Puukallistajad ajavad käojaani

Selge on see, et Eesti Vabariigi idee ei ole raha teenida, vaid eesti kultuuri ja rahvast
säilitada. Iseenesest ei ole need kaks nähtust vastuolus: uuringute tulemused kinnitavad, et rohkema raha eest saab rohkem tervist, haridust, õnne ja sotsiaalset heaolu, mitte vähem. Kuid Eestis näib olevat levinud mõtteviis, et selleks et kultuuri ja rahvast edendada, on vaja majanduskasvu pidurdada. Mõnede meelest oleks Eestil vaja suurendada naturaalmajanduse ja bartertehingute osakaalu, sest ‘ressursse ei jätku’. Ideaaliks peetakse olukorda, kus inimesed kasvatavad ise toidu, teevad riided ja mööbli ja kaevavad maa seest autosse valamiseks ka naftat. Vastupidiselt mõne aasta eest majanduskrahhis kogetule, kui Eesti majanduskasv vähenes aastaga 17 protsenti, mille kestel rahvas jäi (ülla-ülla) vaesemaks, arvatakse mõnedes puukallistamise kogukondades ikka, et kahenev majandus kasvataks Eesti heaolu. Kuidas?

Paljude meelest saab rahvas väärikalt elada vaid toimivas kvaliteetses kultuurses keskkonnas, mitte rahakeskses süsteemis, milles ei nähta lahendit ei vaesusele ega õnnele ega rikkusele. Väidetakse, et inimkond on maakera ressurssidega viimase 150 aastaga üsna puhta vuugi teinud, ning viidatakse Rooma Klubi 1970ndatel välja antud raamatule Kasvu Piirangud. Selle vana raamat väidab, et maakera ressursid ei saa toetada sellist majanduse ja inimkonna kasvu isegi mitte arenenud tehnoloogiaga. See hüsteeria kasvava majanduse vastu peegeldab 18. sajandi usumehe Malthuse hirmu, et rahva lisandudes ei jätku kõigile enam toitu, ignoreerides fakte selle kohta, et pärast 2. maailmasõda on toiduainete tootmine on kasvanud kiiremini kui rahvastiku juurdekasv.

Selle volatiilsus väheneb ja levik on kõikjal paranenud. Toidu tegelikku puudust ei saa süüdistada ka näljahädades, mis on tekkinud poliitilistel mitte põllumajanduslikel põhjustel.

Eesti vaesumise pooldajad aimavad õigesti, et sisemajanduse kogutoodang (SKT) ei ole hea mõõdik rahva heaolu mõõtmiseks. Viimasel ajal ongi õnneks tekkinud mitmeid alternatiivseid indekseid, mis mõõdavad kas rahva sotsiaalselt heaolu (tervist, haridust, vabadusi, looduskeskkonda, elamistingimusi, mida saab raha eest osta) või siis seda, kui jätkusuutlik riigi majandus on, mõõtes riikide varasid, mille pealt raha teha ja SKTd kasvatada.

Just see viimane – riigi varade – mõõtmine, mille kallal töötasid Maailmapanga teadlased Glenn-Marie Lange, Quentin Wodon ja Kevin Carey mitu aastat, aitab meil aru saada, kui suurt rolli tegelikult mängib ressursside “röövimine” majanduses. Tänavu veebruari alguses esitletud raport ‘Riikide muutuv rikkus’ vaatab riikide varasid kolme ressursi kaudu, mõõtes esiteks maavarade hulka, teiseks inimkätega loodud rikkust (ehk taristut) ning kolmandaks inimressurssi. Paljude meelest oleks võinud arvestusse neljandaks kaasata ka riikide institutsioonid, millest oleneb, kui võrselt on võimalused ning rahaline ja sotsiaalne heaolu inimeste vahel jagatud.

Täpselt nagu firmadel on oma väärtuse hindamiseks kasumiaruanne ja bilanss, nii peavad ka riigid vaatama, kas edasiseks majanduskasvuks on olemas vajaminev laiaulatuslik varade portfell. Ja kuigi 70ndatel aastatel tehtud hoiatuste põhjal oleks võinud arvata, et kõik ressursid saavad kohe otsa, leidis uuring sellegipoolest, et maailma varade portfell (mitte segi ajada sisemajanduse kogutoodanguga) kasvas ajavahemikus 1995-2014 märkimisväärselt.

Uuring, mis mõõtis 141 riigi varasid 20 aasta jooksul (1995 -2014), leidis, et riigid saavad vara luua investeeringute tegemisega kahte esimesse ressurssi – taristusse ja inimeste haridusse – ning samal ajal kolmandat ressurssi - maavarasid – mõistlikult majandades. Kõrge sissetulekuga riikides, mille hulka kuulub ka Eesti, moodustab inimkapital (mida teadurid mõõtsid inimese eluea jooksul teenitud tulu väärtusena) 70 protsenti kogu varadest. Rikkad ja nutikad riigid kasutavad ka palju rohkem taastuvaid ressursse, mis ei ammendu. Ainult vaesed riigid toetuvad oma majanduses enamasti loodusressursside kasutamisele. Muuseas, kaks kolmandikku nendest riikidest, mis on jäänud 20 aasta jooksul vaesemaks, on maavarade poolest rikkad. Kuid enamus on neist ka haprad või sõjalises konfliktis olevad riigid, mis näitab veel kord, et loodusvarad üksinda ei kindlusta riigi arengut. Uuring näitab ka, et varade loomine ei käi maavarade röövimise kaudu, vaid rikkus saavutatakse palju efektiivsema maavarade kasutamisega, millest saadud tulu investeeritakse tagasi haridusse ja taristusse. Järelikult pole vaja ka maavaradele lõppemisele liialt keskenduda. Majanduse jätkusuutlikkuseks on vaja hoopis häid institutsioone, mis majandaks maavarasid mõistlikult. Ja head institutsioonid on enamasi hea haridusega riikides. 

Kõige tähtsam tõdemus ongi see, et inimkapital (ehk siis haritud ja terved inimesed) on maailma kõige tähtsam vara. Hea uudis on see, et haridust ja tervist saab osta raha eest. Kuidas naturaalmajanduse ja bartertehingute tingimustes raha teenida, mille eest siis haridust, kultuuri ja tervist osta, majanduskasvu needvad maamehed meile ei ütle.  Nad ajavad meile ainult käojaani väärikusest ja väärtussüsteemidest.

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Võitlus üheksapealise lohega

Avaldatud Äripäevas 1. septembril 2014: http://www.aripaev.ee/blog/2014/8/29/voitlus-uheksapaise-lohega

Tehke mõnel töökoosolekul eksperiment: andke kõikidele kolleegidele pidulikult 50 senti ning vaid ühele tuhat eurot. Kuigi kõik said endisega võrreldes veidi rikkamaks, tundub enamikule siiski, et nad on varasemaga võrreldes kehvemas olukorras. Ilmselt oleks nad isegi eelistanud, et keegi poleks raha juurde saanud.

See näide seletab, miks sissetulekute ebavõrdsus ühe riigi sees nii ebameeldiv on. Palkade poolest on Eesti isegi Euroopa Liidu mastaabis üks ebavõrdseima jaotusega riike. Ilmselt on see põhjus, miks mõned eestlased küsivad, kas me sellist Eestit tahtsimegi. (Õigupoolest tundub see imena, et eestlased laulupidudel üldse veel võhivõõrastel kätest kinni hoiavad.)

Hea uudis on see, et 2000. aastate alguse majanduskasv lihvis kihistumisel veidi nurki maha – siis suurenesid tuntavalt kõige vaesemate inimeste sissetulekud. Ning kuigi ka ülirikaste teenitud sissetulek suurenes, kokkuvõttes keskklass siiski kosus.

Kuid mis saab edasi? Kuidas mõjutavad Eesti ebavõrdsust meie aeglustunud majanduskasv, potentsiaalsed välisinvesteeringud ning võimalik robotiseerimine, mille kohta president ütles, et see on väikeste riikide võimalus?

Kui majandus enam ei kasva, jääb riigil üha vähemaks raha, mida kihistumise vältimiseks haridus- ja terviseteenustesse tagasi valada. Mida kehvemaks jääb inimeste haridus ja tervis, seda vähem tõenäoline on, et nad omakorda majanduskasvu panustavad. (Pool)surnud ring. Siiski näitavad uurimustulemused, et võrdsemates ühiskondades on pikemad majanduskasvuperioodid ja seda oleks Eestil hädasti vaja.

Pirukas ei suurene. Kui Maailmapank eelmisel aastal ebavõrdsusele tähelepanu pööras, leidsid majandusteadlased, et sellega võitlemiseks ei piisa olemasoleva suurusega piruka tõhusast ümber jagamisest: kihistumise leevendamiseks peaks pirukas kogu aeg kasvama. Ja seda ei paista praegu kusagilt. On ebatõenäoline, et vaesemate inimeste palgad tõuseksid praegu kiiremini kui keskmine palk.

Professor Yiagadeesen Samy Carletoni ülikoolist leiab, et teenustepõhistes majandustes – nagu seda Eesti majandus on – kipub sissetulekute ebavõrdsus aja jooksul veelgi suurenema. Erinevalt tööstuspõhisest majandusest, kus palgaerinevused ühiskonna lõikes olid väiksemad (tihti suurte ametiühingute nõudmisel), kipuvad teenussektoris palgavahed palju suuremad olema. Teenussektoris (ja eriti väiksemates ettevõtetes) on raskem ühtlaselt tootlikkust suurendada. Ikka on vaja suure palgaga tippjuhte ning ka mutrikesi-asjaajajaid. Igal juhul õgvendab teenuste ülekaal majanduses keskklassi veelgi enam, jättes järele vaid äärmused.

Välisinvesteeringud kipuvad sissetulekute ebavõrdsust veelgi suurendama juhul, kui raha suundub juba niigi kõrge tootlikkusega sektorisse, kus suurendab juba niigi kõrgeid palku. Eesti rahva ühtsusele mõeldes tuleks investeeringud suunata pigem sinna, kus praegu veel madalamad palgad ja väiksem tootlikkus, et sealseid töötajaid keskklassi upitada.

Mida rohkem tööstust automatiseeritakse, seda vähem inimesi seal vaja läheb. Palgad olemasolijate jaoks kerkivad. Positiivne lugu. Mida aga teevad need, kes robotiseerimise käigus tööstussektoris nn üle jäävad? Põllumajandusse nad enamasti ikka tagasi ei lähe - arenenud riikides on vaid 2-4% elanikkonnast põllumajandusega hõivatud. Kui nad just välismaale ei lähe, suundub suurem osa tööstusest vabanenud inimesi ikka teenustesse, kus on suured palgaerinevused. Nii tekibki suhteliselt rohkem kihistunud ühiskond. Robotite tulek oleks väikeriigile võimalus siis, kui see oleks ühtlaselt industrialiseeritud. Lääneriikide hulgas aga sellist naljalt ei leidu.

Igal aastal laulupidu? Isegi kui riik püüab aktiivselt taasindustrialiseeruda, uusi alasid avastada ja turge leida, siis nende alade automatiseerimine aja pikku lisab taas ebavõrdsust juurde. Kihistumise üheksa pead aga ei peaks tähendama, et riik ei peaks proovima uusi tööstusalasid tekitada, neid nutikalt müksates, kui vaja. Pigem peaks ühiskond kokku leppima, kui suurt ebavõrdsust on inimesed valmis taluma.

Kihistumist mõõtev Gini koeffitsent oli 2011. aastal 0,3197 – see on madalaim näitaja terve Eesti taasiseseisvusmisperioodi jooksul. Sissetulekute ebavõrdsuse tippajad olid 1993. aastal (0,3672) ning 2000. aasta paiku (0,3610). Kas Eesti oleks valmis nendesse aegadesse tagasi minema? Kaudsed andmed juba näitavad 2011. aastast alates taas sissetulekute ebavõrdsuse hiljukest kasvu.

Huvitav, kui suure Gini koefitsendi puhul ei ole eestlased enam valmis laulupeol võhivõõral kätest kinni hoidma? Kas 0,4 või 0,5 puhul veel hoiavad? Või peaks püüdma korraldada laulupidusid sissetuleku edasise kihistumise puhul igal aastal, et ühiskonna sidusus püsiks – kas või näiliselt?

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About the limitations of CSR

My interview with Mr. Ingram from NSI, published in 2012 The Rising Africa magazine

As the North-South Institute prepares for the NSI Ottawa Forum on Governance of Natural Resources for African Development, in May 2013, The Rising Africa talked to the former special representative of the World Bank to the United Nations and the World Trade Organization, and the current President of The North South Institute, the leading development think tank in Canada, Mr. Joseph K. Ingram.

 

Our editor Marje Aksli visited Mr. Ingram in his office in Ottawa, and asked what the biggest challenge in Africa’s development is.

We all know that Sub-Saharan African economies are growing at an exceptional rate, and that the narrative of Africa is changing for the better. That is important, and I am not going to repeat their successes here. Yet in spite of these positive changes the biggest challenge in Africa remains its prevailing poverty and growing inequality. Most public policy experts would say that the most important factor in reducing inequality is providing meaningful employment opportunities to a growing youth population. Africa has serious problems with unemployment, even in the fast growing economies. Much of the unemployment is attributable to a huge youth surge – 60 percent of the total population in Sub-Saharan Africa is under the age of 30. This creates very high dependency ratios. South Africa, for example, has extremely high youth unemployment even though they have a relatively skilled labour force compared to other African countries.

How do you comment on some studies which claim that the younger the population, the lower probability that the country is democratic?

That theory is inconsistent with the fact that the number of democracies in Africa has risen from 8 to 23 in the last decade. Look at what has happened with the Arab Spring! It is largely young people who have brought about democratic change.  For the moment, it may not always be change that we like, but it is the first step towards an enduring democratic system.  A young population is a source of economic growth – you can’t have growth without adding to the labour force and increasing skill level of that labour. Also, history and empirical evidence show that with increased education there is increased demand for greater transparency and accountability, basic building blocks of democratic development.

So what do we know about the youth surge in Africa?

We know that if you do not meet youth’s expectations, there are going to be political problems, and a breakdown of social cohesion producing all kinds of negative outcomes including social discontent, surge in migration patterns, contestation over scare resources, extremism and religious fundamentalism. Groups take advantage of these problems to create challenges to the state. We are starting to see manifestations of that that fundamentalism in both the Maghreb, Somalia and the Sahel: in northern Mali, and even in Nigeria where religious violence has grown.

Is Africa’s challenge of jobless growth unique in the global scene?

The issue of jobless and job-poor growth is not unique to Africa: it is a problem we share globally, though not with the same outcomes. The U.S. and Canada are also experiencing the growing inequality and high levels of under and unemployment But clearly its outcomes are more acute in Africa where socio-economic conditions are much worse to begin with. Additionally, Africa has relatively weak political institutions. That said, there are significant improvements in the overall quality of governance.  We are talking about a continent with 54 countries.  Yet as we all know, democracy is fragile, as recent events in Mali have shown. Africa still has a legacy of corruption to deal with, as revealed by the indexes produced annually by Transparency International.

What research has NSI done in the area of governance of natural resources?

For almost a decade NSI has been doing field research on the subject of natural resource governance primarily in areas inhabited by first nations people in Canada and aboriginal communities in Latin America. Based on our findings we are increasingly shifting the focus of our research to sub-Saharan Africa. Our goal is to study the relationship between governance and the economic benefits of extractive activities.  Natural resources exploitation is important for all countries, and the wealth generated is critical to host governments, local communities and their populations.  Such resources should be exploited in a way which produces a win-win-win outcome:  a win for the host governments, for the local communities and for the mining companies.

What research projects does NSI work on?

We work very closely with two global initiatives. One is driven largely by the African Union and UN Economic Commission for Africa. Their African Mining Vision is an attempt to create a framework – standard setting for how African governments and investing companies should behave, and what the implications might be for home governments like Canada. A second initiative we have been involved with is led by one of the world’s leading development economists,  Prof. Paul Collier of Oxford University This initiative, the Natural Resource Charter, is also an attempt to create a set of regulatory principles by which host governments and mining companies would operate so that the exploitation of extractives as well as other natural resources, is done in an economically, socially, and environmentally responsible way producing the desired win-win-win outcome.

What should the companies do in a field of CSR when the governance is weak and civil society is not strong yet?

Let me start by explaining how we at NSI are planning to proceed in support of these global initiatives. The research we are going to undertake has several components, including the role of the private sector, the emerging powers, and going beyond CSR. We are also concerned with the impact that Canadian investments will have on long-term Canadian competitiveness and economic growth and poverty reduction in Africa. We have an interest in Canada being competitive as an investor in natural resources but at the same time we are also interested in how best that investment can enhance higher and more equitable growth outcomes.

In this context, we are also looking at the role of corporate social responsibility, including its limitations. African governments too are increasingly conscious of the limitations of self-regulation and in the context of the Africa Mining Vision are seeking to address them. Based on NSI’s past research in Canada and Latin America our conclusion is that CSR is a necessary but  not sufficient set of principles when it comes to ensuring the win-win-win outcome I referred to  earlier. Indeed a growing body of research, both empirical and academic, recognizes that there are serious limitations with relying solely on principles of corporate social responsibility. Although in general, Canadian companies have behaved well globally - often better than their competitors – a handful have not. And this has hurt both the Canadian brand and the sort of development outcomes we are all looking for from natural resource exploitation.

How has the limited scope of CSR hurt Canadian companies?

Companies have tended to rely on Corporate Social Responsibility principles alone.  But because CSR is a form of self-regulation, companies are often not accountable for whether they behave in a socially or environmentally responsible manner, especially in countries where local legislation and enforcement capacity are weak. 

Is reliance on self-regulated CSR going to produce the win-win-win outcome? What are the consequences if CSR fails to do so, especially in a context of high income inequality and poor socio-economic conditions? We have seen one possible outcome recently in the events at Marakana in South Africa where the violence in one mine has escalated and spread more widely creating a serious constraint on the country’s potential for economic growth. Incidences of violence have increased in frequency not only in Sub-Saharan Africa but also in parts of Asia and Latin America. While we recognise that CSR is necessary, we also need to ask ourselves if principles based on self-regulation are sufficient. Or do we need to look beyond CSR at more regulated forms of behaviour?

What direction is Africa moving in?

At this point it would appear that the work of the African Union and African governments is moving in the direction of stronger global standards and regulation. This may be in part due to the demands of a growing civil society in Africa demanding greater transparency and accountability.  The members of the African Union are cognisant of this important development which comes with democratic governance.

Is this what the forum you organize in May is about?

The Forum we plan to host in May of 2013 is titled  “The NSI Ottawa Forum on Governance of Natural Resources for African Development”  and we plan to have academics, CSO representatives and senior policy makers from Africa, Canada, Europe and the U.S. participating.

The Forum will examine not only how governments can best mobilize financial resources from natural resource exploitation but also how those governments can best spend the resources so that they contribute to the development of the national economy and their local communities. 

This is vital for the long term development and stability of the country. It is also vital for the mining companies themselves and their long run competitiveness. Their capacity to get contracts in the future will increasingly depend on how they are perceived both by host governments but also by the local communities.

So, you say that ...

... the more responsibly the companies behave, the more they consult with the local communities, the more positive the outcome will be in terms of strengthening their brand vis-a-vis their competitors.

But what if some investors buy up mining sites putting cash on the table, exceeding three-four times the market value?

Certainly this sort of thing happens but if that money is used for investment, to build infrastructure locally or to invest in adding value through local processing - rather than just shipping the raw minerals out – while creating more employment locally, this is going to help. This is what Canadian companies need to be doing with greater frequency, as well as talking to the local populations and taking their views into account before making investment decisions.

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Canada – 6th largest donor at the African Development Bank!

My interview with Mr. Montador, published in The Rising Africa magazine, 2012

For a while Bruce Montador was our man in Tunis: from 2007 to 2011, he represented Canada at the African Development Bank as an Executive Director. Having travelled to 28 countries in Africa either for work or fun, he shared his thorough Africa-insights with The Rising Africa.

First of all, how does the development work of AfDB differ from the one of World Bank (and the planned development bank by the BRICs)?

The AfDB has fewer resources than the World Bank has for the African region, so it needs to focus. It tries to limit its programming to a relatively few areas – infrastructure, private sector, governance and higher education. Infrastructure is critical, particularly for things like electricity, regional integration and water. The private sector is taking off – there are ever more references to Africa in the mainstream business press, but there are still many challenges facing both African and foreign entrepreneurs.

It is hard to comment on the proposed BRICs development bank, since as far as I know it is not yet operational. There is a tendency to announce projects like that without them ever doing very much for a range of practical reasons.

How does Canada participate and finance the bank? Is the contribution from Canada growing or the opposite?

Canada supports the Bank in two ways. As a shareholder, Canada’s capital pledges allow the Bank to borrow at good rates on the market, to on-lend to middle income countries and the private sector. As one of the few remaining AAA credits, Canada’s pledge is important to the Bank, particularly since Canada is already a big shareholder for our size (about 10 percent of the non-regional share).

Moreover, during the financial crisis, there was a need to increase the Bank's capital, and the temporary pledge of capital Canada made at the Pittsburgh G-20 meeting in 2009 allowed the Bank to continue to serve its members.

The other way we, Canadians support the Bank is through the budgetary grants to the African Development Fund to allow for loans and grants to low-income countries and for regional public goods. We currently give 108.5 million dollars a year – it will be up for renegotiation next year for the cycle starting in 2014. We are the 6^th largest donor, and our contribution has grown with each replenishment.

Canada is seen as an important partner – though for African Development Fund, the big players are really the Europeans – the UK, Germany and France. Canada also supports some multi-donor trust funds that do additional work – in areas like preparatory work for regional infrastructure projects and water, and for Aid for Trade.

What can Canadian companies and NGOs do to benefit from the AfBD? Please share recommendations...

Canadian consulting companies do quite well from AfDB contracts. Firms that are interested should be in touch with the Embassy in Tunis, which can help keep them informed of opportunities. Companies with bigger investment interests should check with the Bank's private sector department to see if there are possible synergies. Some NGOs may find consulting opportunities, and some of the thematic trust funds, like the Congo Basin Forest Fund, have approved projects from Canadian NGOs. AfDB does not do as much outreach to NGOs as at the World Bank, in part because NGOs have not typically paid a lot of attention to the AfDB.

What are the trends affecting the AfBD and how does it affect Canadian companies and NGOs?

The AfDB is bolstered by the growing Afro-optimism, and companies and NGOs will see growing opportunities. However, the tight fiscal environment in donor countries will probably limit growth of the concessional window, the AfDF, and thus limit growth in the Bank Group's operations in least developed countries. There may be fewer Bank contracts available in traditional areas of health and basic education. Finally, there will probably be more competition from African firms in the markets for Bank procurement.

Can you share your personal opinion on Africa’s development; say from 2007 to 2011, on the example of one or two countries of your choice?

Since my work in AfDB largely coincided with the financial crisis – I can say that Africa was doing quite well before the crisis, and was not directly touched by the financial crisis. The only country that was really integrated into the international financial system, South Africa, has a sound banking system. However, like Canada, the continent was adversely affected by the economic downturn created by the financial crisis in the US and Europe.

In addition, the nervousness of international lenders led them to pull back from marginal markets with which they were less familiar, a description which basically fit the whole of Africa. 

Fortunately, the relatively rapid recovery in Asia, and in commodity prices, as well as a return of Asian investors looking to secure supplies of commodities, helped Africa to get back on to a solid growth path relatively quickly.

That is an overview, obviously situations vary. A country like Ghana, where governance and economic reforms were well underway, and where new oil production is adding to growth, is a very positive story. Tunisia, where political uncertainty has devastated the tourist sector, has actually not done badly in terms of sustaining exports despite the weakness in the euro-zone, its main market. The East African Community has been showing fairly solid growth, based on resources but also the gains from growing integration.

Professor of economics at the London School of Economics and Political Science Alwyn Young has claimed in his research paper ‘The African growth miracle’ that Sub-Saharan living standards (as measured in ownership of durable goods, the quality of housing, the health and mortality of children, the education of youth and the allocation of female time in the household) have been growing three and a half to four times the rate indicated in international data sets.

It is an interesting analysis, and not inconsistent with the AfDB's estimates of a larger African middle class than might be expected.  However, it is still important to recognize that many of those people emerging from poverty are still relatively vulnerable; the trend is positive, but there is a long way to go. This of course also means that there is lots of scope for further strong growth.

In your view, is it justified to compare North African countries with Sub-Saharan countries – or should the stats and analysis be always separated, as two very different entities?

From the political perspective of African countries and the African Union, it is all of Africa that is the frame of reference. Obviously there are cultural and economic differences between North Africa and Sub-Saharan Africa but I don’t know if looking at the Middle East and North Africa together is a better framework. There are lots of differences between the Maghreb and the Mashreq.

We in CCAfrica often make country-based overviews of development (so called Monthly African Indicators), but perhaps there are other units (cities, nationality, culture etc) which would tell a better story?

With 54 countries the indicators become a sea of data, but the cities, cultures etc are open to interpretation. I would suggest looking at the five broad regions – North Africa, East Africa, Southern Africa, Central Africa and West Africa. There are one or two countries whose allocation is controversial or in flux, but broadly this approach produces relatively homogeneous (or less heterogeneous!) subsets. One story to tell in this context would be the relative success of regional integration in the different areas – best in East Africa and weakest, so far, in North Africa.

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“Africa is not a monolithic entity”

An interview with the CEO of CCC, published in 2012 in the Rising Africa magazine

The President and CEO of the Canadian Commercial Corporation (CCC), Mr. Marc Whittingham shared his views on African development with “The Rising Africa”. Was there a lost decade in Canada-Africa relationship? Our editor Marje Aksli asked the questions.

The mandate of CCC is “to assist in the development of trade between Canada and other nations.” How big share of your clients are currently from Africa nations?

Right now, African clients make up a relatively small share of our total business, but that small share is actually quite significant when we look at the types of projects that we are working on in Africa with Canadian companies – these are complex infrastructure projects. We are seeing a lot of potential in Africa; rapid urbanization in many countries on the continent is putting tremendous pressure on infrastructure. We are taking a very active role in engaging with clients from Africa to show them the solutions that Canadian companies can offer for their water, transportation and energy infrastructure investments.

Do you work with companies directly, or through their country governments only?

CCC has the authority to sign international contracts on behalf of the Crown for purchases destined for a foreign government. This provides foreign government buyers with the option of a government-to-government arrangement that can reduce the time, cost and risk of international tendering. It also offers a very practical mechanism for bilateral cooperation in key areas such as defence and infrastructure development.

How do you choose the countries CCC works in?

First of all, we never treat Africa as one entity; we look at each country individually. I was fascinated by the address by the dean of African diplomatic corps in Ottawa, Mrs. Chideya at the Canada-Africa Symposium when she said: “We are many different countries. Africa is not a monolithic continent.” And this is what companies in Canada need to understand, as well. The countries in Africa have individual resources, individual rules of law and individual talents and human capital.

What recommendations do you have for Canadian companies doing business in Africa?

Certainly there needs to be an increased awareness that there are opportunities, as the reality of Africa starts to be discussed in the media, and Canadian Council on Africa is doing an excellent job in that regards. The other thing to mention is that Canadian businesses look for opportunities where they believe there is a stable rule of law. I think you see this recognition in Africa that democracy and rule of law leads to economic development, which leads to social development. Almost in that order. I would advise the companies to know the country they are working in; to talk to Export Development Canada (EDC) about financing; to talk to Canadian trade commissioners, and to look at CCC if there is a possibility of government-to-government transaction. And certainly I would recommend that every company looking to work in Africa join CCAfrica. There are lots of opportunities in different countries of Africa to bring Canadian expertise to different areas.

Was there a lost decade in Canada-Africa relations?

Historically, Canada was doing more in developmental assistance programs and a lot of social development programs. I don’t think we had a lost decade from the business perspective, I think we were never really there from a business perspective. And maybe Africa was not ready for us and maybe we were not ready for Africa. Another reality in Canada is that for many years, Canada’s business was done with Canadians and with Americans. It’s a big market there. Today, our trade is shifting from almost all trade going to the U.S. two decades ago to include other markets: Latin-America, definitely Asia, and now increasingly Africa. I think it is wonderful that Canadian International Trade Minister Fast is leading trade missions to some African countries.

CCC currently has an active project in Ghana in the energy field. Why and how was this project selected?

First of all, Ghana is a country where democracy has prevailed, and the rule of law is prevailing. As the late President Mills mentioned many times the rule of law is necessary as it attracts the investment. In terms of our project there, the Ministry of Energy needed to increase the energy capacity of the country significantly as a part of a long-term strategy to support the power demands of the growing middle class in Ghana. This meant more power plants throughout the country in a relatively short period of time. CCC first got involved in the Ghana power project when we were contacted by our trade partners at the High Commission of Canada in Ghana to assist a Canadian company, Orenda Aerospace Corporation, and its partners in negotiations with the Government of Ghana. Both parties recognized a key facilitation role that CCC could play in the transaction for a 132-Megawatt power generation plant.

Do you see room or availability in your capacity for other companies to follow a similar route?

The opportunities for companies to follow a similar route are countless. African leaders have told me that compared to companies from other countries the Canadian businesses have the advantage of coming with quality products, with a long term perspective and high degree of Corporate Social Responsibility (CSR). Obviously, environmental concerns are paramount in anything we do, but also community engagement, local employment, knowledge and technology transfer to locals. I spoke earlier about rapid urbanization in many African countries and increased demands on infrastructure, we see that most of these demands are for reliable energy and adequate housing. Our goal is to come up with the best-possible Canadian solution to meet countries’ needs.

How do you do that?

The model we put forward is attractive to governments as it presents the Government of Canada as a partner in the country for what can be a very complex process. It is a collaborative approach that includes CCC, Canadian companies, and often the Trade Commissioner Service and Export Development Canada, working with governments to assure them of a credible and ethical process. We started doing public-private partnerships (PPP) in the late 80’s. During the long learning process we realised that the key to a PPP is to make sure that the risk is shared in a right way: public sector should not take private sector’s risks and vice versa. It means that both should take the risk where they are able to manage it properly. Once you do that then you are able to establish a good project that will be efficient for the communities. You need a very strong public sector that is able to negotiate a good risk sharing model with the private sector.

How strong is the public sector in African countries?

African public sectors are of varying strengths. If they do not have enough capacity, you need to back them up. This is where government-to-government contracting can be of help. As a Canadian government entity in contracting, we can provide the capacity and will make sure that the risks are shared in a way that makes sense for everyone. CCC guarantees for both parties that there will be full transparency and it will be in accordance with our Code of Business Ethics. All our employees sign it every year, and the Canadian companies we work with have to comply with it as well.

What could be the positive lessons learned that other companies / governments can benefit from?

Foreign governments have now seen the value that CCC adds by filling the needs of governments to establish robust procurement practices, including due diligence practices to ensure fair, reasonable and ethical contracts in meeting the development needs of the countries. Canadian companies have experienced enhanced access to opportunities by having the power of the Government of Canada at their side in business transactions.

Much has been talked about the CSR and the lack of internationally agreed standards on what should CSR universally hold. What can you say about the CSR projects in the two sites in Africa, in Kenya and Ghana, in terms of their respect for local communities and civil society, environment, economy and governance?

CCC represents both the Government of Canada and Canadian companies in our transactions and CSR and good corporate citizenship are at the forefront of every decision that is made to enter into a contract. This means that we carefully consider all the implications of our business activities not only at home but also abroad. In keeping with the Government of Canada’s stance to encourage and expect all Canadian companies to meet high standards of CSR, we have developed our own guiding CSR principles outlined in our Code of Conduct, and the Code of Business Ethics, which I mentioned already. One element of CSR that we are committed to is the capacity building in the host country, which means that with our projects such as that in Ghana, much of the workforce is actually hired locally, leading to knowledge transfer to the local workforce. In Ghana, we had 94% local employment on the project, meaning that the jobs and skills are kept in country.

How active is the African diplomatic corps in taking advantage of your opportunities?

One of the many advantages of being headquartered in Ottawa is that we have access to the foreign diplomatic missions in Canada. One of the Corporation’s main strategies is to engage with the heads of missions from abroad to not only introduce CCC and our services, but to really educate officials with the government-to-government approach to business and the real benefits that Canada brings to projects, especially to complex infrastructure projects.

Do you think CCC will have a role in the increased trade between Africa and Canada as envisioned by the Minister Fast (his announcement on Oct 16) and the planned CSR hub in Western Africa?

Absolutely. I think CCC will continue to play a very unique role in the increased trade between Canada and countries in Africa. As Minister Fast noted at the Canada-Africa Symposium, Africa is one of the fastest-growing economic regions in the world, which not only means many new opportunities, but also increased competition from around the world. I think CCC, with the Government of Canada and Canadian companies, will be able to contribute greatly to the CSR initiatives that are taking place in Africa, and I believe that supporting ethical business practices is one of the cornerstones of a Canadian approach to trade.

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