Addressing Africa’s growing plastic pollution problem requires an urgent and comprehensive systems response by governments, businesses, sustainability experts, and civil society if countries are to avoid drowning in a sea of plastic waste, while also unlocking the economic benefits of proper waste management.
This is the goal of the pan-African “Towards Zero Plastics to the Seas of Africa” conference (May 23-27), which is set to bring together top decision-makers across the plastics value chain, public and private sectors to formulate concrete action plans for Africa’s 54 continental and island states.
Hosted by the Sustainable Seas Trust’s African Marine Waste Network in Nelson Mandela Bay, South Africa, the five-day conference is an outcomes-oriented event, where delegates will have the opportunity to contribute to a clear decision-making framework for the management of plastics. The Guide to the Development of National and Regional Action Plans is intended for publication by October this year.
Conference calls for Pan-African response to plastic waste crisis
Private sector growth is our way out of a war economy
(Lessons from Botswana and Vietnam)
By Bekan Bekele
When the war broke out in Ethiopia in November of 2020, I don’t think a large majority of Ethiopians expected it to last for this long as well as cause this much trauma and economic burden. Even though there isn’t enough data to determine the amount of money lost, it is still estimated to have lost the economy 100s of billions of birr. Ethiopia being a developing country, this large deficit will take a toll on the people living around Ethiopia for years to come.
For years now many economists and private investors have been pleading the government to open up the economy for the private sector, and it has shown some minor leeway from the current government relative to prior regimes.
There is no consensus in the literature on whether these sorts of dynamic private sector development approaches can be valuable or counter-intuitive (Moretti, 2014; Wang, 2013).
The current accentuation on public investment, especially on infrastructure, has brought about high development, the sustainability of that development would only depend upon the private sector assuming an increasing role in the economy. Internationally the private sector has proven to be the driving force of development.
According to Luis A. Gil-Alana and Prakarsh Singh’s study on ‘Economic Growth and Recovery After Civil Wars’, they state that developing countries recover their economic growth faster than developed countries in response to a shock. Their main finding is that longer civil conflicts are associated with a faster recovery process. But only under higher government spending that causes a faster recovery post longer conflicts and higher consumption and investment are linked to faster recoveries following shorter conflicts. In this regard, instead of having the government spend copious amounts of money (which it doesn’t have) to bread consumption and investment, it would seem like a better option to have the private sector spend money in the economy instead.
Current Main constraints
Other than public sector dominance, a portion of the vital imperatives to private sector development are bulky regulatory systems, which especially obstruct start-ups, and admittance to credit and foreign exchange. infrastructures, while improving, are as of yet still insufficient.
The business community also considers the lack of a level playing field in relation to public enterprises and favored other entities as a binding constraint. World Bank’s latest ease of Doing Business report (2019), ranked Ethiopia at 159th out of 190 economies with 48% in terms of the overall ease of doing business. It ranks particularly low in the ease of starting a business (168th); getting construction permits, which would particularly affect the industry (142th); getting credit (176th); and trading across borders (156th). It does relatively better in enforcing contracts (67th). According to a 2020 report from the World Bank Group, Ethiopia’s per capita income is a mere $936.
Considering that the enormous piece of existing small private sector is in the informal sector, formalization would be necessary, yet unwieldy regulations would more often than not militate against that. According to the Horn Economic and Social Policy Institute (2017), limited access to finance is a major restraint, which fundamentally results from the underdeveloped nature of Ethiopia’s local financial framework and the fact that there are no foreign owned banks, the public sector rules both in supply and demand side of credit. On the demand side of credit, the public sector, especially state-owned enterprises retain two thirds of accessible credit in this manner swarming out the private sector.
Considering all the previous issues of private sector development, there still exists potential underlying solutions to them, especially under trying times. Multiple countries have survived and even thrived after massive wars.
I’ve chosen to showcase two countries that have achieved this feat with great avail and what we can learn from them
I. Botswana
Even though in technical terms Botswana wasn’t under a specific war before they reinvented their economy, they still were under colonial rule up until the 50s and after that is when they did a 180 and mended their economy from being the 3rd poorest country to the richest country in Africa.
From 1965 to 1995, Botswana was the fastest growing country in the world. During that 30-year stretch, Botswana’s average annual rate of growth was 7.7 percent, and Botswana moved from being the third poorest nation in the world to being an “upper middle income” nation. In 2021, Botswana’s real per capita income was $7,839, which is more than four times the $1,826 average per capita income of an individual living in sub-Saharan Africa.
How can this impressive growth be explained?
There is almost complete consensus that Botswana achieved rapid growth because it managed to adopt good policies. The diamonds no doubt helped in the rapid growth. Yet, it is striking that, contrary to other African countries with abundant natural resources such as Angola, Zaire (Congo), Sierra Leone or Nigeria; Botswana was able to cultivate and utilize its comparative advantages to its benefit. Owning a large number of natural resources doesn’t necessarily imply success, government policies were very vital in helping grow the country’s economy. Some of the policies used during their early post-colonial years included but were not limited to; Financing FDI locally, high emphasis on private sector investments, their mineral policy was under mutual beneficial agreements for both domestic and foreign investors, Trade policy kept the economy open to competition from imports which helped maintain market access for non-mineral exports, strong fiscal policy. According to Jack Sackey, Botswana does not have one single silver (or diamond) bullet that explains its economic record. Rather, it was the whole range of policies which, working together, proved growth.
To encourage the participation of the private sector in the economy, a privatization initiative was launched in 2009. According to that initiative SMEs that showed high potential were provided with significantly more assistance as the organizations were identified to have the potential to fully leverage the provided assistance to achieve the objectives of the program. Some of the assistances included; sectoral management-based assistance, Finance, Cost calculation, working capital management, Human resource management, capacity utilization and a clear sales strategy. There have been criticisms to these new policies from a few economists, and some of them were that these policies would create dependencies on the government once they are cut off. All in all, working on the private sector seemed to dramatically change the country of Botswana from a poverty-stricken country to becoming one of the highest per capita income countries in Africa.
II. Vietnam
The Vietnam War left Vietnam in physical and economic ruins. Millions of acres of land had been defoliated by the harmful Agent Orange. The greater part of the country’s towns and villages had been annihilated. The conflict created in excess of ten million inward refugees, 1,000,000 conflict widows, in excess of 750,000 orphans, 350,000 disabled war veterans, and left 3,000,000 individuals jobless. In spite of those challenges, Vietnam has achieved high developmental progress, reaching lower middle-income status in 2010 (Anja Baum, 2020).
How has Vietnam achieved this?
In 1986, following a time of financial collapse and economic halt with 700% inflation, starving farmers, and an economy that was kept above water by $4 million daily aid from the Soviet Union, Vietnam sent off a political and monetary re-establishment campaign called Doi Moi. The reforms were expected to work with the transition from a protectionist to a market economy, consolidating government planning with free-market economy. Doi Moi destroyed the generally planned economy (starting with agrarian reforms), opened a closed economy to global markets and trade, and started pro-business reforms.
Before the 1990s, the advanced private sector was just too little to even consider its role in Vietnamese economic development. Over the recent couple of years, and specifically since the introduction of the Enterprise Law in 2000, the circumstances have changed, and the private sector has emerged as an imperative part of the economy. It has assumed an especially significant role for job creation, representing somewhere around 90% of the 5,000,000 new jobs that have been added in the labor market since 2000. It is likewise progressively significant with regards to investment, output, exports, and tax revenue. These accomplishments have arguably been the consequences of a particular change in the relation between the state and the private sector.
Before 2000, the private sector was viewed with some caution and all new endeavors were expected to apply for a license prior to beginning their activities – a cycle that required months, involved gigantic documentation, and a discretionary decision to allow the establishment of the firm. Beginning around 2000, the job of the private sector has been reinforced, policies advancing the improvement of SMEs have been laid out, and the bulky authorizing strategy has been changed to a lot easier registration process. With an 80+ million population size the GDP of Vietnam in 2021 was $290 billion and is expected to surpass the $300 billion mark by the end of 2022.
The economy of Vietnam is not without challenges of course, but since the country started implementing policies that would enable the private sector to step in and help the economy, it had shown a massive impact in the speedy recovery of their economy. According to World bank group, 2020 the ease of doing business in Vietnam ranks at 70th in the world with 69% ease. The data also showed that the per capita income of Vietnam was $2,785.
In Conclusion
Even though, applying a specific set of policies that have worked for one country doesn’t necessarily imply it would work the same for another. But from seeing the changes from the current privatization policies implemented by the current regime, it would be safe to assume that other ventures of integrating the private sector would be beneficial.
According to transparency international, Ethiopia ranks 89/180 countries with a score of 39/100 in corruption. The data showed that the majority of these corruptions had come from the public sector. This assumption can be backed up by looking at Botswana, and other developed countries that emphasize the private sector to be a source of their economic growth. Botswana ranks 45/180 countries while, the top ten ranked countries have the private sector as a backbone to their economy. What this data shows is that, the more the private sector is liberalized the less the corruption is and the more money is injected into the economy, which would create more welfare to their communities.
Bekan Bekele is a researcher for Wennovate Consultancy, a private consultancy firm that specializes in entrepreneurship, tourism, and investment.
You can find him at bekan.bekele74@gmail.com
References and further readings
An African Success Story: Botswana – Daron Acemoglu Simon Johnson James A. Robinson, 2001
Private sector development program in Botswana: how SME’s are facing challenges – Sid Boubekeur, 2016
Investment policy review Botswana, 2003
Botswana: An example of prudent economic policy and growth – James Sackey, 2000
The State And The Private Sector In Vietnam – Katariina Hakkala Research Institute of Industrial Economics Ari Kokko Stockholm School of Economics, EIJS, 2007
IMF Working paper, Vietnam’s Development Success Story and the Unfinished SDG Agenda – Anja Baum, 2020
New UN disasters report
By Bjorn Lomborg
Exclusive for Capital
A new United Nations report has revealed the disturbing news that the number of global disasters has quintupled since 1970 and will increase by another 40 percent in coming decades. They find that more people are affected by disasters than ever before, and the UN Deputy Secretary General warns humanity is “on a spiral of self-destruction.”
Astonishingly, the UN is misusing data, and its approach has been repeatedly shown to be wrong. Its finding makes for great headlines-but it just isn’t grounded in evidence.
When the UN analyzed the number of disaster events, it made a basic error-and one that I’ve called it out for making before: It basically counted all the catastrophes recorded by the most respected international disaster database, showed that they were increasing, and then suggested that the planet must be doomed.
The problem is that the documentation of all types of disasters in the 1970s was far patchier than it is today, when anyone with a cellphone can immediately share news of a storm or flood from halfway around the world.
That’s why the disaster database’s own experts explicitly warn amateurs not to conclude that an increase in registered disasters equates to more disasters in reality. Reaching such a conclusion “would be incorrect” because the increase really just shows improvements in recording.
You would think that the UN would know better especially when its top bureaucrats are using language that sounds like Armageddon is here.
Unsurprisingly, climate change is central to the UN agency’s narrative. Their report warns there is a risk of more extreme weather disasters because of global warming, so the acceleration of “climate action” is urgently needed. Somehow, the huge international organization has made the same basic fallacy that many of us do when we see more and more weather disasters aired on the TV news. Just because the world is more connected and we see more catastrophic events in our media doesn’t mean that climate change is making them more damaging.
So how do we robustly measure whether weather disasters really have really become worse? The best approach is not to count the catastrophes, but to look instead at deaths. Major losses of life have been registered pretty consistently over the past century.
This data shows that climate-related events-floods, droughts, storms, fires, and temperature extremes-are not actually killing more people. Deaths have dropped by a huge amount: In the 1920s, almost half a million people were killed by climate-related disasters. In 2021, it was less than 7,000 people. Climate-related disasters kill 99% fewer people than 100 years earlier.
The UN report does include a count of “global disaster-related mortality”-and manages to find that contrary to the international disaster database, deaths are higher than ever before. They reach this conclusion by bizarrely including the deaths from COVID in the catastrophes. Remember, Covid killed more people just in 2020 than all the world’s other catastrophes in the past half century. Lumping these in with deaths from hurricanes and floods inappropriately seem designed to create headlines rather than understanding, especially when the agency is using the findings to argue for an acceleration of climate action.
The truth is that deaths from climate disasters have fallen dramatically because wealthier countries are much better at protecting citizens. Research shows this phenomenon consistently across almost all catastrophes, including storms, floods, cold and heat waves.
This matters, because by the end of this century, there will be more people in harm’s way, and climate change will mean sea levels rise several feet.
One comprehensive study shows that at the beginning of the 21st century, around 3.4 million people experienced coastal flooding each year, causing $11 billion in annual damages. About $13 billion or 0.05% of global GDP was spent on coastal defenses.
If we do nothing and just keep coastal defenses as they are today, vast areas of the planet will be routinely inundated by 2100, with 187 million people flooded and damage worth $55 trillion annually. That’s more than 5% of global GDP.
But we will obviously adapt, especially because the cost is so low. That means fewer people than ever will be flooded by 2100. Even the combined cost of adaptation and climate damages will decrease to just 0.008% of GDP.
These facts show why it’s important that organizations like the UN deliver us the real picture on disasters. The UN Office for Disaster Risk Reduction has bad form for making unfounded claims. Instead of headline-chasing with dodgy math and frightening language, the UN should do better—and it should be focused on championing the importance of innovation and adaptation, to save more lives.
Bjorn Lomborg is President of the Copenhagen Consensus and Visiting Fellow at Stanford University’s Hoover Institution. His latest book is “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.”
Government announces a policy change on access to land for industrialists
Government in its new approach has planned to facilitate facilities in industrial parks rather than providing plots of land.
Prime Minister Abiy Ahmed said that most of the bureaucracy and misdemeanor issues are raised in relation to access of land for industry development.
He stressed that from now onwards the government policy has changed and that interested industrialists who want to invest on the industry sector shall access facilities on industrial parks that are massively developed in the past few years but not utilized fully.
“For investors we will provide the adequate infrastructure at the industrial facilities, other wise for the sake of good governance, plots in Addis Ababa or regions will not be provided for industrial developments,” he strongly said.
To date, the government has built 13 industrial parks and three agro processing parks.
