The Russian Export Center (REC) is created as a state specialized institution to support Russian export to foreign markets. It has a group of companies that provides comprehensive financial and non-financial support to Russian export-oriented companies and industries in the single window format.
One of the key tasks is to interact with relevant ministries and departments in the sphere of improving and developing foreign trade of the Russian Federation to Europe, Latin America, Asia and Africa.
In this interview, Peter Fradkov, General Director of the Russian Export Center (REC), discusses some aspects of Russian trade operations, strategies and challenges as well as future plans in the direction of Africa during a recent meeting with Kester Kenn Klomegah, an independent researcher and a policy consultant on African affairs in the Russian Federation and Eurasian Union.
Here are the interview excerpts:
Q: Could you please tell us about the Russian Export Center and why it was established as a subsidiary of Vnesheconombank in 2015?
A: In recent years, Russia has been making every effort to avoid the "raw-materials" export model and focus on developing export-oriented industries. The launch of the Russian Export Center was a key step towards the development of a full-fledged national export support system. Previously, the exporter had to apply to various authorities on different issues. In the course of time it became clear that it was necessary to create a "one-stop-shop" for exporters to receive a full range of services and support their products in foreign markets.
The reason behind creating a Russian Export Center within Vnesheconombank, based on the mandate of Vnesheconombank as a development institution, was the need to unite the Center, the EXIAR insurance agency and Roseximbank in one group in order to offer our customers a full range of financial and non-financial services, to provide Russian exporters with ample tools for entering foreign markets.
Q:With a focus on South Africa, is there any possibility for it to be used as a gateway to reach the market of southern African region? Do you also plan to develop or localize production centers and cooperate or compete with other foreign producers there?
A: Let me address the last question first. It is unlikely that upon entering the South African market, Russian companies will pursue any competition objectives. On the other hand, they are not afraid of competition, as Russian industrial products, primarily machinery, are quite competitive and can occupy positions not only in the market of South Africa, but also in other African countries.
Russian manufacturers have a number of specific competitive advantages. Let's take, for example, agricultural machinery. The main advantage of Russian products as compared to the counterparts by major foreign manufacturers is a lower price and almost the same level of capacity, quality and useful life. Moreover, the cost of operation, including maintenance, repairs, etc. is often lower than that of the foreign competitors worldwide. Considering the fact that Africa has 60% of the world's resources of untreated but agriculturally suitable land, we recognize remarkable opportunities for supplies of agricultural machinery, fertilizers, plant protection products and other solutions to improve the efficiency of agricultural activities in African countries.
Besides, a number of Russian companies operating in South Africa, such as Rosatom, Rostselmash, and Renova are implementing educational programs to train local specialists for the subsequent operation and maintenance of equipment, facilities or plants built with Russian support. This is an important contribution to the social development of the African country.
As for the plan to establish production there, it is a very interesting form of cooperation, which the Russian companies are now considering. And what matters here is that a reliable partner has to be chosen. In this context, cooperation with local and foreign producers in South Africa looks very promising The Russian Export Center takes an active part in the development of state support measures to create a service and repair infrastructure for Russian companies operating abroad, the launch of which is scheduled for the next year. The Republic of South Africa offers good conditions for the creation of joint manufacturing facilities and opportunities for them to enter the markets of the South African Customs Union (SACU) and the Southern African Development Community (SADC) countries in the future.
Q: Do you also think there is a lot of potential in terms of raising trade and economic cooperation between the African continent and Russia? Doing business in Africa is not easy but what kind of approach do you envisage to adopt?
A: Today, African countries are taking an increasingly active part in the global political and economic space. The Soviet Union made a significant contribution to the social and economic development of African countries by building large industrial and infrastructure facilities and helping to establish national education and health care systems. However, in the 1990s the Russian-African relations came virtually to a standstill. At present, Russia's foreign trade turnover with Africa is about 12 billion US dollars, which is a rather modest achievement. Nevertheless, the African continent remains a rather promising market for Russian industrial goods.
When working with exporters, we are witnessing increasing understanding that Africa is a new global market with a population of more than 1 billion people, with great potential for economic growth and, accordingly, consumption.
On the other hand, I can't recall of any special difficulties, inherent to the Russian-African business partnership. Perhaps, I should point out a still insufficient awareness of the real economic opportunities, market conditions and specific counterparts in African markets by Russian businesses and, accordingly, poor awareness of capabilities of Russian partners incumbents by Africans.
As I already said, what really matters for Russian companies is to find potential partners and distributors. Many companies do not possess competencies for searching foreign partners. Any successful project which came to exist had very often a spontaneous nature and was forged due to some historical experience, exhibitions or some other events. And we haven't undertaken any focused effort based on modelling of business processes to find dealers and distributors. Russian Export Center actively engages in tackling this issue in order to reconcile consistently supply and demand with each other.
Q: What are your key focus, products and services? Would you also focus on big companies and who are your potential clients? And what about medium-size enterprises?
A: Customers of the Russian Export Center include representatives of very different industries: machine building, agro-industrial complex, IT, chemicals, pharmaceuticals, and many others. Our customers cooperate with countries in Asia, CIS, Africa, South America and Europe. The important thing is Russian Export Center deals with both major businesses and small and medium-sized exporters. Of course, the goals and opportunities of these companies vary. The medium- and small-sized exporters e.g. submit inquiries relating to non-financial support, search for partners, analysis of foreign markets, educational services in the field of exports. The major players are more interested in financial and insurance support. Russia is a big country, so we pay special attention to working with regions. According to data for 2016, a significant proportion of REC customers (about 70%) accrued exactly to the regional companies. And it comes without surprise since the vast majority of manufacturing companies are located in the regions. We are pleased to witness a higher interest shown by the regional companies in entering African markets, most of these companies represent small and medium businesses.
Q: So, what are the key challenges here with regard to the latest economic developments which are faced by other foreign players on the African continent now?
A: Currently, lots of countries worldwide are intensifying efforts to get a foothold in Africa. Russia has traditionally and historically built very good, trust-based relations with the African continent. At the same, I should notice that trade and economic relations with many countries do not meet the achieved level of political relations. Trade turnover could be much more sizable in terms of both quality and numbers and both sides could experience such growth.
Reinforcement of positions of Russian exporters in Africa requires creation of certain conditions. The main one of them is penetration into the market. We are often faced with discriminatory barriers, which are there not because we are from Russia, but because we have just not thought about how to remove these barriers. For example, in some African countries we deal with the fact that European or American companies have to pay really low customs dues or do not have to pay them at all, while we often have to pay away 20-40 % custom duties, for example, for cars or cement. The government authorities, both intergovernmental commissions and the Russian Export Center, are primarily concerned with removing barriers for Russian exporters and opening up foreign markets for them.
Q: What do you hope to achieve over the long term in the market in Africa? Describe the African market and say your final words to your potential clients who are located in different countries and regions in Africa?
A: Global goal of the Russian Export Center is to create favorable conditions for the growth of Russian exports. Being a key state institution for export support, the Government of Russia has set important tasks before us. This year we are to involve more than 6.5 thousand new companies in export activities and also support export deliveries worth at least $ 20 billion.
The world of today has gone global, and without the integration of world trade into the processes business scaling would be impossible. Our primary task is to gradually change the thinking of Russian entrepreneurs, who are often skceptical about entering foreign markets, including African ones. Secondly, we strive to promote the image of Russia as a producer of diverse and high-quality products. For this purpose, the Russian Export Center has launched a program to promote Russian goods and services under a single country brand "Made in Russia". And in this context, Africa is a very important partner for us, though not an easy one.
Currently, the REC Group which includes EXIAR and Roseximbank has developed a comprehensive line of financial and non-financial instruments for the support of Russian companies in foreign markets operating or going to enter the African markets. In my opinion, the key products are financing of goods supplies (including, credits to the buyer or the buyer's bank), insurance of export contracts and international investments, issuance of guarantees.
The potential customers in Africa should be aware that the beneficiaries and consumers of these governments support measures are not just our exporters since we additionally arrange financing for supply of products and take other special support measures which are in fact assumed by the Russian state. Thus, the Russian Export Center aims to reach a mutually beneficial, long-term cooperation with our African partners.
Credit: Kester Kenn Klomegah
The European Commission will advise the leaders of the 27 EU member states meeting at the European Council on December 15 to proceed with the second phase of Brexit negotiations. It judges there has been sufficient progress on the three key issues that it insisted should constitute the first phase of talks. Those are citizens’ rights, the Irish border and the UK’s financial settlement.
That doesn’t mean that a final solution has been achieved on any of these issues – just that there is enough common understanding between the EU27 and the British government to continue to the next phase of negotiations.
So, what next? Expect more of the same: time pressures, a well-choreographed approach from the EU leadership and a weak British government gradually converging with the European position.
Remit of the second phase
Brexiteers may be surprised to find that the second phase of negotiations will not focus on a future trade agreement between the UK and the EU, but on settling the UK’s withdrawal from the EU. Although that Brexit agreement must take into consideration the future EU-UK relationship, including trade.
Solutions will first be needed for the three issues negotiated during the past six months. Michel Barnier, the EU’s Brexit negotiator, has recommended that a strand of these negotiations should focus specifically on the Irish border issue.
On citizens’ rights, there appears to be an overarching agreement between the UK and the European Commission. However, the European Parliament still has concerns about what role the EU Court of Justice will play in dealing with these rights. It also wants greater clarity on whether UK citizens will still be able to move freely in the EU after Brexit, on the process to obtain “settled status” in the UK, as well as whether rights will be extended to the future partners of EU citizens. The European Parliament’s view matters as it has to ratify the eventual Brexit deal. Whether the EU27 incorporate these issues into the phase two negotiating agenda will become clearer at the European Council next week.
The UK’s financial settlement needs to be drawn up during the second phase of the negotiations too. The methodology for working out the final outstanding bill (estimated to be between €40bn to €60bn) has been settled but the final figure and the payment schedule have yet to be agreed.
Another negotiation strand will focus on the British government’s vision for its future relationship with the EU – which has been vague to date. The UK chancellor (finance minister), Philip Hammond, confirmed in early December that the cabinet has not yet discussed the issue. EU officials will want more clarity to ensure that the withdrawal agreement is informed by that future deal – and crucially to decide the terms of any transition period. The UK has requested a two-year transition period during which it will remain part of the single market and customs union.
The Brexit negotiations in phase two will also cover the UK’s withdrawal from Euratom – the European atomic energy community – and any future cooperation on security, defence, foreign policy, terrorism and international crime, as well as the role of the Court of Justice of the EU in the governance of the Brexit agreement.
The clock is ticking
As with the previous phase of the negotiations, the ticking Brexit clock puts pressure particularly on the UK government. There are ten months left to complete the negotiation of the UK’s withdrawal agreement. Michel Barnier has made it clear that this agreement needs to be ready by October 2018 so that it can be ratified by the member states and the European Parliament by 29th March 2019 – the deadline that marks two years since the UK triggered Article 50, giving notice of its intention to withdraw.
It has taken six months to sufficiently converge on three fundamental issues so it is difficult to foresee how the outstanding items, including a vision for the future UK-EU relationship, can be solved within ten months. Article 50 allows for an extension of the negotiation process, that can be agreed between the UK and the EU at any point during the Brexit negotiations. But this in-built flexibility tool will be difficult for the UK government to deploy given its promise to incorporate the time and date of Brexit into the EU Withdrawal Bill.
The UK’s commitment to find a no-border solution on the island of Ireland means that leaving the EU without a deal is no longer an option. Moreover, soft Brexit is the only outcome that can deliver such a solution. The UK has unnecessarily cornered itself into negotiating a Brexit agreement within ten months, so disagreements at home, late-night trips to Brussels and last-minute deals are likely to become the norm.
The Brexit process is not an ordinary international negotiation. Article 50 was designed as a deterrent and once triggered it places the balance of power firmly with the EU. The experience of the past six months illustrates the power asymmetry between the UK and the EU27. The EU27 has maintained a solid, unified voice while earlier concerns about a Bexit domino effect across the continent have been assuaged.
The British government wasted its bargaining advantage by triggering article 50 in March 2017 despite being unprepared for the magnitude of the negotiations ahead. Since then, it has been weakened by a reduced majority in parliament and its dependence on the Northern Irish Democratic Unionist Party and an absence of a concrete vision of its future relationship with the EU.
“The most difficult challenge is still ahead”, European Council president, Donald Tusk, warned referring to the next phase of negotiations. The EU27’s unity will be tested now because national preferences are likely to become more obvious in the next phase. But as has been the case thus far, the pressure – from various conflicting interests – will very much remain on the UK government.
Senegal opens a flagship new airport lastweek, seven years later than originally planned but with ambitions to become a west African regional hub with a capacity for three million passengers.
President Macky Sall will cut the ribbon at Blaise Diagne International Airport (AIBD) at midday (1200 GMT) in the town of Diass, 47 kilometres (29 miles) from the capital of Dakar, while a plane from new airline Air Senegal will make the first symbolic takeoff.
Work began in 2007 on the 645 million-euro ($767 million) airport under former president Abdoulaye Wade, but unforeseen problems and a change of construction company have repeatedly delayed the project and ballooned costs.
Blaise Diagne -- named after the Senegalese MP who was the first African elected to France's parliament -- is at the heart of Sall's "Emerging Senegal" plan, which includes the construction of a new city, Diamniadio, close to the site in Diass. As the country invests more heavily in tourism, Senegal is also betting on the facility's strategic position close to several beach resorts that are already heavily frequented by European holidaymakers.
"The airport will be key in the promotion of 'Destination Senegal'," Prime Minister Mahammed Boun Abdallah Dionne said in a speech on Tuesday, adding that airport services at the site would contribute to the development of the special economic zone nearby.
With a capacity of three million passengers, Blaise Diagne will still rank far below the busiest African airports and a long way off challenging Nigeria in the west African region, though plans for up to 10 million travellers are in the pipeline, according to officials.
- Uncertainty for new airline -
Passenger numbers have increased in recent years at Dakar's current airport in the middle of the city, leading to long waits at security and contributing to chronic traffic jams, and the old Leopold Sedar Senghor airport will become a military airfield from Friday.
The new airport boasts six footbridges direct to flight cabins, and will be able to service a range of aircraft including Airbus's massive A380s.
Work was completed on the 4,500-hectare site -- with 2,000 hectares unused in case of required expansion -- by Turkish consortium Summa-Limak after a disagreement with Saudi Arabia's Bin Laden construction derailed the final stage of preparations. But bets on whether Blaise Diagne would open on time have lasted until the last minute amid complaints by major European airlines over fuel capacity and regulations.
Summa-Limak will now operate the airport for the next 25 years, furthering ever-closer economic ties between Ankara and Dakar.
A train linking the airport with the city is not expected to open for years, leaving taxi drivers in pocket but ordinary travellers nervous of arriving on time for flights in a city with unpredictable traffic.
Backed by loans from France's development agency the African Development Bank (ADB), the West African Development Bank (BOAD) and Islamic lender the Islamic Development Bank (IDB), officials are celebrating the airport's completion -- but the future of Senegal's new airline is less certain.
Air Senegal still does not have all the licences required to begin commercial flights and has a fleet of just two ATR 72-600s, but Aviation Minister Maimouna Ndoye Seck said international ambitions for the airport meant a well-performing national airline was "a necessity".
The Square Kilometre Array (SKA) is the world’s largest radio telescope project, which will collect data over one million square kilometres from radio astronomy telescopes on the African and Australian continents. In the long run the two-phased SKA could possibly help scientists answer questions in astrophysics, cosmology and fundamental physics.
Phase one of the project entailed setting radio telescopes in South Africa and Australia. Phase two will include more telescopes being added by partner countries, New Zealand and the eight African countries namely: Botswana, Ghana, Kenya, Mauritius, Madagascar, Mozambique, Namibia and Zambia. The full array should be up and running by 2030, but the first phase is expected to be operational by 2023. The launch of Ghana’s radio telescope is a critical part of this process. Dr Bernard Duah Asabere explained its significance.
How did Ghana get involved in the project and how does it fit in?
Ghana has had a redundant satellite communication antenna in Kutunse – a suburb 25 kilometres north-west of the capital, Accra.
Between 2011 and 2017 this antenna has been undergoing refurbishment for use as a radio astronomy telescope. At the end of the first engineering phase, the refurbished telescope is capable of participating in global network observations using a technique known as Very Long Baseline Interferometry (VLBI). It also be used in single dish or standalone operational mode.
Interferometry is a technique in which collections of telescopes scattered over a large area function as a single radio telescope. The Very Long Baseline Interferometry technique is most well-known for:
imaging distant cosmic radio sources,
tracking spacecraft, and
for applications in astrometry.
But the technique can also measure the time differences between the arrival of radio waves from separate antennas to the same source in the sky. This helps astronomers get a better image resolution of an object or a region in the universe.
Put simply, if different telescopes at different locations are all tuned to observe the same source in the sky at the same time, astronomers can get fine details of the specific object being observed.
The countries that make up the African SKA project are each building their own radio telescopes or converting redundant telecommunication dishes so that they function as a network known as the African VLBI Network (AVN).
Ghana now becomes the first country in the African SKA partners besides South Africa to have a telecommunication antenna converted to realise the African VLBI Network. With Ghana’s telescope now operational, it means that South Africa and Ghana will be able to do joint observations. When the other seven African SKA partner countries get theirs ready, they will join the African’s network.
Kenya, Mozambique and Zambia are contending to add the next telescope to the network.
How did we know the Ghanaian telescope was ready and what will it do?
Across the globe there are several very long base interferometry networks: Europe has one, as does Australia and America. Any telescope across the world is able to join an observation in one of these networks.
After Ghana re-engineered the antenna into a functional radio astronomy telescope, it needed to do a science commissioning of the facility to see if the refurbishment was successful and it could track and observe astronomical sources in the sky and join international observations.
When Ghana tested its telescope it was able to detect methanol masers, observe pulsars and also succeeded in participating in an observation with 15 other telescopes which form part of the European very long base interferometry network.
Until now South Africa has been the only country on the continent that had been joining in VLBI observations with other countries’ networks because it was the only country with a radio telescope on the continent.
With radio telescopes in Ghana and South Africa, an African network is now given birth to. Aside being a part of the African network, Ghana could join other telescopes on the globe to do science observations.
What is the significance of Ghana’s telescope for astronomy in Africa?
There are many celestial objects to observe in the Universe: planets, masers, galaxies, meteorites, stars and even regions in the sky. And there are global questions that astronomy community is interested in addressing. This includes questions like: is there any life outside earth? Are there other stars that are as prominent as the sun? How did the universe come into being? These are questions that the SKA will attempt to address.
If Africa has its own network, astronomers on the continent can choose what celestial objects and regions it wants to observe.
If we look at most of the existing telescopes across the world, there has been a hole in Africa. Telescopes situated in the Northern hemisphere are unable to see the region of the sky in the southern hemisphere. With an African very long base interferometry network set up, astronomers in Africa can now observe both the northern and southern hemispheres of the sky from the continent.
What is Ghana bringing to the party and what does it hope to get out of this SKA collaboration?
The facility at Kutunse will be used as a science instrument but also as a training facility. Ghana will help the other seven countries that form part of the African network refurbish their unused antennae.
Although this technology is not new and has been done in Australia, Peru, Japan and the UK, no other country in Africa has done this.
For Ghana, developing the skills, regulations and institutional capacity in the partner countries is a vital part of building the square kilometre array on the continent over the next decade. This is because it will optimise African participation in the SKA.
Ghana will build it robust research community in a field never before accessible to the country.
But there is also the prospect of improving the radio astronomy capacity in the country. Ghana’s radio astronomy development strategy forms part of the broader Ghana Science, Technology and Innovation Development Plan.