News

Thursday 23rd February 2006
China launches new bid to eradicate poverty as investment in Africa increases
China has launched a "new socialist countryside" policy aimed at reducing an ever growing inequality gap between the vast rural areas and the thriving coastal regions. The policy is part of a wider plan to eradicate all poverty in China by 2050. Although China is now considered the world's fourth largest economy and the third largest exporter, with growth expected at between 8-9% in 2006, there are currently around 160m people living below the World Bank's international poverty line of 57p ($1) a day (1). The "new socialist countryside" initiative aims to increase rural incomes and infrastructure in farming areas through a combination of crop subsidies and tax cuts, costing an estimated hundred's of billions of Yuan over the next few decades (2). China is also increasing investment in other parts of the world, and has now overtaken the UK as being the third largest economic partner of Africa, after the US and France... See related story

Tuesday 17th January 2006
Oil prices rise in wake of Nigerian attacks and Iranian instability
Recent attacks by militants in Nigeria and uncertainty over Irans nuclear programme has pushed up oil prices, with analysts predicting prices could reach as high as $80 a barrel. Attacks on western oil companies in Nigeria's oil rich Niger Delta have escalated recently, with Shell considering pulling out of the region after last Friday's pipeline explosion and kidnapping of four foreign oil workers, and Sunday's storming of one of its facilities by heavily armed militants that left at least 17 people dead (1). The Niger Delta is the largest oil producing region in the country and is made up of swamp lands, forests and hundreds of rivers and estuaries, that make it extremely difficult to police. Militant groups have grown out of a general belief that local populations are not benefiting from the oil exploration, and that oil companies, and in particular Shell, have not honoured promises of social and economic development. Shell has identified community development as integral part of its operations, including youth development and sports. UK manufacturing has particularly suffered due to the high oil price as the cost of raw materials rose at record levels in December 2005 (2).

Thursday 12th January 2006
Britain, the US, and France criticised for £7bn Nigerian load repayment
Britain, the US, France and the Netherlands have been criticised for receiving £7bn of loan repayment from Nigeria under a debt relief agreement signed between the African state and the Paris Club of Creditors last year. Britain, as the largest creditor received £900m last Friday and will receive £1.7bn over the next few months - a total equating to more than the UK's entire annual aid budget for Africa. Nigeria has an average income of £565 compared to £16,776 in the UK, £16,210 in France and £22,519 in the US, and one in five children die before their fifth birthday. Western government officials counter by emphasising that Nigeria is an oil rich state and has lots of potential wealth.

Tuesday 10th January 2006
China and the West gear up for African energy safari
Trade between Africa and China increased to £18bn in 2005, according to figures released by Chinese customs. The recent acquisition (1) of a Nigerian offshore oil and gas field by CNOOC for £1.3bn, one of China's largest state run oil companies, supports the view that the continent is becoming ever more important as a source of raw materials for China's ever expanding industrial base, and that the country is soon predicted to overtake the UK as Africa's third most important trading partner, behind the US and France. China has maintained ties with Africa since the cold war, when it did business in areas overlooked by the West and the Soviet Union, and currently has around 680 state companies involved in mining, fishing, precious woods and telecommunications. China has diplomatic relations with 47 out of the 53 African states and has declared eight African countries as official tourist destinations for Chinese nationals. The rising strategic importance of African oil fields could see the continent's history emerging from one of exploitation in the 19th century's 'scramble for Africa', to one of ideological conflict, via the US and the Soviet Union during the cold war, to the centre of a trade war over the world's ever increasing need for new energy sources to fuel its industrial growth and consumer demand.

Tuesday 3rd January 2006
World economic outlook for 2006
Despite the natural disasters, collapsed trade talks and the huge increase in world oil prices, the world economy continued to grow in 2005, registering 4.3% growth, and is expected to grow by the same figure in 2006. UK growth is set to increase marginally to 2.2%, continuing an unprecedented 53 continuous quarterly expansions. The EU and the euro zone are forecast to increase by 2.0%. Of the world's leading economies, the US is expected to grow by 3.3%, Japan by 2.0%, Germany by 1.2%, and China by 8.2%. Other Asian economies are also predicted to see strong growth, with Hong Kong expecting 4.5%, Singapore 4.5%, Taiwan 4.3% and India, with 6.3%. Elsewhere, Africa is set to grow by 5.9%, with Angola, as the continent's fastest growing economy, expecting huge growth of 27.6%, due mainly to a booming oil industry. Despite the growth and the increase in Chinese and Western oil company investment, the country's economy is in disarray from 20 years of war, with 70% of the population living below the poverty line.

Wednesday 14th December 2005
US, EU brinkmanship threatens world trade talks
Disagreement between the US and the EU has led to an impasse at the WTO summit, while outside, a bizarre demonstration saw hundreds of South Korean farmers stripping off to their shorts and taking a lemming-like plunge into Hong Kong habour (1). Inside the conference centre, US Trade Representative, Rob Portman, called on the EU to make extra concessions on agriculture, while Peter Mandelson, EU Trade Commissioner, accused America's food aid programme as being 'fake', that's designed to help US farmers rather than the world's poor. The stand-off came as Pascal Lamy, the director-general of the WTO, urged trade ministers to be 'open-minded, bold and courageous' if progress on talks, started in Doha, Qatar, four years ago, were to be concluded successfully. Any deal on agriculture in the EU is extremely complex however, with negotiations having to made between all member states. EU officials view America's concentration on agriculture as distorting the wider issues of trade. The EU currently has 11m farmers, rising to 14m when Romania and Bulgaria join in 2007, while the US has 2m. The EU also imports 85% of all of Africa’s agricultural exports and 45% of those from Latin America. On the whole, the EU imports more agricultural products from developing countries than the US, Australia, Japan, Canada & New Zealand put together (2). Protests at the summit have so far been relatively peaceful, while some of the older Korean farmers were taken to hospital after the cold, foul water took its toll.

Wednesday 7th December 2005
Climate change threatens wealth creation in poor countries
New research conducted and published by the World Bank has found that the development of third world and low income countries are most at risk from global warming. Current indicators of measuring growth and wealth creation (GDP) ignores the importance of land and the environment, and that cropland and pastureland make up almost 70% of the value of natural capital in low income countries. The research, published in conjunction with the United Nations’ Climate Change Conference in Montreal, found that excluding oil states, natural resources made up 25 percent of the total wealth of low income countries, much larger than the 16 percent share of produced capital. The average difference between natural capital and produced capital for the African countries of Madagascar, Chad, Mozambique, Guinea-Bissau, Nepal, Niger, Democratic Republic of Congo, Burundi, Nigeria and Ethiopia is 34.4%. The findings reveal that rising temperatures will have a major impact on economic development and wealth creation in third world countries, increasing the risk of crop failure and famine... Read the full report

Wednesday 23rd November 2005
WTO members fail to reach agreement on trade before Hong Kong Summit
World Trade Organisation (WTO) members have admitted they will be unable to agree a framework for a new trade deal at the upcoming WTO summit in Hong Kong. Peter Mandelson (EU Trade Commissioner) and Rob Portman (US Trade Representative), and other large trading countries such as Brazil, India and Japan have tried desperately to reach agreement on agricultural tariffs and government subsidies in order to announce a fairer deal at the summit next month. The difficulty in reaching agreement spans from protecting national interests and existing trade deals and trading partners, often from developing countries, and balancing this with a fairer deal for the third world. Officials from the latest round of talks said differences 'were narrowing' and that countries were 'inching forward' towards a deal, and that progress would continue in 2006. Member states have vowed to follow the spirit of the previous summit at Doha, Qatar in 2001, where the WTO pledged to reject the use of protectionism, liberalise trade policy, and ensure that international trade played its part in the promotion of economic development and the alleviation of poverty... see below

Monday 14th November 2005
Blair battles to save Gleneagles trade reform
Tony Blair will tonight use his annual Guildhall speech in London to urge the World Trade Organisation's 148 members not to 'lower their ambitions' over what can be achieved at next months WTO summit in Hong Kong. Mr Blair will ask governments whether they believe in an open or closed world and will acknowledge that "...the global challenges of conflict, terrorism, trade, climate change and poverty are inextricably linked.". He will also warn that failure to liberalise trade could see the world economy miss out on up to £370bn of growth, with Africa losing an additional £40bn, equivalent to just a one percent increase in the continents share of world trade.

Friday 8th July
G8 deal on an end to farm subsidies looks unlikely
The G8 summit looks unlikely to set a timetable for radical trade reform and an end to farm subsidies. With world exports currently valued at £6.9 trillion, and only £137bn (2%) coming from Sub-Saharan Africa, the region is certain to miss its 2010 millennium development targets. Africa, with an abundance of wealth in natural resources, a point illustrated by Europe's 'Scramble for Africa' in the 19th century, is poorer today than 25 years ago, with the regions total GDP being less than the developed world spends on farming subsidies. Zimbabwe's opposition leader, Morgan Tsvangirai, has called aid to Africa without trade reform, like "giving Africans fish without teaching them how to fish." Mr Tsvangirai also called on the African Union to publicly condemn Robert Mugabe's repression and destruction of homes, and said African leaders who blamed the west for Africa's ills without focusing on their own governance and democratic freedom "missed the point entirely" on the cause of Africa's problems...

Wednesday 6th July 2005
Pressure for trade reform as world leaders gather at G8 summit
Mariann Fischer Boel, the EU Commissioner for Agriculture and Rural Development, has welcomed recent US commitments for farm reform. Her comments come as world leaders convene at Gleneagles for the G8 summit, with trade likely to be high on the agenda. Ongoing world trade talks have called for nations to reform protectionist policies of paying farmers for what they produce, stockpiling, and dubiously disposing of surpluses through 'food aid'. African exports, as a percentage of world exports, have reduced from over 4% in 1970 to 1.8% in 2004, as a result of being unable to compete with the developed worlds protected trade blocks. Recent US cotton reform and strong African growth creates optimism that fair competition and hard work, more than aid and debt relief, can break Africa's 'poverty cycle'... click for more

Wednesday 15th June 2005
African economic growth
Tony Blair, on the back of his European tour, has said there is a 'substantial measure of agreement on Africa'. The continent itself is showing strong economic growth in 2005, with three of the five fastest growing economies in the world coming from central Africa, in Angola (13.8%), Chad (10.0%) and the Democratic Republic of Congo (9.2%). Africa as a whole is measuring 5.0% GDP growth, just less than the world average of 5.1%, but higher than Europe, the US and the Western Hemisphere. Despite the growth, Africa still contains the highest concentration of poorest countries on Earth, with people living on £1.10 a day in Angola and 50 pence a day in Chad. Ethiopia's blooming flower industry creates optimism that sustained growth as well as foreign aid can eliminate hunger and create a brighter future... click for more

Friday 10th June 2005
G8 deal on African debt relief
Gordon Brown and his US equivalent, Treasury Secretary John Snow, are close to agreeing a £9.17bn deal on African debt relief. The deal follows Downing Street frustrations over a lack of consensus on the details of debt relief, with George Bush emphasising his view that free trade and private investment are more powerful tools for economic growth than government aid. The deal follows the US's 'carrot and stick' approach of making aid conditional on increased democracy and good governance, with Africa for a decade being full of civil war, genocide, corruption and repression... click for more

Tuesday 7th June 2005
Tony Blair's US summit on Africa and climate change
Tony Blair has flown to Washington for talks with George Bush over Africa and climate change. Mr Blair's visit coincides with the United Nation's release of an 'Atlas of our changing environment' showing environmental damage and pollution from space. Mr Blair is looking for an endorsement and a commitment from the US administration, particularly as payment for Britain's support on the war in Iraq - a decision taken of great political risk for Mr Blair... click for more

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