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Excerpt:
This article is published ahead of the International Day of Indigenous Women, celebrated September 5, which marks the execution of indigenous guerrilla leader Bartolina Sisa.
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Scene from Djibouti Port. Credit: James Jeffrey/IPS
By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Sep 4 2018 (IPS)
Several arguments have been advanced to justify privatization since the 1980s. Privatization has been advocated as an easy means to:
1. Reduce the government’s financial and administrative burden, particularly by undertaking and maintaining services and infrastructure;
2. Promote competition, improve efficiency and increase productivity in providing public services;
3. Stimulate private entrepreneurship and investment to accelerate economic growth;
4. Help reduce the public sector’s presence and size, with its monopolistic tendencies and bureaucratic support.
Moot case for privatization
First, privatization is supposed to reduce the government’s financial and administrative burdens, particularly in providing services and infrastructure. Earlier public sector expansion was increasingly seen as the problem, rather than part of the solution. Thus, reducing the government’s role and burden was expected to be popular.
Jomo Kwame Sundaram. Credit: FAO
Second, privatization was believed by some to be a means to promote competition, improve efficiency and increase productivity in service delivery. This belief was naïve, confusing the question of ownership with that of promoting competition.It was believed that privatization would somehow encourage competition, not recognizing that competition and property rights are distinct, and not contingent issues. Associated with this was the presumption that competition would automatically result in greater efficiency as well as improved productivity, not recognizing economies of scale and scope in many instances.
Third, privatization was expected to stimulate private entrepreneurship and investment. There is also a popular, but naïve belief that privatization was going to stimulate private entrepreneurship when, in fact, the evidence is strong, in Malaysia and elsewhere, that privatization often crowds out the likelihood of small and medium-sized enterprises actually emerging to fill the imagined void, presumed to exist following privatization.
Admittedly, there is scope for new entrepreneurship with privatization as new ways and ideas offered by the private sector are considered – or reconsidered – as the new privatized entity seeks to maximize the profits/rents to be secured with privatization.
However, the private purchase of previously public property, in itself, does not augment real economic assets. Private funds are thus diverted, to take over SOEs, and consequently diminished, rather than augmented. Hence, private funds are less available for investing in the real economy, in building new economic capacities and capabilities.
Fourth, privatization was supposed to reduce public sector monopolies, but there is often little evidence of significant erosion of the monopolies enjoyed by privatized SOEs. Arguably, technological change and innovation, e.g., in telecommunications, were far more significant in eroding privatized monopolies and reducing costs to consumers, than privatization per se.
From the 1980s, if not before, various studies have portrayed the public sector as a cesspool of abuse, inefficiency, incompetence and corruption. Books and articles, often with clever titles such as ‘vampire state’, ‘bureaucrats in business’ and so on, provided the justification for privatization.
Undoubtedly, there were some real horror stories, which have been conveniently and frequently cited as supposedly representative of all SOEs. But other experiences can also be cited to show that SOEs can be run quite efficiently, even on commercial bases, confounding the dire predictions of the prophets of public sector doom.
Has privatization improved efficiency?
Although some SOEs have been better run and are deemed more efficient after privatization, the overall record has hardly been consistent. Thus, it is important to ascertain when and why there have been improvements, or otherwise. It is also important to remember that better-run privatized SOEs, in and of themselves, do not necessarily serve the national or public interest better.
Undoubtedly, most SOEs can be better run and become more efficient. But this is not always the case as some SOEs are indeed already well run. For instance, very few privatization advocates would insist that most SOEs in Singapore are poorly run.
As its SOEs are generally considered well-run, public ownership is not used there to explain poor governance, management or abuse; instead, public ownership is recognized there as the reason for public accountability, better governance and management.
Principal-agent managerial delegation dilemma
Hence, in different contexts, with appropriately strict supervision, SOEs can be and have indeed been better run. Privatization, in itself, does not solve managerial delegation problems, i.e., the principal-agent problem, as it is not a problem of public ownership per se.
With SOEs, the principal is the state or the government while the agents are the managers and supervisors, who may — or may not — pursue the objectives intended by the principal.
This is a problem faced by many organizations. It is also a problem for private enterprises or corporations, especially large ones, especially where the principal (shareholders) may not be able to exercise effective supervision or control over the agent.
Also, natural monopolies (such as public utilities) are often deemed inefficient due to the monopolistic nature of the industry or market. The question which arises then is whether private monopoly is better, even with regulation intended to protect the public interest.
The answer needs to be ascertained analytically on the basis of evidence, and cannot be presumed a priori. If an industry is a natural monopoly, what does privatization achieve? Often, it means a transfer to private hands, which can be problematic and possibly dangerous for the public interest.
The post Revisiting privatization’s claims appeared first on Inter Press Service.
Excerpt:
Advocates made exaggerated claims that privatization would reduce governments’ fiscal problems while ensuring more efficient, productive and competitive economies by promoting private entrepreneurship, innovation and investments.
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U.S. Air Force maintenance technicians assigned to the 509th Aircraft Maintenance Squadron work on a B-2 stealth bomber at Whiteman Air Force Base, Mo. on March 19, 2011. The unit maintains aircraft tasked with strategic nuclear deterrence and global strike operations. Credit: Kenny Holston/U.S. Air Force
By Daryl G. Kimball
WASHINGTON DC, Sep 4 2018 (IPS)
Five long years have passed since U.S. President Barack Obama proposed and Russian President Vladimir Putin unfortunately rejected negotiations designed to cut their excessive nuclear stockpiles by one-third below the limits set by the 2010 New Strategic Arms Reduction Treaty (New START).
Since Russia’s 2014 invasion of Ukraine, U.S.-Russian relations have deteriorated dramatically. A Russian violation of the Intermediate-Range Nuclear Forces (INF) Treaty has put that treaty at risk and the nuclear arms reduction dialogue remains stalled. As a result, each side still can deploy a whopping 1,550 strategic nuclear warheads, as allowed by New START.
Reliance on outdated launch-under-attack policies means that either leader at any moment can launch as many as 800 city-destroying nuclear weapons within about 20 minutes of a “go” order. Each side would have hundreds more nuclear weapons available in reserve for counterstrikes. The result would be a global catastrophe.
Clearly, it is vital that the world’s two largest nuclear-armed powers pursue further measures to reduce their bloated stockpiles and the risk of a nuclear confrontation. Yet, Moscow’s brazen effort to interfere with the 2016 U.S. elections on behalf of the Trump campaign and suspicions that then-candidate Donald Trump encouraged that effort have further complicated the bilateral relationship and cast doubt on Trump’s ability to deal with Putin.
Meanwhile, a qualitative nuclear arms race is underway, and a quantitative nuclear arms race may be just around the corner. The United States and Russia are rushing forward with costly, ambitious plans to upgrade their Cold War nuclear arsenals and develop new types of destabilizing nuclear weapons.
In little more than two years, on Feb. 5, 2021, New START is scheduled to expire. Without a decision to extend the treaty, which is allowable under Article XIV, there will be no legally binding limits on the world’s two largest arsenals for the first time since 1972. The risk of unconstrained U.S.-Russian nuclear competition and even more fraught relations would grow.
In a March interview with NBC News, Putin voiced interest in extending New START or possibly even making further cuts in warhead numbers. In April, the Trump administration announced it is conducting a “whole-of-government review” on whether to extend New START, an effort described as still in its early stages.
At the Helsinki summit in July, Putin presented several proposals “to work together further to interact on the disarmament agenda, military, and technical cooperation.” Afterward, Trump stated that “perhaps the most important issue we discussed at our meeting…was the reduction of nuclear weapons throughout the world.”
Unfortunately, the two leaders did not reach any agreements in Helsinki. Subsequently, U.S. national security adviser John Bolton, following a Geneva meeting with Russian counterpart Nikolai Patrushev on Aug. 23, did not announce a date for talks on New START or on “strategic stability.”
There is no time for further delay. New START clearly serves U.S. and Russian security interests. Failure to extend the treaty would compromise U.S. intelligence on Russian nuclear forces, open the door to unconstrained nuclear competition, and undermine U.S. and allied security.
An extension of New START also would provide additional time for Trump or his successor to pursue negotiations on more far-reaching nuclear cuts involving strategic and tactical nuclear systems, an understanding about the limits of U.S. strategic missile defenses, and limitations on non-nuclear strategic strike weapons that both sides are beginning to develop.
Fortunately, the treaty can be extended by up to five years, to 2026, by a simple agreement by the two presidents without complex negotiations, without further approval from the U.S. Senate or Russian Duma, and without unwise concessions to Moscow.
Even the toughest Democratic critics of Trump’s Russia policies support New START extension. Legislation introduced in June by Sens. Bob Menendez (D-N.J.), Jack Reed (D-R.I.), and Mark Warner (D-Va.) calls for extension of the treaty so long as Russia remains in compliance.
The compliance disputes involving the INF Treaty present a more complex problem. To move forward, Washington and Moscow should agree to reciprocal site visits by experts to examine the 9M729 missile that is in dispute.
If the disputed Russian missile is still believed to have a range that exceeds the 500-kilometer treaty limit, Russia could, as a confidence-building measure, modify the missile into compliance or, ideally, halt production and eliminate any such missiles.
To address Russian concerns about the possible conversion of U.S. missile interceptor systems in Europe to offensive purposes, the United States could agree to reciprocal site visits or perhaps even physical modifications of the launchers.
Despite their many disputes, it is vital that Washington and Moscow maintain a stable, predictable nuclear relationship and avoid direct military conflict.
To do so, Trump and Putin should relaunch the strategic stability dialogue and commit to reaching an early agreement to extend New START. If not, an even more dangerous phase in U.S.-Russian relations may emerge.
The post Can the U.S. and Russia Avert a New Arms Race? appeared first on Inter Press Service.
Excerpt:
Daryl G. Kimball is Executive Director, Arms Control Association
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Essam Yassin Mohammed is Principal Researcher at the International Institute for Environment and Development (IIED)
By Essam Yassin Mohammed
LONDON, Sep 4 2018 (IPS)
Over-fishing, warming oceans and plastic pollution dominate the headlines when it comes to the state of the seas. Most of the efforts to protect the life of the ocean and the livelihoods of those who depend on it are limited to exclusive economic zones – the band of water up to 200 nautical miles from the coast.
Fishermen offloading tunas at the industrial fish port of Abidjan, Côte d’Ivoire. Credit: FAO/Sia Kambou
But to be truly effective, all of the ocean needs to be protected. The high-seas that lie beyond national jurisdictions ― two-thirds of the ocean’s surface ― remain largely ungoverned.The world has a new opportunity this week to move a step closer to addressing these issues as UN members start negotiating an international legally binding treaty to protect the high seas. (United Nations Convention on the Law of the Sea on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction, 4-17 September). The first of four rounds of negotiations that will continue until 2020.
Despite the common perception that the high seas are too remote to matter to coastal communities, strong scientific evidence shows the ocean is a highly interconnected ecosystem. For example, a number of fish species use the high seas at different stages of their lifecycle for feeding and spawning, which is why protecting it is critically important to coastal communities’ livelihoods and economies.
For these negotiations to be effective and fair, it is crucial the people living in coastal communities in the least developed countries (LDCs) and small island developing states (SIDS) are listened to and have an active role in protecting and sustainably managing the ocean. They are among those most affected by the impacts of how the ocean is used and protected, from fishing to conservation measures.
Any measure to govern these waters must make sure that any activity in these waters benefits everyone ― particularly the poorest countries.
The ocean as a whole is recognised by international law as a common heritage of mankind ― it belongs to everyone, now and forever. But most developing countries do not have the financial or technological means to share the benefits it provides.
To make sure they have equal access, it is crucial this treaty establishes a mechanism that enables them to share its benefits. Monetary benefits can be best shared by establishing a trust fund.
This, as is the case with such governing bodies as the International Seabed Authority, would enable coastal communities to build their capacities and become involved in monitoring the environmental health of the seas.
And they would be able to participate proactively in research and development, and sustainably use the high seas as a source for medicines, science and other genetic resources.
It could be financed from a percentage of the profits that wealthier countries make through economic activities on the high seas whether from extraction of marine genetic resources or any other activity.
The equitable distribution of benefits from conservation of the high seas should also be at the core of the negotiations. It is important that any new global agreement recognises that when protected areas are designated they consider how they will affect coastal communities across the global south.
These areas linking territorial waters to the high seas are critical both for protecting marine species and helping to restore coastal fisheries, which are vital to sustaining the livelihoods of people in poor coastal communities.
One of the biggest threats to marine biodiversity in areas beyond national jurisdiction is overfishing. Studies show that fishing in the high seas is unprofitable and are only economically viable because governments subsidies large fishing fleets. It is important that in this first round of talks, governments agree clear steps to end all harmful subsidies.
Instead, these subsidies should be directed towards activities that deliver positive social and environmental results. By providing support for monitoring and surveillance of marine protected areas, giving incentives to fishers for not using damaging fishing practices, and enhancing access to markets and services including by providing support for storage facilities, poor coastal communities and fishers will be able to benefit from ocean-friendly investment.
We cannot afford to keep the status quo. These negotiations are an opportunity to establish a new legally binding treaty that is fair and equitable for everyone. This is about sustainably sharing 50 per cent of the planet with 100 per cent of the world’s population.
It is crucial the needs of the poor are heard at every stage of this process to make sure they are not left behind in the drive to govern the life of the oceans.
The post New Rules for High Seas Must Include Needs of Poorest Nations appeared first on Inter Press Service.
Excerpt:
Essam Yassin Mohammed is Principal Researcher at the International Institute for Environment and Development (IIED)
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By WAM
DUBAI, Sep 4 2018 (WAM)
Dubai Mercantile Exchange (DME), the premier international energy futures and commodities exchange in the Middle East, announced the launch of eight new oil listings on Monday, following completion of the regulatory review.
Among the new products offered by DME is the Oman Crude Oil/Platts Dubai Crude Oil Futures contract (code DOP) which helps customers match their hedging exposure for crude from Saudi Arabia, the world’s largest exporter of crude oil. Saudi Aramco recently announced it is changing the way it calculates its Official Selling Price (OSPs) from 1 October, 2018, which will take the monthly average of DME Oman and Platts Dubai – creating a hybrid between the two major Asia benchmarks.
To complement the new crude oil hedging tool, DME is also listing the Oman/Dubai contract as a spread versus Brent futures and Asian refined products.
The new listings will complement DME’s current suite of products, which includes the flagship Oman Futures contract, along with Dubai and Brent/Dubai futures.
Ahmad Sharaf, Chairman of DME, said,”The new listings are the next step in the natural evolution of the DME and exchange-traded products across the Asian markets, helping customers to hedge physical pricing exposure on both crude oil and refined products.”
WAM/Tariq alfaham/Hatem Mohamed
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Rohingya alight from a boat as they arrive at Shahparir Dip in Teknaf, Bangladesh in 2017. Credit: IPS
By Tharanga Yakupitiyage
UNITED NATIONS, Sep 4 2018 (IPS)
After the release of a scathing report on Myanmar’s human rights violations, next steps to achieve accountability and justice remain elusive and uncertain.
A year after the re-escalation of violence that forced almost a million people to flee to neighbouring countries, a fact-finding mission found a “human rights catastrophe” in Myanmar.
“The gross human rights violations and abuses committed in Kachin, Rakhine and Shan States are shocking for their horrifying nature and ubiquity,” the report states.
“Many of these violations undoubtedly amount to the gravest crimes under international law,” it continued.“The U.N. system really failed the people of Myanmar particularly the Rohingya by treading softly.” -- Human Rights Watch’s U.N. Director Louis Charbonneau
Triggered by insurgent attacks on security forces, the report pointed a finger to Myanmar’s military, known as the Tatmadaw, for committing the gravest of crimes including indiscriminate killing, burning of houses, and sexual violence.
The investigators identified six generals, including the commander in chief of the Tatmadaw Senior General Min Aung Hlaing, and recommended that they be prosecuted at the International Criminal Court (ICC) or at an alternative tribunal.
“There needs to be an unequivocal message sent that Myanmar’s military cannot act with impunity against ethnic minorities in Myanmar again,” Amnesty International’s Asia Advocacy Manager Francisco Bencosme told IPS.
“Never again has to mean never again – and the entire world is watching to see what the international community does,” he continued.
Like Bencosme, Human Rights Watch’s U.N. Director Louis Charbonneau also told IPS that the Security Council should refer the situation in Myanmar to the ICC or create a special criminal tribunal for prosecution.
But how did we get here?
Years of systematic oppression against Myanmar’s ethnic minorities made the crisis “foreseeable”—so what happened?
A System-Wide Failure
In 2008, the U.N. failed to heed warnings of increasing violence between the Sri Lankan military and the Liberation Tigers of Tamil Eelam (LTTE) and did not report evidence of widespread government violations and casualties.
A 2012 internal review found that various U.N. agencies including the Security Council failed at every level to protect civilians and meet their responsibilities in the last months of the civil war in the South Asian nation.
In the wake of the fiasco, the U.N. implemented the Human Rights Up Front Initiative to ensure a better system of monitoring and responding to international crises. Though Myanmar was identified as a situation requiring the Action Plan’s human rights response to crises, the approach was rarely, if ever, used, the report stated.
Instead, U.N. agencies continued to prioritise development goals, humanitarian access, and quiet diplomacy—an approach which “demonstrably failed.”
“The U.N. system really failed the people of Myanmar particularly the Rohingya by treading softly,” Charbonneau told IPS.
“Now instead of us saying ‘never again’ after Sri Lanka, Rwanda, Srebrenica—here we are saying well yet again it happened. The U.N. didn’t do what it was supposed to be doing, it didn’t raise the alarm bells to the extent that they could have,” he continued.
The Security Council’s response, or lack thereof, has been equally disappointing. The U.N. organ has had only a handful of meetings on Myanmar and none have resulted in any resolution.
In contrast, Syria has received special attention over the last seven years with numerous meetings in the “triple digits.”
“Given the scale of the crisis in Myanmar, it is difficult to reconcile the different responses of the Security Council particularly given a situation where the U.N. for sometime has been warning about the possibility of the ‘g’ word that is genocide,” Charbonneau said.
“It would be good to see an attempt to really push the Council to try something. We haven’t seen that yet and I don’t know if we will see it,” he continued.
China and Russia, Security Council members with veto power, have consistently pushed back on efforts to act on Myanmar’s crisis, stating that the crisis should only be resolved by the parties directly affected including Bangladesh where over 700,000 Rohingya refugees have fled to.
In the Security Council’s first open meeting on Myanmar in eight years, Russia’s ambassador Vasily Nebenzya warned against claims of ethnic cleansing and blaming Myanmar’s authorities as it “will make it more difficult to achieve lasting interethnic peace inside the country.”
Whether it is genocide or crimes against humanity, Bencosme highlighted the need for the international community to act with respect to Myanmar.
“We don’t need a legal diagnosis to understand that something desperately tragic and clearly unlawful has been happening in Myanmar. What matters most is that a civilian population is under attack because of its race or religion, and that these violations must stop immediately,” he told IPS.
Myanmar has repeatedly denied accusations of violations including those most recently published through the fact-finding mission’s report.
“Myanmar authorities have shown themselves to be both unable and unwilling to investigate and prosecute those responsible. As a result, the ICC is the appropriate route to deliver justice,” Bencosme said.
However, since Myanmar is not a member of the ICC, only a member of the Security Council can bring the case to the tribunal.
“The time for rhetoric is over – there needs to be action. There needs to be genuine accountability and justice. There needs to be an honest conversation about referring the situation to the International Criminal Court. We need to pursue all avenues of justice for these victims and their families who are the heart of the crisis,” Bencosme concluded.
Urgent Action Needed
While Charbonneau expressed hope that the new report will “reenergise” the U.N., he noted that we should not idly wait.
“I don’t think we should be waiting around for the Security Council—too often the Council doesn’t move on issues and it’s more deadlock than ever these days. We may have to keep using these work-arounds like the General Assembly and the Human Rights Council,” he told IPS.
Among the alternative avenues for action is the establishment of an impartial mechanism by the Human Rights Council or General Assembly to collect, analyse, and preserve evidence for future potential criminal proceedings in the ICC or another criminal tribunal.
The report also recommends that the U.N. urgently adopt a common strategy to address human rights concerns in Myanmar in line with the Human Rights Up Front Action Plan, as well as a comprehensive inquiry into whether the U.N. did everything possible to prevent or mitigate Myanmar’s crisis.
“The time has past for these feeble condemnations or expressions of concern that we are so used to from the U.N.—we just really need action,” Charbonneau said.
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António Guterres, Secretary-General of the United Nations, in an address to the China-Africa Cooperation Summit in Beijing
By António Guterres
BEIJING, Sep 3 2018 (IPS)
This Forum on China-Africa Cooperation is an embodiment of two major priorities of the United Nations: to pursue fair globalization and to promote development that leaves no one behind in the context of a rules-based system of international relations supported by strong multilateral institutions.
António Guterres
China has achieved remarkable development progress in recent years, with an unprecedented reduction in poverty, and I commend its commitment to sharing its successes through different initiatives and namely the Belt and Road.Africa, too, has made dramatic advances, and hosts some of the world’s most dynamic economies. Together, China and Africa can unite their combined potential for peaceful, durable, equitable progress to the benefit of all humankind.
It is important that current and future development cooperation contributes to peace, security and to building a “community of shared future for mankind.”
China and Africa have strengthened their relationship in recent years, enjoying growing mutual trust and exchanges at all levels.
Development cooperation is increasing, based on the two mutually compatible roadmaps: the United Nations 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063.
I commend this engagement. Cooperation, based on the principles of the UN Charter, can benefit your peoples and can benefit the international community as a whole.
And allow me to mention five areas that will be crucial for the success of this very important partnership.
First, reinforcing the foundations of Africa’s progress. Stronger cooperation between China and Africa can lead to sustainable, environmentally-friendly and resilient development in Africa that is inclusive, reaching first those people that are furthest behind. Financial and technological support for infrastructure development is critical.
So is building capacity on trade as African countries start to realize the potential of the landmark Continental Free Trade Area. And they’re also ready to support the strengthening national data systems to help African countries formulate policy and drive decision-making.
Second, ensuring national ownership and African-led sustainable development.
In the past year, the United Nations has agreed joint frameworks with the African Union on Peace and Security and on supporting Agenda 2063.
These frameworks are based on our commitment to be a steadfast and trusted partner of Africa, with full respect for Africa’s stewardship of its own future.
The China-Africa partnership echoes this collaborative approach to create not just immediate gains but long-lasting value.
And we are ready to support the strengthening of governance and institutional capacities in African countries to ensure country ownership and leadership that fully responds to the needs and aspirations of Africa’s people.
Of particular concern are education and job opportunities for young people, and equality and empowerment for the continent’s women and girls.
Third, deepening South-South cooperation.
I believe this Summit will contribute to preparations for the United Nations Conference on South-South Cooperation in Buenos Aires next year.
South-South cooperation is fundamental for fair globalization. But the dramatic increase in South-South cooperation does not eliminate the need to implement North-South commitments, including those assumed in the context of the Addis Ababa Action Agenda.
We need to ensure that cooperation paves the way for Africa’s economic vitality and greater trade, both at regional and global levels.
Partnership for sustainable development must also give more space for African voices, innovations and perspectives in global development discourse around the world.
Fourth, promoting sustainable fiscal policies.
United Nations Country Teams are fully committed to supporting African nations to seize their full potential of their cooperation with China.
At the same time, we all need to work together to guarantee the financial sustainability of African development.
Sound fiscal policies are an essential pillar for sustainable development. It is imperative that we support Africa to both preserve and create fiscal space for investments.
That includes a concerted global effort to combat tax evasion, money laundering and illicit financial flows allowing to contribute to the success to the strong African commitment to fight corruption as agreed at the African Union Summit in early January 2018.
Fifth, climate change.
Climate change is an existential threat. A sustainable future for China, Africa and the world means climate-friendly and climate-resilient development as it was underlined today by President Xi Jinping.
As we are increasingly aware, climate change and environmental degradation are risk multipliers, especially for fragile states and vulnerable regions.
China is today a global leader in climate solutions.
It is important that it shares its advances with Africa to enable the continent to leapfrog traditional polluting development in favour of green growth.
And also ,to support Africa in adapting to climate change and in building resilience to the impacts that Africans have done so little to cause.
This Summit exemplifies the win-win collaboration that is necessary for the future we want.
The United Nations will continue to support the China-Africa Partnership and more broadly, South-South cooperation, so that all nations – in Africa and beyond – may enjoy sustainable and inclusive development.
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Excerpt:
António Guterres, Secretary-General of the United Nations, in an address to the China-Africa Cooperation Summit in Beijing
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