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Mexico officially joins IEA: First member in Latin America

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Mexico officially became the International Energy Agency’s 30th member country on 17 February 2018, and its first member in Latin America. The membership came after the signed IEA treaty (the IEP Agreement) was deposited with the government of Belgium, which serves as the depository state, following ratification by the Mexican Senate.

Mexico’s accession is a cornerstone of the IEA’s on-going modernization strategy, including “opening the doors” of the IEA to engage more deeply with emerging economies and the key energy players of Latin America, Asia and Africa, towards a secure, sustainable and affordable energy future.

The IEA Family of 30 Member countries and seven Association countries now accounts for more than 70% of global energy consumption, up from less than 40% in 2015.

“With this final step, Mexico enters the most important energy forum in the world,” said Joaquín Coldwell, Mexico’s Secretary of Energy. “We will take our part in setting the world’s energy policies, receive experienced advisory in best international practices, and participate in emergency response exercises.”

“It is a historic day because we welcome our first Latin American member country, with more than 120 million inhabitants, an important oil producer, and a weighty voice in global energy,” said Dr Fatih Birol, the IEA’s Executive Director. “The ambitious and successful energy reforms of recent years have put Mexico firmly on the global energy policy map.”

At the last IEA Ministerial Meeting, held in Paris in November 2017, ministers representing the IEA’s member countries unanimously endorsed the rapid steps Mexico was taking to become the next member of the IEA, providing a major boost for global energy governance.

They recognized that Mexico had taken all necessary steps in record time to meet international membership requirements since its initial expression of interest in November 2015. In December, the Mexican Senate ratified the IEP Agreement paving the way for the deposit of the accession instrument and for membership to take effect.

Mexico is the world’s 15th-largest economy and 12th-largest oil producer, and has some of the world’s best renewable energy resources. The IEA family will benefit greatly from Mexico’s contribution on discussion about the world’s energy challenges. The IEA is delighted to continue supporting implementation of Mexico’s energy reform with technical expertise, and further intensifying the fruitful bilateral dialogue of energy policy best practice exchange.

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Finance

ADB $300 Million Loan to Promote Macroeconomic Stability in Pakistan

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The Asian Development Bank (ADB) has approved a $300 million policy-based loan to help promote macroeconomic stability in Pakistan by facilitating improved trade competitiveness and export diversification.

“While COVID-19 hit Pakistan at a critical point in its macroeconomic recovery, the government’s ongoing efforts to ensure stability have started showing encouraging results this fiscal year,” said ADB Principal Public Management Specialist Hiranya Mukhopadhyay. “ADB’s program will support these efforts and help Pakistan to improve its export competitiveness—now more important than ever given the impacts of the pandemic.”

ADB’s program will help Pakistan recover its current account deficit in a sustained manner and continue to facilitate export diversification. It will introduce important tariff- and tax-related policy reforms to help improve Pakistan’s international competitiveness and further strengthen key institutions, including accreditation bodies, the Export–Import Bank of Pakistan, and the Pakistan Single Window.

The new financing falls under Subprogram 2 of the Trade and Competitiveness Program. Under the first phase, ADB helped the government usher in key reforms, including reducing or abolishing tariffs and ad hoc duties on a large number of raw materials and intermediate goods. Several steps were also taken to introduce e-commerce, strengthen key institutions involved in facilitating trade, and enhance the export certification process.

Since fiscal year 2004, Pakistan has registered a rise-and-fall pattern of export growth reflecting underperformance in its export industry and long-term decline in export competitiveness. This is compounded by lost export growth momentum from COVID-19, which has reduced high-income countries’ demand for manufacturing goods and disrupted the supply of raw materials.   

ADB is coordinating its efforts with other development partners and donors while the program complements International Monetary Fund-led reform initiatives by helping to improve competitiveness, which will help build robust foreign exchange reserves.

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Africa Today

Kenya’s GDP Contracts Under Weight of COVID-19, Impacting Lives and Livelihoods

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The latest World Bank economic analysis for Kenya projects the economy to contract by between 1.0 percent and 1.5 percent in 2020, as ongoing COVID-19 containment measures and behavioral responses restrict activity in Kenya and its trading partners.

The Kenya Economic Update, Navigating the Pandemic, notes the downturn in economic growth reflects the more severe economic impact of the pandemic to date than had been initially anticipated, including a large impact on the national accounts of the closure of education institutions since March. In response, the government has deployed both fiscal and monetary policies to support the healthcare system, protect the most vulnerable households, and support firms to help preserve jobs, incomes and the economy’s productive potential. With a sharp decline in tax revenues due to the weakening in economic activity, and tax relief, and an increase in COVID-related spending needs, the fiscal deficit has widened, and debt vulnerabilities have risen. The fiscal deficit widened to 8.2 percent of gross domestic product (GDP), up from the pre-COVID budgeted target of 6.0 percent of GDP, and Kenya’s debt to GDP ratio has risen to 65.6 percent of GDP as of June 2020, up from 62.4 percent of GDP in June 2019.

“As the COVID-19 pandemic continues to threaten both the lives and livelihoods of Kenyans, we remain committed to supporting the government to allocate sufficient resources to the health sector to combat the pandemic, continue with mass testing, support self-quarantine, social distancing, and protect the most vulnerable groups,” said Keith Hansen, World Bank Country Director for Kenya. “It is equally critical to provide well-targeted support to the most vulnerable affected households.”

Beyond strengthening health systems and protecting incomes, the report recommends several near-term actions that can play a role to combat recession and revive the economy’s productivity, creating the conditions for a resilient and inclusive recovery. Ensuring continued access to safe healthcare, including for non-COVID-19 related health concerns, remains a priority. Given fiscal constraints, this will require redirecting expenditures to the highest priority areas, whilst maintaining a focus on raising the efficiency of spending and ensuring the transparent use of funds.

Following the job and income losses precipitated by the crisis, the report notes support is needed for the “new poor” whose livelihoods have been affected. This could be achieved through a horizontal scale-up of social protection programs, appropriately targeted, timely, and temporary while the crisis persists.It is critical to ensure continued support to vulnerable households, while safeguarding human capital through expanded access to digital technology, combined with better access to information to mitigate usage of negative coping strategies (i.e. asset liquidation) and combat food insecurity while offsetting the increase in poverty.

“Following the extraordinary economic support efforts necessitated by the crisis, Kenya’s economic recovery can be supported by the authorities returning to an appropriately-timed and balanced fiscal consolidation path, to reduce mounting debt vulnerabilities and safeguard macroeconomic stability,” said Alex Sienaert, World BankSenior Economist and lead author of the report. “Kenya will also need to enhance its existing institutional setup for monitoring and responding to future communicable disease outbreaks, and further the still-critical “Big 4” agenda for medium-term inclusive growth, including realizing the government’s vision of sustainably providing universal healthcare.”

Kenya’s economic outlook remains highly uncertain, as the COVID-19 pandemic continues to unfold in the country, and globally. Under baseline assumptions, the economy is projected to rebound quickly in 2021, lifting real GDP by 6.9 percent y/y. A major factor in this strong rebound is the unusual impact on the national account’s treatment of education sector output normalizing, which is projected to add 2.2 percentage points to real GDP growth next year.Delayed availability of vaccines, and prolonged social distancing and other needed COVID-19 countermeasures, could undermine the projected recovery in economic activity.

The report’s policy section focuses on options to strengthen healthcare system and testing capacity, to support firms, and to protect the most vulnerable households to cope with the COVID-19 global pandemic.

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The future of work: promoting gender equality, diversity and inclusion

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Image: European Wilderness Society

The United Nations Industrial Development Organization (UNIDO) and the Vienna Regional Office of the International Organization for Migration  (IOM) have organized a webinar on flexible working arrangements (FWAs) and the future of work. The webinar was part of the 19-23 October 2020 Enabling Environment Week, a joint initiative of the Gender Focal Points and Focal Points of Women of the Vienna-based United Nations organizations (VBOs) and the International Gender Champions initiative.

Enabling Environment Guidelines (EEGs) and their accompanying Supplementary Guidance for the United Nations System were developed in 2019 in response to the UN Secretary General’s System-wide Strategy on Gender Parity. The EEGs provide UN system-wide guidance to create a more diverse, inclusive and respectful work environment – both as a precursor to achieving gender parity and a key to sustaining it. Implementing FWAs is one of the measures recommended in the EEGs.

“Workplace flexibility can be mutually beneficial to an organization and its personnel, and is recognized to help achieve gender parity,” said Fatou Haidara, Managing Director of the UNIDO Directorate of Corporate Management and Operations, who moderated the webinar. “Our transition into the Fourth Industrial Revolution has been marked by the COVID-19 pandemic, which for many employers and employees represented their first-ever experiences with flexible working arrangements.”

Dr. Heejung Chung, Principal Investigator of the Work Autonomy, Flexibility and Work-life balance project at the University of Kent, shared insights from her research on how work from home during the lockdown has impacted a series of work-life issues. She said  that employees have been able to spend more time with their families and expressed better well-being and improved work schedules and productivity. The pandemic has caused a cultural shift towards work from home, with employees feeling more trusted and supported by managers during this time, and many employees who did not want to work remotely before now changing their mind.

The pandemic has undoubtedly shaken up how we work – what we thought would be the future of work has been abruptly made the present. “Corona has somehow accelerated this way of using flexible working hours,” said Ambassador Pirkko Hämäläinen, Permanent Representative of Finland to the UN in Vienna. ”You don’t even need to be in the office to give a service to your customers, like this webinar. That is so important to realize and, with corona, we have realized it.”

The Finnish government codified flexible working arrangements as early as 1996 through the Working Hours Act, a policy which was updated this year to allow employees to decide when and where they work for at least half of their hours. “It’s a win-win situation for people. Gainful employment must be options for both women and men,” said Hämäläinen.

Whether men and women will be able to equally benefit from gainful employment will largely depend on the future of work, which will be impacted by frontier technology brought about by the Fourth Industrial Revolution. As such, digitalization may facilitate telecommuting for those jobs that can be carried out remotely. Prof. Damian Grimshaw, Professor of Employment Studies and Associate Dean for Research Impact at King’s Business School, noted that challenges remain in ensuring that everyone can benefit from workplace flexibility. This is especially linked to the need to create a culture of trust between managers and employees, and to phase out rigid workplace structures revolving around a time-keeping and high presenteeism approach.

Evidently, a sophisticated and reliable digital infrastructure is a precondition for the successful implementation of FWAs, which raises the issue of the digital divide which is especially pronounced in the developing world. The COVID-19 pandemic has already exacerbated inequalities, notably for women, hence inclusive, human-centered digitalization is needed to leave no one behind and to ensure all can reap the benefits of workplace flexibility.

In implementing FWAs, employers can contribute to addressing these inequalities and achieving gender equality and the empowerment of women. Chung revealed that by allowing mothers the option of staying in the labour market and maintaining their incomes, workplace flexibility can help reduce the overall gender pay gap. It also encourages fathers to take a greater role in unpaid domestic care work, which contributes to transforming social norms.

“Flexwork helps change the culture of whose responsibility it is to care,” Chung said. The still heavily unequal distribution of household duties continues to be especially visible and pronounced during the current pandemic, as school closures have added homeschooling to the unpaid domestic care work predominately carried out by women.

The private and public sector around the world, as well as many UN system entities, have recognized the benefits of FWAs in fostering a more enabling, diverse working environment and promoting gender equality and the empowerment of women. Michael Emery, Director of Human Resources at the International Organization for Migration, noted that there has been a general call through the High-Level Committee on Management (HLCM) of the United Nations’ Chief Executive’s Board for a more flexible approach. “A lot of research shows the more flexible we are, the more attractive we are as an employer – particularly to women,” he said.

While acknowledging difficulties in implementing FWAs in the UN’s field operations due to digital infrastructure issues, the recent increase in remote work has challenged the idea of international civil service as we know it. Emery shared that UNICEF has just cancelled a lease on one of its buildings as it expects a lot of its staff will continue to work from home. “We can perfectly survive with 20% of staff in Headquarters in the office.”

Juliane Drews, Advisor at UNAIDS, explained that already six years before the COVID-19 pandemic, UNAIDS abolished core working hours and defined office opening hours from 7am to 7pm to provide staff with a twelve-hour window to complete their workload at their ease. The objective was also to empower employees and teams to have conversations about healthy ways to organize their work. “The United Nations and a lot of international organizations need to recognize there’s a new generation of employees coming that have different expectations of an employer,” Drews said. “We need to use training and reskilling to prepare middle managers and senior leaders to be ready to welcome the next generation in the workplace. It’s about thinking differently and taking this disruption as an opportunity to leap forward to a better, different normal.”

She also raised the issue that remote work allows individuals to safely work on issues that are criminalized in their home countries: UNAIDS works, for example, with sex workers, users of intravenous drugs and the LGBTIQ+ community. It is not just about the binary approach to gender equality. “We need to take this gender conversation and put an intersectional lens on it,” she added.

The discussion concluded that implementing FWAs has many benefits, for example increased well-being, efficiency and business continuity, as well as decreased absenteeism and operating costs. FWAs also play a crucial role in fostering diversity and inclusion, and promoting gender equality and the empowerment of women. At the same time, the COVID-19 pandemic has fast-forwarded us into the future of work, with many managers now recognizing and trusting that employers can and will deliver when using any form of flexible working arrangements, such as remote work, compressed hours, and scheduled breaks for external learning activities. The Enabling Environment Guidelines provide the UN with an overarching framework to successfully implement FWAs and foster a welcoming, safe, equal and discrimination-free workplace that allows the UN to produce better results for the people they serve. That’s the beauty of the UN System,” Drews said. “Most of us are driven by our passion, not by doing our eight hours and ticking the box.”

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