Breaking: UK Court blocks Nigeria oil spill case against Shell

A British court has blocked pollution claims against Anglo-Dutch energy giant Shell by many residents of Nigeria's Niger Delta region demanding action over decades of oil spills there.

 Shell not responsible for 'decades of oil spills' in Nigeria?

The judge today struck out the claims against Royal Dutch Shell and its Nigerian subsidiary, but gave the communities permission to file an appeal

Members of the Ogale and Bille communities, who say thousands of lives have been devastated by environmental disasters from the global company, had applied for the case to be heard in Britain, arguing that rampant corruption in their home country prevents them from achieving justice in courts there.

 But the High Court in London on Thursday said that it did not have jurisdiction in the case, ruling that it should be settled in Nigeria.

The High Court ruled on Thursday that Royal Dutch Shell cannot be held responsible for the actions of its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd. This is despite the company having profited from decades of abuses and environmental destruction in the Niger Delta. The communities are expected to appeal.
 

“The Ogale and Bille communities have been hit by multiple Shell spills, threatening their health and drinking water. The UN found groundwater contamination in Ogale was more than 450 times the legal limit – when Amnesty investigators went back four years later, Shell still hadn’t cleaned up the pollution. This ruling could mean that the communities will never receive meaningful compensation, and that the oil spills will be not be properly cleaned up,” said Joe Westby, Campaigner on Business and Human Rights at Amnesty International.

“This ruling sets an especially dangerous precedent. If it stands, then the UK Courts have given free rein to multinational companies based in the UK to abuse human rights overseas. Poor communities and developing countries will pay the price. This is a deeply depressing reminder of the impunity enjoyed by powerful corporations, and a blow to other communities in the Niger Delta who are still awaiting justice.

“We hope and expect that the court of appeal will overturn this decision to show that the UK justice system will provide remedy to impoverished communities who suffer serious abuse caused by UK corporations.”

Two Nigerian communities brought separate legal actions against Royal Dutch Shell and its Nigerian subsidiary in 2016. The first claim was brought on behalf of 2,335 people from the Bille Kingdom, a fishing community whose environment has been devastated by oil spills over the past five years.

The second claim was on behalf of the Ogale Community in Ogoniland which consists of around 40,000 people. Over several years there have been repeated oil spills from Shell’s pipelines in Ogoniland which have still not been cleaned up.

Evidence presented before the court and Amnesty International’s years of experience working on the issue show that Royal Dutch Shell, an Anglo-Dutch company, has significant direct involvement with its Nigerian subsidiary. However, Shell disputed the jurisdiction of the UK court, arguing that the case concerned Nigerian plaintiffs and a Nigerian company.

The judge today struck out the claims against Royal Dutch Shell and its Nigerian subsidiary, but gave the communities permission to file an appeal.

“The judge’s decision is blatantly at odds with how multinationals like Shell work in today’s globalised world. Too often they hide behind the legal fiction that their subsidiaries operate completely separate to them. If multinationals are allowed to reap profits from their companies around the world without being held responsible when they commit human rights abuses, then abuses can – and will – take place,” said Joe Westby.

Communities affected by oil spills in Nigeria are usually forced to negotiate directly with the company and are at a huge disadvantage, which invariably means they are cheated. For rural communities taking a claim to the Nigeria courts is extremely difficult because only federal courts can deal with oil cases and few lawyers are willing to take on the major oil companies. The rare cases that do make it to court languish for years in the Nigerian justice system with no resolution.

In January 2015 a UK law firm won a landmark settlement agreement from Shell to pay £55 million to the Bodo community in Niger Delta after the case was brought to the UK court. Shell had originally offered just £4,000 compensation. As part of these legal proceedings Shell was forced to admit it had understated – for years – the size of the oil spills. Only the UK court process was able to bring this to light.

“It is shocking that Shell is trying to deny it is responsible for its 100% owned subsidiary. Shell has profited from decades of human rights abuse and environmental damage in the Niger Delta and both Royal Dutch Shell and Shell Nigeria should be held legally accountable,” said Joe Westby.

Background

In 2011 the United Nations Environment Programme (UNEP) documented the appalling environmental damage and oil pollution in Ogoniland. Its study described public health as seriously threatened by oil spills and said that environmental restoration of the area could prove to be the world’s most wide-ranging and long term oil clean-up exercise ever undertaken.

At the time, Shell stated it accepted the findings and the recommendations of the UNEP Report. However, a 2015 investigation by Amnesty International revealed that claims by Shell that they had cleaned up heavily polluted areas were blatantly false. Researchers observed ongoing oil pollution at four locations where UNEP found contamination – including Okuluebu in Ogale, one of the sites included in the legal claim. The Nigerian government regulator certified the area as clean in 2012, but researchers saw patches of black oil covering the ground and observed a strong smell of petroleum.

Shell sued in UK for 'decades of oil spills' in Nigeria

More than 40,000 Nigerians demand action from Shell to clean up oil spills that have devastated communities for decades.

Emere Godwin Bebe Okpabi, leader of Nigeria's Ogale people, unpacked four bottles of water from his homeland and lined them up on a table to show why his subjects are suing Royal Dutch Shell in a London court.
The Nigerian water is contaminated with oil and cancer-causing compounds such as benzene. It is what his people drink every day.
Lawyers for more than 40,000 Nigerians are demanding action from Shell to clean up oil spills.
Britain's High Court began hearing lawsuits on Tuesday filed by the Ogale and Bille people alleging that decades of oil spills have fouled the water and destroyed the lives of thousands of fishermen and farmers in the Niger River Delta, where a Shell subsidiary has operated since the 1950s.
They brought their fight to Shell's home base because they say the Nigerian courts are too corrupt.
"Let the shareholders of Shell who are residents of the advanced world, like Britain, let them see a representative of a kingdom that is being destroyed for them to have money," he told The Associated Press news agency on the eve the hearing. "That's blood money."

Lawyers for more than 40,000 Nigerians are demanding action from Shell to clean up oil spills [Frank Augstein/AP]

The Anglo-Dutch oil giant argues that the case should be heard in Nigeria, pointing out it involves its Nigerian subsidiary SPDC, which runs a joint venture with the government, and Nigerian plaintiffs.
London law firm Leigh Day is handling the cases after it won a landmark agreement from Shell to pay $83.5m in compensation to the Bodo community for damage caused by oil spills in 2008 and 2009.
Shell originally offered $50,000 before the Bodo took their case to the same UK court.
The new lawsuits were brought by two communities located in Ogoniland, part of the oil-rich southern Niger River Delta.
They want to hold Shell, incorporated in the UK, responsible for the actions of its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd, or SPDC.
The subsidiary said it has produced no oil or gas in the region since 1993.
The area is heavily affected by crude oil theft, pipeline sabotage and illegal refining.
It is arguing in court that the legal challenge is speculative and full of "legal and evidential weaknesses".

SPDC said it will challenge the jurisdiction of the UK courts in this case - arguing that it concerns Nigerian plaintiffs in dispute with a Nigerian company over issues in Nigeria.
"If the claimants' lawyers are correct as to the existence of this novel duty of care, [Shell] and many other parents of multinational groups will be liable to the many hundreds of millions of people around the world with whom their subsidiaries come into contact in the ordinary course of their various operations," the company said in its court argument.
"That would constitute a radical if not historic expansion of the law and open the floodgates to litigation on an unprecedented scale."
The Ogale and Bille communities account for only a small portion of the millions of Nigerians that human rights activists say have been injured by contamination they say would never have been allowed in the home countries of the multinational oil companies that operate in partnership with the Nigerian government.

Claimants brought their fight to Shell's home base because they say the Nigerian courts are too corrupt [Sunday Alamba/AP]

Shell was the first oil company to operate in Nigeria, starting production in 1958.
In the 1990s, the military government sent armed troops to put down protests by the Ogoni people, turning the oil-producing south into a war zone.
One of the leaders of those protests was Ken Saro-Wiwa, a writer and environmental activist whose opposition helped stop Shell's production in Ogoniland.
He and eight others were hanged by the government of military dictator Sani Abacha in November 1995 in a case the US condemned.

President Muhammadu Buhari has promised a clean-up of Ogoniland, which was supposed to start in June but has been delayed.
The new lawsuits come at a time when Shell is pivoting towards other areas, such as Brazil.
It recently bought BG Group Plc for $52.4bn, increasing its proven reserves of oil and gas by 25 percent. And like other oil companies, it is also slashing jobs and postponing investments to adjust to lower oil prices.
But Shell is still seen as having deep pockets, said David Elmes, course director of the Warwick Business School's Global Energy Research Network.

Shell originally offered $50,000 before the Bodo tribe took their case to the same UK court [Frank Augstein/AP]

While Shell would argue that its settlement with the Bodo community shows its willingness to provide compensation for problems it caused, the new cases involve damage arising from what Shell says is sabotage and theft, Elmes said.
And as Shell looks to move to other countries, "people who feel they have a case against the company are looking to take action now", he said.
In a 2011 report, the United Nations said in at least 10 communities in Ogoniland, public health was "seriously threatened" by drinking water contaminated with hydrocarbons.
In one area, the water contained the carcinogen benzene at levels 900 times higher than what the World Health Organization says is safe.
While the report recognised that oil production in the region had ceased, it criticised Shell's oversight of the remaining facilities.

The report recommended emergency measures to provide adequate drinking water. But so far nothing has been done, said Okpabi who describes himself as the paramount ruler of the Ogale people.
He brought the bottles of water to his lawyer's office in London just to make the point.
Removing his hat and leaning forward, he argued that his people have been made poorer by the destruction of an ecosystem.
He is angry at Shell, arguing it called the shots for its Nigerian subsidiary and so should be held accountable in Britain.
"My system cannot give me justice," Okpabi said. "There is only one place that can give me justice. That is why I am here."

Locals await Niger Delta oil spill clean-up

Source: AP

Deziani Alison-Madueke fights back, challenges EFCC to provide evidences of Malabu, $153.3million against her!

Minister of Petroleum under former President Goodluck Jonathan, Mrs Deziani Alison-Madueke, has allegedly spoken out after a long silence concerning the accusations against her by the Economic and Financial Crimes Commission (EFCC).
 

 

 

SDK media tabloid exclusively reported that  former minister of petroleum has reacted to allegations widely circulated in the media by EFCC that she had forfeited some money she reportedly stole as a government official. Deziani Alison-Madueke allegedly denied all the allegations against her by the EFCC.

 According to the report, Mrs Alison-Madueke gave seven points to dismiss EFCC allegations as below:

 

 

 

1. THE $153.3 MILLION ALLEGATION

I am deeply disturbed and bewildered by recent media reports (Premium Times Thursday 12 January, 2017 and other dailies about the same time) claiming that by virtue of an order of the Federal High Court, I have forfeited to the Federal Government, the sum of $153.3m which I purportedly stole from the Nigerian National Petroleum Corporation, NNPC.

First and foremost, whilst the reasons for my being out of the country are public knowledge, the principle of fair hearing demands that I should have been notified of formal charges if truly there was a prima facie evidence or indictment against my person linking me with the said issue, so as to ensure that I had adequate legal representation. This was never done.

I wish to state that I cannot forfeit what was never mine. I do not know the basis on which the EFCC have chosen to say that I am the owner of these funds as no evidence was provided to me before the order was obtained and they have not in fact served me with the order or, any evidence since they obtained it.

 

In the face of the obvious falsification of facts and misinformation, it is only right and proper that the EFCC should publish the details of the $153.3M lodgements, the bank account numbers and the account beneficiaries, showing proof of my link to them. Having also alleged that the said $153.3M was ‘wired’ from NNPC, the EFCC should also publish details of the NNPC accounts from where the said $153.3 million was taken from, with proof that I authorized such a transaction/transactions acting either in my private capacity or, as The Honourable Minister of Petroleum.

Let me state for the record that as Minister of Petroleum, the operation and management of NNPC finances were outside my purview as outlined in both the Petroleum Act and the NNPC Act.

2. MALABU

With regards to the various news reports published in both the online and print media, insidiously inferring that I was indicted by Italian prosecutors for, as they put it, ‘ sharing in the Loot’ of the $1.3bn OPL 245 oil block deal that involved Malabu and the Joint Venture Multinational partners, ENI(AGIP) and Royal Dutch Shell. Let me once again State for the record, that this is another figment of the author’s imagination, which given the persistent bid to ensure my destruction and stick all of the Sins of the Corruption plagued Oil and Gas Sector of over the last 30years upon my head, probably emanated from the EFCC itself!

In 2010, shortly after I was appointed as Minister of Petroleum Resources, the issue of OPL 245 was brought to my attention. I looked into the case and immediately became aware of the inherent and long standing sensitivities around this issue. It became clear from the onset that this case was not within the direct purview of the Minister of Petroleum Resources but in the main was centered around issues of Law. By this time there was already an ICSID(International Centre for Settlement of Investment Disputes) investigation and claims against the FGN running into billions of dollars. Therefore, we took directives from the Chief Legal Officer of the Nation; the Attorney General and Minister of Justice. In all of these matters due process was followed to the letter at all times.
 

3. THE ALJAZEERA REPORT - $18 MILLION MANSION
 

On the 13th of June 2016, the EFCC once again took their well-trodden path to the media, this time claiming that they had ‘discovered’ a mansion in Asokoro, Abuja, worth $18million (approx. N9billion) which they purported to belong to me. The EFCC went to the extent of bringing in Aljazeera, an International TV Station, to air a damaging documentary against me in this regard, showing a particular residential building in Asokoro, Abuja, which they told Aljazeera belonged to me.

The EFCC Chairman Ibrahim Magu, personally took the Aljazeera reporter to the building, alleging that it belonged to me. It has since become apparent that the house belongs to a company owned by Mr Kola Aluko.

Since the EFCC claims that the alleged $18million Asokoro property belongs to me, then they should kindly produce the ‘Authentic’ Certificate of Occupancy and Land Registry information and any other relevant information, as proof of my ownership of the property.

 

4. FAMILY HOME - YENEGOA, BAYELSA STATE

On the 9th November 2016, the EFCC visited our Family home in Yenegoa (Bayelsa State) as pre-agreed and they were escorted around the premises. I was therefore completely shocked to once again see my name sensationally splashed across the Front Pages of Newspapers and widely circulated on the internet, with blaring Headlines such as “EFCC UNCOVERS DIEZANI’S MULTI-BILLION NAIRA ESTATE” - Nation Newspaper, January 8, 2017 (Annex- 4A). There was absolutely nothing ‘Hidden’ or ‘Concealed’ about the home. I HAD DECLARED IT OPENLY as required by Law, in my Asset declaration forms (Annex-4B). Yet the EFCC have announced that they ‘Just Discovered’ my ‘Hidden Estate’! And labelled it a ‘Multi-Billion Naira Estate’! Even though they had been given the Bill of Quantities, showing actual amount spent.

It is accepted tradition across the length and breadth of Nigeria, for people to own country/hillage homes. Given the size of the land and the location of the compound, the buildings thereon cannot by any stretch of the imagination be a “Multi-Billion Naira” palatial estate, as the news mongers would want to portray.

 

The EFCC were taken on a tour of the compound which consisted of a main house and two outhouses - An Obi (meeting bungalow) and a staff quarters(BQ) building - above which we built 3 guest rooms and a parlour. The only other 2 structures are the gate and generator houses. Construction began in late 2011 and was handled in phases. During the visit the EFCC was given the bill of quantities, which up until the time construction stopped in early 2015, due to my illness, was at approximately N394 million which was declared in the code of conduct documentation.
 

5. $700 Million Cash Found In My House

Stories were circulated by unscrupulous agents of calumny that the EFCC found a mind boggling $700million in cash in my home in Abuja. Would the videos of this $700 million cash discovery not have made good viewing? Or should those who recovered this money not tell the public where exactly the money has been kept? Perhaps the Central bank should corroborate that it is in custody of these monies allegedly found in my house? But then, it is now patently apparent that Nigerians are no longer easily led to believe fables and sensational untruths.
 

6. REALITY VERSUS FICTION

I would like to state for the record that I performed my duty as Minister of Petroleum Resources with the utmost sincerity and sense of responsibility, ensuring that all Nigerians irrespective of creed, gender or tribe enjoyed their rightful benefits from the Oil and Gas Sector.

$5.6 Billion LNG Dividend Fund

It is pertinent to note that at the end of my tenure, I left behind in the LNG dividend fund, for the incoming Administration, the sum of $5.6billion(five billion six hundred million US Dollars)(Annex-6A). I did this to ensure continuity in the crucial gas sector development which underpins the entire Power and Energy Sector and which was and still is, absolutely imperative for the Country’s current and future economic development.

Fuel Scarcity

It is on record, that I immediately took the issue of incessant fuel queues head-on and in my time as petroleum minister, Nigerians rarely experienced fuel shortages. These queues had long dominated our landscape, causing untold hardship to millions of ordinary Nigerians stuck in fuel queues for hours; like the bus driver who was unable to earn enough to go to the market, and the market woman who, therefore, earned less and so could not afford school fees. This example, though at the most basic level, caused a chain reaction which was replicated in various facets throughout the economy. So, on the macro economic level, the main benefit of ending the fuel queues was an immediate increase in GDP, reduction in inflation and easier facilitation and movement of people, goods and services, across the country.

The continuing effect of all these measures were that even in the most remote locations, Nigerians could buy and sell petroleum products.
 

THE MISSING $20 BILLION

In late 2013, NNPC was accused by the then CBN governor, of misappropriating first $49.8billion, then it changed to $12billion and finally it was said to be $20billion. And in the twinkling of an eye that accusation was turned around and directed at me, personally. I was accused of stealing/misappropriating the unfathomable amount of $20 billion.

In a CNN TV Interview in March 2015, the former CBN governor stated that “there was this gap of $20 billion after reconciliation between what NNPC exported and what it repatriated to the federation account and I raised a number of issues that I think have not yet been discussed and addressed sufficiently. One of them is billions of dollars being paid in kerosine subsidy without appropriation by the National Assembly and against a presidential order and we don’t know who authorised these payments yet. Nobody has owned up to say I authorised these payments, I made a mistake, it will stop…”. He, went on to say that…. “…It could be $20 billion at the end of the day, after reconciliation they could account for 10 or 12…”. So, as he pointed out, there was indeed a reconciliation that at first stage had begun to close the purported gap.

 

I made several attempts when we came into office in April 2010, to get to the real truth of the matter. Even before we came in the GMD who served under Rilwanu Lukman, Alhaji Barkindo, who is today the Secretary General of OPEC, had written to the then minister of Finance, Alhaji Muhktar, to enquire for clarity on the matter, to no avail(Annex-2B). Finally, I had to write to President Jonathan to get to the truth of the matter. President Jonathan pointed out that although he and President Yar’adua had wanted to cancel the entire issue of subsidies, the unions had objected and therefore the payment of subsidy had never been stopped. He directed that in the meantime we continue the payments but with the proviso that we prepare for complete deregulation as soon as possible(Annex-2C), which I of course moved to implement on Jan 1st, 2012.

 

Today, we all know that the PWC report that was published cleared me of any wrong doing and no one up till now has been able to controvert the PWC report, nor has anyone been able to show that the $20 billion is actually, or was ever, missing. In addition, the Makarfi-led committee in the Senate of The Federal Republic of Nigeria, in a series of publicly-held hearings, also vindicated me on the matter of the purportedly missing funds.

At end December 2011, I directed PPPRA to move for complete deregulation, to rid the Oil & Gas sector of the speculators, the bloated middlemen and the parasitic influence of Godfatherism. This was in an attempt to create a far less corruptible system as it was quite clear that the intended benefits of the Subsidy system were not reaching the masses but were being hijacked by unscrupulous middlemen cabals. And finally, to allow the true market factors of supply and demand to come into play….. And as you all know, the country pushed back against it. Even after that, in early January 2012, I sought the permission and received the approval, of President Jonathan to write to EFCC asking that they please come in and investigate the entire Subsidy program and the fraudulence embedded in it(Annex-2D). And yet, I was called the corrupt one.

It is pertinent to note here, that the incumbent government themselves maintained the full subsidy regime for over one year until they realised (as I had pointed out in 2011 and had championed continuously), that it was unsustainable.

 

7. MY POSITION

 

It is saddening that after eight years of serving my country, my experience as a public servant has been fraught with continuos malicious castigation and character assassination, all in the name of ‘personal vendettas’ or political horse trading. It has become apparent to many that these untruths told were at best well-crafted fables. The most dramatic and damning accusation was the infamous missing $49.8 Billion Dollars, that went from to $12 Billion and then up to $20 Billion and which was alleged missing from NNPC. Today, we all know that the PWC report that was published cleared me of any wrong doing and no one up till now has been able to controvert the PWC report nor has anyone found the “missing” 20 billion, or who took it. In addition, the Makarfi-led committee in the Senate of The Federal Republic of Nigeria, in a series of publicly-held hearings, also vindicated me on the matter of the purportedly missing funds. Yet, we are all silent as if these events never occurred!

SEE ATTACHMENT-1 THAT EXPLAINS MY POSITION ON THE ‘MISSING’ $20 BILLION.

 

The allegations that I have addressed above are no different, the character assassination continues, this time with a new set of hirelings.

I remain very proud of the fact that all the policies, tenets and plans that I initiated in the Oil & Gas sector are still underpinning the entire structure. This is because they were put in place with the good of the entire nation and its people in mind. They were not factional, or tribal, neither were they based on religious bias.

 

I can therefore, NO LONGER SIT BACK and allow the fabricated accusations against my person designed by unscrupulous persons with a vengeful agenda go unchallenged

Nigeria journalists’ union to sue media organisations for non-payment of salaries

The Nigeria Union of Journalists, NUJ, says it plans to sue media organisations at the Industrial Arbitration Court for defaulting in the payment of their workers.

Deji Elumoye, Chairman, Lagos council of the union, made this known to the News Agency of Nigeria, NAN, in Lagos on Tuesday.

The Nigeria Union of Journalists, NUJ, says it plans to sue media organisations at the Industrial Arbitration Court for defaulting in the payment of their workers.
He said the organisations had been notified of the planned action and that they would be served court papers as soon as all the processes had been concluded.
Mr. Elumoye added that the step became inevitable as the media houses had not shown sincerity or commitment in their engagements with the union on peaceful resolution of the matter.
“Non-payment of salaries of journalists is a serious issue and we are not taking it lightly with the affected organisations.
“We have been picketing some defaulting media houses. While some have been responding well, others have not shown sincerity in our engagements with them.
“For God`s sake, why would you continue to owe journalists who traverse everywhere to get the stories that sustain your organisation?
“We understand that some are facing precarious financial situation. We are holding talks with them. But some have no excuses for not paying their workers; we are not going to spare them.

“In fact, we have almost concluded plans to take three defaulting media houses to the Industrial Arbitration Court over the issue. As soon as the court papers are ready, they will get them,” he said.
Mr. Elumoye urged media houses to promptly pay the salaries in order to motivate the journalists to add more value to their organisations.
On the Media Salary Scale, Mr. Elumoye said the union was expecting action from the Federal Government on its implementation.
He explained that the union had several engagements with the past administration on the issue and that it received assurance that it would be implemented.
“We held several meetings with the last government on the issue and there was an agreement that an enhanced salary, the exact amount I will not disclose will be implemented.
“Even the current Minister of Information, Alhaji Lai Mohammed has acknowledged that an agreement was reached with the last government on salary raise.
“But the present administration has not been engaging us on the implementation. May be it is because of the recession or something. We hope they respond so that the lots of our members can be improved,” he said.
(NAN)

Nigeria to rebound from recession at one percent as global growth edges up to 2.7 percent despite weak investment -World Bank

Good news! Nigeria is forecast to rebound from recession as global growth edges up to 2.7 percent despite weak investment -World Bank

-Nigeria is forecast to rebound from recession and grow at a 1 percent pace

-Public Investment Can Bring Private Investment off the Sidelines
In the latest report of the World Bank’s January 2017 global economic outlook Sub-Saharan African growth is expected to pick up modestly to 2.9 percent in 2017 as the region continues to adjust to lower commodity prices. Nigeria is forecast to rebound from recession and grow at a 1 percent pace. However, the report suggested that growth in South Africa and oil exporters is expected to be weaker, while growth in economies that are not natural-resource intensive should remain robust.



Global economic growth is forecast to accelerate moderately to 2.7 percent in 2017 after a post-crisis low last year as obstacles to activity recede among emerging market and developing economy commodity exporters, while domestic demand remains solid among emerging and developing commodity importers, the World Bank said in a report released on Tuesday.

Growth in advanced economies is expected to edge up to 1.8 percent in 2017, the World Bank’s January 2017 Global Economic Prospects report said. Fiscal stimulus in major economies—particularly in the United States—could generate faster domestic and global growth than projected, although rising trade protection could have adverse effects. Growth in emerging market and developing economies as a whole should pick up to 4.2 percent this year from 3.4 percent in the year just ended amid modestly rising commodity prices.

World Bank says a protracted period of uncertainty could prolong the slow growth in investment that is holding back low, middle, and high income countries. WASHINGTON, Jan. 10, 2017

Nevertheless, the outlook is clouded by uncertainty about policy direction in major economies. A protracted period of uncertainty could prolong the slow growth in investment that is holding back low, middle, and high income countries.
“After years of disappointing global growth, we are encouraged to see stronger economic prospects on the horizon,” World Bank Group President Jim Yong Kim said.
“Now is the time to take advantage of this momentum and increase investments in infrastructure and people. This is vital to accelerating the sustainable and inclusive economic growth required to end extreme poverty.”



The report analyzes the worrisome recent weakening of investment growth in emerging market and developing economies, which account for one-third of global GDP and about three-quarters of the world’s population and the world’s poor. Investment growth fell to 3.4 percent in 2015 from 10 percent on average in 2010, and likely declined another half percentage point last year.
Slowing investment growth is partly a correction from high pre-crisis levels, but also reflects obstacles to growth that emerging and developing economies have faced, including low oil prices (for oil exporters), slowing foreign direct investment (for commodity importers), and more broadly, private debt burdens and political risk.
“We can help governments offer the private sector more opportunities to invest with confidence that the new capital it produces can plug into the infrastructure of global connectivity,” said World Bank Chief Economist Paul Romer.
“Without new streets, the private sector has no incentive to invest in the physicalcapital of new buildings. Without new work space connected to new living space, the billions of people who want to join the modern economy will lose the chance to invest in the human capital that comes from learning on the job.”
Emerging market and developing economy commodity exporters are expected to expand by 2.3 percent in 2017 after an almost negligible 0.3 percent pace in 2016, as commodity prices gradually recover and as Russia and Brazil resume growing after recessions.
Commodity-importing emerging market and developing economies, in contrast, should grow at 5.6 percent this year, unchanged from 2016. China is projected to continue an orderly growth slowdown to a 6.5 percent rate. However, overall prospects for emerging market and developing economies are dampened by tepid international trade, subdued investment, and weak productivity growth.
Among advanced economies, growth in the United States is expected to pick up to 2.2 percent, as manufacturing and investment growth gain traction after a weak 2016. The report looks at how proposed fiscal stimulus and other policy initiatives in the United States could spill over to the global economy.
“Because of the outsize role the United States plays in the world economy, changes in policy direction may have global ripple effects. More expansionary U.S. fiscal policies could lead to stronger growth in the United States and abroad over the near-term, but changes to trade or other policies could offset those gains,” said World Bank Development Economics Prospects Director Ayhan Kose.
“Elevated policyuncertainty in major economies could also have adverse impacts on global growth.”

                                         Regional Outlooks
East Asia and Pacific: Growth in the East Asia and Pacific region is projected to ease to 6.2 percent in 2017 as slowing growth in China is moderated by a pickup in the rest of the region. Output in China is anticipated to slow to 6.5 percent in the year. Macroeconomic policies are expected to support domestic drivers of growth despite soft external demand, weak private investment, and overcapacity in some sectors.
Excluding China, growth in the region is seen advancing at a more rapid 5 percent rate in 2017. This largely reflects a recovery of growth in commodity exporters to its long-term average. Growth in commodity importers excluding China is projected to remain broadly stable, with the exception of Thailand where growth is expected to accelerate, helped by improved confidence and accommodative policies. Indonesia is anticipated to pick up to 5.3 percent in 2017 thanks to a rise in private investment. Malaysia is expected to accelerate to 4.3 percent in 2017 as adjustment to lower commodity prices eases and commodity prices stabilize.



Europe and Central Asia: Growth in the region is projected to pick up to 2.4 percent in 2017, driven by a recovery in commodity-exporting economies and recovery in Turkey. The forecast depends on a recovery in commodity prices and an easing of political uncertainty. Russia is expected to grow at a 1.5 percent pace in the year, as the adjustment to low oil prices is completed. Azerbaijan is expected to expand 1.2 percent and Kazakhstan is anticipated to grow by 2.2 percent as commodity prices stabilize and as economic imbalances narrow. Growth in Ukraine is projected to accelerate to a 2 percent rate.
Latin America and Caribbean: The region is projected to return to positive growth in 2017 and expand by 1.2 percent. Brazil is projected to expand at a 0.5 percent pace on easing domestic constraints. Weakening investment in Mexico, on policy uncertainty in the United States, is anticipated to result in a modest deceleration of growth this year, to 1.8 percent. A rolling back of fiscal consolidation and strengthening investment is expected to support growth in Argentina, which is forecast to grow at a 2.7 percent pace in 2017, while República Bolivariana de Venezuela continues to suffer from severe economic imbalances and is forecast to shrink by 4.3 percent this year. Growth in Caribbean countries is expected to be broadly stable, at 3.1 percent.
Middle East and North Africa: Growth in the region is forecast to recover modestly to a 3.1 percent pace this year, with oil importers registering the strongest gains. Among oil exporters, Saudi Arabia is forecast to accelerate modestly to a 1.6 percent growth rate in 2017, while continued gains in oil production and expanding foreign investment are expected to push up growth in the Islamic Republic of Iran to 5.2 percent.
The forecast is based on an expected rise in oil prices to an average of $55 per barrel for the year.
South Asia: Regional growth is expected to pick up modestly to 7.1 percent in 2017 with continued support from strong growth in India. Excluding India, growth is expected to edge up to 5.5 percent in 2017, lifted by robust private and public consumption, infrastructure investment, and a rebound in private investment. India is expected to post a 7.6 percent growth rate in FY2018 as reforms loosen domestic supply bottlenecks and increase productivity. Pakistan’s growth is projected to accelerate to 5.5 percent, at factor cost, in FY2018, reflecting improvements in agriculture and infrastructure spending.
Sub-Saharan Africa: Sub-Saharan African growth is expected to pick up modestly to 2.9 percent in 2017 as the region continues to adjust to lower commodity prices. Growth in South Africa and oil exporters is expected to be weaker, while growth in economies that are not natural-resource intensive should remain robust. Growth in South Africa is expected to edge up to a 1.1 percent pace this year. Nigeria is forecast to rebound from recession and grow at a 1 percent pace. Angola is projected to expand at a 1.2 percent pace.


Posted by Lashley Oladigbolu, accredited Journalist of the World Bank Online Briefing Centre.