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Stronger Investment and Export Growth Continue to Strengthen Indonesia’s Economy

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The Indonesian economy continued to expand at a solid pace during the third quarter of 2017 helped by commodity tailwinds and stronger domestic and external demand, according to the World Bank’s December 2017 Indonesia Economic Quarterly.

Real GDP growth increased from 5.0 percent in the second quarter to 5.1 percent in the third quarter of 2017. Investment growth rose to its highest level in more than four years and foreign direct investment recorded the largest net inflow in more than seven years. Export and import volumes registered double-digit growth for the first time since 2012.

“In addition to external factors such as higher commodity prices and stronger global growth, the solid performance of the Indonesian economy was also supported by a better business environment that is attracting more foreign direct investment, as well as more public capital investments, which is the direct positive impact of fuel subsidies reduction two years ago,” said Rodrigo A. Chaves, World Bank Country Director in Indonesia.

“This reflects the importance for the Government to persevere in implementing further ambitious reforms such as increasing tax collections and continuing to rationalize subsidies to accelerate infrastructure and human capital development .”

There are also signs that private consumption has started to recover. Sales of consumer durables such as car and motorcycles rebounded, with the latter jumping double-digits in the third quarter after three years of consecutive contractions.

Real GDP growth is projected at 5.1 percent for 2017, accelerating to 5.3 percent in 2018 driven by continued strong investment growth, further recovery in consumption, and an increase in government spending.

Effective government spending is also crucial to economic development. More than half of total government spending across all levels of government in Indonesia is conducted by sub-national governments, with 38 percent managed by district governments and 15 percent by provinces. This substantial allocation of resources to local governments, a product of Indonesia’s decentralization policy since the early 2000s, reflects the primary responsibilities of local governments to deliver basic services, notably health, education and local infrastructure.

Decentralization has increased opportunities for local solutions to local problems. Access to services has improved over the past 15 years of greater decentralization, but service delivery outcomes vary widely among local governments. The report, titled Decentralization that delivers, examines the wide-ranging performance of local governments and identifies mechanisms to help local governments perform better.

“Improving service delivery by local governments requires working on three i’s: more incentives for better performance in spending the resources the central government transfers to districts; more information for citizens and the central government to better monitor local government performance, and more interaction between citizens and businesses and their local governments and service providers to demand better quality,” said Frederico Gil Sander, Lead Economist for the World Bank in Indonesia.

The launch of the December 2017 Indonesia Economic Quarterly is part of Voyage to Indonesia, a series of events leading up to the 2018 IMF-World Bank Annual Meetings in Bali. The Australian Department of Foreign Affairs and Trade supports the publication of the report.

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Burkina Faso: Former colony orders French troops to leave

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A soldier from Burkina Faso stands guard along the border with Mali and Niger during a military operation against terrorist suspects.(file photo) © Michele Cattani

Burkina Faso has demanded the withdrawal of French troops stationed on the territory of the West African nation, local media reported, citing a government decision. Relations between Paris and its former colony have been on a downward spiral for months now, with the local population blaming France for their security problems.

Agence d’Information du Burkina (AIB) reported that the government of Burkina Faso had suspended a 2018 agreement with France, which regulated the deployment of its service members in the country. Paris now has one month to remove its soldiers, the agency said.

France currently has 400 troops in the African country, who are stationed there as part of efforts to combat Islamist terrorist groups in the region.

In November 2022, French President Emmanuel Macron officially announced the end of anti-insurgent ‘Operation Barkhane’ in the Sahel region, which has been largely viewed as a failure. In doing so, France also vowed to “reduce the exposure and visibility of [its] military forces in Africa.”

The Sahel is a region in northern Africa that includes Senegal, Mauritania, Mali, Burkina Faso, and a number of other neighboring countries.

Paris ended another military mission in neighboring Mali last August after relations went sour, with the government calling France’s military involvement “not satisfactory.”

Hundreds of people protested in the Burkina Faso’ capital Ouagadougou against the French military presence, chanting anti-French slogans.

Mohamed Sinon, one of the main leaders of the collective that called the demonstration, said it was to show support for junta leader Traore and the security forces fighting jihadists. “We are a pan-African movement and we want cooperation between Burkina Faso and Russia, but also the strengthening of friendship and of cooperation with Guinea and Mali,” he added.

Protesters carried huge posters showing the presidents of Mali and Guinea — both of whom also came to power in coups — as well as Russian President Vladimir Putin.

A source close to the government clarified it was “not the severance of relations with France. The notification only concerns military cooperation agreements”.

Sources familiar with the matter told AFP that France’s preferred option would be to redeploy its forces in the south of neighbouring Niger, where nearly 2,000 French soldiers are already stationed.

French troops withdrew from Mali last year after a 2020 coup in the former French colony saw its rulers also inch closer to Russia.

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European farms mix things up to guard against food-supply shocks

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By ETHAN BILBY

‘Items in this section have limited availability due to supplier production issues,’ ‘Sorry, temporarily out of stock’ and ‘Sold out’ are all signs that became familiar as recent global upheavals exposed how precarious our food supply is.

The COVID-19 pandemic led to bare shelves in supermarkets as shipping routes were cut off. The war in Ukraine has affected the supply of essential grains.

But increased climate change stands to cause even greater disruption. Researchers say part of the solution to mitigating that risk is for farms to become more mixed through some combination of crop cultivation, livestock production and forestry, a move that would also make agriculture more sustainable. 

For Dr Sara Burbi, assistant professor at Coventry University in the UK until December 2022 and now an independent researcher, COVID-19 was a wake-up call.

‘Suddenly, we experienced first-hand what happens when value chains are not resilient to shocks and what happens when globalisation, with all its intricacies, does not work anymore,’ she said. ‘We saw highly specialised farming systems fail when they over-relied on external inputs that they had no access to.’

Climate change, according to Burbi, could provide even bigger global shocks ranging from widespread crop failures to lower yields or damage from flooding. More sustainable agriculture is essential to ensure food supplies can withstand the impact of climate change and unexpected local, national and even global crises.

Beneficial combos

During her tenure at Coventry University, Burbi coordinated the EU-funded AGROMIX project, which runs until end-October 2024.

As part of the project, pilot farms across Europe are experimenting with combining crop and livestock production in one farm (mixed farming) and with pairing farming and forestry activities (agroforestry). Poultry grazing in orchards is an example of a mixed-farming approach. The results reveal interesting synergies and promising effects, including improvements in soil health.

‘For a long time, forestry and agricultural activities have been considered at odds, as we have pushed for more and more specialised land uses,’ Burbi said. ‘This has led to loss of soil fertility and a sharp decline in biodiversity, coupled with an increased dependence on external inputs to compensate.’ 

A combined system can increase the cycling of nutrients needed in the soil for crops to grow. It can also help to regulate air and water quality, prevent land degradation and even provide biomass and food on-site for livestock.

One site in Switzerland, for instance, found that mixed farming helped keep soil quality high, while more specialised farming tended to deplete it.

AGROMIX will use 12 pilot sites and nine experimental ones, spread across three climatic zones (Atlantic, Continental and Mediterranean), to develop recommendations for farmers on combining productivity with greater sustainability and climate resilience.

Although mixed farming has been practiced for a long time, it is only recently that scientists have begun to measure biophysical data on such sites and provide real evidence to support approaches that work.

The project has found that the presence of trees on pasture has measurable benefits to animal health and welfare, especially in extreme heat when they provide a canopy of much-needed shade.

Trees and hedgerows can also offset greenhouse-gas emissions from livestock, increase the carbon sequestration capacity of the land, provide a haven for biodiversity and help prevent flooding.

The project wants to work closely with farmers, taking into account their needs and priorities.

‘Knowledge integration can empower key actors, in this case farmers, to embrace the transition to sustainable farming,’ Burbi said.

The next step will be designing agriculture systems that are totally energy independent and, as a result, even more sustainable.

Forest focus

The EU-funded MIXED project at Aarhus University in Denmark is also focused on combining mixed farming systems with agroforestry to make agriculture more efficient and resilient.

‘It’s not only about economic efficiency, but also environmental and climate efficiency,’ said Professor Tommy Dalgaard, the project coordinator. ‘Agriculture needs to be resilient to change, all kinds of change.’

Working with around 100 farmers across Europe, MIXED has created networks to study the different ways in which mixed farming and agroforestry can be used.

One focus is on the take-aways that can be gleaned from the traditional agroforestry techniques used in the Tagus Valley of Portugal, in an area known as the Montado.

‘They have these big cork oaks that are often more than 100 years old with grazing cattle below them,’ said Dalgaard. ‘In the winter, they can plough the soil and make small fields with cereal so they can harvest a winter crop and then in the dry season the cattle can be there.’

It is possible to have these green, vegetated areas because of the ancient oak trees, which create shade and sustain the water cycle.

The concern is that drought may threaten the oaks, so researchers from the project are trying to work out how best to preserve the system as well as how to adapt it to new areas.

Danish farms in the project have taken a different approach, looking at how farmers can use coppicing to create a carbon sink. Coppicing is a pruning technique that cuts trees to ground level, causing new shoots to grow rapidly from the base to form a bush.

These are then usually harvested every 10-20 years for biomass fuel, meanwhile also giving shelter and shadow to free-range, high-value livestock such as sows with piglets. Cutting the bushes to create mulch also helps to improve soil quality and avoids burning them, according to Dalgaard.

The project’s ultimate aim is to build up a European database demonstrating examples of mixed farming and agroforestry, highlighting the benefits and advising on best practices. Essentially, it is about inspiring more farmers to adopt mixed farming and agroforestry methods and supporting them in the process.

‘We need real-life examples,’ said Dalgaard. ‘We now have some concrete examples of farmers, agricultural landscapes and value chains that can report good results from having done something in a different way.’

Research in this article was funded by the EU. This article was originally published in Horizon, the EU Research and Innovation Magazine.

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Astana hosts 18th Iran-Kazakhstan Joint Economic Committee meeting

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Photo: Iranian Agriculture Minister Javad Sadati-Nejad (R) and Kazakh Prime Minister Alikhan Smailov sign MOU documents in Astana on Thursday.

The 18th meeting of Iran-Kazakhstan Joint Economic Committee meeting was held on Thursday in Kazakhstan’s capital Astana, at the end of which the two sides signed a comprehensive document to expand cooperation in numerous areas including trade, agriculture, environment, tourism, science, and technology, education and sports.

As IRIB reported, the two countries’ Joint Economic Committee meeting was co-chaired by Iranian Agriculture Minister Javad Sadati-Nejad and Prime Minister of Kazakhstan Alikhan Smailov.

Sadati-Nejad and Smailov held talks before the two countries’ joint meeting to discuss major areas that should be agreed upon in the event’s concluding document.

Speaking to the press after the joint committee meeting, Sadati-Nejad said that according to the signed memorandum of understanding (MOU), 30 percent of the trade between the two countries will be in the field of agricultural products.

According to the agriculture minister, the two countries are also going to establish a commercial-agricultural joint venture in order to develop trade in the Persian Gulf countries, Central Asia, and West Asia.

In this meeting, Amir Yousefi, the vice-chairman of the Agriculture Committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) also said that Kazakhstan is a good option for extraterritorial cultivation due to the good water conditions and the quality of soil, which should be considered by Iranian investors.

Reaching $3b of annual trade on agenda

Speaking on the sidelines of the meeting, Sadati-Nejad announced that the two countries have put an annual trade of three billion dollars on the agenda, expressing hope that signing the comprehensive MOU would pave the way for achieving this target.

“The presidents of the two countries have aimed to increase the level of trade to three billion dollars; currently this number is around 500 million dollars,” the minister said.

Mentioning the developments in the two countries’ banking relations, the official said that the expansion of relations in the agriculture sector is of special importance for both sides.

He further noted that a joint committee will be formed in the next month to pursue this goal, saying: “Kazakhstan has requested Iran’s engineering services in modern irrigation and desalination areas, and we have expressed our readiness to provide them with the mentioned services.”

Iranian trade center to be opened in Almaty

During the meeting of the two countries’ expert committees which was held prior to the main event on Wednesday, Amir Abedi, the head of the Iran-Kazakhstan Joint Chamber of Commerce, announced that the business office of Iran-Kazakhstan joint chamber will soon be opened in Almaty.

Pointing to the capacities of Iran and Kazakhstan for the development of economic relations, Abedi considered Kazakhstan’s market as a strategic destination for Iranian businessmen.

The 17th Iran-Kazakhstan joint economic committee meeting was held about a year ago in Tehran.

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