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WEF’s 2019 Global Competitiveness Report: Singapore Overtakes USA for Number 1 Spot. Where Does SA Stand?

Ten years on from the global financial crisis, the world economy remains locked in a cycle of low or flat productivity growth despite the injection of more than $10 trillion by central banks. The latest Global Competitiveness Report paints a gloomy picture, yet it also shows that those countries with a holistic approach to socio-economic challenges, look set to get ahead in the race to the frontier.

The World Economic Forum‘s (WEF) latest Global Competitiveness Report 2019 showed that Singapore has overtaken the United States to become the most competitive nation in the world. The US is losing ground in measures such as “healthy life expectancy” and preparedness for the future skills needed in the 21st century, the report says.

Some of this year’s better performers appear to be benefiting from the trade feud between China and the US, including Singapore and Vietnam. Led by Singapore, the East Asia and the Pacific
region is the most competitive in the world.

Covering 141 economies, the index measures national competitiveness—defined as the set of institutions, policies and factors that determine the level of productivity and long-term economic growth.

The report measures the strength of 103 key indicators, such as inflation, digital skills and trade tariffs, arranged into 12 pillars. Each indicator, or ‘pillar’ uses a scale from 0 to 100, to show how close an economy is to the ideal state or ‘frontier’ of competitiveness in that area. With a score of 84.8, Singapore is the world’s most competitive economy in 2019, overtaking the US, which falls to second place. Hong Kong SAR, Netherlands and Switzerland round up the top five.

Top 10 performers on the 2019 WEF Global Competitiveness Report.

“The world is at a social, environmental and economic tipping point. Subdued growth, rising inequalities and accelerating climate change provide the context for a backlash against capitalism, globalization, technology, and elites,” the WEF warned.

“There is gridlock in the international governance system and escalating trade and geopolitical tensions are fueling uncertainty. “This holds back investment and increases the risk of supply shocks: disruptions to global supply chains, sudden price spikes or interruptions in the availability of key resources,” it said.

Singapore

Singapore has long been a thriving global financial center, and has built itself up despite limited land. After early years of turbulence and despite lacking natural resources and a hinterland, the nation developed rapidly as an Asian Tiger economy, based on external trade and its workforce.

The city-state is classified as an Alpha+ global city, indicating its influence on the global economy. Singapore is the only country in Asia with an AAA sovereign rating from all major rating agencies, and one of 11 worldwide. Singapore is a highly developed country and is ranked 9th on the UN Human Development Index, the highest in Asia for a sovereign state, with the 3rd highest GDP per capita in the world. It was ranked the most expensive city to live in from 2013 to 2019 by the Economist, and is identified as a tax haven.

Along with benefits from the ongoing US-China trade war, Singapore’s financial system and macroeconomic stability raised its rating.

Singapore ranked 2nd overall in the 2018 report. This year, the country ranks first in terms of infrastructure, health, labor market functioning, and financial system.

While Hong Kong was penalized in points for their lacking worker protection (scoring only 10 points, and ranking 116th in the category), Singapore ranked well, scoring 89 points, and ranking 18th for worker protection.

Singapore improves from an already high base on 10 of the 12 pillars, and its score on every pillar is between 4 and 19 points higher than the OECD average. The country ranks first on the Infrastructure pillar (95.4), where it also ranks first for road quality infrastructure, efficiency of seaport and airport services, and sea transport connectivity. It also tops the Health (100), Labor market (81.2) and Financial system pillars (+2.0 points, 91.3), and achieves a nearly perfect score for Macroeconomic stability (+7.1, 99.7, 38th).

Performance in terms of market efficiency (81.2, 2nd behind Hong Kong SAR) is driven by the fact that Singapore is the most open economy in the world. Singapore ranks 2nd (80.4) for the quality of public institutions, behind Finland, but its performance is undermined by limited checks and balances (65.9, 23rd)—Singapore notably ranks 124th on the Freedom of the Press Index—and lack of commitment to sustainability (63.5, 66th). Going forward, in order to become a global innovation hub, Singapore will need to promote entrepreneurship and further improve its skills base, albeit from a relatively high base (78.8, 19th).

Southern Africa

Led by Mauritius (52nd), sub-Saharan Africa is overall the least competitive region, with 25 of the 34 economies assessed this year scoring below 50.

South Africa, the second most competitive in the region, improves to the 60th position, while Namibia (94th), Rwanda (100th), Uganda (115th) and Guinea (122nd) all improve significantly, the WEF showed. Among the other large economies in the region, Kenya (95th) and Nigeria (116th) also improve their performances, but lose some positions, overcome by faster climbers, the report said.

South Africa

South Africa’s competitiveness has regained momentum after the recent political landscape shift and climbed seven places in 2019. The country is a regional financial hub (83.2, 19th), with well-developed equity, insurance and credit markets, all achieving a score of 100, the report said.

South Africa’s WEF Global Competitiveness Report 2019 scores.

It has also developed one of the most advanced transport infrastructures in the region (45th) and is among the top countries in Africa for market size (35th). Beyond these established strengths, health conditions—though starting from a low base (118th)—are better, adding 3.3 years to the average healthy life expectancy since the last assessment. Institutional quality has also improved (55th) but unevenly, the report said.

Some aspects of this category have achieved ‘remarkable progress’, including restored balance of powers across different state’s entities (16th), enhanced administrative efficiency of the public sector (39th) and corporate governance (26th).

Other aspects however, continue to perform poorly: security (135th) remains one of the main restraints to South Africa’s competitiveness, while transparency (62nd) and government adaptability to change (100th) are also below par, the report said.

“Further, South Africa’s competitiveness is being held back by relatively low business dynamism (60th), which is inhibited by insolvency regulation and administrative burdens to start a business, and a persistently insufficient labor market flexibility (111th),” the WEF said.

The report showed that flexibility of wage determination is limited (134th) and hiring foreign labor is difficult (123rd). “South Africa’s sensitivity to exports of mineral resources is likely to hit the country’s economic outlook and will make reducing unemployment (projected above 27%) challenging. “Against this backdrop, structural reforms are needed tore-ignite the economy and offer better opportunities to a larger share of South African citizens.”

How to get to number 1

The index examines the relationship between competitiveness and the two other dimensions of sustainable development – social cohesiveness and environmental sustainability. It shows that there are no inherent trade-offs between competitiveness and sustainability, and between competitiveness and social cohesiveness. This suggests a “win-win” policy space, where a productive, low-carbon, inclusive economy is possible, and it is the only viable option going forward.

  1. Be an all-rounder: The report is a reminder to apply a holistic approach and to better balance short-term considerations against factors whose impact is felt beyond quarterly results and election cycles. For example, the results of the index show that labor and education policies have not been keeping up with the pace of innovation in most countries, including in some of the largest and most innovative economies.
  2. Integrate tech: Governments must better anticipate the unintended consequences of technological integration and implement complementary social policies that support populations through the Fourth Industrial Revolution. The report shows that several economies with strong innovation capability like South Korea, Japan and France, or increasing capability, like China, India and Brazil, must improve their talent base and the functioning of their labor markets.
  3. Education: Talent adaptability is critical. It pays to enable the workforce to contribute to the technology revolution and to be able to cope with its disruptions. Talent adaptability also requires a well-functioning labor market that protects workers, not jobs. Advanced economies such as South Korea, Italy, France and, to some extent, Japan need to develop their skills base and tackle rigidities in their labor markets.

To read the full report, click here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2], [3], [4]. Image sources: [1], [2].

September 21st is World Cleanup Day

September 21st is World Cleanup Day, and we encourage everyone to get involved however they can.

World Cleanup Day is an international effort to band together and clean up our earth, to do our part in preventing the growing climate crisis we find ourselves in.

World Cleanup Day on 15 September 2018 united 18 million people across 157 countries and territories, for the biggest waste collection day in human history.

This year, it aligns with the UN-sanctioned International Day of Peace, as well as falls around the time of two school strikes for climate. One is the September 20 Climate Strike, three days before a UN emergency climate summit being held in New York,and the other is with 350.org and Earth Strike next week, on the 27th.

To find out more about World Cleanup Day, click here, and to find out how to get involved, click here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Greenpeace States Eskom Should Get Rid of Coal Power Stations

A recently published study by Greenpeace Africa has urged Eskom to start phasing out its coal power stations and open IPP auctions for renewable energies.

A study commissioned by Greenpeace Africa titled ‘Eskom: A road-map to powering the future‘ has recommended that the struggling power utility get rid of its coal power stations.

With reports that Eskom’s debt will reach a quite staggering R500 billion, the future of the state-owned company looks increasingly uncertain.

Eskom relies on coal due to the local market producing it relatively cheaply and the significant infrastructure geared towards coal power.

Greenpeace Africa’s senior political adviser Happy Khambule said: “Fundamental reforms of the South African electricity sector and Eskom’s business model are inevitable and urgent.

“This report presents a road-map with solid options for the country’s electricity supply industry crisis, outlines a realistic and sustainable future for Eskom, and ensures that all crucial functions of the South African electricity system improve.”

The negative environmental impact of coal power stations and doubts over its long-term viability as a power source led Prof. Dr. Uwe Leprich, the author of the study, to conclude Eskom needs to start phasing it out.

Key recommendations for Eskom reform include:

  • The gradual phase-out of coal-fired power generation from Eskom to new generation companies (GenCos)
  • The refinancing of Eskom through the decommissioning of coal-fired power stations older than 40 years, and the sale of all remaining coal-fired power plants
  • The retention by Eskom of the important role of the transmission system operator with the possibility of operating its own grid-supporting (non-coal) power plants
  • The opening of the IPP auctions for renewable energies to Eskom as well in order to make it a significant part of the utility’s business model
  • The possibility for Eskom to participate in the newly created six regional electricity distributors
  • The opportunity for Eskom to create new services for end-use customers on the basis of the digitization revolution that is evolving all over the world

To read the full study, click here.

Government sued for air pollution

The recommendation comes in the wake of environmental justice group groundWork and Mpumalanga community organisation Vukani Environmental Justice Movement in Action taking the South African government to the Pretoria High Court over a perceived violation of citizens’ constitutional right to clean air.

“Living in Witbank, one of the most polluted areas in the country, has hugely affected our health and lives,” says Vusi Mabaso, Chairperson of Vukani.

“Both government and industry have continuously failed to deal with the problem, irrespective of our efforts to engage with them to ensure they take steps to protect human health.

“Together with groundWork, Vukani has decided to use litigation to push government to take urgent steps to deal with the high air pollution and in the interest of our health and to protect our right to clean air.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Dominik Vanyi [1], [2].

Sustainable Bamboo is Taking Root in Africa

Kenya: A trove of green opportunities

Bamboo, nicknamed the wonder plant, is the strongest and fastest-growing woody plant on earth, and supplies a global trade worth an estimated US$2 billion per year. The lion’s share is earned by Asian countries, whose bamboo-based industries span a vast range from paper making and scaffolding to luxury flooring and foods. But Africa is also witnessing a boom in bamboo.

In African countries that produce bamboo, research and development is usually the work of the forestry or agricultural sectors. However, scaling up requires expertise in specialized areas — such as micro-enterprise development, small-scale or industrial bamboo growing, and production of bamboo products — that might be better found in the private sector.

In Kenya, the bamboo industry involves a multi-stakeholder approach, with consultations among relevant government ministries, NGOs, research institutes and universities and others, facilitated by the Kenya Forestry Research Institute (KEFRI).

One of the largest stakeholders to take up bamboo development so far is Green Pot Enterprises, launched in 2014 to promote bamboo farming in Kenya and to help the country maximize the commercialization of bamboo.

So far the organization has farmers covering over 1,000 acres of land in Narok County, with another 2,000 acres to be planted this year. It is targeting 4,000 acres by the end of 2016.

Green Pot has two principal development plans. With a “gated community of forests,” the organization buys a large parcel of land then subdivides it into 10-acre and 2-acre plots for lease by Kenyans at “affordable rates,” according to its website.

Each buyer gets a title deed (the bamboo farm is managed as one whole unit despite the multiple owners) and a 30-year sublease. The company plants and fully maintains the forests and markets the produce once it is ready.

A parallel community outreach programme ensures that for every acre of bamboo planted in the gated communities programme, a corresponding acre is planted by members of the local community. This programme finances the supply of seedlings, Green Pot explains.

“Globally, there is a big push for bamboo because of its immense financial and environmental benefits. It brings wealth to the people, cleans rivers, stops soil erosion, and so on,” Green Pot’s chief executive officer, Caroline Kariuki, told Africa Renewal. She says the gated
communities programme is mainly in Narok County, but the outreach campaign is active in more than 10 counties across the country.

For Kenya, Green Pot selected three main varieties of bamboo—moso, giant bamboo and Dendrocalamus membranaceus—because they are highly suitable for the chosen areas and have more economic viability than other varieties.

“When we began the project, we did a strategic plan to ensure we have a ready market for our growers. We are building factories with three main areas of focus: construction materials such as flooring, block boards and veneer; bamboo textile products; and bamboo energy products ranging from generation of electricity to briquettes for mass domestic use,” said Ms. Kariuki. “Considering that more than 70% of Kenyans use wood and wood-based products as their main source of fuel, this is a massive market.”

The group has partnerships with county governments, NGOs, government agencies and even local universities and is now seeking partnerships with climate change–focused funds for the rehabilitation of the Mara River and Njoro River.

“We are keen to establish partnerships with strong technology expertise and key buyers of our products to ensure that we are on track to deliver the promise to our customers upon maturity of our bamboo in four years’ time,” said Ms. Kariuki, who is also the finance/administrative director of the Open Society Initiative for East Africa.

Tanzania: New income for 5,000 rural women

Bamboo has been increasing in importance as a non-timber forest product in Tanzania over the last two decades, according to INBAR. Locally bamboo is sought for handicrafts, residential fencing, flower farming, farm props for banana plantations, furniture and other minor cottage industry products like basketry and toothpicks.

Almost all the bamboo products made in the country are used domestically. Bamboo farms should be established to ensure a sustainable supply for the handicraft, construction and horticultural industries, among others.

INBAR, in partnership with the International Fund for Agricultural Development, helped establish 100 bamboo nurseries and set up micro-enterprises, and trained 1,000 locals in a specially created Bamboo Training Center.

Today some 5,000 women in these rural communities produce crafts and desks for local schools and sell charcoal briquettes.

Ethiopia: The potential of bamboo as a strategic crop

With about 1 million hectares of indigenous bamboo, Ethiopia is the biggest bamboo grower in Africa. It is home to 67% of all African bamboo.

The country has two species—Yushania alpina, planted and managed by farmers in the highlands, and Oxytenanthera abyssinica, which grows naturally in the lowlands.

Despite the size of its natural bamboo forest, Ethiopia has only recently started to tap its potential and is now eager to embrace bamboo technologies and knowledge transfer, mostly from INBAR and a range of Chinese experts.

“Bamboo should be considered the most important, fast-growing, strategic intervention for afforestation and deforestation in the mountainous and degraded areas of the country,” said Ethiopia’s state minister for agriculture, Ato Sileshi Getahun, at a recent event.

In Ethiopia bamboo is being used for protecting watersheds, for intercropping, to create shade for other crops, as a windbreak and as a natural mulch to provide drought protection. People also use it for fuel, fencing and furniture, and sometimes bamboo shoots are used for food and animal fodder.

However, bamboo value-addition in the country is still relatively small, hence limited export earnings.

The country has three factories and the sector employs more than 1,000 people.

Ghana: Once ignored, now big business

Ghana currently has about 400,000 hectares of bamboo, a mostly natural stand in the western region. Some exotic species have been introduced into Ghana, including the thick-walled Beema bamboo from India, and the near-solid Oxytenanthera abyssinica from Ethiopia. These two are particularly useful for biomass energy and are well adapted to drier areas.

According to Michael Kwaku, director of INBAR (International Network for Bamboo and Rattan) Ghana, 18 species of exotic bamboo were first introduced into the country from Hawaii in 2004 by the Ghanaian branch of the Bamboo and Rattan Development Programme (BARADEP), as part of a project with the Opportunities Industrialization Centre. The project was also extended to neighbouring Togo.

BARADEP-Ghana distributed the species to some institutions and nongovernmental organizations, which propagated them and monitored their growth conditions and adaptability in Ghana. It aims to provide adequate planting materials for private and commercial bamboo plantation developers in Ghana.

“Until recently, bamboo was a noncommercial open-access resource in Ghana. Over the past few years, the usefulness of bamboo and its commercial value is being appreciated. Commercial exploitation has begun for such products like bamboo bicycles, bamboo charcoal, furniture, bamboo boards and building support poles,” Mr. Kwaku told Africa Renewal. Bamboo is also being used to restore degraded mining areas.

Challenges to commercialization

Challenges to the development of commercial bamboo planting include the slow pace of state uptake and support as the sector is still young and financial institutions are reluctant to grant credit facilities, including loans. The micro-enterprises are still considered poorly organized, according to Mr. Kwaku, which makes receiving support from stakeholders difficult. The skills and technology gap is a challenge.

INBAR is helping in western Africa with an awareness campaign about the economic potential of bamboo and about forming partnerships with governments. Currently eight member countries in West and Central Africa have conducted training workshops and educational tours to China to acquire firsthand experience of the bamboo economy.

“Bamboo is a big plus for building green economies. It is the promise of earnings at the household level that will attract the most interest across the population,” said Nii Osha Mills, Ghana’s minister for lands and natural resources, at a recent INBAR event.

Zambia: Innovation at its best

In Zambia, a local company, Zambikes, is producing bamboo bikes, bike trailers for transporting agricultural goods, and innovative bike-drawn “Zambulances” to be used at clinics around the capital, Lusaka.

Looking Ahead

Bamboo’s untapped potential to restore degraded lands and forests, store carbon and supply energy to millions of rural communities is immense.

In addition to its prospects for manufacture, bamboo can make a major contribution to reducing carbon emissions, the article said. In China alone, the plant is projected to store more than one million tons of carbon by 2050.

Despite bamboo’s potential, Dr. Hans Friederich, INBAR director general, says many decision makers, planners and national sustainable development action plans have not yet taken into account this resource and the benefits it can bring to society.

“Properly applied, bamboo will help many low- and middle-income countries achieve their sustainable development goals,” says Friederich.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Dil [1], Falco Negenman [2].