Private Chinese outbound investment, not as well-known as government-led investment, offers both opportunities and challenges for Africa, according to this paper. The significance of Chinese private-sector investment is already visible in the burgeoning manufacturing sector in some parts of Africa, and the trend will continue to grow in the near future. The underlying force behind this trend is the increased pressure of industrial restructuring in coastal China, a force that drives some labour-intensive firms to relocate to other parts of the developing world, including Africa. The author argues that African host country governments can respond to this phenomenon with proactive development policies and strategies to maximise private Chinese investment for the benefit of their own economies.
Health equity in economic and trade policies
In this new report, Eurodad reports that hidden ownership of companies and other legal structures facilitate tax evasion, and argues that better information about who owns and controls companies and other set-ups is key to bringing trillions of dollars of offshore wealth back into the tax net and to help prevent future capital flight. The authors call for governments to create publicly available registers of the owners and controllers of companies, trusts and other legal structures and to improve compliance with, enforcement of and sanctions for anti-money laundering rules.
Pierre Laporte, Minister of Finance for the Seychelles, revealed government’s new plans for a Corporate Social Responsibility (CSR) Fund in his budget speech in December 2012. Businesses now have four options to contribute to social development, namely sponsorship, donations, direct funding of community projects, or contribute to the new Fund. All businesses that make a turnover of SR 1 million and above will be expected to contribute to the Fund a rate of 0.5% of their turnover. The Minister clarified that Government will continue to fund infrastructure projects in districts, and CSR funds would be expected to go to areas such as environment, beach and coastal management projects, health and wellness including sports, renewable energy and others to be decided upon. Supporters of the Fund are hoping it will become a sustainable funding mechanism for civil society groups.
Senior delegates from 63 of the 79 African, Caribbean and Pacific (ACP) countries, including some 15 Heads of State, attended the ACP Summit in December 2012. This summit declaration highlights members’ determination to “stay united as a Group” and retain relevance by “enhancing the ACP-European Union (EU) relationship as a unique North-South development cooperation model, while developing South-South and other partnerships. A new working group will reflect on the response of the ACP Group to global challenges. Officials also decided to set up a high-level panel to advance trade negotiations with the EU.
African Union ministers of trade and agriculture gathered in early December 2012 at a joint conference in Addis Ababa to discuss their growing and increasingly overlapping work agendas. Agriculture remains the key source of income and employment for most Africans, while efforts intensify across the continent to liberalise intra-regional trade. In this blog, the authors summarise the main resolutions from the summit, while the final outcomes document is being drafted. Ministers agreed to accelerate implementation of the Plan of Action for Boosting Intra-Africa Trade in both agricultural commodities and processed food products. This is hoped to lead to an early deal to liberalise key regional food staples markets, as part of the continental free trade area. They also identified the national and regional compacts and investment plans of the Comprehensive Africa Agriculture Development Programme (CAADP) as the main instruments to define and operationalise trade-agriculture collaboration, while strengthening the capacity of relevant institutions and producers to effectively participate in these innovative practices and monitor their impact at country level. While they acknowledged the need to work at national, regional and continental levels to remove trade barriers in agricultural commodities, they emphasised that without immediate follow-up, food security will remain uncertain.
This book presents a detailed account of South-South collaboration in the health biotechnology sector. In particular, it casts light on the factors that guide effective scientific partnerships and exchanges. The authors explore these issues by combining a wide range of quantitative and qualitative methodologies, including co-publications analyses, in-depth surveys of biotechnology firms and interviews with around 350 researchers, entrepreneurs and policy-makers in developing countries. The key findings indicate that the level of South-South collaboration among researchers in health biotechnology remains low but is slowly increasing and that entrepreneurial collaboration seems to be more prevalent. Collaboration has helped to extend capacity in health biotechnology research, manufacturing and innovation to an increasing number of developing countries and thereby lessened the divide between them. Such collaboration has strongly focused on shared health needs and has helped to increase the availability of more affordable health products and services. Governments and non-governmental organisations have also been able to foster closer ties between researchers by establishing programmes and extending funding for collaboration. Nevertheless there is still a lack of dedicated resources.
Many developing countries have entered into bilateral investment treaties (BITs) to protect foreign direct investment (FDI), which entail substantial restrictions on the sovereignty of recipient countries. At the end of 2011, 2,833 BITs had been signed worldwide. The granting of legal protection to foreign investors under BITs and other agreements (such as chapters in free trade agreements negotiated with developed countries) has often been seen as necessary to attract FDI. However, the author of this article argues that it is doubtful whether they have actually been effective in generating investment flows and promoting development gains. Moreover, many low or middle income countries that have signed BITs have been sentenced by international arbitral tribunals to pay millions of dollars as a result of alleged violations to these treaties. The authors caution that awards by tribunals have been based on overbroad definitions in the agreements and ambiguous legal standards such as “fair and equitable treatment” that have led to negative court outcomes for policies adopted in the public interest. The author presents a case study of Uruguay, where the government is being sued by a major tobacco manufacturer for issuing stricter packaging and labelling requirements for cigarettes to reduce tobacco consumption.
Least developed countries (LDCs) that are members of the World Trade Organisation (WTO) have submitted a request to the TRIPS Council for an extension of the transition period for them to comply with the TRIPS Agreement for as long as they are classified as LDCs. The request was submitted by Haiti, on behalf of the LDCs, at a meeting of the TRIPS Council on 6-7 November 2012. The exemption will continue to allow LDCs to access affordable medicines without the risk of violating patents on the medicines. Haiti argued that because of their extreme poverty, LDCs need the policy space to access various technologies, educational resources, and other tools necessary for development. Furthermore, LDCs have such small economies that they do not represent a significant loss of profits for pharmaceutical patent owners. Most intellectual property-protected commodities are simply priced beyond the purchasing power of these countries’ governments and their nationals, the spokesperson for Haiti added. Haiti has asked for this issue to be put on the agenda of the next TRIPS Council meeting, scheduled to take place in March 2013.
In this policy brief, the authors argue that mineral wealth can be harnessed for equitable and sustainable development if countries: design and implement comprehensive, inclusive and rights-based social policies; build strong democratic institutions; and develop the policy space to foster productive diversification while safeguarding macroeconomic stability. Public revenues generated through mineral production can provide a starting point for building state capacity that delivers on economic and social development objectives. States should enhance their capacity to strategically mobilise and allocate resources, the authors argue, as well as enforce standards and regulations, and establish social pacts through funding, delivering and regulating social services and social programmes. For countries that are dependent on mineral revenues, social policy is a crucial instrument to harness the development potential of mineral wealth while helping to avoid the pitfalls associated with the resource curse.
From a mere US$2 billion in 1999, annual Sino-African trade has now reached $160 billion, making China a leading trade partner for Africa. China’s economic cooperation with Africa is also fuelled by investments and aid. In this report, CCS argues that Africa needs to include transparency, governance and public service delivery are included in the agenda for the Forum on China-Africa Cooperation (FOCAC), which was set up in 2000 to formalise bilateral engagement between China and Africa.