Europe is in a paradox; I’m not even talking about the war in Ukraine. But the insinuation is interrelated. This crisis dovetails with the inflationary pressure exacerbated by the Russian invasion of Ukraine. The commodity prices are through the roof as sanctions are gradually taking effect on the commerce between the European Union (EU) and Russia. The current snapshot of the European economy defines the contours of inflation in the region. While quantitatively similar, inflation in Europe is nuanced compared to the US inflationary profile. The US prices spiraled due to the easy money injected by the US government to wade off an economic crunch during the pandemic. The inflation in Europe, on the contrary, is pivoted on energy and food shortages. Thus, while the US expects a brief period of economic depression, Europe is staring into the abyss of staple shortages, supply chain snarls, and a significant risk to organic economic growth.
Recently, the EU lowered its 2023 growth projection to 1.4% – a contraction from the expected growth of 2.6% in 2022. Yet as annual inflation in the EU jumped to 9.6% last month – a multi-decade peak – the European Central Bank (ECB) has no choice but to turn hawkish. While the shift away from easy money is in accord with the aggressive outlook adopted by the US Federal Reserve, the EU faces complexities that the Fed would never confront.
The ECB delivered a surprise last Thursday as it hiked the interest rates for the first time in over a decade. The ECB increased the benchmark rate by a larger-than-expected increment of 50 basis points. The move has effectively settled the deposit rate – which had been in the negative territory since 2014 – to zero. However, the unprecedented scale has pushed the refinancing operations rate to 0.5%; the marginal lending rate to 0.75%. According to the ECB statement released on Thursday, the “larger first step on its policy rate normalization path” was taken to “support the return of inflation to the Governing Council’s medium-term target” and ensure that “demand conditions adjust to deliver its inflation target [vis-á-vis 2%].” The policy shift appears in tandem with the aggressive approach adopted by almost every developed economy around the globe – except for Japan. However, the nature of the ECB’s monetary tightening differs with respect to intrinsic factors.
A rate increase of a half percentage point is (frankly) not as aggressive when compared with the tightening schedule implemented by other advanced economies. Since May, The Reserve Bank of Australia (RBA) has raised interest rates by 125 basis points – the fastest consecutive increments since 1994. The Bank of Canada hiked its benchmark interest rate by a percentage point last week – the single highest increase since 1998. And even the Bank of England (BOE) – once a constituent under the ECB – has increased its bank rate by 115 basis points – cumulatively in a series of rate hikes since December 2021. Evidently, the ECB is behind the curve – leading to the susceptibility of seepage of liquidity across the Atlantic. Yet, we need to realize one particular dimension, a distinctive quality that sets ECB apart from other central banks: it is responsible for setting the monetary policy for a chorus of developed (and developing) economies in Europe – not just a single advanced economy.
The ECB is the central bank of 19 European countries sharing the Euro as a fungible currency. A rate hike welcomed by stable economies like France could be detrimental to countries with unsustainable debt piles – like Greece, Italy, and Spain. Raising interest rates at the same pace as the US Fed – an implicit norm throughout the globe – could reignite the regional sovereign debt crisis as increasing borrowing costs would rapidly sink a few European nations into fiscal turmoil. Hence, the ECB has introduced a new tool, the Transmission Protection Instrument (TPI), to counter these “unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy.” Nonetheless, the risk of fiscal fragmentation remains viable as the implementation criteria is ambiguous. For instance, the ECB claims that its Outright Monetary Transactions (OMTs), governed under the TPI framework, would depend on the “severity of the risk facing fiscal transmission.” Thus, the ECB would be walking a fine line between fiscal consolidation and conducing fiscal irresponsibility. That line is particularly noticeable today. Following the ECB press conference on Thursday, yields on 10-year Italian bonds rallied; the Italian stock market trailed. All amid a political shuffle in Italy as Prime Minister Mario Draghi resigned for the second time in a week. Analyzing the volatile political atmosphere in Europe, I believe demarcating between the effects of sovereign fiscal incompetence and echoes of the ECB policies would be one of the most pressing challenges for the ECB in months to follow – perhaps second to the Russian threat to the European economy.
While the gas prices in Europe have shown some respite after a scare of blockade of the Nord Stream 1 (NS1) pipeline, the risk of retaliation still looms. The European Commission (EC) has directed a possible mandate for the EU nations to cut gas consumption (under their respective emergency plans) by 15% to prepare for a chilly winter without Russian gas. Nonetheless, countries like Hungary and Germany would almost certainly trip into a deep recession if Russia actually resorts to such a move. It increasingly seems likely! Gazprom – Russia’s state-controlled gas monopoly – retrospectively declared force majeure on deliveries from June 14th – capping potential gas supplies via the NS1 pipeline while safeguarding against litigation. Thus, further similar policy moves by the ECB – under the planned forward guidance – would be increasingly more difficult to enact as regional economies would increasingly suffer from stagflation – inching towards a steep recession.
Ultimately, the ECB announcement was not without a silver lining. The ECB has effectively managed to pump the Euro after it briefly fell to parity with the US dollar – for the first time in 20 years. But this is a temporary interlude as the future economic outlook of the EU spells gloom – from eroding consumer confidence to supply chain disruptions to high energy costs during bouts of sweltering climatic conditions. And therefore, I believe this confounding situation could culminate in only two scenarios: 1.) A miraculous end to the war in Ukraine, cessation of sanctions on Russia, and a subsequent end to the European energy crisis. Fantastical to even envision, I agree! 2.) A recession gripping more than half of the 19 nations of the EU – Germany leading the pack in mass economic deterioration.
Mitsuko Takahashi on the global egg industry
A Severe Economic Crisis in Lebanon: The Lebanese Pound Has Collapsed
The author is a political and economic analyst. He focuses on geopolitical policymaking and international affairs. Syed has written extensively on fintech economy, foreign policy, and economic decision making of the Indo-Pacific and Asian region.
The Only Game in Town: A Trilogy of the Fed, Inflation, and Recession
The Angolan Factor in China’s Relations with Africa
Why the EU Could End Within a Year
Asian and Pacific Countries Preparing for the Far East Forum
The Green China; Hindrance and Limitations of the Green Transition
The Great Game of China and the United States of America in Asia
“Having been forced into being the only game in town, they (Federal Reserve) now find their destiny in no longer entirely or even mostly theirs to control.” – Mohamed Aly El-Erian (Egyptian-American economist)
This quote from the 2016 book (The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse) befits the puzzling economic reality in the United States. Shrugging inflation as transitionary last year, the US Federal Reserve has purposefully shifted to the other side of the monetary spectrum. After not increasing the interest rates last year, the Fed has delivered a quarter-point, a half-point, and two back-to-back three-quarters of a point hikes since March. Consequently, the fears of a stark economic slowdown have compounded as critics have flagged selective metrics to convince the onlookers that the United States is already in a recession. However, while some signs allude to the possibility of an end of the business cycle, the objectivity of robust economic resilience is still hard to deny!
The Federal Reserve announced its fourth rate increase of 2022 on Wednesday in a precedented session. Citing job gains, elevated inflation, and supply chain imbalances, the Fed officially justified its second consecutive 75-basis points rate hike. And while Fed Chair Jerome Powell reiterated the notion of “not in a recession yet,” the official statement by the Federal Open Market Committee (FOMC) projected the feared forward guidance – their unanimous inclination toward slower economic growth even at the cost of substantial job losses. This rate hike is significant due to the extended period until the next meeting in September. Given the sharp disinflationary guidance manifested by the Fed throughout the first half of this year, the next meeting would be pivotal to the delicate balancing act between sustainable growth and price stability. Moreover, the latest rate increase has effectively bumped the Federal Funds Rate (the interbank overnight borrowing cost) between 2.25% and 2.5% – a range widely acknowledged as neither aggressive nor lenient. Yet with an expected target to extend the rate to about 3.4% by December this year, the next month would be crucial to watch for any cooling effects – stemming from the ripples of monetary tightening – that may legitimize smaller increments in the second half.
Many economists argue that the Fed is moving too fast – perhaps worsening the blow of a recession instead of steering toward a smooth landing. Even a few US lawmakers, including Democrat Senator Elizabeth Warren, have opposed the hawkish maneuvers of the Powell-led central bankers. Their arguments are not all unjustified. For instance, the Yield Curve – a graph charting the relationship between the annual returns of 2-year and 10-year treasury notes – has been in inversion throughout July. History shows that an inverted yield curve has always preceded an economic downturn in the United States. And presently, the bond market signals indicate that investors doubt the ability of the Federal Reserve to swerve past a recession. According to the Bureau of Economic Analysis (BEA), the US economic output, gauged by the Gross Domestic Product (GDP), contracted for a second successive quarter – signaling a sustained decline in economic activity. And even fillings for unemployment listings – a bellwether indicator of layoffs – have climbed slightly higher in recent weeks. The confluence of these factors substantiates the arguments of the Fed critics claiming a recession is already in play. However, the antipode argument is also intriguingly convincing!
According to the National Bureau of Economic Research (NBER) – the official corroborator of recessions in the US – an economy is in a recession when there is a “significant decline in economic activity that spreads across the economy, and that lasts more than a few months.” Following this definition, we should not focus on just a few sectors of the US economy to gauge the broader economic health. So to assess the first claim, let us examine the data to answer: Are we already in a recession?
Most probably not! I admit the yield curve has historically been an omen of economic collapse in the US. But a chronology of US recessions depicts that economic downturns usually start after the graph has normalized. For instance, the Great Recession officially began in December 2007 – months after the yield curve had already reverted. It is because a recession usually starts off after the Fed has completed its tightening schedule and begins to lower the rates again. Thus, a lag in policy transfer over time leads to this phenomenon.
While the GDP contracted for the first half of this year, that is also not a sure-shot indicator of an economic downturn. It is because mainstay sectors of the US economy – like the Housing and Automobile industries – could drag down the measure of economic output singlehandedly. Yet it would obviously not be considered a recessionary meltdown without a “decline in economic activity that spreads across the economy.” For example, the US economy was officially in a mild recession after the burst of the dot-com bubble, but the GDP never fell in the recession year 2001.
Moreover, the quarterly GDP is subject to revision as while the GDP contracted by an annual rate of 1.6%, the Gross Domestic Income (GDI) expanded by an annual rate of 1.8% in the first quarter. Such a spread between the two measures is rare, given both estimate the same metric vis-á-vis the national economic activity. Thus, it is highly likely that an upward revision in the GDP reveals that the US economy did not contract at all in the first quarter!
Lastly, while the jobless claims have increased lately, the number of unfilled job openings has consistently fallen from a record high late last year. And adding between 300,000 to 400,000 jobs a month in 2022, the unemployment rate – which typically should spike in a recessionary environment – is near a 50-year low, still declining despite inflation and consistent rate hikes. Hence, the argument for an ongoing recession is moot from an analytical perspective. But what about an imminent recession?
The answer is as complex as it is irrelevant. For the sake of argument against the anti-hawkish Fed critics, while I admit the economy is slowing down, the pace of the slowdown is not palatable. The existing home sales have notably dropped; the rent has ticked higher. The car sales are down, but the confounding shortage of microchips has skewed the indicator. How can we confidently claim that the fall in automobile sales is due to consumer restraint and not the lack of availability of cars on sale? Despite a contraction in GDP (susceptible to future revision), consumer spending grew at an annual rate of 1.8% in the first quarter. The oil prices are still looming around $100/barrel, and the US strategic crude reserves have shown a worrisome drop in the last few weeks. The war in Ukraine is still flaring the global commodity prices, and Europe is visibly suffering from a debilitating energy crisis – relying on the US-supplied LNG to survive the winter. China is dealing with an unprecedented economic crunch which could eventually lead to convoluted supply chain snarls for the US. We need to realize that the Fed policies cannot resolve these supply-side challenges of food/energy inflation. And thus, even if overdoing is a legitimate possibility that could lead to a devastating economic collapse, the Fed has no choice (or control) over its destiny but to hike interest rates in the hope of sustainable economic activity down the road.
At the expense of stating the obvious: even the most sage economists around the globe cannot definitively predict the timeline of an approaching (or ongoing) recession. But I believe the course of action by the Fed would still remain the same regardless of an acute awareness of the point of inception. We should realize that the ‘easy money’ injected during the pandemic ought to exit the system to avoid an entrenched inflationary sentiment similar to the 70s. Hiking taxes or cutting government spending cannot bring about a timely shift in the inflationary profile of any country. And the US economy cannot afford to lose any more time. Hence, even at the cost of being cast in a villainous persona, the Fed is the only game in town capable of guiding the economy out of uncertainty – though probably not unscathed.
China, India, Vietnam and a number of Asian and Pacific countries are already gearing up for the 7th Eastern Economic Forum scheduled to take place on 5–8 September in Vladivostok, Far East. With the emerging new economic order and the United States and European Union’s sanctions on Russia for its “special military operation” in the former Soviet republic of Ukriane, the Asian and Pacific countries are stepping up efforts in collaborating in economic sectors in the Russian Federation.
As part of the preliminary preparations, the Ministry for the Development of the Russian Far East and the Russian Far East and Arctic Development Corporation (FEDC) have organized a roundtable on the development of industry in the Far Eastern Federal District.
Anatoly Bobrakov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic and moderator of the roundtable noted that the main economic sectors of the Far East (mining, manufacturing, transport, and logistics) account for 43% of the gross regional product.
“More than 2,700 projects are currently being implemented in the Far East with state support. Amid unprecedented sanctions, it is important to note that investors are not ready to give up on the declared projects. That, however, they face multiple risks caused by companies from unfriendly countries, when those refuse to supply equipment and components necessary for the implementation of projects or refuse to install and maintain the equipment,” he explained.
Bobrakov believes that it is necessary to create conditions so that the equipment and components would be produced locally in the Russian Federation, including through joint ventures with companies from friendly countries that own technology and know-how. “I am confident that we can ensure the technological sovereignty of the Russian Federation, provide both our traditional and new industries with technology,” said Bobrakov.
While inviting the participants to the discussion, Darya Kiryanova, Deputy General Director for Economic Development of FEDC also noted: “What is happening in Russia right now is perceived as a stress on the one hand, but on the other hand is viewed as an opportunity. Domestic industry is facing a challenge to localize production within the country. It is necessary to understand what needs to be reinvented and what can be reused by changing supply chains.
She would, therefore, like to collect the main issues and problems faced by industrial companies and form a package of proposals and necessary changes in the state policy for further integration into the sessions at the Eastern Economic Forum.”
Mikhail Kuznetsov, Director of the Eastern State Planning Centre (Vostokgosplan), described the current situation in the industrial sectors of the Far East and the Arctic: From 2017 to 2021, the growth rate of the manufacturing industry in the Far East outpaced the national average. Metallurgy, transport engineering, and the chemical industries were among the leaders.
In 2022, amid growing sanctions pressure, many Russian enterprises faced a shortage of spare parts, chemical components, as well as disrupted supplies channels for finished products. At the same time, the Far Eastern Federal District has the potential of untapped natural resources, growth in transport engineering and cargo transit. This can become the basis for the development of import substitution in the country. However, the product transformation of enterprises requires all available funding, as well as time for technical re-equipment and personnel training.
According to Vostokgosplan’s Kuznetsov, the most promising enterprises that potentially can help overcome the problem of import substitution are operating in the chemical and machine-building industries. According to the forecasts of the development institution, industrial production in the Far East will grow at a faster pace than the Russian average, and by 2025 this indicator may exceed 15%.
Alexander Didenko, General Director of Metallenergo, and Nikolay Radko, Acting General Director of Rusolovo, and Alexander Patlach, Design Director of Bystrinsk Ore Mining Company, all shared their views on what needs to be improved to strengthen support measures for manufacturing enterprises in the Far East. The speakers noted the importance of creating a tin cluster in the Far East and including it in the list of industrial priorities.
Additionally, they spoke about revising the terms for transferring land from one category to another for the implementation of industrial projects within an ASEZ. For example, the Bystrinsky Mining Company (the subsoil user and operator of the Kumroch project) plans to create a modern high-tech gold mining and processing plant from scratch in Kamchatka Territory by 2026. The project worth RUB 20 billion will be implemented as an ASEZ resident.
“Not a single Russian territory can boast such diverse and effective measures to support investors as those in place in the Far East. This is very important when implementing a project,” says Alexander Patlach.
The company is currently preparing the relevant documentation and expects to start the advanced development of the Kumroch deposit by the end of the year. The necessary machinery and equipment in the amount of more than 50 units has already been purchased, the investor has prioritized Russian producers, Chinese equipment has been purchased to cover some required positions.
Alexander Didenko, General Director of Metallenergo touched upon the programmes of preferential leasing and Industrial Mortgage. The latter is being launched by the Ministry of Industry and Trade, Ministry of Finance, and Ministry of Economic Development together with heads of several regions.
Didenko said: “We are waiting, because we have both capacities and resources, which we would like to purchase, but there is not enough working capital. Therefore, we would like to get additional support measures to minimize the regulatory time for consideration of applications.”
More detailed information about the relevant support measures for entrepreneurs who want to quickly organize a manufacturing business, was delivered by Nikolai Elantsev, Head of Monitoring and Coordination of Regional Industrial Infrastructure Development of the Department of Regional Industrial Policy and Project Management of the Ministry of Industry and Trade of the Russian Federation.
Maxim Nikiforov, Deputy General Director of Baikalengineering shared the peculiarities of localization of engine and propeller production at Komsomolsk ASEZ and raised the issue of the state commission.
Issues of financing and obtaining bank guarantees were also touched upon by other speakers. Thus, Alexander Korneichuk, General Director of NSRZ proposed to consider the possibility of 0% VAT for the shipbuilding industry.
President of the Union of Industrialists and Entrepreneurs of the Republic of Buryatia, General Director of Ulan-Ude Instrument-Making Production Association Vladimir Luchnikov noted the importance of subsidizing interest rates and financial support measures, plus suggested to consider the possibility of establishing a guarantee fund for Far Eastern industrial enterprises. The company is reinvigorating an innovation cluster in Buryatia, including all industrial enterprises of the region, and is focused on the production of import-substituting goods in medicine, aviation, instrument manufacturing, and railway trains.
Sergey Yarutin, General Director of the Association of Import Substituting Enterprises, focused on possible directions of import substitution and ways of parallel imports.
At the end of the discussion, Denis Nevzorov, Director of the Department for International Cooperation and Technological Development of the Far East and the Arctic at the Ministry for the Development of the Russian Far East, informed the audience about the current mechanisms for supporting both existing and planned enterprises. For example, the speaker called the territories of advanced social and economic development the most interesting for the implementation of industrial projects.
Among the successful examples were the projects of the Zvezda Shipbuilding Complex and Arnika in the Primorye Territory, Sibur, as well as the gas processing and gas chemical plants in the Amur Region. Baikal aircraft production in the Republic of Buryatia is being prepared for implementation. Industrial parks and technoparks are being created in Khabarovsk, Primorye Territory, Yakutia, and Chukotka Autonomous District.
An investor in an ASEZ is granted tax, infrastructure, land, and construction preferences. Moreover, this regime allows for different mechanisms of state support not only from the Ministry for the Development of the Russian Far East, but also from the Ministry of Industry and Trade, the Ministry of Construction, and the Ministry of Economic Development.
Since May 2022 the Ministry of Economic Development launched subsidies from the federal budget to Russian credit organizations for reimbursement of soft loans. In addition, anti-crisis measures were taken to replenish working capital. Besides, 124 enterprises are included into the list of backbone enterprises, including those in the areas of aviation and shipbuilding. At the same time, since this year the mechanism of the industry development fund has been functioning. If earlier industry subsidies from the budget of the regions was 30 to 70, now it is 10 to 90, according to Denis Nevzorov.
In addition to the existing ASEZs, Free Port of Vladivostok, Arctic Zone, and Kuril Islands preferential regimes, there is also the current SITC on Russky Island, with tax preferences, labour quotas, and the competition-free provision of land plots.
Daria Kiryanova, Deputy Director General for Economic Development of FEDC, emphasized: “Whatever the status of your company, whether you use the existing preferential regimes or not, the Ministry for the Development of the Far East and the Arctic together with FEDC are ready to help you implement projects, as we are extremely interested in ensuring that companies and their capacities work effectively.”
The Indian pharmaceutical business community supported by the Indian Business Alliance discussed new opportunities and cooperation as well as opportunities for Indian pharmaceutical business by presenting their projects and participating in international economic forums taking place both in Russia and around the world.
“The Republic of India is a strategic partner of Russia. I am confident that the new partners in the pharmaceutical industry will successfully continue the partnership between the two countries in this area. Moreover, our specialized Healthy Life division will provide communication and consulting assistance for the development of business projects,” said Alexander Stuglev, Chairman and CEO of the Roscongress Foundation.
It was during the meeting of 20 representatives of Indian pharmaceutical companies which focused on the need for support and assistance in expediting product registration time in Russia, as well as assistance from the Roscongress Foundation. All of them expressed an interest in participating as partners in the Eastern Economic Forum in Vladivostok (5–8 September 2022) and the Russian Investment Forum in Sochi in February 2023.
The heads of the companies stressed that the transition from simple commodity supplies to more complex cooperation and localization of production, which in turn will help the emergence of new points of growth, is an extremely important area of cooperation between the two countries. In addition, the parties noted that this process should be launched bilaterally, exclusively in competitive industries.
“I see a good basis here for deepening bilateral investment ties. And I am convinced that by working together, our entrepreneurs will be able to create new products with high added value, build production chains, and subsequently promote their goods and services in the markets of third countries,” stressed Sammy (Manoj) Kotwani, head of the Indian Business Alliance.
In the month of July, similar roundtable brought together about 50 representatives of industrial enterprises, business associations, regional authorities and development institutions, experts, as well as residents of the Far Eastern preferential regime territories. They voiced the most important proposals for further elaboration and inclusion in the industry session of the EEF 2022.
A delegation of the Russian-Chinese Business Council and Chinese partners has already visited the capital of the Russian Far East. The visit was arranged by Gennady Timchenko, Chairman of the Business Council, and Oleg Kozhemyako, Governor of Primorye Territory, with the support of Zhang Hanhui, Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China to the Russian Federation, the Russian Presidential Administration, the Russian Chamber of Commerce and Industry, and the Roscongress Foundation.
The Chinese businessmen held discussions with the Governor of Primorye Territory Oleg Kozhemyako during the RCBC’s working visit to Vladivostok. The key issue on the meeting agenda was the development of bilateral cooperation between Russia and China in the face of sanctions imposed by unfriendly countries.
They expressed confidence that the meeting would help to strengthen the good relations and fruitful cooperation between the business communities of the Russian Far East and China. The Governor of Primorye spoke about the investment potential of the region and invited representatives of Chinese business to take part in the Eastern Economic Forum 2022.
The Chinese are engaged in the transport infrastructure of Primorye. On the other hand, increasing the supply of high-quality goods to the PRC, and implementing new investment projects. “We are counting on the help and assistance of the Russian-Chinese Business Council in cooperation with our Chinese colleagues. We aim to expand the turnover and develop border-related ties. I hope this visit is a platform for establishing strong partnership ties,” said Governor of Primorye Territory Kozhemyako.
In his welcoming speech, CRBC Executive Director Evgeny Markin noted the importance of developing cooperation between China and the Russian Far East in the current difficult geopolitical situation. “Russia and China are key partners and reliable allies. I am confident that the delegation’s visit will benefit the development of bilateral ties between the business communities of the two countries. For its part, the Russian-Chinese Business Council will make every effort to develop a long-term and fruitful partnership between the Russian Federation and the People’s Republic of China,” he said.
“Russia and China are key partners and reliable allies. I am confident that the delegation’s visit will benefit the development of bilateral ties between the business communities of the two countries. For its part, the Russian-Chinese Business Council will make every effort to develop a long-term and fruitful partnership between the Russian Federation and the People’s Republic of China,” he said.
“China’s economy is developing ahead of the curve, it is stable and sustainable. Our country is now more able and willing than ever to be a reliable partner for Russian business. In the context of sanctions pressure and a difficult political situation, the role of the Far East is becoming extremely important in building profitable cooperation between China and Russia. We hope that the visit of the Business Council delegation will strengthen cooperation between our countries and become a powerful incentive for developing new projects,” said Piao Yangfan, Consul General of the PRC in Vladivostok.
“The Eastern Economic Forum is the key business event in the Far East. Every year it brings together a large number of participants that include official delegations, entrepreneurs and members of the expert community. I am confident that this year will be no exception. We expect a high interest from our Chinese partners as well. We are always happy to see them at our events,” noted Anton Kobyakov, Advisor to the President of the Russian Federation and Executive Secretary of the EEF 2022 Organizing Committee.
The 7th Eastern Economic Forum will be held from 5 to 8 September 2022 in Vladivostok on the campus of Far Eastern Federal University (FEFU). It is organized by the Roscongress Foundation.
Popularly referred to as MozParks, it is the leading developer and operator of industrial parks in Mozambique located in southern Africa. According its documents, it is a Public Private Partnership (PPP) between the Mozambican Government Agency for Investment and Export Promotion (APIEX) and private investors. It is the holding company for the Beluluane Industrial Park in Boane and the newly developed Topuito Industrial Park in Nampula.
During the US – Africa Business Summit on July 19-22, 2022, in Marrakech, Morocco, held under the patronage of the King of Morocco, Onorio Manuel, MozParks General Manager together with Silvino Moreno, Minister of Industry and Commerce of Mozambique, were searching for investors to develop MozParks. The summit was the right place at the right time simply because it attracted policy makers, private senior executives, and leaders of key organizations from the United States and many African countries to Marrakech.
The participants gathered under theme “Building Forward Together” used as an opportunity to renew the multifaceted ties and scale up commitments between the United States and Africa. Much focus is on trade, investment and commerce. Together they were finding solutions in response to recent economic and health challenges, according to the programme of the summit.
On 20th July, the Building a Sustainable Food Ecosystem panel discussion explored the possibilities for public and private sectors to contribute to the creation of a sustainable agribusiness ecosystem and highlighted the significance of the vast resources African countries have available to achieve this goal.
Silvino Moreno, Minister of Industry and Commerce of Mozambique, one of the moderators at this discussion, talked about the necessity of creating agro-industrial value chains in Mozambique, which would make a big impact on sustainable development of the national economy. “With the increasing productivity of raw agricultural produce, the national agro processing should take care of preserving the food and delivering good quality products to consumers,” he said. Moreno also mentioned the importance of keeping the balance between exporting food produce and fulfilling the needs of the internal market.
Onorio Manuel, MozParks General Manager, in his speech to the audience of the Invest in Mozambique Session, presented the services that MozParks offers to its agribusiness tenants. That includes the incentives and advantages of SEZ, IFZ for Industrial Parks and Agro-Park Development in Mozambique.
He outlined the current policies that favour private investment and creating SMEs which will be illustrated by MozParks experience and achievements in the industry. “We choose locations for our industrial parks with a view of growing value chain economies with a special focus on creating employment opportunities for local communities,” said Manuel.
Over the last 22 years, MozParks has brought the Industrial Park Development in Mozambique to a level of international standards making it globally competitive. Currently, it hosts industrial and service companies from 17 countries. The strategic locations of the parks provide business opportunities for SMEs to grow around industrial giants and Megaprojects like Mozal Aluminium Smelter in Maputo Province and Kenmare Titanium Minerals Mine in Nampula Province.
MozParks has been addressing the task of developing and managing Agro-Industrial parks and Special Economic Zones. Topuito Agro-Industrial Park in Nampula has already opened its site to customers. MozParks is planning to develop four (4) new Agro-Industrial Parks in Cabo-Delgado Province within the next five (5) years. With an approximate population of 30 million, Mozambique is endowed with natural resources. It is a member of the Southern Africa Development Community (SADC) and the African Union (AU).
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