Thursday, April 19, 2007

Dear Mr Riggs

Welcome to the seventh of the Brenthurst Briefings, a regular newsletter published by the Brenthurst Foundation to keep readers abreast of economic and political developments of importance to the economic well-being of Africa. The purpose of this monthly newsletter is not to give busy people another thing to read on Africa, but to highlight, summarise and access important recent analysis on and events in Africa.

We look forward to your comments, suggestions and feedback.

Greg Mills

Key Statistics on Africa

Many African countries, including Senegal, Mozambique, Burkina Faso, Cameroon, Uganda, Ghana and Cape Verde, have lifted significant percentages of their citizens above the poverty line and might well be on course to meeting the income poverty Millennium Development Goal (MDG) target of halving poverty by 2010, according to the World Bank report, African Development Indicators (ADI) 2006.

Africa has moved from last place to third in this year's regional rankings for reforms that encourage new enterprises, formal sector jobs and growth, according to the World Bank/IFC report, Doing Business 2007: How to Reform. This marks the first time Africa has been among the top three reformers, following Eastern Europe and the OECD countries in the number of business-friendly regulation reforms. Forty-five regulatory changes in 30 economies in the region reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements.more

The Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER) has released the most comprehensive study ever performed of personal wealth - as opposed to income. Based on data from 2000, the study finds that one percent of the world's adults alone owned 40 percent of the world's wealth, while the bottom half of adults in the world together owned less than one percent. Absurdly, many individuals in high-income countries incurring large mortgage and consumer debts are among the 'poorest' in terms of household wealth. Still, North America's 6 percent of the world adult population accounted for 34 percent of world household wealth.

Chinese and Indian firms are increasingly doing business in Sub-Saharan Africa, and their interest in the continent extends well beyond a hunt for natural resources, a World Bank study says. Exports from Africa to Asia tripled in the last five years, making Asia Africa's third largest trading partner (27%) after the European Union (32%) and the United States (29%), according to Africa's Silk Road: China and India's New Economic Frontier.

The annual AIDS Epidemic Update 2006 from UNAIDS and the World Health Organization reports on the latest developments in the global AIDS epidemic. The report details the epidemic's scope and human toll in eight world regions. With 4.3 million new HIV infections in 2006, and very few countries succeeding in reducing the number of new infections, the report finds an overall growth in the spread of the disease. More optimistically the report identifies positive trends over the past decade in the sexual behaviors of young people in many countries, as well as effectiveness of HIV prevention programmes targeted at high risk groups.

50 per cent of people in parts of Africa and Asia have no access to medicines due to harmful government policies, reports the Civil Society Report on Intellectual Property, Innovation and Health. The document, produced by 16 civil society organizations from around the world, is being released ahead of a report on a similar theme from the World Health Organization.

Funding Shortage Edges Millions of Southern Africans into Food Crisis. Facing a US$60 million gap in funds, the United Nations World Food Programme has been forced to cut aid to 4.3 million people in southern African countries. The reductions will hit mother and child nutrition centres, school-feeding projects and food schemes for HIV/AIDS and tuberculosis patients, "for whom nutrition is key in boosting immunity to diseases that have ravaged the region." Also, food assistance provides a crucial "survival cushion" for many southern Africans while they finish schooling or learn new job skills.

UNCTAD's Least Developed Countries Report finds that higher rates of economic growth in many least developed countries (LDCs) have not translated into improved human well-being. The report suggests that LDCs must increase their very low labour productivity to achieve sustained growth and poverty reduction. As 2000-2010 will be the first decade in the LDCs where the economically active population outside agriculture will grow faster than that within, the LDCs must develop competitive businesses in manufacturing and services, says the report. It identifies challenges that LDCs will face in this effort, among them improving physical infrastructure. UNCTAD finds that donors must reallocate aid to address these challenges.

Important African Policy Developments

Global Issues for Global Citizens - An Introduction to Key Development Challenge. Written by 27 World Bank experts, this book draws on the Bank's global capabilities and experience to promote an understanding of key global issues that cannot be solved by any one nation alone in an increasingly interconnected world. It describes the forces that are shaping public and private action to address these issues and highlights the Bank's own work in these areas. Covering four broad themes --global economy, global human development, global environment, and global governance -- this volume provides an introduction to today's most pressing global issues.

What If Developing Countries Could Finance Poverty Eradication from Their Own Public Resources. In this contribution to the 2006 Social Watch Report, Jens Martens of Global Policy Forum calls for a "paradigm shift in the international discourse on development financing." Martens draws up concrete policy recommendations to enable poor countries to mobilize "enough domestic resources to guarantee universal access to reasonable quality essential public goods and services."

A Policymakers’ Guide to Dutch Disease tackles the issue of Dutch Disease - that is, the theory that aid flows will lead to an appreciation of the real exchange rate which can slow the growth of a country's exports- and that aid increases might thereby harm a country's long-term growth prospects.

Despite the general focus on Africa's failings, the region also has many success stories, argues this Afrol News article. Cape Verde, Botswana and Seychelles amongst others have achieved a level of development moving them out of the category of Least Developed Countries. These countries now feel "penalised for progress," as donors disengage while investors are still not convinced, bringing "new hardships" to governments trying to move their nations from a middle-income level "to a wealthy state of general welfare."

A World Bank report says governments in developing countries should invest more in their young people, or else run the risk of dealing with social tensions and dropping behind in the global economy. The World Development Report 2007 - Development and the next Generation points out that there are now more than 1.3 billion young people in the developing world -- the largest number ever in history. The report says the sheer number of young people can stretch the capacity of governments to deliver services and jobs, "which poses risks for their countries and the world at large.

The 2006 Least Developed Countries Report found that although the world's poorest countries have enjoyed the highest growth rates in two decades, human well-being in these mainly African countries has not improved. This Foreign Policy In Focus piece argues that the lack of rural communities' participation in governing their natural resources largely accounts for that imbalance.

A high-level delegation from around 24 African countries completed a two-day visit to Malaysia to participate in a Knowledge Economy Seminar in Putrajaya and Kuala Lumpur. This was jointly organized by the Malaysian government and the World Bank to facilitate the exchange of development experiences. Participants included finance ministers and other high-level government officials from Sub-Saharan African countries as well as observers from four Asian countries. The initiative aims to share Malaysia’s experience of successful sustained high growth and rapid poverty-reduction and in moving from a low-income country to an upper middle income country in forty years.

The United Nations Conference on Trade and Development Report for 2006 urges countries of the South to implement more autonomous policies, and to strengthen further the global partnership for development to achieve the Millennium Development Goals (MDGs). In proposing discussion of proactive industrial policies and government support for some economic sectors, "we are not recommending any anti-trade stands," said UNCTAD officials.

Defining the Right to Food in an Era of Globalization. Expressing grave concern with the continuing increase in global hunger and the current food crisis in Africa, this report insists the time has come to view hunger and famine "as a violation of the human right to food." While national governments have the primary obligation to fulfill their citizens' right to food, in an era where domestic actions affect people in other countries, governments must assume obligations beyond their own borders. Being more powerful than individual states, the World Bank, International Monetary Fund and World Trade Organization, as well as large transnational corporations must also take on due responsibility to fulfill this human right.

A new working paper A Primer on Foreign Aid explores trends in aid, the motivations for aid, its impacts, and debates about reforming aid. It begins by examining aid magnitudes and who gives and receives aid. It discusses the multiple motivations and objectives of aid, some of which conflict with each other.

The Millennium Development Goals report 2006 considers progress made by the international community towards the Millennium Development Goals (MDG's). The authors assert that there are significant challenges ahead if the MDG's are to be met by 2015, however they note that certain goals are within reach.

Managing Director of the International Monetary Fund Rodrigo de Rato has drafted a proposal to increase China, Mexico, South Korea and Turkey's voting shares at the Fund, while delaying steps to increase the influence of the world's poorest countries. With no guarantee that the IMF will implement the proposal's second phase of giving "greater voice to poor countries," African countries fear the reform will weaken their position. British Chancellor of the Treasury, Gordon Brown "";has publicly backed calls for a greater voice for African countries at the Fund", and with a special appeal to Britain, African IMF representatives strongly call on other countries to block Rato's proposal.

Sustainable Land Management provides strategic focus to the implementation of sustainable land management components of the World Bank's development strategies. Sustainable Land Management is a knowledge-based procedure that integrates land, water, biodiversity, and environmental management to meet rising food and fiber demands while sustaining livelihoods and the environment. Sustainable Land Management -- Challenges, Opportunities, and Trade-offs, aimed at policy makers, project managers, and development organisations, articulates priorities for investment in land and natural resource management and identifies the policy, institutional, and incentive reform options that will accelerate the adoption of productivity improvements and pro-poor growth.

Informal cross border food trade in Southern Africa highlights the issue of trade barriers in Southern Africa and its impact on informal cross boarder trade in the region. The report shows that while there may be surpluses in neighbouring countries, food deficit countries such as Zimbabwe continue to experience high grain prices due to import/export restrictions.

The South African Institute of International Affairs has published four new trade policy reports: Services Trade in Southern Africa - A Literature Survey and Overview; Developing a Comprehensive IBSA Strategy - On WTO Agriculture Negotiations; South-South Economic Cooperation - The India-Brazil-South Africa Case and The Aerospace Industry - Prospects for Strategic Cooperation among the IBSA Countries (Mills Soko)

For African cotton farmers, more crops equal less pay. Despite cultivating more land than in previous years, cotton farmers in Burkina Faso earn less as raw cotton prices dropped more than 20 percent from 2004 to 2006. Cheap cotton from the US drives prices down. While Burkinabes cannot replace cotton for any other crop, the US government keeps the US cotton industry alive by giving US$1 billion in subsidies to only 25,000 farmers. With WTO negotiations collapsed and congressional and presidential elections looming in 2008, US legislators may not agree on any subsidy cuts at the 2007 Farm Bill revision.

The ninth issue of the African Terrorism Bulletin, a quarterly newsletter produced by the Organised Crime and Money Laundering Programme of the Institute for Security Studies (ISS), analyses terrorism and counter-terrorism strategies in Africa.

Funding and visiting AIDS orphans projects in Malawi, pop icon Madonna joins the growing list of celebrities putting resources into Africa. Christian Science Monitor reports that most aid agencies welcome the arrival of celebrities in the world of humanitarian aid, appreciating the press attention that "these A-listers" can draw to development in Africa. Other analysts, however, fear that too many donors preoccupy themselves with projects that make them "look good," rather than promote long term development.

Brenthurst Foundation Developments

Established in April 2005 by the Oppenheimer family, the Brenthurst Foundation is on the frontier of knowledge in contributing to a debate around strategies and policies for strengthening Africa's economic performance. It is aimed at the creation of an environment conducive to positive economic change.

During the first part of 2007, the Foundation organised or participated in a number of key events:

  • The Foundation hosted a Dialogue on Southern Africa and International Terrorism from 25 to 27 January with the aim of determining whether an emergent threat existed, the likely magnitude and manifestation of this threat, its potential effect and whether the region had the capacity to contain it – should it arise. Participation by the South African Intelligence Services, including the Minister, the US National Intelligence Council, the UNODC, the Institute for Strategic Studies and the SA Institute for International Affairs, ensured the quality of the debate – with particular value being derived from the formal participation of the respective intelligence communities. Due to the sensitivity of some of the discussions and an agreement on non-attribution, a report on the conference proceedings will not be published. Certain papers were presented without restriction and these, along with an article by Greg Mills which emanated from the conference, are available on the Brenthurst website.
  • The Foundation also participated in the Conference on Breaking Global Deadlocks, with specific reference to the threat of climate change and the Kyoto Protocol, hosted by the Canadian Centre for Global Studies and the Centre for International Governance Innovation in Toronto from 28 to 30 January. The conference was chaired by the Hon Paul Martin MP, ex-Prime Minister of Canada and the proposals were given impetus through their submission to a number of high profile forums in the USA and Europe. Shortly thereafter, a major public shift in position by US lawmakers provided momentum to the stalled protocol.
  • The second in the series of China-US-Africa Trilateral Dialogues took place in Beijing from 4 to 7 March. Participation by senior government officials and academics from all three participants contributed to the momentum generated at the first meeting in August 2006 and wider African representation from African countries, including the AU Commission, provided more authority to the direction of the debate. The third and final meeting is scheduled for later this year in Washington DC. A paper reflecting the African view of the potential for US-China competition in Africa for commodities will be available on the Brenthurst Foundation website shortly.
  • A research trip was conducted to Malaysia from 14 to 17 March with the objective of determining how Malaysia has dealt with poverty, sustained economic growth and diversification, the influence of regional factors and potential racial friction resulting from discriminatory government policy – with its obvious application on the RSA. Discussions, briefings and debates were concluded with the Ministry of Trade and Industry, the Asian Strategy & Leadership Institute, the Institute of Economic Research, the Bank Negara, the economic Planning Unit in the Office of the Prime Minister, the Multi-media Development Corporation and the Institute of Strategic and International Studies. These were complimented by appointments with Dr Mahathir Mohamad to discuss the New Economic Policy and with the SA High Commissioner to obtain a South African view of the subject.
  • Vietnam & Africa: Comparative Lessons and Mutual Opportunities, was co-hosted by the Brenthurst Foundation and the Institute of African and Middle East Studies on March 30th 2007 in Hanoi, Vietnam. The conference brought together representatives from Africa and Vietnam to compare and draw lessons from each other’s experiences in development, as well as to explore opportunities for mutual co-operation between Africa and Vietnam. Today Africa is faced with the crises of poverty, hunger and the challenge of accelerating the economic growth rate. Vietnam on the other hand, has been able to deal with issues of poverty and hunger. This can be attributed to commitment to appropriate policy and institutional reforms, efficient use of overseas development assistance, establishment of mutually beneficial trade and commercial relations and pro-poor objectives that associate economic growth with social equity. These are important ingredients that, if applied, could stimulate economic and social development in Africa. The conference papers are currently being edited with a view to being published on the Brenthurst Foundation website shortly.

The Reference Publications section of the Brenthurst Foundation website has been reorganised. New publications include papers presented at the Globalisation and Economic Success conference in Cairo late last year.

The website contains a wealth of other reference information and we have reorganised the publications section to make it easier to find reports and documents. Recent media articles include A fresh chance to help Rwanda (Business Day), China in Africa - can it be win-win? (Business Day), Killing Pablo’s Image - Security and State-Building in Colombia (Rusi Journal), Mission Possible in Afghanistan (Business Day), A new image for Colombia ( International Herald Tribune) Eighth pillar of wisdom for Iraq and Before we put our soldiers in harm’s way (Business Day).

Contact Details

Physical address:
E Oppenheimer & Son,
St. Andrew's House,
6 St Andrew’s Road ,
Parktown,
Johannesburg

Postal address:
PO Box 61631
Marshalltown
2107
South Africa

Website:
www.thebrenthurstfoundation.org
E-mail:
leila.jack@eoson.co.za
Tel: +27 (0)11 274-2096
Fax: +27 (0)11 274-2097
Please click here if you would like to be removed from our distribution list.

No comments: