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Growth in Sub-Saharan Africa is Slower than Expected

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Sub-Saharan African economies are still recovering from the slowdown in 2015-16, but growth is slower than expected, according to the October 2018 issue of Africa’s Pulse, the bi-annual analysis of the state of African economies by the World Bank. The average growth rate in the region is estimated at 2.7 percent in 2018, which represents a slight increase from 2.3 percent in 2017.

“The region’s economic recovery is in progress but at a slower pace than expected,” said Albert Zeufack, World Bank Chief Economist for Africa. “To accelerate and sustain an inclusive growth momentum, policy makers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity. Policymakers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt.”

Slow growth is partially a reflection of a less favorable external environment for the region. Global trade and industrial activity lost momentum, as metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects. While oil prices are likely to be on an upward trend into 2019, metals prices may remain subdued amid muted demand, particularly in China. Financial market pressures intensified in some emerging markets and concern about their dollar-denominated debt has risen amid a stronger US dollar.

The slower pace of the recovery in Sub-Saharan Africa (0.4 percentage points lower than the April forecast) is explained by the sluggish expansion in the region’s three largest economies, Nigeria, Angola, and South Africa. Lower oil production in Angola and Nigeria offset higher oil prices, and in South Africa, weak household consumption growth was compounded by a contraction in agriculture.  Growth in the region – excluding Angola, Nigeria and South Africa –  was steady. Several oil exporters in Central Africa were helped by higher oil prices and an increase in oil production. Economic activity remained solid in the fast-growing non-resource-rich countries, such as Côte d’Ivoire, Kenya, and Rwanda, supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.

Public debt remained high and continues to rise in some countries. Vulnerability to weaker currencies and rising interest rates associated with the changing composition of debt may put the region’s public debt sustainability further at risk. Other domestic risks include fiscal slippage, conflicts, and weather shocks. Consequently, policies and reforms are needed that can strengthen resilience to risks and raise medium-term potential growth.

This issue of Africa’s Pulse highlights sub-Saharan Africa’s lower labor productivity and potentials for improvement “Reforms should include policies which encourage investments in non-resource sectors, generate jobs and improve the efficiency of firms and workers,” said Cesar Calderon, Lead Economist and Lead author of the report.

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Energy News

ADB Supports 275 MW Power Plant to Boost Energy Access in Sumatra, Indonesia

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The Asian Development Bank (ADB) today signed a private sector financing package to support the construction of a 275-megawatt combined-cycle gas turbine power plant in Riau province in central Sumatra, Indonesia, to help secure the country’s energy future and provide communities with more affordable and reliable electricity.

The financing consists of a $70 million A loan from ADB’s ordinary capital resources and $82 million B loan from Sumitomo Mitsui Banking Corporation and MUFG Bank, with ADB providing a partial risk guarantee (PRG) to the participating commercial banks. The International Finance Corporation (IFC) will provide $50 million for the Riau Natural Gas Power Project in the first-ever cofinancing of an infrastructure project by ADB and IFC in Indonesia.

ADB will also administer a $20 million loan from the Leading Asia’s Private Sector Infrastructure Fund (LEAP), supported by the Japan International Cooperation Agency. Established in March 2016, LEAP’s mandate is to help fill financing gaps and increase access to finance for ADB-supported infrastructure projects in Asia and the Pacific.

“ADB’s involvement in the project has helped secure long-term commercial bank financing necessary for any large-scale infrastructure investment, which has remained a challenge in Indonesia,” said Infrastructure Finance Division Director for Southeast Asia, East Asia, and the Pacific at ADB’s Private Sector Operations Department Mr. Jackie B. Surtani. “ADB’s role as a lender and provider of PRG to the project’s B loan lenders will enable the project to mobilize a significant amount of long-term debt.”

The project is being implemented through PT. Medco Ratch Power Riau, a special purpose vehicle partially owned by PT. Medco Power Indonesia, a leading developer and operator of small and medium-sized independent power producers (IPP) in the country, and Ratchaburi Electricity Generating Holding Public Company Limited, Thailand’s largest IPP.

“ADB’s role was key in getting this transaction closed from the negotiation stage of the power purchase agreement to the structuring of the financing package,” said PT. Medco Power Indonesia Chief Executive Officer Mr. Eka Satria.

The plant is expected to provide stable and reliable power to the domestic grid, amounting to about 1,445 gigawatt-hour annually. The use of combined-cycle gas-fired power generation will improve the environmental sustainability of the current energy mix in Sumatra by displacing diesel and coal as fuels for electricity generation.

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Environment

Education critical to ensure future of forests, and reverse their destruction

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The UN drew attention to the vital role that forests play in addressing some of the world’s greatest environmental challenges on Thursday, and the importance of tackling the issues that threaten them, such as deforestation, and land degradation.

The UN drew attention to the vital role that forests play in addressing some of the world’s greatest environmental challenges on Thursday, and the importance of tackling the issues that threaten them, such as deforestation, and land degradation.

Marking the 2019 International Day of Forests, the UN Food and Agriculture Organization (FAO) launched new forestry education initiatives aimed at raising awareness amongst young people about their sustainable use and conservation, and some of the major challenges related to forestry education.

Despite the well documented and important role that forests play in keeping the environment healthy and helping to address global challenges such as climate change through the capture of greenhouse gases, many people have little knowledge of the many ways that forests support human life, or the grave dangers many forests face.

As more and more people move to cities, becoming oblivious to the plight of rural areas, says the FAO, this problem is growing.

In a statement, José Graziano da Silva, FAO’s Director-General, said that “education is a critical step to safeguarding natural resources for future generations. It is essential for children to learn about forests at an early age.”Education, however, can challenge and reverse this situation. The FAO has identified deficiencies in the way that forest-related issues are taught, describing forestry education as generally “inadequate,” and failing to address emerging challenges. The opportunities to study forestry at all levels, the Organization says, are few and far between.

As part of the global celebrations marking the day, the UN Department of Economic and Social Affairs (DESA) held a special event at UN Headquarters in New York on Thursday, featuring remarks by senior UN and government officials, as well as a panel discussion and general discussion by Member States and UN bodies.

Opening the event, Mr. Hossein Moeini Meybodi, Senior Forest Policy Officer at the UN Forum on Forests, was positive about the effect that education, awareness raising measures and improved forestry management can have on the future of forests: “It is our sincere hope that by sharing positive messages on solutions that exist for forests, and the communities that they support, we can learn from each other and together create a greener, more sustainable world for future generations.”

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Human Rights

UNESCO research on AI’s implications on human rights

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“Artificial Intelligence (AI) is increasingly becoming the veiled decision-maker of our times.  AI has profound implications on human rights ranging from freedom of expression, privacy, to right to equality and participation; a human rights based approach must be mainstreamed to guide the development AI through inclusive multi-stakeholder participation,” said UNESCO programme specialist Xianhong Hu, when she spoke at the 40th Session of the United Nations Human Rights Council last week.

She was presenting the summary findings of UNESCO’s new report Steering AI for Knowledge Societies: A ROAM Perspective, during the panel discussion on Human Rights in the Era of Artificial Intelligence: Exploring the AI development from UNESCO’s prism of Internet Universality, this report shows these principles are intended for all interested stakeholders and AI development should align with human Rights, Openness, Accessibility and Multi-stakeholder governance.

This ROAM approach can serve to guide the ensemble of values, norms, policies, regulations, codes and ethics that govern the development and use of AI – a theme that was echoed by a number of delegates in the room.

“The complexity of AI calls for an interdisciplinary, comprehensive, global and multi-stakeholder reflection on the opportunities and challenges that come with such advanced ICTs,” stated Abdulaziz Almuzaini, Director of the UNESCO Geneva Liaison Office.

UNESCO’s ROAM framework was highly commended by delegates, professionals and academic representatives present during the panel session. “We appreciate our cooperation with UNESCO. AI is transforming our lives, the use of AI in the exploitation of big data is essential. These are all areas we need to protect human rights,” said Omar Zniber, Permanent Representative of Morocco. H.E. Zniber elaborated that AI-generated content sometimes boosts “fake news” and blurs the lines for accountability of produced content. Moreover, AI’s consequences will be felt strongly the Global South, where the potential for digital divide are stronger.

Further insight was provided by Francois Gave, Deputy Permanent Representative of France, regarding France’s position on AI and technology. Stating that AI has been placed on the G7 agenda, he noted that democracy itself could be at stake in the grander scheme of human rights, because some people do not realise that their information is being gathered and retained. At the level of the European Union, many principles surrounding human rights and data privacy exist. However, he held that “now is the time to take things further and work together.”

Dr. Eileen Donahoe, Executive Director, Stanford Global Digital Policy Incubator, moderated the session and pointed that the implication of AI for human rights are vast and multilayered. She believes the existing universal human rights framework including UNESCO’s ROAM principles, can serve as a primary guide for technologist and for policy-makers to help ensure that AI development is beneficial for humanity.

The UNESCO summary report also reveals that privacy is often infringed when AI involves opaque data collection, de-anonymization, third-party data-sharing, and the tracking and profiling of individuals.

 “Increasing Information personalization and content moderation by AI enhance users’ access to information, but at the same time can narrow down the scope of Information and the pluralism of ideas to which they are exposed. Particularly, when Internet intermediaries are pressured to use AI to combat hate speech and disinformation, this can risk removing legitimate content and thus undermine the free flow of information”, stressed UNESCO’s Hu in her presentation.

Vidushi Marda, Legal Scholar from Article 19, stressed that some people may be “forsaken” with the development of AI. She held that the unintended consequences of AI are not being considered as much as they ought to be.

Coining AI as a “trend” word, Jovan Kurbalija, Executive Director and Co-Lead of the United Nations Secretary General High Level Panel on Digital Cooperation, emphasised that using AI in local scenarios is of utmost importance. In addition to the protection of human rights, “human happiness and appreciation” must also be considered.

UNESCO’s new summary report is about ongoing research and  the final publication will elaborate key options for actions for different stakeholders as well as overarching options for shaping the future of AI development. The preliminary brochure is online at https://en.unesco.org/sites/default/files/unesco-steering_ai_for_knowledge_societies.pdf as well as on UNESCO’s webpage dedicated to Artificial Intelligence https://en.unesco.org/artificial-intelligence.

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