Professor Karl Wohlmuth gave a Keynote Lecture on “Transport Infrastructure and Regional Integration in Africa – A Neglected Link” at the second “Aviation in Africa” International Workshop which was organized in June 2018 by the Institute for Transport and Development (ITD) of the Hochschule Bremen (City University of Applied Sciences Bremen) on behalf of the international scientific organization GARS (German Aviation Research Society). Professor Wohlmuth emphasized in his lecture the following themes: Scoping the neglected link of transport infrastructure and regional integration; New Initiatives to link Infrastructure, Continental and Regional Development in Africa; Transformative Regional Integration and Infrastructure Development in Africa; The “Infrastructure State”, Regional Integration and Aviation Development in Africa; and Conclusions –Way Forward in Africa. More than hundred experts on aviation and development participated at the three days meeting in Bremen (see the PDF Programme and the PDF Power Point Presentation).
Professor Karl Wohlmuth speaks about “Transport Infrastructure and Regional Integration in Africa”
Professor Deusdedit Rwehumbiza from the University of Dar es Salaam speaks about “Perspectives of regional integration in East Africa”
Participants (left Conference Organizer Professor Hans-Martin Niemeier from the ITD) listen to the lecture of Professor Hans-Heinrich Bass about “Monetary Integration in East Africa”
Professor Wohlmuth argued in his lecture that a new approach towards transformative regional integration is needed for Africa to overcome the bottleneck factors which impede structural change in Africa. Not trade liberalisation is the key priority issue of regional integration, but structural transformation between and within economic sectors. This “transformative regional integration approach” contrasts with the “linear regional integration model” which was inherited in Africa from the European integration process. Also, it was strongly emphasized that transport infrastructure development is biased in Africa as roads construction (within the countries and at cross-border level) is still the key transport sector development business. Other transport modes, like railways, aviation, waterways and rivers, and ocean shipping, are still neglected. But most seriously, the mobility concepts are not clarified in Africa; it is not made clear how the transport modes are really used (by producers and consumers). Huge investment projects are agreed upon in the context of national, regional and continental transport development programmes, but financing, implementation and maintenance levels are weak, and the social, commercial and economic benefits of the projects are not always made clear. The map of PIDA’s Priority Action Plan (see below) shows how neglected other transport modes than roads (along the Corridors and the Trans African Highways routes) are and will be until 2040.
From: Export-Import Bank of India, Connecting Africa: Role of Transport Infrastructure, March 2018, p.42
Note: PIDA/Programme for Infrastructure Development in Africa
Aviation has huge developmental advantages for Africa, but this transport sub-sector is still neglected in all decision-making processes, at national, regional and continental African political and governance levels. The observed progress of Africa in terms of ICT (Information and Communication Technology) and STI (Science, Technology and Innovation) development indicators gives hope and will facilitate the build-up of an aviation infrastructure. Aviation has huge effects in Africa on employment, industrialization, technological development, skills and human resources development, regional development, export development, mobility of people, goods and ideas, and especially on the opening of economies for trade, investment, technological innovation and skilled migration. The proposed publication project for volume 22 of the African Development Perspectives Yearbook on “Sustainable Development Goal 9 (Infrastructure, Industrialization and Innovation) and African Development – Challenges and Opportunities” will consider the issues of a more balanced transport infrastructure in Africa as a base for a broad industrialization advance and the speeding-up of innovation processes in African firms (see PDF International Call for Papers for Volume 22, 2020). Members of GARS and other experts on aviation in Africa are invited to submit their Abstracts to the Editors of the African Development Perspectives Yearbook (see the link to the Yearbook programme: http://www.iwim.uni-bremen.de/africa/about.htm).
Professor Karl Wohlmuth has given advice to the Promotions Committee of the Federal University Of Technology in Akura, Nigeria. The Promotions Committee is responsible for the appointment of Professors and Associate Professors. Professor Wohlmuth was asked to evaluate candidates on the basis of their publications and overall qualifications for the position in question. It is a sophisticated multi-stages system of evaluation for the promotion to the rank of a Professor and an Associate Professor. Karl Wohlmuth was invited for this function by the Vice-President of the University and by the Head (Secretary) of the Promotions Committee. The Federal University of Technology is a leading University in Nigeria.
Also, Professor Wohlmuth has advised the Promotions Committees of the University of Khartoum (Sudan) and of the University of Juba (South Sudan) concerning appointments to Full Professorship. The University of Khartoum is on the way of reorganizing and strengthening its academic profile to regain the leading position which it had after independence among African universities. The University of Juba, as well as other universities in South Sudan, are still suffering because of the civil war in the country and the serious governance problems.
Professor Wohlmuth was also active as a reviewer of manuscripts, book proposals and articles for peer-reviewed journals. The Canadian Journal of Development Studies asked him to review manuscripts. This journal is now a leading journal on development studies in North America. The UNU-WIDER Institute in Helsinki asked Professor Wohlmuth to review a contribution for an international journal. UNU-WIDER is the globally leading institute for development research. Professor Wohlmuth was also active for the Journal Of International Development, for the journal Comparative Economic Studies, and for various African journals. Again, Professor Wohlmuth was asked to review proposals for book publications for the Economics Book Editions programme of Routledge Publishers.
Professor Wohlmuth was invited to advise a leading German multinational on issues of Customer Assessment to Optimize Business Models in Africa. As there are increasing business relations with Africa, the role of different groups of customers (by size, sector, and country) is becoming more and more relevant. It is therefore important to optimize the business models in Africa accordingly. A preparatory group of the German multinational company is involved in writing the first draft of the assessment.
Professor Wohlmuth has given advice and was peer-reviewing a Strategy Document on Revitalizing Sudan which was written by Dr. Murtada Mustafa. The Strategy Document is emphasizing five core pillars (Education, Entrepreneurship, Agriculture, Industry, and Management/Civil Service), which are considered as the basis of a new development strategy for Sudan. Dr. Murtada Mustafa was the first permanent Undersecretary of Labour in the government of Sudan. He has also had various leading functions in the International Labour Office (in Geneva, Harare, Cairo, and Khartoum). The Strategy Document will also be published in the Sudan Economy Research Group (SERG) Discussion Papers, and it will be circulated to policymakers inside and outside of Sudan. It will be published in English and in Arabic languages.
Professor Wohlmuth is also supporting and advising two Guest Researchers at the Faculty of Economics and Business Studies, University of Bremen: The agricultural economist Professor Reuben A. Alabi, Department Of Agricultural Economics, Ambrose Alli University, Ekpoma, Nigeria is in Bremen for the period 2015-2018, and the international economist Professor Chunji Yun from the Faculty of Economics, Seinan Gakuin University, Fukuoka-City, Japan is in Bremen for the period September 2017 to August 2018. For both researchers this is a further stay for research programmes, in cooperation with Professor Wohlmuth, at the University of Bremen and at IWIM. Both researchers have published in the various IWIM Publications Series. Further publications are expected from this research period.
Professor Alabi is doing researches on waste management and related value chains in Nigeria (comparing such value chains with the ones in Germany) and on aspects of the agricultural transformation in Nigeria. He is also these months working as a research fellow at the International Monetary Fund (IMF) in Washington D. C. in their African Department to do research and to give advice on the E-wallet fertilizer subsidy scheme which was introduced in Nigeria by Akinwumi A. Adesina, at that time the Nigerian agriculture minister who is now the President of the African Development Bank in Abidjan. It is the purpose of the assignment to the IMF to look at the possibilities of a wider use of the Nigerian E-wallet fertilizer subsidy scheme in other African countries. Professor Alabi and Professor Wohlmuth cooperate in Bremen on editions of the African Development Perspectives Yearbook concerning aspects of Nigeria’s economic and agricultural transformation. Most recently, Unit 2 of Volume 20 (a Unit is a collection of essays for a specific theme, introduced by the editors of the Unit) was finalized on “Science, Technology and Innovation Policies for Agricultural Transformation in Nigeria”. A strategy was outlined on the basis of the Unit 2 by Professors Alabi and Wohlmuth.
The researches by Professor Chunji Yun centre on the European integration process. He is interested in the fact that the European Union (EU) has 28 (later after Brexit 27) employment regimes and labour policies, so that cross-border investments by firms through global and regional value chains have implications for the national employment regimes and the still national labour markets. He investigates the implications of cross-border investments on nationally organized labour markets for two sectors (automobiles and electronics). He will analyse the different sectoral structures of the value chains which are demanding different types of labour by function at different levels of skills and at different places; these cross-border investments and value chains are then leading to quite different labour market outcomes. He concentrates in his research work on the cross-border investments of German companies in the Visegrad countries to study the repercussions of the changing value chains on the national labour markets and the national labour policies in Germany and in the four Visegrad countries. Because of the fact that Bremen is a centre of production networks, such as for automobiles and automotive parts, there is also the possibility for Professor Yun to visit production sites in Bremen. Professor Wohlmuth and Professor Chun have discussed the first research report in December 2017; the second research report is due in February 2018 for a further intensive discussion and review.
Professors Hans-Heinrich Bass, Robert Kappel and Karl Wohlmuth were invited by the FES Tunis to speak at the workshop “Alternative Economy and Social Justice”, 14-15 September 2017, about the future of labour in the MENA region. The focus on the first day was on Employment and Alternative Sectors: Green Economy, Digital Economy, as well as Social and Solidarity Economy. It was expected by the organizers that the experts give concrete recommendations and suggestions on the role of the civil society – more precisely the trade unions - in order to preserve labour rights and to warrant the sustainability of jobs within these new sectors of an alternative economy. The second day was reserved for a common meeting with the regional projects “Climate and Energy”, “For Socially Just Development” and the “Regional Trade Union Project”.
It was planned for the first day to have an expert debate on the subject of new opportunities and challenges of the transformation of the labour market in the context of the newly emerging three sectors in the MENA Region. In particular, the labour market implications of the Green Economy, the Digital Economy, and the Social and Solidarity Economy were discussed. The three German economists were invited because of their collaboration with the FES on a study to analyse the starting points for an employment strategy for Tunisia (see the PDF of the study: library.fes.de/pdf-files/iez/13336.pdf, and for a download of the versions in German, Arabic, French and English languages see: https://www.fes.de/t3php/publ_int.php?&f_ABC=tunis&f_RSW=tunesien&logik=or&t_listen=x&sortierung=jab&t3titel=Tunesien). A short report about the meeting summarizes the main points of discussion (see the link: http://www.fes-mena.org/events/e/alternative-economy-and-employment/). The event was part of a larger programme of the FES for the MENA region (see on the programme “Economic Policies for Social Justice”: http://www.fes-mena.org/topics/economic-policies-for-social-justice/, and on the book as a final report with the title “Towards Socially Juist Development in the MENA Region”, to be accessed for download via PDF: library.fes.de/pdf-files/bueros/tunesien/13871.pdf).
Professor Karl Wohlmuth hielt einen Vortrag zum Thema: Kooperative Innovationsstrategien in Deutschland und im Land Bremen. Die Rolle der verschiedenen Akteure. Der Vortrag fand am Montag, 28. 8. 2017, im International Graduate Center (IGC) der Hochschule Bremen statt. Professoren und Dozenten von Hochschulinstituten der Provinz Sichuan, insbesondere vom Sichuan Administration Institute (SAI) unter der Leitung von Frau Deng Ying, Vize-Präsidentin, informierten sich über den Wirtschaftsstandort Deutschland und über neue Innovationsstrategien der Politik und der Unternehmen. Auch die „One Belt, One Road“-Initiative der chinesischen Regierung wurde aus deutscher Sicht bewertet. Die Rolle der Denkfabriken in Deutschland bei der Entscheidungsfindung über Großprojekte, internationale Projekte und Innovationsprojekte war auch ein Themenkomplex des Seminars.
Professor Wohlmuth ging in seinem Vortrag zunächst detailliert auf die Rolle Deutschlands im globalen Innovationswettbewerb ein, um dann die Struktur der Nationalen und Regionalen Innovationssysteme und die Rolle der verschiedenen Akteure zu erläutern. In einem weiteren Teil des Vortrages wurde die Zusammenarbeit von Universitäten, außeruniversitären Forschungsinstituten und Unternehmen in Bremen erläutert; an Beispielen wurde verdeutlicht, wie Unternehmen, Forschungsinstitute und Behörden bei Innovationsprojekten kooperieren. Von besonderem Interesse war für die chinesischen Teilnehmer des Seminars die Art der Einbindung der bremischen Innovationspolitik und Innovationsförderung in den Rahmen der Innovationsstrategie der Bundespolitik. Auch die Beziehungen der Akteure der Innovationspolitik in Deutschland und in Bremen mit dem Ausland interessierten die Teilnehmer.
Die lebhafte Diskussion ging auch um die Entscheidungsprozesse bei der Vergabe von Fördermitteln für Innovationsprojekte; die Rolle der europäischen und bundespolitischen Akteure bei der Finanzierung von Projekten wurde hinterfragt. Auch der Spielraum der einzelnen Forscher bei der Entscheidung über die Wahl von Forschungsthemen und bei der Mitteleinwerbung interessierte die Teilnehmer aus der Provinz Sichuan. Großen Raum im Vortrag und bei der Diskussion nahmen die Neue Hightech Strategie der Bundesrepublik und die neue Hightech Strategie von China, die Strategie „Made in China 2025“, ein; eine vergleichende Analyse wurde präsentiert. Die dargestellten Bewertungen der deutschen Innovationstätigkeit durch die EU (im European Innovation Scoreboard 2017 und im Research and Innovation Observatory (RIO)-Länderbericht 2016: Deutschland) zeigten den Teilnehmern die Stärken und die Schwächen der deutschen Innovationslandschaft in vergleichender europäischer Perspektive auf. Am Beispiel von bremischen Innovationsprojekten wurde dann noch gezeigt, wie die diversen Akteure (Unternehmen, Forschungsinstitute, Finanzinstitute, Behörden, Consultingbüros, etc.) in Clustern kooperieren und wie Absprachen zwischen Unternehmen, Forschungseinrichtungen und Behörden zustande kommen.
Die Präsentation zu dem Vortrag ist als PDF verfügbar (vgl. PDF Wohlmuth, Sichuan Province, Kooperative Innovationsstrategien). Eine Ausarbeitung auf der Basis des Vortrages ist vorgesehen.
Professor Karl Wohlmuth war auch eingeladen, einen Vortrag bei einem Weiterbildungsseminar vom 4. 7. bis 11. 7. 2016 für Teilnehmer aus der Provinz Tianjin, Volksrepublik China zum Thema „Innovation und industrielle Entwicklung in Deutschland“ zu halten. Die PDFs zu anderen Vorträgen von Professor Karl Wohlmuth in diesem Programm für chinesische Experten sind über die beiden Homepages (IWIM und Karl Wohlmuth) abrufbar.
Professor Chunji Yun, Professor since 2010 at the Division of International Economics, Department of Economics, Seinan Gakuin University, Fukuoka City, Japan is since September 2017 Guest Researcher at the Faculty of Economics and Business Studies, University of Bremen; he will stay until August 2018. He was invited by Professor Karl Wohlmuth and the Dean, Professor Jochen Zimmermann, to do researches on the theme Transforming the European Social and Economic Model in the Enlarged EU from a Viewpoint of the Production and Employment Regime (see the synopsis of the research outline below under Research Purpose,..). This is the second research visit by Professor Yun in Bremen. Ten years ago Professor Yun was research fellow at IWIM for 18 months. He has published in the IWIM book series as number 13 (Link: http://www.iwim.uni-bremen.de/publikationen/pub-jwt.htm) on “Japan and East Asian Integration” and in the White Discussion Paper series as number 33 (Link: http://www.iwim.uni-bremen.de/publikationen/pub-white.htm) on “Production Network Development in Central/Eastern Europe and Its Consequences”. Based on these publications, Professor Yun was invited to international conferences and he was asked to submit papers for international publications. The contact between IWIM, University of Bremen and Professor Yun continued over the years.
Research Purpose, Analytical Standpoints, Previous Studies and Expected Research Results (a short summary of the Research Proposal):
With the deepening of the economic integration, and particularly since the recent Euro Crisis, there are heated debates over the social dimension of integration in Europe. The background of the discussion is if the European Union (EU) aims at an ‘Economic Europe’ or moves towards a reconstruction of a ‘Social Europe’. In this context, the research aims to analyse the transformative dynamics of economic and social models in the enlarged EU, by exploring how nationally organized employment regimes are forced to adapt to the deepening of an ‘Economic Europe’. More specifically, the national employment regimes are affected by changing cross-border production regimes which are characterized by processes of “fragmentation of production”, “global/regional production networks”, and “global value chains (GVC)”. Also, an investigation of the possibilities of reversing the ‘Race-to-the Bottom’ situation of social conditions within the EU is intended as part of the study.
The research will be carried out as mainly being based on two influential analytical perspectives, the “variety of capitalism” approach and the “global value chain” approach. The former approach has analysed various European economic and social models, focusing on the institutional complementarity among industrial relations, including collective bargaining, labour market flexibility or rigidity, the vocational training system, the financial system, and so on. This approach is also giving special attention to the interrelationships among the required skill specificity, the skill formation, employment and social protection systems, and the institutional comparative advantages of each national employment model. On the other hand, the latter approach, as a most influential analytical perspective on global manufacturing and service industries, has elaborated analyses of a cross-border division of labour featured as vertical specialization or vertical integration/disintegration. This latter approach is using a sophisticated methodology and is developing policy arguments for industrial upgrading within the hierarchical structure of the new international division of labour. And, most recently, its focal point is shifting from industrial upgrading to social upgrading/downgrading. The most important feature of the research is to figure out the interactions and/or the causal relations between GVC development within and beyond the enlarged EU and the transformation of economic and social models.
Research Outcomes by February 2018: First Research Report is available, Second Research Report is forthcoming
Professor Yun has presented a first report on his researches in December 2017. The second research report is forthcoming in February 2018.
In the first research report from December 2017 Professor Yun discusses four themes:
1. Starting Point or Background of Research (first draft)
There is a discussion about two prevailing myths. The Myth 1 is related to the Eurozone Crisis considered as being due to fiscal profligacy and being a sovereign debt crisis right from the start. The Myth 2 refers to the Eurozone Crisis as a crisis of (Unit Labour) cost competitiveness in combination with fiscal irresponsibility. These two arguments are evaluated.
2. Problematic Causal Chain of (Cost) Competitiveness, Imbalances, and Internal Devaluation (first draft)
There is a discussion of the role of the Unit Labour Cost (ULC), being considered as an a priori argument for labour market reform being inherent in the referred to competitiveness indicators. The drawbacks of the ULC analysis are presented. This is followed by a survey of recent researches on the regional imbalances in the EU.
3. The Germany-centred production network and the regional imbalances in the European Union (still work in progress)
There is a discussion on the contradictory neoclassical views on the German export surplus, then a discussion on the German position within the regional production networks (manifested by the GVCs), and finally a discussion on the changes occurring and the differences becoming visible in regard of Global Value Chain-GVC/ Global Production Network-GPN Structures.
4. Transforming the Employment Regime in terms of GVC/GPN: Germany and Visegrad (still work in progress)
The analysis starts with a discussion on social upgrading/downgrading in GVC-based development patterns, followed by an analysis of the erosion of the German Model interpreted as a Diversified Quality Production (DQP) model. Then the changes of this model are analysed, by looking at two kinds of modularization and the implications for the production networks, referring to the electronics and automotive sectors. Then for these two sectors the implications of the expanding production networks on the employment regimes are considered.
Professor Yun is doing intensively literature researches, but is also attending conferences, lectures and discussions with experts in the field. He is also considering to visit international enterprises which are located in Bremen, as these enterprises are valuable sources for information on global value chains (GVCs) and global production networks (GPNs) between Germany and the Visegrad countries. Professor Karl Wohlmuth is meeting regularly with Professor Yun for discussions of the issues. The study has high relevance also for the strategy of the German trade unions as globalization impacts differently on economic sectors in Germany.
Professor Reuben Adeolu Alabi, Guest Researcher at the Faculty of Economics and Business Studies, University of Bremen, was invited by the African Department of IMF to do researches over February and March 2018 at the IMF Headquarters on The Pro-Poorness Of The Electronic Fertilizer Subsidy Programme And Its Implications On Food Security In Nigeria. Professor Alabi will continue his researches on the Electronic Fertilizer Subsidy Programme Nigeria (EFSPN) which he started in Bremen during his research stay since 2015. The EFSPN Scheme is considered as innovative and as a model for other African countries. It was introduced by Akinwumi Adesina, since 2015 acting as the President of the African Development Bank, in the time when he served as Nigeria's Minister of Agriculture and Rural Development. Until his appointment as Minister in 2010, he was Vice President of Policy and Partnerships for the Alliance for a Green Revolution in Africa (AGRA).
The shortcomings associated with the fertilizer subsidy scheme led Nigeria to adopt the Growth Enhancement Subsidy Scheme (GESS) in 2011. In this scheme the private sector plays the role of supplying and distributing fertilizer, while the government is involved in the registration of the beneficiaries and the payment of 50% of the cost of fertilizer and of other agro-inputs received by the farmers. The scheme delivers subsidized agricultural inputs to farmers through an electronic wallet (e-wallet) system. With unique voucher numbers that are delivered to their phones, farmers then redeem their input allocation from accredited agro-dealers. It is expected that this scheme will improve agricultural input distribution and marketing. In addition, it should provide incentives to encourage actors along the fertilizer value chain to work together towards the common purpose of improving agricultural productivity, household food security, and income. The hope is that this would better serve the intended beneficiaries who are farmers and reduce the fiscal burden of a universal fertilizer subsidy from the government thus making it more effective. However, there is need to find out if this new scheme is pro-poor and to test its impact on the fertilizer use and the productivity of the farmers in Nigeria. Professor Alabi will continue his researches about the pro-poorness of the programme in Washington D.C. at the IMF Headquarters, and will advise the IMF staff on the relevance of the system for other African countries. The new fertilizer subsidy scheme of Nigeria is also revolutionizing the finance system in rural areas of Nigeria (see: http://www.cgap.org/blog/bringing-mobile-wallets-nigerian-farmers).
This analysis is part of the programme “Food Security and Agricultural Transformation in Nigeria” which is done by Professor Alabi in Bremen in cooperation with Professor Karl Wohlmuth, who is advising the research programme since 2015. The two professors have now finalized a Unit of Volume 20 of the African Development Perspectives Yearbook on “Science, Technology and Innovation (STI) Policies for Agricultural Transformation in Nigeria”. The Unit on Nigeria has an Introduction written by the two professors on the issues, the contributions and the proposed strategy for Nigeria. New tools for agricultural transformation are considered, such as using indigenous agricultural technologies, developing Genetically Modified (GM) crops, and implementing Food Fortification strategies in Nigeria. A critical evaluation of these new tools is presented. Professor Alabi will continue his researches in Bremen until 2020. He has published widely in the IWIM publications series and he is acting as a co-editor of the African Development Perspectives Yearbook. Professor Wohlmuth supports the programme since 2015 as a senior adviser.
The programme of the Conference of the Institute for New Economic Thinking (INET) in Edinburgh, 21-23 October, had the overall theme: “Reawakening. From the Origins of Economic Ideas to the Challenges of Our Time”. The Conference was a remarkable event. There were panels, main lectures and presentations, keynote lectures, breakfast, lunch and dinner sessions, on subjects such as the consequences of the financial crisis and the great recession afterwards; the future of the eurozone; the growth of the dual economy in the advanced economies; the causes of popular revolts and of the rise of populism; lessons from democratic collapses and the rise of Nazi Germany; the rise of Trump and the America First Agenda; the emergence of public and private debt traps; the role of fake news and the role of economists; new developments in various contested fields of economics and political economy; but also discussions on developing economies and emerging economies; on Adam Smith and the Scottish Enlightenment; on technology and economic development; on immigration and intergenerational issues; on gains from trade, and so on. Lectures and presentations by four Nobel Prize Economists were of special importance and insights. George Akerlof, James Heckman, Michael Spence and Joseph Stiglitz gave impressive presentations on methodology used by economists, on specific contested issues of the economics profession, and on the policy implications of the work of the economists in governments and international organizations (see the link to the event: https://www.ineteconomics.org/events/reawakening). See on the overall agenda of INET: https://www.ineteconomics.org/
For development economists the sessions about the growth of the dual economy in the advanced world were a highlight. The discussion about dual economies was for a long time a domain of development economics; the development economists studied the take-off and the catching-up issues. The original purpose of dual economy models was it to show how a modern sector can be developed through surplus labour from a stagnating traditional sector. Now top economists were discussing at the conference in Edinburgh the growth of the dual economy in advanced countries to understand the “high income trap” which is affecting the most advanced economies. At high average per capita income levels severe problems arise for growth, employment and distribution which create political tensions and social problems in many advanced countries (see on the need to analyse the “high income trap” of the OECD countries as deeply as the “middle income trap” of the developing countries the following viewpoint: https://asia.nikkei.com/Viewpoints-archive/Economeister/Time-to-talk-about-the-high-income-trap?page=2). A new class formation is presented which is resulting from the “high income trap”: the “precariat” is increasing, the “rentier class” is growing, but the “middle class” is vanishing. In two sessions of the Edinburgh Conference the reasons for the emergence of the dual economy in the advanced countries and the type of policies to prevent the further advance of the dual economy were discussed. The new class formation is associated with a growing income share of the upper 1% of the income earners, while an increasing part of the capital share is going to the rentier class and an increasing part of the labour share is going to higher level wage earners.
The middle class is described as increasingly vulnerable and vanishing, while the class of precarious income earners is rapidly growing. Figures presented by Lance Taylor at the Edinburgh Conference highlight the new class structure for the USA. The USA have a three-class economy, so that it is better to speak of a “trialism”, not of a “dualism” in the USA (and probably the same situation is in other advanced economies). Lance Taylor writes: “The main income sources of the top 1% of households are from capital gains, proprietors’ incomes, interest, and dividends. Including capital gains they have a 50+ % saving rate, and 40% of total wealth. Households between the 60th and 99th percentiles get 70% of their income from wages, ~10% each from fiscal transfers, finance, and proprietors’ incomes. They save less than 10%, and hold 60% of wealth (mostly housing). The bottom 60% get almost 50% of income from wages, and 45% from government transfers. They have negative reported saving (true for other OECD economies), and a negligible wealth.” The interactions of these three classes (assuming that these trends continue) are important for the overall dynamics or stagnation of the economy. The interactions determine also the crises to be anticipated. Therefore, the Edinburgh Conference discussed which type of policies could prevent the spread of dual or trial economies and the emergence of severe crises in the future (proposed interventions mentioned were: innovative enterprises to achieve sustained prosperity; wealth creation through state entrepreneurship; new policies for redistribution of wealth and income; a guaranteed minimum income plus a commitment of the society to full employment; gender-related policies to combat the dualism and trialism; etc.). Reforms to get out of the “high income trap” are possible, but the “policy paralysis” has to be overcome.
Professor Wohlmuth had the opportunity to participate as a guest observer at the conference in Edinburgh by invitation of INET. The participation at the conference opens new avenues for the work in development economics, but also in regard of international economic policy. The dual/trial economy approach as applied to advanced economies is also helpful to understand the rise of the populists all over the world, the danger of democratic collapses, and the decline of the Social Democratic Movement in Europe. Professor Karl Wohlmuth has written a Note on the reasons for the decline of the Social Democrats in Germany, which is based on the dualism/trialism concept and which is also relevant for an understanding of the decline of Social Democratic Parties in other countries of the Eurozone.
Two Policy Briefs on the State of the Sudanese Economy
Mohammed Elhaj Mustafa Ali presented two Policy Briefs on the current economic situation of Sudan. Mohammed Elhaj Mustafa Ali is a Lecturer of Economics at the University of Kassala. He is author of an essay for Volume 20 of the African Development Perspectives Yearbook, dealing with knowledge spillovers from multinational corporations’ affiliates in Sudan. He has obtained his Ph.D. in Economics from the University of Gezira, Sudan. The two Policy Briefs were accepted by the Sudan Economy Research Group (SERG) as inputs to the current policy debate about new economic policies for Sudan.
Policy Brief One, April 2017: Battling Youth Unemployment: Measures to Secure Jobs for Sudanese Urban Youth
See the short Summary below:
In a nutshell
- According to the available figures, a large proportion of labour force in Sudan is youth with a substantial part residing in urban centres. This reality makes urban youth more vulnerable to unemployment and severely harmed by its negative consequences. However, although urban youth from both genders are greatly exposed to unemployment, reports demonstrate that the exposure of females to this risk is quite higher compared to males.
- These facts raise two important policy questions about: (1) What policymakers should do to provide Sudanese urban youth with more job opportunities? And, (2) What are the workable policy options which need to be implemented to give females a fairer share in job opportunities?
- Various policy actions can be proposed to decrease the number of the unemployed among urban youth, especially the females. These actions include initiating programmes on technical and vocational education, conducting vocational training schemes, and adopting affirmative policy actions in the form of employment quota systems.
The full paper is available as a PDF (see: Ali-Policy Brief-Youth Unemployment)
Policy Brief Two, May 2017: Foreign Direct Investment in Sudan: The Measures to Increase Inflows and Getting Full Benefits
See the short Summary below:
In a nutshell
- Sudan is one of the developing countries that is endowed with abundant resources. However, these resources, i.e. arable land, water, cheap labour, and favourable climatic conditions, cannot work in isolation from other essential factors of production, on the top of them being an adequate amount of capital. This is because the country's domestic savings are far less than necessary to cover the capital needed to put the economy on the track of sustainable economic growth and development.
- The heavy reliance on low-productivity agriculture, the failure to channel domestic savings into domestic financial institutions, in addition to the customs that encourage luxurious consumption among the middle class, have greatly contributed to the widening of the gap between capital needed to initiate a real development process and the savings which are mobilized from domestic sources.
- Therefore, in the light of the unfeasibility of other external sources of capital, such as borrowing, aid and portfolio investments, the only accessible channel to fill capital's gap in Sudan can be achieved by hosting larger amounts of FDI (Foreign Direct Investment). However, the question arises to what extent Sudan can attract this FDI? In other words, what are the key factors in determining the ability of the country to be a favourable destination for FDI?
- The flow of foreign capital in the form of FDI is not an end itself. It is a means to provide the country's economy with an adequate volume of capital that helps in accelerating the process of economic growth, elevating exports, promoting imports, as well as facilitating the reduction of the high unemployment rates.
The full paper is available as a PDF (see: Mustafa Ali-Policy Brief-Foreign Direct Investment)
The Africa Capacity Report 2017 with the title “Building Capacity in Science, Technology and Innovation for Africa’s Transformation”
The Africa Capacity Report 2017 with the title “Building Capacity in Science, Technology and Innovation for Africa’s Transformation” is the major annual publication of the African Capacity Building Foundation (ACBF). Professor Dr. Samia Satti Nour from the University of Khartoum is a leading international expert on Science, Technology and Innovation (STI) policies. She was invited by the ACBF to be a key consultant for this project. She has drafted major chapters of the Africa Capacity Report 2017 (ACR 2017). The ACR 2017 investigates in various chapters the capacity gaps in Africa and especially so in the STI systems of Africa. In the chapter one of the report the Africa Capacity Index 2016 is presented, mentioning the top performers and the low performers. An Overview section and a Summary and Policy Recommendations chapter give a balanced view of the capacity developments and gaps in Africa and especially in the STI sectors. The ACR 2017 is rounded up by STI Annexes, African Capacity Indicators, and a Compendium of Statistics.
Download of ACR 2017 and of former reports: https://www.acbf-pact.org/what-we-do/how-we-do-it/knowledge-learning/africa-capacity-report
Professor Samia Satti Nour and the Research Group on African Development Perspectives Bremen:
Professor Samia Satti Nour works as an author, editor and project adviser for Volume 20 of the African Development Perspectives Yearbook, co-editing with Professor Karl Wohlmuth the Unit on “STI Policies in Sudan”. She is also main author of a synopsis of the findings of the ACR 2017 for the Unit One of Volume 20 of the African Development Perspectives Yearbook on “Basic Issues of STI Policies in Africa”. The Volume 20 (2018) has the main title: "Science, Technology and Innovation Policies for Inclusive Growth in Africa – Basic Issues and Country Cases Sub-Saharan Africa". The complementary Volume 21 (2019) has the title "Science, Technology and Innovation Policies for Inclusive Growth in Africa – Issues of Human Resources Development and Country Cases North Africa”.
See on the Yearbook Series: http://www.iwim.uni-bremen.de/africa/africanyearbook.htm
Sudan Report: Governance and Fiscal Federalism in Sudan, 1989 – 2015
Atta El-Hassan El-Battahani and Hassan Ali Gadkarim are the authors of a study on “Governance and Fiscal Federalism in Sudan, 1989-2015: Exploring Political and Intergovernmental Fiscal Relations in an Unstable Polity”. Both researchers have working relations with the Sudan Economy Research Group (SERG) in Bremen and the Governance Sudan Project (GSP) of IWIM which was funded by the Volkswagen Foundation.
The Sudan Report | March 2017 with the title “Governance and Fiscal Federalism in Sudan, 1989–2015: Exploring Political and Intergovernmental Fiscal Relations in an Unstable Polity” by Atta El-Hassan El-Battahani and Hassan Ali Gadkarim was published in March 2017 in Bergen by the Chr. Michelsen Institute (CMI Report no. SWP 2017:1).
From the Chr. Michelsen Institute (CMI) about the Report:
This report analyses the implementation and impact of decentralisation in Sudan: To what extent have the efforts to implement decentralisation policies actually devolved power and fiscal resources to sub-national levels, for the benefit of the local populations? The present research confirms what other studies have concluded: that in Sudan the centre remains the ultimate arbiter when it comes to the distribution of economic and political resources between the centre and local states and regions. Economic control and fiscal transfers in Sudan remain relatively centralised. There is no systematic relationship between actual transfers to states and poverty reduction. Government expenditures for states have increased at the same time that state-generated revenues have decreased, and a fair and equitable system of fiscal equalisation and gap-filling is absent. Finally, there exists a mismatch between fiscal decentralisation and the political set-up. The prevailing features of governance in Sudan do therefore not embrace genuine political and fiscal decentralisation.
“Science, Technology and Innovation Policies for Inclusive Growth in Africa" – this is the title of two forthcoming volumes of the African Development Perspectives Yearbook which are prepared now by a group of international experts. The Editorial Committee of the African Development Perspectives Yearbook has decided to split the scheduled volume 20 (for 2018) into two volumes, the volume 20 (for 2018) and the volume 21 (for 2019). This was considered as advisable because of the great number of high quality submissions of manuscripts to the Editors. While Volume 20 will consider Basic Issues of STI (Science, Technology and Innovation) policies in Africa and Country Cases for Sub-Saharan Africa, the Volume 21 will present Issues of Human Resources Development in the Digital Age, Country Cases for North Africa, and Book Reviews and Book Notes.
In Volume 20 of the African Development Perspectives Yearbook essays on the linkages of inclusive growth, sustainable development and STI policies will be presented in the Introductory Unit. Also successful cases of STI development in Africa and STI systemic issues will be analysed. Focus countries are Sudan and Nigeria. Professor Samia Satti Nour, Khartoum University, Sudan and Professor Reuben A. Alabi, Ambrose Alli University, Ekpoma, Nigeria and currently Guest Researcher at IWIM/University of Bremen, were nominated as co-editors of the Units on Sudan and Nigeria and as Volume Editors; both have accepted the invitation. UNESCO Regional Science Policy Adviser Hassan Nazar, UNESCO Cairo Office, Egypt will be the co-editor of the Unit on Basic Issues of STI policies in Africa.
For Volume 21 (2019) essays are prepared for a Unit on Human Resources Development in Africa in the Digital Age, based on case studies for Cameroon and Nigeria. Country cases in North Africa are Egypt, Tunisia and Algeria. As usual, a strong Unit on Book Reviews and Book Notes rounds up the Volume 21. Again, UNESCO Regional Science Policy Adviser Hassan Nazar, UNESCO Office Cairo, Egypt will be the co-editor of the Unit on North Africa. Professor Achim Gutowski is again responsible for the Unit with Book Reviews and Book Notes. Professor Tobias Knedlik as the Managing Editor and Professor Karl Wohlmuth as the Scientific Co-ordinator are the other volume editors for the two forthcoming issues.
The African Development Perspectives Yearbook has over the decades - the first volume has appeared in 1989 – become the major English-language publication on Africa in Germany. The response to the annual International Calls for Papers is huge, with an increasing interest on the side of African experts and experts from international and regional African organisations. UNCTAD/ Geneva, UNESCO/ Cairo, and the African Capacity Building Foundation (ACBF)/Nairobi, Kenya are the institutional cooperation partners for these two volumes. UNECA in Kigali, Rwanda has organized the book launch for the volumes 18 and 19 of the African Development Perspectives Yearbook in October 2016. This was a great event, with TV appearances in 48 African countries. The Research Group on African Development Perspectives Bremen, which is editing the Yearbook, is also involved in researches, advisory work, and training activities. In 2019 the Research Group will celebrate the “30 years birthday ceremony” of the African Development Perspectives Yearbook.