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Improving Maritime Logistics to Boost Indonesia’s Competitiveness and Reduce Poverty

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A US$300 million loan approved today by the World Bank’s Board of Executive Directors will help the Government of Indonesia deepen reforms to reduce the costs and improve the reliability of the country’s maritime logistics.

The Second Indonesia Logistics Reform Development Policy Loan (DPL) builds on the reforms supported by the first Logistics DPL approved in November 2016 and addresses some of the key bottlenecks in the movement of goods within and across Indonesia’s borders.

“Efficient maritime logistics is vital for higher growth of the manufacturing, agriculture and service sectors,” said Rodrigo A. Chaves, World Bank Country Director for Indonesia and Timor-Leste. “Better logistics will increase the country’s competitiveness and also help poverty reduction by lowering the price of goods and services in remote regions, especially in Eastern Indonesia.”

Inefficient port operations, uncompetitive logistics services markets and lengthy trade procedures hinder Indonesia’s competitiveness. Ports are often a bottleneck in the country’s logistics chain, hampered by inadequate infrastructure, burdensome regulations and low productivity.

These constraints contribute to the higher costs of logistics for manufacturing firms in Indonesia compared to Thailand and Vietnam and to the lower logistics performance of Indonesia relative to other countries in the region, as measured by the World Bank’s Logistics Performance Index.

“In the world’s largest archipelago, with around 17,000 islands, the logistics supply chain is typically long and fragmented. This project will address some of the main bottlenecks at various points of the supply chain,” said Massimiliano Calì, World Bank Senior Economist.

The project’s main focus is on strengthening ports’ governance and operations, enabling a competitive business environment for logistics service providers, and making trade processing more efficient and transparent.

Reforms supported by the first Logistics DPL have already caused benefits to Indonesia, including an acceleration of new port projects with additional private sector participation, increased entry of operators in logistics markets and a reduction of time and costs of trade processing.

The World Bank’s support to Indonesia’s logistics sector is a vital component of the World Bank Group’s Country Partnership Framework for Indonesia, which focuses on government priorities for transformational development impact. This DPL is also leveraging additional lending from the Government of Germany through the German Bank for Development (KfW) and the Government of France through the Agence Française de Développement (AFD).

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New Programme Aims to Improve Infrastructure Procurement Capacity in Africa

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The Africa Infrastructure Fellowship Programme (AIFP) was today announced by Jean-Baptiste Lemoyne, Minister of State attached to France’s Minister for Europe and Foreign Affairs.

The World Economic Forum, the Global Infrastructure Hub and the private investment firm Meridiam have partnered to create the Africa Infrastructure Fellowship Programme (AIFP), an initiative to help African governments strengthen internal procurement capability by training and retaining key officials in procurement agencies, with the aim of attracting greater private-sector investment to Africa.

The components of the programme will be tailored to the needs of each country but, at its core, the AIFP will be made up of the following elements:

  • Three-day introduction to infrastructure procurement and networking with peers (provided by GI Hub)
  • Tutoring and examination through the Multilateral Development Banks’ Private Public Partnerships certification course
  • Two-week intensive course in infrastructure procurement (provided by selected universities)
  • Two-month placement in a private-sector company’s infrastructure team
  • Ongoing support for 12 months following the programme, including twice-yearly AIFP-related events hosted by the GI Hub

“It is important to emphasize that this project is in line with the mission of the Forum, to improve the state of the world. It is necessary to highlight the importance of jointly solving the challenges that surround the development of infrastructure at the global level,” said Denise Burnet, Head of Event Management and Member of the Executive Committee at the World Economic Forum.

Chris Heathcote, Chief Executive Officer of the Global Infrastructure Hub, said that, despite ongoing efforts, attracting private-sector investment into Africa remains a major challenge, and is a barrier to achieving the UN Sustainable Development Goals.

“In order to meet the UN SDGs and the demands of accelerating economic and population growth in the African continent, we forecast that these countries will need to spend $7.6 trillion to 2040. Our analysis forecasts that the continent will invest $4.3 trillion based on current trends, exposing an investment gap of $3.3 trillion, or 43%. Investors will only invest in countries where market conditions are favourable, and it’s our goal through this initiative to assist in creating an environment that is conducive to private-sector investment in infrastructure,” said Heathcote.

Thierry Déau, Chief Executive Officer of Meridiam, added: “As long-term investors, we are convinced that key success factors to projects rely on excellent synergies between the private and public sector. We chose to accompany the AIFP initiative, convinced that this agile organization based on strong commitments of stakeholders is the perfect tool to accelerate the deployment of sustainable infrastructure in Africa.”

Africa has the highest population growth globally, and a number of its countries rank highly in terms of economic growth; and yet these countries also have the lowest growth in infrastructure stock.

The AIFP will be a six-month capability-building programme that will give participants a robust understanding of procurement, governance and the role of the private sector in infrastructure projects. The programme will provide participants with a mix of theoretical and practical training, opportunities to work within major private-sector companies, and lead to the establishment of a strong network of infrastructure practitioners across Africa.

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How ICT is transforming and making our societies more resilient

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Together with the International Telecommunication Union (ITU) and other partners, the United Nations Industrial Development Organization (UNIDO) has organized a side event at the UN High-level Political Forum on Sustainable Development (HLPF) to explore how information and communication technology (ICT) is transforming and making our societies more resilient.

The HLPF, which runs through to 18 July, brings together more than a thousand government, business and civil society leaders. The Forum, which meets annually under the auspices of ECOSOC, is a platform for the exchange of experiences in the implementation of the Sustainable Development Goals (SDGs), identifying gaps and lessons learned.

A selected multi-stakeholder panel at the side event, “ICT enabling the transformation towards sustainable and resilient societies”, included government, business and the UN. Participants discussed how digital technologies are improving productivity and competitiveness, pointing out that recent studies confirm that digitalization has immense potential that could deliver around $100 trillion in value to business and society over the next decade. It was also noted that digital solutions have the potential to enhance resource optimization and efficiency in water and energy consumption.

Providing a UN perspective, UNIDO’s Takeshi Nagasawa said, “The sustainable energy transition and Industry 4.0 share important characteristics that can be interconnected to pursue a sustainable energy transition. Such integrated approaches could be guided by the SDGs, which provide important target setting for energy, climate change and industry,” adding that UNIDO has “the capability and relevant portfolio to foster Industry 4.0 across all stages of industrial development.”

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Climate action: Organic waste as fuel for a circular economy

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The Secretariats of the United Nations Framework Convention on Climate Change (UNFCCC) and the United Nations Industrial Development Organization (UNIDO) have organized a workshop as part of the Regional Technical Expert Meetings on Mitigation (TEMs-M) and the Marrakech Partnership for Global Climate Action. It was held during the Asia-Pacific Climate Week, taking place between 10 and 13 July in Singapore. The session on “Enabling waste-to-energy, industrial waste reuse and prevention solutions to achieve circular economy and boost climate action” brought together members of civil society, UN agencies and financial institutions.

The workshop presented waste-to-energy, in particular the use of organic agricultural waste as a source of fuel, as an integral part of achieving the circular economy and its associated social and environmental benefits. The circular economy transforms the currently prevailing linear model of ‘take-make-use-dispose’ into one based on closed cycles, ultimately powered by renewables.

Rene van Berkel, UNIDO Representative in India, said, “The circular economy is not to be constrained to a recycling economy, but is one that firstly, maximizes use of renewables; secondly, minimizes resource use for products and services; and thirdly, perpetually recycles and recovers residual wastes.”

Three case studies were presented and served as a basis for discussion. Brahmanand Mohanty, an independent energy and resource management expert, spoke about technical insights into aspects of waste-to-energy projects in Lao, Thailand and Cambodia. Abhishek Bansal, Head of Sustainability for Arvind Limited, talked about the private sector focusing on enhancing sustainability and promoting the idea of a circular economy across key inputs such as cotton, energy, water and chemicals. And Solomone Fifita, Manager of the Pacific Centre for Renewable Energy and Energy Efficiency, presented on the circular economy concept, with a focus on waste-to-energy technologies through a policy/institutional perspective.

“Using waste as an alternative fuel is a key enabler for the circular economy, and practical solutions are already practiced in different sectors, for example, as alternative fuels in cement-making, and the production of biodiesel from spent cooking oils and of biogas from effluents,” van Berkel said. “It is time to scale up and speed up these solutions as a practical way to deliver on commitments in the Paris climate agreement.”

The Technical Expert Meetings on Mitigation (TEMs-M) facilitate the identification of policy options, practices and technologies with high mitigation potential. They bring interested parties together to examine in-depth opportunities to promote the implementation of and support for climate action. This event builds on a meeting held earlier this year.

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