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Global Risks Report 2020: US, China trade war unsettles the world

The Global Risks Report 2020, published annually by the World Economic Forum (WEF) has indicated that from its survey, economic confrontations between major powers is the biggest risk facing the globe currently, while young people believe climate change present the biggest risk.

A “global risk”, in the context of the report, is defined as an uncertain event or condition that, if it occurs, it can cause significant negative impact for several countries or industries within the next 10 years. The survey was conducted from 5 September to 22 October 2019, among the World Economic Forum’s multi-stakeholder communities (including the Global Shapers Community, comprising of young people), the professional networks of its Advisory Board, and members of the Institute of Risk Management.

The survey focused on short-term risks, which is confined to the year ahead, as well as the long terms risks, focusing on the coming 10 years. When the survey was carried out respondents were asked to assess whether the risks associated with 40 current issues would increase or decrease in 2020 compared to 2019. Respondents were also given the option to name any other issue(s), not included in the 40 risks listed that they expect to be a source of increased risk in 2020.

According to the report, in the short term risks, the global economy is at risk of stagnation owing to rising trade barriers, lower investment and high debt that are straining economies around the world. “The margins for monetary and fiscal stimuli are narrower than before the 2008–2009 financial crisis, creating uncertainty about how well countercyclical policies will work,” the report indicated. The report noted that global trade, which for decades has been an engine for growth, is slowing down.

World Trade Organization (WTO) data for the first three quarters of 2019 shows that total world merchandise trade decreased by 2.9 percent from the previous year, it decreased in the world’s top ten traders, according to the report, further indicating that reduced trade volumes are largely the result of what the WTO has called “historically high levels of trade restrictions”.

The potential result, the report said, according to the IMF, could be global growth slowing by 0.8 percentage points in 2020, should the United States and China uphold existing tariffs or implement new ones. “While progress was made in late 2019 between the United States and China towards a trade agreement, the effects of having turned trade from an instrument of cooperation to a weapon of rivalry may persist,” he report observed.

Recent editions of the Global Risks Report warned of downward pressure on the global economy from macroeconomic fragilities and financial inequality. These pressures continued to intensify in 2019, increasing the risk of economic stagnation. Low trade barriers, fiscal prudence and strong global investment—once seen as fundamentals for economic growth—are fraying as leaders advance nationalist policies.

 The margins for monetary and fiscal stimuli are also narrower than before the 2008–2009 financial crisis, creating uncertainty about how well countercyclical policies will work. A challenging economic climate may persist this year: according to the Global Risks Perception Survey, members of the multi-stakeholder community see “economic confrontations” and “domestic political polarization” as the top risks in 2020. Amid this darkening economic outlook, citizens’ discontent has hardened with systems that have failed to promote advancement.

Disapproval of how governments are addressing profound economic and social issues has sparked protests throughout the world, potentially weakening the ability of governments to take decisive action should a downturn occur. Without economic and social stability, countries could lack the financial resources, fiscal margin, political capital or social support needed to confront key global risks.

CLIMATE CHANGE FEARS PUT IN PERSPECTIVE

The survey, carried both on multi-stakeholders and Global shapers (a network of emerging young leaders around the world affiliated to World Economic Forum) concluded that in the long term risks, expected to happen in the next 10 years, climate change present the biggest risks. Extreme weather; Climate action failure; Natural disaster; Biodiversity loss; Human-made environmental disasters all featured in the top 5 in terms of likelihood.

The report indicate that Climate change is striking harder and more rapidly than many expected. “The last five years are on track to be the warmest on record, natural disasters are becoming more intense and more frequent, and last year witnessed unprecedented extreme weather throughout the world,” the report said.

“Alarmingly, global temperatures are on track to increase by at least 3°C towards the end of the century—twice what climate experts have warned is the limit to avoid the most severe economic, social and environmental consequences.” The near-term impacts of climate change add up to a planetary emergency that will include loss of life, social and geopolitical tensions and negative economic impacts, the report said.

For the first time in the history of the Global Risks Perception Survey, environmental concerns dominate the top long-term risks by likelihood among members of the World Economic Forum’s multi-stakeholder community; three of the top five risks by impact are also environmental.  “Failure of climate change mitigation and adaption” is the number one risk by impact and number two by likelihood over the next 10 years, according to our survey. Members of the Global Shapers Community—the Forum’s younger constituents—show even more concern, ranking environmental issues as the top risks in both the short and long terms.

The Forum’s multi-stakeholder network rate “biodiversity loss” as the second most impactful and third most likely risk for the next decade. The current rate of extinction is tens to hundreds of times higher than the average over the past 10 million years—and it is accelerating. Biodiversity loss has critical implications for humanity, from the collapse of food and health systems to the disruption of entire supply chains.

The report recognise that for the future of climate change mitigation, 2020 is a critical year, indicating that it presents the first opportunity for nations to revise their national plans to tackle climate change as set out under the 2015 Paris Climate Agreement, and to close the gap between what they have pledged and what is needed. “An increasing number of governments are announcing long-term net-zero emissions goals and showing more interest in tackling outstanding challenges in developing potential low carbon solutions,” the report said.  

“These include creating a low-carbon hydrogen supply chain at scale; reducing emissions through carbon capture, use and storage; managing the intermittency of renewables with grid-scale storage solutions; electrifying domestic and commercial heating; better recycling of electric car batteries; and mapping out the future availability of the raw materials needed to support the transition. 


The report contended that achieving significant change in the near term will depend on greater commitment from major emitters, noting that failure to seize 2020’s opportunity to mitigate climate change will have three main consequences. First, transition risks will increase. Further delay in reducing emissions will make it harder to achieve carbon budget goals: companies and markets will ultimately be forced to adjust more rapidly, which could lead to higher costs, greater economic disruptions, or draconian interventions from panicked policy-makers that imperil macroeconomic and financial instability.

Communities will also suffer if jobs are lost without well-thought-through and equitable transition plans in place. Over 40 central banks and supervisors are already examining how climate risks can be integrated into their economic and financial activities.
According to the report, The Bank of England has warned that corporations in incumbent “dirty” industries can expect to go bankrupt if they fail to understand the risk of their business models becoming obsolete as investment flees to net-zero-emission alternatives.

The Financial Stability Board’s Taskforce on Climate-related Financial Disclosures announced recommendations in 2017 that have driven boardroom discussions regarding financial exposures and transition strategies. “Now supported by almost 900 companies, assessing financial risk of climate change is becoming more mainstreamed.

Governments are also moving towards mandatory disclosure of climate risks by listed companies,” the report said. The investor community is also responding to climate risk, according to the report, with a recent notable development being the launch of the UN-convened Net Zero Asset Owners Alliance at the 2019 United Nations Climate Action Summit

Short-Term Risk Outlook

*Risks expected to increase in 2020

Economic confrontations
Domestic political polarization
Extreme heat waves
Destruction of natural ecosystems
Cyberattacks: infrastructure
Protectionism on trade/investment
Populist and nativist agendas
Cyberattacks: theft of money/data
Recession in a major economy
Uncontrolled fires

Long-Term Risk Outlook

*Top 10 risks by likelihood and impact over the next 10 years

Extreme weather
Climate action failure
Natural disaster
Biodiversity loss
Human-made environmental disasters
Data fraud or theft
Cyberattacks
Water crises
Global governance failure
Assets bubble

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Jackdish Shah loses interest in BDP

17th May 2022
Jackdish

As the preparations for the Botswana Democratic Party (BDP) congress are about to kick off, reports on the ground suggest that the party’s Deputy Treasurer Jackdish Shah will not defend the position in August as he contemplates relocation.

According to sources, the businessman who joined the BDP Central Committee in 2015 at the 36th Congress held in Mmadinare is ready to leave the party’s politburo. It is said he long made up his mind not to defend the position last year. A prominent businessman, Shah, when he won the position to assist Satar Dada in 2015 was expected to improve the party’s financial vibrancy. By then the party was under the leadership of Ian Khama.

According to close sources, Shah long decided not to contest because he has fallen out of favour with the party leadership. It is said he took the decision after some prominent businessmen who are BDP members and part of football syndicate decided to push him out and they used their proximity to President Mokgweetsi Masisi to badmouth him hence the decision.

“The fight at the Botswana Football Association (BFA) and Botswana Football League (BFL) has left him alone in the desert and some faces there used their close access to the President to isolate him,” said a source. Media reports say, Shah does not see eye to eye with BFA President MacLean Letshwiti who is also Masisi’s buddy hence the decision.

BFL Chairman Nicholas Zackhem is said to be not in good terms with Shah, who at one point Chaired the then Botswana Premier League (BPL). “He is seriously considering quitting because of what is unfolding at the team (Township Rollers) which is slowly not making financial gains and might be relegated and he wants to sell while it is still worth the investment,” said a highly placed source.

Shah is a renowned businessman who runs internet providing company Zebra net, H &G, game farm in Kasane, cattle farm in Ghanzi region and lot of properties in Gaborone. He also has two hotels in USA, his advisors have given him thumbs up on the possible decision of relocating provided he does not sell some of the investments that are doing well.

Asked about whether he will be contesting Shah could not confirm nor deny the reports. It is said for now it is too early as a public decision will have to be taken after the national council meeting and prior to the national congress. “As a BDP Central Committee member he cannot make that announcement now,” a BDP source said.

BDP is expected to assemble for the National Council during the July holidays while the National Congress is billed for August. It is then that the party will elect a new CC members. The last time BDP held elective congress was at Kang in 2019. The party is yet to issue writ.

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Govt ignores own agreements to improve public service

17th May 2022
Govt

The government has failed to implement some commitments and agreements that it had entered into with unions to improve conditions of public servants.

Three years after the government and public made commitments aimed at improving conditions of work and services it has emerged that the government has ignored and failed to implement all commitments on conditions of service emanating from the 2019 round of negotiations.

In its position paper that saw public service salaries being increased by 5%, the government the government has also signalled its intention to renege on some of the commitments it had made.
“Government aspires to look into all outstanding issues contained in the Labour Agreement signed between the Employer and recognised Trade Union on the 27th August 2019 and that it be reviewed, revised and delinked by both Parties with a view to agree on those whose implementation that can be realistically executed during the financial years 2022/23, 2023/24 and 2024/25 respectively,” the government said.

Furthermore, in addition to reviewing, revising and de-linking of the outstanding issues contained in the Collective Labour Agreement alluded to above and taking on a progressive proposal, government desires to review revise, develop and implement human resource policies as listed below during the financial year 2022/23,2023/24,2024/25

They include selection and appointment policy, learning and development policy, transfer guidelines, conditions of service, permanent and pensionable, temporary and part time, Foreign Service, expatriate and disciplinary procedures.

In their proposal paper, the unions which had proposed an 11 percent salary increase but eventually settled for 5% percent indicated that the government has not, and without explanation, acted on some of the key commitments from the 2019/2020 and 2021/22 round of negotiations.  The essential elements of these commitments include among others the remuneration Policy for the Public Service.

The paper states that a Remuneration Policy will be developed to inform decision making on remuneration in the Public Service. It is envisaged that consultations between the government and relevant key stakeholders on the policy was to start on 1st September 2019, and the development of the policy should be concluded by 30th June 2020.

The public sector unions said the Remuneration Policy is yet to be developed. The Cooperating Unions suggested that the process should commence without delay and that it should be as participatory as it was originally conceived. Another agreement relate to Medical Aid Contribution for employees on salary Grades A and B.

The employer contribution towards medical aid for employees on salary Grades A and B will be increased from 50% to 80% for the Standard Option of the Botswana Public
“Officers’ Medical Aid Scheme effective 1st October 2019; the cooperating unions insist that, in fulfilling this commitment, there should be no discrimination between those on the high benefit and those on the medium benefit plan,” the unions proposal paper says.

Another agreement involves the standardisation of gratuities across the Public Service. “Gratuities for all employees on fixed term contracts of 12 months but not exceeding 5 years, including former Industrial class employees be standardized at 30% across the Public Service in order to remove the existing inequalities and secure long-term financial security for Public Service Employees at lower grades with immediate effect,” the paper states.

The other agreement signed by the public sector unions and the government was the development of fan-shaped Salary Structure. The paper says the Public Service will adopt a best practice fan-shaped and overlapping structure, with modification to suit the Botswana context. The Parties (government and unions) to this agreement will jointly agree on the ranges of salary grades to allow for employees’ progression without a promotion to the available position on the next management level.

“The fan-shaped structure is envisaged to be in place by 1st June 2020, to enable factoring into the budgetary cycle for the financial year 2021/22,” the unions’ proposal paper states. It says the following steps are critical, capacity building of key stakeholders (September – December 2019), commission remuneration market survey (3 months from September to November 2019), design of the fan-shaped structure (2 to 3 months from January to March2020) and consultations with all key stakeholders (March to April 2020).

The unions and government had also signed an agreement on performance management and development: A rigorous performance management and reward system based on a 5-point rating system will be adopted as an integral part of the operationalization of the new Remuneration System.

Performance Management and Development (PMD) will be used to reward workers based on performance. The review of the Performance Management System was to be undertaken in order to close the gaps identified by PEMANDU and other previous reports on PMS between 1st September 2019 and 30th June 2020 as follows; internal process to update and revise the current Performance Management System by January 2020.

A job evaluation exercise in the Public Service will also be undertaken to among others establish internal equity, and will also cover the grading of all supervisory positions within the Public Service.
Another agreement included overtime Management. The Directorate of Public Service Management (DPSM) was to facilitate the conclusion of consultations on management of overtime, including consideration of the Overtime Management Task Team’s report on the same by 30th November 2019.

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Health Expert rejects ‘death rates’ links to low population growth

17th May 2022
Health-Expert

A public health expert, Dr Edward Maganu who is also the former Permanent Secretary in the Ministry of Health has said that unlike many who are expressing shock at the population census growth decline results, he is not, because the 2022 results represents his expectations.

He rushed to dismiss the position by Statistics Botswana in which thy partly attributes the low growth rates to mortality rates for the past ten years. “I don’t think there is any undercounting. I also don’t think death rates have much to do with it since the excessive deaths from HIV/AIDS have been controlled by ARVs and our life expectancy isn’t lower than it was in the 1990s,” he said in an interview with this publication post the release of the results.

Preliminary results released by Statistics Botswana this week indicated that Botswana’s population is now estimated to be 2,346,179 – a figure that the state owned data agency expressed worry over saying it’s below their projected growth. The general decline in the population growth rate is attributed to ‘fertility’ and ‘mortality’ rates that the country registered on the past ten years since the last census in 2011.

Maganu explained that with an enlightened or educated society and the country’s total fertility rate, there was no way the country’s population census was going to match the previous growth rates.
“The results of the census make sense and is exactly what I expected. Our Total Fertility Rate ( the average number of children born to a woman) is now around 2.

This is what happens as society develops and educates its women. The enlightened women don’t want to bear many children, they want to work and earn a living, have free time, and give their few children good care. So, there is no under- counting. Census procedures are standard so that results are comparable between countries.

That is why the UN is involved through UNFPA, the UN Agency responsible for population matters,” said Maganu who is also the former adviser to the World Health Organisation. Maganu ruled out undercounting concerns, “I see a lot of Batswana are worried about the census results. Above is what I have always stated.”

Given the disadvantages that accompany low population for countries, some have suggested that perhaps a time has come for the government to consider population growth policies or incentives, suggestions Maganu deems ineffective.

“It has never worked anywhere. The number of children born to a woman are a very private decision of the woman and the husband in an enlightened society. And as I indicated, the more the women of a society get educated, the higher the tendency to have fewer children. All developed countries have a problem of zero population growth or even negative growth.

The replacement level is regarded as 2 children per woman; once the fertility level falls below that, then the population stops growing. That’s why developed countries are depending so much on immigration,” he said.

According to him, a lot of developing countries that are educating their women are heading there, including ourselves-Botswana. “Countries that have had a policy of encouraging women to have more children have failed dismally. A good example is some countries of Eastern Europe (Romania is a good example) that wanted to grow their populations by rewarding women who had more children. It didn’t work. The number of children is a very private matter,” said Maganu

For those who may be worried about the impact of problems associated with low growth rate, Maganu said: “The challenge is to develop society so that it can take care of its dependency ratio, the children and the aged. In developed countries the ratio of people over 60 years is now more than 20%, ours is still less than 10%.”

The preliminary results show that Mogoditshane with (88,098) is now the biggest village in the country with Maun coming second (85,293) and Molepolole at third position with 74,719. Population growth is associated with many economic advantages because more people leads to greater human capital, higher economic growth, economies of scale, the efficiency of higher population density and the improved demographic structure of society, among many others.

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