On the first day of the World Economic Annual Forum Meeting 2020, leaders reported on their regions’ respective strategic outlooks, highlighting cooperation to improve trade and economic growth.
Middle East and North Africa
Potential solutions to sluggish growth were raised in a session on the Strategic Outlook for the Middle East and North Africa. Standardizing norms among nations in the region could facilitate trade, and selectively reducing borders – physical and digital – could enable people to work together and invest in each other’s countries. It could also help increase the movement of goods, services and data. said Abdullah AlSwaha, Saudi Arabia’s Minister of Communications and Information Technology, was optimistic, saying: “Growth is no longer a question of if, but when.”
In December 2019, Saudi Arabia assumed the rotating presidency of the G20 and said it is committed to finding an agenda that focuses on improving the status of women and the youth to “leave no one behind”. Saudi Arabia is also trying to “steer consensus” on the digital divide, AlSwaha said, finding a middle ground between those who are more pro-consumer and pro-privacy, and those who are more pro-corporation.
In Latin America, new governments are facing domestic pressures that cut across borders, but leaders in Argentina, Brazil and Mexico are taking steps to strengthen their economies.
“Our national challenge is to detach from the lost decade (the last decade) and make Argentina a contributor to a stronger Latin America,” said Guillermo Nielsen, Special Envoy of the Government of Argentina and Chairman of YPF. The two main challenges of President Alberto Fernández of Argentina are to restructure the debt and launch the country on a growth path. The plans for getting to growth centre on raising exports in the agriculture, mining and energy sectors, Nielsen said.
Brazil is looking to “reindustrialize the economy” by developing infrastructure that would bring natural gas to the country from Bolivia and, according to Paulo Guedes, Brazil’s Minister of Economy, legal reforms will create greater flexibility for the economy by removing regulations. After President Jair Bolsonaro of Brazil took office a year ago, the government began attacking longstanding policies that had contributed to weakening the economy, said Guedes. A social security reform has passed the congress and will ease the future burden on government that threatened public finances. “We are now tight on fiscal and easier on money,” he added.
In Mexico, President Andrés Manuel López Obrador is committed to maintaining macroeconomic stability, said Graciela Márquez Colín, Mexico’s Secretary of the Economy. The country is betting on foreign and domestic investment to stimulate growth, which was near zero last year.
In Africa, leaders said they are committed to tackling corruption in their countries but more needs to be done to eradicate it, including strengthening democracy and making governance more transparent. Mokgweetsi Eric Keabetswe, President of Botswana, said there are many things governments in Africa “need to do better”. One is to improve revenue management and tax collection to give citizens more faith in the system of governance and see the benefits of bringing their businesses into the formal sector.
Improving trade is another area where Africa can do better. In 2018, the African Continental Free Trade Area, which brings together a market with a GDP estimated at $2.3 trillion and 1.2 billion people, was launched. “Africa hardly trades with itself and yet so many goods and services are required,” Keabetswe added.
A session on the Strategic Outlook for the Indian Ocean Rim revealed that most countries there have regional free-trade agreements among themselves, except for China and India, and most have huge trade deficits with China, with terms of trade that are not equitable or transparent. Without credible assurances and a robust framework, however, India has decided not to commit.
“For the first time India has demonstrated that trade will not be determined by diplomacy,” said Piyush Goyal, Minister of Railways and Minister of Commerce and Industry. Nevertheless, India plays an important role in the Indian Ocean region, is one of its largest economies and cares for fellow countries, he noted. “We are committed to support other countries in their efforts to fight climate change, particularly smaller island nations.”