Expo 2020 Dubai, under its 'Connecting Minds, Creating the Future' theme, is setting a new standard for sustainability. The event's comprehensive Expo 2020 Sustainability Initiatives aim to make it the most sustainable World Expo ever. Expo 2020 is focusing on three main elements: sustainability, mobility, and opportunity. Aiming to become the most sustainable expo so far, Expo 2020 Dubai has taken diverse measures from installing renewable energy systems to reducing water usage and segregating waste. Expo 2020’s sustainability efforts are supported by its partners that have been undertaking various sustainability initiatives of their own besides helping realize the expo's sustainability vision. Expo 2020 partners and environmental sustainability efforts GHG emissions Expo 2020 partners are taking climate action by setting ambitious GHG emissions reduction goals. For example, Accenture is targeting net-zero carbon emissions by 2025, with specific goals to reduce absolute GHG emissions by 11% and its scope 1&2 emissions by 65% from its 2016 baseline. Cisco has also promised to have net-zero emissions by 2040, with near-term goals of reaching net-zero for global scope 1&2 emissions by 2025 and reducing scope 3 emissions by 30% by 2030 from its 2019 baseline. Water consumption Expo 2020 partners are also working on reducing their water consumption. For example, PepsiCo has reduced its consumption by 21% from 2018 to 2020. The company has also pledged to improve its water use efficiency by 15% in agriculture, and by 25% in operations from its 2015 baseline. It is also hoping to replenish the water consumed in manufacturing by 100%. Renewable energy Expo 2020 partners are conscious of the impact of their operations on the environment and thus have been switching to clean energy sources. For instance, both SAP and Mastercard are fully relying on renewable energy, with 100% of their electricity being generated from renewables in 2020. Waste recycling Waste recycling initiatives are also key for the Expo 2020 partners. Among the partners, Nissan is a leader, with 96% of its wastes either recycled or diverted in 2020. It is followed by Siemens, with 93% of its wastes recycled or diverted in the same year. Some partners have set other waste recycling goals such as Accenture, which pledged to repurpose or recycle 100% of its e-waste by 2025. Partners’ contribution to a more sustainable Expo 2020 Siemens As the Expo 2020 Infrastructure Digitalization Partner, Siemens is helping the expo achieve its sustainability targets by integrating its smart building technology across the expo structures, providing transparency into their energy and water consumption. PepsiCo In preparation for the event, PepsiCo has launched Expo 2020 Dubai co-branded Aquafina cans and glass bottles, as well as limited-edition Pepsi cans, which are all fully recyclable. PepsiCo is also collaborating closely with Dulsco, the official waste management partner for Expo 2020, to ensure waste is collected and recycled, supporting the Expo’s waste diversion targets. Mastercard Mastercard, Expo 2020's official payment technology partner, has created an add-on feature to Expo 2020 tickets, which allows visitors to donate to Mastercard's Priceless Planet Coalition. Expo 2020 highlights the urgent need to embrace sustainability, which can be observed through the efforts made by the organizers and partners to change their practices to create a more sustainable future. Partner companies have come a long way to achieving their goals in terms of reducing greenhouse emissions, curbing their water consumption, using renewable energies, and recycling their waste. Some had more noticeable successes than others, such as SAP, Accenture, and Cisco, while others are still on the way. Expo 2020 partners, including Siemens, Emirates, PepsiCo, MasterCard, and DP World have also contributed to a more sustainable expo, emphasizing the significance of sustainability to all Expo visitors. Khawla Khrifi - Business Research Analyst Sources: Expo 2020 and Environmental Sustainability
The 21st century has witnessed major efforts by industries all around the globe to seize new technological capabilities to improve personal lives, corporate dynamics, and industrial processes. In an era of severe climate change crises, new technologies and industrial philosophies are becoming more and more essential. In this context, green architecture emerged as a solution to conserve nature and initiated the transformation of the real estate industry. “At the turn of the 21st century, a building’s environmental integrity as seen in the way it was designed and how it operated, became an important factor in how it was evaluated.” What is Green Architecture Green architecture is an eco-conscious approach that advocates for the preservation of nature in designing, constructing, and operating buildings. In green architecture, the architect adopts a design philosophy that considers the environmental impact of all aspects of the project. A green building or community is one that takes into account the efficiency and sustainability of energy resources, the preservation of water and air resources, waste reduction, and the adaptability of materials to a changing environment. Green architecture does not only aim to limit or eliminate the negative impact that construction activity has on the environment, but to have a positive effect on the people and nature through environmentally conscious designs, practices, building materials, and the use of the latest technologies. Why Green Architecture? Construction harms the environment in several ways: high energy consumption, generation of waste, high direct CO2 emissions compounded by deforestation, and water and air pollution. From architectural design to operations, a construction project contributes to climate change, disrupts wildlife, and consumes a lot of resources. The United Nations Environment Program reported that the “buildings and construction sector accounted for 36% of final energy use and 39% of energy and process-related carbon dioxide (CO2) emissions in 2018, 11% of which resulted from manufacturing building materials and products such as steel, cement, and glass. And according to research and statistics, in 2018 the worldwide emissions from buildings rose to 9.7 gigatonnes of carbon dioxide (GtCO2).” The Rise of Green Architecture and Technologies The green architecture was founded in 1969 by Ian McHarg who theorized a holistic approach to transform the way buildings and communities are designed, built, and operated. His most important contribution are detailed in his book “Design with Nature” where he outlined the process of living harmonically with nature by applying a “landscape suitability analysis”. His principles of regional ecological planning explain the importance of assessing the health of a region, its ecological constraints, and accordingly where and how construction should take place to live in harmony with nature. In 1994, the U.S Green Building Council formalized McHarg’s principles establishing the Leadership in Energy and Environmental Design standards (LEED). The LEED standards were made to provide measurable guidance and framework for the design and construction of environmentally responsible, highly efficient, and cost-saving green architecture projects and green buildings. The standards mainly focus on sustainable site development, water savings, energy efficiency, material selection, and indoor environmental quality and are updated frequently. The Green Building Council also tackles awareness, education, innovation, and design of sustainable development. Green architecture was founded in 1969 by Ian McHarg who theorized a holistic approach to transform the way buildings and communities are designed, built, and operated. His most important contribution are detailed in his book “Design with Nature” where he outlined the process of living harmonically with nature by applying a “landscape suitability analysis”. His principles of regional ecological planning explain the importance of assessing the health of a region, its ecological constraints, and accordingly where and how construction should take place to live in harmony with nature. Simultaneously, the advancements in environmental technology and different fields of hydrogeology, geology, biochemistry, and nature-cybernetics have encouraged the goals of sustainable city planning and green architecture. Technology in the 21st century creates the opportunity for a different approach to architecture and design that embraces the environment. Green Architecture Technologies Green walls and vertical gardens along with green roofs are all hallmarks of green buildings that help minimize heating and cooling costs, prevent storm-water runoff, filter out pollutants, and accordingly reduce energy use and cost. Solar power, in addition to hydropower and wind power, is very often used as renewable energy resources for heat and electricity so that any residential or commercial building is able not only to fulfill its own needs but to generate and store electricity. Recycling and waste reduction are also features of major importance in green architecture. Recent smart city projects are trying to blend green infrastructure with internal smart home solutions and seize technological tools to improve sustainability. Smart appliances are being used to minimize energy consumption aiming at establishing net-zero energy in residential and commercial buildings. Net-zero energy buildings rely only on the energy produced onsite from renewable resources through a combination of energy efficiency and renewable energy generation. Green water technologies are also being used along with different irrigation technologies to enhance the quality of water for irrigation and the ecosystem overall. Other water technologies and techniques include dual plumbing systems, the re-use of water, and harvesting rainwater to minimize the consumption of traditional freshwater resources. Sustainable design is based on energy-minimizing strategies as designing windows that constantly reflect daylight, the use of low emitting materials, and the use of smart glass to save a lot on heating, ventilation, and air conditioning costs. In addition, the design also considers the materials used internally and externally to ensure the health and safety of people with regard to carcinogenic elements or toxic materials. Green Architecture around the Globe: Several countries have initiated green building investment projects around the world to meet the Paris Agreement and Sustainable Development Goals (SDGs) for 2030. As of 2015, several countries have already incorporated Green buildings in their master plans. Singapore is one of the earliest countries in Asia to incentivize and initiate green architecture projects. In 2009, the Singapore Green Building Council was established to encourage green architecture and to encourage private-public partnerships. “Singapore is the only country that makes it mandatory for any building of 5,000 square meters to achieve minimum standards as per the code for environmental sustainability,” says Mayank Kaushal, an architect, senior sustainability consultant, and researcher with Future Cities Laboratory. The Parkroyal on Pickering hotel in Singapore designed and completed in 2013 is a prime example of this philosophy in action featuring 161,459 square feet of sky gardens, waterfalls, and planter walls. The hotel incorporates different technologies including solar power grids, rain sensors, and water and light saving tools. The project was designed and completed by WOHA, and the project won Interior Design’s 2013 Best of Year Award for Hotel Common Space. Several countries around the globe have been either developing or planning on going green as well including Canada, Germany, Guatemala, U.S.A, Australia, China, Denmark, Italy, India, Japan, Mexico, Netherlands, U.K, U.A.E, Egypt, South Africa. However, each country may pursue green architecture and sustainable development differently according to its resources and climate. Challenges and Conclusions Green building practices are gaining more acceptance in the construction and real estate industries as a viable solution to becoming environmentally sustainable. Yet green architecture was founded more than 50 years ago, and its uptake hasn’t been progressing as one would expect. Adopting sustainable development and green architecture practices remains challenging for several reasons. Compared to conventional methods, the capital and additional costs needed constitute the major challenge to even consider going green especially for developing countries. The materials and equipment used in the construction of green buildings are expensive as are the technologies needed for energy efficiency and generation. But more recent research shows that: “investments can be recouped through operational cost savings and, with the right design features, create a more productive workplace.” However, the cost is not the sole challenge, other major obstacles include the lack of expertise and skilled manpower, the lack of awareness and environmental education, minimal adoption incentives, and the lack of laws and policies. More importantly, the lack of dedicated research and development is a major issue. And while the main purpose of adopting green architecture is nature-driven, the indirect effects this new approach can have on society is revolutionary. Adopting sustainable development in fact stimulates environmental awareness, technical and scientific research, new skills in the workforce, and efficient industrial practices. The future is ours to lose. References Bold Business, Building Green, 2019. https://www.boldbusiness.com/infrastructure/green-construction-environmental-impact/ Inso Architectural Solutions, Green Architecture Vs. Sustainable Architecture in South Africa, 2021. https://www.inso.co.za/blog/green-architecture-vs-sustainable-architecture-in-south-africa/ World Green Building Council, How Green Building is Facilitating Rapid Sustainable Growth in Africa, 2021. https://www.worldgbc.org/news-media/how-green-building-facilitating-rapid-sustainable-growth-africa DNA Barcelona, DNA Unveils a Futuristic Eco-Building for Singapore, 2020. https://www.dna-barcelona.com/dna-unveils-a-futuristic-eco-building-for-singapore/ TessilBrenta Nonwovens Technology, Green Roofs and Terraces, 2021. https://www.tessilbrenta.com/en/ecotess#roofs EliteTraveler, Futuristic Target Tower to be Built in Singapore, 2021. https://www.elitetraveler.com/design-culture/architecture-interiors/futuristic-garden-tower-to-be-built-in-singapore High Speed Training, Pollution from Construction, 2019. https://www.highspeedtraining.co.uk/hub/pollution-from-construction/ IEREK, Green Buildings and its Benefits in Smart Cities, 2017. https://www.ierek.com/news/index.php/2017/08/01/smart-cities/ Conserve Energy Future, Green Construction, 2021. https://www.conserve-energy-future.com/top-sustainable-construction-technologies-used-green-construction.php CNN, Green buildings: 18 examples of sustainable architecture around the world, 2020. https://edition.cnn.com/style/article/green-buildings-world-sustainable-design/index.html Daniels, T. 2019. McHarg’s theory and practice of regional ecological planning: retrospect and prospect https://www.researchgate.net/publication/335080769_McHarg's_theory_and_practice_of_regional_ecological_planning_retrospect_and_prospect Britannica, The Rise of Eco-Awareness, 2021. https://www.britannica.com/art/green-architecture/Principles-of-building-green United Nations Environment Program, 2019 Global Status Report for Buildings and Construction Sector. https://www.unep.org/resources/publication/2019-global-status-report-buildings-and-construction-sector U.S Green Building Council, Vision, 2021. https://www.usgbc.org/articles?Channels=%5B%22Industry%22%5D Britannica, The Rise of Eco-Awareness, 2021. https://www.britannica.com/art/green-architecture/Principles-of-building-green Conserve Energy Future, Green Construction, 2021. https://www.conserve-energy-future.com/top-sustainable-construction-technologies-used-green-construction.php Interior Design, 8 Sustainably Designed and Architecturally Significant Buildings in Singapore, 2019, https://www.interiordesign.net/articles/16140-8-sustainably-designed-and-architecturally-significant-buildings-in-singapore/ World Green Building Council, The Business Case for Green Building: A Review of the Costs and Benefits for Developers, Investors and Occupants, 2021. https://www.worldgbc.org/news-media/business-case-green-building-review-costs-and-benefits-developers-investors-and-occupants
The second-largest sector after agriculture in Africa is the fashion and textile industry with an estimated market value of $31 billion in 2020 and growing every year (1). Fast fashion is a marketing and manufacturing model where clothing moves instantly from the runway to retail stores. Fast fashion captures the latest fashion trends and styles and manufactures clothing immediately to satisfy demand, season after season. It is able to do this by optimizing certain aspects of the supply chain to produce designs quickly and inexpensively. Marketing teams then target mainstream consumers, persuading them to buy the latest collections. These items are often set at a low price, making them attractive to a wide base of consumers encouraging them to replace one season’s garments with the next (2). Fast fashion produces around 52 micro seasons instead of the traditional 2 per year, increasing demand at an exponential rate. (12). Examples of fast fashion retailers include H&M, Zara, Uniqlo, Primark, Topshop, and Next that produce massive amounts of clothing very efficiently (3). But what is the fast fashion industry doing in Africa? What opportunities does it bring to the table and what risks does it present to this continent? Fast fashion can contribute positively to the African economy. Within Africa, the entire textile/clothing sector is already the second-largest employer after agriculture (4). In Kenya, data shows that every job in the garment sector generates 5 other auxiliary jobs (4). With shorter shipping routes to European and USA markets, Africa also has an important strategic advantage over Asian manufacturers. In fact, it takes just three weeks for a shipping container to travel from West Africa to Western Europe and a month to travel to the East coast of the United States. Africa also benefits from lower (or comparable) labor costs to Asia and apparel manufacturers in many African countries offer duty-free deals (or reduced tariffs as much as 30% compared to Asia) when entering European, American, and Australian markets (4) giving Africa a competitive edge over its Asian counterparts. Clothing and textiles represent about 7% of world exports, and apparel production is. For instance, Ethiopia is already a destination for apparel manufacturing such as Guess, Levi’s, H&M, which have shifted their production therefrom China (13). According to the Oxford Committee for Famine Relief (OXFAM), if Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by 1% the resulting growth could lift 128 million people out of poverty (4). The torch of the “world’s low-cost manufacturer”, long-held by China, is set to pass to Africa in the very near future (5). China has its sights set on shifting the focus of its economic system towards creating a significant domestic market with greater consumption capacity. For this reason, it is trying to go beyond a model that hinges on cheap labor. The African economy instead is still growing by 10% annually, an exception in the last decade, making it an attractive destination for foreign investors (5). In this context, Chinese firms are now looking to delocalize their production, without surrendering control of the supply chain, by seeking out, as European and American firms have done before them, low wages and suitable infrastructure (5). In Africa, the potential for attracting these investments is considerable, owing in part to wages being as low as 60-70 dollars per month in countries like Ethiopia (5). The fast fashion industry moves very quickly, and African countries are also interested in attracting this industry as it provides an opportunity for much-needed economic diversification. Countries like Ethiopia are a good example of the possible synergies to be had. There is a great deal of investment flowing into the country because of its lower wages and proper infrastructure, with good access to ports, a young and motivated workforce, and labor market governance that is favorable to investors. The country is also in the same time zone as Europe and is conveniently situated geographically with respect to target markets. Other countries with high potential include Nigeria, Ghana, and Kenya. Nigeria, Africa’s largest oil producer, recently scrapped its textile import ban, driving renewed interest from international fashion and apparel retailers. The country is currently home to leading brands such as Levi’s, Mango, Nike, and Swatch, which have set up stores in the Palms Shopping Mall in Lagos (7). These are all countries where increased macroeconomic stability has been conducive to the influx of capital (5). “Western companies were ignoring the prospects of the continent of Africa, especially with fashion retailers. Some not shipping there at all, others taking 21 to 30 days […]” (6). Yet, that will quickly change as they begin to grasp the opportunity that Africa offers (6). On the other side of this coin is the deleterious environmental impact of this production model. According to statistics published by the United Nations Environment Program and the Ellen MacArthur Foundation, the fashion industry is responsible for 10% of annual global carbon emissions, more than the aviation and shipping sectors combined (8). The industry’s use of water and energy has marked it as one of the planet’s biggest polluters. Climate change is already having a negative impact on food security and public health (9). In addition, Africa faces the unique problem of being the last link of this industry’s value chain: 45% of all donated clothing globally ends up in the hands of for-profit brokers, with 70% of that ending up in Africa (10). Kenya alone, for instance, imported a whopping $133 million worth of worn clothing from Canada, Europe, and China in 2017, practically wiping out their homegrown textile industry (10). As purchasers attempt to resell their items, they are often unaware of what products they are receiving, or even their quality. If the quality is sub-par, the materials get tossed in landfills losing traders lots of money and creating huge piles of trash. This means that developing countries are importing more waste textiles than the cotton they export and are therefore losing major profits– suffocating both their economies and their environments (10). Farmers in Burkina Faso, the largest cotton producer in sub-Saharan Africa, have identified that the cotton they produce seems to only gain real value once it is exported to outside countries, like China, and turned into fabrics, threads, and garments. Those garments are then sold globally (in stores like H&M, Topshop, or Zara) used, donated, and end up back in Africa, only to get thrown away. As calls for corporate consciousness begin to rise, initiatives for change are emerging. Consumers have a greater awareness of issues like sustainability. This has resulted in organizations, like the United Nations, considering negotiations to reform fast fashion’s destructive manufacturing process (10). Indeed, Africa looks like a promising market for fast fashion; however, a new improved system is needed. A version that is better than the current one where the production model is more sustainable and that supports a circular economy rather than a linear one. Reform is needed to save not only the environment, but also the people. Sara Yamama - Research Analyst Sources: https://intpolicydigest.org/2020/11/28/fashioning-with-waste-turning-fast-fashion-into-an-opportunity-in-africa/ https://www.thechicselection.com/fast-fashion-its-environmental-impact https://kitengestore.com/positive-impact-made-measure-fast-fashion/ https://www.fashionafricasourcingtrips.com/about/emerging-market-facts/ https://www.aspeninstitute.it/en/pin/africa-set-be-new-fast-fashion-factory-interview-maurizio-bussi https://wwd.com/fashion-news/fashion-features/bringing-affordable-fast-fashion-to-africa-1202775707/ https://www.businessoffashion.com/articles/global-markets/global-briefing-could-africa-be-the-next-frontier-for-fashion-retail https://www.fashionatingworld.com/new1-2/african-fast-fashion-may-swamp-ethical-fashion https://un-ruly.com/how-that-zara-top-you-bought-is-hurting-africas-economy/ https://www.unisa.ac.za/sites/corporate/default/Colleges/Agriculture-&-Environmental-Sciences/News-&-events/Articles/Fast-fashion-is-the-new-plastic
A brief history of SEZ development in the world Special economic zones (SEZs) have been gradually gaining traction in the developing world over the last two decades. While modern SEZ development started decades ago in Europe and Asia, an increasing number of African countries have been developing SEZ policies and building SEZs in collaboration with internal and external players. Special economic zones (SEZs) are generally defined as demarcated geographic areas within a country where the rules of business are different from those used elsewhere in the country. The main differences are usually related to investment conditions, trade and customs, and the regulatory environment. The history of SEZs can be traced to the island of Delos in the Cyclades archipelago. Around 167 BC, Rome gave it “free harbor status” thereby turning it into a toll-free harbor which turned it into a center for Romans operating in Asia Minor. At the beginning of the 20th century, free trade zones were generally established near ports and by 1900, there were 7 free trade zones in Europe and 4 in Asia. In this period, SEZs started incorporating manufacturing plants such as the Cadiz SEZ in Spain which accommodated one of the first Ford Motors plants in Europe. China has been a leading country in terms of SEZ development and has leveraged its comprehensive SEZ policies to promote development. SEZ development in Africa SEZs were first introduced in Africa in 1970 in Mauritius and enacted its EPZ Act in the same year. Other countries including Ghana and Senegal started developing SEZ later in the 1970s. Accelerated development however started in the 1990s as more African governments sought to mimic the development of East Asian countries. [UNCTAD] There are currently over 230 SEZs in Africa and 200 single-enterprise zones. SEZs are present in 38 of the 54 countries in Africa with Kenya having the highest number at 61. Other notable countries are Nigeria with 38 SEZs and Ethiopia with 18 zones. [UNCTAD] [caption id="attachment_5536" align="aligncenter" width="440"] Figure 1: Number of SEZs in African countries, UNCTAD[/caption] African countries mostly focus on manufacturing and exports of low-skill, labor-intensive industries such as garments and textile. Nonetheless, certain countries are focusing on the inclusion of diverse sectors with higher value addition. Morocco for instance aims to integrate high-tech activities and the automotive industry within its SEZs, notably in Tangier’s Automotive City and Kenitra’s Atlantic Free Zone. [caption id="attachment_5537" align="aligncenter" width="696"] Figure 2: Number of SEZs by type in the world, UNCTAD[/caption] In 2013, Rwanda opened its Kigali Special Economic Zone to host several domestic and foreign firms in various sectors. Within three years, the zone was employing 2% of the entire country’s workforce. Unlike most SEZs, the Kigali SEZ does not provide tax incentives for firms operating in the zone. Instead, companies benefit from a strong and streamlined regulatory environment as well as improved infrastructure and trade facilitation. African SEZs have consistently ranked among the top SEZs in the Financial Times’ FDI Intelligence. In 2020, SEZs from Morocco, Mauritius, and Nigeria were included in the list of Global Free Zones of the Year Lessons from China’s experience: What can African countries learn China started developing SEZs in 1978 and currently has over 2,500 zones. Early development was focused on coastal cities (e.g. Shenzhen, Zhuhai, etc.) while later development was focused on the west of the country to promote regional development. China developed a wide range of SEZs including industrial development zones, free trade zones, and export processing zones. The development of SEZs played a significant role in China’s economic rise and are estimated to have accounted for 22% of national GDP, 46% of FDI, 60% of exports, and created over 30 million jobs With its focus set on improving livelihoods and providing job opportunities, China developed tailored SEZ programs for different regions depending on its specificities. For instance, one of China’s key success factors was its early focus on manufacturing and retail industries which absorbed a large unskilled labor force. African countries can benefit from China’s success story. First, by setting SEZ models adjusted to local circumstances instead of replicating existing models. For instance, China developed tailored SEZs that fully benefit from the local workforce, proximity to other manufacturing centers, and access to local markets. Another lesson from China is the long-term planning of SEZs based on quantified data and objectives and ensuring its fit within the country’s long-term development goals. China leveraged SEZs to grow local industries in a constraining environment thus overcoming local constraints such as its labor force’s qualification level, market demand, and other hurdles in its development model. As such, Africa countries need to ensure that SEZs fit within their respective development plans using careful and skilled planning. Throughout the development of its SEZs, China invested immense efforts in building sound infrastructure. The role of adequate and stable power, transportation links, and other infrastructural elements cannot be understated. In a study conducted by the World Bank of six African countries with another four non-African countries, it was found that downtime due to power outages was significantly higher in Africa. While financial hurdles can significantly impede infrastructure development, African nations can benefit from a PPP model to attract more private investors and thus over its hurdles. [caption id="attachment_5538" align="aligncenter" width="705"] Figure 3: Power outages in hours, World Bank[/caption] SEZs need access to a local labor force that is sufficiently skilled for its focus activities. By integrating “smart” incentives linked to the employment and training of its local labor force, Africa can benefit from SEZs to improve livelihoods and provide better outcomes for its working-age population. Another key element is the linkages to local universities and research centers. Through the successful partnership of the local research workforce with foreign investors, African researchers and scientists can benefit from the shared experience and the technology transfer that consequently occurs through the partnership. Morocco’s SEZ experience and lessons learned Morocco’s SEZs have consistently ranked in the top zones in Africa and the World. In 2020, the Tangier Med Zone ranked 2nd world economic zone after Dubai’s Multi Commodities Center in the Financial Times’ “FDI Global Free Zones of the Year 2020”. In order to understand Morocco’s success, we need to look at the history behind the developments of SEZs in the North African country. Morocco first enacted its SEZ law in 1995 which provided various incentives to foreign investors and started and established Tangier Med Special Agency (TMSA), its first dedicated SEZ authority in 2002. The zone was primarily focused on the automotive industry and engage the Moroccan Industry Association for Automotive Producers (AMICA) to focus on training and vocational development. By 2018, the six SEZs in the Tangiers area (which are all managed by TMSA) were hosting over 470 firms, having created 70,000 jobs with a total private industrial investment of USD 3.5bn. In addition, Morocco and China are currently planning a USD 10bn new industry-focused zone called Mohammed VI Tangiers Tech City which is set to create 100,000 jobs. Morocco has shown unwavering commitment towards the creation of high-quality zones instead of a high number of zones. By focusing its efforts on a limited number of SEZs, the Kingdom sought to create a suitable environment to attract full industry ecosystems by targeting large players in key sectors such as PSA and Renault in the automotive sector and Boeing and Bombardier in the aerospace industry. In 2016, Morocco amended the previous 1995 legislation and committed to creating new SEZs in all 12 regions. This new legislation aimed to create sector-oriented zones that interconnectedness between different firms operating the same zone. The new law is part of Morocco’s strategy to strengthen its manufacturing capabilities and is part of the Industrial Acceleration Plan launched in 2014. The impact of SEZs on Morocco’s industrial sector is noticeable as the sector has contributed 25% of its GDP by 2017, compared to an average of 19% between 1985 and 2016. Morocco further aims to increase the share of industry to 30% by 2022 and create an additional 500,000 jobs by 2020. However, SEZ development in Morocco is still in need of further improvement to ensure backward linkages with the local economy which suffers from similar issues found in other African nations. A lack of qualified workforce, limited provisions for local partner companies operating outside the SEZs, and limited options for local imports of finished goods. Another key aspect that needs to be examined is the tax system which may limit interactions between different companies within Morocco’s SEZs. Conclusion SEZs have shown considerable potential in African nations, and while many challenges lay ahead, these zones can play a tremendous role in the development of the African continent. Countries in Africa need to overcome many hurdles for their SEZ development and need strong and long-term strategies to unlock the potential of SEZs in their respective economies. It has already been demonstrated that SEZs can be a key part of industrial development in many nations, and Africa needs to harness the full potential of its SEZs as part of a successful transition to an industrialized and self-reliant continent. Anass Rifaoui - Research Analyst Sources: http://documents1.worldbank.org/curated/en/343901468330977533/pdf/458690WP0Box331s0April200801PUBLIC1.pdf http://www.cn.undp.org/content/dam/china/docs/Publications/UNDP-CH-Comparative%20Study%20on%20SEZs%20in%20Africa%20and%20China%20-%20ENG.pdf https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf https://www.worldbank.org/content/dam/Worldbank/Event/Africa/Investing%20in%20Africa%20Forum/2015/investing-in-africa-forum-special-economic-zones.pdf https://www.econstor.eu/bitstream/10419/206420/1/1681095483.pdf https://www.policycenter.ma/sites/default/files/SEZ%20WEB%20FINAL.PDF https://oxfordbusinessgroup.com/overview/accelerating-growth-focus-clusters-special-economic-zones-and-investment-aeronautics-continue https://www.worldbank.org/content/dam/Worldbank/Event/Africa/Investing%20in%20Africa%20Forum/2015/investing-in-africa-forum-global-experiences-with-special-economic-zones-with-a-focus-on-china-and-africa.pdf https://www.fdiintelligence.com/article/78955
What is globalization and its impact There is no doubt that globalization is a phenomenon that has changed the world as we know it for the better. International cooperation touches all of our day-to-day aspects, including food, transportation, leisure, even information; the world as we know it today would have been very different without this crucial global aspect. Even in times of crisis, the world stands together and acts for the greater good; with one of the most recent examples, the coronavirus vaccine that was discovered and distributed thanks to the international scientific cooperation. However, the alter-globalization movement sees some major flaws in this system, and some important changes need to take place in order to ensure a better application of this process in this interconnected world. Today, we live in a world where access to information, goods, and services are literally at our fingertips; a world in which mobility and trade flows have never been higher. There is no denying that today’s world is one of interconnectivity; where the activities of countries, individuals, and companies are constantly intertwined. With this increasing interconnectivity, comes interdependence; and economic globalization is basically the interdependence of the different parts of the world’s economy as a result of the rapid growth of international trade of goods and services (figure 1), the flow of international capital, and the rapid spread of technologies and knowledge-sharing methods. The expression “the world is a small village” has never been closer to reality. [caption id="attachment_5513" align="aligncenter" width="478"] Figure (1): Evolution of world merchandise trade 1950-2019, WTO[/caption] Since the second world war, the international system was shaped by the then-formed alliances that lasted beyond the conflict. Globalization was seen as the cure for the nationalist movements that fueled World War II. International organizations such as the United Nations (UN), the World Bank, and the International Monetary Fund (IMF) emerged on this new global economic scene, even before the war had ended; followed by supra-national regional entities such as the European Union (EU). The global economy was witnessing the creation of its newest and biggest players – multilateral organizations. However, during the last couple of years, the world has witnessed the rise of movements that are rejecting some aspects that created the foundation of this globalization. The sudden upsurge in populist groups, separatist movements, and nationalist activities clearly indicates that there are some rules and consequences of the globalization game that several groups and countries are rejecting. From that perspective, we can say that globalization is not just a borderless world in which goods, services, mobility, information, and capital are accessible for everyone, everywhere; there is an unjust and an unfair aspect of this era-defining process. Hence comes the following question: how can globalization become a double-edged sword; and is there a better way of coping with it? The price of globalization: who sets the rules? In theory, globalization speculates that the world should be working together on different fronts, to achieve common social, political, and economic goals. Nevertheless, some countries are more influential than others, based on several factors that contribute to their overall status and that create what we may call – for simplicity reasons – a hierarchy between them. Whether they are labeled as first, second, and third world countries, or developed, developing, and lower-income countries, the international system is not a system in which all countries have the same weight. International organizations today give specific countries more power than it accords to other ones: take the UN’s Security Council for example, with the veto power solely bestowed on its 5 permanent members. In a world of 193 UN member-states, 5 countries are able to dismiss any decision they deem inadequate. [caption id="attachment_5514" align="aligncenter" width="520"] Figure (2): Number of vetoes used between 1946 till today, UN Library[/caption] Today, people of the world share many things in common thanks to the internet, social media, international travel, and many other platforms. One thing that is also shared is culture, something that never existed before: one international and globalized culture. Kids around the globe would recognize characters such as Mickey Mouse, regardless of their countries of origin, social class, and education. While in theory, this is not a negative point, however, if it comes at a price in which this newly formed global culture replaces indigenous ones, it becomes a cultural threat. Some things that may seem mundane, such as beauty standards and the way of dressing, are affected by the Western understanding of it. That is why anti-globalism activists claim that American television highlights Western notions of beauty and different lifestyles that may not be entirely coherent with local cultures. [caption id="attachment_5515" align="aligncenter" width="577"] Figure (3): International tourist arrival by world region 1950-2018, Our World in Data[/caption] This brings us to another point, which is international travel, a major contributor to the planet’s carbon emissions that produces 8% of global emissions. Similarly, the outsourcing of pollution is on the rise due to globalization, as some countries – mostly developed ones – in their efforts to reduce their CO2 emissions, send their most polluting industries abroad. Britain was able to reduce its domestic emissions within its borders by one-third between 1990 and 2015 but has done so by relocating its energy-intensive industries abroad. Reports estimate that 25 percent of the world’s total CO2 emissions are now being outsourced in this manner[1], particularly since wealthier countries that are supposedly reducing their emissions, such as Japan and Germany, are in fact doubling or tripling their outsourced emissions to China and other developing countries. Therefore, by including the “outsourced” CO2 emissions produced by industries affiliated with developed countries located in poorer countries, it is obvious that their total emissions have not decreased and did in fact increase[2]. This is only possible due to the current global system that creates an international production chain where the most polluting steps of industrial production can be set up in foreign countries that are more in need of international investments. This globalized production chain is also linked to international inequality in the cost of labor. Some countries tend to have cheaper labor than others, which allows companies (usually from high-cost and developed countries) to adopt a low-cost country sourcing strategy, which allows them to have access to a cheaper labor force in other countries (usually low-cost developing countries) Finally, it seems that this globalized system is self-sustained, since the international organizations that created it also enforce the “rules of the game”. In fact, the globalized system of aid and development – whereby multilateral and bilateral donors provide loans and grants for less-developed countries- also impose neo-liberal policies in return for this assistance. Through this quid pro quo process, one could say that rich countries force the governments in the rest of the world to adopt less restrictive economic policies such as liberalizing global trade, decreasing subsidies to local industries, and allowing more space for the private sector to grow. The stability and continuation of the globalized system is therefore ensured by the very existence of international organizations. Conclusion So, what can be done? A simple question that requires a very complicated answer. Ironically, it seems that the best way to cope with the side effects of globalization is through more globalization. It is an undeniable fact that the world is much better thanks to international cooperation on so many fronts that serve the planet as a whole, as mentioned earlier with the coronavirus vaccine. Just like it was with the invention of plastic and the discovery of fossil fuel, the world was mesmerized by this groundbreaking invention, and its thousand uses, but was unaware of its catastrophic side effects on the environment. The timid rise of the alter-globalization movement shows that the world needs to work together, to come up with a fair and just system that integrates countries and individuals, not separate them; an inclusive system in which decisions are collectively made and not imposed. A world in which labor protection, environmental protection, civil liberties, and the protection of indigenous cultures are taken into consideration. The question is, in our lifetime, will we ever see such a system? Sources: Economic Globalization – A Double-Edged Sword, Rethinking Prosperity (link) It’s Not Only Necessary to Develop an Alternative to Globalization — It’s Entirely Possible, Foreign Policy in Focus (link) An alternative view of Globalization 4.0, and how to get there, World Economic Forum (link) Growing Market Offers Huge Potential — but Also Peril : Globalization's Double Edge, New York Times (link) World Trade Organization (link) United Nations (link) Our World in Data (link) The Carbon Loophole in Climate Policy, Daniel Moran, KGM & Associates, Ali Hasanbeigi and Cecilia Springer, Global Efficiency Intelligence, August 2018 (link) Mapped: The world’s largest CO2 importers and exporters, Carbon Brief, 5 July 2017 (link) [1] The Carbon Loophole in Climate Policy, Daniel Moran, KGM & Associates, Ali Hasanbeigi and Cecilia Springer, Global Efficiency Intelligence, August 2018 (link) [2] Mapped: The world’s largest CO2 importers and exporters, Carbon Brief, 5 July 2017 (link)
