For more than two decades, Russia has been struggling to establish some economic influence, but such efforts have hit stumbling blocks which policy experts and Russian authorities themselves have attributed to inadequate knowledge of investment and economic possibilities in Africa.
Quite recently, Keir Giles, Associate Fellow (on the Russia and Eurasia Program) at Chatham House in London, wrote in an emailed interview “surely lack of knowledge about investment opportunities is one factor holding back economic engagement, but it is certainly not the only one. The problem remains that there are whole sectors of the economy where Russia is simply irrelevant – to take the most obvious example, consumer goods – and so their engagement will always be dwarfed by China.”
“The only exceptions are the traditional strengths of Russia (and the Soviet Union before it) – infrastructure, raw materials and energy. In effect, the lack of engagement is partly a consequence of the failure to develop and diversify since the end of the Soviet Union that is a fundamental challenge to the Russian economy,” he further explained.
Giles recounted the history that “economic collapse at the end of the Soviet Union affected Moscow’s engagement with Africa along with other regions. While Russia was finding its new place in the world, diplomatic representations abroad were cut back harshly and resources focused on those countries seen as essential.”
As a result, Russian expertise and engagement with Africa entered a hiatus, at exactly the same time China started rapidly to increase investment and presence. Moscow’s recent efforts seek to redress this and catch up – in parallel with, for example, Russia’s return to Latin America – both to find and exploit commercial opportunities, and to foster support from third nations in Russia’s ever more intensive confrontation with the United States and Europe.
“The most conspicuous aspect of Russia’s involvement in Africa is its absence,” says John Endres, Chief Executive Officer of Good Governance Africa from South Africa, adding that “whereas the Soviet Union was quite extensively engaged in Africa, Russia has almost entirely abandoned the field to other foreign players during the past two decades.”
Interestingly, Russia has more than 40 full-fledged diplomatic representations and fixed special trade missions to facilitate trade and investment in a number of African countries, and yet economic engagement has faced difficulties down the years.
The Foreign Ministry published the text of Deputy Foreign Minister Mikhail Bogdanov’s speech on official website where he highlighted the same old problems facing the development of Russia-African ties at a session on Urals-Africa economic forum in Yekaterinburg. “One must admit that the practical span of Russian companies’ business operations in Africa falls far below our export capabilities, on one hand, and the huge natural resources of the continent, on the other,” Bogdanov said assertively.
Of course, one of the obstacles has been insufficient knowledge of the economic potential, on the part of Russian entrepreneurs, needs and opportunities of the African region. “Poor knowledge of the African markets’ structure and the characteristics of African customers by the Russian business community remains an undeniable fact. The Africans in their turn are insufficiently informed on the capabilities of potential Russian partners,” Bogdanov stressed in his speech without suggesting any possible solutions.
Re-echoing Deputy Minister Bogdanov, Professor Irina Abramova, the Director of the Institute for African Studies under the Russian Academy of Sciences, has explained the situation thus: “as before, we cannot deny the insufficient knowledge of the Russian business structures specificity of Africa, its requirements, and other parameters. On the other hand, Africans are poorly informed about the possibilities of Russian partnership.”
Similarly, Lyubov Demidova, Deputy Chairperson from the Russian Chamber of Commerce and Industry (Moscow region), wrote in an emailed response to a media interview that “the main obstacle is insufficient knowledge of the economic potential, on the part of Russian entrepreneurs, needs and opportunities of the African region.”
For this, she hopes to help members of the business community of all African countries to address systematically issues of effective cooperation. “The main task is to shift to a more comprehensive approach, using the extensive territorial network of the Russian Chamber of Commerce. Russia’s business should be provided with full information on business and economic development in African countries and their needs in order to establish an ongoing Russian-African mutually beneficial business dialogue,” she suggested.
For the past years, only a few of those Russian efforts at reviving economic cooperation have been made public. Media has not been on the priority side of Russian diplomacy. Efforts by a few African countries to obtain media representation have been stifled in the bud. The worse is that African NGOs on culture have not been encouraged to operate in the Russian Federation.
“Russian media write very little about Africa, what is going on there, what are the social and political dynamics in different parts of the continent. Media and NGOs should make big efforts to increase the level of mutual knowledge, which can stimulate interest for each other and lead to increased economic interaction as well,” said Fyodor Lukyanov, Editor-in-Chief of the Journal Russia in Global Affairs. Lukyanov is also the Chairman of the State Council on Foreign and Defense Policy.
“To a certain extent,” Lukyanov said, “the intensification of non-political contacts may contribute to increased interest. But in Russia’s case, the main drivers of any cooperation are more traditional rather than political interests of the state and economic interest of big companies. Soft power has never been a strong side of Russian policy in the post-Soviet era.”
For the dearth of vital economic information, Russian Foreign Ministry, Department of Press and Information, could grant media accreditation to, at least, a few African journalists to work in Russia. That could help bridge the business information gap. Most often, African political leaders and corporate business directors have to depend on western media reports about developments in Russia, according to many policy experts.
Dr. O. Igho Natufe, PhD (McGill), a Research Professor at the Center for Studies of Russian-African Relations and Foreign Policy of African Countries, whose book “Russian Foreign Policy in Search of Lost Influence” published recently, explained that in order to improve the overall relationship, Russia has to review its policy strategies and one surest way is to employ or make use of “Soft Power” in dealing with Africa.
Russian authorities have to acknowledge that media has a huge role to play, thus frequent exchange of visits by Russian and African journalists as well as regular publication of economic and business reports could help create public business awareness and further raise to an appreciable level the relationship between the two countries.
Olga Kulkova, Research Fellow at the Center for Studies of Russian-African Relations, Institute for African Studies in Moscow, also noted in her opinion article that “in the global struggle for Africa, Russia is sadly far from outpacing its competitors. In terms of stringency of strategic outlook and activeness, the country is seriously lagging behind China, US, EU, India, Brazil.”
Kulkova suggested that “Africa needs broader coverage in Russian media. Leading Russian media agencies should release more topical news items and quality analytical articles about the continent, on-the-spot TV reports in order to adequately collaborate with African partners and attract Russian business to Africa. More quality information about modern Russia be broadcast in African states. Indisputably, it would take a lot of money and efforts, but the result will pay off.”
Russia has to take into account if it wants to improve the chances for success in Africa. All the leading foreign countries have been doing that quite efficiently for a long time, Kulkova noted. For example, at the Forum on China-Africa Cooperation (FOCAC), both China and Africa have fixed a “China-Africa Press Exchange Center” in China to encourage exchanges and visits between Chinese and African media, and China already supports frequent exchange of correspondents from media organizations of the two sides. Most probably, Russian authorities, both in the Kremlin and in the Foreign Ministry, have to learn from some of China’s policy directions with Africa.
In addition, trade experts have also been looking at ways to improve trade relations and economic cooperation with Africa. For instance, Andrey Efimenko, an Expert at the Russian Chamber of Commerce and Industry, told me that CCI of Russia has closely monitored the activities of Russian companies in Africa.
“Unfortunately,” Efimenko regrettably pointed out, “some large Russian companies operating on the African market have managed to establish themselves negatively in a number of countries. This is primarily due to ignorance of cultural peculiarities of the region, the lack of social responsibility, failure to fulfill contractual obligations. These cases damage the image of Russia and Russian companies with further entering the African market.”
Tellingly, some Russian researchers have their own explanations too. “Until recently, Africa was poorly represented in macro-economic forecasting and research, especially in terms of Russian-African relations,” wrote Professors Aleksei Vasiliev and Evgeny Korendyasov both from the Russian Academy of Sciences, Institute of African Studies. Professor Vasiliev, a former Special Presidential Envoy to African countries and Korendyasov, a former Russian Ambassador to the Republic of Mali and Burkina Faso.
They both authored an article published (available on Vaidal Discussion Club website) stating that Russia has officially declared promoting relations with Africa a priority goal. Assurances made by Russian officials in their statements that Africa is “in the mainstream of Russia’s foreign policy” have not been substantiated by systematic practical activities, and the development of relations between Russia and Africa has so far nothing to boast about.” (See also: Russia in Global Affairs website).
Without doubts, Russia’s major lines of African partnership in the long-term perspectives include developing investment cooperation, widening Russian companies’ presence in the African markets through increased deliveries of industrial and food products, and enhancing Russia’s participation in driving the economic development of Africa. On the other hand, access to Russian market for African countries has to be simplified. Official statistics on Russia’s trade and investment in Africa are still hard to find.
Retirees worldwide will outlive their savings by a decade – and women will fare worse
Retirees in six major economies can expect to outlive their savings by years. Women should prepare to bear the brunt of such shortfalls, going without retirement savings for at least two years longer than their male counterparts.
As government and employer-sponsored retirement plans are under strain globally, individuals have found themselves to be increasingly responsible for their retirement savings. Despite this, savings have not accelerated fast enough to make up for the deterioration of traditional retirement plans, suggests a new report by the World Economic Forum, Investing In (and for) Our Future.
In six economies analysed, most male retirees can expect to live past their savings by nearly a decade. Women can expect to go even longer without their savings, as they will likely live more than 10 years without retirement savings to rely on due to their longer average lifespans.
These shortfalls can vary greatly by country and gender; men in the United States are expected to outlive their savings by about eight years while women in Japan will live nearly 20 years past their savings account. Despite these vast differences, the average retiree in Australia, Canada, Japan, the Netherlands, the United Kingdom, or the US will not be able to last through retirement on savings alone.
These shortfalls must be addressed, by both individuals and policy-makers, to ensure that seniors can enjoy life throughout their non-working years.
Governments must act to create retirement landscapes that prevent savings shortfalls. Currently, retirement policies in many countries, including India and China, can often hinder optimal retirement savings and investments.
Though governments should act, they would be wise to avoid implementing one-size-fits-all retirement policies as individual retirement needs can vary greatly from person to person. Instead, governments should change, or even roll back, their regulations to allow individuals to make investments that will increase their long-term returns.
A new report from the World Economic Forum identifies two key investment changes governments should allow so individuals can most effectively address their savings gaps. Both identified actions aim to optimize investment so retirement savers can achieve higher yields from their savings.
1. Consider risk from the perspective of someone saving for retirement
“The real risk people need to manage when investing in their future is the risk of outliving their retirement savings,” said Han Yik, Head of the Institutional Investors Industry, World Economic Forum. “As people are living longer, they must ensure they have enough retirement funds to last them through their longer lives. This requires investing with a long-term mindset earlier in life to increase total savings later on.”
Many people are far too risk-averse in their retirement investing. While consistent saving is important to build retirement money, being mindful of long-term returns on retirement portfolios is crucial to ensuring that an individual doesn’t outlive their savings. Many young to middle-age savers should change their risk outlook, understanding that outliving their savings is a far greater risk to them than short-term investment risk.
2. Diversify the investment of saving accounts, by geography and asset type
While focusing on long-term returns is often beneficial for retirement savers, diversification can preserve those returns by mitigating overall investment risk.
Currently, most retirement investment vehicles are largely based on traditional equity and fixed-income investments that have the advantages of being easy to value as well as having high liquidity. However, given the long-term nature of retirement savings, that liquidity comes at a cost. Although they require adequate understanding and sound financial advice, investment in alternative assets, particularly illiquid assets, can bring strong diversification benefits to a retirement investment portfolio.
In this area, again, policy-makers must ensure their retirement policies do not hamper the ability of individuals to make the best long-term choices for their portfolios. In most countries, default retirement options focus on liquidity and the ability to perform daily valuations at the expense of long-term growth. Governments should consider changing or even rolling back these regulations to allow retirement savers to invest in the assets best suited to their individual retirement goals.
In addition, many retirement portfolios also tend to have a heavy domestic focus. Diversifying the geography of investments in portfolios can reduce risk to home country economic events. By expanding the locations of their investments, retirement savers, particularly savers from smaller economies, can protect themselves from market or economic slumps in an individual economy while still maximizing their returns.
Decumulation, or spending in retirement, is another key area of well-being after the working years yet there is far less research dedicated to it.
For instance, today’s retirement spending projections are based on the rule that retirees will withdraw 4% of their portfolio each year they are retired. However, the World Economic Forum and Mercer suggest that this estimate does not match how retirees spend in the real world, with much higher spending in early retirement years and less as retirees age. This spending volatility highlights the need for new retirement solutions that both allow for flexible spending while also ensuring savings that last through retirement.
“With populations around the world living longer than ever before, we need far more creative decumulation solutions for longevity protection” says Rich Nuzum, President, Wealth at Mercer. “There are some alternative solutions emerging such as pooled annuity funds, but older individuals are going to need a more diverse range of financial tools to help protect against longevity risk.”
Some countries, such as the UK and the Netherlands, have begun to recognize the importance of robust policies for the decumulation period and are even considering rolling back regulations for retirement savings. However, there is much more to be done in this area to ensure that seniors can thrive during their period of enjoying the funds they have worked so hard to save over their working years.
Sustainable development: Within reach in Iran and Asia and the Pacific
Climate change is increasing the intensity and frequency of natural disasters in Asia and the Pacific. The tragic loss of life and the destruction wrought by recent flooding in the Islamic Republic of Iran is a reminder of the threat to lives, livelihoods and societies posed by extreme weather events. A reminder that only an integrated response to economic, social and environmental challenges can pave the way to sustainable development.
The floods which swept across the Islamic Republic of Iran in spring this year were devastating. They affected 10 million people and 500,000 people were displaced of which half were children. Hospitals and schools were destroyed, denying 100,000 children and education and thousands access to basic health care. Large sections of the country’s road network were affected, which will weigh on the economy, but also impact on many families’ daily lives. Damages have been estimated at $4.7 billion, a third of which concern the agricultural sector, critical to many livelihoods.
Yet as tragic and costly as the recent floods have been, they are also part of a wider phenomenon: the increasing risk of natural disasters outpacing resilience in the Islamic Republic of Iran and in Asia and the Pacific. Sand and dust storms, drought, desertification and wind erosion are all expected to rise in South-West Asia by 2030. Intensified by climate change, these disasters are becoming increasingly frequent. They hit the poor and vulnerable hardest, particularly in informal settlements. Some of Iran’s least developed provinces have suffered the most, with successive sand and dust storms destroying crops and infrastructure, and undermining people’s health, study and work.
These challenges exemplify why economic, social and environmental considerations must be considered together, if we are to effectively mitigate the consequences of natural disasters and achieve sustainable development. Evidence from across the globe tells us ignoring the social impact of economic growth can place a huge strain on societies, and at its worst lead to instability and conflict. Ignoring the environmental cost of economic growth in many parts of our region has led to climate change and an increased risk of natural hazards, which entrench poverty and perpetuate inequality. Nowhere is an integrated, multilateral response needed more than in Asia and the Pacific, the most disaster-prone region in the world.
With this in mind, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has worked with the Islamic Republic of Iran to establish the Asian and the Pacific Centre for the Development of Disaster Information Management (APDIM) in Tehran. It will deliver targeted capacity development for disaster information management and knowledge sharing. A regional cooperation mechanism for combatting the sand and dust storms has already been adopted. This will work to reduce the causes of risk of multiple hazards, develop a sand and dust storms alert system and tap regional partnership networks to enhance technical support where it is most needed.
My ambition is for APDIM to fit into a broader regional development and cooperation effort. One to reduce the inequality and environmental degradation which have accompanied recent exponential economic growth in our region. Our analysis shows the investment needed to achieve sustainable development in Asia and the Pacific is within reach. Developing countries’ investment needs stand at an additional $1.5 trillion per year, or five percent of their combined GDP. In the Islamic Republic of Iran, we estimate investments needed to climate-proof basic infrastructure are equivalent to roughly 1 per cent of Iran’s GDP in 2018. Further investment would be required in education and people centered approaches to build resilient communities and economy.
Sustainable development which balances economic growth with the need for social inclusion and environmental protection is essential to ensure a prosperous Iran today and a clean, compassionate and safe future for our children. Investing in people, as well as investing in skies, land and water can ensure that future. The Islamic Republic Iran has the means and the will. Yet persistence will be required to achieve this ambition, and the United Nations family stands ready to assist in any way it can in the months and years ahead.
A sustainable greener future needs green employment skills
change and environmental degradation are among the greatest challenges of our
times. The signatory states of the 2015 Paris Agreement on
climate change recognized the need for urgent action. But a
commitment to environmental sustainability by itself is not enough. On the one
hand, climate change and environmental degradation reduce productivity and
destroy jobs and the effects fall disproportionately on the most vulnerable. On
the other hand, the transition to a green economy has the potential – if
handled correctly – to create tens of millions of sustainable jobs.
So far 183 countries have committed to the Paris Agreement target (of keeping the rise in global temperatures to less than two degrees Celsius) by submitting national determined contribution (NDCs) documents that detail the adaptation and mitigation measures they plan. However, while two-thirds of these NDC’s recognize the importance of boosting capacity development and public knowledge of climate change, fewer than 40 per cent include any plans for skills training (or retraining) to support their implementation. What’s more, more than one in five have no plans for any training or capacity development measures at all.
should ring alarm bells. Commitments to greening economic sectors such as
energy, agriculture, waste management, manufacturing and transport can’t
advance into concrete change if the necessary skills are not available. It is
women and men with the right knowledge and skills who will take the decisions,
and develop and maintain the technology, green production processes and
sustainable investment strategies that are outlined in the NDCs and other
Skilling, reskilling and upskilling covers not just technical skills but, core/soft skills (such as environmental awareness, analytical skills, teamwork, innovation, communications, leadership, negotiation abilities, and management and entrepreneurship skills), which can offer a comparative advantage because they can easily be transferred across occupations. Other most wanted skills include sales and marketing, customer handling, repair, digital skills, scheduling and budgeting, to mention just a few examples.
These issues will be discussed at the Global Forum, Boosting Skills for a Just Transition and the Future of Work (6 June), where the Key Findings of a forthcoming report Skills for a greener future (to be published later this year) will be discussed. The report includes information from 32 countries. The aim of the Forum is to highlight the need for concrete action on skills, identify occupational needs, skills gaps, and response strategies related to a sustainable future of work, and discuss possible multi-lateral collaboration that can advance green human capital.
We know this will require massive investment. But it can create millions of new jobs and repurpose many existing ones. Particular attention must be paid to ensuring that women are included in relevant skills training, so that these measures help reduce the gender gap and combat gender stereotypes rather than entrenching them. The number of high-skilled and – especially – middle-skilled jobs have the potential to grow if there is investment in relevant skills training. Workers in construction, manufacturing, agriculture and sales may gain employment if the green transition is supported by skills development. This requires good coordination across different ministries and between public and private sectors. Yet, our review of 32 countries shows that current policies are often piecemeal and lack subsequent action.
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