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Global Warming and the Danger to Coastal Communities

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Global Warming and the Danger to Coastal Communities
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“Go and explain to developing countries why they should continue living in poverty and not be like Sweden”, “No one has explained Greta that the modern world is complex and different and… people in Africa or in many Asian countries want to live at the same wealth level as in Sweden”. These are two of the several statements Russian president Vladimir Putin made in criticism of Greta Thunberg’s UN speech while he spoke during an energy conference last year. But why is the situation that the Russian president is referring to, so complex? And why is that the world leaders who are failing to tackle climate change are now trying to tell the world that it is not just about climate but also geopolitics? This piece tries to delve into the inevitable dilemma that is emerging in the sphere of climate change mitigation and the geopolitics that has always been the one of the topmost priorities for the nations around the globe.

The Present State

Historically, the industries and the global economy has been reliant on fossil fuels, resulting in the anthropogenic climate changes that we are witnessing today. At present, geopolitics is at the center of the struggle for mitigation of the climate change phenomenon. This has led to a variety of responses from different nations. Some are trying to postpone the responsibility, some are trying to deny, and some are trying to spearhead the fight against the problem. However, the issue of climate change is not one that can be solved by one or a subset of nations working in isolation. It remains to be seen how the results of climate change as well as the struggle for mitigation will impact the ground reality for the populations, as it is widely expected that the effects on different nations will be to different extents. Some are set to be hit harder than others, and some are going to be hit even if they have not done anything to contribute to the problem. In this background, many of the concerns about the technological manipulation of nature, environmental destruction, North-South relations, sustainable development, conflict and resource wars have returned to prominence in recent years in the increasingly intense debate about climate change. In this piece we a look at some of the major themes in the geopolitical landscape today related to climate change and climate change mitigation activities.

Russia and Saudi Arabia are two of the several examples of nations which depend on energy commodities export for most part of their revenue. They are also the best examples of nations with vastly established fossil fuel production and processing infrastructure. Accordingly, they face different geopolitical challenges than others in terms of their climate mitigation policy adoptions. Nations like Russia and Saudi Arabia, as well as Qatar, Iran, Venezuela, and UAE depend on exports of oil and gas to developing and emerging economies like China and India. However, an increasing emphasis in these developing economies for a transition towards renewable energy sources has been creating unrest in the oil, gas as well as coal export dependent nations. In case of Russia, another issue, in form of permafrost thawing has been emerging since the last few years as a big worry threatening its infrastructural facilities in Far East region as well as the Siberian region. Last year Russia witnessed several oil spills due to weakening infrastructure in its facilities. However, this issue is dwarfed due to the fact that infrastructure can be upgraded, but if the demand for oil and gas reduces in the global markets due to a renewable energy transition, then the vast infrastructures will become loss generating assets.

                In Gulf countries, the narratives of collapse and chaos in a post-oil world has taken over most policy makers’ imagination. According to some predictions, over the next 50 years, these countries could be facing a twin issue of increasing strain on societies and economies due to climate change on one hand and increasing shortage of funds on the other, either due to the decreasing exports and demand, or due to simply less production due to waning stores of energy. Moreover, emergence on alternative sources like shale oil in US and oil and gas in Central Asian region can also lead to increased strain in these countries. This has led to new geopolitical conditions becoming possible for the Gulf region which has for long been dependent on a US hegemony in the region for overall security framework. A receding US interest can witness an increasing interest of other powers like China and Russia.  

Moving to the developing world, economies like India, Brazil and even China have at various times expressed an unwillingness to concede mitigation of emissions of greenhouse gases and pointed towards their right to economic and industrial development, world equity and issues. This stance has attracted criticism from the developed world who see this struggle against climate change as a journey in which every nation needs to stand in unity. However, on one hand where concepts like ‘Common but Differentiated Responsibilities’ has emerged in climate action frameworks, countries like India have showed that they are ready to lead in the action for climate change mitigation by implementing policies to work towards a transition to renewable energy. This stance although is also influenced by the fact that India is forced to import most of its fossil fuel needs from other countries which exists as a big burden to its economy. By decreasing its reliance on energy imports, India can look towards following a more independent course in the geopolitical order. As seen in the collapse of Iran-US relations which led to India being forced to abandon its oil imports from Iran, a situation where India is not dependent on oil itself, stands to be a big win. Further, initiatives like the International Solar Alliance have helped India to cultivate India’s image as a responsible global actor, at par with other like the European Union who has been using climate change activism as an element of its foreign policy to retain command over the global climate change policy agenda and thus assert not only regional, but global influence.

               Talking about the global powers, US and China are undoubtedly the two biggest players in the world today when it comes to geopolitics, as well as emissions. In US, about half of electricity is generated through coal power plants as the nation has abundant coal deposits. The last four years under President Trump witnessed US detaching itself from major climate change action frameworks like the Paris Agreement based on the reasoning that any policies which have a chance to curb economy growth will have a disastrous effect on the lives of American citizens as well as national security. On the other hand, China, which has for some time now been the biggest greenhouse gas emitter, has now been working towards becoming the leader in sphere of sustainable energy. Chinese president Xi Jinping at the last year’s United Nations General Assembly made the promise that China will become carbon neutral by 2060. According to scholars of the field, through this stance, China not only wants to enhance its geopolitical position as a main partner to EU for future, but also wants to take away attention from its human rights abuses, and aggressive behavior. This phenomenon needs to be understood in the light of the fact that today almost all mining, production and processing of rare earth elements, which are essential for the production of renewable energy infrastructure like solar panels, takes place in China. Thus, providing not only an upper hand to China as an economic power but also as a great geopolitical power in sustainable energy.

               Not all countries however face the dilemma of effects of slowing economy in case they go for transition to renewable energy or adopt policies that mitigate emissions. The poorest of the countries stand to go bankrupt and loose relevance due to geopolitics of climate action in case the world decides to transition fast to renewable energy. These are the poor countries of Africa which have recently started establishing their oil production and now almost completely depend on it. As mentioned by Russian president Putin, these are the economies which look towards economic development based on their energy stores. They however have massive potential for renewable energy extraction too. But this potential need massive amounts of investment in infrastructure to realize, an element that these economies do not possess. Further, as the oil produced by these satisfy the needs of the developing and emerging economies, most of their buyer nations will see no benefit in trying to aid the African economies to substantially create their supplier’s renewable energy sector.

               Similar is the case of the Central Asia region where the nations depend on extractive industries of oil, coal, and gas. Both climate impact as well as climate change mitigation and adaptation in this region is projected to heighten geopolitical tension.  Not only are the foreign direct investments in the region low at present, but the existing investments do also not prioritize resilient and sustainable development and is related mostly in sector of non-renewable energy resource extraction. The geopolitics of this region is connected in more than one way with the issue of climate change. The region is prone to water and energy shortages. Whereas carbon rich Kazakhstan, Turkmenistan and Uzbekistan extract and use oil, gas and coal for their energy production, other nations in the region- Tajikistan and Kyrgyzstan, which have lower GDP per capita uses clean hydro energy. Thus an inequality exist as the downstream nations are those which are more reliant on fossil fuels and the upstream nations, although not energy rich, possess ample hydroelectric potential. This inequality is estimated by the scholars to create strains in the region which can spill over in the rest of Asia.

The Dilemma

               It might seem like the fossil-fuels based energy export reliant nations are set to lose the most in the coming future as the world starts looking for ways to transition towards clean fuel and energy in the coming years. However, the oil and gas industry might not be ending anytime soon.

               For instance, Nord Stream 2, a planned pipeline through the Baltic Sea, which is expected to transport natural gas over from Siberia to consumers in Europe is being looked upon as a secure and reliable as well as cleaner source of energy for the coming decades. It indeed will replace the coal powered sectors in Europe and help reducing carbon emissions, however, this is also expected to provide Russia a sort of geopolitical push that it has not witnessed in many years now in terms of its relations with Europe, especially since the conflict with Ukraine in 2014. Although, this has changed in recent times as tensions arose with Georgia and the political chaos around Alexei Navalny’s poisoning, who was being seen as a political competitor to President Putin by some in Russia.  However, this is not to say that Russia has not been working towards climate change mitigation agenda. In November last year, Russian President Putin signed a decree ordering the Russian government to work towards meeting the 2015 Paris agreement to fight climate change, but stressed that any action must be balanced with the need to ensure strong economic development.   This in geopolitical terms can be seen as an attempt to align Russia with the change in presidency in US, where the new president  Joe Biden is supposed to be an avid supporter for climate activism and is expected to work towards making US carbon neutral with a long-term plan, in stark contrast to the previous president Donald Trump.

               Another geopolitical battle is emerging in the Arctic, where several nations like the US, China and Russia are no vying for dominance. In Arctic, with melting snow, shipping is all set to witness an increase. According to some estimates, if shipping along the Arctic becomes fully accessible, Bering Sea can become an area of contention for US and Russia, as well as China, thus reducing the importance of other choke points and the nations controlling them, like Egypt and Southeast Asia. This phenomenon also exists in line with the argument that if oil ceases to be a central driver of the global economy, many regions like Gulf are set to see their long-standing relations with the western nations like US change.

               Climate change related migration, which can result out of several reasons like submergence of islands, droughts due to varying rainfall patterns, stronger hurricanes or storms, or massive flooding of rivers due to higher rate of melting of glaciers that feed them with water, is also becoming a geopolitical contention that the nations are staring at today. The world has witnessed in 2015 refugee crisis in Europe, the extent of chaos, heightened populism, and nationalism, as well as lack of trust in multilateralism and established institutions that can be caused. Even though in this case, the result was not due to underlying climate change related challenges directly, similar effects due to influx of refugees and similar migration patterns can be expected from the regions of changing patterns of rainfall. This leads us to think where the current situation leaves us today for the future.   

What does the Future Hold?

               For many economies, initial investment cost for renewable energy systems is usually high, resulting unaffordability for many, especially in developing countries. Some others on the other hand, like Malaysia, with some of the highest level of subsidies on fossil fuels result in renewable energy market to remain economically weak and uncompetitive. Similarly, for Australia’s economy, which has for long been reliant on  fossil fuel industries to ensure the economic prosperity across the country, it is now becoming an issue of contention which it will need to resolve in order to ensure not its own, but also its neighborhood’s sustainability lying in the Indo-Pacific region as low lying islands which are at the risk of submergence due to climate change related effects.  

               In today’s world, not only can conflicts related to renewable energy infrastructure lead to stress as seen in case of Central Asian region, but also strain over issues like transfer of technology between developed and developing countries can turn into bigger forms of geopolitical conflicts. It also remains to be seen if the resources like rare-earth metals, which are needed for expansion of cleaner energy platforms will be available according to need of a nation or be made available to the highest buyer and turned into a business. The global order as it stands today between the oil producers and the oil consumers is also set to change as the climate change mitigation policies are adopted resulting from increasingly severe negative effects emerging from the anthropogenic climate change.           

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Lifting the Bottom Billion: Will It Work This Time?

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Imagine being part of a billion people stuck in a cycle of extreme poverty—unable to break free due to war, corruption, lack of education, and isolation from global markets. These individuals make up what economist Paul Collier famously termed the “Bottom Billion.” Despite countless international efforts to address their struggles, many remain trapped in some of the most challenging conditions on earth, particularly in sub-Saharan Africa. With new strategies and technologies emerging, the big question is: Will it work this time? In this article, we’ll dive into the latest global initiatives and the hurdles still standing in the way of lifting the Bottom Billion out of poverty once and for all.

Understanding the Bottom Billion Crisis

For decades, poverty reduction efforts have centered on providing aid, improving infrastructure, and addressing public health issues. However, the situation for the Bottom Billion is complex and often resistant to traditional development strategies. According to Collier, these individuals are caught in one or more of four traps: conflict, natural resource dependence, landlocked countries with bad neighbors, and poor governance. These traps create cyclical poverty that is difficult to escape.

Recent data shows that while global poverty rates have decreased—thanks to economic growth in places like China and India—the situation for the Bottom Billion remains unchanged in many regions. Sub-Saharan Africa, for instance, continues to struggle with high poverty rates, despite decades of international aid. The challenge is not just about money; it’s about addressing the root causes that keep these populations poor.

Current Global Efforts: What’s Being Done?

Several initiatives have been put in place to address the unique challenges faced by the Bottom Billion. These include:

1. Sustainable Development Goals (SDGs)

The United Nations’ Sustainable Development Goals (SDGs) aim to end poverty in all its forms by 2030. Goal 1 specifically targets the eradication of extreme poverty, focusing on providing social safety nets, access to basic services, and job creation. While the SDGs offer a comprehensive approach, progress has been uneven, particularly in conflict-affected regions where governance and infrastructure are weak.

2. International Aid and Debt Relief

Foreign aid and debt relief programs have been crucial in offering immediate assistance to impoverished nations. In 2020, the International Monetary Fund (IMF) and World Bank launched initiatives to alleviate debt for the world’s poorest countries, especially in the wake of the COVID-19 pandemic. The IMF’s Debt Service Suspension Initiative (DSSI) has temporarily freed up resources that these countries can use for critical healthcare and social services. But critics argue that aid, while necessary, often doesn’t address the systemic issues—like governance and corruption—that perpetuate poverty.

3. Microfinance and Social Entrepreneurship

Microfinance has been a popular tool for lifting people out of poverty. By providing small loans to individuals, particularly women, microfinance initiatives aim to stimulate local businesses and empower communities. Organizations like Grameen Bank and Kiva have made significant strides, but scaling these efforts to reach the Bottom Billion remains a challenge. Social entrepreneurship—businesses that focus on generating social impact rather than profit—has also emerged as a promising solution, but its effectiveness is still debated.

The Role of Technology in Poverty Alleviation

One of the most promising developments in the fight against poverty is the role of technology. In recent years, digital tools have shown the potential to bridge gaps in education, healthcare, and financial services.

1. Mobile Banking and Digital Inclusion

Mobile banking, particularly in countries like Kenya with platforms like M-Pesa, has revolutionized financial access for the poor. These platforms allow users to transfer money, save, and even access loans without needing a traditional bank account. For the Bottom Billion, many of whom live in rural or underserved areas, mobile banking provides a lifeline for economic participation. However, challenges around digital literacy and infrastructure still need to be addressed.

2. Online Education and E-Learning Platforms

Education is another area where technology can make a transformative impact. The rise of e-learning platforms offers the opportunity to bring quality education to even the most remote regions. Projects like Khan Academy and Coursera have made strides in offering free educational content to people worldwide, but scaling this in regions where internet access is scarce or expensive remains a hurdle.

3. Telemedicine and Healthcare Access

Telemedicine has the potential to bridge gaps in healthcare, particularly in areas where access to hospitals or doctors is limited. With the help of mobile technology, remote consultations and diagnostics are becoming more common in developing countries. In the context of the COVID-19 pandemic, telemedicine has become a critical tool, allowing healthcare workers to reach vulnerable populations. However, expanding this service to the Bottom Billion will require investment in both digital infrastructure and healthcare systems.

One of the biggest barriers to lifting the Bottom Billion out of poverty is poor governance. Corruption, weak institutions, and lack of transparency make it difficult for aid and development programs to reach those who need them most. Transparency International’s Corruption Perceptions Index consistently shows that the most impoverished countries are also among the most corrupt.

In countries with poor governance, even well-meaning efforts can fail. Aid money often doesn’t reach its intended recipients, infrastructure projects stall, and political instability exacerbates existing problems. Addressing governance issues is critical to making any poverty alleviation program successful.

So, will it work this time? The answer lies in a multifaceted approach that goes beyond just financial aid. Here are a few key elements that must be addressed for any hope of success:

  1. Improving Governance: Without addressing corruption and weak institutions, any efforts will be undermined. Initiatives that promote transparency, accountability, and democratic governance will be crucial.
  2. Inclusive Economic Growth: Economic development must reach the most marginalized groups, particularly women, rural communities, and those living in conflict zones. Programs that focus on building local economies and creating jobs will be vital.
  3. Leveraging Technology: Digital tools offer immense potential, but they must be accessible to all. Expanding internet access and digital literacy will be key in enabling the Bottom Billion to participate in the global economy.
  4. Local Solutions for Local Problems: Global strategies must be adapted to local contexts. What works in Southeast Asia may not work in sub-Saharan Africa. Engaging local communities in the decision-making process is essential for sustainable progress.

Lifting the Bottom Billion is one of the most daunting challenges of our time. While the task is immense, it is not impossible. By focusing on good governance, inclusive growth, and technological innovation, the global community has a chance to make meaningful progress in reducing extreme poverty. Will it work this time? Only if we approach the problem with a comprehensive, targeted, and sustainable strategy. The stakes are high, but the rewards—improving the lives of a billion people—are worth every effort.


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Easing Africa’s Debt Burdens: a Fresh Approach, Based on an Old Idea

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In his address to the 79th session of the UN general assembly this week, South African president Cyril Ramaphosa described debt as “a millstone around the neck of developing countries”. Three legal and economic scholars set out the African debt problem and what must happen if African countries are to get out of what Ramaphosa described as “a quicksand of debt”.

The statistics are stark: 54 governments, of which 25 are African, are spending at least 10% of their revenues on servicing their debts; 48 countries, home to 3.3 billion people, are spending more on debt service than on health or education. Among them, 23 African countries are spending more on debt service than on health or education. While the international community stands by, these countries are servicing their debts and defaulting on their development goals. The Group of 20’s current approach for dealing with the debts of low income countries is the Common Framework.

It requires the debtor to first discuss its problems with the International Monetary Fund (IMF) and obtain its assessment of how much debt relief it needs. Then it must negotiate with its official creditors – international organisations, governments and government agencies – over how much debt relief they will provide. Only then can the debtor reach an agreement – on comparable terms to the official creditors – with its commercial creditors. Unfortunately, this process has been sub-optimal.

One reason is that it works too slowly to meet the urgent needs of distressed borrowers. As a result, it condemns debtor countries to financial limbo. The resulting uncertainty is not in anyone’s interest. For example, Zambia has been working through the G20’s cumbersome process for more than three and a half years and has not yet finalised agreements with all its creditors.  The need for a new approach is overwhelmingly evident. Although the current crisis has not yet become the “systemic” threat it was in the 1980s when multiple countries defaulted on their debt, it is a “silent” sovereign debt crisis.

We propose a two-part approach that would improve the situation of sovereign debtors and their creditors. This proposal is based on the lessons we have learned from our work on the legal and economic aspects of developing country debt, particularly African debt.

First, we suggest that official creditors and the IMF create a strategic buyer of “last resort” that can purchase the bonds of debt distressed countries and refinance them on better terms.

Second, we recommend that all parties involved in sovereign debt restructurings adopt a set of principles that they can use to guide the debtor and its creditors in reaching an optimal agreement and monitoring its implementation.

The current approach fails to deal effectively and fairly with both the concerns of the creditors and all the debtor’s legal obligations and responsibilities. Our proposed solution would offer debtors debt relief that does not undermine their ability to meet their other legal obligations and responsibilities, while also accommodating private creditors’ preference for cash payments.

Our proposal is not risk-free. And buybacks are not appropriate for all debtors. Nevertheless it offers a principled and feasible approach to dealing with a silent debt crisis that threatens to undermine international efforts to address global challenges such as climate, poverty and inequality.

It uses the IMF’s existing resources to meet both the bondholders’ preferences for immediate cash and the developing countries’ need to reduce their debt burdens in a transparent and principled way. It also helps the international community avoid a widespread default on debt and development.

Bondholders are a major problem

Foreign bondholders, who are the major creditors of many developing countries, have proven to be particularly challenging in providing substantive debt relief in a timely manner. In theory, they should be more flexible than official creditors.

Developing countries have been paying bondholders a premium to compensate them for providing financing to borrowers that are perceived to be risky. As a result, bondholders have already received larger payouts than official creditors. Therefore, they should be better placed than official creditors to assist the debtor in the restructuring processes. However, despite having received  large returns from defaulted bonds, bondholders have remained obstinate in debt restructurings. Our proposal seeks to overcome this hurdle in a way that is fair to debtors, creditors and their respective stakeholders.

How it would work

First, the official creditors and the IMF should create and fund a strategic buyer “of last resort” who can purchase distressed (and expensive) debt at a discount from bondholders. The buyer, now the creditor of the country in distress, can repackage the debt and sell it to the debtor country on more manageable terms. The net result is that the bondholders receive cash for their bonds, while the debtor country benefits from substantial debt relief. In addition, the debtor and its remaining official creditors benefit from a simplified debt restructuring process.

This concept has precedent. In 1989, as part of the Highly Indebted Poor Countries Initiative, the international community’s effort to deal with the then existing debt burdens of poor countries, the World Bank Group established the Debt Reduction Facility, which helped eligible governments repurchase their external commercial debts at deep discounts. It completed 25 transactions which helped erase approximately US$10.3 billion in debt principal and over US$3.5 billion in interest arrears.

Some individual countries have also bought back their own debt. In 2009, Ecuador repurchased 93% of its defaulted debt at a deep discount. This enabled the government to reduce its debt stock by 27% and promote economic growth in subsequent years. Unfortunately, the countries currently in debt distress lack sufficient foreign reserves to pursue such a strategy. Hence, they need to find a “friendly” buyer of last resort.

The IMF is well positioned to play this role. It has the mandate to support countries during financial crises. It also has the resources to fund such a facility. It can use a mix of its own resources, including its gold reserves, and donor funding, such as a portion of the US$100 billion in Special Drawing Rights (SDR), the IMF’s own reserve currency, which rich economies committed to reallocate for development purposes. Such a facility, for example, would have enabled Kenya to refinance its debts at the SDR interest rate, currently at 3.75% per year, rather than at the 10.375% rate it paid in the financial markets.

It is noteworthy that the 47 low-income countries identified as in need of debt relief have just US$60 billion in outstanding debts owed to bondholders. Our proposed buyer of last resort would help reduce the burden of these countries to manageable levels. Second, we propose that both debtors and creditors should commit to the following set of shared principles, based on internationally accepted norms and standards for debt restructurings.

Guiding principles

1. Guiding norms: Sovereign debt restructurings should be guided by six norms: credibility, responsibility, good faith, optimality, inclusiveness and effectiveness.

Optimality means that the negotiating parties should aim to achieve an outcome that, considering the circumstances in which the parties are negotiating and their respective rights, obligations and responsibilities, offers each of them the best possible mix of economic, financial, environmental, social, human rights and governance benefits.

2. Transparency: All parties should have access to the information that they need to make informed decisions.

3. Due diligence: The sovereign debtor and its creditors should each undertake appropriate due diligence before concluding a sovereign debt restructuring process.

4. Optimal outcome assessment: The parties should publicly disclose why they expect their restructuring agreement to result in an optimal outcome.

5. Monitoring: There should be credible mechanisms for monitoring the implementation of the restructuring agreement.

6. Inter-creditor comparability: All creditors should make a comparable contribution to the restructuring of debt.

7. Fair burden sharing: The burden of the restructuring should be fairly allocated between the negotiating parties.

8. Maintaining market access: The process should be designed to facilitate future market access for the borrower at affordable rates.

The G20’s current efforts to address the silent debt crisis are failing. They are contributing to the likely failure of low income countries in Africa and the rest of the global south to offer all their residents the possibility of leading lives of dignity and opportunity.

Danny Bradlow is Professor/Senior Research Fellow, Centre for Advancement of Scholarship, University of Pretoria

Kevin P. Gallagher is Professor of Global Development Policy and Director, Global Development Policy Center, Boston University

Marina Zucker-Marques is a Senior Academic Researcher, Boston University Global Development Policy Center, Boston University

Courtesy: The Conversation


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South African Agriculture Needs to Crack the Chinese Market. How to Boost Exports

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China, the world’s second largest nation by economy and population, is a big buyer of food from the rest of the world. This makes it a potential market for countries that are agricultural producers, like South Africa. But as agricultural economist Wandile Sihlobo says, South Africa has lagged behind its competitors in the Chinese market. To increase its share, the country’s policymakers must up their game

South Africa’s agricultural sector has more than doubled in value and volume terms since 1994. This success has been linked to international trade. Exports now account for roughly half (in value terms) of the annual agricultural production. Other drivers have been improvements in productivity through crop and animal genetics.

Exports are largely to the rest of the African continent. In 2023 these accounted for 38% of South Africa’s agricultural exports. The EU is another important market for South Africa’s agricultural sector, accounting for a 19% share in 2023. In recent years, Asia and the Far East, in particular China, have been identified by the agriculture sector and policymakers as the key growth frontiers.

Asia and the Middle East accounted for a quarter of South Africa’s agricultural exports in 2023. But huge pockets of opportunity remain, in terms of products and countries. China is the biggest opportunity, largely because of its population and economic size. China, the world’s second largest economy after the US, must feed 1.4 billion people. To do this, China is a huge importer, resulting in an agricultural trade deficit with the rest of the world of about US$117 billion. This suggests there’s a gap for countries with good agricultural offerings.

South Africa has lagged behind its competitors in gaining from this growth in Chinese imports. It stands at number 32 in the list of countries that supply China with food. South Africa’s agricultural exports to China accounted for a mere 0.4% of Chinese imports in 2023.

China’s size warrants more attention than it typically receives from South African policymakers. The South African agricultural sector – I am the chief economist of the Agricultural Business Chamber of South Africa – has been calling for greater effort on increasing South African exports to China.

Exhibit 1: China’s agricultural trade

Source: Trade Map and Agbiz Research

China’s top agricultural imports include oilseeds, meat, grains, fruits and nuts, cotton, beverages and spirits, sugar, wool, and vegetables. South Africa is already an exporter to various countries in the world of these products and is producing surpluses for some. This means there is room to expand to China, especially as South Africa’s agricultural production continues to increase and with more volume expected in the coming years.

It therefore makes sense for South Africa to focus more on widening export markets to China. This means arguing for a broad reduction in import tariffs that China currently levies on some of the agricultural products from South Africa. Removing phytosanitary constraints in various products is also key.

There is room for more ambitious export efforts. Three government departments must lead the conversation – Trade, Industry and Competition; Agriculture; and International Relations and Cooperation.

What’s holding South Africa back

South Africa has strong political ties with China, bilaterally and through the umbrella group known as Brics and the Forum for China-Africa Cooperation. But these forums are primarily political, not trade blocs.

What South Africa doesn’t have is preferential market access to China’s food markets. This hobbles South African farmers who compete for the Chinese market with Australian and Chilean producers. Australia and Chile have secured trade agreements that give them competitive advantage.

The lack of an agreement that secures better access for South African producers means that they face substantial trade barriers. The main ones are:

What China buys

China’s key agricultural imports include soybeans, cotton, malt, beef, palm oil, wool, wine, fruits, nuts, pork and barley. South Africa is among the top ten global agricultural exporters in most fruits, and a significant producer of wine.

South Africa’s current major exports to China are wool, citrus, nuts, sugar, wine, maize, soybeans, beef and grapes. With the exception of wool, South Africa’s market share of these products remains negligible. South Africa expects an increase in various fruits and nuts production in the coming years from trees that have already been planted.

The wine industry also continues to see decent volumes of production. The same is true for the red meat industry, which is on a path to grow and to expand its export markets. The producers of all these products could benefit from wider access to China.

What’s to be done

South Africa stands as an anomaly among the top global agricultural exporters with limited market access to China for various products. If China is to be an area of focus for export-led growth in agriculture, a new way of engaging will be essential to soften the current trade barriers.

Firstly, a strategic approach to the Chinese agricultural markets needs to be adopted. This would entail dedicated teams from both South African and Chinese departments of agriculture that would deal with details of trade barriers.

Secondly, South Africa should use the Brics platform – of which China is also a member – to call for deepening of agricultural trade among the Brics members. This would help add momentum to the bilateral engagements of South Africa and China.

Thirdly, South Africa should encourage foreign direct investment – in particular Chinese investors – in agriculture for new production in areas which have large tracts of underutilised land. These include the Eastern Cape, KwaZulu-Natal and Limpopo provinces.

Having Chinese nationals as partners in agricultural development could help boost trade and business ties between the two countries.

Lastly, China provides a good base for the demand for higher-value agricultural products, which South Africa intends to focus on in its development agenda.

Wandile Sihlobo is a Senior Fellow, Department of Agricultural Economics, Stellenbosch University


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