RSS

Monthly Archives: November 2011

World Bank Group Works to Improve Tax Transparency for Developing Countries, by the World Bank, Wednesday, November 30, 2011


On November 10, 2011, The World Bank Group adopted a new policy governing the use of offshore financial centers in its private sector operations and confirming its commitment to supporting countries through technical assistance. The new policy promotes tax transparency using international standards established by the Global Forum on Transparency and the Exchange of Information for Tax Purposes (“Global Forum”). The Global Forum currently has over 100 member countries who have committed to these standards and have agreed to undergo substantive peer reviews by other members of the Global Forum. The results of the reviews allow countries to identify areas for further improvement.

The Investment Climate Department of the World Bank Group will play an important role in the implementation of this policy and in the World Bank Group’s tax transparency initiative by providing technical assistance and advice to countries requesting help to improve the transparency of their tax systems. This would include specific assistance to help them address areas for improvement identified during the Global Forum’s review process.

“The World Bank Group’s investment climate tax transparency program will play an important role by contributing to the global agenda of curbing tax evasion and improving monitoring of the flow of funds. The technical assistance provided will significantly contribute to assisting developing countries achieve higher levels of tax transparency.” said Pascal Saint-Amans, Head of the Secretariat for the Global Forum on Transparency and the Exchange of Information for Tax Purposes.

Earlier this month in Cannes, the G20 reaffirmed the importance of prioritizing the link between strong tax regimes, fostering tax transparency in developing countries and development.

The objective of the Investment Climate department’s tax transparency advisory program is to assist developing countries improve their ability to enforce their domestic tax systems and potentially increase revenue collection. Areas of focus for the program include:

  • Reforming tax legal and regulatory frameworks
  • Streamlining and establishing tax administrative procedures
  • Establishing transfer pricing frameworks
  • Strengthening accounting standards and reporting obligations
  • Helping countries meet their exchange of information obligations as set out in international agreements
  • Plus: A strong learning component for tax practitioners through guidebooks on issues like transfer pricing, peer-to-peer learning through regional practitioners network workshops and training.

The tax transparency initiative is being implemented in partnership with the IMF, regional development banks, and other relevant stakeholders including the OECD, the International Bureau of Fiscal Documentation, and the European Commission.

The Investment Climate Department is already seeing strong demand with advisory support already being provided to Georgia, Bosnia and Herzegovina, Albania, Botswana and Thailand and requests for assistance from several other countries. Tax transparency trainings have also been held in Latin American and the Caribbean, Africa and East Asia and the Pacific with tax practitioners from over 60 countries attending.

 
2 Comments

Posted by on November 30, 2011 in Uncategorized

 

Why Stretching is Good For You


Why Stretching is Good For You.

 
Leave a comment

Posted by on November 30, 2011 in Uncategorized

 

and life goes on


choforche:

magnificiente

Originally posted on Helena Hildur W.:

Lighting the kitchen fire when dawn is yet to come.
Paying bills and answering mails while grey morning light edges into the room. An hour later, the dog and I are running free, bare-headed under a silvery November sky.
Memorizing the atmosphere and colours of the day, identifying the corresponding pigments; translating visual perception into materiality. Bringing it into the studio.

To kindle the fire inside. Another small step, and the path unfolds.

Afterwards, a pause and something to eat before it’s time to reach out again. There is no lack of work here.
At ART LAB gnesta, we realize that we’re into something even greater than we understood at the outset; re-inventing art as our social method.

To all friends in Ukraine: there are stories yet untold, and relations to develop. I hope to come back to you, from this new platform. For now, just this memory from Lviv…

View original 16 more words

 
Leave a comment

Posted by on November 30, 2011 in Uncategorized

 

The large size of government and government spending: An affront to liberty, By Chofor Che, Wednesday November 30, 2011


The large size of government and government spending is misguided in a way that is inimical to liberty. Over the past century the size of government spending has grown outstandingly in advanced economies. Government spending has also grown in developing countries but typically to lower levels. Big spending programs are usually put in place for services such as health, education, defence as well as social security and welfare. Modern governments are supposed to provide for public goods as well as services and programs that affect the lives of individuals.

Big government is a reality in virtually in all rich democracies. In most developed countries, government spending accounts for over half of gross domestic product (GDP), while in the even lowest spending economies, it accounts for about one quarter of GDP. Developing countries are usually characterised by smaller government spending as a share of GDP because much of economic activity is outside the cash economy, and the revenue base for governments can be really limited. Developing countries in most cases cannot afford the elaborate welfare programs and social safety nets of developed economies.

One area where governments in the developed world have gradually retreated in recent years is the public ownership of corporations, especially financial institutions, utilities and resources and industrial companies. This same move is slow in the developing world. In the developed world many such enterprises and corporations have been sold to the private sector.

Economic theory proposes that governments should provide so called public goods, such as policing and defence which benefit the public at large because the free market would under furnish such services and goods. Government today does not limit itself to the provision of these public goods, but also distorts the provision of other goods and services like agriculture. Governments also furnish expensive programs as social safety nets, welfare as well as major infrastructure, which benefit direct users of these programs as well as the public at large. Such programs also referred to as quasi public goods often have a strong redistributive element, from wealthier taxpayers to big consumers of the programs.

The literature on fiscal federalism has developed several principles for assigning expenditure responsibilities among various governments. Practically, most constitutions assign legislative responsibilities explicitly and expenditure responsibilities implicitly. These assigned principles include apportioning responsibility to the order of government whose population benefits from a public good, decentralising or devolving program administration when there is strong advantage in feedback from the population being served and furnishing for some federal role in important programs that redistribute wealth among individuals. In various programs there is allowance for both orders of government to be involved.

Legislative responsibilities are usually assigned by constitutions and not expenditure responsibilities. The responsibility to administer spending programs usually stems from legislative responsibility. Exceptions exist notably in integrated federations such as Germany, where the constitution may lay down that constituent units or sub national units of government even including local government should administer certain programs in areas of concurrent legislative responsibility.

The assignment of responsibilities in federations is best addressed via wider considerations about devolved forms of government. Arguments for decentralisation or devolution are of the view that it furnishes greater public choice because lower tiers or sub national units of government are more responsive and closer to local populations. In such circumstances, multiple constituent government units or sub national government units can act as policy laboratories and learn from one another. Decentarlisation provides checks against abusive concentration of power as well as corruption and other malpractices attributed to big government and centralisation. However, those who argue for the welfare of the individual citizens and the need for coherent policies across a country usually prefer a more centralised from of government.

The big spending areas of education, pensions, health care and welfare further complicate the situation. For purposes of local responsiveness and cost efficiency, their management may be decentralised, but this may create barriers to mobility and lead to citizens across the country getting differing treatment.  Therefore for purposes of program integrity and equity, many argue that central government should have a role. I concur, but this role must be limited.

To my view, governments need not over tax wealthier tax payers to achieve this aim. The strong redistributive operation by government defeats the purpose of limited government in a free society.

 
2 Comments

Posted by on November 30, 2011 in Uncategorized

 

DEVALUATION OF THE CFA FRANC-JANUARY 2012 By Abdoulaye Villard Sanogo, translated by Martial Frindéthié


This is privileged information. The member countries of the CFA-Franc-Zone will soon be brooding over “black thoughts.” except for last-minute reorganization, in forty days exactly, that is, on January 1, 2012, the CFA Franc will be devaluated, once again. The CFA, which is currently pegged to the euro at the exchange rate of 1 euro for 655.59 CFA, will soon fall at the rate of 1,000.00 CFA for 1 euro. According to a European diplomat, French president Nicolas Sarkozy has charged Alassane Dramane Ouatara with bringing the news to his peers of the WEAMU (West African Economic and Monetary Union); which explains Ouattara’s last week’s grand West African tour.

“Denis Sassou Nguesso of Congo-Brazzaville has been directed to inform his peers of the Monetary and Economic Community of Central Africa (CEMAC) and also of the Comoros Islands,” the diplomat stresses, adding that Sarkozy has taken upon himself to personally notify susceptible Senegalese president Abdoulaye Wade, who is presently facing social and political discontent at home. Wade is expected to later inform his peer of tiny Guinea-Bissau.

The decision to devaluate the CFA is a consequence of the crisis in the Euro-Zone, which has for the most part been carried by Germany. Our source indicates that Merkel has stressed to Sarkozy the importance of putting some budgetary order in France’s ex-colonies before it is too late. However, it is clear that this measure is less intended to shelter the economies of the CFA-Zone than to save the Euro-Zone by preventing a further crash of France’s economy, as the burden of saving the euro becomes too much for Germany to bear. How would CFA devaluation really help France?

France’s gain would be enormous in financial and budgetary terms. The war that France fought openly against Cote d’Ivoire in April 2010, and which resulted in the fall of President Gbagbo and the installation of puppet Alassane Ouattara, was as bloody and savage as to obliterate most nationalist inclinations in Africa. The war has eradicated any tendency in French-speaking African leaders to enfranchise their countries’ economies from France’s dominion by diversifying their political and economic partnerships. In Cote d’Ivoire, in the aftermath of France’s 2010 military assault, all the 1961 Franco-Ivorian “agreements” got revived. French companies are now snatching all the contracts in the country. French Bouygues has taken over the economy of Cote d’Ivoire. Today, it appears normal that Sarkozy should compel the government of Cote d’Ivoire to use France as an indispensable go-between on the global market. France has priority right in Cote d’Ivoire. It is first to France that Cote d’Ivoire should sell its export commodities and from France that it should buy its imported goods. With the CFA devaluation, countries of the CFA-Zone will spend a lot of CFA in exchange for few goods from France. This inequality in the terms of exchange, compounded with France’s shameless exploitation of Francophone African agricultural and geological resources, means that very soon France will garner the billions of Euros Sarkozy has been desperately seeking everywhere in order to pull France out of its economic slump. As an economic expert has once predicted, African countries will use 40% of their assets to refurbish France’s broken economy.

As it happened during the 1994 CFA devaluation, once again aid-seeking African countries will receive a lot of money from European countries, since the euro’s value will increase with the devaluation of the CFA. Once again, the naïve praise-singers lodged in African presidential palaces, unaware of the deception, will greet the “rain of billions” brought down by European “benefactors” in a carnivalesque celebration. Future generations of Africans, once again, will be left to service huge debts to Europe with high interest rates.

The cost of foodstuff, which has skyrocketed since Ouattara’s usurpation of power in Cote d’Ivoire, will rise even higher from January 1 onward. The devaluation is only advantageous to those who export. However, most countries in the CFA-Zone do import more than they export. They import almost all of their manufactured goods, their processed food, and their rice. Starting January 2012, African importers will need to spend 1,000 CFA for every 1 euro-worth of the commodities they buy from Europe. African retailers will raise their prices on local markets to compensate for their losses. The crunch will be felt in African pots and pans and gas tanks. The poor African populations will only keep enduring, powerlessly.


 
8 Comments

Posted by on November 30, 2011 in Uncategorized

 

Transposing Frederic Bastiat’s thoughts on Opportunity Cost to the situation in Africa: The case of Cameroon, By Chofor Che 24/11/2011



Frederic Bastiat shows that, every time we make a choice, we give something up.[1] Bastiat adds that, in the economic sphere, an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.[2] African governments still fall short, when it comes to making decisions preferred by their people. These actions give rise to several effects such as unemployment, effects which are not seen in the short run. Despite cries on the need for the participatory role in development policies whereby development initiatives are conceived with the involvement of the local populace, many governments in Africa still continue to conceive policies and impose them on local communities. This accounts for the increasing poverty levels, poor entrepreneurial initiatives, poor social amenities, weak decentralisation policies, corruption as well as porous development initiatives. By focusing on the case of Cameroon, this contribution therefore seeks to identify three areas were the respect of individual liberty falls short. This contribution first of all delves into philosophical concepts surrounding opportunity cost, individual liberty and limited government in a free society. Examples are analysed in the case of Cameroon with respect to Bastiat’s point of view including poor governmental action in the country’s cement industry, poor privatisation of the road sector to the detriment of the domestic air transport sector and finally a poor policy in the energy sector. A conclusion is then advanced identifying other countries that have to also revisit some of their policies like Chad, Mali and Nigeria. Credit is also given to countries like Botswana and South Africa, for these countries have gone a long way to uphold the principles of free markets, individual liberty and limited government interference.

 

Philosophical concepts of opportunity cost and the purpose of limited government in a free society

When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. Scarcity of resources is one of the more basic concepts of economics. Scarcity necessitates trade-offs, and trade-offs result in an opportunity cost. While the cost of a good or service often is thought of in monetary terms, the opportunity cost of a decision is based on what must be given up (the next best alternative) as a result of the decision. Any decision that involves a choice between two or more options has an opportunity cost. In relation to government decision, choices have to be made with respect to its available resources. The resources we are referring to here are land, labour and capital. Once a country decides to increase production in relation to a good or service after obeying the principles of opportunity cost, ways to achieve this include borrowing, technological advancement or more taxation. When a government decides to increase taxes to achieve this aim, then individual liberty is trampled upon. The people bare the brunt of certain government decisions.

Government is a legalised entity. One of the most perplexing problems of the ages seems to have been that of finding the proper place of government in society. The purpose in having a government with certain powers is not to concede that the scope of governmental power over the affairs of individuals should be all inclusive, or that one power justifies another.

In order for individuals to benefit from living together, they require a society that respects individual rights. The sole purpose of government is to protect these rights. A government possesses a legal monopoly on the use of force, which it must use only in retaliation against those who initiate force. Government protects individual rights by placing the use of retaliatory force under objective control. To carry out this mission, a government performs three basic functions: the police, to protect individuals from domestic criminals; the military; to protect individuals from foreign threats; and a court system, to enable individuals to settle disputes without resorting to force. The government of a free nation does not regulate its citizens, provide them a social “safety net” or try to influence their (non-coercive) behavior in any way.

On the other hand, the absence of Government allows anarchy to rob the people of their liberty, where as at the other extreme, the government itself becomes the robber. The task in a liberal society therefore is to find that point where all the people will enjoy the greatest possible degree of liberty especially economic gains. It will allow full enjoyment of liberty by all who refrain from going beyond their right to and imposing on the liberty of others.

Having defined opportunity cost and provided arguments on the purpose of government in a free society, it is now important to review certain examples of actions carried out by the government of Cameroon, actions viewed as suspicious by a majority of the populace. It should be noted that these examples do not only relate to Cameroon alone, but to several African countries.

 

Focus on Cameroon’s cement industry

The tribute that the people pay to business is what is seen. The tribute that the people would have to pay to the state or to its agents in the socialist system is what is not seen. What is this so-called tribute that people pay to business? It is this: that two men render each other a service in full freedom under the pressure of competition and at a price agreed on after bargaining.[3] This thought propounded by Bastiat pushes us to question the paradox surrounding market competition in the cement sector in Cameroon.

The cement sector in Cameroon is suffering from numerous government restrictions. The country’s lone company has produced and marketed cement for the past 30 years. This action is indeed viewed by many as suspicious. Not only are business operators interested in the cement industry left out of the market, but government owns monopoly of this sector by imposing exorbitant taxes on those who venture to get into the industry. Despite news that there is no longer monopoly in this sector, free market principles are still to prevail in the scenario of Cameroon’s cement industry. There is a contention that if this sector is opened to free trade and not over regulated, then free trade will prevail.

Success stories in the cement sector in Africa can be drawn from countries like South Africa and Botswana. A county like South Africa was able to afford ‘state of the art’ infrastructure during the 2010 World Cup competition due to her growing cement industry. This country was able to mobilise and construct hotels, stadia and distraction sites for visitors during the 2010 World Cup competition, due to the presence of numerous cement producing competitors. This effort was amplified by neighbouring countries with a success story in cement production like Botswana. A great part of this success is owed to free market principles and the encouragement of competition within the domestic and international circles.

Bastiat is therefore of the view that if we were to take into consideration what is not seen, because it is a negative factor, as well as what is seen, because it is a positive factor, we should understand that there is no benefit to industry in general or to national employment as a whole. This school of thought also applies to the cement industry in Cameroon. There is therefore a need for the government of Cameroon to encourage local as well as international actors to delve into this industry.

 

The effects of privatisation on the road and domestic air transportation sectors in Cameroon.

Nothing is more natural than that a nation, after making sure that a great enterprise will profit the community, should have such an enterprise carried out with funds collected from the citizenry. But I lose patience completely, I confess, when I hear alleged in support of such a resolution this economic fallacy: “Besides, it is a way of creating jobs for the workers.”  This is a position Bastiat advances in the domain of public works. He goes further to add that, the state opens a road, builds a palace, repairs a street, digs a canal; with these projects it gives jobs to certain workers. That is what is seen. But it deprives certain other labourers of employment. That is what is not seen.[4]

The Republic of Cameroon closed down a number of airports concerned with domestic air transportation in the 1980s after the economic crisis. The government argued that in so doing, more resources would be shifted to the road sector. Unfortunately, this sector remains deplorable today. Resources were not only shifted to the road sector but this sector was privatised. Not only were airports shut down all around the country but many people lost their jobs. The country lost some of her finest pilots. Today government has admitted that ten years after privatising the road sector, things have instead gone from bad to worst. The reason for bad results following such privatisation policy is because the process was imposed by the World Bank and International Monetary Fund (IMF) on most African countries including Cameroon. Moreover, the Government of Cameroon continued to interfere in the process.

Resources which are being wasted in the road sector due to porous budgeting at the Country’s Parliament should be ploughed back into the domestic air sector. Many airports are wasting away in many parts of the country. Moreover, reopening these airports would create employment for many Cameroonians.

 

Issues with the energy and power sector in Cameroon

Society is the aggregate of all the services that men perform for one another by compulsion or voluntarily, that is to say, public services and private services. This is a view realistically observed in our day to day lives, a view projected by Bastiat.[5] The first, imposed and regulated by the law, which is not always easy to change when necessary, can long outlive their usefulness and still retain the name of public services, even when they are no longer anything but public nuisances. The second are in the domain of the voluntary, that is., of individual responsibility. Each gives and receives what he wishes, or what he can, after bargaining. These services are always presumed to have a real utility, exactly measured by their comparative value. That is why the former are so often static, while the latter obey the law of progress. These thoughts hunt the energy and power sector in most African countries, especially Cameroon.

Access to energy is essential for economic, social and political development. It encourages individual development via an improvement in educational and sanitary conditions. It makes economic development possible through the mechanisation and modernisation of communications. It plays a role in improving the economic environment by opening the way to more resourceful public sector intervention, greater respect for the environment and a strengthening of democracy. Despite its enormous potential in fossil and renewable energy sources, however, Africa and Cameroon in particular suffers from major energy deficits. Most governments especially the Cameroonian government has made a choice to continue allocating a fabulous amount of money to poor electricity supply.

The continent’s resources are underexploited or exported in raw form or wasted in the course of extraction or transport. For instance hydraulic basins are found in Central Africa. The Republic of Cameroon is based in Central Africa. The truth is that Cameroon still suffers from chronic power failure due to unexploited power sources. The hydraulic basins of Central Africa, the Rift Valley fault and the sunshine from which the continent in general benefits provide sources of hydraulic, geothermal and solar energy which are rarely equalled elsewhere in the world. At present, however, only a tiny part of this potential is exploited: 7 % of hydraulic capacity and less than 1 % of geothermal capacity, while photovoltaic development is embryonic. With what is being used by the Cameroonian government for electricity supply, a sustainable option could have been thermal energy. This source of energy is not exploited. This would cause the government less, in terms of energy supply and resources could now be diverted to the agricultural sector which needs to be mechanised. With the situation at hand, Cameroonians suffer from black outs and the electricity bills are exorbitant. The government of Cameroon needs to start rethinking her policy strategy and opt for more sustainable energy venues. Resources equally need to be focused on agriculture. The picture in the minds of Cameroonians today is that the privatisation process especially in the electricity sector, has failed woefully. Privatisation is a beautiful concept which propels development but when such a process is meddled in by government interference, then the principles of free markets and individual liberty are trampled upon.

 

Recommendations and Conclusion

            In actual fact, this contribution did not set out to criticise the government of Cameroon nor the policies of similar situated countries. The Republic of Cameroon has been credited for several policies that work. Policies that encourage free markets and individual liberty. What this contribution did was to criticise some government policies which stifle the creation of jobs and free markets in Africa.

Thus the recommendations furnished above are not only limited to a country like Cameroon. For instance, a country with huge potentials like Nigeria may want to reconsider her power and energy supply strategy. A vast majority of Nigerians still suffer from power failure. Despite a great production of fuel and an efficient human resources bank, a lot of entrepreneurs especially those depending on sustainable power supply for efficient business success, remain helpless. These recommendations can also be proposed to countries like Chad, Mali and Burkina Faso. Chad faces problems of transportation like Cameroon. There is need for this country to also revisit her domestic transportation industry and divert some attention from the road sector to the domestic air transport industry.

Despite concerns raised above, there are several countries in Africa that respect the principles of free markets and individual liberty. Such countries include South Africa and Botswana. These countries have been able to reminisce on Frederic Bastiat’s thoughts on opportunity cost and apply them sustainably. South Africa and Botswana have been able to expand their cement supply industry, improve on their domestic road and air transport sectors and diversify their power supply industry. Evidence from South Africa remains incredible. South Africa has been able to prove to the whole world that she is a growing economic power. Most of this success is owed to the respect of free markets, individual liberty and limited government interference.

What government members, public policy actors, economic planners and economists in Cameroon and other African countries should do is to start revisiting strategies of improving on certain government action which stifle the creation of jobs. Ideas propounded by Frederic Bastiat must therefore be encouraged amongst policy actors, academics and even students for sustainability and economic growth in Africa and Cameroon in particular.


[1] Seymour Cain, trans. / George B. de Huszar, ed. Frederic Bastiat ‘What Is Seen and What Is Not Seen’ in  Selected Essays on Political Economy accessed at http://www.econlib.org/library/Bastiat/basEss1.html# Chapter%201

[2]  Ibid.

[3] Ibid Ft 1 above.

[4] Ibid Ft 1 above.

[5] Ibid Ft 1 above.

 
Leave a comment

Posted by on November 24, 2011 in Uncategorized

 

Working for a World Free of Poverty [Solar Energy for Morrocco] THE WORLD BANK NEWS RELEASE, Friday, November 18 2011


The World Bank approved $297 million in loans to Morocco to help finance the Ouarzazate Concentrated Solar Power Plant Project, taking a historic step toward realizing one of the first large-scale plants of this kind in North Africa to exploit the region’s vast solar energy resources.

With this approval from the Bank’s Board of Executive Directors, Morocco takes the lead with the first project in the low-carbon development plan under the ambitious Middle East and North Africa Concentrated Solar Power (CSP) Scale-up Program.  A $200 million loan will be provided by the International Bank for Reconstruction and Development, the part of the Bank that lends to developing country governments, and another $97 million loan will come from the Clean Technology Fund.

“The World Bank is proud to provide the financing needed to make this large-scale renewable energy investment possible, said World Bank Group President Robert B. Zoellick. “Ouarzazate demonstrates Morocco’s commitment to low-carbon growth and could demonstrate the enormous potential of solar power in the Middle East and North Africa. During a time of transformation in North Africa, this solar project could advance the potential of the technology, create many new jobs across the region, assist the European Union to meet its low-carbon energy targets, and deepen economic and energy integration in the Mediterranean. That’s a multiple winner.”

The 500 megawatt (MW) Ouarzazate solar complex, as the first power site, will be among the largest CSP plants in the world and is an important step in Morocco’s national plan to deploy 2000 MW of solar power generation capacity by 2020.

The World Bank has supported Morocco’s national Solar Power Plan since it was launched in 2009 and is now making this significant loan to co-finance the development and construction of the Ouarzazate Project Phase 1 parabolic trough plant through a Public Private Partnership between the Moroccan Agency for Solar Energy (MASEN) and a private partner. Ouarzazate Phase 1 will involve the first 160 MW and will help Morocco avoid 240,000 tons of CO2 equivalent a year.

The Ouarzazate project will also contribute to Morocco’s objectives of energy security, job creation, and energy exports. As a regional frontrunner in clean energy, Morocco is rising to the challenge of its international commitments made in the last two United Nations’ climate summits and under the “Union for the Mediterranean.”

“The Ouarzazate first phase is a key milestone for the success of the Moroccan solar program,” said Mustapha Bakkoury, President of MASEN. “While answering both energy and environmental concerns, it provides a strong opportunity for green growth, green job creation, and increased regional market integration. It will pave the way for the positive implementation of the regional initiatives sharing the same vision (Mediterranean Solar Plan, Desertec Industry Initiative, Medgrid, World Bank Arab World Initiative). The support of international financial institutions, like the World Bank, through development financing but also climate change dedicated financing, is essential to help bring the overall scheme to economic viability,” added Bakkoury. 

The Ouarzazate loan is in line with the World Bank’s commitment to scaling up funding that helps developing countries cope with climate change and embark on a low-emission development path. The World Bank Group’s renewable energy portfolio increased from a total of $3.1 billion between fiscal years 2008-09 to $4.9 billion in 2010-11. Given the simultaneous expansion of the overall energy portfolio during the same period, the renewable energy proportion rose from 20 percent to 23 percent.

About the project: The World Bank, the Clean Technology Fund, the African Development Bank, the European Investment Bank, the Agence Française de Développement, European Union Neighborhood Investment Facility, and the Kreditanstalt fur Wiederaufbau are working with MASEN and a competitively selected private partner to implement Ouarzazate I.

 
1 Comment

Posted by on November 19, 2011 in Uncategorized

 

IMF rejects Moody’s warning on South Africa’s spending , By LINDA ENSOR, BUSINESSDAY Published: 2011/11/17 06:42:27 AM


International Monetary Fund agrees with Treasury that risk of “populist pressures” is overstated and endorses government’s countercyclical fiscal policy

 

CAPE TOWN — The International Monetary Fund (IMF) does not share the view of ratings agency Moody’s that there is a significant risk that state spending will spiral out of control and raise SA’s debt burden to unsustainable levels.

Moody’s lowered the outlook on SA’s sovereign credit rating from stable to negative last week, citing, among other things, worry over political risk and possible changes to the fiscal framework.

The agency said populist pressure and tension within the ruling African National Congress (ANC), and between it and its alliance partners, could undermine the Treasury’s commitment to low budget deficits and debt targets.

But IMF assistant director for Africa Abebe Selassie — who, with a team of economists, is on a mission to SA to prepare the multilateral organisation’s new report on the economy — dismissed these concerns.

He endorsed the government’s countercyclical fiscal policy, which he said had proved very supportive of the economy.

However, of concern to Mr Selassie was the decline in competitiveness of local manufacturers due to rising production and labour costs, which had contributed to slower growth.

The Treasury also believed Moody’s “overplayed” its concern about SA’s political risk, and said last week there were no indications of a change to the fiscal framework. Rival agency Standard & Poor’s was also not worried about SA’s rising debt trajectory.

Mr Selassie stressed in a briefing to Parliament’s finance committee yesterday that the government would have to rein in spending to contain debt, which is projected to rise from about 27% of gross domestic product in 2009 to 40% by 2015.

Debt service costs, the fastest- growing item of state spending, are expected to reach R115bn by 2015 from R76,9bn this year.

The government has committed itself to raising real noninterest expenditure by only 2,3% a year over the next three years, against an average 7,9% over the three years to end 2011-12.

If this were achieved, “strong prospects” existed of debt being contained, Mr Selassie said.

Asked after the meeting whether political pressures on state spending were overwhelming, he said: “No, I don’t think the pressures are overwhelming.

“There is a recognition of the need to moderate spending growth. I think the government’s document (the medium-term budget policy statement) reflects a consensus view in government that spending growth going forward has to be more restrained than in the past.

“It is a very domestic, very political decision. I think that is what government has decided and I think it is a very sound decision,” Mr Selassie said.

The IMF has lowered its growth forecast for SA to 3% this year and 3% next in the light of the global and domestic slowdown.

“Of course, if the euro zone goes into recession and the global economy slows down much more rapidly than we are projecting, then we will be revisiting our forecasts as some impact on SA is going to be likely,” he said.

“The last time around when the global economy went into recession, SA was hit very hard. There are causes for resilience now … I don’t think there is room for much labour shedding left in the economy,” Mr Selassie said. “Policies are in a supportive vein, but some impact of the global slowdown is almost certain.”

Mr Selassie said while the Congress of South African Trade Unions was correct in saying that labour’s share of national income had declined over the past decade or so, this was not the case in key sectors such as manufacturing, which were at the cutting edge of global competition and had suffered a decline in international competitiveness.

A far greater contributor than the strong rand to the loss of competitiveness and weak export performance was the sharp increases in the cost of production due to electricity prices and unit labour costs rising at a rate higher than the rise in productivity.

The overregulation and overconcentration of the economy had limited competition. “The inefficiency of the product and labour markets has exacerbated the impact of the (global) shocks.”

ensorl@bdfm.co.za

 

 
1 Comment

Posted by on November 17, 2011 in Uncategorized

 

Central Africa’s role in building a solar energy agenda for Africa By Chofor Che, Thursday November 17, 2011


The Solar Energy Conference took place in Johannesburg, South Africa from 19 to 22 September 2011. This was an opportunity to address the challenges of solar energy as a source of energy and look at opportunities and growth potentials for sustainable solar energy provision in Africa. South African Energy and Public Enterprises Ministers, Elizabeth Dipuo Peters and Malusi Gigaba were both speakers at the opening ceremony of the conference.

One may think this was an event solely for South Africans or Southern Africans. The truth is that this event has showcased solar energy as an alternative source of energy for the whole of Africa, especially Central Africa. Central Africa suffers seriously from lack of adequate energy supply. This may be by fault or default.

It is surprising to know that since the First solar panel factory in East Africa was set up in Naivasha, the energy situation on the continent remains appalling. Naivasha is a market town in Rift Valley Province, Kenya, lying North West of Nairobi. It is located on the shore of Lake Naivasha and along the Nairobi – Nakuru highway and Uganda Railway. Naivasha is part of the Nakuru District. Though the intention for setting up this unit in Kenya was also to benefit Central Africa, the true picture is that Central Africa still remains in the dark.
This production facility is the first to produce Photovoltaic (PV) solar panels in East Africa and is the joint venture of Ubbink B.V. a wholly owned subsidiary of Centrotec Sustainable AG and Chloride Exide (Kenya) Limited, the local partner.Solar PV panels accumulate sunshine and convert solar energy into electricity. The panels are ideal for private homes and solar power plants for schools, hospitals, water supplies as well as for telecommunications systems.
As one of the sunniest continents on our planet, Africa’s solar energy is useful for mobile phone charging, water pumps, as well as home and street lighting. Minimising the use of high pollution energy sources by using solar energy, contributes to  saving the environment. At present, almost 98 per cent of the rural population in Africa does not have grid power supply and is therefore seriously hampered in its efforts to develop economically. The only available energy sources are costly diesel generators and high-pollution kerosene lamps. These sources of energy are maintenance-heavy and moreover affected by escalating fossil fuel prices.
Ubbink East Africa claims that within less than a year they have been able to train more than 40 people in a technology unknown before to the region.  They also claim to produce more than a 100 high quality solar panels a day and that these PV solar panels distributed by Chloride Exide will bring affordable electricity to most of rural Africa and help people to avoid the rising cost of diesel fuel for generators and kerosene for lamps. Though they claim that the first solar panel factory in the whole of East and Central Africa is giving an enormous boost to the local industry, this is still to be measured especially in rural Central Africa.

The Solar Energy Africa forum was therefore an important platform where solar energy in Africa was critically examined. This event provided a very practical take on how solar works, what has happened on the continent so far and what investment opportunities are available.

There has not been much training on solar energy in Africa. Teething problems and failed projects seem to be the experience alongside little to no investment in these projects because Africans have not validated these sources of energy and their technologies. Africans have to acknowledge though that with less regulation by governments, privatisation, foreign investment and more knowledge on solar energy, Africa will rise to this available source of energy and soar. Solar energy not only will guarantee nights with lights in hospitals or better quality of service in rural Africa, it will create jobs and bring about  better living standards for all.

Central Africa has all the resources for solar development but the catalyst remains political enthusiasm and will. The Economic Community for Central Africa remains adamant on spearheading this agenda forward. If the governments of Cameroon, Chad, Gabon, Equatorial Guinea as well as Central African Republic could make the issue of solar energy a priority, a gross part of rural Central Africa could be saved from the looming energy crises plaguing the sub region.

There is therefore need for governments in Central Africa to boost the solar energy agenda. Civil society groups as well as investors in the Central African region should also endeavour to brain storm on solar energy and pave a way forward for Central Africa and the African continent as a whole.  Ideas, especially from the Solar Energy conference in Johannesburg must be translated into effective policies on the ground if rural Africa as a whole and rural Central Africa in particular has to be sorted out of the dark. In making policy a reality central governments must bring on board local governments especially municipalities who are closest to rural Africa. If given a chance, municipalities in Central Africa can assist in giving solar energy the role it deserves in solving the energy deficient melee on the continent.

 
1 Comment

Posted by on November 17, 2011 in Uncategorized

 

What does Gaddafi’s fall mean for Africa? by Mahmood Mamdani- October 20, 2011


As global powers become more interested in Africa, interventions in the continent will likely become more common.
“Kampala ‘mute’ as Gaddafi falls,” is how the opposition paper summed up the mood of this capital the morning after. Whether they mourn or celebrate, an unmistakable sense of trauma marks the African response to the fall of Gaddafi.

Both in the longevity of his rule and in his style of governance, Gaddafi may have been extreme. But he was not exceptional. The longer they stay in power, the more African presidents seek to personalise power. Their success erodes the institutional basis of the state. The Carribean thinker C L R James once remarked on the contrast between Nyerere and Nkrumah, analysing why the former survived until he resigned but the latter did not: “Dr Julius Nyerere in theory and practice laid the basis of an African state, which Nkrumah failed to do.”

The African strongmen are going the way of Nkrumah, and in extreme cases Gaddafi, not Nyerere. The societies they lead are marked by growing internal divisions. In this, too, they are reminiscent of Libya under Gaddafi more than Egypt under Mubarak or Tunisia under Ben Ali.

Whereas the fall of Mubarak and Ben Ali directed our attention to internal social forces, the fall of Gaddafi has brought a new equation to the forefront: the connection between internal opposition and external governments. Even if those who cheer focus on the former and those who mourn are preoccupied with the latter, none can deny that the change in Tripoli would have been unlikely without a confluence of external intervention and internal revolt.

More interventions to come

The conditions making for external intervention in Africa are growing, not diminishing. The continent is today the site of a growing contention between dominant global powers and new challengers. The Chinese role on the continent has grown dramatically. Whether in Sudan and Zimbawe, or in Ethiopia, Kenya and Nigeria, that role is primarily economic, focused on two main activities: building infrastructure and extracting raw materials. For its part, the Indian state is content to support Indian mega-corporations; it has yet to develop a coherent state strategy. But the Indian focus too is mainly economic.

The contrast with Western powers, particularly the US and France, could not be sharper. The cutting edge of Western intervention is military. France’s search for opportunities for military intervention, at first in Tunisia, then Cote d’Ivoire, and then Libya, has been above board and the subject of much discussion. Of greater significance is the growth of Africom, the institutional arm of US military intervention on the African continent.

This is the backdrop against which African strongmen and their respective oppositions today make their choices. Unlike in the Cold War, Africa’s strongmen are weary of choosing sides in the new contention for Africa. Exemplified by President Museveni of Uganda, they seek to gain from multiple partnerships, welcoming the Chinese and the Indians on the economic plane, while at the same time seeking a strategic military presence with the US as it wages its War on Terror on the African continent.

In contrast, African oppositions tend to look mainly to the West for support, both financial and military. It is no secret that in just about every African country, the opposition is drooling at the prospect of Western intervention in the aftermath of the fall of Gaddafi.

Those with a historical bent may want to think of a time over a century ago, in the decade that followed the Berlin conference, when outside powers sliced up the continent. Our predicament today may give us a more realistic appreciation of the real choices faced and made by the generations that went before us. Could it have been that those who then welcomed external intervention did so because they saw it as the only way of getting rid of domestic oppression?

In the past decade, Western powers have created a political and legal infrastructure for intervention in otherwise independent countries. Key to that infrastructure are two institutions, the United Nations Security Council and the International Criminal Court. Both work politically, that is, selectively. To that extent, neither works in the interest of creating a rule of law.

The Security Council identifies states guilty of committing “crimes against humanity” and sanctions intervention as part of a “responsibility to protect” civilians. Third parties, other states armed to the teeth, are then free to carry out the intervention without accountability to anyone, including the Security Council. The ICC, in toe with the Security Council, targets the leaders of the state in question for criminal investigation and prosecution.

Africans have been complicit in this, even if unintentionally. Sometimes, it is as if we have been a few steps behind in a game of chess. An African Secretary General tabled the proposal that has come to be called R2P, Responsibility to Protect. Without the vote of Nigeria and South Africa, the resolution authorising intervention in Libya would not have passed in the Security Council.

Dark days are ahead. More and more African societies are deeply divided internally. Africans need to reflect on the fall of Gaddafi and, before him, that of Gbagbo in Cote d’Ivoire. Will these events usher in an era of external interventions, each welcomed internally as a mechanism to ensure a change of political leadership in one country after another?

One thing should be clear: those interested in keeping external intervention at bay need to concentrate their attention and energies on internal reform.

Mahmood Mamdani is professor and director of Makerere Institute of Social Research at Makerere University, Kampala, Uganda, and Herbert Lehman Professor of Government at Columbia University, New York. He is the author most recently of Good Muslim, Bad Muslim: America, The Cold War and the Roots of Terror, and Saviors and Survivors: Darfur, Politics and the War on Terror.

This article was first published on Aljazeera
http://english.aljazeera.net/indepth/opinion/2011/08/201182812377546414….

 
Leave a comment

Posted by on November 15, 2011 in Uncategorized

 
 
Follow

Get every new post delivered to your Inbox.

Join 1,627 other followers

%d bloggers like this: