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Sierra Leone’s Macroeconomic Situation Remains Challenging Despite Bold Policy Measures

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Unlocking the bottlenecks to robust and sustained real growth through economic diversification and addressing pre-existing macroeconomic weaknesses will be crucial for building a resilient economy that promotes inclusive growth and reduces poverty, according to the new World Bank Sierra Leone Economic Update (SLEU) launched today in Freetown. The country’s macroeconomic situation remains challenging despite the bold and courageous policy measures taken by the new government.

Growth is still low (3.7 percent), inflation and exchange rate depreciation are high (16.8 and 11.8 percent, respectively), the fiscal and current deficits are high (6.6 and 13.8 percent, respectively), and increasing debt has resulted in the country being downgraded from moderate to high risk of debt distress. However, the medium-term outlook is promising, with growth expected to reach 5.2 percent by 2021, driven primarily by supply side factors, including favorable agricultural output, uptick in mining activities and strong performance of the services sector, the report notes. Key risks to the growth outlook include a deterioration in Sierra Leone’s terms of trade; lower than anticipated FDI inflows and the effects on the exchange rate and prices; fiscal slippages including adverse debt dynamics; and financial sector weaknesses.

The SLEU is an annual publication that reports on and analyzes recent economic developments, reviews regional and global contexts and analyzes the implications for the country, and presents the medium-term outlook and prospects for the economy. The 2019 Update focuses on promoting inclusive growth and poverty reduction, namely ‘Financial Inclusion for Economic Growth and Development’. The target audience for the SLEU includes policy makers, business leaders, development partners and analysts interested in Sierra Leone’s economy.

“There is an urgent need for Sierra Leone to develop a comprehensive strategy for deepening the financial sector and this is required to ensure poverty reduction, job creation, investment and growth in the country,” said Gayle Martin, World Bank Country Manager for Sierra Leone. “Whether Sierra Leone can promote sustained inclusive growth and reduce poverty depends on whether it can modify the structure of the economy to generate more and better-paid manufacturing and service jobs. That could be accomplished by facilitating creation by the private sector of formal manufacturing and services activities and increasing the productivity of the informal sector.”

The special topic of the 2019 Update focuses on deepening the financial sector for inclusive economic growth and development. The report notes that usage of the financial system is low in Sierra Leone with only about 5 percent of adults using formal savings products and about 54 percent saving money within the past year. Access to finance for enterprises is a significant barrier to growth of the private sector with 40 percent of firms indicating lack of credit as their biggest constraint. Only 11 percent of Sierra Leoneans have mobile money accounts compared to 20.8 percent in Liberia, 38.9 in Ghana and 72.9 percent in Kenya.

“The government plays a key role in developing the financial sector through promoting resilience and stability. One of the key functions that needs to be established is an effective supervision and regulatory regime for financial institutions to address market failures like anti-competitive behavior, market misconduct, information asymmetries, and systemic instability, which can negatively impact financial sector development, economic growth, and shared prosperity,” said Youssouf Kiendrebeogo, World Bank Senior Economist and one of the authors of the SLEU.

To address existing macroeconomic weaknesses and enhance economic growth, the Sierra Leone government should maintain the fiscal consolidation path, improve debt policy and management and intensify efforts to clear the large stock of arrears.

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Parliament decides on new Commission President

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MEPs vote on the candidate for the president of the European Commission on Tuesday 16 July.

German Defence Minister Ursula von der Leyen, who was nominated for the post by the European Council, will outline her programme and discuss it with MEPs from 9.00 CET. MEPs will vote on her candidacy at 18.00 CET.

In order to become Commission President, von der Leyen must secure the support of an absolute majority of MEPs (as of today she must get at least 374 votes). The vote will be a secret paper ballot.

Although she has the backing of EU leaders and is a member of the political party that won most seats in the European elections, von der Leyen was not a lead candidate, a fact criticised by many MEPs.

Political groups have already subjected von der Leyen to tough questioning about her plans for the Commission.

If she fails to win a majority, the European Council would have to put forward another candidate.

Following May’s elections, one of the first tasks of the new, directly-elected European Parliament is the election of the next European Commission President.

Once this new president has been approved, work starts on setting up the new Commission. Parliament’s committees will hold hearings with each of the commissioners-designate to assess their suitability for the portfolio to which they are assigned, before MEPs vote on the Commission as a whole.

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Academic Seminar Europe Goes Silk Road through Armenia Took Place in Yerevan

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July 12, 2019, Yerevan, Armenia- “China-Eurasia” Council for Political and Strategic Research, Russian-Armenian University (RAU) and “Europe Goes Silk Road” jointly organized academic Seminar “Europe Goes Silk Road through Armenia”. Academic seminar was hosted bythe RAU. 

During the opening ceremony of the seminar, Mr. Zhou Hongyou (Counsellor of the Chinese Embassy in Armenia), spoke about the Belt and Road Initiative’s progress, results and prospects, he also introduced the last developments in Sino-Armenian relations.

Dr. Arman Navasardyan (Ambassador Extraordinary and Plenipotentiary, Ex Deputy Minister of the Ministry of Foreign Affairs of the Republic of Armenia, Head of the Department of World Politics and International Relations of the RAU) introduced several recommendations for improving Sino-Armenian cooperation.

In turn, Mr. Sebastian Holler, (Co-Founder of the EUROPE GOES SILK ROAD, Research Associate of the Austrian National Defence Academy, Member of the Shabka Think Tank) told about the foundation of the EUROPE GOES SILK ROAD project.

Dr. Mher Sahakyan, the main initiator of this academic Seminar welcomed speakers and guests and mentioned, that the main aim of the seminar was to provide a platform for researchers who do research on Belt and Road initiative.

After the opening remarks Mr. Sebastian Maier (Co-Founder, EUROPE GOES SILK ROAD, Independent Infrastructure Researcher, former TU Wien Assistant Professor) and
Mr. Florian Krendl (Co-Founder, EUROPE GOES SILK ROAD, Member of the 2050 Thinkers Club, Austria) introduced the main aims and approaches of the  “EUROPE GOES SILK ROAD” project.

Mr. Sebastian Holler and Mr. Sebastian Maier spoke about preliminary results and outlook of the “EUROPE GOES SILK ROAD Expedition.

Dr. Varuzhan Geghamyan (Assistant Professor, Yerevan State University Director, ARDI Institute) introduced his research on Sino-Turkish relations in the 21-st century.

Dr. Mher Sahakyan’s research was focused on main aims of the Belt and Road Initiative and he also introduced several recommendations for improving Sino-Armenian Cooperation in the context of Belt and Road Initiative.

An active discussions and exchange of thoughts followed after each presentation.

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OECD very concerned that active bribery is no longer a felony in Greece

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The OECD Working Group on Bribery has serious concerns that recent steps taken by Greece may leave the country in breach of the OECD’s Anti-Bribery Convention. On 11 June 2019, Greece amended the Criminal and Criminal Procedure Codes. As a result, the main active bribery offence was converted from felony to a misdemeanour, which is a less serious offence. The Working Group is concerned that this amendment may have far-reaching ramifications, ranging from the closure of ongoing corruption-related investigations and prosecutions, to possible hindrance of international cooperation in future cases and shorter limitations period. The Codes entered into force on 1 July 2019, having been adopted in the last session before Parliament was dissolved ahead of national elections, which took place on 7 July 2019.

The OECD Working Group on Bribery will conduct a supplementary Phase 3ter review of Greece, with an on-site visit in the fall of 2019 and the publication of an evaluation report in December 2019.[2] The evaluation will be conducted jointly with the Council of Europe Group of States against Corruption (GRECO), which also decided to carry out an urgent evaluation of Greece’s amendments to its Criminal Code. Depending on the results of this evaluation, the OECD Working Group may decide that further appropriate measures are necessary, including the possibility of a High Level Mission to Greece. The OECD Working Group has also agreed to issue a letter that will be sent to the Greek Prime Minister. The letter will outline serious concerns about the potential impact of the revised anti-corruption criminal measures.

This is the second time the Working Group has decided to undertake a supplementary examination of Greece. In 2012, Greece failed to promptly investigate a significant foreign bribery case and to provide timely information on its anti-bribery efforts, and, as a result, the Working Group on Bribery conducted a Phase 3bis evaluation in 2015.

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