Accounting for natural capital - The case of the African Economic Outlook
-
Upload
development-co-operation-directorate-dcd-dac -
Category
Education
-
view
776 -
download
4
description
Transcript of Accounting for natural capital - The case of the African Economic Outlook
![Page 1: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/1.jpg)
Accounting for natural capital?The case of the African Economic Outlook
![Page 2: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/2.jpg)
22
Chapter 1: Macroeconomic ProspectsAfrica’s Growth: resilience in the face of
headwinds from the global economy
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(e)
2013(p)
2014(p)
0
1
2
3
4
5
6
7
Africa Africa excluding Libya
Gro
wth
Rat
e (%
)
![Page 3: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/3.jpg)
Chapter 2: External Financial Flows and DRMFDI is picking up
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(e)
2013 (p)
-30
-10
10
30
50
70
90
110
130
150
170
190
210
TOTAL
Remittances
ODA
FDI
Portfolio invest-ments
USD
bill
ion
![Page 4: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/4.jpg)
Chapter 3: Trade and Regional IntegrationTrade: China in the lead
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
50
100
150
200
250
Africa's exports to selected partners (2000-2011)
EU-27
China
USA
India, Brazil, Korea, Turkey, Russia
Intra-African
Billion USD
![Page 5: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/5.jpg)
5
Chapter 4: Human DevelopmentSlow progress
Average change in income and non-income human development indices, 2005-12
![Page 6: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/6.jpg)
6
Chapter 5: Political and Economic GovernancePublic protest up, civil violence down but > 2011
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
0
100
200
300
400
500
600
Public protest (base 100 = 2000)
Civil Violence (base100 = 2000)
![Page 7: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/7.jpg)
2002 (no theme)2003 Privatisation2004 Energy2005 SME Financing2006 Transport2007 Water and sanitation2008 Technical & Vocational Skills2009 Innovation and ICT 2010 Public Resource Mobilisation and Aid2011 Africa’s Emerging Partners
2012 Promoting Youth Employment2013 Structural Transformation and Natural Resources2014 Global Value Chains and Africa’s Industrialisation
Chapter 6: Special Theme
![Page 8: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/8.jpg)
8
Chapter 6: Special Theme 2014 “Global Value Chains and Africa’s Industrialisation”
Potential for integrating GVCs :
1. Extractive industries: backward linkages from oil, copper, diamonds, gold. e.g. MOZAL cluster.
2. Agriculture /agroindustry : Cotton, coffee, tobacco, flowers, horticulture, cashews, cut flowers … But so far mainly isolated success stories, no massive upscaling.
3. Light manufacturing: few success stories (Mauritius, Tunisia, Morocco, Lesotho) despite preferential access to EU, US markets
4. Tradable services: Some successful companies across the region, e.g. Kenya: Business Process Outsourcing (BPO), Call Centers.
GVC do have potential in certain areas – but unlikely to become strong drivers of the desired structural change.
Greatest potential for inclusive growth in high-value agriculture.
![Page 9: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/9.jpg)
Farmer Processor RetailerLogistics
Blue Skies’ ‘fresh from harvest’ value chain
• Employment• Income distribution• Technology and skills transfer
Chapter 6: GVCs (cont.)Cut fruit from Ghana
Source: Blue Skies
![Page 10: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/10.jpg)
Chapter 6: GVCs (cont.)Textile/clothing in Ethiopia, Tanzania
• over 28000 employees in China and Cambodia, export to the US and EU markets
• hired over 1000 local workers in Dar es Salam, Tanzania in 2013• Incentives: stable political environment, good relations with China, SEZ
• Sourcing knitwear from MAA Garment & textile, in Mek’ele• Lower wage cost, delivery time to EU shorter by 1/3 vs. China• Ethiopia’s textile & apparel exports grew by 28% / 12 months to June
2012 = US$84.6m (compared to total German imports alone $17.4bn)• Next: Tesco (UK), Primark (IRE)
Source: Tang Xiaoyang, Tsinghua University
![Page 11: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/11.jpg)
Chapter 6: GVCs (cont.)Regional Value Chains: The rise of supermarkets
11
Who will benefit?• Supermarkets aim for preferred suppliers• Small holders ill-prepared to meet
demands (quality, packaging etc.)• But experience of Kiambu’s small holders
in Kenya shows that it can be done • Though experience of Nicaragua farmers
with Walmart warrants caution• South African supermarkets in
the lead• Kenyan supermarkets focused in
East Africa (Nakumatt eyeing Nigeria)
• International players entering (Spar, Walmart )
Can supermarket increase global reach of African manufacturers?
![Page 12: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/12.jpg)
12
54 Country NotesStrictly comparable, 15 pages, 7000 words
2-year Forecasts • Growth• Inflation• Current account, • Budget balance
Analysis• Macroeconomic Policy• Economic and Political Governance
• Incl. Natural Resource Management & Environment (300 words)
• Social Context and Human Development• Thematic Analysis: GVCs
![Page 13: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/13.jpg)
African Economic Outlook
13
Macro Trade Human GovernanceFinance
Algeria Angola Benin
Ethiopia
Zambia Zimbabwe
Statistical Annex
Special Theme: Youth Employment, Natural Resources, GVCs …
FORECASTS
![Page 14: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/14.jpg)
14
Drivers of growth = “Shifting wealth” (including the commodity price boom), demography and better macroeconomic policies
But 5% growth is not enough to take-off
Tackling the job challenge: structural transformation, private sector development
Two drivers: natural resources, rising consumer demand => Territorial strategies, product-specific
The Big Picture: Is Africa Rising?
![Page 15: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/15.jpg)
15
The “environmental risks faced by developing countries today call for a radical shift in how we view growth and development”
OECD (2013) Putting Green Growth at the Heart of Development.
Are we missing something?
![Page 16: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/16.jpg)
16
1. Integrate the environment in country growth forecasts (upgrade model) → data?
2. Add section in country notes → tokenistic?3. Add selection of environmental indicators to
statistical annex→ visibility, impact?4. Chapter on environment → add?5. Other?
Options for “Greening” the AEO?
Additional issues:• Green Economy, Green
Growth, Sustainable development?
• Political economy
![Page 17: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/17.jpg)
17
Option 1 - Integrate the environment in country growth forecasts (upgrade model)
+ truly integrates environmental factors
into the (traditional) economic growth model
Results are in a language that is familiar to policymakers/the audience of the AEO
Analytically strong and theory-based approach
- Theoretically and empirically
challenging Large workload and data
requirements Uncertain outcome Dependent variable is still GDP
growth (close to GG concept, not necessarily a weakness)
![Page 18: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/18.jpg)
18
Option 2 – Add Section in country notes
+• Textual closeness the of environment
and economic growth emphasizes their close connection
• Brings the environment to the attention of the readers of the country notes
• Individually tailored paragraphs for each country, specific contexts can be incorporated and/or highlighted
• Can be combined with options 3&4
-• Add-on solution, no full integration• It does not seem logically
consistent with the current structure of country notes to include a separate fairly standardized paragraph on the environment in all country notes
• Workability (all authors of country notes have to be involved)
• Natural resources are already included in the country notes when they are an important component of GDP growth
![Page 19: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/19.jpg)
19
Option 3 - Add a section on the environment in the statistical annex
+• Relatively little effort required• Has been done in other reports (e.g.
ADB, 2013; World Bank, 2013b)• Easy and quick to implement• Can be combined with options 2&4• Only one point for discussion:
selection of indicators (and ways of presentation)
-• Will not generate much attention
compared to other options• Added, but not really integrated in
AEO (as stand-alone option)• Without explanations: limited
interpretation• Does not “change how we think
about growth” if numbers are not put into context
![Page 20: Accounting for natural capital - The case of the African Economic Outlook](https://reader036.fdocuments.net/reader036/viewer/2022062320/558e01a11a28ab736c8b457d/html5/thumbnails/20.jpg)
20
Option 4 - Add an extra chapter on the environment to the AEO
+• A special theme would generate
public interest• An additional chapter 6 would give
the environment the space and visibility it deserves in the logic of comprehensive wealth
• Can be combined with options 2&3
-• Add-on solution• Chapter 6 (Special theme): partly
very close to 2013 special theme on natural resources
• Environment & poverty overlaps with other chapters
• (Minor) re-organization of other chapter(s) necessary
• “far away”, separates the environment from economic growth part