原創 Stergomena Tax 中國投資參考
Overview of COVID-19 in the SADC Region
The Southern African Development Community (SADC), which is home to approximately 300 million people, had recorded approximately 766,503 confirmed cases of COVID-19 as of 1 October 2020, out of which 681,890 had recovered, and 18,538 died. The first confirmed case was reported in South Africa on 5 March 2020. Within 9 weeks, all 16 SADC countries had registered cases of COVID-19. The Kingdom of Lesotho was the last SADC Member State to record a case of COVID-19 with its first case registered on 13 May 2020.
The emergence of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes COVID-19, in the SADC region has led governments and public health authorities to implement rigorous measures to contain the spread of the disease within national and regional borders. Travel restrictions or bans, partial or total lockdowns, border closures, mandatory quarantine for all travellers and isolations of confirmed cases, among others, were the main measures imposed across the SADC region. These measures determined the trajectory of the disease across the region. The region experienced a slow progression between March and June 2020, while a steady increase in new cases was observed between May and August 2020, when most countries started easing some measures. By September 2020, most member states had started recording a sustained decrease in incidence and mortality.
SADC: A multi-sectoral approach
Immediately after recording the first case in the region in March 2020, SADC expanded the Member States-constituted SADC Technical Committee on Health to include other sectors such as trade, customs, transports, and finance, to ensure a multi-sectoral approach towards responding to the COVID-19. The multi-sectoral approach enabled the region to address a number of challenges, and ensure continuity in the supply of goods and services. This was done, by among others, adopting a virtual operation approach, developing guidelines to facilitate transportation and movement of goods and services during the COVID-19 pandemic period, harmonizing policies across the region to mitigate the socio-economic impacts for the COVID-19, and mobilizing resources to reinforce and improve capacities at national and regional levels.
SADC Member States have also utilized various fiscal and monetary measures and policy actions mainly to provide safety nets to people and firms made vulnerable by the crisis. These policy safeguards and stimulus packages include tax relief and deferrals, corporate grants and concessional loans, cash transfers, extended unemployment benefits and social assistance. These measures were aimed at preserving decent living standards and livelihoods by ensuring access to basic goods and services. For firms, the objective is to avoid permanent scarring and unnecessary bankruptcies leading to job losses and liquidation of assets. These policy measures helped to preserve employment and wages while maintaining capacity that will be crucial for the recovery.
Socio-economic impacts of the COVID-19
The COVID-19 pandemic came at a time when the SADC regional economy had not fully recovered from the 2008-9 global financial crisis, and the extreme weather events that include droughts, floods and cyclones, which have occurred in the region from time to time with catastrophic impacts. While the initial impact of the pandemic has been on the health sector in terms of infections, deaths and overstretched health systems, the measures that have been implemented by respective Member States to contain the COVID-19, such as social distancing and lockdowns, have had adverse impacts across all sectors manifesting into a socio-economic crisis. The COVID-19 distorted world trade, disrupted supply chains, depressed asset prices, shut down factories and stores, and choked international and domestic travel for tourism and business. SADC Member States that heavily rely on extractive industries and tourism were heavily affected by depressed commodity prices and restriction of domestic and international travel. As a result, the regional economy is projected to contract by 4.8 percent in 2020 from an estimated growth rate of 2 percent in 2019.
In most countries especially the developing countries, governments have limited fiscal headroom to avail the required financial resources. The pandemic disrupted economic activity and eroded the tax base whilst expenditures grew exponentially further widening fiscal deficits leading to deterioration of the debt position, substantially more than in 2009 at the peak of the global financial crisis. According to the International Monetary Fund (IMF), gross government debt all over the world is projected to increase by more than 13 percent of gross domestic product (GDP) to more than 96 percent of GDP.
The pandemic has thrown the SADC Macroeconomic Convergence (MEC) programme off-track as Member States concentrate on containing the COVID-19 and limiting its socio-economic adverse impacts. The SADC regional average fiscal deficit is projected to more than double from 3.3 percent of GDP in 2019 to 7.4 percent in 2020, a significant divergence from the SADC Macroeconomic Convergence (MEC) Programme threshold of 3 percent. Reflecting on the deteriorating fiscal positions largely due to the COVID-19, public expenditures as well as the incapacity to service foreign and domestic debt obligations, SADC region’s average public debt is projected to increase from 58.4 percent of GDP in 2019 to 66.9 percent in 2020. The debt levels are expected to remain within the SADC convergence target of 70 percent of GDP. The pandemic has also seen most Member States』 creditworthiness at risk with some being downgraded by rating agencies.
Most economies have reopened under strict health protocols resulting in an increase in economic activity in the SADC region and globally. However, in the absence of a permanent medical solution to the pandemic, economic activity recovery is still fragile coupled with high unemployment given the uncertainties emanating from the unfolding COVID-19 pandemic, which has seen delays in private and public investments as well as companies failing to reopen after failing to absorb the losses incurred during lockdown period. Although the pace of job cutting is slowing in many countries, the outlook on employment remains bleak given the uncertainty on the duration of the pandemic. Regional outbreaks and stricter restrictions pose a risk to this rebound seen in global manufacturing activities.
Cooperation with China in the development of SADC
SADC Member States and China share mutually beneficial economic ties through trade and investment flows. In trade, China is the biggest consumer of SADC region primary commodity exports whilst the SADC region imports manufactured goods from China for final consumption or as inputs or raw materials. In terms of investment, there is significant flow of capital from China largely into infrastructure development in the SADC region and Africa as a whole through initiatives such as China’s Belt and Road Initiative (BRI) development strategy, which aims to invest in infrastructure development and forge economic ties between China and other regions, including Africa. Indeed, SADC has identified infrastructure deficit as one of the main hindrances to economic development and deeper regional integration.
Besides the various initiatives to attract foreign direct investment (FDI), including improving business environment, fiscal incentives, signing of investment treaties and investment promotion activities, SADC will continue to explore other investment opportunities for Chinese investment. The COVID-19 pandemic has partly amplified the need for functioning and effective logistics and trade facilitation. It has also brought to light the need to embrace new ways of doing business and trading such as e-trade, which require functioning and effective interconnectivity and automated systems. The facilitation of movement of people and industrial goods across borders is a necessary step now that Member States are lifting restrictions and resuming normal business and industrial operations.
In addition, investment opportunities should be explored in the priority sectors, such as Agro-processing, Mining and Pharmaceuticals. SADC is currently compiling a database of investment projects focus on the priority sectors to be promoted, such as regional integrated projects in Agro-processing with about 14 value chains, and infrastructure projects focusing on six sectors namely energy, transport, Information Communication Technology (ICT), water, meteorology and tourism.
Therefore, the economic well-being of China is important to the SADC region, since a quick economic rebound of China in the second quarter of 2020 improves the prospects of the SADC economy and the global economy at large. SADC recognizes the efforts by China to accelerate the recovery of its economy from a COVID-19-induced contraction, which will have a positive ripple effect on its trade partners, including SADC.
Editor | Luan Ruoxi
Design | Demi
本文刊於《中國投資》2020年10月號
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《中國投資》雜誌創辦自1985年，由國家發改委主管，國家發改委投資研究所、中國國際工程諮詢有限公司主辦，是我國投資領域唯一的中央級刊物，業界最早專注於投資領域趨勢報導的核心期刊。創刊三十多年以來，雜誌以全球視角看中國投資，涵蓋宏觀經濟、行業分析和企業投資案例，同時以全球市場為坐標，聚焦特定國家、地區和重大國際趨勢，目前已經成為世界各國政府官員、各類投資機構、專家學者、企業家以及記者媒體的專業對話平臺。
《中國投資》雜誌每期覆蓋包括上市公司在內的200多家央企國企和10000多家中國民營企業、1000多家中央與地方政府決策部門和機構、1000多家行業協會和商會、300多家主要金融機構等，是了解宏觀經濟環境、行業趨勢前景和企業投資案例的重要參考。
China Investment, founded in 1985, is a monthly under the supervision of National Development and Reform Commission (NDRC) China’s macro-economic management agency, It’s jointly operated by Investment Research Institute under NDRC, China International Engineering Consulting Corporation. Enjoying an exclusive position under the central government, China Investment is the core journal which started the earliest among similar magazines to focus on the investment trend. Over the past 30-plus years, China Investment has been in line with theglobal market as its fundamental coordinate with a strategic focus on specific countries and regional markets and those major international propensities. China Investment is a key dialogue platform for officials from different countries, investment agencies, experts and scholars, business people and journalists.
原標題：《Cooperation with China to contribute to SADC’s Economic recovery》
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