Economy

Boost From BRICS: 'Emerging' Trading Partners Are Fair Deal For Impoverished Africa

Opinion: More and more, poor African countries are throwing their lot in with emerging economic powers like China, India and Brazil. In many cases, these new trade relationships are less one-sided than observers might expect.

A Chinese convoy in Mbarara, Uganda (stttijn)
A Chinese convoy in Mbarara, Uganda (stttijn)
Helmut Reisen

China, Brazil and India have become major trading partners for poor African countries. The emerging economic powers of Asia and Latin America are not, however, the only ones to benefit from these partnerships. Historically dependent Africa is profiting as well from these new relationships, which have more to do with efficiency than "charity."

Today, the term "rogue aid" is by no means the right way to describe the business partnerships between poor African countries and their new trading partners, especially China. This concept, which was first used in early 2007 by the prestigious American magazine Foreign Policy, conveys several clichés about the impact of this new kind of aid: deteriorating governance norms in Africa, mounting debt, de-industrialization and the piling up of non-advanced manufactured goods.

The concept is in fact inappropriate in several ways. For starters, these new trading partners do not really offer "aid." Nor do they act like "crooks." The African countries themselves certainly don't view their new trading partners that way.

It is no longer necessary to state the importance of emerging countries for Africa. Using the most recent data about the African continent, the 2011 edition of the African Economic Outlook shows how in the space of a decade these countries went from marginal associates to Africa's top trading partners. According to the website, at the start of the millennium these new partners weren't members of the Western donors club, also known as the OECD's (Organization for Economic Cooperation and Development) Development Center.

Africa's top trading partners are China, India, Brazil, South Korea and Turkey, not only in terms of bilateral trade volume, but also because of the diversity of countries and sectors these emerging countries work with.

Which trading partners are most efficient in helping African countries reach their development goals? When it comes to infrastructure, water, transport, energy and innovation, Africa sees emerging countries as more efficient partners than the traditional donors and multilateral institutions. These results are even more striking when you think about the efforts made by traditional donors in these fields.

The economic cooperation between Africa and its emerging partners goes beyond China-Africa bilateral trade. It also goes beyond commercial exchanges, and increasingly beyond raw material extraction. The emerging partners offer more flexible financing, more appropriate expertise, technology and training, more affordable and promptly delivered infrastructure, generic drugs, machines and consumer goods adapted to Africa.

More importantly, African governments have a wider range of policy options, which means they have increased their ability to make the necessary decisions to pursue their own development goals, rather than those of their donors. This has put an end to decades of a near unilateral dependence on Western sponsors. And since Africa is a shock-prone continent, it seems wiser to depend on a larger number of trading partners and customers.

The power of choice

The China-Africa partnership isn't unique. Trade between African countries and their emerging partners has grown at dizzying speed over the past decade. Today, Africa's trade with emerging countries has doubled, reaching 40% of its total trade volume. Ten years ago, they represented only half of the trade between Africa and the European Union. Now they are on par. In 2009, China overtook the United States as Africa's top trading partner.

So is Africa moving away from a post-colonial dependence towards a Chinese one? The current trends seem much more promising: Africa can now choose its trading partners. China has not replaced the West as Africa's exclusive partner. In fact, putting the West aside, Africa's trade with all its other emerging partners represents almost twice its trade with China.

But the partnerships don't stop at trade. These new partners offer new financing mechanisms. China, India and Brazil in particular offer alternative methods of development funding. These new economic players have blurred the traditional dividing lines between investment and public development aid, between trade and aid, between the public and private sector. In terms of economic cooperation, aid is only one tool among many.

This shows a significant difference between the cooperation strategy of traditional sponsors and that of new partners. Western style "charity" emphasizes aid to reduce poverty. The "Asian" model emphasizes the partner's potential and tries to develop mutual benefits. In fact, this approach is similar to Japan's former cooperation strategy with China.

Emerging countries aren't only looking for Africa's raw materials. Many would be surprised to learn that the growth of African trade isn't solely based on its natural resources. Manufactured goods represent a growing portion of the products emerging countries import from Africa, while they are a shrinking share of Africa's trade with Western partners. Moreover, the flow of foreign direct investment is more concentrated in OECD member countries than in oil-exporting African countries.

We cannot expect a small African country to lead negotiations with major emerging countries by itself, and be treated as an equal. But today, thanks to cross-border improvements in infrastructure, African countries are benefiting from better regional cooperation and economic integration. Greater transparency from Africa's emerging partners could help dispel the remaining myths that some Africans, and too many Europeans, still too often take as truth.

Read the original article in French.

Photo - stttijn

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Future

7 Ways The Pandemic May Change The Airline Industry For Good

Will flying be greener? More comfortable? Less frequent? As the world eyes a post-COVID reality, we look at ways the airline industry has been changing through a pandemic that has devastated air travel.

Ready for (a different kind of) takeoff?

Carl-Johan Karlsson

It's hard to overstate the damage the pandemic has had on the airline industry, with global revenues dropping by 40% in 2020 and dozens of airlines around the world filing for bankruptcy. One moment last year when the gravity became particularly apparent was when Asian carriers (in countries with low COVID-19 rates) began offering "flights to nowhere" — starting and ending at the same airport as a way to earn some cash from would-be travelers who missed the in-flight experience.

More than a year later today, experts believe that air traffic won't return to normal levels until 2024.


But beyond the financial woes, the unprecedented slowdown in air travel may bring some silver linings as key aspects of the industry are bound to change once back in full spin, with some longer-term effects on aviation already emerging. Here are some major transformations to expect in the coming years:

Cleaner aviation fuel

The U.S. administration of President Joe Biden and the airline industry recently agreed to the ambitious goal of replacing all jet fuel with sustainable alternatives by 2050. Already in a decade, the U.S. aims to produce three billion gallons of sustainable fuel — about one-tenth of current total use — from waste, plants and other organic matter.

While greening the world's road transport has long been at the top of the climate agenda, aviation is not even included under the Paris Agreement. But with air travel responsible for roughly 12% of all CO2 emissions from transport, and stricter international regulation on the horizon, the industry is increasingly seeking sustainable alternatives to petroleum-based fuel.

Fees imposed on the airline industry should be funneled into a climate fund.

In Germany, state broadcaster Deutsche Welle reports that the world's first factory producing CO2-neutral kerosene recently started operations in the town of Wertle, in Lower Saxony. The plant, for which Lufthansa is set to become the pilot customer, will produce CO2-neutral kerosene through a circular production cycle incorporating sustainable and green energy sources and raw materials. Energy is supplied through wind turbines from the surrounding area, while the fuel's main ingredients are water and waste-generated CO2 coming from a nearby biogas plant.

Farther north, Norwegian Air Shuttle has recently submitted a recommendation to the government that fees imposed on the airline industry should be funneled into a climate fund aimed at developing cleaner aviation fuel, according to Norwegian news site E24. The airline also suggested that the government significantly reduce the tax burden on the industry over a longer period to allow airlines to recover from the pandemic.

Black-and-white photo of an ariplane shot from below flying across the sky and leaving condensation trails

High-flying ambitions for the sector

Joel & Jasmin Førestbird

Hydrogen and electrification

Some airline manufacturers are betting on hydrogen, with research suggesting that the abundant resource has the potential to match the flight distances and payload of a current fossil-fuel aircraft. If derived from renewable resources like sun and wind power, hydrogen — with an energy-density almost three times that of gasoline or diesel — could work as a fully sustainable aviation fuel that emits only water.

One example comes out of California, where fuel-cell specialist HyPoint has entered a partnership with Pennsylvania-based Piasecki Aircraft Corporation to manufacture 650-kilowatt hydrogen fuel cell systems for aircrafts. According to HyPoint, the system — scheduled for commercial availability product by 2025 — will have four times the energy density of existing lithium-ion batteries and double the specific power of existing hydrogen fuel-cell systems.

Meanwhile, Rolls-Royce is looking to smash the speed record of electrical flights with a newly designed 23-foot-long model. Christened the Spirit of Innovation, the small plane took off for the first time earlier this month and successfully managed a 15-minute long test flight. However, the company has announced plans to fly the machine faster than 300 mph (480 km/h) before the year is out, and also to sell similar propulsion systems to companies developing electrical air taxis or small commuter planes.

New aircraft designs

Airlines are also upgrading aircraft design to become more eco-friendly. Air France just received its first upgrade of a single-aisle, medium-haul aircraft in 33 years. Fleet director Nicolas Bertrand told French daily Les Echos that the new A220 — that will replace the old A320 model — will reduce operating costs by 10%, fuel consumption and CO2 emissions by 20% and noise footprint by 34%.

International first class will be very nearly a thing of the past.

The pandemic has also ushered in a new era of consumer demand where privacy and personal space is put above luxury. The retirement of older aircraft caused by COVID-19 means that international first class — already in steady decline over the last decades — will be very nearly a thing of the past. Instead, airplane manufacturers around the world (including Delta, China Eastern, JetBlue, British Airways and Shanghai Airlines) are betting on a new generation of super-business minisuites where passengers have a privacy door. The idea, which was introduced by Qatar Airways in 2017, is to offer more personal space than in regular business class but without the lavishness of first class.

Aerial view of Rome's Fiumicino airport

Aerial view of Rome's Fiumicino airport

commons.wikimedia.org

Hygiene rankings  

Rome's Fiumicino Airport has become the first in the world to earn "the COVID-19 5-Star Airport Rating" from Skytrax, an international airline and airport review and ranking site, Italian daily La Repubblica reports. Skytrax, which publishes a yearly annual ranking of the world's best airports and issues the World Airport Awards, this year created a second list to specifically call out airports with the best health and hygiene standards.

Smoother check-in

​The pandemic has also accelerated the shift towards contactless traveling, with more airports harnessing the power of biometrics — such as facial recognition or fever screening — to reduce touchpoints and human contact. Similar technology can also be used to more efficiently scan physical objects, such as explosive detection. Ultimately, passengers will be able to "check-in" and go through a security screening anywhere at the airports, removing queues and bottlenecks.

Data privacy issues

​However, as pointed out in Canadian publication The Lawyer's Daily, increased use of AI and biometrics also means increased privacy concerns. For example, health and hygiene measures like digital vaccine passports also mean that airports can collect data on who has been vaccinated and the type of vaccine used.

Photo of planes at Auckland airport, New Zealand

Auckland Airport, New Zealand

Douglas Bagg

The billion-dollar question: Will we fly less?

At the end of the day, even with all these (mostly positive) changes that we've seen take shape over the past 18 months, the industry faces major uncertainty about whether air travel will ever return to the pre-COVID levels. Not only are people wary about being in crowded and closed airplanes, but the worth of long-distance business travel in particular is being questioned as many have seen that meetings can function remotely, via Zoom and other online apps.

Trying to forecast the future, experts point to the years following the 9/11 terrorist attacks as at least a partial blueprint for what a recovery might look like in the years ahead. Twenty years ago, as passenger enthusiasm for flying waned amid security fears following the attacks, airlines were forced to cancel flights and put planes into storage.

40% of Swedes intend to travel less

According to McKinsey, leisure trips and visits to family and friends rebounded faster than business flights, which took four years to return to pre-crisis levels in the UK. This time too, business travel is expected to lag, with the consulting firm estimating only 80% recovery of pre-pandemic levels by 2024.

But the COVID-19 crisis also came at a time when passengers were already rethinking their travel habits due to climate concerns, while worldwide lockdowns have ushered in a new era of remote working. In Sweden, a survey by the country's largest research company shows that 40% of the population intend to travel less even after the pandemic ends. Similarly in the UK, nearly 60% of adults said during the spring they intended to fly less after being vaccinated against COVID-19 — with climate change cited as a top reason for people wanting to reduce their number of flights, according to research by the University of Bristol.

At the same time, major companies are increasingly forced to face the music of the environmental movement, with several corporations rolling out climate targets over the last few years. Today, five of the 10 biggest buyers of corporate air travel in the US are technology companies: Amazon, IBM, Google, Apple and Microsoft, according to Taipei Times, all of which have set individual targets for environmental stewardship. As such, the era of flying across the Atlantic for a two-hour executive meeting is likely in its dying days.

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