Economy Archive

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Weitzenegger joins SEEDwork Sustainable Economic Development and Employment

Karsten Weitzenegger is an Associate of SEEDwork, the expert association for sustainable economic development and employment. Please visit my profile at http://www.seedwork.net/profile/karsten-weitzenegger SEEDwork is a registered non-profit association composed of professionals with long-standing experience in technical and financial development cooperation. The purpose of the association is the promotion of societal and economic development in developing and threshold countries. SEEDwork focuses on sustainable growth, decent work, and the promotion of international cooperation in this regard. “Growth – Income – Social Inclusion” We promote economic development and employment in a range of different areas. In many cases, reforms in the financial sector are necessary to establish transparency for investors or to provide individuals and micro, small and medium enterprises (MSMEs) with funding. This may especially apply to micro-credits for the small entities. Therefore, we link existing and would-be entrepreneurs to financing institutions. Regarding sustainable business development we use value chain analyses as […]

seedwork_logo1Karsten Weitzenegger is an Associate of SEEDwork, the expert association for sustainable economic development and employment. Please visit my profile at http://www.seedwork.net/profile/karsten-weitzenegger

SEEDwork is a registered non-profit association composed of professionals with long-standing experience in technical and financial development cooperation. The purpose of the association is the promotion of societal and economic development in developing and threshold countries. SEEDwork focuses on sustainable growth, decent work, and the promotion of international cooperation in this regard.

“Growth – Income – Social Inclusion”

We promote economic development and employment in a range of different areas. In many cases, reforms in the financial sector are necessary to establish transparency for investors or to provide individuals and micro, small and medium enterprises (MSMEs) with funding. This may especially apply to micro-credits for the small entities. Therefore, we link existing and would-be entrepreneurs to financing institutions.

Regarding sustainable business development we use value chain analyses as a starting point to develop action plans for the MSMEs involved, and we accompany their implementation. With all our activities we particularly cater for the special needs of different target groups like for example the qualification of young people to increase their employability or their chances to become self-employed, e.g. in the green sector.

In addition, we involve members of the Diaspora who wish to contribute to the economic development of their countries of origin be it through own investments or the extension/linkage of their existing businesses in their new home-countries with their country of origin. We incorporate professional bodies like chambers and associations in our work to enable companies to learn from each other and to improve their business performance.

servseed

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Capacity Building for Cooperation in in North-East Asia

GIZ Programme Support for Economic Cooperation in Sub-Regional Initiatives in Asia GIZ SCSI facilitates two Trainings for GTI in Beijing and Ulaanbaatar From September 22-23, SCSI hosted a training in Beijing to enhance the communication capacity for the Secretariat of the Greater Tumen Initiative (GTI). Participants that attended the workshop included GTI Secretariat staff, as well as representatives of the Chinese Ministry of Commerce and the Russian Federation’s Trade Mission. As successful regional economic cooperation within the Greater Tumen Region depends on effective communication between national focal points and the GTI Secretariat, SCSI invited trainer Karsten Weitzenegger to mentor the workshop and to present participants with a broad range of communication tools. After assessing the challenges of communications among the GTI Secretariat, the National Coordinators and other stakeholders, the participants actively engaged in elaborating new concepts to take effective measures towards building communication capacity. From September 26-27, a training on […]

GIZ Programme Support for Economic Cooperation in Sub-Regional Initiatives in Asia

GIZ SCSI facilitates two Trainings for GTI in Beijing and Ulaanbaatar

From September 22-23, SCSI hosted a training in Beijing to enhance the communication capacity for the Secretariat of the Greater Tumen Initiative (GTI). Participants that attended the workshop included GTI Secretariat staff, as well as representatives of the Chinese Ministry of Commerce and the Russian Federation’s Trade Mission. As successful regional economic cooperation within the Greater Tumen Region depends on effective communication between national focal points and the GTI Secretariat, SCSI invited trainer Karsten Weitzenegger to mentor the workshop and to present participants with a broad range of communication tools. After assessing the challenges of communications among the GTI Secretariat, the National Coordinators and other stakeholders, the participants actively engaged in elaborating new concepts to take effective measures towards building communication capacity.

From September 26-27, a training on proposal writing for Mongolian GTI Focal Points followed in Ulaanbaatar. Based on the positive feedback from a similar training last year this event brought together participants from many of the ministries and government agencies involved in GTI cooperation such as the Ministry of Finance, the Ministry of Agriculture, and the Development Bank of Mongolia as well as representatives of provincial governments. Through sessions on proposal writing as such and input on the particularities of guidelines and regulations of proposing projects within the GTI framework provided by officer Mr. Batkhuyag Baldangombo from the GTI Secretariat, the training provided the opportunity for the participants to exchange information about Mongolia’s engagement in the GTI framework.

More on GIZ SCSI Programme

Sub-Regional Initiatives play an increasingly important role in Asia’s regional economic cooperation and integration. They help countries to overcome the limitations of domestic markets and foster inclusive development, both by boosting economic growth and by providing the resources for appropriate policies. The GIZ SCSI Programme supports regional stakeholders with the aim to strengthen selected core processes of regional economic cooperation and integration and to contribute to a sustainable and inclusive economic development in the region. More: www.giz.de

Source: GIZ Connect Asia Newsletter

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Fair Trade = no poverty! WFTO promotes 10 Principles of Fair Trade #FairTradeBreaksPoverty

Culemborg, 26 September 2016 – This year WFTO observes Global Anti-Poverty Week (16-22 October 2016) by promoting the 10 Principles of Fair Trade as means to eradicate poverty as desired by the first goal of the 17 Sustainable Development Goals – NO POVERTY. WFTO believes that the principles of Fair Trade are effective overarching tools to fight poverty. Using the concept of ‘Agent for Change’ (Fair Trade as an agent for change), WFTO’s formula to eradicate poverty: Fair Trade + Economic Opportunities = No Poverty Fair Trade is a tangible contribution to the fight against poverty, climate change and global economic crises. The World Bank reports that more than one billion people still live at or below $1.25 a day.1 The World Fair Trade Organization (WFTO) believes that trade must benefit the most vulnerable and deliver sustainable livelihoods by developing opportunities especially for small and disadvantaged producers. Recurring global economic […]

Culemborg, 26 September 2016 – This year WFTO observes Global Anti-Poverty Week (16-22 October 2016) by promoting the 10 Principles of Fair Trade as means to eradicate poverty as desired by the first goal of the 17 Sustainable Development Goals – NO POVERTY.

WFTO believes that the principles of Fair Trade are effective overarching tools to fight poverty.
Using the concept of ‘Agent for Change’ (Fair Trade as an agent for change), WFTO’s formula to eradicate poverty: Fair Trade + Economic Opportunities = No Poverty

Fair Trade is a tangible contribution to the fight against poverty, climate change and global economic crises. The World Bank reports that more than one billion people still live at or below $1.25 a day.1 The World Fair Trade Organization (WFTO) believes that trade must benefit the most vulnerable and deliver sustainable livelihoods by developing opportunities especially for small and disadvantaged producers. Recurring global economic crises and persistent poverty in many countries confirm the demand for a fair and sustainable economy locally and globally.

The World Fair Trade Organization (WFTO) is a global network of organisations representing the Fair Trade supply chain. Membership in WFTO provides Fair Trade organisations with credibility and identity by way of an international guarantee system, a place of learning where members connect with like-minded people from around the world, tools and training to increase market access, and a common voice that speaks out for Fair Trade and trade justice – and is heard.

WFTO prescribes 10 Principles that Fair Trade Organisations must follow in their day-to-day work and carries out monitoring to ensure these principles are upheld.

10 FT Principles

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UNCTAD 14: Policy coherence needed to turn trade into an engine for growth in Africa

Trade and investment can be drivers of inclusive growth for sustainable development in Africa, says the ILO’s Deputy Director-General for Field Operations and Partnerships, Gilbert Houngbo, at UNCTAD 14 in Nairobi but calls for more integrated policies to realize that potential. By Gilbert Houngbo, Deputy Director for Field Operations and Partnerships, the International Labour Organization (ILO). Africa’s rapidly growing workforce needs decent work. Increased trade and investment can help drive inclusive growth for sustainable development but we need more integrated policies to realize that potential. It could prove vital for the creation of decent jobs, especially for millions of young Africans, and this is the message that the ILO is bringing to the 14th United Nations Conference on Trade and Development  (UNCTAD 14) being held from 17 to 22 July in Nairobi, Kenya. How to translate decisions into actions after the adoption of the 2030 Agenda for Sustainable Development ? That’s […]
Trade and investment can be drivers of inclusive growth for sustainable development in Africa, says the ILO’s Deputy Director-General for Field Operations and Partnerships, Gilbert Houngbo, at UNCTAD 14 in Nairobi but calls for more integrated policies to realize that potential.
By Gilbert Houngbo, Deputy Director for Field Operations and Partnerships, the International Labour Organization (ILO).

Africa’s rapidly growing workforce needs decent work. Increased trade and investment can help drive inclusive growth for sustainable development but we need more integrated policies to realize that potential.

It could prove vital for the creation of decent jobs, especially for millions of young Africans, and this is the message that the ILO is bringing to the 14th United Nations Conference on Trade and Development  (UNCTAD 14) being held from 17 to 22 July in Nairobi, Kenya.

How to translate decisions into actions after the adoption of the 2030 Agenda for Sustainable Development ? That’s what will be at the heart of the conversation among Heads of State and Government, ministers of economic affairs and trade, accompanied by leaders from international organizations, business, civil society and media.

After decades of assuming that sound economic, trade and investment policies would automatically deliver growth and thereby employment and decent work, the world has come to know better. That is why all Member States explicitly made inclusive growth and decent work for all one of the 17 global sustainable development goals (SDGs).

The 2030 Agenda is an integrated approach to development where economic growth, environmental protection and social justice shall go hand in hand. Full employment and decent work for all is placed together with inclusive economic growth as SDG number 8 , at the very heart of the 2030 Agenda.

Harnessing the potential of trade and investment as an important stimulus for the generation of decent work opportunities and sustainable development is a crucial component of the global partnership for the implementation of the 2030 Agenda. The ILO and its Decent Work Agenda  brings several interconnected policy tools and supporting evidence-based research to such a new global partnership.

The Decent Work Agenda has four strategic objectives, considered equally important and mutually reinforcing: To set and promote standards and fundamental principles and rights at work; to create increased opportunities for women and men to decent employment and income; to enhance the coverage and effectiveness of social protection for all, and to strengthen tripartism and social dialogue – that is, to strengthen trade unions and employers’ organizations and their capacity for dialogue with each other and with governments.

Working women and men across Africa recognize the need for such policies. The Addis Ababa Declaration at the 13th African Regional Meeting of the ILO  in December last year spells it out: In spite of high and sustained growth over the past decade – in fact six of the top ten fastest growing economies were in Africa – progress has been lacking in diversifying productive capacity, inequality is increasing and poverty remains among the highest in the world.

Lack of employment and decent work for young people is the continent´s most pressing challenge. The ILO´s report on Global Employment Trends for Youth 2015  pinpointed the fact that North Africa has the highest youth unemployment rate in the world, at more than 30 per cent, a majority of them long-term unemployed. While sub-Saharan Africa fares better, at 11.6 per cent youth unemployment – the long-term figure there of 48.1 per cent is also very serious. And this does not count the millions of young people who have given up to look for a job altogether. If they are included, the figures nearly double in low-income countries.

With high unemployment and underemployment depicting a bleak scenario, employers including foreign investors are also concerned that they cannot find the skilled workers they need. This indicates a serious skills gap – which certainly is a barrier for African countries to take successful part in global supply chains, the dominating mode of production, trade and growth in the globalized economy.

The ILO is assisting our member states in addressing this multifaceted challenge by leading the Global Initiative on Decent Jobs for Youth . This is a unique partnership developed by 21 United Nations agencies as a platform to engage all partners investing and supporting youth employment around the world. Better skills development and linkages to global markets and investments are key among the actions to be taken under this initiative.

Meeting the challenge of assuring progress towards decent work throughout global supply chains will require the strengthening of a range of labour market institutions, including the capacity of public authorities and employers’ and workers’ organizations to effectively monitor and enforce compliance with laws and regulations. This was one of the conclusions of the discussions on the ILO´s International Labour Conference , which met in Geneva, Switzerland last month.

These conclusions can instil new life into the trade and investment outlooks of the African continent. They urge governments to adopt a more integrated and coordinated approach to policy-making. It is crucial to ensure that all relevant ministries are involved across their respective portfolios when their policies influence each other – and that is certainly the case for trade, investment and labour policies.

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How to Finance a Sustainable World Economy

Berlin, 07/20/2016 – Banks and insurers can play a crucial part in stabilizing the climate, while at the same time safeguarding their clients’ assets. Leading representatives of finance and climate research will discuss the best strategies for a turnaround in investing this Thursday in Berlin. The event is hosted by the Swiss global bank UBS, the French multinational insurance firm AXA, CDP, the European innovation initiative Climate-KIC, Humboldt-Universität zu Berlin and the Potsdam Institute for Climate Impact Research (PIK). Divestment – the diversion of capital from fossil fuel industries to green innovation and sustainable businesses – is a new approach to reducing greenhouse-gas emissions, which could turn out to be a global “game changer”.

The Great Investment Turnaround: how to finance a sustainable world economy

Already today, investments of billions of Euros are being redirected. Pioneered by students of wealthy US universities, divestment has reached financial big shots like Allianz by now: the financial services company announced its intention to divest from its assets in coal mining. The foundation of the legendary US oil dynasty Rockefeller plans to divest their funds from the fossil fuel industry as well.

“The risks of climate change affect everyone and everything. When the finance sector now divests billions from the fossil business, this does not only reflect a moral responsibility but also makes good business sense,” says PIK director Hans Joachim Schellnhuber, co-initiator of the conference. “While weather extremes increase already, many of the biggest climate impacts, like the consequences of sea-level rise, will become perceptible only after it would be too late to act. Therefore it is important for the finance sector to recognize the warnings of science and to ramp up sustainable investments as soon as possible. The Paris Agreement substantiates that the nations of the world aim at reaching zero emissions by 2050. This means we are now in year one of the Great Transformation. Whoever still invests in coal and oil will not only damage the environment, but eventually also lose a lot of money.”

“Recognize the possible economic and social impacts of climate change”

„As a global bank it is of major importance to recognize the possible economic and social impacts of climate change, in order to better prepare us and our clients,” says Axel Weber, Chairman of the Board of Directors of UBS Group AG. “The financial sector is working hard to lay the foundations for filling gaps in financing climate action and to support nations in delivering on their corresponding commitments. We aim for a sensible long-term allocation of capital that is congruent with a low-carbon economy.”

Christian Thimann, Global Head of Strategy, Sustainability, and Public Affairs at AXA Group and Vice-Chair of the FSB Task Force on Climate-related Financial Disclosure, says: “Finance has an important role in addressing climate change, because it steers long-term investment. Investors need to understand how companies address climate change in their strategies, which goes well beyond the current carbon footprint. Under the mandate of the G20 and the Financial Stability Board, the Task Force on Climate-related Financial Disclosure seeks to develop consistent voluntary disclosures by companies and enhance investor understanding of climate-related business risks and opportunities. Such disclosures and better investor understanding will foster implementation of the COP21 agreement.”

„Divestment is one of the most potent signals of investor discontent”

Susan Dreyer, CDP Country Director Germany, Austria, Switzerland adds: „Divestment is one of the most potent signals of investor discontent and can be a valuable method to manage portfolio risk, given climate risks are becoming more urgent every day. Having built a platform for transparent and comparable climate strategies, into which 5600 companies worldwide are voluntary reporting today, CDP knows of the impact investor engagement can unfold. Shareholder resolutions or setting joint reduction targets are good examples. And yet, the clear signal from both civil society and investors that fossil based business models do not have a future in the decarbonized world of 2050, is helpful and needed.”

Among the distinguished speakers are also Rainer Baake, State Secretary at the Federal Ministry for Economic Affairs and Energy, Laurence Tubiana, French Ambassador for international climate negotiations at COP 21, Monsignor Marcelo Sánchez Sorondo, Chancellor of the Pontifical Academy of Sciences, and high-ranking finance representatives, from the major bank HSBC to Union Investment, from the central bank of the Netherlands to the French Ministry of Finance.

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The Sustainable Development Goals as Business Opportunities

OECD Development Co-operation Report 2016 The face of development has changed, with diverse stakeholders involved – and implicated – in what are more and more seen as global and interlinked concerns. At the same time, there is an urgent need to mobilise unprecedented resources to achieve the ambitious Sustainable Development Goals (SDGs). The private sector can be a powerful promotor of sustainable development. Companies provide jobs, infrastructure, innovation and social services, among others. Increasingly, investments in developing countries – even in the least developed countries – are seen as business opportunities, despite the risks involved. The public sector can leverage the private sector contribution, helping to manage risk and providing insights into effective policy and practice. Yet in order to set the right incentives, a better understanding is needed of the enabling factors, as well as the constraints, for businesses and investors interested in addressing sustainable development challenges. The Development […]

OECD Development Co-operation Report 2016

The face of development has changed, with diverse stakeholders involved – and implicated – in what are more and more seen as global and interlinked concerns. At the same time, there is an urgent need to mobilise unprecedented resources to achieve the ambitious Sustainable Development Goals (SDGs). The private sector can be a powerful promotor of sustainable development. Companies provide jobs, infrastructure, innovation and social services, among others. Increasingly, investments in developing countries – even in the least developed countries – are seen as business opportunities, despite the risks involved. The public sector can leverage the private sector contribution, helping to manage risk and providing insights into effective policy and practice. Yet in order to set the right incentives, a better understanding is needed of the enabling factors, as well as the constraints, for businesses and investors interested in addressing sustainable development challenges.

The Development Co-operation Report 2016 explores the potential and challenges of investing in developing countries, in particular through social impact investment, blended finance and foreign direct investment. The report provides guidance on responsible business conduct and outlines the challenges in mobilising and measuring private finance to achieve the SDGs. Throughout the report, practical examples illustrate how business is already promoting sustainable development and inclusive growth in developing countries. Part II of the report showcases the profiles and performance of development co-operation providers, and presents DAC statistics on official and private resource flows.

With the adoption of the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs), the world now has the most ambitious, diverse and universal development roadmap in history. To meet the challenges they represent, the global community needs to move well beyond the approximately USD 135 billion provided annually as official development assistance (ODA). Investment needs for the SDGs in developing countries are estimated to be in the order of USD 3.3 to 4.5 trillion per year. Taking action to limit the global temperature increase to 1.5°C above pre‑industrial levels will require some USD 100 billion every year until 2020 from developed countries alone. At the same time, the new goals make it clear that the challenges of sustainable development are no longer merely a question of what is happening in poor countries – they are challenges for us all. To tackle these global and interlinked concerns, a diverse array of stakeholders will need to join forces – with the private sector taking a pivotal position.

Investment in sustainable development is smart investment

The business case for the SDGs is strong. This Development Co‑operation Report 2016 makes it clear that investing in sustainable development is smart investment. Companies that introduce sustainability into their business models are profitable and successful, with positive returns on capital in terms of reduced risk, diversification of markets and portfolios, increased revenue, reduced costs and improved value of products. Increasingly, investments in developing countries – and even in the least developed countries – are seen as business opportunities, despite the risks involved. On the other hand, companies provide jobs, infrastructure, innovation and social services, among others. This report explores five pathways for realising the enormous potential of the private sector as a partner for delivering on the SDGs, providing the quantity and quality of investment needed to support sustainable development.

Five pathways to the Sustainable Development Goals

1. Foreign direct investment is by far the greatest source of international capital flows to developing countries and is considered one of the most development‑friendly sources of private investment. It can create jobs, boost productive capacity, enable local firms to access new international markets and bring with it transfers of technology that can have positive long‑term effects. Many are expecting these flows to play a major role in filling the SDG financing gap. According to the United Nations Conference on Trade and Development (UNCTAD), a concerted effort by the international community could help to quadruple foreign direct investment by 2030, especially in structurally weak countries. There is, however, some cause for concern: global capital flows have started to decelerate, while economic vulnerabilities are growing. Chapter 2 warns that a slowdown, or even reversal, in foreign direct investment could have serious negative ramifications for both developing and international investment markets. Framing development strategies around the complementary and mutually reinforcing qualities of private investment and development co‑operation can help to offset the cyclic, changing nature of foreign direct investment trends.

2. Blended finance – using public funds strategically to provide, for instance, de‑risking instruments for private investors – can dramatically improve the scale of investment in development. Blended finance offers huge, largely untapped potential for public, philanthropic and private actors to work together to dramatically improve the scale of investment in developing countries. Its potential lies in its ability to remove bottlenecks that prevent private investors from targeting sectors and countries that urgently need additional investment. To accelerate social and economic progress towards the Sustainable Development Goals, blended finance needs to be scaled up, but in a systematic way that avoids certain risks. Chapter 3 takes a close look at the use of development and philanthropic finance to unlock resources through blending mechanisms that have the potential to transform economies, societies and lives. It notes that while the concept of blending public and private finance in the context of development co‑operation is nothing new, it has played a marginal role so far.

3. Chapter 4 of this report describes work underway to monitor and measure the mobilisation effect of public sector interventions on private investment. This is expected to be an important element of the new “total official support for sustainable development” (TOSSD) framework, which will provide important information about financing strategies and best practices, helping to attract development finance to support the SDGs. A recent OECD survey has confirmed the feasibility of collecting and measuring data on the direct mobilisation effect of guarantees, syndicated loans and shares in collective investment vehicles; work is underway to develop similar methodologies for other financial instruments. Much work still remains to be done, however, in particular to find ways of measuring the indirect – or “catalytic” – effect of public interventions on the achievement of the global goals and in tackling climate change. The OECD is co‑ordinating its efforts with work underway in other fora to ensure coherence.

4. If development is to be truly sustainable and inclusive it must benefit all citizens – in particular the poorest, most marginalised and vulnerable. Social impact investment has evolved over the past decade as an innovative approach to increasing the benefits of business for the world’s poorest and most marginalised populations. Enterprises that generate measurable social as well as financial returns can bring effectiveness, innovation, accountability and scale to development efforts. Public funds can be used to strengthen and promote this type of investment by sharing risks, and also by supporting a sound business environment, particularly in the least developed countries and in countries emerging from conflict. These new business models can complement existing ones, especially in areas not traditionally popular with business – but essential to the poor – such as education, health and social services.

5. For business to do good while doing no harm, the private sector must be held to the same international transparency and accountability standards as all other actors. Chapter 6 looks at the principles and standards of responsible business conduct and how following them can give responsible businesses an advantage that benefits their bottom lines, while at the same time producing positive results for people and the planet. Business and government have complementary roles to play in implementing, promoting and enabling responsible business conduct. The OECD Guidelines for Multinational Enterprises help to optimise their contributions, supporting the development of responsible and accountable business practice to ensure that investment quantity is matched by business quality to produce social, economic and environmental benefits.

This report provides examples of how the OECD is stimulating dialogue and creating opportunities for co‑operation among the many stakeholders involved in sustainable development. It also presents practical cases that illustrate how businesses are already working to promote sustainable development and inclusive growth in developing countries. In this era hallmarked by globalisation, rapid technological advancement and competition for precious resources, it is important to remember that business thrives when the world thrives.

Read the full book on: 10.1787/dcr-2016-en

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The development effectiveness of Development Finance Institutions

Development funding is increasingly being channelled through Development Finance Institutions. These national institutions are particularly solicited when using development aid money to free up further investment, known as leveraging. When used well, these tools have the potential to allow sectors of developing countries’ economies that wouldn’t otherwise attract investment to strengthen and expand. However, this joint TUDCN-CPDE research paper highlights a number of alarming shortfalls in how these institutions operate that can seriously undermine international development goals.

This new report, entitled ‘The development effectiveness of supporting the private sector with ODA funds’ examined nine Development Finance Institutions (DFIs). It is jointly produced by the CSO Partnership for Development Effectiveness (CPDE) and the TUDCN. Five case studies (available below) provided a background for the study which found that DFI practice is lacking in three vital areas:

Ownership

Ownership has been repeatedly highlighted as a fundamental pillar of development. In spite of that, the majority of the DFIs examined had policies that expressed a preference for supporting the interests of the donor country. This is in clear contradiction of the aim of promoting local ownership and that of ensuring that aid by untied from external interests. In the case of COFIDES (Spain) and OPIC (USA) they go as far as requiring that any investment they make benefit their national (donor) companies. It is perhaps no coincidence that these are the only two DFIs examined in the study that are part owned by private national stakeholders. The issue of private ownership needs to be addressed as it creates a bias that can evidently lead to the compromising of development interests. The concept of ownership also extends to setting the aims of projects. However, not one of the DFIs require that either developing country governments or local social partners be consulted in setting out the aims of a project.

Development results

In order to obtain a good and independent idea of what the development impacts are on the ground, there is a need for performance standards and monitoring systems to be accessible. However, reporting standards are insufficient across the board. There is currently too strong a reliance on self-reporting and limited use of monitoring indicators. Key documentation required for ensuring accountability is not made available. Furthermore, as highlighted by the Panama Papers, it is widely recognised that offshore financial centres (OFCs) have a negative impact on developing countries. It is astounding then that 75% of CDC’s (UK) investments went through jurisdictions that are among the 20 most secretive. This poses serious challenges to the transparency of the DFIs’ work.

Mutual accountability

Meanwhile, accountability flows in only one direction. There is a need for stakeholders to have access to essential information and for complaint procedures to be systematically put in place in order for the opinions of the beneficiaries to be heard. The ability of workers to get organised and raise a complaint to the relevant body is also questioned. This reflects a broader approach of DFIs to labour standards as distinct from development goals. This outlook is symptomatic of a general contempt for labour interests among DFIs which is otherwise illustrated by the fact that none of them require the board to include a workers’ representative.

In light of these findings, the current performance of DFIs is unsatisfactory. Examples of best practice can lead the way to a sustainable approach to the use of financial tools for development.

The full report is available here: EN FR ES

The full case studies are available here:

Source: ITUC http://www.ituc-csi.org/DFI-study

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ILO calls for reorientation of Latin American labour market policies

ILO: Labour market policies in Latin America must be reoriented to protect social achievements and address productivity gaps At a time when governments in the region face the dual challenges of creating quality jobs and safeguarding achievements in social inclusion and work quality, an ILO report highlights the need for a new approach based on active labour market policies to address the current economic slowdown. Lima, 21 June 2016 (ILO) – The International Labour Organization (ILO) has urged Latin American countries to carry out a “strategic reorientation” of their labour market policies in order to increase productivity and to address rising unemployment and informality resulting from the economic slowdown. The report in Spanish A report warns that “the achievements made since the 2000s, in terms of social inclusion and work quality have stalled and are even beginning to reverse,” which can lead to a dangerous “structural stagnation” in labour markets […]

ILO: Labour market policies in Latin America must be reoriented to protect social achievements and address productivity gaps

At a time when governments in the region face the dual challenges of creating quality jobs and safeguarding achievements in social inclusion and work quality, an ILO report highlights the need for a new approach based on active labour market policies to address the current economic slowdown.

Lima, 21 June 2016 (ILO) – The International Labour Organization (ILO) has urged Latin American countries to carry out a “strategic reorientation” of their labour market policies in order to increase productivity and to address rising unemployment and informality resulting from the economic slowdown.

The report in Spanish

A report warns that “the achievements made since the 2000s, in terms of social inclusion and work quality have stalled and are even beginning to reverse,” which can lead to a dangerous “structural stagnation” in labour markets that could, in turn, generate an increase in inequality and informality and erosion in the middle class”.

“The alarm bells are ringing, the economic slowdown will impact the region’s labour markets in 2016 and over the next years,” said the ILO’s Regional Director for Latin America and the Caribbean, José Manuel Salazar.

“Now what we are talking about are effective solutions. The so-called active labour market policies represent a policy shift that seeks to improve and update the skills of the labour force, readjust labour supply and demand, and promote productive employment. This integrated approach is what labour markets in the region need,” he added.

The report, “What works: Active labour market policies in Latin American and the Caribbean ”, was developed by the ILO’s Research Department in Geneva.

According to the document, despite some years of solid growth in which social progress and unemployment advanced, those achievements were not consolidated, thus revealing structural deficiencies. The report warns that “even with remarkable progress, the shift to a knowledge driven economy and one based on better quality jobs has not been completed”.

ILO specialist Veronica Escudero, one of the authors of the report, warned that “even if these policies have great potential, we need to highlight that the design, targeting and implementation are essential to guarantee their effectiveness.”

In this sense, it is necessary to “be very clear about the employment barriers that people in a country face, as well as the needs of the local labour market, to ensure the relevance of the policies and to maximize their impact, including the number of beneficiaries,” explained Escudero.

An urgent policy reorientation for Latin America and the Caribbean

To tackle unemployment, informality and low productivity growth, a policy reorientation is needed in Latin America and the Caribbean. ILO economists Clemente Pignatti and Verónica Escudero discuss the potential opportunities that can be leveraged from active labour market policies in the region.

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Cash Transfer Programs Succeed for Zambia’s Poor, Offer Lessons for Battling African Poverty, AIR Finds

African nations increasingly embrace cash transfers to combat the continent’s cycle of poverty WASHINGTON D.C., United States of America, June 8, 2016/ — Programs designed to alleviate hunger and increase food supply through cash transfers to some of Zambia’s poorest families achieved those goals and more, final evaluations conducted by the American Institutes for Research (AIR) (http://www.AIR.org) revealed. Overall, researchers found that a cash-transfer program geared toward families with at least one young child had effects that amounted to a net benefit of 1.5 kwacha—Zambia’s currency— for each kwacha transferred. A second program for households with fewer able-bodied people to farm had effects that amounted to a net benefit of 1.68 kwacha for each kwacha transferred. Besides eating more meals and building more reliable food reserves, families used the money to improve their housing, buy additional necessities for their children, acquire more livestock and reduce debt. The studies, commissioned by […]
African nations increasingly embrace cash transfers to combat the continent’s cycle of poverty
WASHINGTON D.C., United States of America, June 8, 2016/ — Programs designed to alleviate hunger and increase food supply through cash transfers to some of Zambia’s poorest families achieved those goals and more, final evaluations conducted by the American Institutes for Research (AIR) (http://www.AIR.org) revealed.

Overall, researchers found that a cash-transfer program geared toward families with at least one young child had effects that amounted to a net benefit of 1.5 kwacha—Zambia’s currency— for each kwacha transferred. A second program for households with fewer able-bodied people to farm had effects that amounted to a net benefit of 1.68 kwacha for each kwacha transferred.

Besides eating more meals and building more reliable food reserves, families used the money to improve their housing, buy additional necessities for their children, acquire more livestock and reduce debt.

The studies, commissioned by UNICEF, are likely to be closely watched as African nations increasingly embrace cash transfers to combat the continent’s cycle of poverty. South Africa’s program is the largest, with roughly 16.1 million people—about a third of its population—receiving some kind of social grant.

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Notably, the two Zambian programs were unconditional—providing small, consistent sums of money with no strings attached on how they were spent. The programs bucked general criticisms that cash transfers spark dependency. Rather, the discretionary approach empowered families, who used the grants to improve their living standards in ways that made sense given their individual circumstances. At no point during the multiyear grants did alcohol consumption increase. Nor was there any impact on fertility, according to the evaluations.

“The unconditional approach worked,” said Stanfield Michelo, director of social welfare at Zambia’s Ministry of Community Development and Social Welfare. “And because it did, the region is making positive strides. Without a doubt, the changes would not have been possible without AIR’s rigorous evaluations.”

The evaluation of the Child Grant cash-transfer program (CGP) lasted four years, and the evaluation of the Multiple Category Targeting Grant (MCTG) lasted three years. Begun in 2010 in three of Zambia’s poorest districts, the CGP was open to all households with at least one child under age 4. Half were randomly assigned to receive cash transfers of 60 kwacha ($12) a month, and half to a control group that did not receive funds. The MCTG was aimed at poor households with fewer able-bodied people to farm, due largely to a “missing generation” of parents in their 30s and 40s and disproportionally high numbers of adolescents and orphans cared for by widows and grandparents. As with the CGP, half the MCTG participants received the equivalent of $12 a month and half were in a control group that didn’t.

The studies were notable not only for their duration, but also for their use of randomization and control groups to tease out the program’s true effects.

“Few evaluations of cash transfer programs can make such strong causal claims with as much certainty as these two evaluations,” said David Seidenfeld (http://www.air.org/person/david-seidenfeld), AIR’s senior director of international research and evaluation and lead study author. “The design of the study, which extended over several years, allowed us to see that the beneficiaries do not grow complacent over time, but instead find ways to grow the value of the transfer beyond benefits related to food security and consumption.”

Although the studies revealed persistent successes, they also offered future researchers and policymakers an idea of cash transfers’ limitations. The studies did not show consistent successes in education or child nutrition, possibly due to large-scale infrastructure issues—namely, the supply of social services, access to clean water, and a lack of health care and education facilities.

Among the studies’ principal lessons, researchers found that the degree of positive impact depended largely on the participants’ characteristics. For example, the multiple-category grants had large impacts on schooling because participating households had more school-age children. Overall, school enrollment jumps of 8 percent for children ages 11–14 and 11 percent for children 15–17 were attributed to the program, and these age groups are at the greatest risk of dropping out in Zambia, according to the report. By contrast, four years into the program, the child grants had no enrollment or attendance impacts for children in three groups: ages 4–7, 8–10 and 15–17.

“Another lesson is that the unconditional nature of the grants gave participants the flexibility to use the money to combat principal life challenges,” said UNICEF Zambia Representative Hamid El-Bashir Ibrahim. “For example, the CGP significantly affected many indicators commonly associated with resiliency—the ability to manage and withstand shocks. Households with transfers significantly improved housing quality and tools, livestock procurement, and opportunities to diversify income-generating activities so they could better withstand emergencies.”

“The overall results demonstrate unequivocally that common perceptions about cash transfers—that they are handouts and cause dependency, or lead to alcohol and tobacco consumption, or increases in pregnancy—are not true in Zambia,” Seidenfeld said. “Quite the contrary. Due to the unconditional nature of the grants, households had the flexibility needed to meet their most pressing challenges head on.”

The final reports on the Child Grant cash transfer program (http://bit.ly/25KDdJk) and the Multiple Category Transfer Grant program (http://bit.ly/1Udb21M) can be found on AIR’s website. The site also features a video (http://bit.ly/1TXR5Oe) of David Seidenfeld discussing lessons learned from the multiyear studies.

Source: APO (African Press Organization) on behalf of American Institutes for Research (AIR).

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Trade finance and SMEs – Bridging the gaps in provision

The World Trade Organisation (WTO) has released a new study focusing on SMEs’ lack of access to trade finance, providing a list of recommendations to address the gap.

WTO Director-General Roberto Azevêdo has issued a call for action to help close the gaps in the availability of trade finance that affect the trade prospects of small and medium-sized enterprises (SMEs), particularly in Africa and Asia. In a new WTO publication, “Trade Finance and SMEs: bridging the gaps in provision”, which examines the problem and looks into possible solutions, DG Azevêdo says that easing the supply of credit could have a big impact in helping small businesses grow and in supporting the development of the poorest countries.

WOT Report May 2016

The WTO’s strategy focuses on three fronts: firstly, encouraging global financial institutions to stay engaged, ensuring that regulations are not prohibitive; then, enhancing local financial institutions’ capacity to supply trade finance to SMEs; finally, supporting multilateral development banks’ programmes increasing the availability of trade finance.

A six-point recommendation list tackles additional issues, from enhancing existing multilateral banks’ trade finance facilitation programmes, to closing the trade finance knowledge gap, strengthening training programmes, as well as maintaining a closer dialogue with regulators and improving monitoring of trade finance provisions. The report also suggests that setting specific targets could help in mobilising and co-ordinating efforts to improve SMEs’ access to trade finance. Source: smefinanceforum.org