Geopolitics threaten economic cooperation – WEF
Competition among nations to establish relative geopolitical power threatens to undermine the logic of global economic cooperation and potentially the entire international rule-based system, the World Economic Forum has indicated in its Global Risks report of 2015.
According to the Global Risks report, much of the interplay between economic and geopolitical interests plays out not in the trade arena but in the Bretton Woods institutions. Countries’ inability to agree on an institutionalised, closer coordination of macroeconomic policies to reduce global imbalances provides an interesting example. Some observers see the failure to mitigate these imbalances, combined with the return of strategic competition in an era defined by an erosion of trust, as raising a tail-risk possibility of undermining the Bretton Woods institutions themselves and the international rule-based system more generally.
These developments are reflected in the recent alternative structures being established by selected countries. Brazil, Russia, India and China in 2014 set up the New Development Bank, the so-called BRICs Bank, which is intended to lend up to $34 billion globally, particularly for infrastructure projects.
In the same year, together with 20 other countries, China created the Asian Infrastructure Investment Bank for the Asia-Pacific region. “Much as a retreat from global multilateralism is worrisome, stronger regional multilateralism is not necessarily a bad thing, as regional solutions to regional problems can be consistent with global governance structures; although economic integration is not often explicitly targeted, it binds nations more closely together politically.
While increased interdependencies have brought the world closer together, the Global Risks report, emphasises the flip side of the effects of this situation, as people’s lives become more complex and more difficult to manage while businesses, governments and individuals alike are forced to decide upon courses of action in an environment clouded by multiple layers of uncertainty; self interest stands to erode the rule based system and cooperation.
Faced with competing strategic needs and governments’ growing tendency to look inwards and prioritise their domestic producers and economies, and with an increased reliance on economic levers as a means to gain geopolitical influence, ‘the coming years could see competitive relationships between the major powers develop into trade and currency wars, requiring economic diplomacy.’
“While regional institutions and alternative structures have a role, global institutions must respond to pressure to better reflect the rising wealth and power of emerging economies. They remain the most promising means for competing powers to build strategic trust, which could minimize the detrimental effects of geo-economic competition on growth and prosperity,” says the report.
“The interconnections between geopolitics and economics are intensifying because states are making greater use of economic tools, from regional integration and trade treaties to protectionist policies and cross-border investments, to establish relative geopolitical power. This threatens to undermine the logic of global economic cooperation and potentially the entire international rule-based system,”
The fragility of societies is of increasing concern, fuelled by underlying economic, societal and environmental developments. A major driver of social fragility is rising socio-economic inequality within countries, although it is diminishing between countries. Among the members of the Organisation for Economic Co-operation and Development (OECD), the average income of the richest 10 percent has now grown to about nine times that of the poorest 10 percent. In other countries, the ratio Is even higher: for example, more than 25 times in Mexico.
According to the Global Risk Report, Geopolitical risks are back, as evidenced by the central node of the failure of national governance in the interconnections maps, and the strong linkages to interstate conflict and profound social instability, among others. With economies tied together on an unprecedented scale by financial and trade flows, analysts who contributed to the views in the Report, are concerned about the resurgence of the trend towards the interplay between geopolitics and economics.
While national governments in the past also made use of economic tools to increase their relative power, today’s strong economic ties arguably make this interplay more complex and therefore more difficult to navigate. This resurgence could have profound implications for the effectiveness of global governance mechanisms in other areas, from combating climate change to reaching an international solution for Internet governance. Even as nation states step up their efforts to maintain or expand power, urbanization is slowly but surely rebalancing the locus of power from national to city governments.
The data gathered for this report suggest that urbanization is a critical driver of profound social instability, failure of critical infrastructure, water crises, and the spread of infectious diseases. This will only be further exacerbated by an unprecedented transition from rural to urban areas: by 2050, two-thirds of the world’s population – an estimated 6.3 billion people – will live in cities, with 80 percent in less developed regions. Rapid and unplanned urbanization in these regions has the potential to drive many risks. How effectively the world addresses global risks.
When confronted with political and economic volatility at home, countries often revert to protectionism under the guise of policies to reduce risk as evidenced by a recent OECD report showing that despite their professed commitment to free trade, G20 economies have increasingly reverted to protective measures since growth slowed in 2012 in the wake of the global financial crisis. Protectionism can take different forms. It can be related, for example, to the protection of strategic sectors, local content requirements in the case of external investment, or state bailout.
The 10 most likely global risks, the WEF says, are; interstate risks; extreme weather events; failure of national governance; state collapse or crisis; unemployment or underemployment; natural catastrophes; failure of climate change adaptation; water crises; data fraud or theft; and cyber-attacks.
Meanwhile, the risks that will have the biggest impacts are: water crises; the spread of infectious diseases; weapons of mass destruction; interstate conflict; failure of climate-change adaptation; energy price shocks; a breakdown in critical information infrastructure; fiscal crises; unemployment or underemployment; and biodiversity loss and ecosystem collapse.
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Nigerians, Zimbabweans apply for Chema Chema Fund
Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.
According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.
“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’
Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.
One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.
Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”
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Merck Foundation and African First Ladies mark World Health Day 2024
Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.
I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.
As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.
Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.
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Interpol fugitive escapes from Botswana
John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.
Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.
The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.
In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.
At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.
Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.
When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.