193 Member States have equal representation.
In her goal to bring the UN’s main deliberative and policy-making organ closer to everyday people, she chose the traditional ruler of the Ashanti people of Ghana to deliver the keynote address: a historic first.
Representing a kingdom that has existed since the 17th century, Otumfuo Osei Tutu II ascended the podium wearing kente cloth and accompanied by two praise-singers.
He highlighted some of the UN’s accomplishments in preserving global security: for example, staving off nuclear war and preventing conflict between nations. However, as he observed, the landscape today is different.
“Warfare is no longer the threat we face from states; it is now a danger we face on a daily basis from our citizens and from all quarters. This new threat comes on the heels of an unprecedented trust deficit in political leadership at the national level. The effect of this trust deficit is to erode the capacity of political leaders to rally their people to coalesce around national interests. The consequence for peace and security cannot be overstated”, he said.
The Ashanti leader called for a new partnership between elected authorities and traditional governance, in the spirit of authentic collaboration.
European Solidarity Corps: Three years on
Tomorrow is the third anniversary of President Juncker’s 2016 State of the Union announcement to set up a European Solidarity Corps, offering young people the opportunity to take part in a wide range of solidarity activities across the EU.
Since then, more than 161,000 young people between 18 and 30 have signed up to join the Corps, and the initiative has made a difference in many people’s lives. Most of the activities funded offer opportunities to volunteer – individually or in teams. But young people can also benefit from traineeships and jobs. Moreover, young people themselves can set up solidarity projects where they initiate, develop and run activities to contribute to positive change in their community, while living abroad and gaining valuable skills.
Commissioner for Education, Culture, Youth and Sport, Tibor Navracsics, said: “We have achieved a lot in the last three years. In record time we put in place a new programme opening up opportunities for young people and organisations to support others, helping us build a more cohesive, caring society. I am proud to see so many young people eager to get involved and active in projects on the ground. Their enthusiasm is truly inspiring. This is why I have proposed to extend and strengthen the European Solidarity Corps after 2020.”
Inclusion is one of the most common topics tackled by European Solidarity Corps projects but not the only one. Other topics are youth work, climate change, community development, citizenship, education and culture. Tens of thousands more opportunities are expected to be created in the following months and years in these fields. Moreover, one in three of the activities funded by the European Solidarity Corps are reserved for participants with fewer opportunities who face obstacles such as disabilities, educational difficulties, or economic, social or geographical obstacles.
For instance, in Latvia, a project entitled “A special place for special people” promotes the integration of young people with disabilities into the labour market by employing them and involving them in all the activities of a social enterprise café in Riga. In Greece, volunteers help protect the forest of Xylokastro and Derveni by taking care of watering and planting trees, as well as cleaning the forest paths. And in Sweden, through the project “Climate Awareness”, volunteers learn about climate change and biodiversity by helping in the organic garden and ecovillage and participating in outreach activities. As an example of a project initiated by volunteers themselves, in Lithuania, five participants from a centre for disabled young people set up their own Solidarity Coffee project, enabling them to form new friendships and build personal connections with the wider community.
In his State of the Union address of September 2016, President Juncker announced the creation of a European Solidarity Corps, providing opportunities for young Europeans to engage in solidarity activities and contribute to society as part of the Commission’s broader strategy to invest in young people. The Corps responds to a real interest among young people to engage in social projects. In a Eurobarometer survey published in spring 2019, more than half of the young respondents said they had participated in volunteering activities or local community projects. Three in four stated that they had been engaged in organised movements or volunteering.
A mere 3 months after President Juncker’s announcement, on 7 December 2016, the Solidarity Corps was launched, with the aim of having 100,000 young people taking part by the end of 2020. During an initial phase, eight different EU funding programmes were mobilised to offer volunteering, traineeship or job opportunities.
On 30 May 2017, the Commission put forward a proposal to equip the European Solidarity Corps with a single legal base, its own financing mechanism and a broader set of solidarity activities. The new Regulation came into force on 5 October 2018 and the Corps has its own budget of €375.6 million until 2020.
The first calls for proposals were launched in August and November 2018, creating some 20,000 new opportunities. Another call for proposals is currently open, with an application deadline of 1 October 2019, and is set to create another 7,000 opportunities. This call invites organisations with a quality label to apply for grants and set up projects for young people to volunteer, work or go on traineeships. Groups of young people can also apply to run a solidarity project themselves. Young people interested in taking part in a funded project can directly sign up on the European Solidarity Corps Portal.
On 11 June 2018, the Commission put forward its proposal for the European Solidarity Corps under the EU’s next long-term budget 2021-2027, allocating €1.26 billion to enable about 350,000 young people to go on a solidarity placement over seven years.
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