World Bank says re­mit­tances by Africans cit­i­zens from Europe and N Amer­ica reached $40bn

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African coun­tries ought to re­ject the Eco­nomic Part­ner­ship Agree­ments that the Euro­pean Union is cur­rently try­ing to force on them and in­stead get it to sign mi­gra­tion agree­ments that have the ef­fect of ben­e­fit­ing both par­ties equally, Shan­tayanan De­vara­jan, the World Bank’s Chief Econ­o­mist for Africa, told the African Eco­nomic Con­fer­ence in Ki­gali, Rwanda, on Novem­ber 1.

“When a low-skilled African moves to Europe, their pro­duc­tiv­ity, their earn­ings, quin­tu­ple. The other fact is while Africa’s young pop­u­la­tion is grow­ing, Europe’s is shrink­ing. This seems like a no-brainer,” De­vara­jan told a ple­nary ses­sion dis­cussing youth em­ploy­ment for in­clu­sive growth.

The World Bank es­ti­mates re­mit­tances by Africans cit­i­zens liv­ing mostly in Europe and North Amer­ica to have reached $40 bil­lion in 2010. “But the true size is be­lieved to be far larger,” ac­cord­ing to a World Bank study on re­mit­tance mar­kets in Africa.

Re­mit­tances, the study adds, “are as­so­ci­ated with re­duc­tion in poverty, im­proved ed­u­ca­tion and health out­comes, and in­creased avail­abil­ity of funds for small busi­ness in­vest­ments. Re­mit­tances rep­re­sent a pos­i­tive and rel­a­tively non­con­tro­ver­sial out­come of mi­gra­tion.”

Ac­cord­ing to De­vara­jan, “You can quin­tu­ple the pro­duc­tiv­ity of lowskilled Africans and have them do the jobs Euro­peans need be­cause there aren’t that many young peo­ple to do it in Europe. It is a win-win [sit­u­a­tion]. So let’s get the Euro­pean Union, in­stead of sign­ing EPAs, to sign mi­gra­tion agree­ments to bring lowskilled Africans to Europe to do the jobs that need do­ing.”

The EU has pre­sented EPAs as re­place­ments for pre­vi­ous non-re­cip­ro­cal agree­ments such as the Lomé Con­ven­tions and the Cotonou Agree­ment, which ex­pired in 2007. How­ever EPAs have come un­der fire for be­ing un­fair to African economies, with crit­ics ar­gu­ing that EPAs will only suc­ceed in ex­ac­er­bat­ing the bulging youth un­em­ploy­ment that African coun­tries have yet to de­vise ef­fec­tive strate­gies to deal with.

“Africa must pay at­ten­tion to these eco­nomic part­ner­ship agree­ments that the EU is forc­ing on Africa be­cause that is an­other ma­jor job killer,” Prof. Chuk­wuma Charles Soludo, the Chair­man of the African Her­itage Foun­da­tion, warned par­tic­i­pants.

“Europe says that pol­icy is not good for the poorer Euro­pean coun­tries and that’s why they are not be­ing sub­jected to the same poli­cies, but Africa has to sign on them. We are wor­ry­ing about rain that beat us yes­ter­day, but look an­other one is loom­ing,” he added.

Ac­cord­ing to Prof. Soludo, what’s more wor­ry­ing about EPAs is they don’t have any sig­nif­i­cant net­ben­e­fit to Africa.

“Al­ready 33 out of the 47 coun­tries are LDCs [least de­vel­oped coun­tries] and there­fore qual­ify to ex­port ‘ev­ery­thing but arms’ to the EU with 100 per cent duty-free and quota-free. So, what is the ad­di­tional ben­e­fit to these coun­tries?” Prof. Soludo wrote in an anal­y­sis of EPAs he pub­lished ear­lier this year.

“For the re­main­ing 14 non-LDC coun­tries, it is cu­ri­ous why the EU can­not ac­cede to the re­quest by the African Union to treat Africa as the world’s ar­che­typ­i­cal LDC re­gion and grant the same EBA to all of the coun­tries.

“Or, al­ter­na­tively, there are sev­eral pro­pos­als about bench­mark­ing and se­quenc­ing the con­di­tion­al­i­ties/lib­er­al­iza­tion to syn­chro­nize with eco­nomic ad­vance­ment of these re­main­ing 14 coun­tries. So far, these pro­pos­als have not been ac­cepted by the Euro­pean Com­mis­sion even for dis­cus­sion,” he adds fur­ther in his anal­y­sis.

How­ever, clos­ing the door on EPAs is only part of what Africa will need to do to find jobs for its young peo­ple, whom the African De­vel­op­ment Bank’s 2012 African Eco­nomic Out­look es­ti­mates will be a bil­lion strong in the labour mar­ket by 2040.

African coun­tries will have to, ac­cord­ing to Soludo, “de­sign na­tional job strate­gies and plans where most of the pub­lic pol­icy is ac­tu­ally de­signed to fo­cus on the job-cre­at­ing ca­pac­ity of each pol­icy be it pub­lic pro­cure­ment, be it in the area of a spe­cial type of tar­geted in­dus­trial pol­icy ac­tions.”

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