East African Community and European Union never ending ratification

With no agreement for the Economic Partnership between the European Union (EU) and the East African Community (EAC) in sight, the biggest question at this time is what is keeping the individual countries from finding common ground and if that could be expected soon.

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Source: Global Risk Insights

The region-to-region comprehensive Economic Partnership Agreement (EPA) with the European Union (EU) seems to be a controversial topic. Even if there is no media coverage on the European continent. The  goals are aimed to strengthen the relationship between the EU and the EAC and drive forward development. The EPA agreement is centered around the trade of goods.

The main objective is to achieve a duty-free and quota-free access to the EU market and to open the EAC market gradually. This means that an equivalent of 82.6% imports from the EU will be liberalized and there will be no changes on the import taxes for the next 25 years.

The EU has been trying to work on a ratification of the EPA since 2007. It seems most countries have a common opinion on the trade and are all ready to contribute to the increasing business relations in East Africa. The further points about economical, health and rural development will all be run with existing EU funds that do not affect the individual countries of the EU directly.

The countries of EAC have made attempts since 2007 to  gain access to the European market. Kenya and Rwanda succeeded first with the EPA consolidating their commercial position. On the other hand, it brought disadvantages. Kenya belongs to middle-income economies so it will be charged by higher taxes if the  EAC does not sign the EPA and it will influence Kenya’s economy negatively.

Tanzania is still considering the pros and cons of signing the deal by running a study first but there are two countries that oppose the request. Without a study Tanzania will not sign the trade deal with the EU,with one of its important European business partner being the United Kingdom.The EPA seems inconvenient after Brexit and the deal could damage relations with China Tanzania’s main Investor.

The EU imposed trade sanctions against Burundi that caused civil unrest and unwillingness to make a deal. The latest country be involved in the intergenerational process was  South Sudan.

Uganda is also preparing to sign however prefers to wait for all countries of the EAC. Permanent Secretary, ministry of Trade, Amb. Julius Onen, said: “We are not going to allow EPA to disfranchise EAC. What is happening now is that this issue (EPA) is being blown out of proportion by a group of people.” it is not the end of the world for the EAC region. “Uganda does not want to see a weakened EAC, this is why as a country we are trying to see that we are all pulling from the same direction.”

Regarding the signing of the trade treaty between the EU and the EAC, the UN think tank has warned the EAC not to sign the deal. This is because they have made studies to look up how the deal would favor the East African countries nonetheless this deal would not have a positive impact in the trade of this countries. “UNECA says the removal of taxes on capital goods from Europe will cause the EAC accumulated revenue losses of $1.15 billion per year.”

To conclude, several countries of the EAC are still examining the characteristics, advantages and disadvantages of the trade. Some of them,  disagree due to higher taxes and stronger competition from the EU, it is a complex agreement that will still be negotiated for several years.

Source: CTGN AFrica

The Transatlantic Treaty

It’s been a few months we hear about the Transatlantic treaty and negotiations are at stake but many people wonder if this treaty is good for the European Union.

The creation of a single European economic space based on a common market was at the outset, the key objective of the Treaty of Rome. By establishing a common market and progressively approximating the economic policies of the Member States, the Community aims to promote harmonious development of economic activities. But, these things can be transformed with the arrival of several reforms about the Transatlantic Treaty. It is a treaty of free trade currently still in negotiation since July 2013 between the European Union and the United States. It aims to lower customs duty but no only, it also regularizes trade barriers. This treaty is the subject of many critics, we think that it is not appropriate for the European market and it is very difficult to understand the treaty as a whole.

Indeed, little understanding on the part of several experts about this treaty could remind us the debates of the European constitution. In our time, when euroscepticism increases, the transatlantic treaty is not adequate because it can favor the ascent of the populism. So, the Europeans will feel betrayed and the European elites will be denounced because they are always the ones who make the decisions. This is what happens in Greece with the election of Alexis Tsipras, member of the radical left coalition known as Syriza.

Moreover, the idea of opening a new market between us and European Union is very present. But the question is to know if it is really useful, and if it is going to be a success. The process of creating a new market and creating a new area is already complicated in Europe. For the first time, the European Union has to face an economic crisis. This idea of a united continent is already hard to achieve, and maybe this treaty of the European Union with another continent. Before having negotiations with the US, Europe has to solve its own problem if we cannot be sure that there are no inconvenient to this treaty.

To finish, there is a risk modify, but also to deregulate the economies of the two continents, and especially Europe. These continents don’t have the same economic model. Lots of experts put forward that this treaty was influenced by the big companies. It will allow big corporations to sue governments before secretive arbitration panels composed of corporate lawyers. We can observe this phenomenon in Australia, the country is sued by the company PhilipMorris. This idea of “secretive” is very risky for the European Union. It is already a complex economic system, and it would be dangerous to make it more opaque.

In conclusion, the Transatlantic treaty is not good for Europe because it will foster euroscepticism, the situation may become even more critical and companies will have powers that can be dangerous for consumers.

A New Treaty of Versailles?

A week after the election of Alexis Tsipras, Germany and Greece are arm wrestling over the debt situation and some politicians do not hesitate to assimilate the policy of Angela Merkel with the third Reich.

La Grèce peut-elle changer l'Europe ?

Picture taken from the website “Latribune”

Hopes are high among the Greek population, after the victory of a radical left leader. The inhabitants expect the situation is going to evolve in a country with a 175% of GDP debt and a 26 % rate of unemployment. These last years, Greece has been negotiating with the European Union, and especially Germany, so as to reduce the debt. The negotiations are increasingly strained.

As the “Washington Post” reported, Tsipras traveled on the memorial site at the range Kaisariani, where in 1944 Nazi soldiers executed some 200 Greek militants in retaliation for the death of a German officer killed in a Greek ambush. It was his first act as Prime minister. Syriza has been outspoken about the need for Germany to atone for his past in Greece, or at least show a little more leniency now as compensation. “We will ask for debt reduction, and the money in Germany we must start from the Second World War, including repairs,” he said earlier this month. It was total war global dimensions, a war of extreme violence in which entire populations were destroyed through the establishment of a systematic extermination policy.

One of the main factors of WW2 was the Treaty of Versailles. In “The Economic Consequences of the Peace”, John Maynard Keynes demonstrated that the problem was that the reparations Germany had to pay were so big that the country would not be able to pay for it. He said that the treaty of Versailles would feed the German nationalism and would be dangerous. Finally, Germany did not pay for WW1. Today, we also know that the peace of 1919 was a time bomb and yesterday’s Germany is the Greece of today.

It is evident that today the roles have changed. Germany became the most powerful country in the European Union and defeated Nazism. The recent event makes us take conscience that history repeats itself. The situation Greece is facing today is very similar to Germany’s situation during the 20’s. The population suffers from rules established by other countries and this idea led Germany to a totalitarian government. The “German bashing” in Greece is really threatening and Germany knows better than others that it is dangerous to impose rules to a population. It is evident that the European Crisis will be solved by encouraging dialog between Germany and Greece because both ways of behaving are risky, but also with the rest of the European Union, so as to avoid the dangerous lack of communication like during the 20’s.

Modi’s Operandi: A fresh Wind moving through Asia

INDIA seems to formally gain on optimistic politicians, but no one nearly as Hindu & nationalistic as Narendra Modi.

The recently elected 14th prime minister (see Picture 1) is going to swear him in on May 26th. Being a member of the Bharatiya Janata Party (BJP) or also called Indian People’s Party, he’s trying to bring a ‘fresh wind’ into India’s political & economical system.  

According to ‘The Economist’, it is necessary to mention that India is the world’s third largest economy. However, its regional position is not an easy task, as the government is also likely even to deal with iron-ore mafias and there may be some kind of conflicts with its neighbors in Pakistan due to religion.

Anyway, what is clear is that Mr. Modi wants to ‘repair’ India – eradicating hunger, cleaning the famous Ganges River and creating jobs. To do so, the contribution to GDP from the industry will be necessary, and to some extent – and not to pretend – loans to zombie firms too. A deep financial reform has to get started, but… Are banks fit enough for that?

In the first year of Mr. Modi’s term, he needs to stabilize banks and to manage inflation, in order to help India’s economy to boom again. Mr. Mobi ensures in his speech an effective government, providing for example clean & drinkable water and a powerful and flourishing industry. Reforms that can be crucial for India’s future.

The new prime minister strives to achieve an effective and decisive government in order to confront all upcoming challenges, which before have been quite unable to overcome.

The parliament itself has fewer Muslim delegates than ever since 1952.Despite the Islam being the second largest religion in India, and it being the 3rd largest country in number of Muslims (13.4% of the population), after Indonesia and Pakistan, only 7 of the 482 candidates were Muslims and none of them won.

The BJP, or also referred to Hindutva, appealed to his Hindus voters to be proud of their heritage and their country, but trying to avoid the anti-Muslim language. Unlike other parties, Mr. Modi didn’t do any special actions for religious minorities. Supported by the Supreme Court, the BJP tells that the Hinduism has, since its inception, instilling principles of tolerance and compassion plurality – unlike the Muslims, who only appealed to believers in order to get votes. Many Muslims can identify a clash of inclusive tradition and the authoritarian nature of Mr. Mobi.

As for India’s foreign policy, it starts seeing ‘fresh winds of change and openness’, inviting some leaders of South Asia, including the prime minister of Pakistan, Nawaz Sharif, to his swearing-in on May 26th. Although Mr. Modi lacks of experience abroad, just as Gujarat’s Chief Minister, he tries to work intensively with foreign companies, in order to seek more trade and investments.

Apart of this, further actions are essential to improve India’s economy. For example, taxes seem to be very speculative, so foreign companies prefer to export their products to other countries. In this sense, India’s government has to improve its tax net.

Closing, we can also identify two important aspects that have to get improved or even completely changed. The first one is India’s reputation – in order to enhance businesses.

The second aspect is that India seems to go only in two directions: It might observe itself without doing anything, or it may create a valuable private sector to promote more jobs.

What will be the government’s final decision?

 

China – Next Economic Superpower?

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Picture retrieved from: http://endoftheamericandream.com/

“Money rules the world” – This assumption is reflecting the world’s most fundamental structure but at the same time representing the most important component of the international system: the economy – to be concrete, capitalism.

Overgeneralizing – the economy of a nation-state means more prestige and, conforming to the UN, more responsability.

According to historical facts – since the creation and independence of the United States of America – the U.S. has always been a type of ‘policeman’ for the International Community because of it’s huge economy, and therefore being able to establish a modern and strong military army. But according to data retrieved from the World Bank, the U.S. will not longer enjoy its economical leading position anymore by the end of 2014.

China has become the world’s largest goods trading nation in the last years, to take an example in 2013 China’s total merchandise trade was $1,986 Billion larger than in 2007. China increased the exports by $992 Billion and the imports by $994 Billion. If we compare this data with the U.S. goods traded that increased $741 Billion, the EU $1,024 Billion and Japan only $214 Billion, we can see that China alone will increasingly produce more goods than these three developed countries together.

One of the popular claims about China that usually appears in the media is that this fast growth of their economy is slow in terms of the raise of consumption and standards of living, but this affirmation is not true at all. The professor of the London School of Economics Danny Quah noted that: In the last 3 decades, China alone has lifted more people out of extreme poverty than the rest of the world combined. Indeed, China’s ($1/day) poverty reduction of $627 Million from 1981 to 2005 exceeds the total global economy’s decline in its extremely poor from $1.9 Billion to $1.4 Billion over the same period.

On the other side, China’s structure is based on Communism but also having a capitalist economic policy. These strict policies that both the public and private sectors must obey are being regulated by the state, which controls the prices of goods and services. Thus, the dominant role of the state is being affected by certain restructuring reforms that produce large layoffs in a country without unemployment benefits. Under the state’s occultism it is difficult to assess the depth of this corporate restructuring. Without this public sector reform, financial reform is difficult, which gives priority to huge bank deposits – consequences are a very high savings rate and restrictions on capital outflows – whose destination are public companies regardless of their viability.

Economic transformation is not easy and China is facing inflation as well as social conflicts such as huge unemployment, due to its fast growing population. Currently the most important task is to find a promising solution to economic stagnation before China can become the world’s new economic superpower of the 21th Century.

China’s economic growth seems to be relatively new, although it was predicted since the empowerment of the Communist Party. It does not matter at all how many good or bad consequences this evolution will bring with it, –

as Napoleon said, “let China sleep, for when she awakes, she will shake the world”.

Some people think this will bring a positiv feeling in the international economy, and others think it will be awful or even totaly destructive. Which of these assumptions are true?
Future events will show.

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Picture retrieved from: http://leewoodgate.blogspot.it/

INTERVIEW WITH PING SHIH HU SUN, MANDARIN TEACHER AT UEM

I was one of the five students who were assigned Asia as a region to focus on for the International Observatory class and we were told to interview somebody who is related to that region. So I thought that there was no better person to interview than my Mandarin teacher at the Universidad Europea de Madrid, with who I have had the privilege of learning such a difficult yet wonderful language during the second trimester. Her name is Ping Shih Hu Sun and she was born in Taiwan.

I asked her ten general questions about various different topics regarding the region, focusing mainly on China, but also looking at events that have had an effect on China and vice versa.

I am very interested in the whole story about the crisis of the two Koreas, especially the North. Therefore, as an opening question, we can say I was “forced” to ask her about the relationship that exists between China and North Korea.

She said “I think that since they are neighbors, China wants to avoid divergences with North Korea, also because they share a similar political system, Communism, and there aren’t many other Communist states nowadays, so it is important to keep a relationship with them.”

I then continued with a question related to Taiwan, I asked her about the movement that has been going on for years about the complete sovereignty and independence and of Taiwan from China. It is always interesting to hear a personal opinion from somebody who is actually from there.

She said “As a matter of fact, politically and economically Taiwan is totally independent, but I don’t think that Taiwan is capable nor should become a completely independent country because it has been part of Chinese territory for five centuries and due to extraordinary circumstances it finds itself in such situation. No one will ever recognize them as an independent territory and state”.

That question led me to ask her about the Chinese community abroad, specifically in Spain, I was aware of the fact that she was born in Taiwan but I thought that since they are related she could give me an interesting answer, and she did.

She said that “The Chinese community in Spain is like most of the Chinese people, confident about the idea that putting effort into things will lead people to achieve what they aspire.” I immediately agreed with that inspiring statement, because every Chinese person that I know is a very hardworking person.

Manny Ping

After that, I asked her a question that would have taken her ages to answer since it was such an open question therefore she replied in a brief sentence, which made total sense to me. I asked her about some similarities and differences between China and Spain and she replied “Both countries are very hospitable, and are friends of their friends; generally speaking the people are very sociable”.

I then though it was time to move on to talk about more serious issues, so I went back to the North Korea topic, I asked her about the public opinion of the Chinese population about North Korea and its actions whether they support it or oppose it, or whether they just follow what the government says. She gave me a wise answer: “I believe that the people neither support nor oppose the North Korean regime, because the Chinese know that they have their own problems to take care of, they don’t want to pay attention to external problems”.

The next question was along the lines of the previous one. I was skeptical when thinking about asking this question because it involved a very personal answer which many people refuse to give. I asked Ping if she thought that the Chinese regime was too oppressive or if it was improving in terms of democracy, and she said “China is a Communist country, but in some aspects it is improving. However you cannot ask such a big country to make such a drastic change, which would cause chaos like it happened in Russia. China has to make slow progress and the population has to comprehend the real meaning of democracy”.

It seems that the debate about the Tibetan sovereignty has lost media attention years ago, so I thought that it would be interesting to bring it up in my interview, so I asked Ping about her personal opinion on the matter.

She replied by saying that “Tibet is part of the People’s Republic of China since many centuries ago. Nevertheless, the international media tends to twist the truth and misreport the facts. I that think what really matters at the end of the day is what the Tibetans want”.

It seems by the type of questions that I am asking her that I am criticizing China by focusing on the saddest happenings, but the fact of the matter is that I love China, its history, culture, language and people. I just focused on those topics because they have created heated debates for years. So, to continue I asked her about the freedom of the press in China. She thinks that “in today’s political system in China, the press does not have total freedom. Freedom is conceded depending on the topic, those topics which are critical about the regime are promptly censured, but those which aren’t are disclosed normally”.

The last two questions could not have been left aside. I had to talk about the economy, so I asked Ping whether this boost of the economy is the right path for China or if it would be better if they slowed down a little, thus respecting some human rights that some workers had had consequently violated due to that boost.

She said that “human rights of the workers are achievements that characterize developed countries. In a society like the Chinese one the rural population moves to the cities looking for jobs wherever employment is offered, so this is the result when there is more demand than supply. The governments may set the rules, but in the end it the companies who really decide”.

I saved the following questions for the end because it is a question that a lot of people ask themselves. I have to say… I did not expect that answer at all, but I have learned to respect all opinions. I asked Ping whether she thought there would be more competition or cooperation between China and the West, especially the United States.

She firmly said “I supposed there will be more competition with the United States because the Americans don’t want China to be on their level, and will make up stories to show that China is not trustworthy.

I enjoyed this interview with Ping, it was nice to know her opinion on these topics of such importance at the international level.

By Emanuele del Tufo

London 2012: Sport, economic crisis and missiles on residential flats.

Two months left to the beginning of the 2012 London Olympic Games. England’s capital is ready to receive the thousands of athlets and millions of tourists who will enjoy with the Olympic Games. The biggest miltary deployment since World War II will ensure their safety and the citizens. However do the citizens of London, want to convert their city into an Olympic city? Are the Olympic Games appropiate in this moment of a huge global economic crisis? How does this affect the daily lives of the people of London?

It is difficult to find the exact number, but it is estimated that the total cost of the Olympic Games could exceed 11 billion pounds. Only the construction of the Olympic stadium has exceeded 537 million pounds, wich makes it the most expensive stadium in the world. This year the Londoners have seen their taxes go up 20 pounds per citizen to finance the Games. Thousands of citizens are against the holding of the olimpyc games and remaind that they were not consulted and that Greece´s financial crisis started after the celebration of the Olympic Games in Athens 2004. Another concerns Londoners have is what is going to happen with the facilities when the Olympic Games have finished. Unfortunately the “madrileños” can understand the fears of  Londoners because Madrid has tried to be an Olympic City two consecutives times and not happy with their failure are competiting to be Olympic City for 2020.The citizens of Madrid are going to be paying for the ambitions of a Mayor for decades because the facilities that were built are now empty, deserted. Those constructions have not helped at all, only to put the city and the citizens in debt. They will pay the debt through added taxes. How it is it possible that the council with the most debt in Spain wants to be an Olympic City? Should not be the citizens who decided?

Security during the Olympics is an other factor wich furiates the citizens. The army is going to instal batteries of missiles on the roofs of family residences, there will be an aircraft carrier on the River Thames, 13, 500 soldiers will be deployed (a number higher than the British detachment in Afghanistan) will be among 30,000 and 50,000 troops adding policies, security officers and intelligence. All of this in times of austerity. The use of force has been authorized against uncomfortable protests towards the government such as “15M” or “Occupy Wall Street” movements and 300 new security cameras have been installed across London.Monitored citizens, citizens affected by road cutoffs and on public transport too, indiscriminate security controls, families with rockets on their roofs and citizens paying more taxes through the fault of the politician´s egos. While the city becomes poorer political and security companies get richer.

 

By: Isidoro Arriola, Rafael López, Patricia Martínez and Alejandra Rojo.