A Comparison Of The Economies And Transport Infrastructure In Congo-Kinshasa And Sweden

Economy of Congo-Kinshasa

Question:

Discuss about the Illegal logging in the Republic of Congo.

Congo-Kinshasa, which is the capital of the Democratic Republic of Congo, was the second industrially developed country in Africa, after South Africa, during its independence in 1960 (Thomas and Winkler). It was characterized with a thriving mining sector along with a relatively productive agricultural sector. It is a sparsely populated compared to its area and is a home for a vast number of natural and mineral resources. It is characterized with deposits of raw minerals, having an estimated worth of US$24 Trillion (McKnight). Therefore, this country has a history of trading in various raw minerals, by way of mining products, but it has significantly fallen since 1980s due to corruption, politics and war, making it a country today, having a the lowest per capita GDP in the world. 

In Sweden, traditionally, there was pursuance of a free trade policy. Sweden was actively dependent on international trade, which has played significant role in uplifting the development pattern in order to promote high standard of living. The accessibility to overseas markets has enabled the industries to expand and specialize. The liberal trade policies in Sweden had led to promoted imports, competitions and structural change. In 1995, Sweden’s joining of the European Union marked an important step in the Swedish post-war history (Samuelsson and Joakim). 

In social context Congo Kinshasa has faced highest incidences of poverty in recent trends however the incidence of poverty is higher compared to other central African countries. According to recent reports the DRC has a large population of about 65.7 million in 2012 however it has been observed that high population growth rate of 2.7% will intensify the prevailing social conditions (Pritzkow et al.).According to the estimation of the World Bank, approximately 50 million live in Congo-Kinshasa on less than US$1.25 a day (Njuguna). The issue of poverty has proved to be a major weakness in improving the social conditions of the Congo-Kinshasa and in recent trends with the growing population the issue of poverty is ever increasing.

The DRC had faced various political conflicts in the 1990s, leading to a protracted social and economic slump. Efforts have been made for defusing the political crisis by the Government. One of these efforts has been in the form of an agreement, signed on 31^st December, 2016, which provides for a transition period in which powers will be held jointly by the President and the opposition, until the presidential elections in 2017 (Ali, et al.). The agreement also stipulates that the president cannot seek a third term and the change in the Constitution cannot be attempted. But, the agreement was not entered into and the 2017 elections got delayed as the revision of the electoral register was not complete (Samuelsson and Wendell). The political conflicts in the Congo-Kinshasa created hurdles in economic development of the country. Due to political conflicts several projects are awaiting approval and due to this reason the organizational growth of the country is lacking behind. This has proved to be a major weakness to the regions of Congo-Kinshasa.

Economy of Sweden

 In the economical context, DRC has the lowest GDP rate since 2001 due to the declining prices and the shrinking global demand in raw materials. The DRC also lacks access to democratic and international financial markets and has faced a drastic reduction in public finance in 2015 and 2016 (Nicolas et al.). Currently, the Government has launched many reforms and signed various contracts which are accessible to the public, along with participation in the Extractive Industries Transparency Initiative (EITI).

Sweden as a developed country has been considered of having the best and the most equal standards of living in the world. In the beginning the country had a very low unemployment rate, which gradually increased in recent trends, affecting large group of people having low qualifications and immigrants. Moreover, Sweden has a comparatively better labor market and the liberal legislations regarding immigrants give access to the foreigners into the Swedish labor market (Munemo). The access to foreigners has been considered as a major strength as it increased employment opportunities for employment opportunities.

The current Swedish political scene is dominated by the two biggest political parties: Social Democratic Party and Modern Party. For two centuries, the foreign policy of Sweden has been based on the principle of non-alignment and neutrality. Moreover, Sweden has been actively involved in various humanitarian actions along with memberships in many international organizations like WTO and OECD. Sweden is one of the few countries which were able to meet UN’s aid target of 0.7% of GNI and the largest contributor to the UN (Potter, Dawson and Frierson). These factors can be considered as strength of the country as it involved in the development of various humanitarian activities worldwide.

Economically, Sweden has one of the healthiest economies in EU at present and the 5th largest GDP per capita. The Swedish Government’s reforms and responsible fiscal policy was the reason of Sweden’s recovery from the economic crisis in 2008-2009 (Pritzkow et al.). The revenues are usually high and in the last few years it has been exceeding 50% of GDP. The Swedish economy is export oriented and produces more than 50% of the GDP (Lawson). Sweden being a developed country is economically stable and from the very beginning its major strength was that it has an open economy. 

Congo- Kinshasa, the capital of DRC is situated by the Congo River Basin, which has been covering an area of almost 1,000,000 square kilometers. The country has its only outlet to the Atlantic Ocean in the form of a various terror strip of land on the north bank of the Congo River (Anderton, Brenton and Oscarsson). There is a vast, low-lying central area, which is a plateau shaped-shaped sloping towards the west and is covered by tropical rainforest and crossed by rivers. In the west the centre of the forest is surrounded by mountainous terraces in the west and plateaus merging into the savannahs in the south and the south-west (Potter, Dawson, and Frierson). Dense grasslands are found beyond the Congo River in the north and in the eastern border the mountains of Ruwenzori range are found along with Rwanda and Uganda.

Transport Infrastructure in Congo-Kinshasa

Sweden is situated on the Scandinavian Peninsula in the Northern Europe. Sweden has a geographic feature which includes deep coastline on the eastern side along with the Scandinavian mountain chain on its western boundary, which has been separating Sweden from Norway. Sweden has maritime borders with countries like Denmark, Poland, Lithuania, Germany, Russia, Latvia and Estonia and which are linked to Denmark by the Oresund Bridge (Pritzkow, et al). Sweden being a developed country is the 56^th largest country in the world and the fifth largest in Europe and Northern Europe (Ali et al.).

In the Congo-Kinshasa, ground transport has always been challenging as the topography and humidity of the Congo basin acted as serious obstacles to rail and road constructions. Furthermore, the chronic mismanagement and internal conflict has also led to serious under-investment over many years. Congo comprises of thousands of navigable waterways and traditionally it has been effective means of transport in travelling around the country. The most effective means of transport is by air for moving within the country. Air transport is used to move freight and personnel as well (Ali, et al.).

The transport infrastructure of Sweden is marginally above the EU average for roads, airports and ports however in case of railroad infrastructure it and is below EU average. Sweden is the second best country in EU in relation to the timeliness shipments and its TEN-T Core Network for inland waterways has been complete and 50% of the Core road and conventional rail networks has also been complete (Odolinski and Jan-Eric). 

The DRC has been considered as the 102nd largest export economy in the world and exported about $5.69B and imported $5.64B in 2015, resulting in a positive trade balance of $47.5M. In 2015 it was observed that the GDP of the Democratic Republic of the Congo was $35.2B however its GDP per capita was $784 as well (Cathey, Hong and Pak). As to the top exports, there are refined copper ($2.67B), copper ore ($376M), cobalt ($755M), Cobalt ore ($666M), Hydroxides ($302M) and cobalt oxides (Charlesworth). The top imports of Congo-Kinshasa included Packaged Medicaments ($227), Refined Petroleum ($207M), Delivery trucks ($114M) Human/Animal blood ($155M) and Excavation machinery ($113M) (Cathey, Keejae and Simon).

In the world economy Sweden is the 26^th largest export. According to reports, in 2016, Sweden exported $135B and imported $139B which resulted in a negative trade balance of $4.24B. The top exports of Sweden are Refined Petroleum ($6.4B), Packaged Medicaments ($5.56B) Telephones ($3.6B), Cars ($7.42B) and Vehicle Parts ($5.01B) (Odolinski, Kristofer, and Nilsson). In 2016 Sweden imported $139B however during the last five years the imports of Sweden have increased considerably to a rate of 1.88%, from $167B in 2011 to $139B in 2016.

Transport Infrastructure in Sweden

As mentioned earlier, in Congo, the ground transport has been really weak and hence, trade is not done by rail or road. But due to navigable waterways across two third of the country, trade is done by using these water ways to some extent. But air transport is the mostly used transport in Congo and the transport of minerals and those with high value of weight is also carried out by air (Nikis, et al). Some parts of DRC are more accessible from the neighboring countries than Kinshasa, for example the north eastern towns are linked by way of paved roads, in which the goods are brought in by using this route.

The Swedish used the Volga trade route, which was an ancient trade route. It created a link between the Scandinavia Kievan Rus and the Eastern Roman Empire. This route provided opportunities for traders in establishing a direct fortunate trade with the Empire. The bulk of this route encompasses of long distance waterways that included the Baltic Sea, several rivers as well as the rivers of Dnieper river system, with portages and drainage divides (Muyingi). There is a different route along the Dniester River, which pauses on the Shore of the Black sea (Charlesworth). These are the routes which are used by the Swedish along with some sub routes, indicated as the Dnieper trade route and Dniester trade route, respectively.

Sweden being a developed country the economic development is based upon export-oriented economy with the help of hydro-power, iron ore and timber. Being a developed country Sweden occupies the position of the 26^th largest export economy in the world (Yun). In this regard it can be stated that the process of export and import is basically long which in general increases the risk of perishable goods (Pritzkow et al.). The top export destinations of Sweden are Denmark, Norway, Germany and Finland whereas the import origins are China, Belgium, Germany and Netherlands (Winkler). The product which must be used within a short span of time is termed as perishable goods. The time span for the process of import and export is quite lengthy and time consuming and sometimes results in loss if perishable goods are shipped.

The Congo-Kinshasa or the Democratic Republic of the Congo being a developing country is the 102^nd largest exporter in the world. Since time immemorial it has been exporting cobalt and copper ore however the top imports are human and animal blood and refined petroleum (Francois and Olga). It is obvious that from the very beginning the top export destinations of the Congo-Kinshasa China, Saudi Arabia and Zambia while the import origins are India, South Africa and China. In this regard it is noteworthy to mention that the process of import and export is very time consuming. Tariffs are collected on all the imported and exported goods and therefore in case of perishable goods the time span is longer.

In case of Sweden the process of import and export takes place with the aid of shipping. However in some cases goods are exported by road and by air. It has been observed that due to the process of transfer of goods by road several hindrances were faced. There were chances that overload trucks could lead to accidents and in such cases the exporting country will be subjected to huge loss (Baaz et al.). In his regard it can be mentioned that the export and import of goods by road is extremely time consuming and delays the procedure of export and import.

Being a developing country Congo-Kinshasa has often faced serious issues while importing and exporting perishable and other goods. In this regard it can be seen that goods are mainly transported by air, water and by roads. Since safety issues are associated with the transportation of goods the country from the very beginning focused on the fact that airplanes and trucks should not be over-jacked (Muyingi). Since Congo-Kinshasa is a developing country it is not well consistent with the transport mediums and therefore the process of export and import is inefficient (Munemo). 

Sweden being a developed country has a documentation procedure for import and export. Sanitary certificates are required in case of commodities that are composed of animal products and by-products. Single Administrative Document (SAD) is required for movement of goods across the world which is an essential factor for transport of goods outside EU (Jack, Hong and Pak). It can be stated that Sweden does not impose any quota on the products manufactured outside its jurisdiction (Munemo). In this regard it can be mentioned that import documents acts significantly in these matters.

In case of Congo-Kinshasa documents related to declaration of custom and other documentations are required on every export and import of goods. Various custom agencies like DGDA and OCC work closely in these matters. It is essential that exporters must provide BIVAC with the invoice which contains the description of goods that has to be shipped along with a statement accepting such inspection (Njuguna). It is required that the original invoice and the list of goods must contain the net weight, quantity along with the dimension of each packet of goods that has to be exported (Lawson). In this regard it is noteworthy to mention that the original invoice along with the other documents must be verified and duly signed and at the same time attested by the Ministry of Commerce in Congo-Kinshasa (Muyingi). These documents can be obtained easily however the delivery of the goods usually takes a long time.

A trade facilitation roadmap can be defined as the short comprehensive document which contains the strategic vision towards trade facilitation reforms by identifying the milestones required in order to achieve those within a limited period of time. In this regard Sweden being a developed country is still growing. Sweden and Germany is known to be major trading partners in the world economy (Sällh et al.). A forum of negotiations, rules and regulations regarding trade disputes with the member countries has been set up by the World Trade Organization (WTO). Issues regarding trade disputes are usually discussed in the trade facilities of WTO.

In case of Congo-Kinshasa being a developing country, the transport system can be improved. Various safety measures should be developed in this regard. With the recent development in technology larger road vehicles has been manufactured for the purpose of exporting and importing goods (Lawson). For the purpose of devising new solutions there must be an implementation of new trade policy framework along with the implementation of new action plan for roadmap (McKnight). It can be stated that if the facilities of trade is improved in such country then in the future it may result into speedy transfer of goods within a short span of time. Improvement of safety measures is important in order to reduce chances of high jacking in the long run. Port facilities and services have been provided. In order to remove hindrances in the way of import and export procedures transit port has been introduced.

Sweden being a developed country needs improvement in areas of import and export. The process of communication among the importers and exporters should be improved during the import and export of various goods. The introduction of different vehicles in order to ensure the effective working of the process of import and export should be enhanced (Sällh et al). In order to create better relationship with the European Countries Sweden must strengthen its Union territories in order to ensure better ties with the regional countries (Yun). In order to solve issues with the regional countries it is required to introduce trade facilitation solution.

In order to strengthen trade facilitation in Congo-Kinshasa the Custom Reform must adopt certain rules and regulations. The department of human resource management in the Democratic Republic of the Congo Customs should develop sustainable employment in higher level for the benefits of economic growth in the future (Samuelsson and Wendell). The Democratic Republic of the Congo is available for international trade and has been successful in providing employment opportunities to people for future development (Sällh et al.). In order to receive more opportunities from international trade structure Congo-Kinshasa must focus on widening its export base in the long term.

In order to implement provisions of the members of the World Trade Organization the developed countries requires assistance of the WTO who has introduced the Trade Facilitation Agreement for the purpose of this achievement (Lawson). Trade Facilitation Agreement can be defined as a draft made between the members of wealthier nations and poor nations. In this regard it is noteworthy to mention here that Sweden being a developed nation is wealthier as it facilitated the trade agreement (Charlesworth). Various international organizations has been set up in order to facilitate the formation and implementation of trade agreement.

Congo-Kinshasa being a developing country is well assisted by the facilities of trade Facilitation Agreement (Pritzkow et al.). The draft of the agreement was prepared with an intention to protect the trade interests of different nations in the process of export and import (Njuguna).  However it is necessary that developing countries like Congo-Kinshasa should act according to the provisions of the Trade Facilitation Agreement. 

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