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Central African Republic: Diversifying the economy to build resilience and foster growth

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According to the latest economic update for the Central African Republic (CAR), which was published today by the World Bank, the country’s pace of economic growth for 2020 will have slumped to between 0 and −1.2% as a result of the COVID-19 pandemic following five years of robust growth (4.1%, on average). In 2019, although the country’s growth rate slipped to 3.1%, it was still higher than the rates recorded by neighboring countries that are facing a similar situation of fragility, conflict, and violence.  

Entitled The Central African Republic in Times of COVID-19: Diversifying the economy to build resilience and foster growth,theupdate notesthat the global slowdown has not spared CAR, where production of its main export products, such as coffee and cotton, has plummeted. The health crisis has weakened public finances and deepened the country’s balance of payments deficit.

The authors observe that the pandemic’s effects may wipe out years of progress in the area of human development and could drive as many as another 140,000 people into extreme poverty, which was already the plight of 71% of the population in 2019. The growth rate should start climbing again once the pandemic is brought under control, however, rising to an average of 3.9% in 2021-2023, although this is still lower than the projected rates for those years before the outbreak of the pandemic.

Even though the security situation has improved since the peace agreement was signed in February 2019, pre-existing structural problems in the Central African economy have exacerbated the impact of the pandemic,” explained Wilfried A. Kouamé, World Bank Economist and lead author of the report. The economy’s lack of diversification makes it vulnerable to shocks and limits its participation in global value chains, while its heavy dependence on international assistance reduces its budgetary maneuvering room.”

A number of recommendations are made in the report for spurring the economic recovery and boosting the country’s potential growth rate:

Diversify the economy by capitalizing on existing export opportunities. The country’s major export products, such as timber and cotton, offer opportunities for specializing in a wide range of related products, creating new jobs, and generating additional revenue. CAR could also begin to export a variety of new products in which it has a comparative advantage.

Address the major cross-cutting problems affecting the country by putting an end to the violence, strengthening its institutions, ensuring respect for the law, and investing in sustainable development. These steps would expedite the reconciliation process and promote private enterprise and investment. The transport sector also needs to be developed in order to further cross-border trade and open up access to electricity in a country where just 8% of the population currently has access to a source of electrical power.

Reinforce subregional trade. Asia and Europe are among CAR’s top export markets despite their highly competitive nature and the significant constraints associated with the resulting transport costs. Meanwhile, neighboring countries have the potential to be important markets for the country, since they are currently net importers of products that CAR exports elsewhere. This subregional market represents some $31 billion in imports per year and has a population of over 175 million.

CAR has an important choice to make,” said Han Fraeters, the World Bank’s Country Manager for CAR. It can build a strong, diversified, and resilient economy but only if all stakeholders in the country are committed to holding peaceful general and local elections and to implementing the peace accord. Without peace and the prospect of long-term stability, CAR will be unable to realize its strong economic potential.”

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War games will take place off Durban between South Africa, China and Russia

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South Africa’s government has finally shown its colours by inviting Russia and China for war games next month, London’s ‘Daily Mail’ writes with indignation and indignation.

SA President Cyril Ramaphosa has ditched his supposed ‘neutrality’ to the war by hosting the naval drills off the country’s east coast near Durban and Richards Bay from February 17 to 27. The move is the strongest indication yet of the strengthening relationship between South Africa, and the anti-West authoritarian regimes of China and Russia.

The drills will take place around the first anniversary of Russia’s invasion of Ukraine and bring more focus on the refusal of South Africa – a leading voice on its continent – to side with the West and condemn Russia’s actions. The South African government said last year it had adopted a neutral stance over Ukraine and called for dialogue and diplomacy.

But the upcoming naval drills have led the country’s main opposition party to accuse the government of effectively siding with Russia.

But the South African National Defence Force (SANDF), which incorporates all of its armed forces, said next month’s naval exercise would ‘strengthen the already flourishing relations between South Africa, Russia and China’. The aim of the drills was ‘sharing operational skills and knowledge’, the SANDF said.

The three countries also conducted a similar naval exercise in 2019 in Cape Town, while Russia and China held joint naval drills in the East China Sea last month.

The United States and European Union had hoped South Africa would support the international condemnation of Russia and act as a leader for other nations in Africa. But, South Africa appealed to be one of several African countries to ‘abstain’ in a United Nations vote last year condemning Russia’s special military operation.

South Africa and Russia share a long history, after the Soviet Union gave support to the ANC in its fight to bring down apartheid, the regime of repression against the country’s black majority, writes London newspaper. (And we should remember, how the British destroyed the Boers’ Transvaal and the Orange Republic of the at the beginning of the 20th century, and planted the apartheid regime here).

Apartheid ended in 1994 when the ANC won the first democratic elections in South Africa and Nelson Mandela became president.

South Africa is also a member of BRICS, a bloc of emerging economies, alongside Brazil, Russia, India and China.

South Africa’s obligations with respect to sanctions relate only to those that are specifically adopted by the United Nations. Currently, there are no UN-imposed sanctions on the particular individual, they say in Pretoria.

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Will South Korea build nuclear weapons?

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Washington’s attempt to curb North Korea’s nuclear ambitions are at a dead end. The nation is a nuclear state. Its arsenal is growing in both size and sophistication. Although Pyongyang will never be capable of staging a preemptive strike against the United States, it soon may be able to retaliate against Washington for defending South Korea, writes “Foreign Policy”.

The shifting balance has sparked a serious debate within the United States and South Korea over nuclear policy. The first question is whether it makes sense to pursue denuclearization — the famed CVID (complete, verifiable, irreversible dismantlement) — when the North already has the bomb. Although official Washington policy resolutely refuses to acknowledge North Korea as a nuclear state, reality may eventually force a policy retreat.

Even more significant, the South’s establishment wants to get its hands on, or at least close to, American nuclear weapons. Or, suggested South Korean President Yoon Suk-yeol, Seoul might develop its own. He suggested in a press conference last week that South Korea might develop its own nuclear weapon.

There has been a rolling debate in South Korea for about a year on its potential nuclearization. But that has been mostly limited to extra-governmental voices in think-tanks and academia. So it is genuinely surprising that this has already reached the presidential office.

Indeed, it speaks to just how threatening North Korea’s nuclear weapons are perceived in South Korea – and how unhelpful China has been in restraining Pyongyang – that no less than its president is now discussing this.

The South Korean fear is similar: in a spiraling crisis with North Korea, would its nuclear ICBMs compel the US to ‘slow-roll’ assistance for fear of crossing some retaliation threshold with North Korea? The answer is almost certainly ‘yes’, the author of the military portal ‘19fortyfive.com’ is convinced.

It is inconceivable now, in a nuclearized environment, that the US alliance commitment to South Korea is as automatic as it was in a conventional environment. Any US president will flinch at a course of action which might realistically incur a nuclear strike on US cities.

This new reality, since North Korea’s successful 2017 ICBM test, is only just sinking in. For a few years, it looked like former US President Donald Trump and former South President Moon Jae In might strike a deal with North Korea. That was always pretty far-fetched, but once it definitely fell apart by 2020, a South Korean nuclear debate was likely inevitable.

The debate on nuclearization in South Korea itself is culminating. South Korea public opinion is supportive. Nongovernmental opinion is tilting toward it. The country’s main conservative party has said South Korea should withdraw from the Non-Proliferation Treaty if North Korea tests another, seventh, nuclear weapon. And now the South Korean president has broached the issue too.

The big hurdle then is the Americans. The US is South Korea’s only treaty ally and its core foreign relationship. Without American defense guarantees, South Korea’s defense spending would double or triple. So South Korean governments have traditionally given American preferences wide berth.

And indeed, the American response was to play down Yoon’s comments.

In fact, the North Korean nuclear and missile threat will only worsen as the regime tests more and more, and they certainly are not going to stop. The more North Korea can threaten US cities with massive destruction, the less credible US alliance guarantees will be.

Luckily, this problem is not new. America’s European allies faced it during the Cold War because the USSR could strike the US homeland, and a variety of responses, including nuclear sharing and indigenous nuclearization, were tried with reasonable success. The US has also adapted to Israeli, Indian, and Pakistani nuclearization without a massive crisis.

So South Korean nuclearization need not lead to an alliance rupture unless the US insists on it.

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Jacinda Ardern resigned as New Zealand’s PM or was forcibly ousted from power?

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Jacinda Ardern (photo) has insisted her decision to resign as New Zealand’s Prime Minister is because she ‘doesn’t have enough in the tank’ – but there is speculation as to whether she is actually running scared of an election mauling following a public outcry over her draconian Covid lockdowns.

Ms Ardern, 42, choked back tears as she announced she will step down after just over five years in power. She insisted her decision to step down had nothing to do with the fact her Labour Party is trailing in the polls behind its conservative rivals from the National Party ahead of the upcoming election in October.

Her policies sparked nationwide protests – one protest against vaccine mandates that began on Parliament’s grounds last year lasted for more than three weeks and ended with protesters hurling rocks at police and setting fires to tents and mattresses as they were forced to leave.

As a result of the public anger over Ms Ardern’s response to Covid – which included a border closure that lasted more than two years – and her domestic policies, she was facing tough reelection prospects. This has prompted speculation that the real reason she decided to quit was because she didn’t want to face a humiliating defeat in the elections.

Ms Ardern continued: ‘I am not leaving because I believe we can’t win the election but because I believe we can and will. But we need a fresh set of shoulders for the challenges of both this year and the next three.’

Ms Ardern’s ratings have also dropped in recent months due to a worsening housing crisis, rising living costs and mortgage rates, and growing concerns about crime.

This has meant that the Labour Party, which has been in power since 2017, lost its consistent lead in the polls early last year.

Ms Ardern was elected just over five years ago on October 26, 2017, and at 37, was New Zealand’s youngest ever PM. Before that, she was the youngest sitting MP in 2008, elected aged 28.

During her resignation speech, Ms Ardern announced the next New Zealand general election will be held on October 14, 2023.

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