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Government and Business Leaders Remain Optimistic about ASEAN Economic Outlook

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Government and business leaders at a World Economic Forum on ASEAN today said they remain optimistic about the region’s economic outlook despite threats of an escalation in the US-China trade war, rising interest rates and fear of emerging countries’ currency contagion.

Nazir Razak, Chairman, CIMB Group Holdings, Malaysia, said he is more concerned about the global economy at a time when US leadership has turned away from its traditional globalist stance and is reacting negatively to the rise of China. In contrast, ASEAN has transformed itself remarkably from “a zone of tensions and conflicts to one of peace and stability” and continues to enjoy tremendous economic growth.

Judy Hsu, Regional Chief Executive Officer, ASEAN and South Asia, Standard Chartered Bank, United Kingdom, and Sri Mulyani Indrawati, Minister of Finance of Indonesia, pointed to lessons learned from earlier regional crises that have prepared businesses and governments to manage the current bout of emerging-market volatilities triggered by problems in Turkey and Argentina. “Clients become well versed in managing these risks; they have access to hedging tools. Clients with dollar loans have locked in their interest rates,” Hsu observed.

Sound and prudent government policies, including investments in infrastructure and education, are reducing current account deficits and have supported the region’s economic growth. In addition, ASEAN’s youthful demographics – most of its more than 600 million population are young – and rapid access to technology are also fuelling domestic consumption and intraregional investments.

On the impact of a US-China trade war on ASEAN, Kevin Sneader, Global Managing Partner, McKinsey & Company, Hong Kong SAR, China, said that while there will be winners and losers, the outcome is unlikely to be dire. “This generalization is an example of ‘don’t let the facts stand in the way of a good headline’. The headline is trade war but the reality is there are lots of markets out there, and one of [the] opportunities is within ASEAN; intra-ASEAN trade is relatively modest and these markets can replace those that are hurt.”

Rising interest rates should also be seen as an opportunity for policy-makers and businesses to make the necessary adjustments and to watch reckless spending. “This is a good market discipline in signalling to policy-makers as well as players that you are not going to enjoy cheap money and you have to be very prudent,” said Indrawati.

Veerathai Santiprabhob, Governor of the Bank of Thailand, added that the US could have better coordinated its monetary and fiscal policies as its tax cuts have unleashed a new source of money supply, which has delayed the Fed’s attempts to normalize interest rates.

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Energy News

Powering climate action in Africa with renewable energy

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Africa Climate Week (ACW) 2019 kicks off today in Accra, Ghana. The first of three annual regional climate events ahead of the United Nations Secretary-General’s Climate Summit in September, ACW brings together international, regional and national stakeholders to discuss climate change and actions and to strengthen stakeholders’ engagements in key sectors including energy, agriculture and human settlement.

Although Africa is rich in renewable energy resources, penetration of renewables has lagged behind other regions. However, as costs have fallen the deployment of solar PV, concentrated solar power and onshore wind has started to accelerate, albeit unevenly across the continent. Utility-scale solar PV projects that were commissioned in Africa in 2018 achieved a weighted average cost of 0.122/kWh, some 40% higher than the global average. In contrast, onshore wind projects achieved competitive prices of USD 0.056/kWh. Cost reductions are expected to continue to drop, however, and this makes renewables an increasingly attractive ‘win-win’ solution to drive sustainable development while meeting Nationally Determined Contributions (NDCs).

The theme of this year’s ACW is, “Climate Action in Africa: A Race We Can Win” and the event will focus on building a strong regional foundation for climate action under the Paris Agreement. As the world’s platform for renewable energy cooperation, the International Renewable Energy Agency (IRENA) will play a pivotal role in facilitating progress on sustainable development and NDC fulfilment through the deployment of low-carbon renewable energy solutions.

Key IRENA-facilitated or supported sessions include:

NDC Dialogue

For the first time, African countries will gather together to discuss ways to accelerate the implementation of climate action in line with the global temperature goals of the Paris Agreement and countries’ individual NDCs. The session at ACW will contribute to the preparation for second-round NDCs with increased coverage, clarity, and ambition – as well as long-term, low-GHG emission development strategies – ahead of the 2020 deadline.

IRENA is facilitating the NDC Dialogue, during which participants will jointly consider the gap to meet the long-term goal and the need and avenues for raising national, regional, and global ambition, exchange experiences and lessons learned to address challenges relating to NDC preparation, implementation, and finance; and discuss synergistic implementation of NDCs, national development plans, and the Sustainable Development Goals.

Marrakech Partnership

The session will seek to build regional support and participation in the Marrakesh Partnership for Global Climate Action. IRENA will support efforts to build on three transformative areas of the United Nations Secretary General’s Summit, namely, 1) enabling environments for non-state action; 2) long term policy making and 3) sustainable finance.

Thematic Sessions

IRENA is co-hosting a number of thematic sessions. The first one, “Technology Opportunities of the Energy Transition”, emphasises how technology can present opportunities for everyone to take part in the energy transition. It will provide an overview of the latest innovations and dynamic developments in the energy sector, including both centralised and decentralised power systems.

Another, “Innovate4Cities”, is a hosted roundtable discussion between mayors, city practitioners, academics, non-governmental organizations, and national governments at the UNFCCC Africa Climate Week, to discuss data and technology priorities – specific to data access, renewable energy, and transportation – that are key to support cities and local governments to act on climate at the speed and scale necessary to support parties to meet their Paris Agreement commitments.

A third, “Maximizing Benefits through a Clean Energy Transition: A Key Path to Achieving Global Climate Goals” looks at the multiple benefits of transitioning to more sustainable energy production and consumption, with a focus on demand for cooling, highlights proven policies and other tools to harvest these benefits, and encourages collaboration to achieve more with existing resources and tap new opportunities.

Ghana-NDC Investment Forum

The forum aims to catalyse private sector investment, and financial as well as substantive support from all relevant stakeholders to help Ghana implement its climate commitments. During the forum, proven climate solutions will be showcased to attract private investment, present investment-ready climate NDC projects and introduce entry points for private sector to engage in NDC actions.

The outcomes of the above sessions will inform the Africa Climate Week’s communique, including providing specific recommendations to accelerate NDC progress and ambition, in the lead up to the UN Secretary General’s Climate Summit in New York in September.

IRENA

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EU Politics

€2 billion to fast forward the creation of the European Innovation Council

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Ahead of the 21-22 March European Council discussion on innovation, industry and competitiveness, the Commission takes decisive steps to set up a European Innovation Council.

Global competition is intensifying and Europe needs to deepen its innovation and risk-taking capability to compete on a market increasingly defined by new technologies. That is why the Juncker Commission is introducing a European Innovation Council (EIC) to turn Europe’s scientific discoveries into businesses that can scale up faster. Currently in its pilot phase, the European Innovation Council will become a full-fledged reality from 2021 under the next EU research and innovation programme Horizon Europe.

Carlos Moedas, Commissioner for Research, Science and Innovation said: “With the European Innovation Council, we don’t simply put money on the table. We create a whole innovation system to place Europe at the forefront in strategic technologies and innovation that will shape our futures such as artificial intelligence, biotechnology and zero-emission energy. We must focus on the needs of the innovators, who are the ones who will generate jobs, strengthen our global competitiveness and improve our daily lives.”

The Commission launched in 2017 the pilot phase of the European Innovation Council, introducing open competitions and face-to-face interviews to identify and fund Europe’s most innovative start-ups and SMEs.Since then, 1276 highly innovative projects have already benefitted from an overall funding of over €730 million.

Today the Commission announces important steps that will ramp up the remaining two years of the pilot phase of the EIC:

Over €2 billion of funding in 2019-2020: covering the innovation chain: “pathfinder” projects to support advanced technologies from the research base (opens tomorrow); and “accelerator” funding to support startups and SMEs develop and scale up innovations to the stage where they can attract private investment (open in June). Under the “accelerator” funding companies will be able to access blended financing (grants and equity) of up to €15 million.

The Commission will appoint 15 to 20 innovation leaders to an EIC Advisory Board to oversee the EIC pilot, prepare the future EIC, and champion the EIC globally. Innovators from across the ecosystem are invited to come forward by 10 May.  

The Commission will recruit a first set of “programme managers” with leading expertise in new technologies to provide full-time, hands-on support for projects. The call for recruitment will be published shortly.

Also today, the Commission announces 68 additional startups and SMEs selected for an overall funding of €120 million under the existing EIC pilot. The companies are for instance developing a blockchain-based online payment technology, new energy efficient screens and a solution to fight traffic noise (breakdown of beneficiaries per country and sector).

Given the growing economic importance of breakthrough and disruptive innovation, and based on the early success of the EIC pilot, the Commission has proposed to dedicate €10 billion to the EIC under Horizon Europe, the EU research and innovation funding programme for 2021-2027.

Background

With only 7% of the world’s population, Europe accounts for 20% of global R&D investment, produces one third of all high-quality scientific publications, and holds a world leading position in industrial sectors such as pharmaceuticals, chemicals, mechanical engineering and fashion. But Europe needs to do better at turning that excellence into success, and generating global champions in new markets based on innovation. This is particularly the case for innovations based on radically new technologies (breakthrough) or markets (disruptive).

In June 2018, the Commission proposed the most ambitious Research and Innovation programme yet, Horizon Europe, with a proposed budget of €100 billion for 2021-2027. The proposal builds on the Commission’s contribution to the EU Leaders’ meeting on 16 May in Sofia “A renewed European Agenda for Research and Innovation – Europe’s chance to shape its future“, which highlighted the need to create a European Innovation Council and other steps to ensure Europe’s global competitiveness.

The conclusions of the European Council of 28 June 2018 endorsed the setting up of the EIC under the next long-term budget (2021-2027). EU leaders invited the Commission to launch a new pilot initiative on breakthrough innovation within the remaining period of Horizon 2020, in order to pave the way for a fully-fledged EIC in Horizon Europe.

The European Innovation Council is part of a wider ecosystem that the EU is putting in place to give Europe’s many entrepreneurs every opportunity to become world leading companies. Other initiatives include a Pan-European Venture Capital Funds-of-Funds programme (VentureEU), the Investment Plan for Europe (EFSI), the work of the European Institute for Innovation and Technology, the Capital Markets Union Action Plan to improve access to finance or the proposal for a Directive on business insolvency

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Environment

Tackling e-waste challenges in Latin America

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photo: UNIDO

The issue of e-waste continues to represent a threat to both the global environment and human health, and it shows no signs of slowing down anytime soon. E-waste is the quickest-growing waste stream in the world.

Currently, the world produces approximately 50 million tonnes of e-waste a year. This equals the total weight of all the commercial airliners ever made. This figure is predicted to rise to 120m tonnes by 2050.

From 17–22 March, political and technical representatives from 13 countries across Latin America and e-waste experts from around the world will meet in San Jose, Costa Rica, to discuss how to tackle the e-waste landscape in the region.

The second Expert Meeting on the Effective Management and Disposal of E-waste in Latin America under the Stockholm Convention on Persistent Organic Pollutants is being convened by the United Nations Industrial Development Organization (UNIDO), in cooperation with the Ministry of Health of Costa Rica and with co-financing from the Global Environment Facility (GEF.

The meeting is part of a UNIDO-GEF project to assist 13 Latin American countries both technically and financially, advising on e-waste policies and regulations, suitable management technologies, business models, capacity-building, and awareness-raising.

At the national level, the project seeks to strengthen policies and train technical staff and government officials. At the regional level, the project seeks to harmonize key aspects of e-waste policies and strengthen regional cooperation and knowledge exchange. A key element of this year’s Expert Meeting is the E-waste Academy for Managers with the participation of renowned e-waste management experts.

UNIDO collaborates with a large number of organizations on the project, including the United Nations University (UNU), the International Labour Organization (ILO), the International Telecommunications Union (ITU), and the World Health Organization (WHO), as well as various other partners, such as Dell, Microsoft, RELAC and the International Solid Waste Association (ISWA).

The meeting coincides with Global Recycling Day on 18 March. Launched in 2018, the Day is an initiative of the Global Recycling Foundation to help recognize and celebrate the importance of recycling for preserving precious primary resources.

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