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The New Security Environment and the Impact of a Lack of Security on African Economies African Forum on Business and Security Nairobi, 13 – 14 September.

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Presentation on theme: "The New Security Environment and the Impact of a Lack of Security on African Economies African Forum on Business and Security Nairobi, 13 – 14 September."— Presentation transcript:

1 The New Security Environment and the Impact of a Lack of Security on African Economies African Forum on Business and Security Nairobi, 13 – 14 September 2012 Gary Quince, EU Head of Delegation to the African Union

2 1. Africa's Economic Performance and Prospects 2. Africa's Population Trends 3. Conflict and Insecurity : Impact on African Economies 4. Africa-EU Partnership in Action

3 Africa’s Economic Performances: Asia Tigers outrun by African Lions 2001 – 2010: 6 of 10 fastest growing economies, Africa outgrew Asia in eight of last ten years – 2010: 6 of 10 fastest growing economies, Africa outgrew Asia in eight of last ten years. Current high growth rates not just driven by natural resources, but also by wholesale / retail, construction, telecommunications, banking. Current high growth rates not just driven by natural resources, but also by wholesale / retail, construction, telecommunications, banking. Growth supported by structural policy changes which have reduced conflicts, improved macroeconomic/microeconomic situations, including the business environment. Growth supported by structural policy changes which have reduced conflicts, improved macroeconomic/microeconomic situations, including the business environment.

4 Africa’s Economic Performance (2): Good Prospects for Future Growth FDI up from US$ 11 billion in 2000 to US$ 54 billion in FDI up from US$ 11 billion in 2000 to US$ 54 billion in Oil and commodity prices expected to remain favourable. Oil and commodity prices expected to remain favourable. New oil/gas discoveries. New oil/gas discoveries. Africa has 60% of world’s uncultivated arable land. Africa has 60% of world’s uncultivated arable land. Sustained policy reforms can supports sustained growth across Africa: a record 78% of African economies pursued business regulatory reforms in Sustained policy reforms can supports sustained growth across Africa: a record 78% of African economies pursued business regulatory reforms in 2011.

5 Africa: Population Trends 2012: 1.1 billion people 2012: 1.1 billion people 50% under 25 50% under 25 35% urban (lowest of any continent) 35% urban (lowest of any continent) Population growing by 25 million every year. Population growing by 25 million every year. Africa’s population will double in 30 years. Africa’s population will double in 30 years. Urban population will double to 750 million (50% of Africa’s population) by Urban population will double to 750 million (50% of Africa’s population) by Kinshasa, Cairo, Lagos: world’s 11th, 12th and 13th largest cities by Kinshasa, Cairo, Lagos: world’s 11th, 12th and 13th largest cities by 2030.

6 Africa’s Growing Workforce Africa’s workforce: growing and better educated Africa’s workforce: growing and better educated People of working age grew from 440 million in 2000 to 550 today. People of working age grew from 440 million in 2000 to 550 today. Workforce will be better educated: 60% of aged will have secondary education (42% now) Workforce will be better educated: 60% of aged will have secondary education (42% now) Africa needs to create 115 million jobs by – 2008: Africa created 73 million jobs, but only 16 million for under 25's. Africa needs to create 115 million jobs by – 2008: Africa created 73 million jobs, but only 16 million for under 25's. Risks: Informal employment, unemployment, crime. Risks: Informal employment, unemployment, crime.

7 Security: Global Trends 20th century dominated by two global wars, colonial struggle, Cold War, and efforts to establish international systems to foster peace and security. 20th century dominated by two global wars, colonial struggle, Cold War, and efforts to establish international systems to foster peace and security. Some success: wars between states much less common; fewer civil wars. Some success: wars between states much less common; fewer civil wars. But insecurity remains a major development challenge: quarter of world’s people live in areas affected by fragility, conflict, organised crime. But insecurity remains a major development challenge: quarter of world’s people live in areas affected by fragility, conflict, organised crime. Many countries facing cycles of repeated conflicts: 90% of civil wars were in countries that already had civil wars in previous 30 years. Many countries facing cycles of repeated conflicts: 90% of civil wars were in countries that already had civil wars in previous 30 years.

8 Security: Global Trends, New Threats New threats: organised crime, terrorism, political violence New threats: organised crime, terrorism, political violence Organised crime: eg. drug trafficking through Guinea Bissau and Sahel. Human trafficking, corruption and money laundering. Organised crime: eg. drug trafficking through Guinea Bissau and Sahel. Human trafficking, corruption and money laundering. Piracy in Somalia: 237 attacks in 2011, cost US$ 6 billion. West Africa: 45 piracy attacks in Piracy in Somalia: 237 attacks in 2011, cost US$ 6 billion. West Africa: 45 piracy attacks in Terrorism: international groups exploit local conflicts. Terrorism: international groups exploit local conflicts. Political violence: during electoral periods. Political violence: during electoral periods. New awareness: grievances can rapidly escalate when political economic, social change lag behind expectations, fuelled by modern media New awareness: grievances can rapidly escalate when political economic, social change lag behind expectations, fuelled by modern media Natural resource competition: land, water, minerals, forests, climate change. Natural resource competition: land, water, minerals, forests, climate change.

9 Insecurity holds back Development Civil wars cost on average 30 years of GDP growth. Civil wars cost on average 30 years of GDP growth. Trade takes 20 years to recover. Trade takes 20 years to recover. On average, conflict affected countries have over 20% higher poverty rates than peaceful countries. On average, conflict affected countries have over 20% higher poverty rates than peaceful countries. Impact spills over: a country loses 0.7% of GDP every year for each neighbour in conflict. Impact spills over: a country loses 0.7% of GDP every year for each neighbour in conflict.

10 Insecurity holds back development: the human cost Conflict in Africa has left over 50 million more living in poverty. Conflict in Africa has left over 50 million more living in poverty. Refugees and IDP's: 15 million across Africa. 75% of refugees are in neighbouring country. Refugees and IDP's: 15 million across Africa. 75% of refugees are in neighbouring country. State failure in Somalia costs Kenya around US 250 million per year. State failure in Somalia costs Kenya around US 250 million per year. No low income, fragile or conflict affected country has achieved even one of the MDG's. No low income, fragile or conflict affected country has achieved even one of the MDG's.

11 Insecurity holds back development: Business cost 30% of African firms identify crime as a major problem for their business. 30% of African firms identify crime as a major problem for their business. Firms in Sub-Saharan Africa lose a higher percentage of sales to crime and spend a higher percentage of sales on security than any other region: combined cost of over 5% of sales, some countries over 10%. Firms in Sub-Saharan Africa lose a higher percentage of sales to crime and spend a higher percentage of sales on security than any other region: combined cost of over 5% of sales, some countries over 10%.

12 Big gains possible if security is re- established and sustained Several countries emerging from long legacies of political and military / criminal violence have been among those making the fastest progress on MDG's: Several countries emerging from long legacies of political and military / criminal violence have been among those making the fastest progress on MDG's: Ethiopia quadrupled access to improved water between 1990 and 2010 Ethiopia quadrupled access to improved water between 1990 and 2010 Mozambique tripled primary school completion rate between 1999 and 2007 Mozambique tripled primary school completion rate between 1999 and 2007 Rwanda reduced undernutrition from 56% in 1997 to 40% in Rwanda reduced undernutrition from 56% in 1997 to 40% in 2005.

13 Why this cycle of conflict? A combination of Security, Justice and Economic stresses meet Weak Institutions. A combination of Security, Justice and Economic stresses meet Weak Institutions. Political exclusion and inequality Political exclusion and inequality Corruption, organised crime, terrorism Corruption, organised crime, terrorism Youth unemployment Youth unemployment Urbanisation Urbanisation Income shocks Income shocks New pressures: eg: national resource competition, climate change. New pressures: eg: national resource competition, climate change. Risks increase dramatically where Governments, institutions and markets fail to provide basic security, justice and economic opportunities for citizens. Risks increase dramatically where Governments, institutions and markets fail to provide basic security, justice and economic opportunities for citizens.

14 How to break the Vicious Cycle of Violence? Three prerequisites for move to Virtuous Circle of sustainable peacebuilding: Three prerequisites for move to Virtuous Circle of sustainable peacebuilding: Restore confidence in collective action Restore confidence in collective action Transform Institutions to provide Transform Institutions to provide Citizen security Citizen security Citizen justice Citizen justice Jobs Jobs Good neighbours: regionalism and multilateralism Good neighbours: regionalism and multilateralism From non-interference to non – indifference From non-interference to non – indifference Regional/continental integration Regional/continental integration No quick fixes: this takes time and sustained policy/institutional reforms. No quick fixes: this takes time and sustained policy/institutional reforms.

15 Africa and the EU: Partnership in Action Since 2007 Africa and the EU have cooperated under the Joint Africa-EU Strategy with four main strategic objectives: Since 2007 Africa and the EU have cooperated under the Joint Africa-EU Strategy with four main strategic objectives: i) peace and security i) peace and security ii) democratic governance and human rights ii) democratic governance and human rights iii) trade, regional integration and infrastructure iii) trade, regional integration and infrastructure iv) key development issues: iv) key development issues: MDG’s MDG’s Energy Energy Climate Change and Environment Climate Change and Environment Migration, Mobility, Employment Migration, Mobility, Employment Science and Technology, Information, Society and Space Science and Technology, Information, Society and Space

16 Africa and the EU: Example: Supporting Peace and Security in the Horn of Afria In November 2011, EU approved the Horn of Africa Strategy with five areas for action In November 2011, EU approved the Horn of Africa Strategy with five areas for action Building robust and accountable political structures Building robust and accountable political structures Contributing to conflict prevention and resolution Contributing to conflict prevention and resolution Reducing security threats Reducing security threats Promoting regional integration. Promoting regional integration. Implemented with IGAD and AU. Implemented with IGAD and AU. Comprehensive approach combining EU’s humanitarian, development, political and diplomatic, military and security instruments. Comprehensive approach combining EU’s humanitarian, development, political and diplomatic, military and security instruments.

17 THANK YOU


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