G E R M A N Y 2 017 AFRICAN DEVELOPMENT Forging new partners for resilience Dr Akinwumi Adesina discusses the issues Page 46
ENERGY Innovation the key to driving progress on the Energy Trilemma Goals Dr Christoph Frei explains Page 60
In partnership with the
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WELCOME 6 8 10
Vile but Profitable: How human trafficking rose to be one of the world’s most attractive crimes Yury Fedotov, UN Office on Drugs and Crime
Good Governance a Cornerstone of Stability and Security Lamberto Zannier, Organization for Security and Co-operation in Europe
Dr. Steven O’Brien, G20 Foundation Angela Merkel, Germany Olaf Scholz, City of Hamburg GLOBAL ECONOMY
Multilateral Convention on Tax Treaty Related Measures to Prevent BEPS Angel Gurría, OECD
Ensuring Stable and Resilient National Economies Christine Lagarde, IMF
Fit for the Future Carlos Moedas, EU Commissioner for Research, Science and Innovation
G20 has Green Finance Firmly in its Sights Fiona Reynolds, PRI
Driving Sustainable Innovation with the Internet of Things Dr. Christian Busch, LSE Christa Gyori, Harvard University Maya Brahmam, World Bank Group Leith Sharp, Harvard University
The Global Economic Imperative for Eradicating Illicit Financial Flows Raymond W. Baker, Global Financial Integrity
Peacekeeping is Cost Effective, but Must Adapt to New Reality António Guterres, United Nations
Investment Intelligence Hub Matteo Andreetto, STOXX
Capacity Building for an Effective Multilateralism Nikhil Seth, UNITAR
The Global Challenge of Job Creation and the Role of International Trade Guy Ryder, ILO ITC’s Statement in Support of the Second Report of the UN Secretary General’s High Level Panel on Women’s Economic Empowerment Arancha González, ITC Advancing Border Management with Big Data Dr Kunio Mikuriya, WCO
Forging New Partners for Resilience Dr Akinwumi Adesina, African Development Bank
Achieving Sustainable Economic Progress in Africa Sindiso Ngwenya, The Common Market for Eastern and Southern Africa – COMESA
Infrastructure for Africa’s Development Houlin Zhao, International Telecommunication Union
The G20 can Lead the Way to Leave No Woman or Girl Behind Phumzile Mlambo-Ngcuka, UN Women
Boosting Soft Power to Prevent Violent Extremism Irina Bokova, UNESCO
The Global Economy is High on the Agenda Jim Yong Kim, World Bank Group
Financial Stability and Financial Inclusion: Who Sets the “Standards”? Alfred Hannig, Alliance for Financial Inclusion
A Sustained Approach to Combatting Corruption Lise Kingo, CEO & Executive Director, United Nations Global Compact
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Innovation Policies the Key to Driving Progress on the Energy Trilemma Goals Dr Christoph Frei, World Energy Council
Advancing Water Stewardship in the Era of the SDGs Scott Vaughan, Institute for Sustainable Development
Special Program for Admission and Academic Mobility Office of the Academic Vice Rector (PEAMA) Universidad Nacional de Colombia
Policymakers, Business Leaders and the Circular Economy Peter Bakker, WBCSD
Tackling the Climate Challenge Peter Lukas, HeidelbergCement
Sustainable Development and the Battle for Ideas in 2017 Andrew Norton, Institute for Environment and Development
Carbon Pricing Luiz Eduardo F. do Amaral Osorio
Climate Change: How Digital Grids Help in Mitigation Laurent Schmitt, ENTSO-E
The Leading Power Company in Latin America Astrid Álvarez, Grupo Energía de Bogotá
The Balancing Act of an Integral Energy Paradigm Shift Diego Luzuriaga, Instituto Tecnológico de Buenos Aires
Action Plans to Tackle Drug Resistant Infection Alison Holmes, Imperial College London
G20 Health Agenda Needs to Recognize Critical Importance of Chronic Diseases to Achieve SDG 3 Dr. Harald Nusser, Novartis
Mental Health in the era of Sustainable Development Vikram Patel, Harvard Medical School
Combatting Neglected Tropical Disease – Now John H. Amuasi, African Research Network for NTDs
Ending Neglected Tropical Diseases in Our Lifetime Uniting to Combat Negelcted Tropical Diseases
Patient Empowerment Through Digitization Morten Elbæk Petersen, sundhed.dk
Embracing the Change Erik Solheim, UN Environment
The African Climate Policy Centre Dr Fatima Denton & Dr James Murombedzi, United Nations Economic Commission for Africa (UNECA)
MetaSUB: A Global Network for Antimicrobial Resistance (AMR) Tracking and Quantification The International MetaSUB Consortium
Member Countries Sponsors Index
The Rise of the Smart City Michel Sudarskis, International Urban Development Association
Our Solar Future Smart Energy Together Jifan Gao, Trina Solar
Achieving Food Security for All José Graziano da Silva, FAO
Filling the Gap Kanayo F. Nwanze, IFAD
Increasing Climate Resilience Through Water Solutions Benedito Braga, World Water Council
Agile and Sustainable Programming for a Food and Nutrition Secure World David Beasley, World Food Programme
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DR. STEVEN Oâ&#x20AC;&#x2122;BRIEN Secretary General, G20 Foundation
At a glance, the world in 2017 seems to have become less stable and more fractured. Long established certainties have been challenged. In many countries populist and nationalist ideas have entered the political mainstream. In the west commentators have identified the augurs of patterns not seen since the 1930s. The events of the last year are a vivid reminder that history is not over and we should never be complacent about the need to hold the centre ground. It seems fitting, then, that this yearâ&#x20AC;&#x2122;s G20 Summit will take place in Hamburg. Germany is a country that, perhaps more than any other, among the developed
nations, has attempted to project an image of steady pragmatism and wise counsel, in response to the political and financial spasms that have occurred recently. The G20, as a 21st century platform for effective governance and global discourse, should galvanise itself to stand ready to provide a crucial compass, whereby positive and constructive narratives can be fashioned. These will be needed to address the challenges faced by both leading and emerging economies. However, it must be iterated that the world has changed significantly since last summer. In an historic sense the feeling of a door closing on a familiar
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and alloyed world order is, for many, profoundly disturbing. The shock waves may take a long time to play out. Countries that withdraw from their traditional leadership roles are very likely to find that the world moves on, adjusting to the departure of with new solutions. After all, nature abhors a vacuum. Taking a calm look at history and the spirit within individual nations will certainly help. At certain times some countries will choose to decelerate or attune their trajectory towards globalisation. Emotion and sentiment need to be taken out of analysis when responding to trends that are often merely temporary.
Given that there is now no single ‘leader of the free world,’ the possibility is increasing of a new order emerging, in which mutual dependence and a commonwealth of positivity can be forged as the key ideas of our age. In many economies green shoots are showing. This year’s G20 Hamburg Summit should focus on key issues of global significance. These include free global trade, the implementation of sustainable development, and empowerment of women, migration and counter-terrorism. The mood should be one of workmanlike pragmatism that sees the need for global strategies to tackle global issues.
The Hamburg summit should grasp the chance to promote these key commitments within the sphere of international cooperation. It is a time to reject the tabloid, sensationalist mentality that sells newsprint but rarely portrays the actual nuances and essential stability of the real world. As the great Franklyn Roosevelt once said ‘We have nothing to fear but fear itself.’ ■
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ANGELA MERKEL Federal Chancellor, Germany
On 7 and 8 July 2017, the eyes of the world will turn to the G20 summit in Hamburg, where the Heads of State and Government of major industrialised and emerging economies will meet. I am verymuch looking forward to welcoming the G20 partners to the city of my birth. Mastering and shaping the global challenges of our age is a common goal of the G20. The success of the summit will depend significantly on the progress we make towards achieving this objective. Where is the world economy headed? Many current developments give us cause for concern. The development of the world economy is not keeping pace
with expectations. It is worthwhile taking stock of the G20â&#x20AC;&#x2122;s beginnings, as well as the global economic and financial crisis some ten years ago. The G20 revealed its strength in these times of crisis. At the height of the economic and financial crisis, we collectively expressed our support for allowing competition to shape the world economy and for ensuring that world trade remained open. The G20 countries moved closer together in these times of crisis and developed shared mechanisms without resorting to protectionism. The experiences of the crises of the 1930s were a lesson to us that we must not forget.
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The G20 must demonstrate that it stands together. We are mutually dependent on each other – and not only economically and in the area of financial markets. The G20 is an informal cooperative forum founded on shared values. It provides us with a high-visibility framework, promotes our mutual exchange and reinforces our commitment to common principles. We can achieve more together than by acting alone. Alongside stabilising the world economy and financial markets, numerous global challenges are on the G20’s agenda, including geopolitical conflicts, terrorism and migration, as well
as hunger, increasing climate change and pandemics. These challenges will certainly not be mastered by countries plotting a lone course or by isolationism and protectionism. There can be no return to a pre-globalisation world. Only together will we be able to drive forward our objective in the G20 – strong, balanced, sustainable and inclusive economic growth – by addressing economic, social and political uncertainties in concert. In doing so, the G20 contributes significantly to strengthening the stability and resilience of the world economy and, last but not least, to increasing security for each and every one of us.
We can only move forward in close cooperation with one another. I would like to hold a broad-based civil society dialogue on these issues involving all societal groups. I have invited representatives of the business sector, NGOs, trade unions, academia and think tanks, as well as from women’s and youth organisations, to draft recommendations for the G20. This input from civil society is important for the G20’s discussions.I believe cooperation within the G20 to be most vital. Our task is to shape this interconnected world together, and Germany will do its utmost to support these efforts during its Presidency of the G20. ■ Source: www.g20.org
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OLAF SCHOLZ First Mayor, Free and Hanseatic City of Hamburg
I am delighted that the Federal Chancellor has chosen the Free and Hanseatic City of Hamburg to host the first G20 Summit to be held in Germany. It was, in fact, a man from Hamburg (former Chancellor Helmut Schmidt) who came up with the idea that the heads of state and government of important countries should meet informally to discuss the most pressing global issues. The G20 Summit is the logical extension of his idea in the 21st century. It provides a forum in which not only industrialised countries meet, but also key emerging economies. And there are enough topics for
them to discuss: Shaping globalisation fairly, putting an end to armed conflicts, flight and migration, and climate change are challenges which require concerted action. Hamburg is a good place to hold these talks. It says in the Preamble to the Constitution of our City-State: â&#x20AC;&#x153;In the spirit of peace Hamburg, wants to be an intermediary between all continents and peoples of the world.â&#x20AC;? It is not only thanks to the port, located right in the centre of the city, that Hamburg has for centuries had good relations the world over and why it rightly has a reputation for being a cosmopolitan and international city. Hamburg is an
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economic powerhouse – and a city of hope for many people from across Germany and around the world. It is one of Germany’s most popular tourist destinations. Every year the special atmosphere in this waterside metropolis attracts more than six million visitors. Its newest landmark is the Elbphilharmonie, one of the world’s most fascinating concert halls, which is on the banks of the River Elbe and close to the World Cultural Heritage sites Speicherstadt, the port warehouse district, and the Kontorhaus distict. I would like to invite you all to come and discover Hamburg in all its creativity and diversity. ■
In the spirit of peace, Hamburg wants to be an intermediary between all continents and peoples of the world. Source: www.g20.org
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MULTILATERAL CONVENTION ON TAX TREATY RELATED MEASURES TO PREVENT BEPS Opening Remarks by Angel Gurría OECD Secretary General Paris, France, 7 June 2017
ANGEL GURRÍA Secretary General, OECD
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We are about to make tax treaty history! Before you lies the firstever multilateral instrument capable of amending bilateral tax treaties: the Multilateral Convention on Tax Treaty Related Measures to Prevent BEPS. Tonight, more than 70 countries and jurisdictions have come together to join the Convention, with more expected to follow in the coming months. I commend each of you – and the countries you represent – for your commitment to delivering a stronger, fairer global tax system. Less than two years ago, we finalised the BEPS Package to fix international tax loopholes that collectively cost countries up to USD 240 billion in foregone revenue – or around 10% of global corporate tax revenues – every year. The BEPS Package catalysed the largest, and fastest, rewriting of the international tax rules in a century. One of the most concerning types of BEPS arrangements that we sought to
One of the most concerning types of BEPS arrangements that we sought to address was treaty shopping. address was treaty shopping – using third jurisdictions, which would otherwise not be part of a transaction, simply to access the treaty benefits. This Convention puts an end to treaty shopping and will provide taxpayers with greater certainty through improvements to the Mutual Agreement Procedures. It also gives you the tools needed to implement mandatory binding arbitration, tackle hybrid mismatches, and stop artificial avoidance of “permanent establishment” status in your countries. And it goes to the heart of our efforts during this year’s MCM to help restore citizens’ trust in the fairness and transparency of global governance systems and the legitimacy of the processes underpinning global integration.
Renegotiating tax treaties has always been a significant hurdle. It’s time-consuming, resource-intensive, and cumbersome. And that’s what makes this Convention so remarkable. Tonight, with the strokes of your pens, you will begin amending more than 1100 tax treaties. This would normally have taken decades! In moving so quickly, we have taken a big step towards levelling the global playing field. Tax treaties will now be fit for purpose, eliminating double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance. We now move to the most important part of tonight’s ceremony, the signature. It is time to make tax treaty history. ■
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ENSURING STABLE AND RESILIENT NATIONAL ECONOMIES
CHRISTINE LAGARDE Managing Director, IMF
The world economy has been gaining momentum since the middle of last year, but further progress depends on the right combination of sound domestic policies and stronger international cooperation. This is an important moment for G20 countries to take the lead in building stable and resilient economies. What do we mean by stable and resilient? Simply put, this means that countries achieve strong, sustainable, balanced, and inclusive growth, and that they strengthen their capacity to absorb and overcome shocks. While each G20 country should commit to a domestic policy mix tailored to its own characteristics, building up resilience also requires cooperation across borders. Let me take each in turn. First, domestic policies. Maintaining the current growth momentum depends on using the right mix of fiscal, monetary, and structural measures tailored to each country’s individual needs. These policies should be designed to target multiple objectives. For example, fiscal policies and structural reforms should support economic growth while fostering fiscal sustainability, stronger institutions, and healthier private-sector balance sheets.
Exchange rates can be used to mitigate the impact of external economic shocks. However, boosting growth is not enough – a more resilient economy also requires growth that is more inclusive. This means expanding economic opportunities for all citizens, with a special focus on lower-skilled workers, young people, and women. It also requires a steadfast commitment to financial inclusion and good governance. Delivering on broader income gains and job growth increases public support for continued reforms. This creates a virtuous cycle of sound policies, greater resilience against shocks, and higher potential output. This brings me to my second point – external resilience. The global economy is undergoing major structural shifts – as population aging accelerates in many advanced and emerging economies,
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Simply put, this means that countries achieve strong, sustainable, balanced, and inclusive growth, and that they strengthen their capacity to absorb and overcome shocks. new centers of global economic activity emerge while financial markets are ever more tightly connected. Managing these transitions also requires a strong international monetary system that keeps pace with the times. This means that countries work together through a system of rules, shared principles, and institutions. It means reinforcing the spirit of international cooperation that has underpinned a broad rise in incomes and living standards around the world. Hardly a decade ago, such cooperation ensured
that the Great Recession did not become another Great Depression. Led by the G20, this has benefited every country around the world, both large and small. This framework needs to evolve to prevent future crises and meet the changing needs of the global economy. Just to give one example, external surplus and deficit countries will need to work together to reduce excessive global imbalances. The IMF can play an important role in this area by identifying and recommending collaborative solutions.
Reforming the multilateral framework also requires stepping up crisis prevention and building a more coherent global financial safety net. We know that capital flows can help emerging economies catch up to advanced economy income levels. But we also know that stronger policy frameworks are needed to cope with capital flows that can be large and volatile. In this respect, the Fundâ&#x20AC;&#x2122;s institutional view offers a proven tool to guide the liberalization and management of capital flows. We are also pursuing a number of options to enhance external resilience, many of which are extensively discussed in the G20 context. A good example is the strengthening of the IMFâ&#x20AC;&#x2122;s lending toolkit. This would help emerging and developing countries better cope with capital flow volatility in times of distress. The IMF is also working to build up cooperation with regional financial arrangements. This builds on recent experiences in Europe as well as joint test runs between the IMF and the Chiang Mai Initiative. This is an important area where further work is needed to avert crises and better manage them when they occur. Since the global financial crisis, the G20 has been a key driver of reforms in its member countries. As the urgency of dealing with the last crisis has subsided, a new focus on helping the recovery has taken hold. Fostering stable and resilient economies is the best path forward and should remain a critical priority for the G20. â&#x2013; 17
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G20 HAS GREEN FINANCE FIRMLY IN ITS SIGHTS
FIONA REYNOLDS Managing Director, Principles for Responsible Investment (PRI)
The recent moves by G20 nations to embrace green finance, coupled with the ratification of the Paris Climate Agreement by over 190 countries, are clear indicators of the world’s acknowledgement that environmental issues and economic development are inextricably linked. The adoption of the United Nations 2030 Agenda for Sustainable Development (Agenda 2030) with the 17 Sustainable Development Goals (SDGs) is also helping to drive a greener financial agenda and is serving as a catalyst for green investing. A report by the Climate Bonds Initiative, for example, found that $694bn in ‘climate-aligned’ bonds were issued in 2016. Over 90% of these bonds originated in G20 countries. The European Investment Bank (EIB) is the largest issuer of green bonds. In 2016, 26% of its lending sought to alleviate climate change. Many infrastructure projects depend entirely on its backing, notably the €250m invested in retrofitting container ships to reduce nitrogen and sulphur oxide emissions. In 2014, multilateral development banks provided $28.3bn to climate projects in emerging economies. The growth in
G20 climate finance is set to continue, as developed countries promised to mobilise $100bn per year by 2020 in the 2009 Copenhagen Agreement and 2010 Cancun Agreements. Resource-dependent G20 members face the greatest challenges. In South Africa a survey found that the investing for impact (IFI) space represents a rising and significant part of the South African investment industry, approximately 41% of assets (totalling $67bn). Multilateral funds and private investors play a vital role in such economies, where poor sovereign credit ratings and growing budget deficits make it hard for governments to finance green projects, and social issues seem more urgent than longer-term environmental concerns. In China, the opposite is the case: social pressure encourages environmental sustainability, as pollution causes health concerns amongst urban populations. China’s National Energy Administration has said it intends to spend more than $360 billion through 2020 on renewable power sources like solar and wind, which would create an estimated 13 million new jobs. Last year, the G20 Green Finance Study Group (GFSG), which was established
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The growth in G20 climate finance is set to continue, as developed countries promised to mobilise $100bn per year by 2020 in the 2009 Copenhagen Agreement and 2010 Cancun Agreements. under the 2016 Chinese Presidency, released its ‘G20 Green Finance Synthesis Report’ and, for the first time, the Summit’s annual communiqué referenced the importance of greening the financial system—cause for optimism that green finance is becoming the cornerstone of economic policy. The PRI was pleased to contribute to the GFSG as a knowledge partner on institutional investors, alongside UNEP FI. Earlier this year, the German Federal Ministry for Economic Cooperation and Development announced that it was advancing the ‘GreenInvest’ dialogue platform in order to engage developing countries in the mainstreaming and mobilisation of green finance. GreenInvest seeks to ensure that developing countries will have a voice in the evolution of green finance initiatives and practices across the global financial system. It is based on an initiative launched during Mexico’s G20 Presidency in 2012 and will feed-into the
newly established Sustainability Working Group under Germany’s G20 Presidency. It complements other green finance work streams under Germany’s G20 Presidency including the Green Finance Study Group in the Finance Track. During Germany’s G20 Presidency, GreenInvest will focus on three major themes, greening foreign direct investment (FDI), the role of financial technology (‘fintech’) in advancing green finance, and enabling developing countries to effectively participate in international cooperation to accelerate green finance. The German G20-presidency presents a unique opportunity to expand existing work streams and promote the role of green finance and responsible investment across the globe, in addition to encouraging governments and regulators to continue taking a role in supporting green finance initiatives in local markets. ■ 19
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THE GLOBAL ECONOMIC IMPERATIVE FOR ERADICATING ILLICIT FINANCIAL FLOWS
RAYMOND W. BAKER President, Global Financial Integrity
Illicit financial flows are the most damaging economic condition facing developing countries and are a major factor in many of today’s most pressing global challenges. Curtailing these illicit flows is a matter of political will to dismantle the shadow financial system and replace it with greater financial transparency. Doing so will improve the lives of billions of people, which will be to the benefit of the interests of rich and poor countries alike. The latest estimates show that illicit financial flows (IFFs) continue to represent staggering portions of developing country economies. Global Financial Integrity’s (GFI) latest report estimates that IFFs to and from developing countries represent 14.1 to 24.0 percent of their combined total trade on average per year. In addition, IFFs have likely been increasing by 8.5 to 10.1 percent a year on average. The result is that total IFFs—inflows plus outflows—may have reached as much as $3.5 trillion in 2014. The fraudulent misinvoicing of trade is responsible for 87 percent of these measureable illicit flows. These figures represent significant losses of potential drivers of economic development, including a portion for government revenues.
Domestic resource mobilization will be limited until governments start curtailing illicit flows. IFFs directly affect VAT and customs duties when an import or an export invoice is manipulated to underreport the shipment’s value. But the biggest hits to government revenue come from indirect consequences of trade misinvoicing. A company can overinvoice an import to artificially inflate the input costs of the goods it manufactures, which translates to less year-end profit on which to levy corporate income tax. This also works by companies under-invoicing exports of the goods they produce, so that they can claim to have made less revenue. Overall, less tax collection means governments need to take on more debt to finance their development efforts or that there is simply not enough investment in providing critical social services and vital infrastructure projects. When a
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When a country can’t meet people’s needs, they may seek survival and opportunities elsewhere and through other means. country can’t meet people’s needs, they may seek survival and opportunities elsewhere and through other means. The economic challenges that illicit flows create are also contributing to pressing security and justice problems in richer countries. Transnational crime is a $1.6 trillion to $2.2 trillion annual global business, which not only supplies drugs, guns, and other illegal goods in developed countries but contributes to violent conflicts and a lack of legal economic opportunities in poorer countries. Pirates in the waters off Somalia and West Africa have been driven in part by a loss of traditional fishing industries due to illegal fishing and pollution in
their territorial waters by foreign vessels. Refugees seeking asylum and illegal immigration are high on the agenda of richer countries, and illicit financial flows are a factor in the conflicts and economic deprivation they’re fleeing. Every country has a role to play in curtailing these extremely damaging illicit financial flows, especially members of the G20. A key step is to end the system of legal anonymous companies, which has been a factor in every type of illicit financial activity, from terrorist financing to tax evasion. The solution is for governments to require that companies register the real names of the owners (i.e. “beneficial ownership” – the natural
persons who own, control, or benefit from the legal entity), when the company is formed and whenever the ownership changes. Why would any country want it to remain legal for people to move trillions of dollars with anonymity? Governments should also continue to work towards the automatic mutual exchange of tax information to crack down on fraudulent tax and asset declarations. Customs agencies can quite easily begin to make significant progress on curtailing trade misinvoicing by using trade data and systems such as GFTrade™ to monitor transactions for high risks of under – and over-valuation of imports and exports, before the goods are released. The world agreed to make curtailing illicit financial flows a priority for the Sustainable Development Goals. Now it’s time for governments to follow those words with policies, support, and enforcement. ■ 21
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PEACEKEEPING IS COST EFFECTIVE, BUT MUST ADAPT TO NEW REALITY
ANTÓNIO GUTERRES Secretary General United Nations
When I entered the United Nations Secretariat building for the first time as Secretary-General in January, my first act was to lay a wreath honoring more than 3,500 United Nations staff who died in the service of peace. Later that same week, two Blue Helmets were killed in the Central African Republic, where they were working to prevent violent confrontations between communities from descending into mass killings. United Nations peacekeepers place themselves in harm’s way every day, between armed groups that are trying to kill each other or to harm civilians. Countless lives have been saved and improved by UN peacekeeping over the past seventy years; countless families ravaged by war have been given a new start. Independent research has shown the worth of peacekeeping: it prevents the spread of violence; and it typically reduces the numbers of civilians killed by more than 90 percent, compared to before the deployment. We also know peacekeeping is costeffective. The UN peacekeeping budget is less than half of 1 percent of global military spending, and is shared between all 193 UN Member States. US studies show that UN peacekeeping missions
are an estimated 8 times more costeffective than when the US acts alone. That investment pays off many times over when we consider the economic growth and prosperity that follow from increased stability and security after successful peacekeeping missions. In our interconnected world, the emergence of global terrorism means that instability anywhere is a threat everywhere. United Nations peacekeeping operations are on the frontlines of our efforts to prevent the emergence of lawless regions where insecurity, transnational crime and extremism can flourish. They are an investment in global peace, security and prosperity. Our missions have contributed to a legacy of stability, development and economic growth from El Salvador to Namibia, and from Mozambique to Cambodia. Fifty-four operations have completed their mandates and closed; two more, in Liberia and Cote d’Ivoire, will do so in the months ahead. While the United Nations is facing up to the challenges and shortcomings of our peacekeeping efforts, we should also recognize the successes of our mission for peace.
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United Nations peacekeeping operations are on the frontlines of our efforts to prevent the emergence of lawless regions where insecurity, transnational crime and extremism can flourish. The Central African Republic was facing the threat of genocide when peacekeepers arrived two years ago. Today, the country has elected a new government in a peaceful and democratic process, and is struggling to move towards peace and stability, disarmament and the rule of law. Our mission, MINUSCA, is providing crucial support to reduce the threat posed by armed groups, but the situation remains challenging. It is frightening to imagine the tragic consequences if peacekeepers had not been there. In South Sudan, UN peacekeepers are sheltering more than 200,000 civilians who fled when their homes were destroyed by the fighting. As famine stalks the country, UN peacekeepers are providing security for humanitarian agencies to deliver lifesaving aid. Peace in our world may seem like an abstract concept. But peace on the ground depends on gruelingly hard
work, every day, under difficult and dangerous conditions. The world relies on United Nations peacekeepers to go where others cannot and will not, despite the many obstacles they must confront. Too often, United Nations peace operations face a gap between our goals and the means we have to achieve them. In many places, peacekeepers are deployed where warring parties show little commitment to peace. Our missions themselves are increasingly targeted by parties to conflict and violent extremists. Dealing with this new reality requires a serious strategic reform on our part, based on an analysis of the mandates and capacities of our missions and our partnerships with governments and others. We must adapt peace operations to the dangerous and challenging environments they now face. We have already made reforms that have reduced costs significantly and given us greater flexibility to deploy
peacekeepers at short notice. But more remains to be done. I am determined to work with governments, regional organizations and other partners to make sure peacekeeping has the tools and rules it needs. United Nations peacekeeping has been tarnished in recent years by appalling cases of sexual exploitation and abuse that are an outrageous violation of everything we value. Tackling this scourge is a priority for the whole United Nations system. I have presented a plan to all UN Member States that is aimed at ending impunity, and will create victims’ rights advocates in our peacekeeping missions and at UN headquarters. I intend to mobilize world leaders around these critical steps. When people around the world are asked about their priorities, from New York to New Delhi, from Cairo to Cape Town, they give the same response. They want safety and security, to raise their children in peace and give them education and opportunities to shape their future. United Nations peacekeepers are one of the ways in which we deliver on that universal aspiration and make the world safer for everyone. ■ 23
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TRADE & FINANCE
INVESTMENT INTELLIGENCE HUB BREAKING DOWN BARRIERS AND GROWING ASSETS
MATTEO ANDREETTO Head of Index Services at Deutsche Börse Group and CEO of STOXX Ltd
STOXX Limited Selnaustrasse 30 CH-8021 Zürich Switzerland Phone: +41 58 399 5300 www.stoxx.com
The investing world is undergoing a substantial transformation whose roots lie in 20th century research, but that has materialized in force in this millennium. Riding on relentless technological innovation, a rich menu of new and deeper information sources collectively named ’big data,’ multiple interconnection, and intelligent mechanisms have amplified the role of data processing in investment decisions. Amid this transformation, at STOXX we see our role evolving from an indexing business to an Investment Intelligence Hub that converts data into investment tools that are as varied as they are easy to use. A powerful megatrend At the Investment Intelligence Hub, we crunch the expanding collection of data into quantitative analysis and mathematical models to generate ‘smart’ financial performance. This process is bringing up countless new investment means and leaving few corners of the asset-management and financial-services industries free from disruption – a real ‘megatrend’ of our times. Neither artificial intelligence nor quantitative investing is new. But at STOXX we are taking data-based
intelligent investing techniques and expanding them in two directions: first, we make them accessible for the entire industry and the general public; secondly, we deepen the pioneer concepts into ever new territories. A key piece in the strategy toolbox This distinctive investment approach calls for a re-evaluation of the traditional idea of indexing as a rigid way of investing. At STOXX we find ourselves at the center of this financial-technology transformation, and growing alongside it. By defining systematic and smart benchmarks, we are helping incorporate data-driven decisions into portfolio construction via passive approaches. From our traditional market-weighted indices, we have progressed into new, targeted and rules-based products designed with methodical precision and resourceful capabilities. Inspired by what was thought impossible, we plunge forward into what can be achieved and bring forth this new investment megatrend. The democratization of customized passive investment solutions We see our entire indexing offering as a key piece in the investors’ strategy
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toolbox, one that marries quantitative and qualitative analysis, and builds possibilities for all investors. From the retail investor who gets instant investment advice from a robot, to the asset owner that can customize the portfolio exposure by, for example, mitigating, at the ease of a computer click, its portfolio’s climate-related risks. Alongside our established research and high-profile cooperative model with the best universities, we are willing to explore the possibilities of a crowdsourced research process and design channel, where our products can incorporate different interpretations and uses of the same data, enriching diverse strategies. STOXX strategy designers, our asset manager clients, investment consultants and the investors themselves could soon have access to the same data through a dedicated strategy design tool, or open application-programming interface (API), which provides all the building blocks of any given strategy that they can put together. Innovation fueling new strategies and asset growth In a new world that may seem a bit intimidating, the simplicity of indexing is
turning investors to the passive investing realm. Money in index products rose in the past two decades from 55 billion dollars to 4 trillion – a twenty-year compound annual growth rate of almost 24%, according to data from Deutsche Boerse¹, parent company of STOXX. This is further evidence that an increasing number of investors and their wealth advisors are acknowledging that passive investing is taking over the helm from the active approach due to its myriad of advantages at a lower cost. Alternative weighting and factor-investing strategies dubbed smart-beta, and the adoption of ETFs for new asset classes will only add stimulus to this progress. Deutsche Boerse forecasts that passive investing is on its way to represent a third of global assets under management. A technology-powered new frontier Our Investment Intelligence Hub begins at the end of the comfort zone of traditional indexing, we believe. A new frontier powered by technology and the people who can use it lies right in front of us. Everyone at STOXX embraces innovation and puts it at the service of clients. We have made innovation the main engine evolving our business
for the past 20 years, leading to an expanding suite of strategies, which fuel the growth of assets in the passive investing universe described earlier. We are motivated and inspired to design simple yet powerful products for investors to tackle the threats and opportunities presented by today’s interconnected global economy. The iSTOXX FactSet Thematic Indices based on FactSet Revere data, the iSTOXX Europe Factor Indices developed with Alpha Centauri, or the STOXX Climate Impact and Climate Awareness Indices based on CDP data, are just the latest ones that come to mind. Each undertaking is an original resource that has been utilized to fulfill a new ambition. Because ultimately we know that the higher we aspire to, the more our clients will get: a more knowledgeable decision-making process, better-controlled risk, and lower costs. All of which translates into higher and more efficient returns. I encourage everyone to look beyond the old barriers and re-consider even the most established assumptions. The new frontier couldn’t look more promising. ■ 1 “Future of Fintech in Capital Markets,” Deutsche Boerse Group & Celent, June 20, 2016.
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TRADE & FINANCE
FOR AN EFFECTIVE MULTILATERALISM
NIKHIL SETH UN Assistant Secretary General, Executive Director UNITAR
In 2015, under the aegis of the United Nations, the world welcomed the inauguration of new and ambitious agreements for our people and our planet. These included the Paris Climate Change Agreement, the Sendai Framework for Disaster Risk Reduction, the Addis Ababa Action Agenda on Financing for Development, and the umbrella 2030 Agenda for Sustainable Development. These new frameworks presented the world with a vision for multilateralism, which brought together human aspirations for a just and peaceful world, reduced inequalities, and better stewardship of our environment for our and for future generations. The existence and strength of the United Nations, reminds us of the history of our collective commitment to peace and cooperation. The UN was born from the ashes of one of the world’s most destructive human conflicts. Since the UN’s founding, the contemporary history of our world and the multilateral mission of the UN has seen one of the greatest periods of prosperity in human history. Beyond the realm of peace and security, multilateral cooperation has allowed for the halving of extreme
poverty, the eradication of small pox, and dramatic increases in life expectancy and prosperity, and under the framework of the 2030 Agenda, we expect to lift a further 1 billion people out of poverty by 2030. The UN has also helped usher in greater awareness and action for the respect of human rights, human dignity, women’s equality, climate change, environmental regeneration and protection, as well as progress on a host of other economic, social and environmental issues. The continuation of these achievements, however, will be contingent on maintaining strong multilateral processes and a spirit of cooperation and solidarity. Today, effective multilateralism requires the active engagement of non-traditional, as well as traditional actors. States and governments continue to engage in multilateral agreements, however the real change agents in implementing these agreements also include a more diverse and broad scope of constituencies and communities including the private sector, academia, the scientific community and civil society, all of whom hold answers and solutions in their hands. The UN’s role in ensuring the effective participation
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In order to ensure that multilateralism continues to thrive, the UN must be ready to promote greater coordination of action, reinforce existing partnerships, create new and durable ones, and collaborate widely. of these new actors in multilateral processes cannot be underestimated, be it through training, capacity building or through strengthening multi-stakeholder communication and engagement. Capacity building is the ability to transfer policy from the halls of the General Assembly, ECOSOC and the Security Council, to policy makers, actors and change-agents at the ground level. Capacity building is the ability to transfer knowledge, and to usher in change. Capacity building can help realise the promise and hope of a world, driven by the multilateral agenda, to â&#x20AC;&#x2DC;we the peopleâ&#x20AC;&#x2122;, especially those in greatest distress and furthest behind. It attempts to change the attitudes and mindsets of leaders, public policy officials, the business sector and academia, to engender new approaches which will have the greatest impact on the lives of people and will protect our planet. In this light, as the training arm of the United Nations, the United Nations
Institute for Training and Research (UNITAR) has been actively involved in supporting States in implementing multilateral agreements, including the 2030 Agenda and its 17 goals and targets. Tailored support is provided to Least Developed Countries (LDCs), Small Island Developing States (SIDS) and other groups and communities amongst the most vulnerable. In March 2017, UNITAR organised a learning conference in Abuja for government officials from African LDCs, focussing on the development of holistic approaches for the implementation of the 2030 Agenda. We shall organise similar learning conferences in different regions of the world with sessions supporting the development of integrated planning and policy-making processes, monitoring and evaluation mechanisms and the formulation of multi-stakeholder engagement to ensure that the Agenda is translated
to national, regional and local levels as efficiently and as effectively as possible. Measuring progress, through the development of statistical capacity, will also be a key component of our support activities. The training of diplomats for effective multilateralism, chemicals and waste management, training on conflict prevention and resolution, public finance, and climate change, are some of the other areas where capacity building activities have also led to major impacts at the country level. UNITAR has been the leading UN entity in all these areas. In order to ensure that multilateralism continues to thrive, the UN must be ready to promote greater coordination of action, reinforce existing partnerships, create new and durable ones, and collaborate widely. This is the heart of successful multilateralism. UNITAR, for its part, is committed to providing knowledge and skills fundamental to implementing global frameworks, commitments and agreements through inclusive and participatory means, giving fruit and life to contemporary multilateralism. To find out more go to www.unitar.org or contact us directly at email@example.com. â&#x2013; 29
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TRADE & FINANCE
THE GLOBAL CHALLENGE OF JOB CREATION
AND THE ROLE OF INTERNATIONAL TRADE GUY RYDER Director General, International Labor Organization
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There is a motto enshrined in the foundations of the ILO’s original headquarters, now the home of the WTO, “Si vis pacem, cole justitiam” – “If you desire peace, cultivate justice.” It is a message of nearly one hundred years ago that speaks to the political circumstances of today. Political leaders and others are using the term “inclusive” to describe the goals of a national and a global economy that provides social justice, one that does not leave people behind. This certainly means lifting families and communities out of poverty, and insuring against the risk of slipping back into poverty, if some personal or community-wide misfortune strikes. For many it also means less inequality. It is worth recalling that the term “inclusive” figures in the titles of five of the seventeen Sustainable Development Goals adopted by the UN General Assembly in 2015. Of particular importance to the ILO is SDG 8, to “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. This needs to be read side by side with Goal 17 on strengthening the means of implementation, and under that Goal you will find target 17.10 which aims to “promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization…” Juxtaposing Goals 8 and 17 highlights that there is a global consensus that on the one hand, inclusive economic growth means generating decent work for all and that on the other, an open trading system is a means to that end and to the realization of other goals as well. So does more international trade increase or decrease employment? The short answer is that “it depends”. Many studies show that in aggregate, trade opening, at least in times of reasonable growth, does probably generate more jobs than it destroys – but the distributional effects are uneven.
In periods of slow growth as we have been experiencing since the 2008 crisis, the numbers of people and places adversely affected is correspondingly larger. People’s perceptions of the fairness of globalization are closely connected to the realities of job prospects. The weakness of global labour markets and their failure to recover fully from the financial crisis has led to a widespread frustration with the seeming inability of “globalization” to offer a realistic chance of decent work for all. Regardless of whether widening income inequality results from globalisation or technological change, the most economically efficient and rapid way to counteract the recent widespread rejection of open economies and societies is by strengthening labour market institutions. Strong investments in employment and social policies that help workers through periods of unemployment are necessary to counteract the significant losses that some workers may otherwise sustain in a globalized economy. The ILO is working with countries to build and adapt policy tools for labour market inclusion. This is also a major ILO input to the G20’s framework for strong, balanced and inclusive growth. The priorities we have emphasized at the G20 include:
The relationship of labour rights to trade opening, a long-standing and not uncontroversial issue, is stated very clearly in the ILO’s landmark 2008 Declaration on Social Justice for a Fair Globalization which states: “The violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes”. Many recent bilateral and plurilateral trade agreements contain labour provisions referencing the 1998 ILO Declaration on Fundamental Principles and Rights at Work. The ILO has been pleased, when requested, to assist countries in the framing and the implementation of such provisions. To conclude, the ILO was founded after the catastrophic collapse of the first pre-World War I wave of globalization to support progress towards social justice as a foundation for peaceful and cooperative international relations. We were relaunched in 1944 to continue that job. Nearly one hundred years on I hope that we can continue, with our partners, to play a strong and constructive role in generating decent jobs worldwide as a foundation for inclusive growth and development in an open global economy. ■
• Setting minimum wages; • Implementing measures to reverse the long-term decline in labour union density and support collective bargaining structures; • Building up social protection systems; • Counteracting gender and other forms of discrimination; • Implementing programmes to increase employment and raise incomes among low-income and vulnerable households, particularly in regions impacted by increased trade; • And strengthening public employment agencies and skills development to match workers with job opportunities.
The violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes. 31
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TRADE & FINANCE
ITC’S STATEMENT IN SUPPORT OF THE SECOND REPORT OF THE UN SECRETARY GENERAL’S HIGH LEVEL PANEL ON WOMEN’S ECONOMIC EMPOWERMENT Speech delivered by ITC Executive Director ARANCHA GONZÁLEZ in support of the Second Report of the UN Secretary General’s High Level Panel on Women’s Economic Empowerment 13 March 2017, New York
The International Trade Centre congratulates the High Level Panel on this important milestone. The drivers of economic empowerment identified by the Panel resonates with ITC’s hands-on experience in supporting women entrepreneurs. Seeking to accelerate impact and optimise our global and local partnerships, ITC launched the SheTrades initiative in the lead up to the adoption of
the UN Sustainable Development Goals. SheTrades is a goal: 1 million women to market by 2020; a blueprint of seven global actions; and a web and mobile app that offer a platform to connect and establish partnerships that foster women’s participation in trade. Highlights so far include; over 100 partnerships committing to support 800,000 women; 12 national and one regional launch by the end of 2017; delivery of information, skills and business opportunities through the SheTrades app, as well as face to face; and leadership of the “Geneva Trade Impact Group” to drive the systemic change necessary for women to fully benefit from the multilateral trading system. The support we provide through a network of local institutions, and with the private sector has catalysed over $60m in new business for women owned companies and producers in the informal sector. And our efforts to leverage digital technology to the advantage of women are beginning to pay off. Through SheTrades, ITC commits to continue to implement the recommendations of the High Level Panel. We hope to reach the one million goal by end of this year and keep momentum by scaling up ambition. ■
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TRADE & FINANCE
ADVANCING BORDER MANAGEMENT WITH BIG DATA DR KUNIO MIKURIYA Secretary General, World Customs Organization Data is generated by every economic activity, including by the movement of goods and people. In fact, the convergence of several technologies is accelerating the generation of data. According to experts, the volume of data continues to double every three years as information pours in from digital platforms, wireless sensors, virtual reality applications, and billions of mobile phones. In addition, data storage capacity has increased, while its cost has plummeted. Data scientists now have unprecedented computing power at their disposal, and they are devising algorithms that are ever more sophisticated. Customs already has a substantial amount of data at its disposal, beginning with data submitted for the customs clearance process. In 2015, 916 million import/export declarations were submitted to Customs authorities of WCO member administrations, 90% (828 million declarations) of which were declared electronically. In general, an import declaration is composed of around 50 data items covering: the actual goods (e.g. Harmonized System goods classification code, specification, unit price, weight and origin); stakeholders (e.g. importer, exporter, person liable to taxation and 34
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shipping companies); logistics (e.g. ports of loading, transit and unloading); customs revenue (e.g. tariff and refund); and financial transactions (e.g. payment method, cost of freight and insurance). On the other hand, an export declaration has similar or less types of trade data. Considering the additional data collected each year in other required documents, such as certificates of origin (e.g. origin of raw materials and intermediary parts) and Passenger Name Records (PNR) as well as data from customs investigations, Customs administrations are collecting huge amounts of data, which deserve high attention from operational services, policymakers and researchers. Moreover, thanks to the development of digital technology, Customs can tap into even more data from other government agencies, commercially available databases, and open source information platforms, such as digitized global public records and multilingual news sources. Yet, do we have the ability to analyze key data rather than simply collect it? Managing the information and making sense out of it is the real challenge. Exploiting big data Only small parts of “big data” from Customs is utilized to produce world trade statistics and trends analyses. While some advanced Customs authorities are using their big data to target high risk cargo and travellers based on their analysis of historical infringement cases, there is still much more to be done. Some analysis is useful beyond customs border management, both at the micro-level with firm-level data and at the macro-economic level with aggregated data. For example, data on the origin of raw materials, combined with the destination of final products, can be used in managing global supply chains, while data on logistics (e.g. major ports of unloading, routes of bonded transportation, location and storage period in bonded warehouses) can be used in maintaining the traceability of high risk imported goods, or developing public transportation infrastructure near ports and industrial complexes. Within the framework of cooperation between Customs and other government agencies, the potential of customs big data becomes even bigger. When customs data on passengers, illegal trade, revenue and international financial transactions
is matched, respectively, with data from Immigration, Police, Tax authorities and Financial Intelligence Units, the performance of each competent public service will be more effective and efficient. Furthermore, the international exchange of big data between Customs administrations will eradicate the risk of fraudulent import/export declarations, such as trade misinvoicing, and enable enforcement agencies to respond promptly to illegal/illicit trade. The benefit from the public release of anonymized customs data will be beyond expectation. Supporting big data analysis Applying big data analysis in real practice requires specific efforts, for establishing IT systems, for enhancing the quality of data, for harmonizing data across border agencies, for recruiting experts, and for assuring data security. Further, Customs administrations need to ensure that privacy and confidentiality laws are respected, so as to uphold the confidence of society while accessing and using such data. The WCO has been promoting the use of data and big data by its members, by inviting experts to talk about the subject, showcasing data analysis related projects, and monitoring and communicating practices related to this domain as well as to related issues (such as human resource management) and specific issues (such as the use of PNR data). Moreover, modern analysis tools play a huge role today and as a result thereof, the WCO strives to educate its members on new tools that provide new opportunities to get the most value from available information. One of the most important contributions of the WCO is with the standardization of the data collected by Customs administrations. When data is interchanged between trade partners by means other than paper documents, e.g. by teletransmission methods including direct exchange between computer systems, a common “language” should be used with an agreed mode of expressing it, i.e. common protocols, message identification, agreed abbreviations or codes for data representation, message and data element separators, etc. If a universally accepted standard is not used, the language has to be agreed bilaterally between each pair of partners interchanging data. Taking into account the large number of parties exchanging
data for an international trade transaction and the increasing number of potential users of teletransmission techniques, it is obvious that such a bilateral approach is not viable. However, the WCO has developed a Data Model that consists of a collection of international standards on data and information required not only by Customs, but also by other government agencies, in relation to the regulation of cross-border trade. This collection was developed after careful examination of all relevant international instruments and guidelines, along with national and industry practices, with the objective of achieving a consensus on the manner in which data will be used in applying regulatory controls in global trade. The Data Model supports data analysis by improving data collection (better quality of data) and by enabling the sharing of data between government agencies. Regarding the transmission of passenger data, the WCO has been working with the International Air Transport Association and the International Civil Aviation Organization in order for Advance Passenger Information (API) and PNR data to be provided to governments in a standard form. The WCO is also working with nonintrusive inspection (NII) equipment suppliers to create an international standard for scanned images and associated metadata. The utility of such a system lies, among other things, in the capacity to centralize the management of scanning operations, to exchange images between border posts and between countries, and to create a huge database of scanned images that could be used by all to train officers or program machines to recognize objects. Digital Customs To conclude, the WCO will continue its efforts to raise awareness among its members on the potential of using data and big data to advance border management including the positive benefits that can accrue to Customs administrations, as the increased use of such data will assist them in meeting the opportunities and challenges of today’s international trading environment, while helping them to fully embrace the digital age in line with the WCO’s “Digital Customs” concept. ■ 35
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A SUSTAINED APPROACH TO COMBATTING CORRUPTION
LISE KINGO CEO & Executive Director, United Nations Global Compact
The Sustainable Development Goals (SDGs) represent the most ambitious global development agenda in history. Developed by governments, civil society and businesses, and adopted by all 193 Member States in September 2015, the 17 SDGs are mutually reinforcing. With less than 5,000 days to go, we welcome the commitment of all governments to create an enabling environment where businesses and societies can flourish. A critical place to start is the elimination of corruption in all its forms in alignment with the UN Convention Against Corruption and UN Global Compactâ&#x20AC;&#x2122;s Tenth Principle. Indeed, governments along with businesses and civil society can support efforts to promote accountability and transparency. Corruption fuels inequality and uncertainty Corruption is one of the greatest obstacles to economic and social development. Estimates show that the annual cost of corruption equals more than 5 per cent of global GDP (US$ 2.6 trillion) with over US$ 1 trillion paid in bribes each year (World Bank). In comparison the estimated investment gap required to achieving the SDGs
is USD US$ 2.5 trillion annually â&#x20AC;&#x201D; combatting corruption could basically free up resources needed to create the world that we want. Corruption is essentially lost economic opportunities for levelling the playing field and for securing social and economic development. Corruption leads to reduced government revenues, it increases the cost of doing business by up to 10 per cent on average and in developing countries, according to the United Nations Development Programme, funds lost to corruption are estimated at 10 times the amount of official development assistance. In countries where corruption exists, governments are unable to deliver public services including health, education, water and sanitation. This also weakens rule of law, as governments are unable to instil public trust in civic institutions, law enforcement and political processes, ultimately undermining their credibility and legitimacy among citizens. It impedes foreign investment and economic growth. Corruption undermines responsible business practices, fair competition and market stability. It prevents people, countries and businesses from fulfilling their potential.
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How the UN Global Compact’s Tenth Principle is Supporting the SDGs Businesses and societies thrive in peaceful, just and inclusive societies. The business case for sustainable development is clear. According to the Business & Sustainable Development Commission, realizing the SDGs opens up US$ 12 trillion of market opportunities. Therefore, we need everyone, everywhere, to commit to combatting corruption. Only then can we truly create the world that we want — a world where everyone has the opportunity to reach their full potential. The UN Global Compact encourages businesses to act responsibly and find opportunities to deliver on the SDGs. Specifically we call on businesses everywhere to sign up to ten universally accepted principles with respect to human rights, labour, environment and anti-corruption, and to communicate on progress every year. Anchored in the UN Convention Against Corruption, and aligned with SDG 16, the UN Global Compact’s Tenth Principle states that: “Businesses should work against corruption in all its forms, including extortion and bribery”. We ask businesses to develop policies
and programmes to address all forms of corruption, and we work to ensure that businesses, governments, UN agencies and civil society work together to realize a more accountable and transparent global economy. Targeting our network of 13,000 participants worldwide, UN Global Compact collaborates with various organizations including our Global Compact Local Networks to promote Collective Action efforts. Our efforts aim to increase business integrity, enhance transparency and bring the private sector, governments, and civil society together to collectively advance the anti-corruption agenda and contribute to the achievement of the UN Sustainable Development Goals – specifically Sustainable Development Goal 16 and target 16.5 on fighting corruption. Join us in fighting corruption. When we end corruption, everybody wins. ■
Targeting our network of 13,000 participants worldwide, UN Global Compact collaborates with various organizations including our Global Compact Local Networks to promote Collective Action efforts. 37
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VILE BUT PROFITABLE: HOW HUMAN TRAFFICKING ROSE TO BE ONE OF THE WORLD’S MOST ATTRACTIVE CRIMES
YURY FEDOTOV Executive Director, UN Office on Drugs and Crime
Jacob, not his real name, was duped into leaving his village and accompanying a group of men to Nairobi after they promised him education and work. Upon arriving in Nairobi, everything changed for Jacob. He was taken to Mombassa and told to hunt for scrap metal. If he failed to find sufficient amounts, he went hungry and was forced to beg on the streets. The thirteen-year old escaped and fled to a nearby town where he committed petty crimes to stay alive. Jacob was arrested, but fortunately, a local NGO stepped in and he was reunited with his family. His story is not unusual or peculiar. It closely follows the dire experiences of millions of people globally who are being cruelly exploited and abused. Today, human trafficking is a global phenomenon worth billions of dollars with deep roots in every country and every region. According to the UN Office on Drugs and Crime’s Global Report on Trafficking in Persons 2016, more than 500 socalled trafficking flows exist globally. Like Joseph, 28 per cent of all human trafficking victims are children with nearly two-thirds being girls.
Domestic trafficking makes up around 43 per cent of all trafficking and most cross border routes are sub-regional. But human trafficking has not remained static, it is Highly fluid as different groups attempt to feed off its profits. Two of the most worrying developments for the international community are human trafficking’s relationship with armed groups and its evil crime twin migrant smuggling. The driving forces behind the rise of human trafficking is conflict, instability and economic uncertainty. People escaping wars and persecution are particularly vulnerable to the traffickers. Studies show that 9 per cent of Syrians escaping the conflict on their way to Europe at the end of 2015 and beginning of 2016 endured some form of trafficking or experienced exploitation. Many armed groups such as Boko Haram and ISIL are involved in trafficking in persons. Victims of trafficking for the purposes of child soldiering, sexual slavery and forced labour have also been seen in current and past conflicts. These deadly conflicts also generate demand for inward trafficking to the conflict zones for the purposes of sexual exploitation or enforced labour.
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More funding needs to be provided to the UN voluntary trust fund for victims of human trafficking from the private sector and the public to help organizations assist victims in the field. The world is currently experiencing the largest mass movement of people since World War II and it is showing few signs of abating. People are crossing perilous seas, baking deserts and enduring suffocating transport to get to safety. Many are dying. Smuggled migrants face torture, extortion and even trafficking for organ removal on some African routes as they search for greater opportunities elsewhere. The relationship between human trafficking and migrant smuggling is often symbiotic with migrants running out of money, being coerced into trafficking, and then continuing on with their desperate journey after paying off debts. All of this makes depressing reading, but we do know how to fight back against the traffickers and smugglers. I would suggest there are five key areas. First, we must fully implement the UN Convention against Transnational
Organized Crime and its protocols against Trafficking in Persons and migrant smuggling. That means developing cooperation founded on sound intelligence sharing, joint operations and offers of mutual legal assistance. Second, laws on anti-trafficking should go further than simply criminalizing the act of trafficking. The victims of human trafficking must be protected and supported. Third, the international community should consider providing additional resources to confront the challenges in conflict zones or where there are huge movements of refugees and migrants. Fourth, there is a need for dedicated action to detect, investigate and successfully prosecute cases of human trafficking. At present, the statistics are simply not good enough. Of the 136 countries
covered, 40 per cent reported 10 or fewer convictions per year in the years between 2012 and 2014. Finally, more funding needs to be provided to the UN voluntary trust fund for victims of human trafficking from the private sector and the public to help organizations assist victims in the field. Countries, in October, will examine the progress made by the Global Plan of Action To Combat Trafficking in Persons, which was adopted unanimously by the General Assembly in 2010. This is a welcome event and it will inevitably increase badly needed cooperation and partnership, but we must also tackle the criminals and their networks, as well as targeting moneylaundering and the corruption fueling this crime. Boys like Joseph were easily exploited because they desired a better future. If we are truly serious about helping the millions of children in similar situations, we must remove the poverty and insecurity that makes children vulnerable. The only way to do this is to pour all our collective efforts into achieving the 2030 Agenda for Sustainable Development, including those goals related to human trafficking. â&#x2013; 39
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GOOD GOVERNANCE A CORNERSTONE OF STABILTY AND SECURITY
LAMBERTO ZANNIER Secretary General of the Organization for Security and Co-operation in Europe
Accountability, transparency, public participation and respect for the rule of law are key principles that underpin democratic, inclusive, safe and stable societies. The trust of citizens in sound political leadership and effective administration is therefore critical. Conversely, the perception that public institutions are misused to serve the selfish interests of individuals or that taxpayersâ&#x20AC;&#x2122; money is misappropriated can be a powerful and dangerous driver of popular discontent. Moreover, if corruption is not addressed effectively, there is risk that it can feed extremism or even lead to violence. Conscious of these security implications, the 57 participating States of the Organization for Security and Co-operation in Europe (OSCE) have long recognised that good governance is an essential cornerstone of stability. On the basis of political commitments adopted through consensus, the OSCE provides tailored advisory assistance, capacity-building and legislative support. Its activities also tie into the global framework provided by the Sustainable Development Agenda and relies on complementary partnerships with regional and international
institutions such as UNECE, UNODC, OECD and the World Bank that are engaged in preventing corruption, money-laundering and the financing of terrorism. The OSCEâ&#x20AC;&#x2122;s work promoting good governance benefits strongly from an extensive field presence in countries undergoing complex transitions, for example in South-East Europe and Central Asia, and from the expertise of the Office of the Co-ordinator of the OSCE Economic and Environmental Activities. Success stories include the 2014 establishment of the OSCE Good Governance Resource Centre in Ashgabat, Turkmenistan, and the 2016 adoption of anti-corruption legislation in Mongolia, which foresees the establishment of Community Councils of Corruption Prevention nationwide. However, promoting good governance is not only a question of adopting appropriate laws, learning investigation techniques or promoting codes of conduct. It is a continuous, long-term effort to change behavioural attitudes and infuse respect for others in all segments of society, particularly among those who may be tempted to take undue advantage of their leading
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The 57 participating States of the Organization for Security and Co-operation in Europe (OSCE) have long recognised that good governance is an essential cornerstone of stability. positions. The need for a cultural shift calls for fostering a social environment that rejects corruption not only because it is illegal but also because it is immoral and unethical. Leading by example and forging multi-level alliances with economic actors and governments, the private sector and financial institutions are among the most effective ways to strengthen an anti-corruption mind-set.
Last year, the OSCE Ministerial Council adopted a decision on Good Governance and Connectivity, a comprehensive text that managed to achieve consensus despite strong political tensions between OSCE participating States on other issues. The decision recognises that strengthening economic ties is crucial in fostering comprehensive co-operation and confidence-building within the
OSCE area. Given growing economic interdependence, governments need to co-operate ever more closely to develop strategies aimed at facilitating harmonization, transparency and predictability of regulations and procedures. Pursuing good governance requires a comprehensive approach to creating appropriate conditions for business to thrive and investor confidence to grow. Todayâ&#x20AC;&#x2122;s unprecedented confluence of transnational threats to security and stability demands that the international community must strive harder to identify common rules to ensure security and prosperity for all citizens. This calls for responsible and farsighted political, financial and economic leadership that promotes good governance as a cornerstone of stability. I am confident that the G20 Hamburg Summit will further strengthen our joint vision of a more secure world in which increased accountability, transparency, public participation and respect for the rule of law contribute to better governance for the benefit of all citizens. The OSCE, building on its solid track record and long-standing experience in this area, is eager to contribute. â&#x2013; 41
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FIT FOR THE FUTURE:
SHAPING A DIGITALLY INTERCONNECTED WORLD CARLOS MOEDAS EU Commissioner for Research, Science and Innovation
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The rise of connected and digitallyenabled innovations and technologies as well as the closer integration of the physical and digital spheres have revolutionised our societies. Digitisation is intrinsically linked with the rise of technologies, such as the Internet of Things, Big Data, 5G and High Performance Computing. These technologies are closely converging with other Key Enabling Technologies. They are also creating close digital-physical interactions that result in new products, services and business models as well as redesigning the workplace. Not only this, but digital innovations are empowering users to reinterpret the meaning of emerging technologies. Advances related to digitisation have the potential to tackle several major societal challenges. They could improve the monitoring of health and the support to the elderly, tackle climate change, improve the management of the energy system, increase the safety and the efficiency of transport systems or improve agriculture sustainability. On the manufacturing side, digitisation leads to customised products. Production is distributed and localised and new innovation models leverage community interaction and knowledge sharing. While the rise of these digitally-enabled technologies holds the promise of large gains in productivity, this potential has yet to materialise in the productivity statistics. The traditional positive relationship between innovation and productivity appears to be broken and we need to understand why this is happening. While some of the aspects of the digital world, e.g. its ‘winner takes all’ dynamics, play a role in this, it is also clear that Europe is still catching up in this domain. It needs to become aware that the digital revolution has fundamentally changed innovation. The digital revolution has democratised innovation. Users are much closer to producers and can more easily influence the way a product or service develops. They experiment, assess and give feed-back. The digital
economy also allows new and smaller players to enter markets and scale up at a speed which was not possible before. It also offers the potential to create entirely new markets. Europe, as the rest of the world, must therefore seize the opportunities that digitisation offers. Only then can it enable innovations that will continue boosting the productivity of our economies and creating more inclusive societies. We need to ensure that digitisation gets into our core economic sectors. It has been estimated that around 90% of our economy is yet to reap the productivity benefits arising from digitisation. It is essential to encourage the digitisation of sectors that are largely untouched by the digital revolution, in areas such as healthcare, energy and transport. We need to make this uptake as smooth as possible. The European Commission is working with the EU Member States to implement initiatives with financial support from Europe’s research, innovation and infrastructure programmes as well as from the private sector. In particular, Horizon 2020 is providing support for activities related to digital innovation hubs and investment in key technologies, as well as their integration into the next generation of digital industrial platforms. Europe’s engagement with public authorities via dialogues, support for multi-stakeholder models and active participation in international networks sustains support for an open, digitally interconnected world. It underpins consistent IPR enforcement and helps develop the common standards needed for the deployment of key technologies. The open nature of Horizon 2020 allows joint research and innovation activities to be carried out with international partner countries, while the EU consistently seeks reciprocal arrangements from its partners. International cooperation is necessary to ensure the scientific leadership and industrial competitiveness of Europe. It is key to accessing research excellence and all types of know-how wherever it is located, and it allows Europe to tap into global innovation networks. ■
It is essential to encourage the digitisation of sectors that are largely untouched by the digital revolution, in areas such as healthcare, energy and transport.
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DRIVING SUSTAINABLE INNOVATION WITH THE INTERNET OF THINGS
DR. CHRISTIAN BUSCH London School of Economics
The Internet of Things (IoT) has been lauded as the next industrial revolution, propelling the world forward by ‘intelligently connecting people, process, data, and things’. IHS estimates that there are approximately 20 billion sensor devices connected to the Internet¹. Data from these devices is being used for everything from monitoring traffic patterns and streamlining manufacturing, to aiding in healthcare systems.
CHRISTA GYORI Leaders on Purpose/ Harvard University
The potential is immense. However, IoT poses as many risks as it does opportunities. It may lead to structural unemployment, impede protection of privacy, exacerbate inequality, and promote cybercrime. At the same time, it can improve low carbon supply chains, peer-to-peer financing, food distribution systems, and access to renewables. The net benefit to humankind will be determined by our ability to harness the IoT to drive sustainable innovation.
MAYA BRAHMAM World Bank Group
In our work at Harvard, the LSE, the World Bank, and Leaders on Purpose, we have been meeting with many of the world’s top CEOs to discuss their leadership strategies as they relate to sustainable development, inclusion, and innovation. Many of the conversations for our current CEO study dovetail with recent discussions about the Internet of Things. This article explores some of the most promising and actionable insights from this work.
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Business and IoT Enlightened business leaders are transforming their organizations, positioning technological innovation to drive organizational performance and increase societal benefit by addressing three areas of focus:
Role of Governments in IoT Government has a central role to play in ensuring digital access and digital literacy for all. In addition, policy-makers will need to leverage IoT to increase diversity and inclusion in governance and decision-making, with focus on:
Actualizing a purpose-driven organization. High employee motivation, retention, and performance are driven by the integration of purpose and values into recruitment, sales, and promotions². Tangible values bind people together, and propel positive impact. Lars Sorenson, former CEO Novo Nordisk, commented: “We’re working with the most talented people. They’re concerned about societal issues, and if the company doesn’t reflect those concerns in the way that we perform, communicate and interact, we will not be successful.”
Actionable public-private partnerships (PPPs). To meet global development demands, re-conceptualizations of PPPs and new institutional and financial innovations are required. IoT will impact the nature of infrastructure investing by improving the speed and efficiency of these investments. This opens the way for redirecting investments in lowyielding assets to higher-return longterm infrastructure assets⁴. In addition, a forthcoming World Bank report has found that IoT has a positive effect on the implementation of business regulations, and can promote efficiency⁵.
Balancing organizational agility with hierarchical structures. Organizations can accelerate the healthy flow and integration of new ideas by using adaptive networked structures alongside traditional hierarchies One example is Siemens’ ‘next47’. According to Siemens CEO Joe Kaeser, “innovation is about solving problems. Today, many organizations have become captive to their own processes and use them as a proxy for results”. The ‘next47’ startup unit operates as a company within the company, It is an agile cluster of startups incubating ideas that can be scaled up when ready. The aim of this ecosystem is to foster disruptive ideas and to capitalize on IoT’s potential.
Smarter infrastructure services. Digital decision support services for governments on water, pipes, and roads are underway. This includes blending digital sources with non-conventional sources of data. For example, from mobile money water buys in certain districts of a city it can be inferred that the water is not flowing, triggering inspection of the pipes. The next frontier for governments will be how best to use this data – while ensuring connectivity for those without internet access⁶.
Moving from a product-based company to a user-focused supernode. The successful organization of the future will need to integrate Big Data, IoT, and direct consumer engagement. Chinese company Haier exemplifies this: Its YouPlus app provides a platform to connect users, businesses, IoT devices, and Haier. CEO Zhang Ruimin wants to transform Haier into an entrepreneurial ecosystem comprised of more than a thousand ‘micro-enterprises’ (MEs). Haier engages these MEs around core ‘platforms’ to develop products that meet customer demands³.
Education and Entrepreneurs. The workforce is going through enormous upheaval. The World Bank has noted that the proportion of jobs threatened by automation in India is 69 percent, 77 percent in China, and 85 percent in Ethiopia⁷. At the same time, job creation is stemming from small business growth. IoT will likely amplify this⁸. Sharing economy successes like Uber and microenterprise models such as Haier’s offer a glimpse of the future. Effective policy to support education for the jobs of tomorrow and a robust “net-entrepreneurial” ecosystem will be required.
1. Morelli, B. 2016. Internet Connected Devices: Evolving from the “Internet of Things” to the “Internet of Everything”. Austin: IHS. 2. Busch, C. 2016. The Impact Organization. London: London School of Economics. 3. Busch, C., & Wang, A. 2017. Global business model innovation: The Haier case. London: London School of Economics. 4. Arezki, R., Bolton, P., Peters, S., Samama, F., & Stiglitz, J. 2016. From global savings glut to financing infrastructure: The advent of investment platforms. IMF Working Paper WP/16/18. Washington: International Monetary Fund. 5. A forthcoming World Bank study of 12 cities (to be published in June 2017) examines the government and business relationship on business services and whether they are more effective with IoT. 6. The World Development Report 2016: Digital Dividends. Washington D.C.: World Bank. 7. Talley, I. 2017. As the World Bank’s Biggest Donors Rethink Funding, Its President Pitches the Need for Ai.” Wall Street Journal. 8. For examples, see: www3.weforum.org/docs/ Media/WEF_Future_of_Jobs_embargoed.pdf
LEITH SHARP Harvard University Fit for the 21st Century Organizational and policy innovation will need to keep pace with technological innovation to ensure organizational survival. We have much to learn from those purpose-driven leaders who are driving sustainable innovation with the IoT by transforming how they lead, govern, and do business. ■
Today, many organizations have become captive to their own processes and use them as a proxy for results. 45
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FORGING NEW PARTNERS FOR RESILIENCE
DR. AKINWUMI ADESINA President of the African Development Bank
Africa’s Transformation has already started. The Bank’s strategy of the High 5s – Light up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa; and Improve the Quality of Life of Africans aligns perfectly beside the admirable COMPACT with Africa, with its focus on food security, infrastructure, peace and security. A UNDP analysis shows that the High 5s cover 90% of the African Union’s Agenda 2063 and the Sustainable Development Goals (SDGs). Speeding up the implementation of the “High 5s”, will accelerate the agreed global objectives and put wind in the sails of the COMPACT with Africa. But the High 5s cannot happen without political stability, good governance and stable communities. Africa cannot afford ‘triangles of disaster’, in which unemployment, poverty and environmental degradation compete with each other in a deadly race to dereliction. The victims of such triangles of disaster are, overwhelmingly, Africa’s youth. That is to say, Africa’s future. Africa wants its young people to stay and become part of a successful Africa, and not risk their lives as recruits
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The victims of such triangles of disaster are, overwhelmingly, Africa’s youth. That is to say, Africa’s future. to extremist terror groups or on the Mediterranean for an unsafe journey and an uncertain future in a new land. That’s why the Bank created the Jobs for African Youth Fund, which seeks to create 25 million jobs and train 32 million young people over the next decade. We hope to generate $30 billion in income gains for the African economy from a mobilized investment of $5 billion. The Bank has committed $24 billion towards agriculture and agricultural industrialization over the next ten years. And it will be keeping the added value in growing and processing its food, for we cannot keep paying $35 billion a year, rising fast to $110 billion a year by 2025, to import food that we should be growing, processing, and consuming ourselves. Africa has over 65% of all the uncultivated arable land left in the world: it can and should feed itself. What is African agriculture without women? The African Development Bank has launched the Affirmative Finance Action for Women (AFAWA) to leverage $3 billion for women entrepreneurs in Africa, mostly in rural areas. Just as birds only fly with two wings, so Africa can fly only by giving women full equality with men. Some 645 million people do not have access to electricity. The Bank has committed about $12 billion by 2020 and we will leverage another $45 – $50 billion in co-financing for energy projects in Africa. Power generation is the key. Our goal, working with all stakeholders, is to connect 130 million people via grid systems, 75 million people via off-grid and ensure that 130 million households get access to clean cooking energy. While the off-grid sector is growing fast, it nevertheless suffers from an uneven enabling environment and from patchy access to financing. We need new ideas and additional partners to beat these challenges. And we need to scale them up throughout the continent.
The African Development Bank considers the private sector as the critical driver of development growth and this is reflected in our investments. Last year alone, the Bank approved $2.6 billion to support private sector investments in Africa. The bill for investment in African economic transformation is certainly high. But Africa has a unique opportunity to tap the top-heavy global capital markets to finance its development. Sovereign wealth funds and pension funds can leverage additional resources. For example, 60 countries in the world are reported to be managing over $7 trillion through 94 sovereign wealth funds. The African Development Bank is keen to encourage the mobilization of domestic resources. For example, sovereign wealth fund assets under management in Africa contain $164 billion. Pension fund assets in Africa currently stand at $334 billion. Tax revenues have exceeded $500 billion per year, and plenty more would be available if loopholes, non-payment and avoidance were ended. The African Development Bank is also actively stimulating the development of domestic bond markets, regional stock exchanges, and commodity markets on the continent. Later this year, the Bank will be launching the Africa Investment Forum, a transactional investment platform matching bankable projects with capital funds. Initiatives with minimal effects on the public budgets of G20 countries include financing infrastructure and power generation through public-private partnerships (PPPs) and promoting accelerated private foreign direct investment. It all amounts to what I am calling the deal of the century. The African Development Bank stands ready to partner with G20 countries in these areas to close the deal and thus unlock the enormous potential of African economies to the benefit of the global economy. ■ 47
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ACHIEVING SUSTAINABLE ECONOMIC PROGRESS IN AFRICA
SINDISO NGWENYA The Common Market for Eastern and Southern Africa – COMESA
African States and development partners have invested heavily towards supporting integration and the promotion of intra-Africa and extra-Africa trade. These investments have gone a long way to assist the countries, through their respective regional economic groupings, in implementing integration programmes such as on trade facilitation. Instruments and protocols have been developed particularly under the Free Trade Area (FTA) concept which is one of the most transformation initiatives in regional trade. There has been mixed fortunes in achieving the set goals. Africa’s share in world exports was about 6% in 1980 and over the years despite high levels of trade facilitation efforts, Africa’s global trade share has dropped to about 3.3%. On the other hand, the overall intra-African trade is still around 15%, a figure very low compared to levels of intra-regional trade in Europe (59%), Asia (52%) and North America (37%). It is evident that the lack of value addition in Africa’s export composition means that Africa’s export fortunes remain contingent on commodity price movements and as a result remain vulnerable to external shocks.
An analysis of how Europe developed its economies and trade performance reveals that, in general the process was accompanied by use of modern technological innovations to replace old systems such as human or animal power in favor of engines. The process was accompanied by global value chains characterized by high levels of importation of raw commodities from Africa and exportation of finished manufactured. It is also important to learn from the export led industrialization processes of the “Asia Tigers” that took place between 1960 and 2000. These countries concentrated their efforts in developing value chains in sectors they had comparative advantages. This was then accompanied by investments in enablers that led to more sophisticated enterprises, such as metalworking, chemicals, and electronics. It is clear from the above case studies that promoting value-added light manufactures and value-added exports will help Africa to mitigate the adverse effects of export instability. This is in addition to high terms of trade variations as a result of high dependency on raw materials. This will reduce African
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countriesâ&#x20AC;&#x2122; exposure to external shocks and risks associated with fluctuations in commodity demand and prices. Given the above challenges it is important that Africa concentrates its energies in implementing backward linkages that encourage the supply of input to its economies through transfer of technology, generation of valueadded activities within the continent and enhancement of regional ownership. In addition, forward linkages should also be encouraged within the continent in order to ensure high level of processing of primary goods prior to export through, for example, the establishment of processing plants, milling companies, refineries, petrochemical industries, and the production of fertilizers, biogas etc.). The above scenario demands that the African region develops local supply industries through joint venture, research and development and transfer
of technology. Countries that tend to benefit from global value chains are those whose companies import cheap raw materials from other countries to use in their production process in order to export high value finished goods downstream. It is in this context that African economies need to better benefit more from the regional and global value chain by enhancing the upstream activities through improved domestic and foreign investments. It has been seen that apart from selling raw commodities, Africa has a comparative advantage in agroprocessing and light manufacturing. Transformational initiatives such as the launch of the Tripartite arrangement that brings together the Common Market for Eastern and Southern Africa (COMESA), the East Africa Community (EAC) and the Southern Africa Development Community (SADC) provides a framework to address some of the key challenges of integration.
Countries that tend to benefit from global value chains are those whose companies import cheap raw materials from other countries to use in their production process.
The Tripartite Free Trade Agreement (TFTA) that was signed in 2015 is anchored on three pillars, namely: market integration, infrastructure development and Industrialization with parallel tracks on free movement of persons and liberalization of services. The advent of ICT and related software tools in the 21st century is an opportunity for Africa to leapfrog in trade and transit facilitation. By moving towards a digital economy would disrupt the age old bureaucratic procedures, processes and institutional arrangements that has over the years seen the implosion of different agencies, both public and private that increase the cost of doing business. For example, there is no need for heavy capital investments in border facilities as all that is required through ICT and software applications is to integrate all agencies, not only at the borders but within the Common Markets. The focus on industrialization as a precursor for market integration is consistent with the new strategic orientation of the African Union agenda 2063, the African Development Bank and the African Regional Economic Communities (RECs). â&#x2013; 49
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FOR AFRICAâ&#x20AC;&#x2122;S DEVELOPMENT HOULIN ZHAO Secretary General of the International Telecommunication Union
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Infrastructure is intrinsic to development. It is the foundation upon which social and economic development is built, the critical support network for enabling innovation, developing new markets and delivering services key to improved quality of life. As one of the UN’s seventeen Sustainable Development Goals, goal nine (known as SDG 9) highlights the role of infrastructure in providing the basic systems essential to the operation of societies and businesses, enabling industrialization and innovation to drive productivity and economic growth, job opportunities and engagement in the knowledge economy. In today’s fast-moving world, all infrastructure depends on information and communication technologies (ICTs). Global, national and local infrastructure is controlled, managed and optimized by ICTs, whether power networks, water supplies, transportation systems or communications networks. Broadband ICT networks are increasingly critical as they represent the superstructure supporting all other infrastructures, industrial processes, socio-economic advancement and human development that follow. Broadband networks, whether fixed, mobile or hybrid, kick-start development with a positive direct impact on economies, improving efficiency, communication and the circulation of goods and services, as well as the creation of new business, markets and innovations directly linked to access to online resources and the information economy – especially important as a catalyst for the growth of small to medium size enterprises. So if we are serious about achieving SDG 9 we need to look to expanding and extending broadband as the first principle of infrastructure development. Far from being a luxury for the industrialized world, it can be the very backbone of successful development for emerging economies. Nowhere does this hold truer than in Africa, home to a significant portion of the world’s four billion unconnected. In many parts of the continent, agricultural
and traditional sectors remain dominant. The growth of industries, economies and societies through sustainable development is limited by an enormous infrastructure gap – a gap which can only be closed by targeted, extensive investment in broadband networks. Yet precisely here, where it is most needed, investment is scarce. Outside of densely-populated urban areas, topography and demography often defeat market viability. Even within cities, low incomes, lack of consumer demand or education, and complex government regulations often inhibit private sector investment. Human capacity lies untapped for want of investment; and the gap between the poorest in many African nations and the wealthy of the so-called developed world threatens to deepen into an unbridgeable divide. The central challenge to deploying fast, reliable, broadband networks is investment. Beyond this lie the complex demand-side issues of providing affordable devices, capacity and training; driving adoption through the creation of relevant content and services in local languages; and ensuring adequate sustainable power supplies. Government is the single most decisive stakeholder in pushing infrastructure build-out and broadband deployment throughout Africa. Where the market cannot or will not go, government policy must take the lead – whether directly, through the use of fiscal, regulatory or policy measures, or through creative partnerships between public, private and civic sectors. The critical conundrum for government lies in the balance between taxation and fiscal incentives; between benefiting from predictable, easy tax revenue and fostering large-scale investment in infrastructure; between the enormous positive impact of ICT and the wider needs of society as a whole. In parts of Africa, in particular where tax bases are narrow and collection mechanisms not always efficient, up to 25% of government income may be drawn from taxing the ICT sector. ICT is a stable, regulated and structured industry than can easily be tapped to balance
public sector budgets. But there is a very real risk in the knock-on effect of higher taxes, increasing the price of using ICT services, decreasing investment in next-generation networks, and severely limiting the positive contribution to society and the digital economy. A more nuanced approach to fiscal policy is needed for the ICT sector to encourage investment in and deployment of critical infrastructure. Policy and regulation initiatives could include new forms of Universal Service Funds, agreements on local and national rights of way, site sharing, and license fees. Sharing or partnering with ICT infrastructure could allow deployment of other government infrastructure such as public buildings, electricity or roads. Viewing ICT as an essential part of an entire ecosystem, rather than an individual industry or isolated source of revenue, would enable taxation and business models to be combined to mutual benefit. For this to happen we need new forms of collaboration and dialogue, both within government (between finance and ICT ministries, for example) and across sectors. Entities such as the UN Broadband Commission for Sustainable Development promote innovative collaboration within the ICT industry, as well as new public private partnership models to accelerate broadband deployment and the sustainable development it brings. The Smart Africa Alliance puts ICT at the heart of development, working to create policy and regulatory environments to encourage partnership, entrepreneurship and knowledge-sharing. Such initiatives are key to creating the investment environment necessary for broadband infrastructure in Africa, and to the socio-economic advancement and human development opportunities it enables. ■
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THE G20 CAN LEAD THE WAY TO LEAVE NO WOMAN OR GIRL BEHIND
PHUMZILE MLAMBO-NGCUKA UN Under-Secretary General and Executive Director of UN Women
The G20 has recognized women’s economic empowerment as crucial to reaching the Sustainable Development Goals (SDGs) and ensuring that no one is left behind. Along with a HighLevel Principle for achieving gender equality and women’s empowerment in the G20 Action Plan on the 2030 Agenda, and a commitment to closing the gender gap in labour market participation (Brisbane 2014), the G20 has set up the W20, a group dedicated explicitly to dialogue on women’s economic empowerment. Such commitments are strongly aligned with the focus of this year’s 61st session of the Commission on the Status of Women (CSW61), and the UN Secretary-General’s High-Level Panel on Women’s Economic Empowerment (HLP), both of which have recently concluded their work. Comprising leaders from governments, private sector, trade unions, commercial banks, civil society and multilateral organizations, the High-Level Panel discussed practical but transformative ways to make economies work better for women. It identified seven drivers that are critical to unlocking women’s economic potential: tackling adverse norms and promoting positive role
models; ensuring legal protections and reforming discriminatory laws and regulations; recognizing, reducing and redistributing unpaid work and care; building digital, financial and property assets; changing corporate culture and practice, improving public sector practices in employment and procurement, and strengthening visibility, collective voice and representation. The pressing task now is to work together with our partners in the G20 to ensure that these transformative recommendations are taken forward at the highest levels. Connecting High-Level Panel recommendations to W20 commitments Key aspects of the High-Level Panel’s drivers and their associated recommendations align with recent themes taken up by the W20 in 2017, including increasing the
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labour market participation rate of women and the value of work traditionally done by women; promoting female entrepreneurship and access to finance for women; and closing the digital gender divide. Labour market inclusion Increasing women’s participation in the labour market means creating an enabling environment where women have access to decent work and equal pay, where stereotypes do not segregate women into low-paying and undervalued positions, and where women are not held back from employment by unpaid care and domestic duties. Around the world, women’s unpaid work invisibly contributes some $10 trillion a year to the global economy, yet this work continues to go largely unappreciated and unremunerated. The amount of unpaid care done by women substantially limits their opportunities for education, political engagement, social activities and
entrepreneurship. To enable an inclusive labour market for all, G20 leaders must promote and finance social protection policies and programmes that reduce and redistribute unpaid care work. Financial inclusion Lack of access to credit can hamper women entrepreneurs’ ability to invest in and grow their businesses. Recent advances such as savings groups and mobile banking services are improving women’s access to finance, but self-bias, high prices and poor product and service design can stifle women’s ability to capitalize on these opportunities. By providing women with equal opportunities to act as operators, providers, policymakers, programme designers and evaluators, as well as to lead governments, central banks and private sector companies, G20 countries can ensure that women are able to both contribute to and benefit from the growth of the digital and financial sectors.
Closing the digital divide Empowering women in technology is vital, as an estimated 90 per cent of future jobs will depend on digital skills. Yet today women represent just one quarter of the technology workforce. The G20 will only be able to accomplish its goals by addressing this imbalance through programmes that deconstruct negative stereotypes about the kinds of jobs women can do, and that increase education and training in the science, technology, engineering, arts and math (STEAM) fields so that women and girls can take full advantage of ongoing technological advances. We are counting on G20 countries to act decisively on commitments that place women’s economic empowerment at their core, including to strengthen the role and status of the W20 within in the G20, so that together we can ensure that economies are made more fair, just and sustainable, in the G20 and around the world. ■ 53
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BOOSTING SOFT POWER TO PREVENT VIOLENT EXTREMISM IRINA BOKOVA UNESCO
The threat of violent extremism knows no borders and highlights the vulnerabilities of all societies today – With the to support from Paris London,of from Homs to Tunis. Promoting violence, fear and hatred, this threat takes many faces, from tragic terrorist attacks to the persecution of people on ethnic and religious grounds, the destruction of schools and cultural heritage, the illicit trafficking of cultural goods and the killings of journalists.
UNESCO United Nations Educational, Scientiﬁc and Cultural Organization
With the support of
UNESCO United Nations Educational, Scientiﬁc and Cultural Organization
We know that that there is no single cause for the rise of this threat, nor is there a single trajectory leading a young woman or man to extremist violence. We know also that ‘hard power’ cannot be the only way to counter a threat that is nourished by exclusive visions based on false interpretations of faith, fuelled by hatred and ignorance. To be effective, we must start as early as possible. We must not only seek to counter violent extremism – we must prevent it. This idea resonates at the heart of UNESCO mandate, guided by the opening of our Constitution: “Since wars begin in the minds of men, it is in the minds of men that the defences of peace must be constructed.” UNESCO is bringing all its weight to support countries in their efforts to prevent violent extremism. This action fits into the sharpening focus on prevention and peacebuilding led by the United Nations Secretary-General, António Guterres, reflecting UNESCO’s comprehensive contribution to the United Nations Global Counter-Terrorism Strategy and the Secretary-General’s Plan of Action to Prevent Violent Extremism. In all this, our objective is clear – to empower
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young women and men with knowledge, skills and values to live up to their potential as positive actors to advance peace. This must start on the benches of schools, because education is a game changer to transform societies and undermine prejudice by fighting ignorance and indifference. Young people are learning to hate – we must teach them peace and tolerance. We must educate them to think critically and globally about their rights and responsibilities. This calls for new skills and competences, including those of cultural literacy, to make the most of the rising diversity of societies today. This calls also for new ways of acting and behaving as global citizens, to shape the values and knowledge we need for the century ahead – this is the spirit of Sustainable Development Goal 4 of the 2030 Agenda for Sustainable Development, which UNESCO is spearheading across the world. Preventing violent extremism must be built into education systems and teaching. This guides UNESCO’s focus on crafting new normative tools – such as the UNESCO Teachers’ Guide on the
Prevention of Violent Extremism and the UNESCO Guide for Policy-Makers on the Prevention of Violent Extremism through Education. To this end, UNESCO is building capacity for educators in Albania, Bosnia Herzegovina, Serbia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. We are leading the same work in West Africa with the International Organisation of La Francophonie, and supporting education to prevent violent extremism in Morocco, Mauritania, and Senegal. In Iraq, Syria, Lebanon and Jordan, UNESCO is investing a special focus on education for young Internally Displaced Persons and refugees, to ensure that no one is left behind – the world cannot afford to lose a generation to violence. We must also act in new ways in the digital age, to empower young women and men new tools of resilience. People speak of a new generation of ‘digital natives’ – UNESCO is working to nurture a new generation of ‘digital citizens,’ with the right skills, competences and behaviours to promote tolerance and human rights online, and counter discourses of hatred and radicalisation leading to violent extremism.
In the face of violent extremist propaganda, we must respond with powerful counter-narratives of unity. This spirit guides the global social media campaign – #Unite4Heritage – that I launched at the University of Baghdad in 2015, to empower young women and men to strengthen the narrative of shared values and heritage, to show that dialogue between cultures is the driving force of all history. This is also why UNESCO is leading the United Nations in supporting education about the Holocaust and other genocides, to fight against new forms of racism and discrimination today, including anti-Semitism, through knowledge of the past. I see preventing violent extremism as a new global struggle for hearts and minds – especially those of young women and men. For this, we need the ‘soft power’ of education, culture, and freedom of expression. No single country can tackle this alone, and this is the importance of effective multilateralism, involving not only Governments, but all actors, from civil society to the private sector. We need to get this right to empower societies and give young people every chance they deserve. ■ 55
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THE GLOBAL ECONOMY IS HIGH ON THE AGENDA JIM YONG KIM President, World Bank Group We are encouraged to see stronger economic prospects after years of disappointing global growth. There are still many downside risks, however, and countries that have the fiscal space need to continue with structural reforms. This is vital to accelerating the sustainable and inclusive economic growth needed to end extreme poverty by 2030. We’re meeting at a time when we face several overlapping crises, both natural and man-made, all of which add urgency to our mission. You and your colleagues have been reporting on them every day: • C onflict; • C limate shocks; • The worst refugee crisis since World War II; and • Famine in parts of East Africa and Yemen, which the UN has called the worst in 70 years. With the famine in particular, the world was caught unprepared. Too often, we forget about crises as soon as they abate – leading to a cycle of panic and neglect. We’re already working with the affected countries and partners to respond to the
famine – and we will use every tool we have, financial and advisory, to prevent famine in the future. On Saturday, I will convene a meeting co-chaired with the United Nations-Secretary General to ensure a coordinated, effective, and well-resourced response. In addition to fragility, accelerations in technology are changing the landscape. We estimate that two-thirds of all jobs that currently exist in developing countries will be wiped out by automation. At the same time, the internet, smart phones, and social media allow everyone to see exactly how everyone else lives, which is causing aspirations to rise all over the world. I see this everywhere I go. So in the midst of these crises, and with rising aspirations, we must change the way we work. We have to find new and innovative ways to reach the poor, and make the world more secure and stable. Last week at the London School of Economics, I outlined how we’re working to change our approach. We have to start by asking whether the private sector can finance a project. If the conditions aren’t right, we will work with our partners to de-risk that project or, if needed, de-risk entire countries or sectors.
This won’t be easy. It will require agreement across the entire international development finance system – multilaterals and bilaterals – to move the global development architecture in this direction. But this is the only way to act with the speed and the scale that these times require. Here’s the good news: There’s never been a better time to find those win-win solutions. There are trillions of dollars sitting on the sidelines, earning little interest, and investors are looking for better returns. That capital should be mobilized to help us meet the exploding aspirations of people all over the world. And with the crises we face, our task is much more urgent than we ever thought. ■
There are still many downside risks, however, and countries that have the fiscal space need to continue with structural reforms.
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FINANCIAL STABILITY AND FINANCIAL INCLUSION: WHO SETS THE “STANDARDS”?
ALFRED HANNIG Executive Director of the Alliance for Financial Inclusion
Financial stability and financial inclusion are equally important policy objectives which are recognized as having a strong and mutually reinforcing relationship. Consistent with this view, the G-20 has been encouraging the Global Standard Setting Bodies (SSBs) to incorporate issues relating to financial inclusion into the international financial regulatory framework. Will the future of financial inclusion include strong centralized international standards from the SSBs or is there an alternative approach that could be taken? SSBs such as FATF and BCBS have made great strides in striking a balance between financial stability and inclusion, while embracing the idea of using a risk-based approach. A recent example of this is the Global Shadow Banking Monitoring Report, issued in May 2017. The report presents the results of the sixth annual monitoring exercise of the Financial Stability Board (FSB) to assess global trends and risks in the shadow banking system and suggests that resilient market-based finance, appropriately regulated, provides a valuable alternative to bank funding for the real economy. The findings are consistent with the Moscow
Resolution on Financial Inclusion and Shadow Banking by Bank of Russia and the Alliance for Financial Inclusion issued in November 2015, which emphasized the necessity to manage the systemic risks emanating from certain unregulated shadow banking activities while recognizing the essential role of non-bank financial institutions in promoting financial inclusion. But despite the growing global consensus on the interlinkages between financial stability and inclusion, questions on how to achieve an appropriate balance have not been fully resolved. As recent IMF and World Bank research correctly points out, there can be policy tradeoffs and synergies between the two objectives, but the relationship is a complex one and the need for guidance is evident. In view of the main mandate of the SSBs, their packed agendas and scarce resources, it seems unlikely that they will be able to prioritize the provision of additional standards or guidance in this area. The question then is how to deal with the perceived standard gap. And more specifically, if, how, and by who we want to bridge this gap.
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Despite the growing global consensus on the interlinkages between financial stability and inclusion, questions on how to achieve an appropriate balance have not been fully resolved. The first question on if guidance needs to be developed is perhaps the easiest to answer. In view of their ambitious policy priorities and regulatory agendas on financial stability and financial inclusion, policymakers and regulators have repeatedly requested evidencebased guidance and proven knowledge on how both policy objectives can be mutually reinforcing. The answer to the second question on how effective guidance should be produced, can be approached by referring to our experience with peer learning platforms. Peer learning and knowledge sharing methodologies have proven to be a useful and constructive way to enable authorities to learn from each other’s diverse experiences in promoting financial inclusion, while at the same time preventing or mitigating the threat to financial stability and integrity. The third question regarding who should take the lead in providing
guidance on the effective balance between financial stability and inclusion is the most critical. The best examples of how regulatory frameworks can be shaped to provide for financial stability and appropriate financial inclusion can be found within countries who have already been sharing their experiences with peers. Effective guidance therefore should ideally draw from practical lessons offered by countries who have successfully pioneered financial innovations and smart policy solutions to promote financial inclusion in a safe, sound and effective manner. These questions were raised at the Global Conference “Maximizing the Power of Financial Access: Finding an Optimal Balance Between Financial Inclusion and Financial Stability”, which was co-hosted in November 2016 by Bank Indonesia and the Alliance for Financial Inclusion in Bali. The results of this conference are documented
in the Bali Outcome Statement on the Linkages Between Financial Inclusion and Financial Stability and confirm that additional guidance on the interconnections of the two policy objectives is in high demand. At the conference, and in subsequent discussions among regulators, it was suggested that AFI develop “a set of indicators” for its members which reflect the relationship between financial stability and financial inclusion. An additional proposal was made to develop an index to link stability and inclusion indicators which could then could be used to compare countries’ progress. Further, it was argued that AFI could develop a financial inclusion “standard” based on these indicators. AFI is not a traditional compliancedriven standard setting body, and yet the regulators within our membership are clearly looking for way to develop standards in support of their financial inclusion work that come from outside of the usual system. AFI currently uses the experience and expertise within its network to recommend policy and regulatory “benchmarks” on topics central to our mandate, perhaps then, these benchmarks can also form the basis for a new kind of ‘standard’. The way forward seems to suggest a phased, bottom-up approach. AFI already provides the opportunity to develop case studies, discuss benchmarks and developing indicators through Working Groups. In the coming years, this can be enhanced to enable Working Groups to develop benchmarks and to see if, in selected cases, regulators are complying with or implementing agreed indicators. The results and recommendations of these efforts can then be discussed with SSBs, the IMF, the World Bank, and others whereby AFI can serve as an all-inclusive platform which welcomes views from a diverse community of partners and stakeholders. Looking ahead, this approach may be able to provide benchmarks which are different in nature and character from traditional standards, based on practical evidence and proportionality in practice. This may also be the first step towards a new form of self-imposed “standards” which can both provide effective guidance and encourage peer pressure towards following good practices. ■ 59
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THE KEY TO DRIVING PROGRESS ON THE ENERGY TRILEMMA GOALS
DR. CHRISTOPH FREI Secretary General, World Energy Council
The energy sector is at a transition point and faces a number of growing challenges in a context defined by unprecedented speed of change. Continued innovation on the policy and technology side is critical to addressing these challenges. Countries have committed to reducing greenhouse gas emissions under the 2015 climate change agreement in Paris (COP 21), putting a renewed focus on the decarbonisation of the energy sector. At the same time energy services must expand to meet rising global energy demand, particularly in many emerging economies to address the inequity of the 1.1 billion people who still do not have access to electricity and modern energy services. Adapting market designs, transforming and expanding energy infrastructure, will put additional strain on energy security and reliability, which is already under pressure by increasing risks and resilience challenges. The Paris Agreement has therefore raised the bar on what countries must do to have a sustainable energy policy – one which delivers not just on energy security, access and affordability; but is also capable of delivering the Paris
commitments. The World Energy Council refers to this approach as balancing the energy Trilemma. Countries must act now to progress on the trilemma with secure, equitable and environmentally sustainable energy to support a thriving energy sector, a competitive economy and a healthy society. Key findings emerging from innovative policies are analysed in the World Energy Council’s latest Energy Trilemma
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report, leveraging on interviews with policymakers and private sector energy leaders. This alighted with an analysis of five years of our Energy Trilemma Index with benchmarks national energy and climate policies helps to provide a strong evidence base for successful policy development at a national level. To truly transform the world’s energy supply, policymakers and decision makers must set few and clear targets.
The 2016 Trilemma report defines measures to progress on the three goals of energy security, energy equity and environmental sustainability with the aim to accelerate the energy transition and lead countries to prosperity and increased competitiveness of their individual economies. It provides guidance in the complex task of translating the trilemma goals into tangible actions. One of the findings of our Energy Trilemma work is that the secret to success for the implementation of innovative energy policies is to clearly benchmark and measure the impact of the policy strategy. Our 2016 Energy Trilemma Index has been designed to help countries simply assess success by providing the world’s most comparative assessment of how countries perform in delivering sustainable energy systems. The index enables countries to visualise their energy system and identify areas for action, and is being adopted by many governments across the world as a neutral guide to assist successful national policy making. At CEM7 in San Francisco last year, a great focus was on innovation to achieve these objectives. Dynamic and flexible renewable energy investment policies are unlocking the potential of new technologies to respond to evolving market dynamics and technological developments. To increase private sector investments in infrastructure expansion and modernisation, in emerging and developing economies, countries should, and are, beginning to reform regulatory frameworks to decrease the cost of doing business and increase competitiveness in the electricity market. At the same time, adequate market design has to incentivise and provide for critical system services. In a world of fast changing dynamics of energy supply and demand and an accelerating pace of technological and business model change staying on top of the new realities becomes critical. The combination of digitalisation, decentralisation and new technologies
will drive new business models, change the way we think about supply-demand interaction, and challenge our current thinking on issues such as sovereignty, privacy or cyber security. However, greater, collaborative, forward-looking dialogue among policymakers business leaders and the investment community, is critical for the delivery of adequate and robust policy frameworks at a global level. For these frameworks to be effective they cannot just be limited to national energy policy but also depend on aligned international trade and climate agreements. The world lacks a process that illustrates the co-dependence of such diverse agreements from a sustainable energy and future sustainability perspective. With no formulation of relevant objective priorities or a relevant tracking of progress we will miss out on significant synergies. The Council’s Energy Trilemma Index has been identified by a proposed G20 Expert Advisory Commission, as a powerful tool to assist the G20’s Energy Transformation Processes. The Commission would build upon the expertise and comprehensive knowledge already existing in the scientific and policy expert communities. The primary aims of the Expert Advisory Commission would be to pool and condense the current evidence base on energy transformations and to deliver comprehensive analyses which would benefit from the exchange of different perspectives. While the specific national context requires that every country find its individual solution to the best trilemma balance, it is clear that many energy challenges will have their most effective solutions in collaborations that go beyond borders. The goal of achieving a sustainable energy future critically depends on sound policy and an internationally coordinated, collaborative, approach. There is a real opportunity for the G20 to promote and deliver such an alignment process, which ultimately will define how successful we are in driving progress on the Energy Trilemma goals. ■ 61
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FIGHTING CLIMATE CHANGE AND BRINGING COMPETITIVENESS TO LATIN AMERICA
LUIZ EDUARDO F. DO AMARAL OSORIO Chief Legal & Institutional Relations Officer
In December 2015, 197 countries signed an agreement to slow down climate change and approved the Agreement of the Paris Climate Change Conference (COP 21). The main challenge of humanity in the next years will be to balance the growing demand for energy with rational use of natural resources. In a context that combines projected growth in the developed and emerging economies and the fight against global warming, carbon-pricing is a necessary tool to enable clean technologies and ensure the future of next generations. Therefore, carbon-pricing means allocating a cost to the impacts generated by the increase in greenhouse gas emissions (GHG) in the atmosphere and constitutes an irreversible trend. Today, more than 60 countries have a carbon-pricing system and over 500 companies worldwide already consider the internal carbon price in their decision-making process, while some other 700 companies plan to do the same until 2018, according to CDP (former Carbon Disclosure Project). Several initiatives on the topic are being implemented in Latin America, in various stages of adoption.
Recently, in Latin America, Chile started to tax greenhouse gas emissions, with emphasis on the collection of taxes on thermoelectric power plants with more than 50Â MW installed capacity. Along the same line, in order to give visibility to the matter and learn about the market, Mexico announced last November a pilot project for simulation of carbon-pricing that will last 12 months and already gathers 50 companies. In Colombia, the Government is holding discussions about the creation of mechanisms for taxing emissions of the Transport industry. In Brazil, the issue has come under the spotlight, since it represents an opportunity for the domestic economy, whose largely renewable power grid is an advantage in comparison with other countries. The Finance Ministry coordinates a work committee for
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guiding Brazilian actions on the matter and studying carbon-pricing – an initiative supported by the World Bank, through the Partnership for Market Readiness (PMR), a forum of countries and international organizations that seek to promote carbon-pricing systems. It is expected that in 2018 the study will be published, so that in 2020 some system can be tested. On energy, EPE (Empresa de Planejamento Energético), a government planning body, created a work group to better understand the impacts and opportunities related to this topic. Additionally, the Brazilian private sector has also been contributing with studies on the importance of adopting the mechanisms, for instance, the positioning promoted by the Business Initiative on Climate.
According to the targets set forth in the Paris Agreement, Brazil has committed to reducing 37% of the emissions by 2015, having as a starting point the 2005 emissions, with a possible reduction of 43% of emissions by 2030. The reduction will mainly result from the decrease in deforestation rate and the increase in the use of renewable sources for generating electric power, consequently strengthening the clean energy matrix that Brazil already has. More than 80% of Brazil’s power generation comes from clean sources, mainly produced by hydroelectric plants, as opposed to other countries such as China, where carbon is the main source. In the aluminum industry, the greenhouse gas emission factor in Brazil may be ten times lower than that of China, indicating the comparative advantage of Brazil.
Renewable sources: a path to Brazilian competitiveness Brazil has recently stood out for the increased share of renewable energy in its power matrix, such as wind power and sugarcane biomass power, which already account for about 15% of the internal power offer. In the next years, solar power shall achieve strong growth in Brazil. The Brazilian Electricity Regulatory Agency (ANEEL) expects that by 2024 about 1.2 million consumer units will produce their own power. The source, whose current share in the matrix is less than 0.1%, could account for 3% of the power in ten years, according to data from EPE, a state planning body of the sector. On the other hand, wind power in the country has become one of the world’s ten largest generators. In February, Brazil’s wind power installed capacity reached a record of 10.7 GW (7.1% of the country’s electricity). The expansion will be greater: there are a little over 7 GW of capacity being built or already contracted, according to the Brazilian Wind Energy Association (ABEEólica). Hence, the country takes actions to fulfill the measures agreed in the Paris Agreement on Climate Change, in December of 2015, when it undertook to increase from 10% to 23% the use of renewable power in the country’s power matrix by 2030. Based on a recent study carried out by the International Renewable Energy Agency (IRENA), renewable power shall add US$19 trillion to the world economy until 2050 and create six million jobs. Attributing a price to CO2 emission is essential to enable the resources needed for the transition to a new low-carbon economy. Therefore, the conditions will be created for Brazil’s and Latin America’s clean matrix, based on renewable sources, to become a competitive advantage. So, I understand that companies as well as national and subnational governments of our region must take advantage from such efficient and rare opportunity to stimulate economic growth and limit the increase in the planet’s temperature and, with this, become major players in this process. ■ 63
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CLIMATE CHANGE: HOW DIGITAL GRIDS HELP IN MITIGATION
LAURENT SCHMITT Secretary General ENTSO-E
Power networks are key in fighting climate change. They bring renewable energy to consumers. They will be part of this network of networks needed for the deployment of e-mobility, gas to power, etc. But they will also more and more connect consumers to consumers allowing millions of peer to peer transactions. And this transformation of the power system has great potential in reducing our carbon footprint. By 2020, there will indeed be in the world more than 50 billion of devices connecting prosumers with each other. Constellations of prosumers’ microgrids connected to one another will compose digital power systems enabling end to end transactions through blockchain. The sum of these systems interacting with each other will create the new Digital grid. This requires a fundamental rethink of how the power system is structured. Bi-directional communication and flows, storage upstream and downstream the meter, as well as dynamic controls of flexible demand need to be enabled. Markets also are called to evolve to allow a new way of managing transactions along the energy value chain. From wholesale markets
facilitated at transmission level, to market facilitation at distribution level and down to aggregation of prosumers’ flexibility. Digital grids will lead to new regulatory options, bringing new choices and incentives to electricity consumers and prosumers. Provided they opt in, consumers will be exposed to real-time electricity prices that will reflect scarcity of flexibility in the overall system. This in turn will help them make conscious choices. How is this ‘power to the people’ helping fight climate change? European transmission system operators were again facing extreme weather conditions last winter with temperatures registered once in every twenty or fifty years. One suspects these severe weather conditions will increase as a consequence of climate change. Digital grids can not only help reduce our impact on climate but also build our resilience vis-à-vis the effects that we start experiencing. I had the opportunity to directly contribute to setting up smart cities and neighbourhoods, putting in practice the Digital grid concept.
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Projects like NiceGrid in France show that peer to peer transactions with the right hard and soft ICT can significantly enhance the flexibility of existing grid infrastructures and contribute to running a system 100% on renewables. By a combination of centralised and decentralised ICT on grid infrastructure, in control rooms, at grid’s edge but also with cloud appstores, Digital grids allow for real-time assessment of grid congestion, security and asset conditions, thereby optimising the flows without endangering security.
They bring unprecedented scalability and computing capability for the management of the end to end energy system, from the control room to the prosumer. What role then for ENTSO-E? ENTSO-E and its members are engaged in this digital transformation. One of our IT projects, the Common Grid Model will for example allow bidirectional data flows between national operators and regional service centres. This is not real time information but
information to improve the planning and forecasting of the grid operation. And this new environment supported by a tailor-made IT infrastructure, a standardised & automated information exchange is just a beginning. Can ENTSO-E serve as a centre of excellence, a facilitator to accompany this industrial revolution? Are there opportunities to develop tools in common? Can ENTSO-E, through this facilitation, accelerate the deployment of Digital Grids in Europe and thus contribute further to the fight against climate change? What is certain is that Europe has what it takes to make this digital transformation. The skills and industrial ecosystem are there. There are examples of regulations and policies which support the digital energy system. The recent Clean Energy Package in its active customer dimension is a step in the positive direction. However, the deployment of innovation, new business models taking advantage of the latest technologies, should be even more favoured in Europe. I look forward to working in ENTSO-E and with our stakeholders to bring this Digital grid from promise to practice. ■ 65
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GRUPO ENERGÍA DE BOGOTÁ
THE LEADING POWER COMPANY IN LATIN AMERICA
ASTRID ÁLVAREZ CEO, Grupo Energía de Bogotá
Grupo Energía de Bogotá (GEB), is a leading power and natural gas multilatina present in Colombia, Peru, Guatemala and Brazil. The group, which headquarters is located in Bogotá, Colombia, is focused on the growth and development of big companies under a stable, sound and independent corporate governance model, which stablishes the decision making process, accountability and protection of all shareholders’ interests. With more than 120 years of experience, GEB participates in the whole value energy chain from generation, transmission, distribution and commercialization of electricity, as well as transportation and distribution of natural gas. In 2016, Grupo Energía de Bogotá redesigned its corporate strategy based on three strategic business groups: Urban Energy Solutions: it is focused on the development and operation of the necessary infrastructure to meet the demand of power energy and natural gas of large cities. Today, GEB offers energy solutions on natural gas and electricity to more than 6 million people through its companies: Cálidda, Contugas, Codensa, Emsa and Gas Natural Fenosa.
Interconnecting for Market Developments: it is responsible for connecting energy generation sources with the large consumption centers and large users. The group connects regions through 12,500 km of power transmission grids and 4,000 km of gas pipelines with its companies: EEB, TGI, Trecsa, EEBIS, ISA Transmantaro, ISA Rep and Gebbras, recent acquisition in Brazil. Low Emission Generation: it seeks new opportunities in renewable energies and energy solutions in countries where the energy matrix is transitioning to sustainable and low-emission generation sources in order to protect and preserve the environment. In Colombia, Grupo Energía de Bogotá through Emgesa has a 22.1% stake in clean hydro power generation.
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The purpose of this strategy is the profitable growth through the development of leading companies, global strategic partners, the best human resource and a corporate governance that complies with the most outstanding standards, supported by the sustainability policy. For GEB, strengthening strategic and bidirectional communication on a permanent basis with the financial and capital market is essential for keeping current and potential investors informed about its economic performance in terms of commerce, finance and operations, increasing the levels of confidence to invest in the company. Through 2016, GEB’s profit growth rate continued to rise. This economic performance allowed invigorating the trading of its stocks in local and international capital bonds markets, as it reflects the value
generation and profitability of the group in the regional energy market. This performance has come along with social and environmental benefits in the countries where the group operates. In 2025, GEB will earn more than COP $35 trillion (approx. US $12 billion at current exchange rate) coming from its business in different Latin American countries and will maintain a compound annual growth rate over 10% through the decade; thus becoming the non-mining business group with the largest profits in the Colombian market and one of the most valuable groups for the Latin American market, its clients, communities and regions where it is present. Grupo Energía de Bogotá has a sustainability policy through which it undertakes to frame all business operations under a sustainability scope,
aiming for balance among the value generation for our shareholders, the welfare of communities, the minimization of the environmental impact, and the value generation shared with territories where we are present, all this within the principles of the United Nations Global Compact and the Sustainable Development Goals. The sustainability policy is based on three mainstays: the permanent, genuine and timely relationship with interest groups in territories; the value generation shared with communities and ethnical groups through strategic alliances with public and private players and the civil society, to tend towards achieving social and economic development, competitiveness and equity; and the fulfillment of regulations and commitments in terms of human rights and climate change mitigation. ■ 67
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THE BALANCING ACT OF AN
INTEGRAL ENERGY PARADIGM SHIFT
DIEGO LUZURIAGA, MSC Dean, School of Postgraduate Studies Instituto Tecnológico de Buenos Aires
Today, more than ever, our global society faces the most critical challenge of our modern age: the transformation of a No-Limits-To-Growth mindset into a systems worldview, characterized by an inherent recognition of nature’s limitation to sustain our depletion patterns. Climate change is not only the symptom of a fading era, it’s a mirror in which we, as a society, must look to develop a credible sustainable development agenda. While the challenge has many dimensions, the way we transform a fossil fuel-based economy into a sustainable energy economy has become the critical path. Since the world requires adequate energy to support high quality of life and prosperity, extreme caution must be taken while designing the period of coexistence of the two energy paradigms. The phasing out of the carbon energy paradigm entails the coordination of actions on at least three distinctive levels: policy, technology and culture. Policy Policies and regulations aimed at dealing with energy systems are strongly characterized by tradeoffs. Incentives to reduce carbon emissions
may delay long-term investment in renewable energy. By the same token, carbon capture and sequestration (CCS) initiatives can be deemed by investors and incumbent players as incompatible with plans to replace traditional infrastructure with renewable systems. The decline of carbon intensity, defined as the total CO2 emissions from energy consumption per unit price of GDP, may mislead policy decision takers into thinking that we are successfully dealing with carbon emissions reduction. The myth, however, consists in that we need to reduce CO2 emissions in absolute quantities, not relative quantities. Yet providing incentives exclusively to renewable energy projects may destabilize the sources of electricity that can be dispatched at the request of power grid operators or wholesale
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electricity markets. Due to the structural condition of intermittence in renewable energy, a baseline of uninterruptable power potential is required — at least until renewable energy technology and smart grids provide us with reliable ways to stabilize a complex energy system. Technology The extent of development of renewable energy technology cannot be used as an excuse to avoid further commitments to deploy new renewable energy systems. Technology must be defined based on the long-term vision of the solution and should make economic sense. The paradigm of renewable energy is also the paradigm of distributed energy, as opposed to centralized energy generation and distribution power grids. To successfully deal
with distributed energy sources it is necessary to develop a new literacy in the system that, today, lies in the domain of smart grid technologies. This literacy implies competence in looking after the optimization of generation capacity, providing means to regulate two-way flows of electricity, and investing the grid with sufficient analytics and information technology applications so as to make it fully reliable. Cultural While one in five people in the world still lack access to the benefits of modern electricity, most of us are used to abundant, ever-present and cheap sources of electricity. Unfortunately, it has taken us decades to become aware of the social and environmental costs involved in this luxury. We are no longer
innocent of our consumptions patterns and cannot justify our decisions based on our respective government’s inertia to accept the inevitable impending energy paradigm shift. The use of non-renewable energy raises a plethora of ethical issues. Both human depletion of natural resources and global warming affect ecosystem functions. While ecosystem functions decline, mainstream production and consumption patterns are still leading the world toward a “post-biosphere era” with little to no understanding of its effects on life supporting systems. Distributed energy fosters collaboration and sharing among human beings; smart grids emulate social networks. We have the potential to make it real but we need to thrive as a sustainable species. Our world today is subject to profound and irreversible transformations. Increasingly, planetary ecosystem boundaries and rapid ecological decline are becoming evident. Life supporting systems are at risk and “no return” red flags are ominous. The dominant economic model promotes incentives that condition business to engage in activities that have a clear trade-off between financial returns and negative social and environmental impact. Embracing the emerging energy paradigm shift represents our critical path towards a sustainable future. Neither technology innovation nor new energy regulations are sufficient conditions to succeed. Caution and a systemic approach are what’s needed to run this gauntlet. ■ 69
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THE RISE OF THE SMART CITY: INNOVATIVE URBAN PROJECT
MICHEL SUDARSKIS Secretary General, International Urban Development Association
1. The Elon Musk' proposal to reduce car congestion by building automatic underground tunnels goes far beyond the continuous extension of the ICT to urban issues.
The relationship between information and communications technologies (ICTs) and the urban sphere is more relevant than ever: and new tags flourish: the connected city, the digital city, the intelligent city, resilient city... The shared objective of local authorities and urban services operators is to put the digital technology at the service of the production of liveable spaces in a more functional, inclusive, resilient and sustainable way. In the absence of a consensual definition, the criteria of the smart city vary by countries, sites and stakeholders, but everywhere the existence of a coherent local urban policy appears as an essential condition, confirming the central role of local authorities in the sharing, management and governance of the Data. The sustainable city and “smart city” are the same when it comes to sober use of resources – energy, water, raw materials – by adjusting the supply, but also in optimising the consumption, operation and maintenance of urban infrastructure and buildings: it is a technical and industrial challenge when it comes to energy and environmental transition. In front of the industrial challenge, the ICTs provide workable and efficient
solutions to congestion and the use of the car, to energy loss and leakage of water networks, but ICTs do not solve systemic problems such as motorisation of travel¹, energy shortages, pollution, climate change, or social and spatial inequalities. These “soft” issues rely less on information systems than on the mobilisation of human, political and social intelligence. Innovation is at the heart of these challenges, in terms of differentiated and flexible offers, efficient management of proximity and attention to the quality of usage, at least as much as on the technical performance of the urban system in general. Innovation, defined as the collective ecosystem of knowledge, takes many forms that differ from pure technology, defined as the material production of
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Urban transformations do not bring about insurmountable technical and urban problems: they bring political questions, to which no purely technical answers exist. innovation. The innovative process is political, just as it is social and cultural. Therefore, it is legitimate to ask how the strategy of transformation through innovation and technology can address the challenges of the new urban question, in particular how can innovation, arising from local initiatives, contribute to the whole development process? At the heart of the understanding of the linkage between innovation and urban policy is the idea that local development is built not on a sectoral basis, nor by the forces of the market, but as the result
of a chain of individual or collective – and political – actions, interconnected through local initiatives or projects with interests, sometimes divergent, but often convergent. The City is regaining its original significance: a form of political and social organisation, however, with concepts and tools largely inherited from the industrial era; thus economy and technology are insufficient to overcome the complexity of functioning and evolution of our urbanised living environment. The City is quintessentially political.
Urban transformations do not bring about insurmountable technical and urban problems: they bring political questions, to which no purely technical answers exist. If a crisis exists, it is a crisis of representation, of the image, of the ownership of the City by its inhabitants. The uncertainties arise from the inadequate or inappropriate technical or conceptual planning responses to the realities of the people who live in the city. Therefore we need to change, more than anything, our approach to the city: we have to stop measuring or describing the city, constructing and managing the city in the same terms and with the same tools we used before. The movement towards an “Innovative City” is a chance to build the City of tomorrow differently. ■ 71
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OUR SOLAR FUTURE SMART ENERGY TOGETHER
JIFAN GAO Chairman & CEO, Trina Solar Jifan Gao is Chairman and Chief Executive Officer of Trina Solar. He is also Chairman of China PV Industry Association and Co-Chairman of the Global Solar Council. Mr. Gao graduated from Jilin University with an MS in Physical Chemistry, after earning his BS in Chemistry from Nanjing University. He founded Trina Solar in December 1997. Under his leadership over the last 20 years, Trina Solar has grown to become a world leading total solution provider of solar energy.
The outlook for solar energy is bright. Innovation has led to striking improvements in the cost of manufacturing and installing solar systems. Costs have been reduced 25% in the past 12 months alone. Solar is essentially a carbon-free energy that is today cost-competitive with energy from fossil fuels. The main obstacles that the solar industry needs to overcome are regulatory, in addition to uncertainty regarding governments’ priorities regarding the future energy mix. In a regulated markets where governments determine the parameters for carbon emission reductions, this is no small challenge. We need to reduce greenhouse gas emissions while creating quality jobs, promoting growth, reducing inequality and ensuring better living standards. We need to tap into human creativity, and do better in reducing greenhouse gas emissions. Previous G20 summits have acknowledged renewable energy’s potential to mitigate climate change and boost sustainable growth. Under the German presidency this year, the B20 Energy, Climate and Resource Efficiency taskforce emphasized the importance
of implementing the Paris Agreement, driving predictable policy and advancing resource and energy efficiency. Political commitment reached a new apex with the Paris Agreement coming into force in 2016 with 177 national signatories, and hundreds of regions and cities to date. Yet the question of how to marshal adequate funding remains unresolved, and there is much to be done to bridge the gap between ambitious plans and putting systemic solutions into operations with renewables projects at the national and local level. Sometimes the most creative solutions are also the simplest and most obvious. Solar energy, derived from cleanly manufactured, transported and installed photovoltaic (PV) solar products is an example of this. Could more be done to support solar energy’s market entry?
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Trina Solar is an international company supplying solutions to a global challenge, yet acting locally with our clients to meet their specific requirements for clean and affordable energy. In the developed world incentives such as feed-in tariffs have been removed, while subsidies for fossil fuels remain in place. As documented by the ODI, average subsidies for fossil fuel production by the G20 have been running at 444b USD annually. In many markets there have been tax hikes for renewable energy, or selfconsuming solar energy for homeowners. Coupled with ongoing trade disputes in multiple continents, these measures are derailing the growth of solar installations. Progress toward achieving grid parity – the point at which energy from renewables is
price competitive with energy from the grid – has slowed in some markets, hampered by new regulations. In the developing world according to the World Bank, over 1.2 billion people are still without electricity, and 2.8 billion are using solid fuels such as coal, charcoal, wood and dung for heating and cooking. Solar and other renewables are underexploited in resolving these problems. Yet business opportunities exist in solving these problems. A recent International Finance Corporation (World Bank Group) report identifies 23 trillion
USD in investment opportunities if only 21 rapidly growing emerging market economies achieve their Paris Agreement Commitment by 2030. Solar has a key role to play in delivering solutions to their Paris Agreement ambitions. PV is low-carbon, cost-efficient, reliable and unobtrusive in meeting the needs of residential and industrial consumers. PV presents ample opportunities for technology dissemination, innovation and job creation along its entire global value chain. A recent Ernst & Young study for Solar Power Europe illustrated how 82% of solar jobs are in the downstream industry, designing, financing, installing and maintaining solar systems. The initial investment to install capacity is returned many times over the life-cycle of a product. Governments could do more to raise awareness of this fact and support those who wish to make the necessary upfront investments in solar energy. Trina Solar is an international company supplying solutions to a global challenge, yet acting locally with our clients to meet their specific requirements for clean and affordable energy. Embodied in the mantra “Smart Energy Together”, innovation and international cooperation are at the heart of Trina Solar’s approach. We continually seeks to improve the performance of our products for our clients, for the environment, and for society at large. So while political leaders easily acknowledge that climate change is a challenge that is not confined by national boundaries, they might also reflect on the global nature of some of the companies that are helping to tackle this challenge. In this light, we urge politicians to resist appeals for protectionism. Unjustified tariffs, technical barriers to trade and non-tariff barriers such as local content requirements will only delay mitigation of anthropogenic climate change. Economic chauvinism is not the right medicine to bring down Mother Earth’s fever. The industry is consolidating. Only the best will survive, as it should be. But no industry especially a young one) can thrive under policy regimes that hinder rather than nurture growth, an innovative growth driving the sustainability of humankind on Mother Earth. ■ 73
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FOOD, AGRICULTURE & WATER
ACHIEVING FOOD SECURITY FOR ALL
JOSÉ GRAZIANO DA SILVA FAO Director-General
The beginning of the 21st century is witnessing profound social, economic and political changes across the globe. Amid great plenty, hundreds of millions of people still face poverty, hunger, unemployment, disease and deprivation. Displacement and distress migration are at their highest levels since World War II. The impacts of climate change are already being felt, and – if left unabated – are set to intensify in the years ahead. The challenges are immense, but they can be overcome if we address their root causes, beginning with securing nutritious food for all. Without proper nourishment, children cannot learn, people cannot lead healthy and productive lives, and societies cannot prosper. The catalytic connection between food security and sustainable development is reflected in the 2030 Agenda for Sustainable Development, which commits all countries to transform their development strategies. In Sustainable Development Goal (SDG 2), zero hunger, food security is addressed as a complex condition requiring complementary actions that include ensuring people are able to buy sufficient food, ending malnutrition, transforming the rural sector, promoting
sustainable agriculture and safeguarding biodiversity. Empowering rural people, who make up almost 80 percent of the world’s poor, is key to achievement, not just for SDG2 but across the 2030 Agenda. Achieving food security for all by 2030 will need our collective commitment. The G20, comprising the majority of the world population and agricultural production and trade, is well placed to lead action towards global sustainable development. Past, present and future In picturing a better tomorrow, we must draw lessons from the past. Much of humanity’s progress has come at a considerable cost to the environment. High-input, resourceintensive farming systems have contributed to deforestation, water
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How to increase food production using and managing water sustainably, a commendable focus area of this year’s G20 German Presidency, is among the greatest challenges of our times. scarcity, soil depletion and high levels of greenhouse gas emissions. How to increase food production using and managing water sustainably, a commendable focus area of this year’s G20 German Presidency, is among the greatest challenges of our times. Nourishing people must go hand in hand with nurturing the planet. The Food and Agriculture Organization of the United Nations (FAO) has developed sustainable approaches in areas such as agroecology, agro-forestry, biotechnology, and climate-smart and conservation
agriculture that bring together traditional knowledge and modern technology to produce more with less. To eliminate hunger permanently we need also to factor in future trends. By 2100, Asia and Africa are expected to house 9 billion of the projected 11 billion people on Earth. The young will dominate the cities of low-income countries, while many wealthy countries must adjust to ageing populations. Twothirds of the global population will live in urban areas by mid-century. Conflicts, crises and natural disasters are growing
in number and intensity. And according to a recent FAO study on the future of food and agriculture, critical parts of food systems are increasingly concentrated in fewer hands, threatening small-scale producers with marginalization and forced exit from agriculture. To build a prosperous future, we must address the high levels of inequality, both between and within countries, in income levels and asset ownership, and in access to nutritious food, land and decent employment opportunities. Investment in the world’s 500 million family farms, which include foresters, fishers, pastoralists, indigenous people, rural women and youth, who manage the majority of the world’s agricultural land and produce most of the world’s food, can go a long way to addressing these challenges. Pro-poor growth strategies, combined with effective social protection systems targeting job creation, market participation, investment potential and income diversification will help us to feed the world this century. Through initiatives such as the Agricultural Market Information System, Tropical Agriculture Platform and Technical Platform on the Measurement and Reduction of Food Loss and Waste, the G20 is already leading innovation in food, agriculture and rural development. Embracing the use of information communication technologies in agriculture, also an issue under discussion by the G20, can help drive global change. Working with Google and the European Space Agency, FAO is already using earth observation satellites to picture land cover changes and to combat illicit fishing. FAO also uses mobile technology and drones for early-warning drought surveillance, reporting animal disease outbreaks and to give farmers information on growing conditions, weather and market prices. The G20’s collective action will be crucial to transform our societies. By taking bold steps to implement Agenda 2030 and strengthening partnerships with developing countries, the G20 can contribute greatly to achieving food security for everyone. ■ 75
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FOOD, AGRICULTURE & WATER
FILLING THE GAP:
PUTTING SMALLHOLDERS AT THE FOREFRONT OF THE 2030 AGENDA
KANAYO F. NWANZE President, IFAD
Throughout the world, over two billion people who live in rural areas – home to three quarters of the world’s poorest and hungry people – depend on roughly 500 million smallholder farms for their livelihoods. These farms make a significant contribution to promoting food security globally – producing the majority of the food in much of the developing world, as well as contributing to local economic growth, employment and social cohesion. If we are to achieve the ambitious goals of the 2030 Agenda for Sustainable Development, including the eradication of extreme poverty and hunger, we will need to create a profound transformation of rural areas and economies. In particular, small and medium agro-enterprises will need to grow into commercially viable businesses to provide not only food but jobs for the youth of tomorrow. Smallholder farmers, however, face significant challenges in expanding their productivity and accessing profitable opportunities across agri-food value chains. They are often unable to access the resources and technology that would allow
them to produce at sufficient quantity and quality to satisfy the requirements of national and international buyers and wholesalers. Without proper seeds and fertilizers, for example, smallholders’ yields are limited; without roads, farmers are unable to transport their crops to markets. And across the world, women farmers face even greater barriers in access to resources, decision-making and gendered household workloads. Further, as climate change brings new weather patterns and more severe natural disasters, farmers may not have a crop at all. Although many issues that smallholders face are location-specific, smallholder farmers all share a key challenge: access to finance. A 2016 report estimated that only US$50 billion
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Photo © IFAD / Marco Salustro
With proper sustainable investment, smallholder farmers can be key actors in transforming rural areas into anchors of opportunity and stability in a time of global unrest and unprecedented displacement. of smallholder financing is available, even though there is $200 billion of global demand. Microfinance continues to benefit many rural people, but there are few existing mechanisms that help them further commercialize and scale up. Regardless of location, many smallholder farms are in an uncomfortable position: too large to benefit from microfinance, but too small to be considered viable by most commercial funds. For many, smallholder farms are perceived to be just too risky to invest in.
The market alone will not meet the needs of this “missing middle” in time for the 2030 Agenda. If we adopt a business-as-usual approach, there will still be an estimated 650 million chronically malnourished people by 2030. Rather, we need to increase financing opportunities for smallholder farmers so that they can prosper and produce more – and so that countries can meet their food security and sustainable development objectives. To this end, IFAD has partnered with the Government of Italy to support the
Smallholder Agriculture Finance and Investment Network (SAFIN). SAFIN will address rural financing challenges by connecting private, public and philanthropic sectors with rural farmers in order to coordinate action and investment, bringing together all actors working to establish opportunities for smallholder financing. First and foremost, SAFIN will serve as a platform for collaboration among existing efforts and innovative new approaches. As a multistakeholder community, SAFIN will provide opportunities for various initiatives to learn from one another without the pressure of competition, and identify solutions to key gaps that are preventing smallholder farmers from accessing effective rural finance. SAFIN will also act as a hub for partnerships to better align existing efforts and ensure that actors are not inadvertently working against one another. SAFIN will identify various thematic work streams to address critical gaps in the global development environment for smallholder farmers. Concerted action needs to be brought to bear on areas such as risk management, data generation and analysis, value chain integration and monitoring and evaluation. With proper sustainable investment, smallholder farmers can be key actors in transforming rural areas into anchors of opportunity and stability in a time of global unrest and unprecedented displacement. Vibrant rural communities are essential for interdependent elements cutting across Agenda 2030 – in particular, eliminating poverty and hunger, achieving gender equality, promoting decent employment, climate and environmental action and reducing inequalities. Inclusive rural transformation, driven by productive and prosperous smallholder farmers, is indispensable to creating a shared prosperity that mitigates the drivers of hunger, migration and violent extremism. For the development community, better coordination is essential to ensuring that we maximize not only our efforts but also our results. ■ 77
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FOOD, AGRICULTURE & WATER
INCREASING CLIMATE RESILIENCE THROUGH WATER SOLUTIONS
BENEDITO BRAGA President World Water Council
Water is the resource most impacted by climate change, and the consequences for our societies are multiple: the list starts with visible effects such as floods and droughts, but also more subtle ones in the area of food and energy security, socioeconomic development, jobs and the like. At the same time, water offers just as many adaptive solutions. All of which suggests that water should be front and center of actions towards climate resilience. Thanks to years of efforts, it seems that this change is finally happening but much still needs to be done. Climate is water The first half of 2017 has already brought a worsening of drought in East Africa, with famine looming dangerously close, as well as catastrophic floods in South America, Pakistan and Southern Africa. Through water, events like these hit every sphere of life â&#x20AC;&#x201C; food, health, energy, industry and biodiversity, to name just a few. Climate change confronts water users with greatly compounded uncertainty, promising more disruptions but no hints of where or when they might occur. And each and every one of us is a water user.
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The first half of 2017 has already brought a worsening of drought in East Africa, with famine looming dangerously close, as well as catastrophic floods in South America, Pakistan and Southern Africa. It is therefore very unfortunate that water was overlooked for a long time in international climate discussions. In fact, it was altogether missing from the 2015 Paris Agreement. This was despite the picture painted by countries in their Intended Nationally Determined Contributions to the UNFCCC, 93% of which identified water as key to adaptation. Significant attention has grown since last year. A multitude of water voices have joined together to call for collective action and the series of events that were initiated at CoP21 built up to the first ever Global Climate Action Day for Water during CoP22 in Marrakech. Water was recognized as one of eight priority areas for action throughout CoP22, making this conference the moment when the global climate community embraced water as a fundamental medium through which we face climate change. Resilient infrastructure for water So what does climate resilience look like from the water’s edge? Most often it looks like a balancing act – and an impressive one. There are almost always multiple vitally important uses to balance for every water resource, while increasing the capacity of all to resist climatic shocks. There are three main mechanisms to achieve this, the three I’s: Institutions, Infrastructure and Investment. Institutions, both public and non-governmental, allow all water users to be part of decisionmaking. Infrastructure enables dramatic improvements in our ability to deal with variability. And investment, of money but also of political will and energy, makes it all possible. Solutions based on infrastructure are plentiful and proven. The World Water Council’s recent book, co-published with ANEAS and CONAGUA, ‘Increasing Resilience to Climate Variability and Change: The Roles of Infrastructure and Governance in the Context of Adaptation’, documents eleven experiences with multipurpose, adaptive infrastructure. These
range from France’s Durance-Verdon and Nepal’s Koshi River Basin to the reoperation of China’s Yellow River system and Turkey’s adaptation strategy for its Seyhan Dam. There are not only diverse solutions to be found around the world, but diverse successes, too. Water in the mainstream Findings in the book show that infrastructure alone is not enough; it requires a governance framework that considers long-term perspectives and multi-sector and multi-level actor needs and perspectives. And it depends on the other two I’s, institutions and investment. It is estimated that 650 billion US dollars of annual investment is required from now to 2030 to ensure the infrastructure necessary to achieve water security. Fortunately, the G20 is leading the way in promoting infrastructure investment as a route to sustainable growth, regional integration and employment. Likewise, planners need to see past water problems to the multi-faceted economic opportunities in water solutions. The World Water Council works with its partners to better define the financing challenges, and potential, of infrastructure that increases resilience. But for this to happen we need to put water solutions in the mainstream. The climate effort has been a successful channel in which to accomplish this mainstreaming. We will continue to work with CoP Presidencies towards Bonn and beyond to ensure water is included formally in the UNFCCC process. We also continue to federate with the entire water community through the #ClimateIsWater initiative, which brings together voices worldwide to make the case for water as a natural medium for climate action. We hope many more voices will join our cause. Given the current momentum, there is every reason to expect that political actors and water stakeholders of all sectors will be mobilized as the world turns from water risks to water solutions. ■ 79
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FOOD, AGRICULTURE & WATER
AGILE AND SUSTAINABLE PROGRAMMING FOR A FOOD AND NUTRITION SECURE WORLD
DAVID BEASLEY Executive Director of the World Food Programme Photo @ WFP/Rein Skullerud
The theme of the Hamburg G20 Summit, “Shaping an interconnected world”, could not be more resonant or timely. The challenges we are confronting, from conflict and migration to climate change and chronic hunger, are increasingly complex and common to us all. We must face them as a global community. Nations cannot insulate themselves from the impact of crises taking place elsewhere. Collaboration and partnership offer a route to building the agile and sustainable programs required to transform the fortunes of the world’s hungry poor and ensure they have access to affordable and nutritious food. At the World Food Programme, we are committed to working with governments, the private sector and civil society to realize this shared ambition. Our task has never been more urgent. Today, in 2017, famine is a real and terrifying prospect for 20 million people in Nigeria, Somalia, South Sudan and Yemen. Men, women and especially children are already dying and, without immediate and coordinated action by the international community, millions of people are in danger of starving to death in the coming months.
In addition to this grave humanitarian crisis – overwhelmingly man-made and caused by conflict – around the world nearly 800 million people go to bed hungry each night. To meet these immense challenges and ensure that affordable, nutritious food is within reach for everyone, we need to approach old problems in new ways. That means being more agile and breaking down traditional distinctions between humanitarian relief on the one hand, and longer-term development activities on the other. In a world where conflict and climate change are major causes of hunger and insecurity it makes no sense to work in silos. Instead, broad coalitions of partners need to design integrated programs which supply the food, healthcare and education needed
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WFP is taking a similarly agile approach in a number of areas, from addressing food shortages caused by climate change to helping smallholder farmers find customers for their produce. today, but also provide the tools that will help communities become more resilient and sustainable tomorrow. The growing use of cash and vouchers, in place of traditional food baskets, is a good example of humanitarians responding quickly and flexibly to urgent needs. I am proud that WFP is leading the way here. Syrian refugees, forced to seek safety in the countries neighboring their shattered homeland, are able to use the cash they receive to buy what they need, instead of being told by well-meaning humanitarians what they require.
In the process they make a valuable contribution to the local economy. Working with a range of partners, WFP is taking a similarly agile approach in a number of areas, from addressing food shortages caused by climate change to helping smallholder farmers find customers for their produce. But it is getter harder and harder as the scale and complexity of the humanitarian challenges grow and the funds available to meet them dwindle. As the G20 nations – the world’s richest and most influential – gather in Hamburg
for their discussions, they should commit to providing additional funding for this life-saving work. They should also explore new ways to invest in integrated humanitarian programs that foster partnerships and pool expertise to achieve a range of outcomes. Not just an end to chronic hunger, important as that is, but also clean water, the eradication of diseases such as malaria and an education for every child. We also need a clear commitment from the leading industrialized nations to shape our interconnected world for the benefit of all its citizens. The G20 Summit is a real opportunity to make progress on this shared agenda and transform the lives of millions of the planet’s poorest people – our brothers and sisters in need. I hope and pray that our global political leaders grasp it. ■ 81
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CLIMATE CHANGE & SUSTAINABILITY
EMBRACING THE CHANGE
ERIK SOLHEIM Head of UN Environment
Deep in American coal country, a Kentucky company recently announced plans to build the state’s largest solar power farm atop a former coal mine. In a separate move, the Kentucky Coal Mining Museum said it was also putting up solar panels to save on its electricity bill. I can’t think of better metaphors for the decline of fossil fuels and the rise of renewables. The fact is, we have passed a turning point in energy production. Fossil fuels are on the decline. Renewables are on the ascent. And both are moving quickly. When it comes to the energy transition, we are somewhere between the horse and the automobile. We will of course continue to need oil and coal as we make the transition to renewables, but even the most speculative gambler would avoid putting money on the future of fossil fuels. The long-term outlook for the industry is bleak. From almost every perspective this is welcome, and we should push the transition forward as forcefully as possible. The biggest beneficiary is our planet: the less coal and oil we burn, the less damage we do to our atmosphere, and the less we fuel climate change.
Additionally, there is less risk of violent ecosystem destruction as we scour the planet for more of a dwindling resource, and transport it far and wide. We should also abandon the past and embrace a future of clean energy for short-term gain. Clean energy is where the new jobs are. Fossil fuel jobs continue to disappear, while around the world more work is being generated in renewable energy. Already, China employs 35% more people in clean energy than in oil and gas. In the US, job creation in the solar industry grew by 17 times the rate of the American economy as a whole last year. In my own country, Norway, fossil fuel employment has tumbled over a cliff. Jobs in the petroleum sector declined by 20% from 2013 to 2016. For investors, this trend should be unmistakable, and already the markets are speaking. In terms of market value, Tesla is now up there with GM and Ford. But backing renewables isn’t only healthy for the planet and economy, it’s healthy for people as well. Air pollution kills about 7 million people a year. That’s almost the same as cancer. Yet these tragedies are completely preventable. The toxic air that city-dwellers breathe is most often a result of burning coal and oil. Chinese cities have infamously suffered from brown skies and catastrophic levels of particulate matter. Europe and other parts of the world are also no strangers to bad air. Oslo recently took the drastic measure of banning diesel vehicles because the levels of particulate matter in the city was severely high. London’s annual limits for toxic nitrogen dioxide were exceeded in only 5 days at the start of 2017. By now, many companies and countries are realizing the transition to clean energy is good for the planet, the economy and for people. They are also realizing it is inevitable. Hardly a few days pass without news of some new renewables milestone met.
However, while it is inevitable, we must encourage its acceleration – and here we look towards the G20, as the world’s major economies, for leadership. We need to create a level playing field for renewables, to help private investors lead the change and free up innovation. Public investors should divest of fossil fuels as well. Ireland became the first country to pass a law to divest itself earlier this year. It’s a model for others to follow. Simultaneously, we should see governments offer support for job training for the transition to a clean energy future. Oil workers cannot easily transfer their expertise to a job in solar or wind. It is vital that workers get the training they need to work in this new economy. Governments can do much to incentivize alternative, clean transportation. Investment in public transport and cycling and pedestrian infrastructure will encourage fewer vehicles. Stricter emissions regulations that protect city dwellers and the adoption of electric vehicles will help. Many countries have already reached peak oil and peak coal – and there is no turning back now. Coal mines are closing and solar farms need to be built. Let’s embrace the clean energy future and move forward together. ■
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CLIMATE CHANGE & SUSTAINABILITY
THE AFRICAN CLIMATE POLICY CENTRE The African Climate Policy Centre retools to strengthen the implementation of the Paris Agreement for Africa’s transformation.
DR. FATIMA DENTON Director, Special Initiatives Division, United Nations Economic Commission for Africa (UNECA) firstname.lastname@example.org DR. JAMES MUROMBEDZI Officer in Charge, African Climate Policy Centre, Special Initiatives Division, UNECA email@example.com
Africa’s development agenda is framed by the UN 2030 Agenda for Sustainable Development and the continent’s wider development blueprint – Agenda 2063. Attaining the development objectives captured in these agenda cannot be done without responding appropriately to the challenges and opportunities posed by climate change; a new climate economy approach is required – i.e. one in which economic growth and sustainability are seen as two sides of the same coin.
The Paris Agreement on climate change represents a pipeline of hope for Africa in particular, and developing countries in general. It signaled a new dawn – a political endorsement of a development model that is not achieved at the expense of resource efficiency and growth. In short, the Paris Agreement was a political triumph to nudge solidarity from nation states through the recognition that the magnitude of the problem warrants greater urgency and a collective responsibility for global leaders to recalibrate economies to a temperature guardrail of below 2 degrees. A key outcome of the 2015 Paris Agreement was the adoption of the Nationally Determined Contributions (NDCs) as the mechanism by which all signatories to the agreement would address climate change mitigation and adaptation actions. But African countries will need analytical, policy and investment support to implement their NDCs within the context their national development plans. The African Climate Policy Centre (ACPC) of the Economic Commission for Africa (ECA) serves as the secretariat and the analytical arm of the Climate
for Development in Africa (ClimDecAfrica) initiative – a joint programme of the African Union Commission (AUC), the ECA and the African Development Bank (AfDB), mandated by African Heads of State and Government to provide a solid foundation for Africa’s response to climate change impacts. The ACPC has capitalised on experiences garnered from the implementation of the first phase of the ClimDev-Africa initiative to retool and frame its new 5-year programme strategy (2017-2021) in ways that enhance the implementation of the Paris Agreement in Africa on the one hand, and; on the other hand facilitate the development and implementation of responses to the impacts of climate change on the continent. As a dedicated climate centre within the ECA aimed at integrating climate change into the structural transformation agenda of the Commission in support of its social and economic development mandate, the ACPC has a strategic and unique position both in terms of convening power and its pool of intellectual and scientific base to effectively support the transition of Africa’s economies towards climate-resilient development.
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systems and also contribute to better longer-term climate prediction. In this regard, ACPC in collaboration with DFID and the UK Met Office is implementing the Weather and Climate Information Services for Africa (WISER) programme, with the ACPC focusing on the pan-Africa component aimed at strengthening the enabling environment for the generation, uptake and use of weather and climate services to support sustainable development, and promoting intellectual leadership in climate science in Africa, built through innovative evidence generation and learning. Furthermore, ACPC’s promotion of the uptake and use of CIS for development planning is also being achieved through its Climate Research for Development (CR4D) and its flagship annual Climate Change and Development in Africa conference (CCDA).
In retooling itself as the centre for knowledge generation and brokering for climate-resilient development policies in Africa, the ACPC has followed three basic verities. First, the need to place infrastructure at the centre of climate action, thus allowing African countries to switch gears and become global leaders in climate-smart infrastructure. Second, demonstrating that climate action that recognizes the centrality of climate information services (CIS) as a poverty alleviation tool will also bridge the gap between CIS and critical development sectors. Third, that the ambition level in the NDCs of African countries will have successful implementation rates only if fully aligned with national development priorities.
infrastructure that are also vulnerable to climate and weather changes and uncertainties. It is therefore essential to ensure that infrastructure investment decisions made today are such that the infrastructure will perform in both today’s and tomorrow’s climate. In this regard the ACPC, the World Bank, the AUC and the AfDB have teamed up to operationalize the Africa Climate Resilient Investment Facility (AFRI-RES), with initial funding from the Nordic Development Fund. AFRI-RES aims to support African institutions and the private sector to strengthen their capacity to plan, design, and implement infrastructure investments that are resilient to climate variability and change in selected sectors.
Smart Infrastructure for Climate Action Many African countries have included development of infrastructure in key sectors such as ecosystems, energy, transport, water, sanitation, and urban areas in their NDCs. Closing the infrastructure gap in these and other sectors in Africa requires substantial investments in the order of USD 100 billion a year, mostly in long-lived
Minding the Gap: closing the knowledge and communications deficit between CIS and critical development sectors Central to successful implementation of NDCs is the application of weather and climate information services. Such information services are essential to addressing key hindrances to climateresilient and inclusive development in Africa, and can provide early warning
Transitioning for the African transformation: staying the NDC course While emissions from economic activity in Africa remains extremely low, by signing up to the Paris Agreement and submitting NDCs, African countries have sent a clear signal of their commitment to achieve climate-resilient and lowcarbon development while contributing to global climate actions. However, many of the continent’s NDCs are currently in need of significant re-elaboration as it has become clear that they were initially rushed to meet submission deadlines for the COP 21. Nevertheless, African nations remain committed to the achievement of climate-resilient and low-carbon development through their NDCs. ACPC will continue to respond to on-going requests from Member States to assist them with the refinement and implementation of NDCs. As such ACPC will ensure that policymakers, private sector and development practitioners are using climate-informed analyses to design adaptation, mitigation and risk reduction programmes elaborated in their NDCs. Going forward, ACPC is equipped and ready to support sustainable, inclusive and climate resilient development in Africa by influencing, strengthening and enabling the transition to climateresilient development through responsive policies, plans and programmes that lead towards transformed economies, healthy ecosystems and human wellbeing. ■ 85
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CLIMATE CHANGE & SUSTAINABILITY
ADVANCING WATER STEWARDSHIP IN THE ERA OF THE SDGS
SCOTT VAUGHAN President and CEO, International Institute for Sustainable Development
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The Hamburg G20 Summit is held as the Sustainable Development Goals (SDGs) approach their second year. The SDGs are many things: they are a clear set of urgent, achievable objectives to move the global community towards equality and sustainability; they are also a comprehensive suite of goals that, like no other before them, holds all countries to task when it comes to human and environmental protection. The SDGs also prove that multilateralism can and must work: they prove that the world can come together. They recognize that we need to collaborate to tackle the most pressing environmental, social and economic issues that affect our families, jobs and future. Within this hopeful expression of international cooperation, the German presidency has named the G20 Summit “Shaping an Interconnected World.” This interconnectedness poses both complex challenges and clear opportunities. Science reminds us daily that our environment is a starting point of this interconnectedness. Pollutants do not stop flowing through the air as soon as they reach the neighbouring country’s border. There is no passport control for mercury streaming down our rivers.
Heat waves and droughts pay no mind to diplomatic relations. We are all feeling the impacts of intensifying extreme weather events, such as flooding and droughts, linked to climate change. Yet these challenges continue to inspire cooperation. There is no better example than how shared freshwater basins have fostered peace and security among neighbours. The SDGs dedicate the whole of Goal 6 to ensuring the sustainable management and availability of fresh water – a goal that reminds us of the necessary comprehensive approach we must take to safeguarding our water. While progress continues in expanding basic services like sewage and wastewater treatment, too many people still lack basic access to clean water. Women, young children and Indigenous communities are most affected. Key groundwater aquifers upon which several global agricultural breadbaskets rely are near depletion. The intensifying effects of climate change compound these long-standing freshwater management challenges. Many of our greatest bodies of water—the Laurentian Great Lakes, Lake Victoria, Lake Titicaca, the wider Amazon basin—span multiple countries,
and thus require cooperative work to ensure their effective management. Over 250 basin-wide international freshwater agreements exist, creating the basis for joint solutions that deliver reciprocal benefits to nations and communities, and help safeguard the millions of jobs – from farming to industry – that rely on predictable freshwater sources. The SDGs are reinvigorating cooperation around fresh water. Through them, all countries are committed to protecting and restoring freshwater ecosystems. The international community is already advancing its agenda of water protection through, for example, the Minamata Convention on Mercury and others. A new generation of transboundary freshwater cooperation agreements is emerging. Within Canada, the bilateral agreements within the McKenzie basin agreement (signed in 2015 between three Canadian provinces) is built upon genuine partnerships with Indigenous communities and ecosystembased management goals. The international community will continue to find innovative ways to safeguard our precious fresh water as a basis of a healthy, sustainable and interconnected world. ■
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CLIMATE CHANGE & SUSTAINABILITY
SPECIAL PROGRAM FOR ADMISSION AND ACADEMIC MOBILITY (PEAMA) Strategy for Regionalization of Quality Higher Education in Colombia.
OFFICE OF THE ACADEMIC VICE RECTOR Universidad Nacional de Colombia
For the Universidad Nacional de Colombia, the biggest public university in the country, the most important aspect for overcoming social difficulties in Colombia must be equal opportunities of education for everyone, regardless of their socioeconomic level; the second aspect in terms of access and fairness refers to equality of opportunities for students from different departments (regions) of Colombia, accentuated by the persistence of diverse problems of an educational, political, economic and sociocultural character in the
most remote zones. For this reason, the Universidad Nacional de Colombia in 2007 created the Special Program for Admission and Academic Mobility – PEAMA, from its Spanish acronym. The main objective of this program is to reduce the gaps among the diverse regions of the country in terms of access, coverage, quality and relevance of education. Under this perspective, the University supports the strengthening of higher education in remote regions of difficult access in the country. The PEAMA is a special program aimed at high school students from the most vulnerable zones: Amazonía, the Caribbean, Orinoquia and the Pacific, which permits entry into any of the 78 undergraduate programs offered by the University in the areas of Sciences, Agricultural Sciences, Social Sciences, Health Sciences and Engineering, at the Campuses of National Presence: Amazonía, the Caribbean, Orinoquia and Tumaco. The challenges of PEAMA are considerable, at the level of technology and methodology, but its achievements show the importance for the University of the search for inclusion and mobility, which is supported through
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methodologies based on information and communications technologies – ICTS. Since 2007, there have been 18,704 applicants, 3,209 of whom have been admitted, 1,431 have been enrolled and 110 have graduated in the four regions in which the program is carried out. In 2012, the OECD made a detailed analysis of the situation of higher education in Colombia. In its publication entitled “Review of National Education Policies. Education in Colombia (2012)”, it concluded that in education, the country faces problems of access and fairness. This is reflected in figures published by the National Ministry of Education, which for 2013 reported a change of less than 15% in the net rate of students enrolled in higher education per Colombian department. At the same time, Bogotá and the departments of Antioquia and Valle del Cauca host 67% of all institutions with high quality accreditations. In 2015, the rate of coverage of the departments of Vaupés, Amazonas and Vichada was less than 10%, which indicates that actions aimed at increasing the supply and improving access to higher education must be intensified.
The PEAMA program enhances its relevance as a tool for overcoming and face the challenge of our country concerning access to and fairness of higher education; it allows students, once they have been admitted, begin the initial phase of their career study the first three semesters in their region of origin. During this period, they take courses from the basic component of their study plan and attain the proper levels in basic mathematics, reading and writing and a second language (English), given by permanent professors from the University with support from academic monitors. After completing the first stage, students begin the process of academic mobility in which they continue their career studies at one of the four main campuses of the University (Bogotá, Medellín, Manizales and Palmira), which provide the required infrastructure to carry out their study programs along with academic accompaniment in the process of adaptation to change. The program includes the international perspective as an incentive for the best students, which is reflected in academic support provided by the institution for studies abroad.
At the end, students return to one of the Campuses of National Presence to complete their graduate final work, creating new knowledge, development from the academic sphere and new opportunities for progress for the community of their region of origin. It is important to stress that in the context of the new post-conflict scenario of our country, it becomes necessary for the standard-bearing quality higher education institutions to undertake regionalization strategies that would serve as tools for inclusion and participation, particularly in zones that have been strongly affected by the violence. In this way, the PEAMA now becomes a strategy for regionalization of the Universidad Nacional de Colombia in response to the Post-Agreement, through which it seeks to contribute and develop a pedagogical strategy of inclusion and social, civic, institutional and entrepreneurial participation in the territories that are part of processes for peace building and coexistence. Quality education becomes the path for inspiring young people to participate in constructive changes of society. ■ 89
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CLIMATE CHANGE & SUSTAINABILITY
POLICYMAKERS, BUSINESS LEADERS AND THE CIRCULAR ECONOMY: DRIVING SOLUTIONS FOR SUSTAINABILITY
PETER BAKKER President and CEO, WBCSD
We live in a resource-constrained world, and we’re pushing up against planetary boundaries. Population growth, urbanization and increasing affluence are driving natural resource consumption beyond the earth’s ability to replenish. Over the last 40 years, annual extraction of materials has more than tripled¹. If we continue along this trajectory, total demand for resources is expected to reach 130 billion tons by 2050, up from 50 billion in 2014. That will mean that by 2050, we’ll be overusing the Earth’s total capacity by more than 400%. Every year, natural resources will become harder to extract and more vulnerable to extreme price volatility – making it difficult and expensive for businesses to provide the products and services necessary for a well-functioning global economy. Addressing these issues will be key for G20 leaders as they seek to build healthy societies and strong economies. Collectively, businesses and policymakers need to step up and make a change, address resource scarcity and get creative with the way we produce and consume goods and services.
Implementing the circular economy provides an elegant path forward, ensuring more sustainable sectors and industries – across the board. The circular economy moves away from the traditional “take-make-dispose” economic model to one that is regenerative by design. The goal is to retain as much value as possible from resources, products, parts and materials to create a system that allows for long life, optimal reuse, refurbishment, remanufacturing and recycling². It will enable companies to remove the concept of waste, design products to last, get creative with material inputs and think through product life-cycles from start to finish. The circular economy is beneficial for society and the environment, and will yield significant economic benefits.
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Specific processes for implementing the circular economy around these key areas will yield massive benefits that positively affect business, society and the environment.
Transitioning to the circular economy represents a $4.5 trillion opportunity, and has the potential to catalyze the biggest social, economic and environmental changes since the First Industrial Revolution. The pathway for getting started is more clear than ever. Eight material inputs for products, agriculture and infrastructure (steel, aluminium, plastic, cement, class wood, primary crops and cattle) are responsible for 20% of global GHG emissions, 95% of water use and 88% of land use. Implementing circular economy measures in these areas can help address climate change, water and land use challenges³. Specific processes for implementing the circular economy around these key areas will yield massive benefits that positively affect business, society and
the environment – while helping achieve the SDGs and the Paris Agreement. Businesses who understand this are starting to step forward, policymakers must follow suit. By moving towards the circular economy, countries and companies can capture increased growth; innovation and competitive advantage while enjoying cost savings; reductions in energy use and CO2 emissions, as well as better supply chain and resource security. Businesses are using renewable energy and recycled inputs, while recovering useful resources out of by-products and waste. They’re designing better products, with longer life-cycles and more opportunities for second and third uses, while exploring sharing platforms to help ensure that more people have access to their products and services.
As more companies implement the circular economy successfully, they serve as proof points for policymakers – illustrating to them that circular economy efforts can benefit society at large. As such, companies are calling upon G20 leaders to help accelerate progress towards the circular economy by: 1. Securing access to sustainably sourced raw materials 2. Implementing measures to increase re-use and recycling at the end of a product’s life 3. Boosting demand and creating consumer/governmental incentives for circular products and services 4. Increasing the uptake of high-quality secondary raw materials 5. Encouraging and supporting research and innovation for smarter uses of resources This isn’t about doing the right thing. It’s about doing the smart thing. It’s about what’s best for the economy, for society and for local communities. By encouraging and implementing new circular business models and technologies, businesses and policymakers have the opportunity to start the engine that drives economic growth while minimizing environmental impacts. ■ 1. UNEP International Resource Panel (2016): Global Material Flows and Resource Productivity Assessment Report 2. Adapted from: https://kenniskaarten. hetgroenebrein.nl/en/knowledge-map-circulareconomy/definition-circular-economy/ 3. Research conducted by Ecofys with WBCSD to be released in 2017. Eight materials include steel, aluminium, plastic, cement, glass, wood, primary crops, and bovine cattle.
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CLIMATE CHANGE & SUSTAINABILITY
TACKLING THE CLIMATE CHALLENGE:
LOW CARBON INNOVATION IN CEMENT PRODUCTION BY HEIDELBERGCEMENT
PETER LUKAS Director Global Environmental Sustainability, HeidelbergCement
Climate protection is a core element of HeidelbergCement’s environmental policy. As an energy-intensive company, we have been making a substantial effort to minimise CO2 emissions for many years – individually as well as under the auspices of the Cement Sustainability Initiative (CSI). The CSI is a global initiative of 23 major cement producers. Its member companies have been addressing CO2 reduction since the start of the initiative in 1999. In 2009, together with the International Energy Agency (IEA), they developed a technology roadmap for the sector, outlining a possible transition path to halving its global CO2 emissions by 2050. Contributing to global commitments During the United Nations Climate Conference in Paris (COP21), HeidelbergCement has reaffirmed its commitment to tackling climate change by signing the Low Carbon Technology Partnership initiative (LCTPi), initiated by the World Business Council for Sustainable Development (WBCSD), the IEA and the Sustainable Development Solutions Network. Together with 17 other international cement
manufacturers, HeidelbergCement committed to a global action plan aiming at a 20 – 25% reduction in global production related CO2 emissions by 2030, compared to what is considered “business as usual”. At the same time, HeidelbergCement has set up its own CO2 strategic plan to contribute to reaching the 2 degrees target, which was confirmed in Paris. The strategic plan endorses operational energy efficiency, innovative products and technologies as well as carbon capture and utilisation as main levers for the reduction of CO2 emissions. Moreover, this strategic plan, as defined 2015, has been externally assessed and confirmed to be in line with the 2 degrees target – indicating that HeidelbergCement is well on track and meeting its responsibilities.
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investigate the process efficiency of the oxyfuel process which is important for the future success of this technology. As a next step we consider the installation of a full scale clinker kiln to test this technology under regular production conditions. HeidelbergCement is also researching the use of biomass in CO2 recycling for the manufacture of biofuels as well as animal feed. In Morocco, we are developing a large-scale pilot project to produce algae for fish food together with partners from other industries. Moreover, our research projects in Sweden, Turkey, and France contribute to our strategy of making CO2 useable. Since 1 June 2017, the German Ministry of Education and Research (BMBF) has been supporting a three-year research project driven by HeidelbergCement and RWTH Aachen University on carbon sequestration by mineral re-carbonation. The project will look into the absorption of CO2 by olivine and basalt but also waste minerals like slags and fly ashes. If successful, such carbonated minerals can be used as aggregates for building materials.
Thinking differently: an alternative clinker technology With the discovery of a new reactive clinker phase, HeidelbergCement has established the basis for an alternative cement technology (Ternocem®). Due to an altered chemical composition and low burning temperatures, the CO2 footprint is 30% lower in comparison with conventional cement and the total energy consumption is reduced by around 15%. A multi-year research programme was launched in 2015 to develop the technology to market maturity which is expected to be reached by the early 2020s. Turning waste into resources: Capturing, storing and recycling carbon Capturing CO2 is the prerequisite for storage or recycling. In 2015,
we completed tests of four different technologies for separating CO2 from combustion exhaust gases at our cement plant in Brevik, Norway. Following a comprehensive feasibility study, the plant was selected by the Norwegian government in 2016 to be considered as the location for the testing of an industrial-scale facility to capture CO2. This would be the first of its kind in the cement industry. Another promising approach is the oxyfuel technology where CO2 replaces ambient air as the main process gas in the clinker burning process. To drive this technology, HeidelbergCement participates in the CEMCAP project that is funded by the EU programme “Horizon 2020”. At several of our plants in different European countries we have implemented test installations to
Sustainability from the start HeidelbergCement does not only have the ambition to reduce its carbon footprint. We also aim to make production processes more sustainable right from the start. Although the extraction of raw materials seems to be a major intrusion into existing ecosystems, HeidelbergCement has proved that quarries can be extremely valuable for environmental protection, as they offer habitats for plants and animals that are being increasingly displaced by intensive land use. Together with BirdLife International and local communities, we have therefore developed a biodiversity strategy to implement rare species protection projects in former quarries in several countries. With the Quarry Life Award, our international scientific and educational contest, we target innovative approaches to study and boost biodiversity at quarry sites and aim to raise awareness about mining ecology in the public. ■ 93
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CLIMATE CHANGE & SUSTAINABILITY
SUSTAINABLE DEVELOPMENT AND THE BATTLE FOR IDEAS IN 2017
ANDREW NORTON Director, International Institute for Environment and Development
If 2015 was the year of progressive global agreements on sustainable development, such as the Sustainable Development Goals and the Paris Agreement on Climate Change, 2016 was perhaps the year of backlash. Simple narratives harking back to a ‘golden age’ of national power seemed to resonate strongly, particularly in rich countries, with those who feel left behind by rapid global change. With shifts towards nationalist agendas and increasingly fraught political climates, can the world sustain collective action to tackle global challenges? Improving sustainability is a priority for Germany’s G20 Presidency, but progress in 2017 cannot be taken for granted. So, what are the key debates affecting our ability to secure a stable global society and a liveable planet? Climate and energy action Progress on tackling climate change is fragile and insufficient. The Paris Agreement pledges on reducing greenhouse gas emissions go barely a third of the way towards stabilising the planet’s climate at no more than two degrees above pre-industrial temperatures.
Phasing out coal production is essential but will create human as well as technological challenges in many countries. Germany, a leader on scaling up renewable energy, still depends on coal for over 40% of its power. And, of course, the 2016 US election profoundly changed the landscape, installing an administration in the world’s largest economy that openly questions the value of climate action. There is a risk that climate denial will become increasingly ‘normalised’ by this example, with disastrous consequences. Optimists point to renewable energy’s economic momentum, driven by technological advances; to China’s clear effort to become a technological front-runner; and to the determination of US states and cities to hold to a low-carbon pathway.
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Paris Agreement on Climate Change. So delivery institutions must get better at getting the ‘money where it matters’ – to poor communities in climatevulnerable countries where it can be used effectively, both for adapting to climate change and expanding access to affordable renewable energy. Inclusive, resilient cities Sustainable and inclusive urbanisation presents another major challenge – and a growing concern for the international community as people increasingly seek opportunities and asylum in cities. New approaches to urban development provide extraordinary opportunities for simultaneously lowering greenhouse gas emissions and providing social benefits, such as improved mobility and health. Changing access to land Small-scale land seizures, concentrations and dispossessions, as well as largescale land acquisitions, increasingly threaten livelihoods in much of SubSaharan Africa. Strengthening land governance to protect local rights in a changing context will matter hugely for rural communities.
Additionally, many developing countries could jump directly to decentralised renewable energy technologies that can rapidly increase energy access in unserved communities. My organisation is supporting the Least Developed Countries with the Renewable Energy and Energy Efficiency Initiative (REEEI) to that end. Long term, the transition to low carbon energy may be unstoppable. But even a slight slowdown over the next decade represents a huge threat – especially to the poorest and most climate-vulnerable. The future of work In rich countries, debates about the future of work and community, and threats posed by automation and globalisation, will deepen, fuelled by growing economic insecurity. Automation
is also a huge issue for developing countries. Will the export pathway to rapid economic growth falter as automation erodes poorer countries’ labour cost advantage? Industrial policies will be needed that promote sustainability and inclusion effectively in different political and economic contexts. The aid bargain In many rich countries, commentators and politicians are questioning the value of aid. In others, support for development action is increasing. Well spent, aid is good value, benefiting communities and making the world more resilient and stable. Official Development Assistance also channels most of the world’s public climate finance, playing an important part in the bargain between richer and poorer countries that underpins the
Inequality Evidence suggests, global income inequality has fallen since 1990, largely due to rising incomes in Asia. But most studies conclude that national-level income inequality has been rising (with some exceptions, mostly in Latin America). Furthermore, global wealth inequality continues to rise. Measuring inequality will remain contentious. There are many difficulties, particularly as household surveys rarely capture the wealthiest people. But policies to tackle inequality — including through education, social protection, and a strengthened tax revenue base — are crucial. The biggest risk of extreme inequality is that it might undermine democratic governance, as well as the motivation of governments to pursue sustainable and inclusive development paths. Realising the ambitions of the SDGs and the Paris Agreement will require concentrated effort in many areas. The political challenges, including engaging disillusioned citizens, will be critical. But the challenge is urgent and the scarcest resource of all may be time. ■ 95
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ACTION PLANS TO TACKLE DRUG RESISTANT INFECTION MUST ADDRESS HUMAN BEHAVIOUR
ALISON HOLMES Professor of Infectious Diseases, Imperial College London
Addressing human behaviour related to antibiotic use remains key to both preserving our existing drugs and for maintaining the effectiveness of any future agents. Effective treatment of infection is needed that is accessible to all, whilst any unecessary antibiotic exposure should be avoided to minimise the development of resistance. Behaviour related to extensive and inappropriate antibiotic use across healthcare and agriculture, or giving rise to environmental contamination needs to be addressed in the global action against antimicrobial resistance (AMR) and preventing drug resistant infection. Behaviour within healthcare requires focused activity, particularly hospital care where patients are most vulnerable and are most at risk. It is also where the occurrence of drug resistant infections and antibiotic usage are most intense. Yet an estimated 30% to 60 % of antibiotic prescribing within hospitals is inappropriate or unneccessary. Therefore improving rational antibiotic prescribing in hospitals should be a major target for behaviour change in action plans. Another focus for action in healthcare must be on infection
prevention practices within hospitals, such as hand hygiene, as these are critical in preventing transmission of AMR and for preventing healthcare associated infections (HCAIs), which then drive further prescribing. HCAIs are a major burden in hospitals, with LMICs experiencing particularly high rates, as well as accounting for much antibiotic use in hospitals and the prevention of HCAI must be part of hospital programmes to improve drug resistant infection. Even in those hospitals where there may be significant committed expertise and excellent policies, it needs recognising that this may still only have a limited influence on overall antibiotic prescribing, because strategic input and integration with governance structures may both be lacking. â&#x20AC;&#x2DC;Top downâ&#x20AC;&#x2122; approaches such as organisational
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When health leaders consider improving antibiotic use in healthcare, they need to consider if enough is being done to develop this as a shared goal across the healthcare workforce. structures and regulation, are of course helpful but they still may not shift attitudes or bring about adequate or sustainable behaviour change in antibiotic prescribing. So, whilst there has been much action around public engagement to change general societal attitudes and behaviours related to antibiotic use, healthcare itself needs to get its own house in order. Antibiotic prescribing within healthcare must be recognised as a ‘behaviour’, that is a complex, dynamic social process, influenced by many
determinants. Important ‘unwritten rules’ in hospitals influence prescribing behaviours and clinical autonomy and hierarchies within clinical specialties can overrule policies, guidelines and expert input. Greater involvement of clinical leaders in healthcare and cross specialty engagement is needed. This lack of engagement is illustrated in international medical conferences, where there is little evidence that antibiotic use and resistance is considered outside the specialties of infectious diseases and microbiology, 97
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The goal of protecting antibiotics and preventing drug resistant infection through rational use needs to be shared within and across the healthcare community, supported by collective international learning regarding effective networks and models. even in those specialties with heavy usage, high risk patients and a dependence on antibiotics. This gap is also reflected in the medical education and training programmes. Successful healthcare improvement interventions, in the wider patient safety agenda, highlighted the importance of redefining a challenge as a â&#x20AC;&#x2DC;socialâ&#x20AC;&#x2122; problem that can be solved through shared human action and behaviour, rather than simply through technical fixes. Successful interventions depending on teams, networks and the sense of community created. So, when health leaders consider improving antibiotic use in healthcare, they need to consider if enough is being done to develop this as a shared goal across the healthcare workforce. There is great untapped expertise and potential in the nursing and pharmacy workforce. The vital role of the clinical pharmacist is already recognised as a key team member in addressing antibiotic use in North America, UK and Australia and effective networks to optimise antibiotic prescribing have been developed, for example in South Africa and Thailand. The role of nurses, the largest workforce in healthcare and
one of the largest workforces in society, is yet to be developed adequately, although there are some excellent examples emerging and there is also much that can be learnt from established and highly successful networks addressing HIV and TB. Technology offers increasing opportunities to improve prescribing and infection prevention. Improved surveillance and rapid feedback allows better decision making and targeted interventions. Mobile Health
and the use of Apps also provides leapfrogging technological solutions. Integrated data and information at the point of care improves clinical decisions and interaction, and decision support systems, careful use of artificial intelligence, rapid diagnostics, data visualisation and risk prediction can potentially improve prescribing. Social media, games and online learning all have potential roles in changing attitudes, awareness and behaviour. Given that antibiotic use is shaped by social, behavioural and contextual factors, interventions as well as research programmes must consider these. The goal of protecting antibiotics and preventing drug resistant infection through rational use needs to be shared within and across the healthcare community, supported by collective international learning regarding effective networks and models. This goal also needs to be embedded in healthcare management and in policy. Governance structures must also be aligned to support this. Antibiotic prescribing practice needs to be considered as a marker of the quality of care provided by healthcare systems. â&#x2013;
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G20 HEALTH AGENDA NEEDS TO RECOGNIZE CRITICAL IMPORTANCE OF CHRONIC DISEASES TO ACHIEVE SDG 3 The G20’s focus on urgent health issues like pandemic preparedness and antimicrobial resistance is very welcome. But we have to be careful that the urgent does not obscure – or even crowd out – the important. Old threats are still deadly and, due to forces like global warming and increasing economic prosperity, they are having an increasing impact on people’s health – albeit away from the lens of a TV news camera. If we don’t do something about them, collectively they could cost the world more than some of the headline stories will ever do. DR. HARALD NUSSER Head of Novartis Social Business
The potential resurgence of old infectious diseases One area of concern is the resurgence of an old enemy, malaria. There has been astonishing progress on malaria since the turn of the century – a child used to die every 30 seconds, now it is every two minutes; certainly an achievement but still an unacceptable number. And while there is still much more work needed to get this figure down to zero, this achievement is under threat. In a parallel to antibiotic resistance, growing resistance to artemisinin (the key malaria medicine) could have major public health ramifications, particularly if it spreads from Asia to Africa.
At the same time as antimalarial resistance looms, a warming planet is creating ever more warm, wet environments – just the kind of climate that malaria-bearing mosquitos thrive in. Evidence of their spread is already appearing. A 2014 publication in Science¹ showed that in warmer years, malaria increases in the normally disease-free highland regions of northwest Colombia and central Ethiopia. If global warming continues, malaria – a word that came into English from Italian – could again be a disease that threatens southern Europe. In fact, it has recently been seen in Greece², so the clock is already ticking. Fortunately, public-private partnerships do have new antimalarials in clinical development that could help stem any resurgence of malaria, but we cannot take anything for granted. Pandemic disease and chronic disease in an interconnected world While we are still far from being able to stop pandemic diseases such as Zika and Ebola, we can, though, limit their impact. In order to deal successfully with any outbreak, we need to ensure that health systems
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everywhere are prepared. And yet, increasing longevity, urbanization and modern lifestyles are already quietly contributing to a hidden pandemic in low- and middle-income countries: a massive increase in noncommunicable diseases (NCDs) such as cancer, heart disease, diabetes and respiratory illnesses. You might think that these are diseases of high-income countries, but in truth 75% of deaths from NCDs happen in lower-income countries. Perhaps even more worryingly, in low-income countries, nearly half of all NCD deaths occur in those aged under 60 years old.
Ironically, the big rise in the risk factors for chronic disease are thanks to the very forces of progress that are improving economic prospects for so many. For example, people live in close proximity in booming cities, can afford to eat more food – much of it unhealthy yet cheap – and do less manual labour.
The results are dramatic. A third of the world’s population is now overweight or obese³, and nearly two-thirds of these atrisk people live in developing countries. In Malaysia, over half of the adult population is categorised as being physically inactive⁴. In Indonesia over two-thirds of adult men were active smokers in 2011⁵, much increased compared to previous years, and a third of Indonesian boys aged 13-15 have used tobacco products in the last month⁶. This burden of illness and death is today affecting a vital part of the workforce in lower-income countries at a time of demographic shift. Long and painful disease cycles impoverish entire families: research in Burkina Faso⁷ showed the probability of catastrophic financial consequences more than doubled in households affected by chronic illness. All of this will have a huge economic impact. Between 2010-2030, NCDs will cost the globe more than US$ 30 trillion⁸. NCDs cause the loss of between 4 to 10% of potential GDP in India every year⁹. Chronic diseases reduce the economy of Latin America by around 2% a year⁹. This compares to a World Bank estimate that the most severe flu pandemic – which could kill up to 71 million people – would cost US$ 3 trillion⁹. Despite the figures, there is much hope. According to the World Health Organization, four-fifths of these premature deaths are preventable. People who manage their chronic conditions with proper diagnosis, care and treatment are often able to continue to work, save and invest in the future. We therefore must not forget about the diseases that don’t often make the headlines. Failure to fund chronic disease prevention and care will see more lost opportunities every year. We hope the G20 recognizes the critical importance of this work in the fight to achieve Sustainable Development Goal 3. ■
REFERENCES 1. http://science.sciencemag.org/content/sci/343/6175/1154.full.pdf?sid=469bcbc2-bf5c-4160-a341-c1dc007935ca 2. https://www.cdc.gov/malaria/new_info/2012/malariagreece.html 3. http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2814%2960460-8/fulltext 4. http://www.who.int/diabetes/country-profiles/mys_en.pdf?ua=1 5. http://www.who.int/tobacco/surveillance/survey/gats/indonesia_report.pdf 6. http://www.searo.who.int/tobacco/documents/ino_gyts_report_2014.pdf 7. Bull World Health Organ. 2006 Jan; 84(1): 21–27 – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2626518/ 8. http://www3.weforum.org/docs/WEF_Harvard_HE_GlobalEconomicBurdenNonCommunicableDiseases_2011.pdf 9. http://www.worldbank.org/en/topic/pandemics/overview
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MENTAL HEALTH IN THE ERA OF SUSTAINABLE DEVELOPMENT VIKRAM PATEL Harvard Medical School Professor Vikram Patel is a Psychiatrist and a Professor in international mental health. He is the Co-Founder and former Director of the Centre for Global Mental Health at the London School of Hygiene and Tropical Medicine, Co-Director of the Centre for Control of Chronic Conditions at the Public Health Foundation of India, and the Co-Founder of Sangath, an Indian NGO dedicated to research in the areas of child development, adolescent health, and mental health. Professor Patel hasÂ contributed extensively to the field of international mental health and is best known for his work on child development and mental disability in low-resource settings. In April 2015, he was listed as one of the worldâ&#x20AC;&#x2122;s 100 most influential people by TIME magazine for his significant activism, innovation and achievement in the field.
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Mental health problems comprise a very wide range of conditions, ranging from autism and intellectual disability in childhood through to depression, schizophrenia, bipolar disorder, alcohol and drug use disorders in adulthood, and to dementia in old age. Every person would know someone in their most intimate circles who is affected. It is, therefore, not surprising that surveys show that one in four persons will be affected by a mental health condition during their lifetime; if anything, this might even be an underestimate. Indeed, mental health problems are amongst the leading causes of the Global Burden of Disease, and their share of this burden is rising dramatically. People affected by mental health problems endure much of their suffering in silence, with little compassion from others and, often, outright discrimination. Many will suffer other chronic diseases and die prematurely, both because of poor quality medical care and suicide. Indeed, there is no health without mental health. In spite of this enormous global burden , as far as mental health is concerned, no country can be considered to be “developed”. There are two reasons for this: first, the amount of resources that countries are committing to mental health care in their health budgets is proportionately much less than the actual burden ; second, very few people globally have access to community based mental health care which incorporates principles of evidence based medicine as well as the rights to a life with dignity. Even in a middle-income country like India, which is self-sufficient in terms of the production of doctors and medicines, the treatment gap for mental health problems in rural areas approaches 100 percent. In many countries,
mental health care is synonymous with receiving only pills or with being incarcerated in an institution (including prisons) where basic human rights are violated. There are two major reasons why the world neglects mental health problems. The first is a range of demand-side barriers, for example, there is generally low demand for mental health care because governments and communities do not believe these are “real” health problems, or may think that these problems are brought on by one’s own behavior or choices and so the affected individual is responsible for their own recovery. There is also a lack of understanding about the existence of effective and affordable treatments. On the supplyside, we face the barrier of not enough resources, especially trained human personnel to deliver mental health care and reliable supply of generic psychotropic medication. I would like to suggest four critical actions which governments and civil society can take as an immediate priority. First, we need to act towards preventing mental health problems building on the knowledge that the brain is extremely responsive to environmental factors particularly in the first two decades of life and that most mental health problems begin before young adulthood. Thus, in order to prevent mental health problems, we need to act early, primarily by ensuring nurturing and safe environments for children and adolescents to thrive in schools, at home and in communities. Second, for people who already are living with a mental health problem, we must move away from hospital based models of care and promote the use of community health workers, peers and other non-specialist frontline
workers to deliver mental health care, in particular psychosocial interventions. This is one of the most innovative advances emerging from the developing world. We also need to use technology in intelligent ways. The Mental Health Innovation Network (www.mhinnovation.net) is a resource which already documents more than 150 such innovations around the world. Third, we need to recognize mental health as a basic human right. From a social justice perspective, we need to especially protect this right in two groups of people: those who are vulnerable to develop mental health problems because of social factors, for example refugees or children who have been neglected; and people who live in institutions, including mental hospitals and prisons. Finally, we need encourage a more open conversation about mental health. On April 7, 2017, World Health Day will focus on the subject of depression with the theme “Let’s Talk”. Indeed, it is only through disclosure and frank conversation that the stigma will ultimately be overturned. As a society, we should support people living with mental health problems to speak out, to share their stories of struggle and of recovery and to shout for action, because we have all waited far to long for some action to happen. In India, on April 7, we will launch the “it’s OK to talk” initiative targeting young people to share their personal stories using songs, photographs, poetry or an essay. In conclusion, we must not only celebrate the fact that mental health finds its place in the Sustainable Development Goals, but also now act in measurable and specific ways to promote mental health, and prevent and care, for there is no sustainable development without mental health. ■
Even in a middle-income country like India, which is self-sufficient in terms of the production of doctors and medicines, the treatment gap for mental health problems in rural areas approaches 100 percent. 103
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COMBATTING NEGLECTED TROPICAL DISEASE – NOW
JOHN H. AMUASI (MBCHB. MPH. MS. PHD) Executive Director, African Research Network for Neglected Tropical Diseases
Unlike other diseases of global health importance such as HIV/AIDS, malaria, Ebola etc., Neglected Tropical Diseases (NTDs) are not “a disease” but “a complex constellation of diseases”. The diseases labelled as NTDs are often curable and preventable, however they become complicated on account of the far reaching cumulative negative effect they have on individuals and societies. The world has recognized how NTDs are a major impediment to global development and the fight against poverty, reflected in the prominence given to NTDs in the G7 agenda in Germany in 2015 and in Japan in 2016, and to specific inclusion of NTDs within the health targets of the Sustainable Development Goals (SDGs) in 2015 (1). In combatting NTDs, multi-level interventions across public and private sectors, involving local (community), intergovernmental and international stakeholders have been funded over the past decade since the London Declaration on NTDs and the launch of the WHO Roadmap in 2012 (2,3). Most recently during the Global Partners meeting on NTDs held in Geneva on April 19, 2017, governments,
partners, philanthropists and industry representatives pledged over USD 800 million to be spent on pushing towards reaching elimination and eradication targets over the next 5 – 7 years (4). Funding commitments and intense efforts by multiple stakeholders have resulted in important successes. These include over 6.2 billion cumulative treatments for a disease like lymphatic filariasis since the year 2000 (5), and barely 3,000 cases of Human African trypanosomiasis being recorded in 2015, the lowest ever (6). Various product development partnerships have received support to work with Pharma in screening large compound libraries to identify compounds that have revolutionized treatment for NTDs such as visceral leishmaniasis, trypanosomiasis etc. (7). Despite the above-mentioned successes, we are still not fully on course to meet our 2020 and 2030 targets (3,8). Many existing solutions to combat NTDs have not been fully optimized, and newer more effective drugs, vaccines, and diagnostics are still needed along with innovative service delivery and access mechanisms. In addition, while research has shown
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Stakeholders also need to develop concrete strategies to woo G20 and African philanthropists to contribute more directly and openly to the fight against NTDs. that NTD investments are amongst the most cost effective and value for money investments in health which address equity, human rights and improvement in quality of life; barely 0.7% of official development assistance for health is provided to NTDs affecting more than 1 billion people (9). Aside the need for greater funding commitments, combating NTDs by taking into consideration their complex nature, including their social determinants, calls for urgent efforts towards strengthening research and program implementation capacity at multiple levels within endemic countries (10). Presently there is relatively little support for research capacity strengthening activities. Recently though, the USAID through the Taskforce for global health, has partnered with the African Research Network for Neglected Tropical Diseases to support a small grants program for African NTD researchers. This initiative channels funds
towards research of national importance, initiated by African researchers with the endorsement of their institutions (11). This kind of collaboration needs to be expanded alongside an increase in support for NTD country programmes to ensure they are embedded in the objective of Universal Health Coverage, because their success is a measure of how much we value access to treatment and prevention as a reflection equity and human rights (5). While mention of NTDs evokes thoughts of the world poorest countries, investigations have revealed a paradoxical NTD burden among the poor living in G20 countries, a concept that has been labelled “Blue marble health” (12). As such G20 nations, and African governments need to employ innovative approaches to providing focused support for research and capacity building programs, perhaps through a matching fund scheme. Stakeholders also need to
1. Engels D. Neglected tropical diseases in the Sustainable Development Goals. The Lancet. 2016 Jan 16;387(10015):223–4. 2. Uniting to Combat Neglected Tropical Diseases. London Declaration on Neglected Tropical Diseases [Internet]. London, UK; 2012 Jan [cited 2017 May 31]. Available from: http://www.who.int/neglected_ diseases/London_Declaration_NTDs.pdf 3. WHO. Accelerating work to overcome the global impact of neglected tropical diseases – A roadmap for implementation [Internet]. WHO Press; 2012 [cited 2015 Jan 6]. Available from: http://www.who.int/neglected_diseases/NTD_ RoadMap_2012_Fullversion.pdf 4. WHO. WHO Global Partners Meeting on Neglected Tropical Diseases [Internet]. WHO. 2017 [cited 2017 May 31]. Available from: http:// www.who.int/neglected_diseases/global-partnersmeeting/en/ 5. Molyneux DH. The London Declaration on Neglected Tropical Diseases: 5 years on. Trans R Soc Trop Med Hyg. 2017 Jan 22; 6. Organization WH, WHO Expert Committee on the Control and Surveillance of Human African Trypanosomiasis (2013: Geneva S. Control and surveillance of human African trypanosomiasis: report of a WHO expert committee [Internet]. World Health Organization; 2013 [cited 2017 Jun 1]. Available from: http://www.who.int/iris/ handle/10665/95732 7. Croft SL. Neglected tropical diseases in the genomics era: re-evaluating the impact of new drugs and mass drug administration. Genome Biology. 2016;17:46. 8. United Nations. Transforming our world: the 2030 Agenda for Sustainable Development [Internet]. New York; 2015 Sep [cited 2017 Jun 1] p. 35. Report No.: A/70/L.1. Available from: http://www. un.org/ga/search/view_doc.asp?symbol=A/70/ L.1&Lang=E 9. Liese BH, Houghton N, Teplitskaya L. Development assistance for neglected tropical diseases: progress since 2009. Int Health. 2014 Sep;6(3):162–71. 10. Beran D, Byass P, Gbakima A, Kahn K, Sankoh O, Tollman S, et al. Research capacity buildingobligations for global health partners. Lancet Glob Health. 2017 Jun;5(6):e567–8. 11. 1Neglected tropical diseases support center. Six African Scientists Receive Inaugural Grants for Operational Research on NTDs [Internet]. 2017 [cited 2017 Jun 1]. Available from: http://www. ntdsupport.org/news/six-african-scientists-receiveinaugural-grants-operational-research-ntds 12. Hotez PJ. Blue Marble Health Redux: Neglected Tropical Diseases and Human Development in the Group of 20 (G20) Nations and Nigeria. PLoS Negl Trop Dis. 2015 Jul;9(7):e0003672.
develop concrete strategies to woo G20 and African philanthropists to contribute more directly and openly to the fight against NTDs. Distinctly referenced in SDG 3, progress in meeting NTD control and eradication targets can be viewed as a “two-way litmus test” of progress to other SDG targets (Water and sanitation, Education, Environment/Climate, Partnerships, one-health) (1). All these are enough reason for all stakeholders to double our efforts and combat NTDs – now! ■ 105
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ENDING NEGLECTED TROPICAL DISEASES IN OUR LIFETIME terrible effects of NTDs trap vulnerable populations in endless cycles of poverty: keeping children out of school, depriving millions of their most productive years of life and thwarting economic prosperity for entire communities. Fortunately, the opportunity has never been so great to beat preventable diseases in our lifetime – reducing suffering, creating a path to prosperity for billions around the globe.
Blindness. Unbearable pain. Grotesquely swollen limbs. Disfigured faces. Stunted growth. Disrupted education. And, for hundreds of thousands a year, death. These are the effects of neglected tropical diseases, or NTDs: a group of diseases that live outside the knowledge of many. These diseases afflict more than a billion of the world’s poorest people in 149 low-and middle-income countries, and threaten hundreds of millions more. The
The work of an ever-growing public-private partnership has enabled remarkable progress toward the elimination of NTDs over the last decade. NTD treatments reached nearly a billion people in 2015 – a near 20 percent increase from just two years prior. This has been achieved through a growing partnership spanning public and private sectors, non-governmental organizations, foundations, and academia, organized within the Uniting to Combat NTDs coalition and the World Health Organization. Drug donation programs play a critical role in this partnership; pharmaceutical partners have donated a record-breaking number of drugs, totaling more than 15.7 billion drugs since 2007.
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The infrastructure and trust established through NTD drug administration programs help community health workers deliver other drugs, diagnostic tests and preventive care to remote communities. This infrastructure contributes to building the “strong and resilient health systems” that are important to achieving universal health coverage (UHC) and effectively preventing and controlling infectious diseases. Accelerating progress against NTDs also improves the health and livelihoods of women and girls, who are disproportionately affected by these diseases. Improving the health and productivity of poor communities strengthens their political and economic stability, building stronger diplomatic and trade partners.
Photos © GSK / Marcus Perkins
Achieving NTD goals produces broad benefits for both global development and the global economy for G20 member countries. Thanks to this partnership, fewer people today are suffering from NTDs than ever before, and many countries are eliminating them altogether. River blindness has been eliminated in nearly all of the Americas. Mexico and Morocco have recently joined Oman in eliminating trachoma as a public health problem. There were only 3,000 sleeping sickness cases reported worldwide in 2015. Guinea worm disease, which 30 years ago afflicted more than 3 million people in 20 countries, is now on the brink of eradication, with only 6 cases reported this year. Since the beginning of 2016, eight countries have eliminated lymphatic filariasis, including Togo: the first African nation to achieve this goal. Emerging economies are also making great strides in NTD elimination. In 2012, Brazil launched a national integrated NTD plan linked to its plan for poverty reduction. India, which accounts for more than 35 percent of the global
NTD burden, is implementing the world’s largest program against lymphatic filariasis and has contributed greatly to the research and body of knowledge on this disease. India is also integrating deworming with school health and nutrition programs to expand the reach of each initiative and provide children with the ongoing care and protection they need to live healthy and productive lives.¹ Taken together, these preventative and curative treatments for NTDs contribute to building “strong, accessible, affordable and sustainable health systems,” which have been recognized by the G20 Health Ministers as key to “economic growth, prosperity, social cohesion and quality of life.” Achieving NTD goals produces broad benefits for both global development and the global economy for G20 member countries.
The world has never had a better opportunity to end NTDs for good. Now is the time for renewed action and commitment. To beat NTDs, we need to focus on two actionable areas. First, we need increased financing – foreign aid from donors, domestic funding from affected countries, and new commitments from private and public partners – to address significant NTD financing gaps. Second, we need global leaders to follow through on their political commitments. These include the 2015 G7 Leaders’ Declaration to increase investments to reach the 2020 NTD elimination goals, and the 2013 WHA resolution on NTDs to increase country ownership of NTD programs and promote their integration into primary healthcare services. We have seen firsthand the incredible progress toward ending NTDs, made possible by the combined work of public and private partners across donor and affected countries. With increased global financial and political commitments, we can scale up progress, ensure NTD programs reach the people who need them most, and achieve a healthier world for all. ■ 1. Bulletin of the World Health Organization, 31 March 2014
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PATIENT EMPOWERMENT THROUGH DIGITIZATION MORTEN ELBÆK PETERSEN CEO for the Danish e-Health Portal sundhed.dk Personal medicine overview, notes from Electronic Health Records from hospitals, lab responses, vaccination data and historical overview of treatments. That’s just a small sample of the possibilities, you have as a citizen on the Danish public owned eHealth portal sundhed.dk. All Danes from 15 years and above can log on to “My Health” with a digital signature in combination with the social security number. The many opportunities and easy access to personal health data makes sundhed.dk the most innovative and significant digital solution in Denmark to support patient empowerment and hereby contributing to cost reducing work flows of health care professionals. Common public strategies in Denmark highlight health data as essential for quality improvement and health research, both of which are significant drivers in the continued development of health care. Initiatives to support patient empowerment and cost reducing workflows grows, taking in consideration that the OECD estimates that public authorities, using data systematically to improve their workflows, reduce operating costs by 15-20 percent. 108
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Initiatives to support patient empowerment and cost reducing workflows grows, taking in consideration that the OECD estimates that public authorities, using data systematically to improve their workflows, reduce operating costs by 15-20 percent. A trust based culture The Danish culture is characterized as trust-based and citizens rely on the public authorities and their handling of personal clinical data. Furthermore, the population expect openness and transparency about health data. That’s some of the reasons, why the number of unique visitors to sundhed.dk keep increasing and by 2017 sundhed.dk has 1,7 million unique visitors per month out of a population of 5.6 million inhabitants. Over the last few years there has been a great demand for learning more about the sundhed.dk solution, and more than 35 countries from all over the world, EU, WHO and organizations with a focus on health IT want dialogue on the possibility of implementing similar models. And Denmark is not hesitant to share the experiences; The successful implementation of sundhed.dk – which was launched in 2003 – rely on different
key factors such as a common, ambitious national eHealth strategy and one coherent, public, funding based on an economic perspective to reduce costs. The trust-based culture, the expectations to openness and transparency, the high reliability in public authorities and their handling of personal clinical data – are all, important factors. Since health data is automatically produced in the meeting between the citizens and the health care sector there is a common interest in optimize and mutual gain from theses outcomes: Citizens “give” data to the system – and patient empowerment through digitization providing insight and transparency is “giving back” data to the citizens”. At the same time sundhed.dk technologically builds on the idea of “one access point”, re-using and showing information and data from local systems. Sundhed.dk is an integration point presenting an overview.
The economic perspective behind sundhed.dk has primarily been to support the general practitioners in their gate keeping function: To keep citizens out from the hospitals, focus on prevention and treatment at home. And at the same time provide a digital solution that provide citizens the possibility to actively use the resources they already have providing insight in own personal health data. Sundhed.dk is an example of exploiting the opportunities in the spread of digital technology providing citizens transparency and openness about their own data and hereby drive changes and improvements in the health care sector. ■
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A GLOBAL NETWORK FOR ANTIMICROBIAL RESISTANCE (AMR) TRACKING AND QUANTIFICATION The International MetaSUB Consortium Sofia Ahsanuddin Aspa D. Chatziefthimiou Soojin Jang Olayinka Osuolale Christos A. Ouzonis Torsten Semmler Haruo Suzuki Ebrahim Afshinnekoo Christopher E. Mason
The emerging threat of antimicrobial resistant (AMR) microorganisms presents a formidable challenge for clinicians, scientists, and policymakers because it implicates increased risk of mortality, morbidity, and associated healthcare costs across the world. Synchronous and harmonized AMR surveillance, embedded in local and global programs, are thus essential to provide robust data regarding the incidence, prevalence, and geospatial distribution of resistant pathogens and AMR determinants. Such data can especially help in developing countries, where AMR is poorly monitored and it is estimated that antimicrobial drug consumption will increase by 67% by 2030. This increased antibiotic usage is driven by escalating demand for large-scale farms and their livestock, giving rise to rapid emergence and transmission of drug-resistant microorganisms in livestock as well as humans. However, accurate AMR data can aid policymakers in formulating evidence-based regulatory policies, which can inform the appropriate use of antimicrobial drugs in human health, livestock maintenance, and infection control practices.
Recent technological advances in next-generation sequencing (NGS) and metagenomics have enabled large-scale coordinated efforts to characterize the global distribution of AMRs, prevalence of microorganisms, and their hosts, thereby providing researchers and clinicians with a more comprehensive understanding of the functional and genetic dynamics of microorganisms as they acquire antibiotic resistance. Metagenomics methods, coupled with standardized metadata collection and analysis, can enable researchers to quantify the DNA present in environmental samples across all kingdoms of life, going beyond what traditional culture experiments could provide. This allows one to create a molecular portrait of microbial and eukaryotic ecosystems, as well as mechanisms of the acquisition of AMR genes, drivers of biofilm formation, and new mutations that can alter functional capacity. Furthermore, NGS methods have been used to uncover novel hostpathogen regulatory networks and AMR changes that are modulated by nucleic acid (DNA/RNA) base modifications, many of which underlie biological processes central to cellular function and localization.
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Global City Sampling Day 2016
whereby different AMR genes are enriched in different cities. The underlying causes for these geospatial and temporal variations remain unresolved at present, yet it is hypothesized that antibiotic use, land use, proximity to farms, and different climates of cities may be key drivers of these differences.
Pilot AMR Marker Map
The need to integrate traditional public health surveillance methods with novel assessment of AMR determinants has never been greater. To investigate the underlying mechanisms and international dynamics of AMR, the MetaSUB (Metagenomics of Subways and Urban Biomes; www.metasub.org) International Consortium was founded in 2015 as a global, transparent, and integrated metagenomic initiative. It is creating geospatial molecular maps of mass-transit systems in over 70 cities, which supports the G20 Sustainable Development Goals (SDG) 11 and 17. The focus on mass-transit systems is particularly critical, given the fact that 54.5% of the world’s population now lives in urban areas, and that mass – transit systems represent densely populated and highly trafficked humanmicrobial-environmental interfaces (hundreds of millions of interactions
per day). This is the first study that will create a comprehensive, comparative map of the world’s DNA and AMR markers in urban environments. To date, over 6,000 environmental samples containing environmental DNA have been collected in MetaSUB cities around the world. The DNA is in the process of being extracted and sequenced to detect known or novel modified nucleic acids, AMR markers, and taxonomic profiles. Once the DNA is sequenced, researchers of the consortium will employ a range of computational tools to characterize and visualize the data to quickly map the detected species into functional taxonomic groups, assess AMR genes and markers, and link them to their mutated or altered states (called epigenetic changes). Our preliminary data thus far suggests that different cities have distinct AMR profiles,
Future Directions Investigating the prevalence and distribution of AMR determinants will aid our understanding of the emergence and incidence of AMR. We intend to utilize the Global Priority Pathogens List (PPI) of AMR bacteria, developed by the World Health Organization (WHO), to inform our work. Moreover, we recognize the importance of routine longitudinal surveillance to monitor pathogen emergence, evolution, and AMR susceptibility and will likely analyze these data in the context of population density, proximity to healthcare centers, and to presence of plasmids. Finally, MetaSUB is collaborating with government organizations, NGOs, and industry stakeholders in the development of new NGS technologies and visualization tools that will allow for “real-time” AMR surveillance. ■ 111
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Prime Minister JUSTIN TRUDEAU
Prime Minister THERESA MAY
President DONALD TRUMP
President EMMANUEL MACRON
President ENRIQUE PEÃ&#x2018;A NIETO
President MICHEL TEMER ARGENTINA
President MAURICIO MACRI
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President JEAN-CLAUDE JUNCKER
President DONALD TUSK
GERMANY President VLADIMIR PUTIN
Chancellor ANGELA MERKEL ITALY
President XI JINPING
Prime Minister PAOLO GENTILONI
President MOON JAE-IN
Prime Minister SHINZŌ ABE
President RECEP TAYYIP ERDOĞAN
Prime Minister NARENDRA MODI
President JOKO WIDODO
President JACOB ZUMA
Prime Minister MALCOLM TURNBULL
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African Climate Policy Centre (ClimDev-Africa)
European Investment Bank
Grupo Energía de Bogotá
Instituto Tecnológico Buenos Aires
Johnson & Johnson
Prince Sultan Institute for Environmental, Water & Desert Research
Uniting to Combat Neglected Tropical Diseases
Universidad Nacional de Colombia
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