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Mozambique: Making the Most of Demographic Change

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The second half of this year indicates the slowdown in Mozambique’s economic performance may be taking hold and shifting this once fast-growing economy to a more modest pace of growth, bringing economic growth down to a level barely above that of population growth.

Mozambique is shifting to a period of slowing growth and increasing concentration.

GDP growth is expected to dip to 3.1 percent in 2017, despite increases in coal and aluminum exports. Whilst these exports boomed, small and medium enterprises (SMEs) have fallen back even more, especially in the manufacturing sector, which contracted for this first time since 1994. The World Bank’s new Mozambique Economic Update notes that SMEs are crowded out, and not even growth in commodity exports is sufficient to counteract the effects this is having on the economy.

A few commodities dominate exports and represent a larger share of foreign currency inflows, which heightens Mozambique’s exposure to external shocks. The concentration of output in the extractive and minerals sector keeps Mozambique on the path of a two-speed economy, one less capable of generating enough jobs to absorb a net inflow of the almost 500,000 people entering the labor force each year.

Trends observed in 2017 make it clear that Mozambique needs to double its efforts to support small and medium enterprises and look beyond the extractive sector for more balanced growth.

A stronger fiscal policy response and increased transparency are key for recovery.

The scale of the shocks faced by Mozambique’s economy over the past two years has been immense. However, as commodity prices and conditions for agriculture improve, and external factors become less of an impediment, the economy turns to the policy response to pursue recovery. Decisive monetary policy measures and strong commodity export performances have helped to stabilize the Metical and bring inflation down in 2017. Fiscal policy also began responding, but at a slower pace.

Making the most of demographic change.

The special focus section of this December’s Economic Update discusses the challenge of transforming Mozambique’s growing and youthful population into a demographic dividend. This is ever more urgent given the drift towards a natural resource extraction based economy with low employment generation.

Mozambique lags behind other sub-Saharan African countries in kicking off its demographic transition. By 2011, its total fertility rate was estimated at an average of 5.9 children per woman, one of the highest in the world. The World Bank estimates that reducing fertility rates would represent an enormous boost to prosperity: an estimated increase in real per capita GDP of 31 percent by 2050.

Mozambique could actively promote policies to trigger the transition, with jobs for women and better family planning services. A sharper focus is also needed on building skills for youth and an economy that grows.

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Energy News

ADB Joins Partnership to Promote Women in South Asia Energy Industry

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photo: ADB

The Asian Development Bank (ADB) is partnering in a new professional network launched today in Kathmandu to promote more female practitioners in South Asia’s energy and power sector.

The Women in Power Sector Professional Network in South Asia (WePOWER) aims to support participation of women in energy projects and institutions, as well as promote more women in science, technology, engineering, and mathematics education.

The first Regional Conference of WePOWER opened today with 150 attendees, including representatives of energy sector utilities and public agencies involved in projects, technical universities, women engineers, and students. The 2-day event is co-hosted by the World Bank Group and ADB.

“WePOWER is closely aligned with ADB’s broader long-term commitment embodied in its long-term Strategy 2030 to remove constraints that women face in finding more and better jobs,” said ADB Principal Social Development Specialist Mr. Francesco Tornieri. “Although this applies to all sectors, we see the energy sector as one of the most challenging.”

Energy access and infrastructure development are critical elements in South Asia’s development. An ADB series of Gender Equality Diagnostic studies on the energy industry in South Asian countries has found that women’s skills and perspectives account for a small part of job and decision-making by energy sector agencies. Gender diversity in technical and senior managerial positions is also visibly lacking.

Moreover, an assessment conducted by the World Bank in 8 South Asian countries found very low female enrollment rates in engineering programs (ranging from 0.5% to 31%), low female staff representation in utilities (2% to 17%), and an even lower percentage of women in technical roles in utilities (0.5% to 6%). The studies identified the need for role models and family support, absence of basic facilities and transport, and presence of various forms of discrimination and harassment.

WePOWER is envisaged to become a vibrant and self-sustaining professional network backed by strategic partners that can provide technical and financial support. Its work program will focus on five strategic areas—education, recruitment, development, retention, and policy and analysis. WePOWER will provide capacity building support, networking, and mentorship for women engineers for career advancement, research to reform policies and practices, exposure to technology, recruiting opportunities, and access to information and conferences.

The World Bank Group has agreed to host the WePOWER Secretariat for an initial four years. A second Steering Committee meeting is planned to be held at ADB headquarters in November.

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EU Politics

New Erasmus: More opportunities for disadvantaged youth

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Erasmus+ should triple its funds, allow more people to take part and adapt its grants to the needs of the participants.

The Culture and Education Committee approved on Wednesday the next generation Erasmus+ programme, proposing a detailed set of measures to lift all economic, social, cultural barriers and allow more people to take part in different learning mobility schemes.

National strategies to foster participation of people with fewer opportunities

MEPs ask the European Commission and national Erasmus agencies to draft a European inclusion framework and develop national inclusion strategies. These measures could include adapting funding to the needs of participants and, particularly, financial support for mobility, adjusting monthly grants and a regular review of living and subsistence costs.

Special support for mobility for people with fewer opportunities should also be foreseen and include language training, administrative support or e-learning opportunities.

The new proposed “small-scale partnerships” strand would allow organisations with little experience or small operational capacity to participate in the programme, especially grassroots organisations or organisations working directly with disadvantaged people.

New Erasmus+ actions

MEPs also re-allocate the budget to different elements in the programme, offering pre-school and early education staff, young athletes and sport coaches the option to participate in mobility schemes. Vocational education exchanges, especially in border regions, are also prioritised in the new programme, with its budget also increased in the approved text.

Co-funding from other European programmes

MEPs propose more synergies with other European funding programmes, so that co-funding could be used either to complement grants, transport, living costs for disadvantaged learners being adjusted as needed or to finance new projects.

Milan ZVER (EPP, SI), rapporteur, said: “European programmes need to be equally accessible to all European citizens, regardless of their socio-economic background. My first goal is to make Erasmus+ the Number One programme of inclusiveness. We made the programme much more fair and inclusive. Parliament will have to fight strongly to triple the overall budget. That’s why it is extremely important to have strong support from other political groups”.

Petra KAMMEREVERT (S&D, DE), Chair of Culture Committee, said: “The new Erasmus+ must be truly open to everyone and encourage everyone in society to participate. We want non-discriminatory and barrier-free access. Pre-school and early-learning teachers should be able to benefit from mobility activities. Students and vocational learners must receive additional financial and structural assistance to gain quality learning experience and acquire skills necessary for their personal development and future job prospects”.

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EU Politics

PES Europe Ministers call for a European Budget that rises to the challenge

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President of FEPS Maria João Rodrigues MEP, First Vice President of the European Commission Frans Timmermans, and Germans Minister of State for Europe Michael Roth photo: PES

Europe needs ambitious short- and long-term planning, the Ministers of European Affairs from the PES agreed today during their discussion of the European budget for 2021-2027.

The chair of the network, German Minister for Europe Michael Roth, called for a European budget that promotes social wellbeing, innovation and sustainability across Europe.

Roth said:“The fundamental role of the European budget is to ensure cohesion, convergence and growth. It is the main tool Europe has to invest in the future, to bring countries closer together, and to make sure our children and grandchildren have a good life. When negotiating the European Budget both the short and long term must be kept in mind. Our ambition today, shapes the Europe of tomorrow. I want a bright Europe for tomorrow.”

The Ministers continued their discussion on the state of the rule of law in Europe.

Roth added:“Democracy and the rule of law cannot be interpreted freely. All Member States have to abide to the same clear set of rules. We will continue keeping a close eye on the issue. And we will continue supporting the great work that the EU Commission’s First Vice President Frans Timmermans is carrying out.”

The meeting was attended by:

  • Michael Roth, Minister of State for Europe, Chair, Germany
  • Helena Dalli, Minister for European Affairs and Equality, Malta
  • Ana Paula Zacarias, Secretary of State for European Affairs, Portugal
  • Hans Dahlgren, Minister for EU Affairs, Sweden
  • Frans Timmermans, First Vice President of the European Commission, European Commission
  • George Katrougalos, Foreign Affairs Ministers, Greece (observer)
  • Maria Joao Rodrigues, Vice President of the S&D Group, chair of the PES FEN Network, European Parliament
  • Javier Moreno, Secretary General of the S&D Group, European Parliament
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