LONDON, May 19 (Reuters)&nbsp;&#8211;&nbsp;A new study by the&nbsp;central&nbsp;bank&nbsp;to the world&#8217;s&nbsp;central&nbsp;banks, the&nbsp;Bank&nbsp;of International Settlements (BIS), has called for&nbsp;urgent&nbsp;action to tackle&nbsp;rising&nbsp;wealth&nbsp;inequality, warning the problem was feeding a dangerous loop of recessions and poverty.



While government policies have largely been blamed for the rise in&nbsp;inequality&nbsp;since the 1980s,&nbsp;central&nbsp;bankers have also come under fire in recent years for fuelling huge stock market gains with ultra-low interest rates and asset buying schemes.



The&nbsp;BIS, looking at 182 recessions across 70 countries, found that even six years after a downturn, the income share of the bottom 50% of earners in an impacted economy remained 0.3% below the pre-recession level on average, whereas for those in the top 10% bracket it was still 0.7% higher.



Economies that are more unequal go through deeper recessions which in turn further increases&nbsp;inequality, its analysis showed. Less progressive taxes and social support programme in many countries have made the problems worse as well.



&#8220;It is increasingly apparent that&nbsp;inequality&nbsp;has evolved from being an academic issue to an&nbsp;urgent&nbsp;policy&nbsp;matter,&#8221; the&nbsp;<a href="https://www.bis.org/" target="_blank" rel="noreferrer noopener">BIS&nbsp;paper</a>&nbsp;said, adding that one of key risks for&nbsp;central&nbsp;banks was that their policy tools become less effective.



The&nbsp;BIS&nbsp;study showed that low-paid workers in some countries were over three time more likely to have lost their jobs during the COVID-19 pandemic, while surging inflation was&nbsp;now&nbsp;hitting poorer households disproportionately hard.



&#8220;Once&nbsp;inequality&nbsp;is left to grow unchecked, deeper and deeper recessions demand additional policy support,&#8221; it said.



&#8220;But at the same time monetary stimulus loses traction, so that the&nbsp;central&nbsp;bank&nbsp;needs to deploy bolder and bolder instruments, which can in turn produce undesirable side effects in terms of wealth&nbsp;inequality&#8221;.



Instead it recommended keeping inflation in check and that governments use &#8220;stabilisation policies&#8221; such as subsidies or support payments that help poorer people.



(Reporting by Marc Jones; Editing by Jan Harvey)

people-black-poverty-guinea-african-bissau-940174-pxhere.com_

Rising inequality now an urgent matter, BIS central bank group warns

Yen Nee Lee
Source: <a href="https://www.cnbc.com/2018/10/11/imf-world-bank-annual-meetings-regulators-at-bali-fintech-agenda-.html">Fintech won&#8217;t drain money away from banks, regulators say</a>
<ul>
<li>The rise of financial technology — more commonly known as fintech — won&#8217;t threaten the existence of banks, policymakers and regulators said at the IMF-World Bank annual meetings on Thursday.</li>
<li>It&#8217;s the responsibility of authorities to make sure that traditional banks are prepared for changes in their industry, they added.</li>
</ul>
The rise of financial technology — more commonly known as fintech — won&#8217;t threaten the existence of banks and it&#8217;s the responsibility of authorities to make sure that traditional lenders are prepared for changes in their industry, policymakers and regulators said in a CNBC-moderated panel Thursday.
The comments were made in Bali, Indonesia where the 
International Monetary Fund 
 and the 
World Bank 
 are holding their annual meetings. The two organizations on Thursday jointly launched a paper, the 
Bali Fintech Agenda 
, to help policymakers around the world strike a balance between encouraging financial innovation and safeguarding the stability of the system.
CNBC&#8217;s Geoff Cutmore moderated a panel discussion in Bali to discuss the contents of the paper. He asked the panelists whether it&#8217;s a good idea to allow fintech firms to &#8220;cherry pick&#8221; profitable segments of the banking industry to operate in — therefore taking money away from a legacy system that&#8217;s built up over decades and has weathered financial crises.
That question, according to Bank of England Governor Mark Carney, is akin to asking &#8220;whether it&#8217;s a good idea to protect the banks from serving consumers better?&#8221;
Carney, who was one of the panelists at the event, said many small and medium-sized enterprises in the United Kingdom face high costs in tapping the formal banking system for funds. Therefore, reaching those businesses through fintech is &#8220;not taking liquidity away, that&#8217;s providing new liquidity&#8221; into the financial system, he said.
The key is to ensure that technological transformation in the financial industry can bring about the maximum benefit and at a minimum costs, which is a &#8220;classical problem&#8221; that many policymakers face, said Sri Mulyani Indrawati, Indonesia&#8217;s finance minister who was also a panelist.
The Indonesian government&#8217;s stance, she added, is that technology can not only help to improve existing ways of doing things but also to pressure the incumbents to improve their business models.
&#8220;For the existing business model, like banking, can they do innovation just as agile and innovative? It could be that some of them could come up with a totally different idea and that&#8217;s good,&#8221; she said.
As the financial industry increases its technology adoption, the crop of regulators — too — need be refreshed, noted Lesetja Kganyago, governor of the South Africa Reserve Bank.
&#8220;Regulators are usually lawyers and accountants, but we need people who understand data science and technology,&#8221; he said during the panel discussion.

Fintech won’t drain money away from banks, regulators say

Justina Crabtree
Source: <a href="https://www.cnbc.com/2018/07/23/china-president-xi-visits-senegal-belt-and-road-reaches-west-africa.html">China&#8217;s latest trade partner in Africa could help it export to the US</a>
<ul>
<li>Chinese President Xi Jinping has just concluded a visit to the west African country of Senegal, the first stop of his four-leg tour of the African continent.</li>
<li>Senegal&#8217;s coastal location could enable China to more easily access U.S. markets.</li>
<li>Senegal is the first West African country to sign up to China&#8217;s Belt and Road Initiative, a multi-billion dollar plan to resurrect ancient trading routes centered on China.</li>
</ul>
<img loading="lazy" decoding="async" src="https://d16akly8855cs7.cloudfront.net/wp-content/uploads/2018/07/24160223/105346104-1532344867993gettyimages-1003078598.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Seyllou | AFP | Getty Images"/>
Chinese President Xi Jinping visited the West African country of Senegal over the weekend, building trade ties which could bear fruit in terms of China’s access to U.S. markets.
Xi met with his Senegalese counterpart Macky Sall, as well as Senegalese Prime Minister Mohammed Dionne, as part of a two-day visit which began on Saturday.
Following bilateral talks, Senegal signed up to be the first West African nation committed to China’s Belt and Road Initiative, a multi-billion dollar scheme to resurrect ancient trading routes centered on China.
Senegal, with a population of just 16 million, might seem like a curious stop for Xi given that Nigeria, Africa’s largest economy, is also in the West Africa region.
But according to 
Ibrahima Diong 
, who has served as Senegal’s minister of Chinese affairs, the country’s location is particularly attractive. 
“For any Chinese companies that would like to export to the U.S., you cannot get better than Senegal,” he told CNBC via telephone, highlighting its position on the west coast of the African continent.
China is Senegal’s second largest trading partner after its former colonial power France.
Xi’s visit to Senegal was the first stop of a broader tour of the African continent. He landed in Rwanda on Monday and will then attend a 
BRICS 
 summit in South Africa, before stopping in Mauritius. The Chinese president visited the United Arab Emirates earlier last week.
Xi&#8217;s Africa visit is his fourth to the continent since he took office in 2013, and his first overseas trip since beginning his second term as Chinese president in March of this year.
<img loading="lazy" decoding="async" src="https://d16akly8855cs7.cloudfront.net/wp-content/uploads/2018/07/24160229/105346108-1532345160539gettyimages-1003700530.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name=" Seyllou | AFP | Getty Images"/>
While Senegal is the first West African country to partner with China as part of its Belt and Road Initiative, Chinese-built infrastructure projects are mushrooming in the region. Last week a railway network was opened in Nigeria’s capital Abuja, helping to address the country’s need for infrastructure.
But, China has been accused of lending to its Belt and Road partner countries under conditions that they will not be able to fulfill.
Diong pointed out that Senegal is a favorable place for China to do business given its stable democracy. He added that Senegal is already an established exporter of its oil and gas reserves, enabling China to carve out a different kind of relationship. “While China needs some commodities, (it doesn’t) want a relationship that’s just commodity driven,” he said.
Partnership with Senegal enables China to “make a dent in the francophone world,” added Diong. He said that “Africans are being extremely pragmatic” in their business decisions, and are no longer constrained by colonial ties.
That perspective was echoed in an editorial published in several South African newspapers over the weekend, in which Xi wrote that South Africa and China had “forged a deep friendship during our common struggle against imperialism, colonialism and racism.”
It detailed that &#8220;China’s direct investment in South Africa has grown by more than 80 times and (now) exceeded $10.2 billion in cumulative terms.&#8221;
For Diong, China&#8217;s inroads in Africa are symptomatic of a shifting geopolitical order, particularly as global media attention is largely focused on the U.S.&#8217; relationship with Russia.
“Africans love the Chinese story,” Doing said. “Beyond just money, China is seen by many Africans as a model to aspire towards,” he added.

China’s latest trade partner in Africa could help it export to the US

Nyshka Chandran
Source: <a href="https://www.cnbc.com/2018/07/20/china-mediation-diplomacy-in-focus-as-xi-jinping-heads-to-africa.html">For years, China shied away from global conflicts. Not anymore</a>
<ul>
<li>Chinese President Xi Jinping will be visiting Senegal, Rwanda and South Africa in the coming days.</li>
<li>As Beijing increasingly presents itself as a mediator in political conflicts, China&#8217;s influence on the continent could grow.</li>
<li>Africa is home to massive Chinese investments and the country&#8217;s first overseas military base.</li>
</ul>
<img loading="lazy" decoding="async" src="https://d16akly8855cs7.cloudfront.net/wp-content/uploads/2018/07/20080312/105342020-1532055235774gettyimages-9923602821.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="YASUYOSHI CHIBA/AFP/Getty Images"/>
As the China invests billions in continent-spanning infrastructure projects, it&#8217;s building a stronger diplomatic voice to match its ever-expanding presence on the global stage.
Across the developing world, Beijing has been engaging in mediation diplomacy — a style of conflict resolution where it&#8217;s the sole or principal moderator — to protect its assets and gain recognition as a respectable superpower.
Africa, where Chinese President Xi Jinping will be touring in the coming days, has long been a training ground for Chinese peace efforts. In 2007, Beijing appointed its first-ever special representative to genocide-hit Darfur to help achieve a political settlement. And in 2015, Chinese officials brought together 
South Sudan’s 
 warring parties for negotiations. Just this week, the communist state offered to mediate in a border dispute between Eritrea and Djibouti, the latter of which is home to 
China&#8217;s first overseas military base 
.
Assuming the role of mediator could increase Beijing&#8217;s influence in nations home to Chinese investments, such as Senegal, Rwanda and South Africa where Xi will soon be visiting.
&#8220;Being seen as a mediator in regional disputes can only help burnish China’s image,&#8221; said researchers at the China Africa Research Initiative, a program at Johns Hopkins University. And in Africa, where 
Xi&#8217;s administration has established greater military links 
, it&#8217;s essential for Beijing to protect the stability of countries where China has economic interests, they added.
In fact, many speculate that it was 
China&#8217;s concerns over its investments in Zimbabwe 
 that resulted in the coup that ousted former leader Robert Mugabe in November of last year — a charge that Xi&#8217;s administration has denied.
According to Xi&#8217;s vision of a &#8220;community of common destiny,&#8221; a phrase he repeatedly uses in speeches, &#8220;China’s growth and prosperity becomes a part of the experience of all these other countries,&#8221; the researchers said, adding that such a line of thinking &#8220;can also be interpreted as a type of foreign policy or growing political influence.&#8221;
It&#8217;s a new development in China&#8217;s traditional diplomatic protocol. Since 1954, the Asian giant has said it practices mutual non-aggression and non-interference in the internal affairs of others. But the nation&#8217;s political ambitions have swelled considerably under Xi&#8217;s reign, and that&#8217;s led to a change of approach. With Chinese commercial and economic ventures now spanning the globe under the 
Belt and Road Initiative 
, Xi&#8217;s government is intensifying efforts to secure Chinese workers and interests abroad.
In 2017, Beijing hosted a meeting with the foreign ministers of Afghanistan and Pakistan to end terrorism-related hostilities between the two as Xi sought to incorporate Kabul into his 
$57 billion economic corridor with Islamabad 
. Last year also saw Xi raise the possibility of three-way talks with Israel and Palestine. He&#8217;s also 
proposed a peace plan for ethnic cleansing in Myanmar 
, which is home to a special economic zone being built by a China-led consortium.
But China&#8217;s attempts at brokering peace may be fundamentally limited. Its primary goal is a stable atmosphere for its global investment, so it is likely unwilling to enforce outcomes or apply pressure, strategists said.
“China will actively explore a way of resolving hotspot issues with Chinese characteristics and play a bigger and more constructive role in upholding world stability,&#8221; Foreign Minister Wang Yi said at 
last October&#8217;s 19th Party Congress 
.
A willingness to provide solutions with &#8220;Chinese characteristics&#8221; is significant, Angela Stanzel, senior policy fellow at the European Council on Foreign Relations&#8217; Asia division, wrote in a brief last week: &#8220;The implication behind this offer is that China is better placed to resolve regional and global problems than other countries, particularly the U.S.&#8221;
The Asian heavyweight may be seeking to demonstrate that, unlike Western countries, it doesn&#8217;t differentiate between democracies and dictators, Stanzel suggested.

For years, China shied away from global conflicts. Not anymore

Justina Crabtree
Source: <a href="https://www.cnbc.com/2018/06/14/google-ai-research-center-to-open-in-ghana-africa.html">Google&#8217;s next A.I. research center will be in Africa</a>
<ul>
<li>Google will open an artificial intelligence (AI) research center in Accra, Ghana, later this year, its first on the African continent.</li>
<li>Other African cities including Addis Ababa, Kigali and Lagos have also been pushing their credentials as tech hubs.</li>
<li>Ghana likely appealed to Google because of its high quality education system and political stability, an expert in the region told CNBC.</li>
</ul>
<img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/06/15070227/105273218-GettyImages-934210100.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Seun Adatsi | Bloomberg | Getty Images"/>
GoogleGOOGL has announced that it will open an artificial intelligence (AI) research center in Africa, its first on the continent.
The Silicon Valley giant said that the new research hub will open in Accra, Ghana, later this year, announcing the move in a blog post published on Wednesday.
&#8220;We&#8217;re committed to collaborating with local universities and research centers, as well as working with policy makers on the potential uses of AI in Africa,&#8221; Google&#8217;s blog post said.
Accra, located in the west of Africa, joins cities including Paris, New York and Tokyo, as well as Google&#8217;s Mountain View headquarters, in hosting an AI research center.
While the decision is the first of its kind for Google in Africa, the company has had offices on the continent for the past decade. It already operates a digital skills training program that it believes can ultimately benefit 10 million Africans. In addition, Google runs a separate initiative called Launchpad Accelerator Africa that it says supports 100,000 developers and over 60 technology startups in Africa.
But, Accra isn&#8217;t the only city in Africa positing itself as a tech hub. Ethiopian capital Addis Ababa and Rwandan capital Kigali are both known for their credentials in tech development, for example. Meanwhile, 
Kenya has been singled out 
 by Microsoft founder Bill Gates for its &#8220;pioneering&#8221; innovation of digital payments platform M-Pesa.
Ghana likely appealed to Google because of the quality of its education system and other feeder institutions, Lucy James, associate consultant with Control Risks&#8217; Africa team, told CNBC via telephone on Thursday. The search company is focussed on &#8220;drawing in local talent and there&#8217;s no shortage of that in Ghana,&#8221; she said.
Ghana also enjoys relative political stability, James explained. Meanwhile, it&#8217;s neighbor Nigeria — the continent&#8217;s largest economy which also promotes business center Lagos as a burgeoning tech hub – is more prone to civil unrest.
Nonetheless, the choice may seem unusual given that Ghana ranks 12th for Sub-Saharan Africa in the World Bank&#8217;s latest Ease of Doing Business index. Rwanda, Kenya and South Africa – another of the continent&#8217;s big economies – all come in the top five by comparison.
But, Ghana&#8217;s pro-business government and entrepreneurial society may have contributed to its selection. People in Ghana share the &#8220;sense that you can disrupt something and make a difference,&#8221; James said.
<img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/06/15070232/104442872-rsz_gettyimages-619259384.1910x1000.jpg" alt="Google's Mountain View, Calif., headquarters. " height="1000" width="1910" data-licensor-name="bennymarty"/>

Google’s next A.I. research center will be in Africa

Justina Crabtree
Source: <a href="http://https://www.cnbc.com/2018/04/16/african-countries-warned-against-becoming-a-fortress-for-trade-by-wto.html">African countries warned against becoming a ‘fortress’ for trade by WTO</a>
<ul>
<li>&#8220;Certainly at the WTO, we see African integration as a stepping stone towards further integration between Africa and the global economy,&#8221; said the director-general.</li>
<li>African leaders met in Kigali, Rwanda, last month to sign a declaration of the establishment of a free trade area on the continent. This, if fully put into practice, would be the largest bloc of its kind in terms of member states since the formation of the World Trade Organization.</li>
</ul>
Recent progress made by African nations towards establishing the world&#8217;s largest free trade area was backed Monday by the director-general of the World Trade Organization (WTO).
Roberto Azevedo warned, however, that the continent must remain outward looking.
<img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2016/09/04/103914629-GettyImages-538551434.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Daniel Leal-Olivas | AFP | Getty Images"/>
&#8220;The notion of a continental (free trade) area, I think, is something that should be supported by everyone,&#8221; he said, speaking at the Commonwealth Business Forum in London.
&#8220;Certainly at the WTO, we see African integration as a stepping stone towards further integration between Africa and the global economy.&#8221;
&#8220;But, Azevedo warned that countries should avoid taking the &#8220;wrong road.&#8221;
He said that discussion needed to include &#8220;how to make sure that the integrated processes do not become a fortress,&#8221; and instead be used as a &#8220;step to open up&#8221; rather than shutting off other forms of global trade.
&#8220;The integration of Africa is an important point of integration into the world,&#8221; he said.
African leaders met in Kigali, Rwanda, last month to sign a declaration of the establishment of a free trade area on the continent. This, if fully put into practice, would be <a href="http://www.cnbc.com/id/105076688?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="> 
the largest bloc of its kind in terms of member states 
</a> since the formation of the World Trade Organization.
The agreement is proposed by the African Union, a collective of 55 countries on the continent. It is touted as encompassing a market of 1.2 billion people with a gross domestic product (GDP) of $2.5 trillion — and intended to encourage Africa&#8217;s trade to <a href="http://www.cnbc.com/id/105094579?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="> 
diversify away 
</a> from its traditional commodity exports outside of the continent, the volatile prices of which have hurt the economies of many countries.
Forty-four African countries signed the pact in March, although sub-Saharan Africa&#8217;s two biggest economies hesitated.
South African President Cyril Ramaphosa only committed joining the agreement at some point in the future, while Nigerian President Muhammadu Buhari did not attend the summit at all. Both cited the need to resolve domestic issues first, for example working with labor unions over feared job losses.
Azevedo also highlighted the need to improve infrastructure in Africa to better facilitate trade. &#8220;Because although they are neighboring countries, sometimes in Africa it&#8217;s easier to connect to Europe or to other markets than to themselves.&#8221;

African countries warned against becoming a ‘fortress’ for trade by WTO

Andrew Wong 
Source: <a href="http://https://www.cnbc.com/2018/04/11/cape-town-water-crisis-cities-should-prepare-for-water-scarcity.html">Cities around the world should prepare for running out of water, experts say</a>
<ul>
<li>Cape Town&#8217;s recent water shortage crisis has raised global concern about the threat of water scarcity.</li>
<li>The increasing risks have cast a spotlight on the issue of water theft and mitigation efforts.</li>
</ul>
It&#8217;s called <a href="http://www.cnbc.com/id/105045796?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="> 
&#8220;Day Zero&#8221; 
</a>: when Cape Town, South Africa&#8217;s bustling port city, sees its water taps run dry, and its population thrust into a perilous situation.
Originally projected for this year, the impending crisis has been delayed in part by severe measures — the city instituted restrictions that amount to less than one sixth of an average American&#8217;s water consumption. Yet despite that effort, &#8220;Day Zero&#8221; is still projected to <a href="http://coct.co/water-dashboard/">arrive next year</a>.
And when it comes, the crisis will see the government switching off all the taps and rationing the resource through collection points.
That future isn&#8217;t just Cape Town&#8217;s. It&#8217;s a scenario cities around the globe may face, experts say.
It may be hard to fathom just how cities could be at risk of a water scarcity crisis when approximately 70 percent of the world is made up of the resource. The stark reality, however, is that the percentage of fresh water probably only amounts to about 2.5 percent, according to often-cited assessments.
<img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/05/15010226/105110468-GettyImages-929526210.1910x1000.jpg" alt="A public swimming pool, in a suburb of Cape Town has been emptied due to local water restrictions on March 6, 2018." height="1000" width="1910" data-licensor-name="Morgana Wingard | Getty Images"/>
Even then, a significant supply is locked up in ice and snow, which means just 1 percent of all fresh water is easily accessible to the global population.
Inequality in access to water is also quickly becoming a problem. While the affluent can find ways to get access to water— through deliveries or in-built tanks — poorer populations are left to their own devices.
That situation oftentimes leads to water theft — for profit, for survival, or for both.
<h4>A &#8216;wake-up call&#8217;</h4>
A nation&#8217;s development has frequently come at the cost of undercutting its sources of clean water, Betsy Otto, director of the World Resources Institute&#8217;s global water program told CNBC. 
&#8220;For example, quite a bit of scientific evidence has shown that deforestation changed the hydrological cycle in the Amazon,&#8221; she said.
Although water scarcity is a very real and pervasive problem, experts said most cities are not immediately at risk of running out of water.
Still, it is extremely important that water scarcity is acknowledged as a global problem because cities should begin working on unique solutions to local problems now, according to Rebecca Keller, a senior science and technology analyst at intelligence firm Stratfor
&#8220;It won&#8217;t be the same exact scenario that Cape Town is facing,&#8221; Keller said. &#8220;It might be pollution, drought, drier climates or significant population growth.&#8221;
<img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/05/15010231/105110477-GettyImages-630128764.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="NurPhoto | Getty Images"/>
The troubles faced by Cape Town should serve as a &#8220;wake-up call&#8221; for other countries about the realities of increasing <a href="http://www.wri.org/sites/default/files/aqueduct-water-stress-country-rankings-technical-note.pdf">water stress</a>, Otto said.
Water stress occurs when demand for the resource exceeds the available supply. It taxes the reserves and may lead to deterioration of fresh water resources.
In recent years, California <a href="http://www.cnbc.com/id/104243226?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="> 
faced a drought 
</a> that lasted years, Australia survived the <a href="http://www.nbcnews.com/id/25617864/ns/us_news-environment/t/australias-decade-long-drought-likely-worsen/#.WsWeZcNuZhE">millennium drought</a>, and Sao Paulo faced a <a href="https://www.nbcnews.com/science/environment/sao-paulo-worries-grow-serious-drought-grips-brazils-largest-city-n385136">water shortage crisis</a> in 2015 due to both drought and inefficient infrastructures.
Otto summed up the global state of preparedness for water scarcity, saying: &#8220;We&#8217;ve either under-invested in measures or allowed existing structures to fall apart.&#8221;
<h4>Water theft</h4>
The <a href="http://www.cnbc.com/id/10000938?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="> 
United Nations&#8217; 
</a> 2010 recognition of water as a human right has complicated the issue of water theft, said Vanda Felbab-Brown, a senior fellow in the foreign policy program at think-tank the Brookings Institution.
&#8220;The right to water does not mean the right to free water,&#8221; Felbab-Brown explained, saying many people had misunderstood the UN. &#8220;In the same manner that people have to pay for food, they should expect to pay for safe water.&#8221;
That sentiment hasn&#8217;t stopped outright water theft on a large scale in countries like Brazil, India and Mexico. Companies and individuals illegally tap into pipelines and reservoirs, or they find other ways to avoid water meters.
There&#8217;s no single solution to the issue, however, as the context of water theft varies between places, Felbab-Brown said. But, she pointed out, better law enforcement, water monitoring, and creating comprehensive databases, are good starting points for governments.
&#8220;Governments need to recognize that they can&#8217;t just apply law enforcement without providing legal alternatives,&#8221; she added.
As of now, water smuggling mostly operates within countries&#8217; borders, but it will eventually occur on an international scale, Felbab-Brown said. 
<img loading="lazy" decoding="async" src="https://cdn.cnbcafrica.com/wp-content/uploads/2018/05/15010235/105110470-GettyImages-468262202.1910x1000.jpg" alt="Ethiopian construction workers working on the Grand Renaissance Dam near the Sudanese-Ethiopian border on March 31, 2015." height="1000" width="1910" data-licensor-name="Zacharias Abubeker | AFP | Getty Images"/>
That could become a point of geopolitical tension between countries dealing with transboundary water issues, Keller said.
For an example of international water tensions, take the construction of the Grand Renaissance Dam in the Nile, a $4 billion hydroelectric project financed by Ethiopia . It&#8217;s left Egypt fearing <a href="https://www.ft.com/content/58f66390-dfda-11e7-a8a4-0a1e63a52f9c">a potential disruption</a> to its fresh water supply.
<h4>Controling demand</h4>
Mitigating water scarcity has proven to be a tricky political subject because, in many countries, environmental or climate solutions tend to have a hard time gathering enough political support to become a reality.
It is also extremely expensive to build out new water supplies, dams and desalination plants.
&#8220;Unless there is an acute event — a severe drought for example — it is the [political] constraints that play out in a long time frame,&#8221; Keller said.
Consequently, many governments have done little to guide their citizens on water-efficient behavior. That can be implemented through price controls, Otto said, but it&#8217;s rarely a popular measure.
&#8220;There should be two tiers of pricing. Conservation pricing, which charges the minimum amount for water that is sufficient for basic needs, should be provided at low rates. Discretionary water use, which is anything beyond the necessary amount, should be charged more,&#8221; Otto said.
On a national level, she said, governments should encourage conversation about conservation issues. That is, saving water will always be cheaper than building or drilling for new sources, Otto added.
The good news, experts said, is there will be time for governments to start preparing for a Day Zero scenario.
&#8220;It&#8217;s not going to be a surprise. The city is not going to run out of water suddenly,&#8221; Keller said.
<h4>WATCH: Michael Phelps on the quest to &#8216;Save Water&#8217;</h4>

Cities around the world should prepare for running out of water, experts say

Justina Crabtree 
Source: <a href="http://https://www.cnbc.com/2018/03/26/south-africa-economy-chief-hints-at-privatization-moodys-upgrades.html">South Africa&#8217;s economic chief hints at privatization drive</a>
<ul>
<li>&#8220;Why not?&#8221; responded National Treasury Director General Dondo Mogajane, when asked by Reuters Saturday if it was possible for segments of South Africa&#8217;s publicly-owned firms to be sold.</li>
<li>New South African President Cyril Ramaphosa, as part of his drive to revive the economy and stymie corruption, has spoken of reforming the country&#8217;s more than 700 state-owned enterprises.</li>
<li>These include utility firm Eskom, which provides most of the country&#8217;s electricity, and South African Airways, both of which are loss-making.</li>
</ul>
<img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2017/12/20/104910407-GettyImages-628057110.1910x1000.jpg" alt="Cyril Ramaphosa speaks during an event commemorating the third anniversary of former South African president Nelson Mandela's death in Johannesburg, South Africa, on Dec. 5, 2016." height="1000" width="1910" data-licensor-name="Zhai Jianlan | Xinhua | Getty Images"/>

A key figure in charge of South Africa&#8217;s economy has hinted at his appetite for privatizing the country&#8217;s ailing state-owned enterprises (SOEs).
&#8220;Why not?&#8221; responded National Treasury Director General Dondo Mogajane, when asked by Reuters Saturday if it was possible for segments of South Africa&#8217;s publicly-owned firms to be sold.
&#8220;There have to be new ways of looking at these things. Are we talking privatization? Are we talking equity partnership? Let&#8217;s give an opportunity for new ministers to unpack what it means,&#8221; he added.

<a href="http://www.cnbc.com/id/105031500?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="> 
New South African President Cyril Ramaphosa 
</a>, as part of his drive to revive the economy and stymie corruption, has spoken of reforming the country&#8217;s more than 700 state-owned enterprises. These include utility firm Eskom, which provides most of the country&#8217;s electricity, and South African Airways, both of which are loss-making.
&#8220;We will need to confront the reality that the challenges at some of our SOEs are structural,&#8221; Ramaphosa said in his debut State of the Nation address in February. &#8220;SOEs cannot borrow their way out of their financial difficulties,&#8221; he added.
Ramaphosa appointed two-time former Finance Minister Pravin Gordhan to head up the Department of Public Enterprises in Februry. Gordhan is known for his tough stance on graft.
But, genuine reform to South Africa&#8217;s state-owned enterprises could provide difficult. &#8220;The main constraint is ANC (African National Congress) policy,&#8221; Francois Conradie, head of research at South Africa-based NKC African Economics, told CNBC via e-mail.
<img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2018/03/26/105089221-GettyImages-612950856.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Waldo Swiegers | Bloomberg via Getty Images"/>
&#8220;In December the party did not vote for any change in its philosophy on SOEs, which it has historically seen as a key focus for state-led transformation and thus not an area of the economy that it is prepared to subject to market forces.&#8221;
&#8220;We think the resistance from the ANC and its partners, just over a year from the national election, will make swift action impossible,&#8221; Conradie added.
The South African economy, which has recently shown tentative green shoots, saw more good news on Friday as ratings agency Moody&#8217;s held the country&#8217;s investment-grade credit rating and revised its credit outlook to &#8220;stable&#8221; from &#8220;negative.&#8221; The decision cited improving growth prospects and the stabilizing of South Africa&#8217;s institutions.
&#8220;The confirmation of South Africa&#8217;s ratings reflects Moody&#8217;s view that the previous weakening of South Africa&#8217;s institutions will gradually reverse under a more transparent and predictable policy framework,&#8221; said Moody&#8217;s in a corresponding statement.
South Africa&#8217;s economy grew by an unexpected 3.1 percent during the fourth quarter of 2017. This pushed annual growth for the year to 1.3 percent, ahead of the anticipated 1 percent. Unemployment also fell quarter-on-quarter by 1 percent to 26.7 percent.

South Africa’s economic chief hints at privatization drive

Katy Barnato
Source: <a href="https://www.cnbc.com/2015/12/15/after-brazil-is-south-africa-the-next-em-to-go-bad.html">After Brazil, is South Africa the next EM to go bad?</a>
 Slowing growth, financial market instability and political turmoil — could South Africa be the next major emerging market to follow Brazil and lose its investment grade rating? 
 Africa&#8217;s most developed economy has just racked up its third finance minister in five days, raising fears among economists that the country&#8217;s political and economic problems could see the country&#8217;s credit rating diving into &#8220;junk&#8221; territory. 
 As of December, Standard &amp; Poor&#8217;s (S&amp;P) and Fitch Ratings rate South Africa&#8217;s credit worthiness at just one notch above junk status, at BBB-minus. Moody&#8217;s Investors Service rated it one degree higher than its rivals, at Baa2 (equivalent to BBB.) 
 Analysts at private bank Brown Brothers Harriman (BBH) and emerging markets (EM) specialist, Renaissance Capital, forecast South Africa&#8217;s rating will be cut further in 2016, hitting the country&#8217;s economic status as it will find it more and more expensive to raise money. 
 &#8220;We reiterate our long-standing call that the nation gets cut to sub-investment grade, and now it&#8217;s likely sooner rather than later… We think a downgrade is a done deal,&#8221; BBH said in a report on Friday. 
<img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/100550573-cape-town-south-africa-gettyp.jpg?v=1532564710&amp;w=1910&amp;h=1000" data-licensor-name="Hoberman Collection | Universal Images Group | Getty Images" width="1910" alt="Cape Town, South Africa" height="1000"></img>Similarities with Brazil
 Brazil and South Africa are among the largest economies on their respective continents and both have suffered slowing economies and cuts to their credit ratings this year. 
 S&amp;P cut Brazil&#8217;s rating to junk status in September and Fitch slashed its rating to the lowest investment grade in October. Moody&#8217;s put Brazil&#8217;s rating on review for a cut to junk earlier in December. 
 &#8220;EM is under stress… Up to this week, we were worried about Brazil, Russia and Turkey among many others. Then last week, South Africa joined the club,&#8221; Demetrios Efstathiou, head of trading strategy at ICBC Standard Bank, said in a report on Monday. 
 &#8220;Will South Africa become a second Brazil? The thought is very scary,&#8221; he later added. 
Pressure on presidents
 A series of bruising political missteps and scandals has raised doubt over the abilities of Brazil&#8217;s Dilma Rousseff and South Africa&#8217;s Jacob Zuma to rejuvenate their economies — and their futures. 
 Brazil&#8217;s congress launched impeachment proceedings against Rouseff this month and the sacking of the South African finance minister last week and his replacement with first one candidate and then another in a matter of days has cast doubt over Zuma&#8217;s leadership. 
 &#8220;Rating agencies will &#8216;wait and see,&#8217; but are highly discomfited by Zuma&#8217;s move,&#8221; Barclays analysts said in a report on Tuesday. 
 &#8220;The surprising sequence of events… has raised the question of whether President Zuma will continue in office or whether a political formula will be found to see him leave the stage,&#8221; they added later. 
Slowdown vs. deep recession
 Both countries&#8217; economies have slowed this year and their currencies have tanked, in part due to waning investor sentiment on EM and expectations about when the U.S. Federal Reserve will raise interest rates. 
 South Africa&#8217;s economy has been hit by the slump in international commodity prices, contracting by a seasonally adjusted annualized 1.3 percent between April and June, quarter-on-quarter, and growing by only 0.7 in the third quarter, according to preliminary official estimates. 
 Official data on Tuesday showed that South African non-farm payrolls for the third quarter inched up 0.1 percent on the previous three months, but remained flat on the same period the year before. 
 However, South Africa&#8217;s economy is expected to grow across each of 2015 and 2016, with Barclays analysts forecasting expansion of 1.4 percent this year and 1.8 percent next. 
 By comparison, Brazil is far worse off, mired in a steep recession, with Barclays forecasting its economy will shrink by 3.8 percent this year and 2.8 percent in 2016. 
 &#8220;Brazil&#8217;s political fragility increased significantly this year, but we think the political crisis is not over. The risk of Rousseff&#8217;s impeachment remains elevated in 2016 and an expanding corruption scandal threatens further economic deterioration,&#8221; Alberto Gallo, head of global macro credit research at RBS, said in a report last week. 
 — Follow CNBC International on Twitter and Facebook.

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