International Cooperation for Sustainable Development

International Cooperation for Sustainable Development

The Peninsula, a daily of Qatar, elaborated as follows on July 9, 2019, on the Qatari role of international cooperation for sustainable development

Whereas Qatar was taken by surprise on June 5th, 2017, the international community was impressed by Qatar’s composed and firm stance in the face of the blockade and continued provocations of the blockading countries. Maturity of the Qatari diplomacy has since gripped global attention, courted international approbation, and most importantly, captured hearts and minds of Qataris into solidarity. A growing reverence for Qatar’s foreign policy and its key figures is unmistakable both domestically and abroad.

A less celebrated side of Qatar’s international role is that of sustainable development. Hundreds of resolutions and decisions are adopted yearly by the General Assembly, the Security Council and the Economic and Social Council of the UN, enacting and promoting sustainable development goals. Overall, the tie-ins between international cooperation and sustainable development are growing more reciprocal and symbiotic. 

This is evinced by the Millennium Declaration, the Johannesburg Declaration and the thousands of bi/multilateral treaties that have followed on from the UN Conference on Environment and Development in 1992. Since then, sustainability and sustainable development have become the watchwords for international bodies, most prominently the European Commission, the World Bank Group, the G-20 and obviously the UN, so much so they established dedicated offshoot organizations. Continuing to reaffirm commitment to the international community, Qatar has lived up to the (arguably) very ambitious agenda of sustainable development set in 2015.

Largely via Qatar Investment Authority (QIA) and Qatar Fund for Development (QFFD), Qatar has assumed the mantle of financiering, especially for the past several years. Qatar generously funds not-for-profit, philanthropic deeds in development assistance as well as investments in sustainable development. 

View of West Bay, Doha

In one year, 2018, QFFD disbursed more than $500m to hundreds of humanitarian and developmental projects in 70 countries across the world; funding natural disaster relief and recovery in the Caribbean, roadbuilding in the Horn of Africa, microfinancing SMEs in the Muslim World, and rehabilitating healthcare facilities in Arab countries, to name a few. 

QIA, on the other hand, ensures sustainable economic prosperity of Qataris for generations to come by investing in sustainable and profitable ventures worldwide. The $10bn pledged for US infrastructure enhancement and the £5bn for British infrastructure are examples of Qatari investments in international sustainable development.

We are yet to see all of these Qatari accomplishments and financial means complemented and popularised byways of active participation and close engagement with international bodies to further promulgate Qatar’s established role in global sustainable development. Young, well-educated Qataris are now more than ever capable of taking part in the sophisticated, pluralistic discourse on climate change, environmental protection, circular economy, wealth equality and social justice; hot sustainability topics that are increasingly gaining steam in international dialogue. In promoting sustainability and sustainable development, Qatari youth have HH Sheikha Moza bint Nasser as the role model to follow, especially with the recent designation of Her Highness as UN Sustainable Development Goals Advocate.

Domestically, international agreements have been coordinated with Qatari laws and regulations. This harmonisation process is best exemplified by the synchronization of the UN 2030 Agenda for Sustainable Development, Qatar National Vision (QNV) 2030 and the resultant quinquennial National Development Strategies. Qatar facilitated the UN Voluntary National Review of the country’s 2030 Agenda for Sustainable Development to acquire international credibility of implementation. Many nations are still lagging in setting and/or implementing sustainable development goals.

Following the onslaught of the blockading countries against Qatar, strong local faculties in sustainable development would call attention to ways the blockade hinders international cooperation intended to foster sustainable development; and they are many. 

The mere act of obstructing transportation to/from Qatar by stifling international transit corridors is condemnable as it violates the General Assembly’s Resolution 69/213 propositioned by the Secretary-General’s High-level Advisory Group on Sustainable Transport.

Qatar is building educational, governmental and diplomatic capabilities to navigate organizational and intergovernmental synergies of sustainable development. And as sustainable development organizations grow more influential in shaping major international accords, frameworks, standards and policies, Qatari representation is essential to preserve our state’s interest. 

Luckily, collective intelligence in Qatar has recognised that reinforcing alliances and partnerships through concerned UN agencies, and other organizations such as IFC and OECD can very much help perpetuate Qatar’s stability amidst the perils of the region.

Whether we are bracing for more seismic shifts in our regional geopolitics, more chasms, or for that matter, expecting rapprochements, sustainable development remains key to continued Qatari prosperity.

Dr Soud Khalifa Al-Thani is Sustainability Director at ASTAD.

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Abundance Is The New Sustainability

Abundance Is The New Sustainability

Only Forbes magazine can produce such article. It is written by Afdhel Aziz , Contributor and posted on November 4, 2018 and about :

The Power Of Purpose: Abundance Is The New Sustainability

Abundance is the New Sustainability Photo by Jeremy Bishop on Unsplash

For a while now, I’ve been struggling with the word ‘sustainability’. Don’t get me wrong: I think it is a worthy goal and it is encouraging to see how pretty much every major Fortune 500 company now has a sustainability strategy in place. But to me, sustainability as a goal seems like such a low bar to achieve: ‘the avoidance of the depletion of natural resources in order to maintain an ecological balance.’ It seems especially unambitious given the scale of the urgent challenges we face as a planet: how we as humans have wiped out 60% of the animal populations since 1970 according to the recent sobering report by the WWF; about how we are rapidly approaching the ‘tipping point’ where climate change could spiral out of control, leaving us with a runaway vicious cycle of global devastation. (By the way, I think we should start referring to ‘climate change’ as the ‘climate apocalypse’ to give the issue its proper sense of crisis, but that’s a whole separate article).

One of the most foundational thinkers preaching a more optimistic worldview is Peter Diamandis, founder of the X-Prize Foundation and Singularity University whose book ‘Abundance: The Future Is Better Than You Think’ (co-authored with Peter Koettler) should be required reading for every CEO and CMO. In it, he argues that the arrival of new ‘exponential’ technologies such as clean energy, artificial intelligence, 3D printing, synthetic biology, nanotechnology and others will lead to a flourishing in human society where we can approach a state of ‘abundance’: where we can provide nine billion people on this planet with the same standard of living that currently, those in the most privileged societies enjoy. As he puts it in the book, “Humanity is now entering a period of radical transformation in which technology has the potential to significantly raise the basic standards of living for every man, woman, and child on the planet.”

I believe that ‘Abundance’ should be the new ‘Sustainability’: the collective goal that we set for ourselves as the ‘moonshot’ of our time. We have the tools and technologies to rebuild what we have broken: what is missing is our collective will to put aside the tribalism and partisan bickering that occupies our consciousness, and focus on the far bigger threat that is facing us : species-level extinction on an unimaginable scale (which by the way, this planet already has seen five of already). If a hostile alien force was to arrive tomorrow, humanity would band together in a hurry: the threat we are facing is far greater than anything Spielberg could envision on a cinema screen.

Here’s some good news. When it comes to energy, we have more than we could ever use: in 88 minutes, 470 exajoules of energy from the sun hits the Earth’s surface, as much energy as humanity consumes in a year.  The price of solar is now falling well below the prices of fossil fuels, and we are rapidly ramping up production of solar panels and batteries to the point where they can start to be widely adopted across the world, creating an energy abundance that can fuel many of the other technologies needed to win this battle (much like the exponential increase in computing power and reduction in price predicted in Moore’s Law lead to the proliferation of cheaper and more powerful devices that we now carry around in our pockets).

Aside from energy, the other uber-challenge facing humanity is water: only 1% of the planet’s water is drinkable, and with much of that becoming tainted with everything from nitrates to antibiotics, the issue has been how to find enough to sustain our ever-growing needs. Recently, Diamandis’s X-Prize Foundation (which issues crowd-sourced challenges around some of humanities biggest problems) awarded their Water Abundance X-Prize (powered by the Tata Group and Australian Aid) to the Skysource / Skywater Alliance, based in Venice Beach, California, which received a grand prize of $1.5M for developing an easily deployable high-volume water generator that can be used in any climate, meeting the competition parameters of extracting a minimum of 2,000 liters of water per day from the atmosphere using 100 percent renewable energy, at a cost of no more than two cents per liter. It turns out there is more water in our atmosphere than in all our rivers combined. I believe breakthroughs like this could in the long term lead to ‘water generators’ being as common-place as solar panels, leading to a decentralized ‘water internet’ that greatly reduces the dependence on increasingly polluted centralized water systems.

I believe corporations have an essential role to play in this journey—because corporations and government are two of the only things that work in trillions; at the scale and speed that these problems need to be addressed. After McDonald’s announced its decision to move to cage-free eggs (the company buys more than 2 billion a year), over 200 companies followed suit. Uber has announced plans to make its entire fleet of cars in London all-electric by 2025 to address the problem of city pollution. Adidas is set to make over a billion dollars this year by selling its Parley for the Ocean sneakers made out of waste ocean plastic. Silicon Valley entities like Chamath Palihapitiya’s Social Capital is ‘a partnership of philanthropists, technologists, and capitalists utilizing venture capital as a force to create value and change on a global scale’ that is doing fascinating work in tackling problems in unique ways. As Diamandis himself has said ‘the world’s biggest problems are the world’s biggest business opportunities’. Companies are waking up to the massive business potential of tackling the world’s problems in ways that drive revenue. As Lesa Ukman, founder of Pro Social Valuation has said ‘We are moving past the era of corporate social responsibility to corporate social opportunity.’

I believe that corporations and government have to work in tandem: the government can raise the ‘floor’ (for instance, in the automobile sector via raising CAFE standards around fuel consumption) while corporations can raise the ‘ceiling’ (the success of Tesla has pushed every single major car manufacturer to accelerate the launch of their own electric cars). Whether it is at the federal, state or city level, government has a role to play in this movement – to regulate wisely, to provide a check and balance, but to also nurture and grow the private sector, by partnering with them in new and innovative ways. Unprecedented problems require unprecedented partnerships.

I also believe that the idea of ‘abundance’ should cover more than environmental issues – but also extend to the idea of people and social justice. Some of America’s biggest corporations including Apple, Pfizer, Microsoft, and Marriott are on the frontlines of the battle for LGBTQ issues. Starbucks announced that ‘every benefits-eligible U.S. partner working part- or full-time will receive 100% tuition coverage for a first-time bachelor’s degree through Arizona State University’s online program.’ Progressive companies like Greystone Bakery are proposing an idea that I think every single company in America should embrace: the idea of ‘Open Hiring’, which fills jobs without judging applicants or asking any questions, creating opportunities for those who have been kept out of the workforce (which includes women, men, people of color, people of all faiths and sexual orientations, immigrants and refugees, those living in poverty or who have spent time in prison, and anyone else who has faced barriers to employment.) 

I propose that Chief Sustainability Officers should rename themselves ‘Chief Abundance Officers’—and that they should radically re-frame their definition of ROI to not only include environmental but social impact as well. We need a more holistic view of measuring the ‘good’ that a company does – and the positive impact that it has on a multitude of different factors ranging from brand value and brand equity, to advocacy and loyalty, to employee engagement, and recruitment and retention. The data is now clear on how hitherto ‘soft’ measures like diversity and gender representation now contribute to financial performance. Companies with the most amount of female board directors outperform those with the least by 66% on a return on invested capital. Companies with above-average total diversity have both 19% points higher innovation revenues and 9% points higher EBIT margins. And companies which provide their employees with opportunities for volunteering and fundraising have 57% less turnover (the average cost of replacing an employee is 1.2 times their annual salary). 

 According to Gallup, a staggering 87% of employees worldwide are not engaged at work; while those companies with highly engaged workforces outperform their peers by 147% in earnings per share. How do we engage these 87% and unlock this huge pool of talent? Well, when asked about career goals at work, whether it was Millennials, Gen X or Baby Boomers, the answer was the same: the desire to ‘help solve social and/or environmental challenges’. Entrepreneur and activist Justin Dillon in his brilliant book ‘A Selfish Plan to Change The World’ sums it up beautifully: ‘Half the world has a poverty of means. The other half has a poverty of meaning.’ Corporations are one of the few things that can solve both: creating products and services that meet the needs of the ‘bottom billion’ of this planet which help raise them out of poverty and into a world of opportunity; while also giving those who already have means but are hungry for meaning and purpose in their life the chance to work on these problems in a way that will unleash their potential and make them proud of the legacy they leave behind.

What is awesome to behold is how quickly we as a species can take action: witness the speed with which the global attention to the problem of plastic – and the ensuing bans on plastic products – have taken hold. Regenerative agriculture has huge potential to not only reduce our dependence on chemically-driven industrial farming – but also pull carbon out of the air and into the soil. The Powerhouse movement out of Norway proposes we move beyond LEED certification into a world of buildings which are ‘net-positive’ – that give back more to their neighborhoods than they consume. The world’s collective decision to fix the hole in the ozone layer is paying off – albeit 30 years later. We are waking up to the potential of the blockchain and bitcoin to create a different technological and financial infrastructure on which to build new enterprises, in a way that democratizes opportunity for the many, not the few. 

The difference is us. It’s going to take a radical shift in our own consumption habits: it takes roughly 1 million pounds of materials annually to support one American’s lifestyle, and less than 1 percent of everything we produce is still in use after six months. It’s going to take us putting aside the labels that separate us – Democrat or Republican, Red State or Blue State – and seeing our common humanity. It’s going to take those of us working in the corporate sector ripping up the rulebook of ‘business as usual’ and finding new ways to innovate, new ways to be leaders. It’s going to mean letting our values drive our value; acting with a sense of moral responsibility, not just financial. As Starbuck’s CEO Howard Schultz put it recently, ‘Not every business decision is an economic one.’ As we say in our book ‘Good is the New Cool’, ‘If we don’t deal with income inequality, no one will be able to afford our products. If we don’t deal with climate change, there’s not going to be anyone left to buy them.’ We have a once-in-a-lifetime opportunity to not only repair our fraying planet and leave it in better shape than we found it but to lay the foundations for future generations to live in an era of peace and prosperity that has been impossible to contemplate until now.

 

I am the founder and chief purpose officer of Conspiracy of Love, a purpose-driven think tank and idea incubator that helps Fortune 500 companies like Adidas, Sonos, Bacardi, Mars and Coty use culture and technology as a force for good. I spent 20 years as a consumer markete…

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Afdhel Aziz is a writer, keynote speaker and founder of Conspiracy of Love, a purpose consultancy that helps Fortune 500 companies and startups use culture and technology as a force for good.

 

 

Afdhel Aziz Contributor

 

Opinions expressed by Forbes Contributors are their own.

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I write about how purpose drives business and social impact.

 

The world’s weird self-organizing economy seen from the MENA

The world’s weird self-organizing economy seen from the MENA

Excerpts of the first 3 points of a brilliant article posted on July 11, 2018 by Gail Tverberg are republished here for their undoubtful interest. It is about how today’s world economy is perceived from the USA as things are unfolding under Trump’s leadership. Meanwhile, the world’s weird self-organizing economy seen from the MENA would seem not to be exactly any different for reasons that we could ponder and eventually elaborate on sometime in the near future.

The world’s weird self-organizing economy

Today’s indications seem to suggest that an even more major recession than the Great Recession may strike in the not too distant future. Why should this be the case? Am I imagining problems where none exist?
The next ten sections provide an introduction to how the world’s self-organizing economy seems to operate.
1) The economy is one of many self-organized systems that grow. All are governed by the laws of physics. All use energy in their operation.
There are many other self-organizing systems that grow. One such system is the sun. Some forecasts indicate that it will keep expanding in size and brightness for about the next five billion years. Eventually, it is expected to collapse under its own weight.
Hurricanes are a type of self-organizing system that grows. Hurricanes grow over warm ocean waters. If they travel over land for a short time, they can sometimes shrink back a bit and grow again once they have an adequate source of heat-energy from warm water. Eventually, they collapse.
Plants and animals also represent self-organizing systems that grow. Some plants grow throughout their lifetimes; others stabilize in size after reaching maturity. Animals continue to require food (a form of energy) even after they stabilize at their mature size.
We can’t use the typical patterns of these other growing self-organized systems to conclude much about the future path of the world’s economic growth because individual patterns are quite different. However, we notice that cutting off the energy supply used by any of these systems (for example, moving a hurricane permanently over land or starving a human) will lead to the demise of that system.
We also know that lack of food is not the only reason why humans die. Based on this observation, it is a reasonable conclusion that having enough energy available is not a sufficient condition to guarantee that the world economy will continue to operate as in the past. For example, a blocked shipping channel, such as at the Strait of Hormuz, could pose a significant problem for the world economy. This would be analogous to a blocked artery in a human.
2) The use of energy products is hidden deeply within the economy. As a result, many people overlook their significance. They are also difficult for researchers to measure.
It is easy to see that gasoline provides the energy supply needed for our cars, and that electricity provides the power needed to clean our clothes. What is missing? The answer seems to be, “Everything that makes humans different from wild animals is something that was made possible by the use of supplemental energy in addition to the energy from food.”
All goods and services require the use of energy. While some of this energy use is easy to see, other portions are well hidden. Energy used in manufacturing and transport is most visible; energy used in services tends to be hidden.
Governments are major users of energy, both for their own programs and for directing energy use to others. Retirees get the benefit of goods and services made with energy products through pension checks issued by governments; researchers get the benefit of goods and services made with energy products through research grants they receive. Wars require energy.
Medical treatments are possible because of the availability of medicines and equipment made with energy products. Schools and books, as well as free time to study in schools (rather than working in the field), are possible because of energy consumption. Jobs of all kinds require the use of energy.
One thing we don’t often consider is that if energy supplies are growing sufficiently, they permit an expanding population. In fact, expanding population seems to be the single largest use of growth in energy consumption (Figure 1). Growing energy consumption also seems to be associated with prosperity.

Figure 1. World energy consumption growth for ten-year periods (ended at dates shown) divided between population growth (based on Angus Maddison estimates) and total energy consumption growth, based on the author’s review of BP Statistical Review of World Energy 2011 data and estimates from Energy Transitions: History, Requirements and Prospects by Vaclav Smil.

Figure 1. World energy consumption growth for ten-year periods (ended at dates shown) divided between population growth (based on Angus Maddison estimates) and total energy consumption growth, based on the author’s review of BP Statistical Review of World Energy 2011 data and estimates from Energy Transitions: History, Requirements and Prospects by Vaclav Smil.

3) Prices of energy services need to be low relative to overall costs of the economy. Falling energy costs relative to overall GDP tend to encourage economic growth.
Most economists expect energy prices to represent a large share of GDP costs, if energy is truly important. The statement above says the opposite. There are at least two reasons why low energy prices, and energy prices that are truly falling when inflation and productivity changes are considered, are helpful.
First, tools (broadly defined) used to leverage the labor of human workers often require considerable energy to manufacture and operate. Examples of such tools include computers, machines used in manufacturing, vehicles, and roads for these vehicles to drive on. The lower the cost to purchase and operate these tools, relative to the benefit of the tools, the more likely employers are to purchase them. If energy costs tend to fall over time, it becomes progressively easier to add more tools to leverage the labor of employees. Thus, employees become increasingly productive over time, raising the economy’s output of goods and services. For a similar reason, rising energy costs, if not offset by efficiency gains, present a barrier to economic growth.
Second, if the cost of energy production is low, it is easy to tax energy producers and thereby capture some of the benefit of their energy for the rest of the economy. If there is truly a “net energy” benefit to the economy, this is one way it gets transferred to the rest of the economy.

Read more on the original  The world’s weird self-organizing economy

Algeria’s challenges facing its population pressure

Algeria’s challenges facing its population pressure

The analysis of demographics in some countries, often forgotten in many studies, raises the issue of both development and national security. Because without sustainable development, it eventually could constitute a real social time-bomb. Algeria’s challenges facing its population pressure getting more acute every year will have to be addressed and at the earliest.
Whilst the evolution of the world’s population increased per the below chart.


The demographers estimate that the global human population is increasing by 246,000 inhabitants per day, a result equal to the difference between 403,000 births and 157,000 estimated deaths per day on Earth, representing an increase of 90 million people per year. By geographical area on average in 2017, Asia represents 4,504,4280,000 inhabitants or 59.7%, Africa 1,256,268,000 is 16.6%, Europe, the richest zone in the world, 742,741,000 is 9.8%, Latin America and the Caribbean 645,593,000 or 8.6%, USA and Canada 361,208,000 or 4.8%, Oceania, 40,691,000 or 0.5% and Antarctica 1,500 or 0.0% for a total of 7,550,262,000 inhabitants.
The growth of the African population is going to be more important during this period. According to the INED of France https://www.ined.fr/ , the population of Africa is going to double between 2017 and 2050, it will rise from 1.25 billion inhabitants to 2.574 billion. On the other hand, the population World should Tend towards 10 billion human beings (9.846 billion).
What about the evolution of the Algerian population?


The figures given by the NSO (National statistical Office) on forecasts of the evolution of the Algerian population by 2030 would be 51,26 million. And according to the current rate hypothesis of 2.4 children per woman and by 2050 to reach 65 million inhabitants, data that must be correlated with life expectancy.
While it is 77.1 years for men and 78.2 for women, it will at birth be 81 years for men and 83 years for women in 13 years. The figures of the INED confirm the trends of the NSO, showing that the Algerian population is young, constituted at 29% of under 15 years, the over 65 years representing about 6%. According to the INED, the forecast on the strong growth of the Algerian population over the next 33 years is due to several annual births of 1,103,000 and a relatively high fertility index (number of children per woman) of 3.1 whereas countries of the Mediterranean basin such as Morocco with 2.4, Tunisia, 2.4, France, 1.9 and Libya, 2.4 have much lower rates. Egypt has however a higher one with an index of 3.3 but Niger occupies the first place in the world ranking with the highest index of 7.3.
What is the spatial distribution of the population?
According to data for 2016, the 12 provinces with a density of less than 20 inhabitants per km² account for 89% of the country’s area with just 13% of the population. The 36 other provinces, all located in the north, have a higher density of more than 120 inhabitants per km², representing 11% of the area, approximately 240,000 km2 and includes 87% of the population.
Among these 36 provinces of the north, the highest densities are found around the large agglomerations of Algiers, Oran, Constantine and Annaba, then come the more rural coastal provinces, then the inner land provinces and finally the wilayas close to the Sahara.
More precisely and in descending order we have: Algiers, Oran, Boumerdes, Constantine, Annaba, Mostaganem, Tizi-Ouzou, Bejaia, Tipaza, Jijel, Sétif, Mila, Skikda, Chlef, Bouira, Ain Defla, Ain-Temouchent, Bordj Bou Arredj, Relizane, Mascara, El Tarf, Guelma, Tlemcen, Souk Ahras, Tissemsilt, Médéa, Batna, Oum El Bouaghi, Sidi Bel Abbes, Sila, Saida, Tiara, Khenchela Biskra, Laghouat and Djelfa.
The other provinces like El Oued, Naama, Ghardaia, El Bayath, Ouargla, Bechar, Adrar, Tamanrasset and Illizi come from far behind.
Good governance and social purpose
Satisfying the needs of a given population must obligatorily whilst considering the new transformation of the world, link economic and social dynamics to achieve some reliability.
The set of previous data shows that in the event of non-development, the demographic pressure would constitute a real social timebomb. As demographic pressure involves increasing needs such as more food consumption and durable consumer goods, more infrastructure, more schools, more training centres and hospitals. Hence the importance for any government to have a forward-looking vision
It is also a matter of thinking already of the diversification of the national economy to create more jobs to meet the needs of an increasingly demanding population. For that, with the scarcity of financial resources, which is likely to impact development projects, the urgency of a new governance re-foundation would be required.
Would it suffice to say that a reorientation of the current socio-economic policy to have necessarily a growth rate higher than the population growth rate otherwise the rate of unemployment will increase (rate of Growth greater than 7/8% over several years to create 350,000 / 400,000 new workstations per year)?
Does not this mean also the imperative to abandon the old patterns of the 1970s especially in the field of industrial policy, to adapt to the Fourth World Economic Revolution which promises to be irreversible and on us by 2020 through 2030, based on networks, more social dialogue and more decentralization, not to be confused with deconcentration.
Ademmebtoul@gmail.com

The myth of raw materials as a Miracle for Development

The myth of raw materials as a Miracle for Development

Several television shows and some dailies, between 2016 and 2017, have got me worried. These involved some so-called experts who affirmed, without restraint and without numerical analysis, that from the exports of phosphate, and / or iron ore in their crude or semi-crude condition, or cement, the country might earn sufficient revenues. Could Algeria currently facing low oil prices, rely on the myth of raw materials as a miracle for development be a real palliative for its incomplete run for its economy diversification.

Unconsciousness or demagoguery? Why then mislead both public opinion and policymakers?

To avoid the myth of raw materials as a miracle solution for development as I have had to demonstrate on several occasions, particularly in my latest Algeria and Its Illusory Raw Material Annuity, for phosphate mining exploitation, all depends on marketing within all environmental constraints, the country’s internal strategic management, etc. The ore’s content, hence key factor determining the cost of exploitation. The growth of the global economy, being by far the greatest influencing factor is expected to experience a significant change in its structure with the advent of the fourth economic and social revolution between 2020 and 2040. The purpose of this contribution is to analyze the case of iron mining.

The case of iron mining in Algeria

For iron, global reserves are valued by international agencies at 85 billion tons (MT). Algeria not quoted in international statistics has, according to Algerian data, reserves (exploitable deposits) that vary between 1500 and 2000 MT, a minister having given the figure of 2500 MT on December 5th, 2015.

World iron production amounts to 3.32 billion MT, and by far, China is the first producer, followed by Australia and Brazil. China however on its on concentrates about 50% of the steel market, both in terms of supply and demand. The price of iron ore fluctuates and in February 2018, the price of iron was $77 per ton. If we stick to the statistics of the European Union in terms of imports, and reported last April 2018, the prices have evolved as follows: $100 per MT in January 2009, $140 in January 2012, $102 in January 2013, $116 in January 2014, $70 in January 2015, $58 in January 2016.

SCOTIA, a Canadian Bank, which specializes in the evolution of commodity prices, provides, in a business note dated July 6, 2016, an international price between $48 and $50 /MT for 2018, depending on the revival of China’s economy, whose steel mills absorbed 70% of the world’s iron ore demand between 2014 and 2017.

With iron ore going at $60 /MT, exports of 3 million of MT/year, giving a turnover of $180 million to which must be subtracted 40% of charges, would leave $108 million to share following the 49/51% rule, between all partners, leaving less than $55 million for Algeria.

With exports of 30 million MT/year, the net profit for Algeria would not exceed $600 million/year. It is that the exploitation of the iron of Gara Djebilet will require large investments estimated by the government in 2013 to about $15 billion in power plants, transport networks, rational use of water, resolution of the remoteness issue of supply sources, environmental protection measures and, above all, all human resources required training.

Only processing into products can therefore provide a higher value added to exports. If we take a few products, with a high added-value, controlled by a few multinational firms, from both the technological and commercial point of view, we have the following prices fluctuations.

  • In February 2018, copper was established at $7,007 per ton, down 0.8% over a month and up 17.9% over a year. At the end of April 2018, the price of copper per kilo was $7.01.
  • In February 2018, the price of stainless steel that depends on various alloys including carbon, chromium and nickel can fluctuate between $2,000 and $2,500 per ton.
  • The price of aluminum was $2,182 per ton, down 1.3% over one month and up 17.3% over one year.
  • In February 2018, the price of lead was $2,581 per ton, down 0.1% over one month and up 11.7% over one year.
  • In February 2018, the price of zinc was $3,533 per ton, up 2.7% over one month and up 24.2% over one year.

In March 2018, the price of all metal ground scrap (type E40) averaged €285 per ton, up 6% over a month and down 33% on a Year. For the Price of steel is very fluctuating and was $620 per tonne on July 22, 2016 compared to $580 per tonne on July 19, 2016. In April 2018, the price of steel in average, is established to $857 per ton.  The prices of the different categories of steel, are for the MM20 steel at $816 / ton, the MM50 at $750 / ton and the MM100 at about $635 / ton.

In the meantime, steel imports costed Algeria in 2016, around $10 billion a year due to mainly its growing domestic demand from a drive to modernize infrastructures coupled with engaging into developments of subsidized housing schemes. In fact, Algeria imports most of the goods it needs due to insufficient domestic production caused by a lack of investment in its non-energy industries, including of course mining of all those abundant and near the surface resources.

In summary, far from being or sounding utopian, it was in 2017 and certainly is still for 2018, the case of all hard currency inflows come, whether directly or indirectly and for 97/98% from only hydrocarbons and their derivatives. Non-hydrocarbon exports would be conditioned by profound structural reforms that far from the Keri vision, would certainly not be a matter of administrative decisions, but rather of the adopting of all necessary policies that would enable the setting up and running of competitive productive companies in terms of, amongst many things, optimal cost/quality ratios, etc.  Within this context, it must be mentioned that from inception, negotiations, maturation, and finally realization and up to its gaining some cruising speed, a project would require in Algeria a minimum of five years.

That is definitely too long, even if in this day and age, heavy mining cum industrial undertakings are still onerous and weighty to come along. Due to their oligopolistic structure, for the mining industry, the only solution is a win/win partnership with reputable firms that could find it difficult to accept the restrictive rule of 49/51% with its unnecessarily bureaucratic burdens; flexibility and real-time decisions being the rule in international trade rather the exception. Ademmebtoul@gmail.com

Algeria and its illusory raw material annuity

Algeria and its illusory raw material annuity

The Minister of Energy whilst proceeding with the installation of an inter-sectorial Steering Committee of the mega-partnership project for phosphate exploitation and the development of petrochemical industries, said in a communiqué that this will enable Algeria to “become a global exporter of phosphate fertilizers and its derivatives”. This contribution is about Algeria and its illusory raw material annuity potentialities with a particular look at the case of phosphate mining and exploiting.

This strategic mega-project’s objective is to achieve a production of phosphates of nearly 11 million Tons/year compared to 1 to 1.5 million of Tons/year currently.

Unlike euphoria such as stated by the former Minister of Industry in 2014 – 2015 that thanks to the exports of phosphate, iron and cement, Algeria would not be negatively impacted by the recent oil prices drop. However, for both phosphate and iron (crude or semi-crude) and cement, marketing depends so much on the constraints of the international strategic environment management, the content of these ores that determines the cost of exploitation, and above all the growth of the world economy whose future structure with the fourth industrial revolution that gradually sets in by 2018 through 2030.

In these internationalized segments, some multinational firms control the techniques and distribution channels. We should avoid the mistakes of the past that have been estimated at billions of Dollars’ worth of losses and approach these for some mutual understanding.

Phosphate is a key element in the composition of fertilizers which are of crucial importance for world food security, but paradoxically the prices between 2015 to 2018 have been oriented downward.

For phosphate reserves, by order we have Morocco 50000 MT, China 3700, Algeria 2200, Syria 1800, South Africa 1500, Russia 1300, Jordan 1300, Egypt 1250, Australia 1030, The USA 1100 and Saudi Arabia 950. As far as production is concerned, we have for 2015, 223 million metric tons (MT) including China 100 MT, Morocco 30 MT, USA 27.6 MT, Egypt 5.5 MT, Tunisia 4 MT, Saudi Arabia 3.3 MT, Israel 3.3 MT, Australia 2.6 MT, Vietnam 2.6 MT, Jordan 2.5 MT and Algeria 2.6 MT. The price of crude phosphate has been divided by three since its peak in the year 2008; Having fallen by 43.2% since the year 2011. The world price of raw phosphate remained stable at around US $115 per MT, on a monthly average of 2015. According to a forecast of the World Bank, the general and medium-term trend of prices of phosphate products would remain down; crude phosphate would negotiate in 2020 at about of $80 – 85 per MT, that of DAP around $377.5 /MT and the TSP to nearly $300 /MT.  In a new analysis, the world rating agency estimates that the prices of phosphate ore will remain on average at 100 per tonne (toll-free), in 2018 and the prices of the ton of phosphate ore (no charge on board) would reach $105 in 2019 and possibly $110 in the long-term

Crude phosphate price is this month approximately $86 per ton compared to $84 for the same period in 2017. So, if Algeria exports 3 (three) million ton of raw phosphate annually at an average price of $100 between 2018 through 2020, we could have a turnover of about $300 million and for ten million tons a billion Dollars.

All related costs in this sector being relatively high, of notably depreciation and wages at a minimum of 40%, the resulting net profit would be, for 10 (ten) million tons about $600 million. In the event of an association with a foreign partner using the unavoidable 49/51% rule, the net profit of Algeria would be slightly more than $300 million. We are therefore, far from the profits generated from the oil fields.

To increase net profit, it is therefore necessary to embark on highly intensive processing units with heavy and profitable investments in the medium term with an export of as diverse products as possible. Thus, in a market as competitive as that of  the European Union, all fertilizer / Urea products were sold at more than $423 per ton in 2014 and was quoted on an annual average in 2017 at $327 per ton and on April 24th, 2018 to €247 per ton.

The price of Ammonia is a function of the price of gas on the international market. For instance, when the price of gas is $4 / MBTU, the cost of Ammonia is about the current rate of $140 / ton. When the gas price is $7 per MBTU, the cost price is $242.

In the world market, prices fluctuated between $338 / ton in August 2017 and $404 as quoted at the beginning of February 2018. But for large exportable quantities, this requiring heavy investments in the medium term would bring any profit not before 2020 – 2022 if the project was in operation as of 2018. And for large exportable quantities, this would require going through some partnership notably because of the world market being controlled by some firms. Moreover, for Algeria, it will be necessary to solve the problem of the price of the transfer of gas which cannot be aligned with that of the market and avoid the numerous disputes. In this context, I recommend, following many experts, that petrochemicals be attached to the Ministry of Energy / SONATRACH for greater coherence and efficiency, even if it is to establish a State Secretariat for Petrochemical Industries.

Focusing only on the country’s higher interests, it must be recognised that there is a lack of strategic vision. I would like to think that, as a word of warning against all visions of utopias of the past, should be left behind.

All this raises the problem of the limits of all public expenditure via the annuity and refers, for Algeria, to the mastery of strategic management to at least avoid all mismanagement, ignoring the new global mutations and / or initiation of non-mature projects that may go bankrupt in between time. A pertinent example is this drift towards all those automotive assembly plants where we ended up with more than thirty manufacturers, thing unknown anywhere in the world.  Hence the importance of understanding the new mutations of these internationalised channels in perpetual technological change.

 

Algeria needs a Vision within which all industrial policies should be coordinated (institutions, financial system, fiscal, customs, federal, socio-educational systems, labor market, land use, etc.), in order to adapt to the new world in perpetual evolution driven by innovation. Without this necessary adaptation to the new world in perpetual change, referring to a clear political will to accelerate the reforms, thus to a cultural revival generalized to the society as a whole, Algeria having all the required potentialities to go beyond the current status quo, it is futile to penetrate any world market. Algeria still dependent for long years on hydrocarbons, all other raw materials would only help make it possible to realize just an average profit,

In short, a win-win partnership with companies that control international circuits is the only way to value phosphate and to bring more value-added because exporting the raw material per say would not be as vitally important especially in a heavily devalued currency.

Let us avoid the illusion of an eternal annuity via some raw materials related exports revenues, as I recall in my previous contributions, no country in the world that has focused solely on raw materials has achieved sustainable development. As we must avoid this myth of the power of capital-money as a means. If we take the oil exporting countries of the MENA region that have had hundreds of billions of Dollars in the last three decades, none have achieved at least an emerging country status.

Since the world is world, and this proves truer with the forthcoming fourth world economic revolution, the prosperity of different civilizations has always been based on good governance.

Ademmebtoul@gmail.com