Two West African economists have emerged at the top from a selection of 36 academic papers presented at the 12th African Economic Conference for proposing reforms, including the de-regulation of the labour markets and the tax administration reforms aimed at raising government revenue.
Dr. Adam Elhiraika, Director of the Microeconomic Policy Division at the UN Economic Commission for Africa (ECA), announced Abidemi Adegboye, a doctorate student at the University of Benin, Nigeria, as the winner of the top paper prize, for his paper on “Economic regulation and employment elasticity of growth in Sub-Saharan Africa,” at the just-concluded African Economic Conference in Addis Ababa, Ethiopia.
The paper was selected for its relevance to the theme of the conference, which focused on the governance reforms required to achieve structural transformation.
The conference, which took place from December 4-6, 2017, provided a forum for leading thinkers and economic practitioners to discuss the emerging issues in Africa with a view to promoting knowledge management and important drivers of policy dialogue and implementation.
Senegalese economics lecturer, Ameth Saloum Ndiaye, from the Department of Economics at the University of Cheikh Anta Diop, Senegal, was awarded the second-best paper prize, for his research on the impact of institutional tax reform and its contribution to the improved well-being in Senegal.
The paper was among those presented during the three-day conference, at the headquarters of the ECA in Addis Ababa, which was also attended by the Ethiopian Prime Minister Hailemariam Desalegn, several African dignitaries, economists and advisors of senior state officials.
In his paper, Adegboye examined the impact of economic regulation on the labour markets in 37 African countries and concluded that structural changes and population changes were not adequate to generate economic growth and create employment in the economy.
There were only five countries from all African economies that had industry as the largest sector in their GDP; and none of the countries had industry as the largest employment sector.
The paper examined employment trends in several African countries. The researcher noted there were only eight countries that had industry as the largest sector in GDP. However, no country had industry as the largest sector in employment. In addition to the initial five countries, three countries – Angola, Congo and Djibouti – had joined the rank on countries with largest industry share in GDP.
For most of the countries (including Nigeria), agriculture was the largest sector in terms of both GDP and employment for the initial year, but the services sector took over as the largest sector both in terms of GDP share and employment in the final year.
The researcher also noted that though the labour force in the region is largely involved in some forms of activity, the jobs being performed do not guarantee their livelihood.
Adegboye also discovered that regulations and government involvement tend to play essential roles in facilitating employment during periods of economic growth. In pursuing employment enhancing growth, regulatory institutions in most countries could function in the areas of controlling excessive population growth, ensuring smooth factor reallocation and aiding balanced growth, he recommended.
In this direction, policies that regulate labour market and other economic activities are essential in aiding feasible employment outcomes given the structural bottlenecks in many African economies.
In his paper, Ndiaye said tax administration reforms have both positive and negative impacts on the collection of revenue depending on how the measurement is done, which proves that the scientific methods used to discover the weaknesses and strengths of both systems remain unreliable.
He said the reform measures depended on the new policies introduced by the tax authorities each year as well as the tax related reforms and those geared towards the tax collection institution.
The conference is jointly organized each year by the African Development Bank, the United Nations Development Programme and UN Economic Commission for Africa. Next year’s edition will be hosted by UNDP. The venue and theme of the meeting will be announced at a later date.
Principles for Strengthening Global Cooperation
Global leaders are advocating for cooperation to be the new compass for international relations and have released a set of seven Principles for Strengthening Global Cooperation. The World Economic Forum’s Global Action Group, comprised of senior members of government, business, civil society, and the expert community, developed the principles.
Børge Brende, President of the World Economic Forum, convened the Global Action Group in virtual meetings beginning in June 2020. François-Philippe Champagne, Minister of Innovation, Science and Industry of Canada; Sigrid Kaag, Minister for Foreign Trade and Development Cooperation of the Netherlands; Tarō Kōno, Minister in charge of Administrative Reform of Japan; Tito Mboweni, Minister of Finance of South Africa; Dina Powell McCormick, Global Head, Sustainability and Inclusive Growth, Goldman Sachs; and Kent Walker, Senior Vice-President, Global Affairs, Google,co-chaired the group.
The seven principles call for prioritizing peace and security, equity, gender equality and sustainability because each of these is advanced by and is needed to advance global cooperation. Their absence can cause deep fractures as highlighted by the Global Risks Report 2021 released earlier this week by the Forum.
- Strengthen global cooperation
- Advance peace and security
- Re-globalize equitably
- Promote gender equality
- Rebuild sustainably
- Deepen public-private partnerships
- Increase global resilience
“Having leaders articulate the importance of working with one another – at a moment that so clearly calls for greater unity but lacks it – can serve as a vital step in rechannelling momentum in the right direction,” said Børge
Brende, President of the World Economic Forum. “The direction we need to head is toward greater dialogue, coordination and collective action. Only in this way can we shape a more equitable and sustainable recovery and increase our future resilience.”
Members of the Global Action Group
Mohammed Alardhi, Executive Chairman, Investcorp Holding
John R. Allen, President, The Brookings Institution
Niels Annen, State Minister for Foreign Affairs of Germany
Thomas Bagger, Head, Foreign Policy Division, Office of Presidential Affairs of Germany
Thomas Buberl, Chief Executive Officer, AXA
Mevlüt Çavuşoğlu, Minister of Foreign Affairs of Turkey
Mathias Cormann, Candidate of the Government of Australia for Secretary-General of the Organisation for Economic Co-operation and Development
Ivo Daalder, President, The Chicago Council on Global Affairs
Jeroen Dijsselbloem, Chairman, Dutch Safety Board
Jeffrey D. Feltman, Senior Fellow, United Nations Foundation
Fu Ying, Chairperson, Center for International Security and Strategy, Tsinghua University
Orit Gadiesh, Chairman, Bain & Company
Arancha González Laya, Minister of Foreign Affairs, European Union and Cooperation of Spain
Samer Haj Yehia, Chairman of the Board, Bank Leumi Le-Israel
Jane Harman, Director, President and Chief Executive Officer, The Woodrow Wilson International Center for Scholars
Mohammed Al-Jadaan, Minister of Finance, Economy and Planning of Saudi Arabia
Ann Linde, Minister of Foreign Affairs of Sweden
Susana Malcorra, Dean, IE School of Global and Public Affairs, IE University
Luis Alberto Moreno, Member of the Board of Trustees, World Economic Forum
Vali R. Nasr, Professor of International Relations, Paul H. Nitze School of Advanced International Studies (SAIS), Johns Hopkins University
Patrick Odier, Chairman of the Board of Directors, Bank Lombard Odier & Co.
Maxim Oreshkin, Aide to the President of the Russian Federation
Suresh Prabhakar Prabhu, Indian Prime Minister’s G20 Sherpa
Ayman Al Safadi, Deputy Prime Minister and Minister of Foreign Affairs and Expatriates of the Hashemite Kingdom of Jordan
Kevin Sneader, Global Managing Partner, McKinsey & Company
Achim Steiner, Administrator, United Nations Development Programme (UNDP)
Net-Zero Challenge: The Supply Chain Opportunity
The commitment to tackling climate change is accelerating in all sectors of society, with net-zero pledges from companies, cities, states, and regions doubling in the past year. Decarbonizing supply chains is a major opportunity for companies to put these commitments into practice.
New research published today by the World Economic Forum and Boston Consulting Group (BCG) shows how tackling supply chain emissions can be a game changer in the global fight against climate change. Net-Zero Challenge: The Supply Chain Opportunity analyzes the top eight global supply chains that account for more than 50% of global greenhouse gas emissions and finds that end-to-end decarbonization of these supply chains would add as little as 1% to 4% to end-consumer costs in the medium term.
The report breaks down the major sources of emissions along each of the eight major supply chains—food, construction, fashion, fast-moving consumer goods, electronics, automotive, professional services, and freight. It assesses the key levers to reduce emissions in each supply chain and shows that many can be easily deployed today and cost very little to implement. The report also points to the global nature of many supply chains, enabling companies to support decarbonization across borders and in countries where governments do not yet prioritize climate action.
The opportunity for impact is especially high for consumer-facing companies, whose supply chain emissions far outweigh their direct emissions from manufacturing. These companies can use their buying power to push for rapid decarbonization and help fund the transition by co-investing with upstream raw-material producers, which struggle to finance the transition alone.
For example, while it costs a steel producer significantly more to make zero-carbon steel, raw input materials like steel account for such a low proportion of end-consumer prices that a zero-carbon car is only about 2% more expensive for the buyer in the medium term.
The report points to nine major actions that CEOs should take today to address supply chain emissions, including:
- Building a robust view of emissions with supplier-specific data and setting ambitious targets for emissions reductions
- Redesigning products and reconsidering geographical sourcing strategies to optimize for CO2
- Cofunding abatement measures and educating suppliers on how to implement low-carbon solutions
- Engaging in industry ecosystems to share best practices and create a demand signal for green products
- Aligning incentives internally to ensure that decision makers focus on lowering emissions
Nigel Topping, the UNFCCC’s high-level climate action champion, said: “Supply-chain decarbonization will be a ‘game changer’ for the impact of corporate climate action. Addressing Scope 3 emissions is fundamental for companies to realize credible climate change commitments.”
Dominic Waughray, managing director, World Economic Forum, said: “This important report shows how companies have the opportunity to make a huge impact in the fight against climate change by also decarbonizing their supply chains. The interaction between governments and companies to seize this opportunity is an important one. We welcome more leaders to join and help build momentum on this important agenda.”
Patrick Herhold, a report coauthor and managing director and partner at BCG’s Centre for Climate Action, said: “The argument that costs are a major barrier to reducing emissions is increasingly flawed—around 40% of the emissions across the eight major supply chains we analyzed can be eliminated with measures that bring cost savings or are at costs of less than €10 per ton of CO2 equivalent. Increasing process efficiency and the use of recycled materials, as well as buying more renewable power, provides companies with major climate gains at very low costs.”
Driving Growth Using ‘Practical Wisdom’: Japan’s Perspectives
In response to the COVID-19 crisis, the World Economic Forum has taken an initiative to create a more sustainable and resilient world. Further to the regular dialogues held on managing the crisis and shaping a positive post-COVID world, the Regional Action Group for Japan (RAGJ), a community of leaders engaged with the World Economic Forum, published a report “Driving Growth Using ‘Practical Wisdom’: Japan’s Perspectives”
The report suggests that the country should create a well-structured, forward-thinking society based on sustainability, inclusivity and resiliency through four pillars: attitude, business culture, economy, and the global collaboration framework. The report also suggests that Japanese leaders can implement the concept by drawing on the country’s “practical wisdom,” or its long tradition of practicing stakeholder-based capitalism, sustainable business models, disaster resilience, and the championing of environmental values.
“There is an urgent need for global stakeholders to cooperate in simultaneously managing the direct consequences of the COVID-19 crisis. It is of great significance for the World Economic Forum that Japanese leaders came together to propose what it takes for the country, as well as for the international community, to improve the state of the world. Japan’s perspectives, laid out in the report, are one of the first responses to our call to present a vision of that guides us through the post-COVID future,” said Makiko Eda, Chief Representative Officer, World Economic Forum, Japan.
“The current crisis requires us to revisit the status quo of every aspect of society. At the same time, it presents us with a unique opportunity to accelerate necessary reforms to shape a better future,” said Nobuhiro Hemmi, Partner and Chief Strategist, Deloitte Japan, who supported the organization of the discussion of the RAGJ. “Capitalizing on this momentum, Japanese leaders are committed to making long-lasting impacts to society while fostering engagement with the public and communities around the world. I hope that the report serves as a catalyst in implementing ‘great resets’ that help shape the post-COVID future,” he added.
The report proposes that Japan draws on its “practical wisdom” in its effort to resetting four areas:
Attitudes: To address systemic challenges such as sustainability and climate change, leaders must abandon wishful thinking that such a task will be easy. Three approaches should help this shift: sharing a greater sense of urgency among officials, businesses, and the public; accelerating necessary reforms for a long-lasting impact on public trust; and addressing unresolved issues to usher in a new era for Japan.
Business Culture: Leaders should transform their own businesses’ behavior, moving the focus away from their own successes in favor of contributing to the common good. Three steps are proposed: growing truly purpose-driven businesses for long-term value generation; upgrading community and environmental solutions via digital leapfrogging; and promoting diversity and inclusion to revitalize the leadership.
Economy: Japanese leaders must transform the economy system, shifting the emphasis away from shareholders to stakeholders. Three measures should support the shift: redefining economic success; striking a shareholder-stakeholder balance to reframe economic focus; and shifting investor focus from short-term returns to long-term value creation.
Global collaboration framework: Japan must rebuild the bonds of global cooperation by growing out of its traditional role as a rule-follower and becoming a rule-shaper. This is made possible by three approaches: adjusting or adopting rules to create a new era of cooperation; renewing global trade systems; and serving as a great mediator for transnational cooperation.
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