Cycling Diplomacy
With His Excellency Pierre MÉNAT
Panama and Kosovo Diplomatic Relations
Is 7.6% too low?
How is China’s economy doing? Is 7.6% too low?
The fact that China’s GDP grew only 7.6% in the last 6 months seems disturbing to some friends. Is it an ill omen of China’s recession? I don’t think so.
First, the recent round of China’s economic slowdown has apparently been caused by cyclical and external factors, including the impact of international financial crisis and the ongoing global recession. Nevertheless, 7.6% remains in the reasonable zone as expected, and China is still a best performer among major economies.
Second, more indicators show China’s economy still keeps the momentum of booming. For example, newly-employed workforce increased by 4.6% to 7.25 million, CPI remained stable at 2.4%, the real-term discretionary income per capita of urban residents grew 6.5% and the rural residents 9.2%. Among the 250,000 domestic enterprises recently surveyed, two thirds were optimistic about their business and the overall economic situation. Foreign trade and investment figures also show economic interactions between China and the rest of the world remain active and sound.
Last but not least, China now is accelerating its market-oriented reforms, including changing the growth model and restructuring economy. Substantial progresses have been made in improving energy efficiency, boosting the tertiary industry, coordinating development among regions etc.. Perhaps, a lower GDP growth rate might fall short of the expectation of many, but at the same time, it makes more space for further reforms towards a more balanced, sustainable and environmental-friendly economy.
What’s the next?
Nobody can predict the world economy in an accurate manner, but China herself can and will do two things in the future.
One is to keep reform on the top of government’s agenda. As long as economic development remains in the reasonable zone, we will continue changing the growth model and restructuring economy, with the financial and macro-economic policies remaining consistent and stable. Relations between government and market will be further streamlined, and market is expected to play a more active and important role in economy. The future of China’s economy will be even more promising.
The other is to dedicate herself to opening even wider to the outside world. China will continue to promote peace, development, cooperation and mutual benefit, and to oppose all types of protectionism. Even in difficult times like today, China’s choice is always to cooperate, to share and to develop together. China’s continuous development will be good news to all.
What does it mean to the Netherlands?
Reforms and economic restructuring need extra knowledge and expertise. In fields like public administration and service, water resources management, agricultural infrastructure, high-tech etc., the Dutch can seize their opportunities in the Chinese market. I do believe the early birds will catch the worms.
Poetry and prose in diplomacy
Colombia, “the best Spanish” !
“To learn the best Spanish in the world, the answer is Colombia!”
The Royal Spanish Academy (RAE) is celebrating its 300th year anniversary. It was founded by the Marquis de Villena and Duke of Escalona, Juan Manuel Fernández Pacheco, on 13th February 1713. Its primary function, over the last three centuries, has been to achieve linguistic identity and establish common grammatical rules for those who speak the language of Cervantes and García Márquez: approximately 528 million people worldwide. As we are reminded by the current Director of the Cervantes Institute, Víctor García de la Concha, the greatest risk of linguistic rupture occurred in the nineteenth century, after the independence of Latin American countries. However, the idea of splintering American Spanish and Spanish of Spain, was unsuccessful due to the RAE, which stimulated the creation of their own language academies in the whole region. The first of them was the Colombian Academy of Language, which was established in 1871 and spread like wild fire throughout all Hispanic nations, including the Philippines, whose Academy was founded in 1924. At present we have 22 associations, including the most recent addition, the American Academy of the Spanish Language which was founded in 1973, after the expansion of the Hispanic population in the United States. Spanish is now the world’s second language -following Mandarin Chinese- if we consider the number of those who are native speakers: 420 million people. This figure rises to 528 million people if we add those who have learned it as a second or foreign language. From this new perspective it is the third language in the world after Mandarin and English. Spanish is also one of the six official languages of the United Nations. To stimulate learning Spanish, the government of Colombia recently presented the portal www.spanishincolombia.gov.co through which it seeks to turn the country into a major destination for foreigners who want to learn this beautiful and influential language. The International System of Certification of Spanish as a Foreign Language (Sicele) recognizes 77 institutions in Latin America and Spain with regular courses; 34 of which are in Spain, while the remaining 43 are located in Latin America, 20 of them in Colombia, a country that enjoys enormous prestige thanks to the quality of its Spanish. This reputation has become the motto of the national government to encourage learning Spanish in our country: “To learn the best Spanish in the World, the answer is Colombia!”.Egypt in and out of the comfort zone
Celebrating Mexico
By Eduardo Ibarrola, Ambassador of Mexico.
Every year, on September 16, Mexicans commemorate the beginning of the Mexican Independence War. Traditionally, on the evening of September 15, the President addresses the nation from the balcony of the National Palace in Mexico City to reenact the moment, back in 1810, when priest Miguel Hidalgo -the Father of the Nation- called Mexicans to the uprising in the small town of Dolores, now located in the beautiful state of Guanajuato. Since its birth as an independent nation, Mexico has faced various challenges that defined its character both domestically and in the international arena. It hasn’t been easy, but today Mexico is a multiparty democracy, with an important network for the protection of human rights and public information access; a deep industrialization process and free trade; our country is an attractive destination for investment and international tourism. In the international arena, Mexico became a prominent actor in the promotion of international law and an active participant in topics like disarmament, free-trade, climate change and the fight against transnational organized crime. With the commemoration of the “Grito de Dolores” we also celebrate our unity, which is the key for our progress. President Enrique Peña-Nieto acknowledges this. That’s why -through the “Pact for Mexico”- his administration works under an unprecedented agreement with the main political parties in order to achieve the structural reforms that Mexico needs to become the prosperous and equalitarian country that every Mexican citizen deserves. In only 9 months, this new governmental approach has already achieved a constitutional framework for an important reform that will increase the quality of the education and also a telecommunications reform that will open the country for a more competitive process. Other examples are the promulgation of the Law for the Protection of Crime Victims and the Crusade against Hunger. Moreover, a very important initiative in energy has already been presented before Congress for discussion. In September is time to celebrate Mexico, not only for our past but also for our present and future. And as long as we remain united and working for our common wellbeing, we will have good reasons to say out loud: Viva México!«Constellation of Russia», outstanding success
EU Financial Transparency
EU reporting requirements set to enhance financial transparency in the extractive sector
By Steffen van der Velde LL.M. Researcher, T.M.C. Asser Instituut
Large companies active in the extractive sector dealing with oil, gas and minerals and loggers of primary forests have recently been subjected to new EU-rules on disclosure of payments made to national governments for projects they operate. The new rules, introduced as an amendment to the pre-existing ‘Accounting-Directives’, aim to make companies dealing with strategic resources and governments more accountable. Especially developing countries, rich in mineral raw material, are expected to benefit greatly from the new rules. Many developing countries, experience difficulties in maximizing the benefits of the exploitation of their mineral wealth, since they lack the governance frameworks necessary to ensure a sustainable contribution of the mining industry to their development as a whole. To illustrate, over 50% of the major known mineral reserves is located in countries whit a per capita gross national income of $ 10 per day or less.[2] Mining is thus of particular relevance to these countries, for it can catalyse broad-based economic development and reduce poverty. In short, mining activities should maximize social and economic benefits, for present and future generations, as well as effectively address negative environmental and social impacts, while any regulatory framework should aim for improvement of accountability and transparency to prevent illicit financial flows from mining activities.[3] The scope of the new rules So far, the foreign extractive industry has benefitted from the regulatory vacuum in developing countries and flourished in the absence of strong regulations on fiscal, social and environmental matters. To counter this development, and in line with earlier adopted legislation by the US Government, more specifically Section 1504 Dodd-Frank Act,[4] the European Union established its own new transparency rules. Combined, the US and EU legislation encompasses a majority of the world’s largest mining companies. In brief, the new Directive,[5] adopted on 26 June 2013 after a long and hard-fought battle between Commission, Parliament, NGO’s and industry lobby groups, requires large undertakings and all public interest entities active in the extractive industry or the logging of primary forest to prepare an annual report on payments made to governments. A ‘large undertaking’ is defined as a company which exceeds at least two of the following three criteria: a balance sheet total of € 20 million; a net turnover of € 40 million; and an average number of employees during the financial year of 250.[6] Any taxes, royalties, dividends, bonuses, licence fees or payments for infrastructure improvement exceeding € 100,000.-, aimed at engaging in the exploration, prospecting, discovery, development and extraction of natural resources would constitute a ‘payment’ under the Directive.[7] The Report should include the total amount of payments made to each government; and if specifiable, the total amount per type of payment attributable to separate projects.[8] NGO’s vs. industry According to Global Witness, a strong proponent of the EU’s enhanced transparency legislation, ‘countries will be able to see where the money generated from their natural resources is going, and therefore ensure it is better used for their benefit’. Furthermore, the NGO commented that the new legislation ‘represents a defeat for […] industry lobbyists in their attempts to stifle the establishment of a global transparency standard in the extractives sector’.[9] Quite contrarily, Business Europe, a lobbyist which represents more than 20 million companies from 35 countries, is not convinced of the effectiveness of the Directive’s new transparency rules. The organisation believes that ‘this proposal will create red tape and further disadvantage for a large number of European businesses in international markets, running counter to the urgent necessity of re-establishing the conditions for confidence and competitiveness in Europe’. Furthermore, they claim that the EU is ‘running the risk of demotivating all companies that have embarked on genuine Corporate Social Responsibility activities on their own’.[10] NGO’s have countered this last argument by claiming that, so far, voluntary reporting standards have not delivered the desired results or were able to enhance the contribution of the mining sector to sustainable development in developing countries. Will the new rules work? Enhancing financial transparency in the extractive sector is a necessary prerequisite to create a more sustainable contribution of the mining sector to general economic performance, especially in developing countries. Still, the new transparency rules solve only one part of the puzzle. For more inclusive sustainable development of resource-rich developing countries to be realized, attention should also be paid to non-financial performance indicators. Here, the Directive still displays shortcomings, and only requires inclusion of such other performance indicators relating to environmental and employee matters ‘to the extent necessary for an understanding of the undertaking’s development, performance or position’.[11] It is not specified in the Directive when this is the case. Another matter of concern is that the new rules only apply to ‘large undertakings’, often listed on one or more stock exchanges. Such companies are accountable to their shareholders, lenders, and generally attract more publicity and attention from the media and NGO’s, resulting in a tendency to conform better to internationally agreed principles or sustainable development standards than smaller, non-listed, mining companies.[12] Their exclusion from the scope of the transparency rules will have to be reflected upon by the European Commission in its first implementation report, to be submitted in 2018. Nevertheless, the new reporting requirements represent a major first step in binding EU extractive companies active in developing countries to stricter sustainable development standards, albeit primarily focussed on enhancing financial transparency. The first reports on payments to governments are expected to be filed in 2017, after the Directive has been transposed into national law by the Member States.