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42. Germany and the UK: Perspectives for Deepening the Bilateral Dialogue on Development Policy
- Author:
- Niels Keijzer and Ina Friesen
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- German Institute of Development and Sustainability (IDOS)
- Abstract:
- Germany and the United Kingdom of Great Britain and Northern Ireland (UK) are the second- and fourth-largest providers of official development assistance (ODA) worldwide and are key actors in driving international policy discussions on global development in the Organisation for Economic Co-operation and Development (OECD), the G7, the G20 and other key groupings and platforms. The development policies of both countries witnessed important convergence and detailed cooperation during the first decade of this millennium – a period when Western countries understood development cooperation as a source of considerable soft power, which was demonstrated in rising budgets and like-minded policy directions. The austerity policies that followed the global economic and financial crisis, and the UK’s decision to leave the European Union (EU) in 2016, have challenged the bilateral relationship in the development policy area between Germany and the UK. The UK’s departure from the EU has reduced the number of joint interactions and corresponding opportunities for identifying cooperation initiatives. Halfway through the period envisaged for the completion of the 2030 Agenda, both countries are adjusting their development policies, seeking to determine their future European roles and global development ambitions, but they remain key partners in global development. Both the UK and Germany have recently revised or are in the process of preparing development policy strategies as part of their integrated foreign policies – a reflection process which in recent months has been challenged to adjust to the implications of the war in Ukraine. The case remains strong for regular exchanges and cooperation on development policy between both countries, including by intensifying dialogues and resuming formal secondments between the FCDO and the German Federal Ministry for Economic Cooperation and Development (BMZ). Two areas in particular offer good prospects. First of all, the UK and Germany should closely work together to deliver on the current G7 Presidency agenda – including the key focus on infrastructure investment, as initiated during last year’s UK Presidency. Other key opportunities for cooperation include gender and climate action, as well as the provision of global public goods. Secondly, Germany and the UK should seek to engage in and harness the role of the OECD as a provider of key standards for international development policy and as an important forum for peer learning. As key providers of global development finance, the legitimacy of its reporting system is essential to both countries’ influence and contribution to global development.
- Topic:
- Development, Bilateral Relations, European Union, Development Assistance, and Dialogue
- Political Geography:
- United Kingdom, Europe, and Germany
43. Is Foreign Direct Investment Losing Clout in Development?
- Author:
- Axel Berger and Alexandros Ragoussis
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- German Institute of Development and Sustainability (IDOS)
- Abstract:
- Over the last decade, only a single projection of foreign direct investment (FDI) flows by the United Nations influential “World Investment Report” has proposed a negative outlook in the medium term. Based partly on surveys of business executives, these forecasts reflect ex¬pecta¬tions of investment growth which, however, have repeated¬ly failed to materialise. In fact, FDI flows to develop¬ing countries have remained stagnant over the past decade. Such wishful thinking is nurtured by a long series of positive narratives and facts about foreign investment. FDI has been one of the pillars of international development efforts for over 70 years. Its promise has not been limited to critical finance, but extends to longer term competitiveness through access to better technology, managerial know-how and, above all, prosperity through more and better paid jobs in the formal sector. From the old prescriptions of the so-called Washington Consensus to the hopeful Addis Ababa Action Agenda, the dominant development narrative has therefore favoured a rather indiscriminate pursuit of investment volume. This brief calls for rethinking of narratives and policies that help to improve the impact of FDI, based on secular trends that challenge our expectations. Four such trends stand out: First, while other sources of finance for development have grown considerably over the last decades, foreign invest¬ment has not followed the trend. Second, the kind of investment that is associated with stronger gains and longer term commitment in host economies – greenfield FDI – has also been in consistent decline as a share of total invest¬ment, while mergers and acquisitions and project finance have gained in importance. Third, the top 100 multinational enterprises (MNEs), accounting for nearly a quarter of global FDI stock, rely less on employment today than they used to in order to grow their foreign presence. Job creation, knowledge transfer and spillovers are therefore less likely to materialise through the presence of mega-firms and their corresponding investment at scale. Fourth, the growth of Chinese outward FDI within a strategic expan¬sionary political agenda stands to change rules and attitudes towards foreign investment moving forwards. We argue that, collectively, these trends invite a renewed conversation around the kind of foreign investment we want and expectations of this source of finance for develop¬ment. These facts obscure neither the broad benefits of FDI to developing countries, nor the value proposition of FDI attraction. Rather, they raise questions about expectations, priorities and the alignment of investment policy with the realities experienced across develop¬ing countries. To that end, we propose four priorities that stand to make a difference in the current context. We call for policy-makers to: 1) Place additional emphasis on retention of investment and linkages with the domestic economy. 2) Try new approaches for FDI attraction that focus on improving domestic investment facilitation frameworks. 3) Be selective as to investment sources and activities in order to mitigate political risks and align inward investment better with sustainable development. 4) Add evidence to improve our understanding of invest¬ment and inform decision-making. Overall, it is critical to engage in a serious multi-stakeholder conversation around expectations, actors and solutions that respond to the investment reality of today.
- Topic:
- Development, United Nations, Foreign Direct Investment, and Economy
- Political Geography:
- Global Focus
44. Europe’s Global Gateway: A New Geostrategic Framework for Development Policy?
- Author:
- Mark Furness and Niels Keijzer
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- German Institute of Development and Sustainability (IDOS)
- Abstract:
- The proposal by the European Union (EU) to build a “Global Gateway” to the world is potentially an important juncture in EU foreign relations. Since its official launch in December 2021, most attention has been put on the initiative’s geostrategic implications and whether the EU can compete with China. Less attention has been paid to the Global Gateway’s implications for EU development policy in terms of strategic objectives, decision-making, thematic focus and financing. Two aspects are important in this regard. The first is whether the Global Gateway is a serious proposal that can deliver on its headline promises to massively increase European infrastructure financing in developing countries, provide partners with an alternative economic and political model to that being offered by China, and make a meaningful contribution to their efforts to realise the 2030 Agenda. The EU’s announcement that the Global Gateway will generate up to EUR 300 billion in investment by 2027 grabbed headlines, many of them sceptical. There is, however, no reason to doubt that the initiative will be adequately financed. Although the planning for the EU’s international aid budget for 2021-2027 has mostly been completed, a significant proportion remains flexible and could be spent on Global Gateway projects. As for the EU’s implementing capacity, the Gateway’s financial toolbox draws on the EU’s recent experiences with the Juncker Investment Plan and the External Investment Plan, which have both been utilised by development banks and private investors. The second aspect is whether the Global Gateway heralds a change in the EU’s motivations, objectives and modalities for cooperation with developing countries and regions. On the surface, the Global Gateway does not seem to change much. There are many thematic overlaps with existing strategic frameworks for engaging with Africa and the EU’s Neighbourhood. There is even a sense that the Global Gateway turns back the clock to the days when the EU focussed aid spending on infrastructure and emphasised its “political neutrality”. The geopolitical context in which the EU finds itself is, however, being transformed by pandemic, wars and multipolarity. The impacts of epochal events such as the Covid-19 pandemic and Russia’s invasion of Ukraine are still playing out. The Global Gateway signals a major adjustment in the EU’s response to these transformations, particularly regarding its engagement with the “Global South”. This will create a new paradigm for EU development policy, defined by strategic interests. It is likely that the new geostrategic framework will weaken the EU’s commitment to, and observance of, core development policy principles, especially the focus on poverty, partner country ownership, open governance and the “do no harm” principle. The Global Gateway’s use of aid to catalyse commercial investment risks further instrumentalising EU development policy. Specific measures are therefore needed to safeguard and promote the principles that the EU and its member states have committed themselves to.
- Topic:
- Foreign Policy, Development, European Union, Development Aid, and Competition
- Political Geography:
- Europe
45. Understanding Hainan Free Trade Port: China's Efforts to Explore High-level Opening-up
- Author:
- Wenfeng Wei
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- On 13 April 2018, upon the 30th anniversary of Hainan province, Chinese President Xi Jinping announced to build Hainan into a free trade port. According to the Master Plan for the Construction of the Hainan Free Trade Port released by the State Council on 1 June 2020, China aims to build this southern island province into a high-level free trade port with global influence by the middle of the century. As China's largest special economic zone, Hainan is expected to become the frontline of China's integration into the global economic system. Noting that the world is facing a new round of major development, changes and adjustment, with protectionism and unilateralism on the rise and economic globalization facing greater headwinds, it was also a strategic decision of Chinese authorities based on the domestic and international landscapes. As such, Hainan Free Trade Port (HNFTP) is more than a regional development initiative, and it has a much bigger role to play in China’s reform and opening endeavors.
- Topic:
- Development, Economics, Special Economic Zones, and Free Trade
- Political Geography:
- China and Asia
46. Accelerating Transitions towards a Circular Economy and Policy Implications for Korea
- Author:
- Jinyoung Moon, Youngseok Park, Seung Kwon Na, Sunghee Lee, and Eunmi Kim
- Publication Date:
- 08-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study analyzes global efforts to transition to a circular economy, and analyzes each country's responses and major issues to the stages of waste generation and management, which decisively distinguish the existing economic system from the circular economy. In addition, this study examines cases of private-sector-led cooperation for sup-porting developing countries in terms of international cooperation and linking with international trade, and also analyzes the implications of information-based environmental policies in response to the circular economy. Finally, based on the results of these analyses, this study proposes policy measures to prepare for the circular economy.
- Topic:
- Development, International Cooperation, Economy, Trade, Private Sector, and Management
- Political Geography:
- Asia and South Korea
47. Development of the IT Industry and Structural Transformation: Focused on IT Cooperation with Russia, Kazakhstan and Uzbekistan
- Author:
- Minhyeon Jeong, Jiyoung Min, and Dongyeon Jeong
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- This study was designed as a primary study to analyze the economic significance and potential of cooperation with Russia, Kazakhstan and Uzbekistan in the IT sector, and to derive implications for new directions between Korea and the three countries with the advent of the fourth industrial revolution era. The goal of the study is to discuss what the development of the IT industry means for the three economies, examine the characteristics of each country, and gain policy implications on how cooperation with Korea should proceed in the future. To this end, this study is consisted of the following four components. First, the economic significance of IT technology cooperation with Russia, Kazakhstan, and Uzbekistan is viewed from the perspective of structural transformation. Second, the effect of IT cooperation between Korea and Russia on the Russian economy is quantitatively estimated through the analytical framework of structural transformation. Third, to supplement the limitations of theoretical discussions and derive customized cooperation directions for each country, the current status and policies of the IT industry in the three countries are examined in detail. Fourth, IT technology subsectors promising for cooperation between Korea and Russia are identified, from the patent citation analysis and network analysis.
- Topic:
- Development, Economics, Science and Technology, Industry, and Information Technology
- Political Geography:
- Russia, Central Asia, Eurasia, Kazakhstan, and Uzbekistan
48. Finding a Path through Quagmire
- Author:
- Will Brown
- Publication Date:
- 08-2022
- Content Type:
- Policy Brief
- Institution:
- Center for Strategic and International Studies
- Abstract:
- n the Central Sahelian nations of Mali, Niger, and Burkina Faso, a decade of violent instability has left 18 million individuals in need of humanitarian assistance. Climate change, underdevelopment, ethnic violence, corruption, and state decay have left civilians in need of peacebuilding, humanitarian, and development support. The deterioration of security conditions, however, has limited civilian access to essential services and impacted humanitarian response capabilities. Donors have promoted the “triple nexus” approach aimed at enhancing the coordination and effectiveness of humanitarian, development, and peacebuilding interventions. Yet, implementation in the Sahel has been hamstrung by a lack of common understanding among partners and a disconnect between the interests and operations of humanitarian and security actors. For the triple nexus approach to effectively improve conditions in the Sahel, humanitarian, development, and security partners must improve collaboration. Actors in the region should develop operational frameworks that ensure they enhance complementary objectives.
- Topic:
- Development, Humanitarian Intervention, Humanitarian Crisis, and Peacebuilding
- Political Geography:
- Africa and Sahel
49. Just Transition for Bangladesh
- Author:
- Mizan R. Khan, Afsara Binte Mirza, and Saleemul Huq
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- International Centre for Climate Change and Development (ICCCAD)
- Abstract:
- In recent years, the just transition to a low carbon economy, supporting climate resilient development has become an issue of global concern for all the right reasons. The response measures to address climate change through switching to a cleaner energy mix and enhancing the adaptive capacity of society – businesses, workplaces and communities will entail significant disruptions particularly, to the lives and livelihoods of the working poor and the marginalised communities across the world. For the most vulnerable countries like Bangladesh, achieving a just transition is important. In countries like Bangladesh, which are not big users of fossil fuels, just transition as a response to climate change impacts relates more to strengthening the resilience and adaptive capacity of communities and rehabilitating the displaced people, ensuring their livelihoods and income opportunities. With this perspective, this policy brief reviews how workers and other vulnerable people are coping with the twin crises of climate change and COVID-19, and looks at the roles the Government of Bangladesh and the trade unions can play to strengthen the just transition measures.
- Topic:
- Climate Change, Development, Justice, Carbon Emissions, and Green Transition
- Political Geography:
- Bangladesh and South Asia
50. Options for a Loss and Damage Financial Mechanism
- Author:
- Michael Franczak
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- International Peace Institute
- Abstract:
- As efforts to mitigate and adapt to the impacts of climate change fall short, discussions around loss and damage (L&D) resulting from climate change have gained urgency. These discussions pivot on questions around financing, which remains very limited. Going into the twenty-seventh UN Climate Change Conference (COP27), the call for a new L&D financial mechanism has been raised by developing countries. This paper provides a brief overview of the state of play of global negotiations on L&D and explores options for funding arrangements for addressing L&D in the context of the positions of the G77 and Alliance of Small Island States (AOSIS). The paper considers options related to four key questions concerning a new mechanism for financing L&D: Where will it be located? A new L&D financial mechanism could be located within the climate regime. However, there could also be complementary mechanisms outside the climate regime. Who will pay for it? There are two broad options for funding: ask for public contributions from donors or impose new taxes. An L&D financial mechanism could adopt both approaches, though some taxes could negatively impact some of the very countries advocating for L&D. Who will control it? Any mechanism should be guided by the principle of Common But Differentiated Responsibility and should be new and additional; needs-based, adequate, and predictable; public and grant-based; guided by vulnerability criteria; and locally driven. What will it do? The fund should make clear how L&D is both distinct from and linked to mitigation and adaptation and should take special care to address critical gaps in financing for slow-onset and noneconomic losses.
- Topic:
- Climate Change, Development, and Finance
- Political Geography:
- Global Focus