Inter Press ServiceEconomy & Trade – Inter Press Service http://www.ipsnews.net News and Views from the Global South Wed, 19 Sep 2018 14:09:38 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.7 The Cambodian Port City on China’s 21st Century Silk Road That’s Becoming the New Macauhttp://www.ipsnews.net/2018/09/cambodian-port-city-chinas-21st-century-silk-road-thats-becoming-new-macau/?utm_source=rss&utm_medium=rss&utm_campaign=cambodian-port-city-chinas-21st-century-silk-road-thats-becoming-new-macau http://www.ipsnews.net/2018/09/cambodian-port-city-chinas-21st-century-silk-road-thats-becoming-new-macau/#respond Wed, 19 Sep 2018 10:17:25 +0000 Kris Janssens http://www.ipsnews.net/?p=157639 Kris Janssens is a Belgian reporter based in Phnom Penh, Cambodia. His goal is to tell extraordinary stories about ordinary people throughout Southeast Asia.

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The little shop owned by Leean Saan, close the monument with the lions. "Business is going down, Chinese people don't buy from me," she says. Credit: Kris Janssens/IPS

By Kris Janssens
SIHANOUKVILLE, Cambodia, Sep 19 2018 (IPS)

The new Macau. That’s what the Cambodian coastal city Sihanoukville is called nowadays. Chinese investors are building casinos there on a massive scale.

The southern port city lies on the new Silk Road (the so called ‘One Belt, One Road’) and is therefore interesting for China.

The Cambodian government is happy to accept the money. And Beijing never asks difficult questions.

“Things are happening so fast in Sihanoukville; the city has changed completely in only a few months time,” a friend tells me.

My last visit there was in December.

And so I wanted to see these ‘spectacular changes’ with my own eyes.

My friend was right. When you enter the city, you see casinos everywhere. There could be about a hundred by now, and new ones are constantly being built. Some of them are big showy palaces, but there are also obscure gambling houses.

Alongside those casinos you still find the typical Cambodian shops, where people drink tea and where food is skewered and cooked on the barbecue.

Tourists at the beach enjoy their cocktails or take a dip in the gulf of Thailand.

But all those elements are in disharmony with one another.

There is clearly no urban planning here.

It seems the builders got carte blanche to satisfy the hunger for gambling.

Gaudy lions

The statue of two golden lions, at a roundabout close to the sea, is a beacon in the city. Leean Saan (76) has a tiny little shop close to the lions. She sells soda water, cigarettes and fuel for motorbikes.

Ten years ago, when the tourists came, she started selling drinks. “But the business is going down,” she says. “There are more and more Chinese people and they don’t buy in my shop.”

“They are gangsters!” says a tuk-tuk driver who comes to buy fuel. “They promise for example to pay three dollars, but when we get to the destination they only give two. And when I complain, they threaten me with violence. They always travel in groups, so they feel superior.”

Making good money

I walk down the street and see some Cambodian youngsters who are queuing to buy coffee. They are more positive about the recent developments.

Rath (22) has been working for five years as a receptionist in a hotel casino. “My first salary was 80 dollars a month. Two years ago it was raised to 200 dollars and since last year I make 500 dollars a month. They need experienced staff.”

But there is a flip side to the coin: prices have gone up in a short period of time. “I used to pay 30 dollars a month to rent a room, nowadays they ask up to 250. But at the end of the day I still earn more than before.”

O Fortuna

It is time to get an inside look into one of those casinos, ‘Golden Sand’. I am the only white person and the security staff watches me closely.

At the entrance of the hall the song ‘O Fortuna’ taken from ‘Carmina Burana’ is being played repeatedly. A screen shows an animated movie with Chinese dragons and philosophers.

The game room is big but feels cold, in spite of the wall-to-wall carpet and the leather and fabric seats. There are Chinese wall ornaments.

Croupiers in red costumes are sitting at big card tables. You see a lot of security agents here as well. Young girls in blue outfits wander down the hall carrying fly swatters to kill annoying insects.

Remarkable: Cambodians are not allowed to gamble, by law. So all customers are Chinese.

Also remarkable: they don’t come dressed in suits and ties, but are dressed in shorts and t-shirts.

“Most customers here are builders,” says Wu, who works himself at one of the numerous construction sites in Sihanoukville. “They come here to spend the money they just earned.”

Wu is here for six months. He earns 700 dollars a month. He could make as much money in China, but here he has more job security.

Recruiting

Srun (28) works as a recruiter. He’s Cambodian but has Chinese roots and works as a tour guide for Chinese tourists. “They often asked me where they could go to gamble.” So Srun went to talk to several casino managers and he has an agreement to work on commission.

“You have to talk face to face to Chinese people,” he says. “I understand some Cambodians think they are gangsters, because they always talk so loudly. But that is simply their way of negotiating.”

Srun gets one percent of the money customers spend on gambling. “That doesn’t seem much, but in some cases we are talking about 10,000 dollars for a group of four people. The casino opens a special VIP-room and I get a 100 dollars.”

Rental prices

It is lunchtime. I decide to go for a noodle soup in a…Chinese restaurant.

“We only have Chinese people,” says manager Zong, “I don’t even speak Khmer.” She followed her husband about one year ago, coming from Hangzhou, in the eastern part of China. “Customers pay about seven times more here for the same dish. So the decision was easily made.”

She pays 3,000 dollars in rent for her restaurant. “That’s a lot of money, but it still is an interesting deal. That also goes for the owner. He could never get this amount of money from locals. So everyone is satisfied.”

This house owner is actively helping the Chinese settlement in Sihanoukville. His fellow citizens, who might have been born here, have no other option than to leave the city and try to find affordable business premises elsewhere.

As long as money talks here, the Chinese population will continue to grow.

Maybe I should make the same trip in another six months from now, to document the new changes to this area.

*The views expressed in this article are the author’s own and do not necessarily reflect those of IPS. 

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Excerpt:

Kris Janssens is a Belgian reporter based in Phnom Penh, Cambodia. His goal is to tell extraordinary stories about ordinary people throughout Southeast Asia.

The post The Cambodian Port City on China’s 21st Century Silk Road That’s Becoming the New Macau appeared first on Inter Press Service.

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Another global financial crisis for developing countries?http://www.ipsnews.net/2018/09/another-global-financial-crisis-developing-countries/?utm_source=rss&utm_medium=rss&utm_campaign=another-global-financial-crisis-developing-countries http://www.ipsnews.net/2018/09/another-global-financial-crisis-developing-countries/#respond Tue, 18 Sep 2018 09:05:35 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=157656 George Soros, Bill Gates and other pundits have been predicting another financial crisis. In their recent book, Revolution Required: The Ticking Bombs of the G7 Model, Peter Dittus and Herve Hamoun, former senior officials of the Bank of International Settlements, warned of ‘ticking time bombs’ in the global financial system waiting to explode, mainly due […]

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By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY & KUALA LUMPUR, Sep 18 2018 (IPS)

George Soros, Bill Gates and other pundits have been predicting another financial crisis. In their recent book, Revolution Required: The Ticking Bombs of the G7 Model, Peter Dittus and Herve Hamoun, former senior officials of the Bank of International Settlements, warned of ‘ticking time bombs’ in the global financial system waiting to explode, mainly due to the policies of major developed countries.

Anis Chowdhury

Recent events vindicate such fears. Many emerging market currencies have come under considerable pressure, with the Indonesian rupiah, Indian rupee and South African rand all struggling since early this year. Brazil’s real fell sharply in June, and Argentina has failed to stabilize its peso despite seeking IMF aid. As Turkey struggles to stabilize its lira, many European banks’ exposure has heightened fears of another global financial crisis.

Why the vulnerability?
Some fundamental weaknesses are at the core of this vulnerability. These include the international financial ‘non-system’ since the collapse of the Bretton Woods system in 1971, and continuing to use the US dollar as the main international reserve currency.

This burdens deficit countries vis-à-vis surplus countries and ensures near-universal vulnerability to US monetary policy. Thus, most countries accumulate dollars as a precaution, i.e., for ‘protection’, eschewing other options, such as investing in socially desirable projects.

Policy makers not only failed to address these weaknesses following the 2008-2009 global financial crisis (GFC), but also compounded other problems. Having eschewed stronger, more sustained fiscal policy interventions, monetary policy virtually became the sole policy instrument. Major central banks, led by the US Federal Reserve, embarked on ‘unconventional monetary policies’, pushing real interest rates down, even into negative territory.

Jomo Kwame Sundaram

Emerging and developing economies (EDEs) offering higher returns temporarily experienced large short-term capital inflows. The external debt of emerging market economies has grown to over $40 trillion since the GFC. The combined debt of 26 large emerging markets rose from 148% of gross domestic product (GDP) at the end of 2008 to 211% in September 2017, according to the Institute of International Finance (IIF).

Easy money raised household and corporate debt, fuelling property and financial asset price bubbles. According to the International Monetary Fund (IMF) April 2018 Fiscal Monitor, global debt peaked at $164 trillion in 2016, or 225% of global GDP, compared to 125% before the GFC. The IIF reported that global debt rose to over $247 trillion in early 2018, i.e., equivalent to 318% of GDP.

Rising debt levels pose serious downside risks for the global economy. With easy money coming to an end, as the Fed continues to ‘normalize’ monetary policy by raising the policy interest rate, capital flight to the US is undermining emerging market currencies. When debt defaults increase with interest rates while income growth remains subdued, the world becomes more vulnerable to financial crisis.

Diminished capacities
Both developed and developing countries have less policy space than during the GFC. Most governments are saddled with more debt following massive financial bail outs followed by abandonment of efforts to sustain robust recovery.

According to the IMF’s April 2018 Fiscal Monitor, average public debt of advanced economies was 105% of GDP in 2017, constraining fiscal capacity to respond to crisis. Meanwhile, monetary policy options are exhausted after a decade of ‘unconventional’ monetary policies.

General government debt-to-GDP ratios in emerging market and middle-income economies almost reached 50% in 2017 — a level only seen during the 1980s’ debt crisis. The 2017 ratio exceeded 40% in low-income developing countries, climbing by more than ten percentage points since 2012.

Playing With Fire
by Yilmaz Akyuz, former South Centre chief economist, has highlighted the self-inflicted vulnerabilities of developing countries. Public debt-GDP ratios in EDEs are likely to rise due to falling commodity prices and stagnant global trade, while they have almost no monetary policy independence due to deeper global financial integration.

Weaker global growth
While corporate sectors have been busy with mergers, acquisitions and share buybacks with cheap credit, instead of investing in the real economy, the financial sector has successfully portrayed sovereign debt as ‘public enemy number one’.

Held hostage to finance capital, governments around the world have wasted the opportunity to improve productive capacities by investing in infrastructure and social goods when real interest rates were at historic lows. At around 24% of global GDP, the global investment rate remains below the pre-crisis level of around 27%, with investment rates in EDEs either declining or stagnant since 2010.

Failure to address the falling wages’ share of GDP, rising executive pay and asset price bubbles, due to ‘easy’ monetary policy, have continued to worsen growing income inequality and wealth concentration. Meanwhile, deep cuts in government spending and public services, while reducing top tax rates, cause anger and resentment, often blamed on ‘the other’, contributing to the spread of ‘ethno-populism’.

In turn, growing inequality limits aggregate demand, which has been maintained by unsustainably raising household debt, i.e., perverse ‘financial inclusion’.

Perfect storm?
Turbulence in currency markets is due to developing countries’ limited economic policy space. A decade after the GFC, developing countries still experience lower growth and investment rates.

Financial sectors of emerging market economies now have more and deeper links with international financial markets, also reflected in high foreign ownership of stocks and government bonds, with large sudden capital outflows causing financial crises.

Meanwhile, recent commodity price drops have accelerated the rising indebtedness of low-income countries. According to the IMF, 24 out of 60 (40%) are now either already facing debt crises or are highly vulnerable—twice as many as five years ago, with a few already seeking Fund bail-outs.

The problem is compounded by declining concessional aid from OECD countries. Also, more creditors are not part of the Paris Club, obliged to deal with sovereign debt on less onerous terms. Meanwhile, growing trade and currency conflicts are worsening the woes of those already worse-off.

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Crisis Drives Nicaragua to an Economic and Social Precipicehttp://www.ipsnews.net/2018/09/crisis-drives-nicaragua-economic-social-precipice/?utm_source=rss&utm_medium=rss&utm_campaign=crisis-drives-nicaragua-economic-social-precipice http://www.ipsnews.net/2018/09/crisis-drives-nicaragua-economic-social-precipice/#respond Mon, 17 Sep 2018 18:07:02 +0000 Jose Adan Silva http://www.ipsnews.net/?p=157649 Five months after the outbreak of mass protests in Nicaragua, in addition to the more than 300 deaths, the crisis has had visible consequences in terms of increased poverty and migration, as well as the international isolation of the government and a wave of repression that continues unabated. Álvaro Leiva, director of the non-governmental Nicaraguan […]

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The Causes Behind Africa’s Digital Gender Dividehttp://www.ipsnews.net/2018/09/causes-behind-africas-digital-gender-divide-2/?utm_source=rss&utm_medium=rss&utm_campaign=causes-behind-africas-digital-gender-divide-2 http://www.ipsnews.net/2018/09/causes-behind-africas-digital-gender-divide-2/#respond Fri, 14 Sep 2018 16:00:10 +0000 IPS World Desk http://www.ipsnews.net/?p=157628 Systemic inequalities based on gender, race, income and geography are mirrored in the digital realm and leave many women, especially the poor and the rural, trailing behind Africa’s tech transformation.  

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Systemic inequalities based on gender, race, income and geography are mirrored in the digital realm and leave many women, especially the poor and the rural, trailing behind Africa’s tech transformation.

By IPS World Desk
MAPUTO, Sep 14 2018 (IPS)

Systemic inequalities based on gender, race, income and geography are mirrored in the digital realm and leave many women, especially the poor and the rural, trailing behind Africa’s tech transformation.

 

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South-South Cooperation in a Transformative Erahttp://www.ipsnews.net/2018/09/south-south-cooperation-transformative-era/?utm_source=rss&utm_medium=rss&utm_campaign=south-south-cooperation-transformative-era http://www.ipsnews.net/2018/09/south-south-cooperation-transformative-era/#respond Thu, 13 Sep 2018 07:11:58 +0000 Jorge Chediek http://www.ipsnews.net/?p=157594 Jorge Chediek is Director, UN Office of South-South Cooperation (UNOSSC) and Envoy of the Secretary-General on South-South Cooperation.

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Jorge Chediek is Director, UN Office of South-South Cooperation (UNOSSC) and Envoy of the Secretary-General on South-South Cooperation.

By Jorge Chediek
UNITED NATIONS, Sep 13 2018 (IPS)

On 12 September, the international community commemorated the UN Day for South-South Cooperation. This is an important acknowledgement of the contributions of Southern partnerships in addressing the many development challenges that confront the international community, such as poverty, climate change, inequality, contagious diseases and humanitarian crises.

Jorge Chediek

South-South cooperation is a unique arrangement where two or more developing countries share technical skills, exchange knowledge, transfer technologies, and provide financial assistance. These collaborations are built on the principles of solidarity, respect for national sovereignty, non-conditionality, national ownership, and mutual respect.

This year’s commemoration was particularly significant, as it marked the fortieth anniversary of an important milestone in international cooperation – the adoption of the Buenos Aires Plan of Action for Technical Cooperation Amongst Developing Countries (BAPA). BAPA institutionalized cooperation amongst developing countries, creating a strategic framework for furthering cooperation in technical and economic areas.

But cooperation amongst developing countries did not begin forty years ago – it traces its origins to the anti-colonial solidarity movement of the twentieth century. The practice gained further popularity in the 1950’s and 1970’s as newly independent States with limited capacities looked for independent ways to accelerate their development, away from the Cold War dichotomy of the day.

Forty years after the adoption of BAPA, the international system is undergoing a major systemic transformation, with new pillars of growth and influence emerging from the global South. Through collective voice and action, developing countries are actively contributing to the building of a more prosperous and peaceful world.

Developing countries today account for the largest share of global economic output and are playing an active, constructive role in traditional institutions of global governance as well as creating new institutions that are Southern-led.

In a noteworthy trend, development solutions increasingly originate from developing countries themselves. Harnessing the abundance of innovative solutions, brought about by its economic growth and advances in technical competencies, the global South now charts its own unique development path.

Developing countries are now drivers of innovation in ICT, renewable technologies, infrastructure development and social welfare. Pooled medical procurement is lowering costs and increasing access to life saving medicines. Southern-led mediation mechanisms for conflict prevention continue to prove especially effective in reducing violent conflicts.

Technical cooperation in agriculture is greatly improving the yields in agricultural output. Transfer of technologies and vast interregional infrastructure investments are facilitating access to international markets for medium and small-scale enterprises.

Southern-based centres of excellence and knowledge hubs have become key vehicles for promoting mutual learning, leading to reduction of poverty and the growth of an emerging middle class.

With this newly formed confidence, the global South progressively looks within itself for ideas, knowledge and skills for tackling many of its common challenges. This enhances its national and collective self-reliance, a major objective of BAPA.

As the capacities of developing countries have improved, there has been a corresponding expansion of the scope of South-South cooperation beyond technical cooperation to other areas. South-South cooperation today includes, amongst other instruments, technological transfers, knowledge exchanges, financial assistance, technical assistance as well as concessional loans.

As a consequence, interregional forums and summits for dialogue amongst developing countries have become an important platform for enhancing South-South policy coordination, launching joint initiatives, and committing resources for infrastructure development, trade and investments – vital for ensuring sustainable development.

Triangular cooperation – Southern-driven partnerships between two or more developing countries, supported by developed countries or multilateral organizations – is increasingly playing a role to ensure equity in partnership and scaling up of success.

In light of this, the United Nations General Assembly has decided to commemorate the fortieth anniversary of the adoption of BAPA by convening a High-level conference (BAPA+40) to be held from 19-21 March 2019 in Buenos Aires, Argentina. BAPA+40 provides a great opportunity for the international community to further strengthen and invigorate cooperation amongst developing countries.

Although great strides have been made by developing countries in improving the living conditions of millions of its people, complex development challenges still persist. Global economic transformations and its corresponding consequences on production patterns present a particular challenge to developing countries.

Automation poses a great risk to job creation in the South; climate change has particularly adverse effects on Small Island Developing States and Least Developed Countries; traditional partnership models are re-evaluated and inequality continues to rise. The global South will play an important role in overcoming these challenges.

The United Nations system continues to support the collaborative initiatives of developing countries by advocating, catalysing, brokering and facilitating such collaborations across many spheres.

Drawing on its vast presence across the global South, the United Nations is well placed to identify development capacities and gaps existing in developing countries while collecting, analysing and disseminating best practices and lessons learned towards the implementation of the 2030 Agenda for Sustainable Development and other internationally agreed development goals.

As the international community enters the third year of the implementation of the 2030 Agenda, concrete development solutions and resources from the global South are critical to achieving the Sustainable Development Goals. Effective development solutions that have worked in a few countries of the global South can be scaled up through South-South cooperation and triangular cooperation to accelerate sustainable development, particularly in countries that are lagging behind.

More and better South-South cooperation is essential to building a better world that leaves no one behind.

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Excerpt:

Jorge Chediek is Director, UN Office of South-South Cooperation (UNOSSC) and Envoy of the Secretary-General on South-South Cooperation.

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Q&A: Achieving Sustainable Goals: “In the End it is All About People. If People Want, it Will Happen.”http://www.ipsnews.net/2018/09/qa-achieving-sustainable-goals-end-people-people-want-will-happen/?utm_source=rss&utm_medium=rss&utm_campaign=qa-achieving-sustainable-goals-end-people-people-want-will-happen http://www.ipsnews.net/2018/09/qa-achieving-sustainable-goals-end-people-people-want-will-happen/#respond Wed, 12 Sep 2018 10:05:07 +0000 Manipadma Jena http://www.ipsnews.net/?p=157577 Manipadma Jena interviews the Deputy Director and Water Sector Lead at the Global Green Growth Institute's (GGGI) Investment and Policy Solutions Division, PETER VOS.

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On Bangladesh's extensive estuaries, millions of poorest climate vulnerable families eke out a paltry living from inter-tidal fishing like this father-son team that is selling their catch of catfish to tourists on a power boat. Credit: Manipadma Jena/IPS

By Manipadma Jena
STOCKHOLM, Sep 12 2018 (IPS)

Today just over two billion people live without readily available, safe water supplies at home. And more than half the world’s population, roughly 4.3 billion people, live in areas where demand for water resources outstrips sustainable supplies for at least part of the year.

Yet the world is not managing water well or making the most of it, the United Nations High Level Political Forum on Sustainable Development said in July this year. This is due above all to failures of policies, governance, leadership and markets."So currently there is emerging a good opportunity to attract conservation finance for nature conservation, for water management, for sustainable landscapes." -- Deputy Director and Water Sector Lead at the Global Green Growth Institute, Peter Vos.

By 2030, investment in water and sanitation infrastructure will need to be around USD0.9 -1.5 trillion per year, according to the New Climate Economy Report 2018. The Global Commission on the Economy and Climate released this major report earlier this month.

Maximising returns on water investment requires recognising the potential for natural or green infrastructure to complement or replace built infrastructure. It also requires mobilising private finance and investment at scale and generating adequate revenue returns. It will also be vital to put an appropriate value on water and sanitation services.

This is what the South Korea headquartered Global Green Growth Institute (GGGI) helps developing countries and emerging economies do, among other things. GGGI, an inter-governmental organisation with 28 member countries, supports and promotes strong, inclusive and sustainable economic growth in its partner countries. It supports countries’ national efforts to translate climate commitments, contained in their Nationally Determined Contributions under the Paris Agreement, into concrete climate action.

“GGGI delivers green growth services in the water sector that requires [the application of] market-based solutions for managing ecosystem services using innovative financial instruments such as Payment for Ecosystem Services (PES),” said Peter Vos, deputy director and Global Water Sector Lead during World Water Week in Stockholm, Sweden. Vos has extensive experience in international water projects both in the public and private sector.

He said that GGGI saw the PES model as not only providing a vehicle for incentivising ecosystem management, but also being able to help achieve long-term sustainable goals.

In a presentation on financing water conservation for ecosystem services at the global event organised by the Stockholm International Water Institute, Vos strongly emphasised PES as a powerful tool for enhancing economic, environmental and social returns from investments in integrated ecosystem management. Excerpts of the interview follow:

Peter Vos, Deputy Director and Water Sector Lead in GGGI’s Investment and Policy Solutions Division, said that GGGI saw the Payment for Ecosystem Services model as not only providing a vehicle for incentivising ecosystem management, but also being able to help achieve long-term sustainable goals. Courtesy: Peter Vos

IPS: Please tell us about GGGI’s participation in the World Water Week and how it benefits from it.

PV: What is getting the attention of the water discussion now is ecosystem services. We try to get knowledge about the crucial elements of this aspect. GGGI is implementing PES in the water sector and has been involved in the development of financial instruments to support ecosystem services in several developing countries.

GGGI works to address issues impacting water availability and use by encouraging water-related innovation in industries and investment in green urban infrastructure, and through integration with policies on water allocation in economic sectors.

Secondly, there are the bilateral meetings which hold importance for our future work and at World Water Week we met a cross-section of stakeholders, including from ministries, donors, also NGOs.

We had very intense discussions and made good progress. GGGI is an international organisation focusing on green growth, and we need partners to pursue our agenda, not only in terms of attracting finance but also in ways in which we can work together, to cooperate, expand and have more impact. We are a small organisation and cannot do it alone.

IPS: GGGI’s water sector has been providing a range of appropriate technical guidance towards green growth to low and lower-middle income countries that are tailored to their socio-economic conditions, their capacity and demand. What are GGGI’s working strengths in this area?

PV: GGGI focuses on mainstreaming water resources management in green planning frameworks, decentralised sanitation and water quality investments, and innovation through bio-economy, including climate resilient food systems and payment for ecosystem services.

What makes GGGI’s operations successful is that we are embedded in the government. We are not outsiders but one of them. We have our staff sitting in the ministry itself, discussing constantly how to improve sustainable economic growth, looking at policy reform through the green pathway.

Green growth policies allow for limited water resources to be used more efficiently and enable access to all at a reasonable cost, while leaving sufficient quantities to sustain the environment. New green projects in water and sanitation not only improve overall capacity in sustainable water management, but also create additional green jobs.

The second aspect about the way GGGI works is that it is there with partner countries for the long haul. Our commitments are long term and we see it through from policy reforms all the way to supporting project implementation. We are there monitoring projects even five years after [implementation] and assist governments if something goes wrong.

Our linkages between policy reform and project development ensures implementation. But if it is only about policy reform then it is very likely that it will be written in a report and may never see the light of day. Without policy implementation, policy reform is a toothless tiger; it will not be successful…So we have two pillars. The first is policy reform to create a conducive environment. [And the] second is project implementation that creates the hands and feet of what we jointly want to achieve.

IPS: What are some of the implementation challenges GGGI faces and how does it handle them?

PV: In setting the ground for reforms, yes challenges are there. Politicians are there for the short term. Elected governments may be there for four years but ministers are often changed in a year’s time. One cannot rely on political support only; one has to work with all the layers below it – the civil service and municipalities – to make a policy or a project sustainable and internalise it.

We consider ourselves the strategic advisors, discussing policies and project extensively till the administration is fluent with them. We ensure that we have a broad base of support and not concentrated on one or two [powerful] persons.

We have been very nimble. The world is changing very fast and we need to adapt and respond quickly to the needs and opportunities for our member countries. So in the past year we have strengthened our presence in the countries of operations. With two-thirds of our staff in member countries, and just one-third at headquarters, we are closer than before to ground operations in member countries.

IPS: GGGI also helps member countries with investment strategies for their green projects. What is its investment mantra in an increasingly public fund-squeezed world?

PV: The mantra is that public investments are not sufficient to change the world. We need to attract other financing. Private financing is very important. There is a huge amount of private financing floating around. They are all looking for investment opportunities.

With current low interest rates it is difficult for them to find the right investment opportunities. So currently there is emerging a good opportunity to attract conservation finance for nature conservation, for water management, for sustainable landscapes.

Definitely there is a search for returns on investments but investors want impact; they want to do good for Nature, to do good for people. So this is also helping. Investors, especially in Germany, in the United Kingdom and the Nordic countries, are contributing to this shift. We have to find our opportunity in this shift to attract funding.

Since there is limited public money, we have to use it intelligently. What GGGI is doing is putting government and donor money or contributions from the Green Climate Fund into projects in such a way that the private investor feels confident that their investment will give assured returns. For instance, in Rwanda we are working on energy efficiency and climate change investments. Financial vehicles are designed with a foundation of public funds and this gives comfort to private investors.

IPS: How do you see the earth in 2050 and where do you see hope for sustainability coming from?

PV: In principle I am very optimistic. This is not a scientific answer but a personal opinion. I am also optimistic that we will be able to achieve positive results and in the end remain below the two degree warming limit.

This positivity is fed by the innovations for sustainability I see, that investors now are looking for impact rather than financial returns and the fact that the membership of GGGI increased to 28 members who remain very committed to a sustainable growth path. Countries like China may still be resorting to coal-powered electricity but they are taking big steps towards sustainability simultaneously.

Today, it is a combination of positive and negative factors, but I hope and expect the positive will prevail, that we will be able to turn the ship in the end. In the end it is all about people. If people want, it will happen.

The post Q&A: Achieving Sustainable Goals: “In the End it is All About People. If People Want, it Will Happen.” appeared first on Inter Press Service.

Excerpt:

Manipadma Jena interviews the Deputy Director and Water Sector Lead at the Global Green Growth Institute's (GGGI) Investment and Policy Solutions Division, PETER VOS.

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“Running Out Of Time” – Local Communities Mobilise for the Climatehttp://www.ipsnews.net/2018/09/running-time-local-communities-mobilise-climate/?utm_source=rss&utm_medium=rss&utm_campaign=running-time-local-communities-mobilise-climate http://www.ipsnews.net/2018/09/running-time-local-communities-mobilise-climate/#respond Wed, 12 Sep 2018 08:42:24 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=157572 Local communities across the globe have risen up to demand commitments on climate change, as frustration mounts over the lack of action. Over the next few days, leaders from civil society, local governments, and the private sector will convene in California to highlight the urgency of the threat of climate change and “take ambition to […]

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Fayaz Ahmad Khanday plucks a lotus stem from Wullar Lake in India’s Kashmir. He says the fish population has fallen drastically in recent times. The Global Climate Action Summit aims to hear the voices and experiences of local communities, but also to showcase the existing grassroots achievements in climate action and that progress is possible. Credit: Umer Asif/IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Sep 12 2018 (IPS)

Local communities across the globe have risen up to demand commitments on climate change, as frustration mounts over the lack of action.

Over the next few days, leaders from civil society, local governments, and the private sector will convene in California to highlight the urgency of the threat of climate change and “take ambition to the next level.”

And it is nothing if not timely.

Not only is it being hosted midway between when the Paris Agreement was signed in 2016 and when it will legally commence in 2020, the Global Climate Action Summit is happening as the United States’ government continues to roll back federal regulations aimed at addressing the issue.“All of the scientists who understand climate change are telling us that we are running out of time to address this issue.” -- Union of Concerned Scientists’ president Ken Kimmell.

In July, the Environmental Protection Agency proposed weakening a rule on carbon dioxide pollution from vehicles. Most recently, the U.S. agency proposed easing Obama-era rules on the reduction of oil and gas industry leaks of methane gas, a major fossil fuel that contributes to climate change.

“The Trump Administration is kind of a wrecking ball that is swinging at virtually all the policies we have in place to try to address climate change,” Union of Concerned Scientists’ president Ken Kimmell told IPS. The union is a nonprofit science advocacy organisation.

“What’s so important about the summit is that if you look beyond the federal government and look at what states and cities and the private sector are doing, you see that in fact there is a still very significant commitment to addressing climate change… it gives us a chance to tell the rest of the world that we are still in this fight,” he continued.

Just days before the meeting, over 300,000 people took part in climate marches and protests around the world to urge local governments to step up action—from rising sea levels in Vanuatu to fossil fuel extraction across the U.S. to coal mining in Kenya.

350 Pilipinas conducted a virtual march by projecting the photos more than 500 frontline communities, activists, students, artists, churchgoers, and other advocates for climate action in Quezon City, Metro Manila. Courtesy: AC Dimatatac/350.org

Executive director of international climate change campaign 350.org, May Boeve, told IPS of the importance of local voices and action, stating: “Part of why the mobilisation is rooted in the local is because we recognise that tackling the climate crisis requires building a new economy that works for all of us and leaves no one behind.”

“This is a set of people who, in many ways, are dedicating their lives to making sure this transition happens. For them, the fact that it’s global, helps them realise that they are not isolated, that the fight that they are waging in their community may seem unwinnable at times but they can draw inspiration from elsewhere,” she continued.

And the summit aims to do exactly that—put the local at the heart by not only hearing the voices and experiences of local communities, but also to showcase the existing grassroots achievements in climate action and that progress is possible.

Earlier this week, California’s Governor Jerry Brown signed a bill to transition the state’s electricity to 100 percent renewable energy by 2045, a major step forward to achieving a carbon-free society.

On the other side of the country, the state of Massachusetts has announced its intention to create offshore wind farms to help power homes.

In China, electric buses are replacing diesel-fuelled assemblies at a rapid rate. Soon, Chinese company BYD, the world’s largest electric vehicle manufacturer, will supply electric vehicles to the U.S. state of Georgia, which will help the state achieve its goal of reducing greenhouse gases.

Even still, more can be done, Boeve and Kimmell said.

Boeve highlighted the need for Brown to cease the expansion of oil drilling and fracking. While production has decreased, California is still ranked sixth among U.S. states in crude oil production.

Kimmell noted that states and cities could work to make building more efficient while the private sector can purchase and use renewable energy for their operations.

“For us to effectively fight climate change, it really has to be from the bottom up, not the top down. It’s really important that local governments and states and private businesses are thinking about what they can do within their power to lower their carbon footprint and the answer is that there is a lot that they can do,” Kimmell told IPS.

A semi-submerged graveyard on Togoru, Fiji. The island states in the South Pacific are most vulnerable for sealevel rise and extreme weather. Credit: Pascal Laureyn/IPS

Boeve expressed concern that progress on climate action, including the transition to renewable energy and the Paris Agreement, are not moving fast enough.

“This is an enormous opportunity to make this transition happen. But if that happens in 50-75 years, we are not actually addressing what we know will reduce warming in the future so we have to make sure the people making decisions on this issue know that the timetable is critical,” she said.

A recent United Nations (U.N.) climate change meeting in Bangkok was criticised by activists after it failed to produce concrete outcomes, including a set of guidelines to implement the Paris Agreement.

“We have not progressed far enough. It is not just an additional session; it is an urgent session,” said Fijian prime minister and COP23 president Frank Bainimarama in his opening remarks. COP23 is the 23rdannual Conference of the Parties to the 1992 U.N. Framework Convention on Climate Change.

Among the controversial topics in the meeting was climate finance for developing countries, from which developed nations such as the U.S. shied away from committing to.

“When people understand the climate crisis, you immediately realise that any country can’t do it alone. Not even half the countries can do it alone—it really requires all of us together,” Boeve said.

“All of the scientists who understand climate change are telling us that we are running out of time to address this issue,” Kimmell said.

He expressed hope that summit participants will leave with a renewed appreciation for the urgency of the crisis and motivation to raise their own and their local and national government’s ambitions.

“There are all of these different success stories and what’s driving this progress is technology and innovation coupled with clear-thinking state policies…this is really a clean energy train that has left the station and I don’t think that Donald Trump can stop it,” Kimmel said.

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Q&A: As Water Scarcity Becomes the New Normal How Do We Manage This Scarce Resource?http://www.ipsnews.net/2018/09/qa-water-scarcity-becomes-new-normal-manage-scarce-resource/?utm_source=rss&utm_medium=rss&utm_campaign=qa-water-scarcity-becomes-new-normal-manage-scarce-resource http://www.ipsnews.net/2018/09/qa-water-scarcity-becomes-new-normal-manage-scarce-resource/#respond Tue, 11 Sep 2018 12:42:37 +0000 Manipadma Jena http://www.ipsnews.net/?p=157558 Manipadma Jena interviews the executive director of the Stockholm International Water Institute TORGNY HOLMGREN

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In south west coastal Satkhira, Bangladesh as salinity has spread to freshwater sources, a private water seller fills his 20-litre cans with public water supply to sell in islands where poor families spend 300 Bangladesh Taka every month to buy drinking and cooking water alone. Credit: Manipadma Jena/IPS

By Manipadma Jena
STOCKHOLM, Sep 11 2018 (IPS)

Growing economies are thirsty economies. And water scarcity has become “the new normal” in many parts of the world, according to Torgny Holmgren executive director of the Stockholm International Water Institute (SIWI).

As climate change converges with rapid economic and urban development and poor farming practices in the emerging economies of South Asia, water insecurity for marginalised people and farmers is already intensifying.

By 2030 for instance, India’s demand for water is estimated to become double the available water supply. Forests, wetlands lost, rivers and oceans will be degraded in the name of development. This need not be so. Development can be sustainable, it can be green.

Technology today is a key component in achieving water use sustainability – be it reduced water use in industries and agriculture, or in treating waste water, among others. Low and middle income economies need water and data technology support from developed countries not only to reach Sustainable Development Goal (SDG) 6 on water, which relates to access to safe water and sanitation as well as the sound management of freshwater supplies, but several global goals in which water plays a critical role.

Speakers at SIWI’s 28th World Water Week held last month in Stockholm, Sweden, underpinned water scarcity as contributing to poverty, conflict, and the spread of waterborne diseases, as well as hindering access to education for women and girls.

Women are central to the collection and the safeguarding of water – they are responsible for more than 70 percent of water chores and management worldwide. But the issue goes far deeper than the chore of fetching water.  It is also about dignity, personal hygiene, safety, opportunity loss and reverting to gender stereotypes.

Women’s voices remain limited in water governance in South Asia, even though their participation in water governance can alleviate water crises through their traditional knowledge on small-scale solutions for agriculture, homestead gardening, and domestic water use. This can strengthen resilience to drought and improve family nutrition.

Holmgren, a former Swedish ambassador with extensive experience working in South Asia, among other regions, spoke to IPS about how South Asia can best address the serious gender imbalances in water access and the issue of sustainable water technology support from developed economies to developing countries. Excerpts of the interview follow:

Torgny Holmgren, executive director of the Stockholm International Water Institute (SIWI), says as water scarcity becomes the new normal, traditional knowledge must be combined with new technology to ensure water sustainability. Photo courtesy: SIWI

IPS: What major steps should South Asian economies adopt for sustainable water services from their natural ecosystems? 

TH: South Asia is experiencing now a scarcity of water as demand now grows, thanks to a growing economy and also growing population. For the region specifically, a fundamental aspect is how its countries govern their water accessibility. We at SIWI have seen water-scarce countries manage really efficiently while those with abundance mismanage this resource.

It boils down to how institutions, not just governments but communities, industries at large govern water – how water systems are organised and allocated. We have instances from Indian village parliaments that decide how to share, allocate and even treat common water resources together with neighbouring catchment area villages.

One good example of this is 2015 Stockholm Water Prize winner Rajendra Singh from India who has worked in arid rural areas with local and traditional water harvesting techniques to recharge river basins, revive and store rain water in traditional water bodies and bring life back to these regions. These techniques can also help to manage too much water from more frequent climate-induced floods.

Even though the largest [amount] water is presently still being consumed for food production, more and more water is being demanded by industries and electricity producers. As competition for the scarce resource accelerates, soon we have to restructure user categories differently in terms of tariffs and allocation because households and food production have to be provided adequate water.

Even farm irrigation reforms can regulate and save water as earlier award winning International Water Management Institute research has shown – that if governments lower subsidies on electricity for pumping, farmers were careful how much and for how long they extract groundwater, without affecting the crop yield. Farmers pumped less when energy tariffs were pegged higher.

IPS: What is SIWI’s stand on the issue of sustainable water technology support from developed economies to developing countries?

TH: Water has key advantages – it connects all SDGs and it is a truly global issue. If we look around we see similar situations in Cape Town, China and California. Water is not a North-South matter. Africa can learn from any country in any region. This is the opportunity the World Water Week offers.

It is true that new technology is developing fast, but a mix of this with traditional technology and local knowledge works well. We also need to adapt traditional technologies to modern water needs and situations. These can be basic, low cost and people friendly. And it could encourage more efficient storage and use of ‘green water’ (soil moisture used by plants).

Drip irrigation has begun to be used more in South Asia, India particularly. There is need to encourage this widely. Recycling and the way in which industries treat and re-use water should be more emphasised.

Technology transfer is and can be done in various ways. The private sector can develop both technologies and create markets for them. Governments too can provide enabling environments to promote technology development with commercial viability. A good example of this is mobile phone technology – one where uses today range from mobile banking to farmers’ access of weather data and farming advisory in remote regions.

Technology transfer from different countries can be donor or bank funded or through multi-lateral organisations like the international Green Climate Fund, but any technology always has to be adapted to local situations.

Training, education, knowledge and know-how sharing – are, to me, the best kinds of technology transfers. Students and researchers – be it through international educational exchanges or partnerships between overseas universities – get the know-how and can move back home to work on advancing technologies tailored to their national needs.

Is technology transfer happening adequately? There is a need to build up on new or local technology hardware. For this infrastructure finance is (increasingly) available but needs scaling up faster.

IPS: How can South Asia best address the serious gender imbalances in water access, bring more women into water governance in its patriarchal societies?

TH: It is important that those in power need encourage gender balance not in decision-making alone but in educational institutions. Making room for gender balance in an organisation’s decision-making structure is important. This can be possible if there is equal access to education. But we are seeing an encouraging trend – in youth seminars sometimes the majority attending are women.

Finding women champions from water organisations can also encourage other women to take up strong initiatives for water equity.

When planning and implementing projects there is a need to focus on what impacts, decisions under specific issues, are having on men and women separately. And projects need be accordingly gender budgeted.

IPS: How can the global south – under pressure to grow their GDP, needing more land, more industries to bring billions out of poverty – successfully balance their green and grey water infrastructure? What role can local communities play in maintaining green infrastructure? 

TH: When a water-scarce South Asian village parliament decides they will replant forests, attract rain back to the region, and when rain comes, collect it – this is a very local, community-centred green infrastructure initiative. Done on a large scale, it can bring tremendous change to people, livelihoods and societies at large.

We have long acted under the assumption that grey infrastructure – dams, levees, pipes and canals – purpose-built by humans, is superior to what nature itself can bring us in the form of mangroves, wetlands, rivers and lakes.

Grey infrastructure is very efficient at transporting and holding water for power production. But paving over the saw-grass prairie around Houston reduced the city’s ability to absorb the water that hurricane Harvey brought in August 2017.

It isn’t a question of either/or. We need both green and grey, and we need to be wise in choosing what serves our current and potential future set of purposes best.

Be it industrialised or developing countries, today we have to make more sophisticated use of green water infrastructures. Especially in South Asia’s growing urban sprawls, we must capture the flooding rainwater, store it in green water infrastructure for reuse; because grey cannot do it alone.

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Excerpt:

Manipadma Jena interviews the executive director of the Stockholm International Water Institute TORGNY HOLMGREN

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Law of the Sea Convention Expands to Cover Marine Biological Diversityhttp://www.ipsnews.net/2018/09/law-sea-convention-expands-cover-marine-biological-diversity/?utm_source=rss&utm_medium=rss&utm_campaign=law-sea-convention-expands-cover-marine-biological-diversity http://www.ipsnews.net/2018/09/law-sea-convention-expands-cover-marine-biological-diversity/#respond Tue, 11 Sep 2018 11:21:21 +0000 Palitha Kohona http://www.ipsnews.net/?p=157556 Dr Palitha Kohona is former Ambassador and Permanent Representative of Sri Lanka to the United Nations & former co-Chair of the UN Adhoc Working Group on Biological Diversity Beyond Areas of National Jurisdiction

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Coral reef ecosystem at Palmyra Atoll National Wildlife Refuge. Credit: Jim Maragos/U.S. Fish and Wildlife Service

By Dr Palitha Kohona
COLOMBO, Sri Lanka, Sep 11 2018 (IPS)

Responding to a persistent demand by developing countries, the conservation community and science, the UN General Assembly has commenced a process for bringing the areas beyond national jurisdiction in the oceans under a global legally binding regulatory framework.

Approximately two thirds of the oceans exist beyond national jurisdiction. The Law of the Sea Convention (UNCLOS), concluded in 1982, currently provides the broad legal and policy framework for all activities relating to the seas and oceans, including, to some extent, for the conservation and sustainable use of marine biological diversity beyond areas of national jurisdiction (BBNJ).

However, despite the comprehensive nature of UNCLOS, many feel that BBNJ is not adequately covered under it as detailed knowledge of BBNJ was not available, even to the scientific community, at the time. Advancements in science and technology have brought vast amounts of knowledge to our attention in the years following the conclusion of UNCLOS.

Today human knowledge about the oceans, including its deepest parts which were inaccessible previously, is much more comprehensive and new information continues to flood in due to significant scientific and technical advances.

UNCLOS, referred to as the ‘Constitution for the Oceans’ by the former Singaporean Ambassador Tommy Koh, came into force in 1994,and will necessarily be further elaborated as human knowledge of the oceans increases and human activities multiply.

It is already complemented by two specific implementing agreements, namely the Agreement relating to Part XI of UNCLOS, which addresses matters related to the Area as defined in the UNCLOS (the sea bed beyond national jurisdiction), and the Agreement for the Implementation of the Provisions of UNCLOS relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks. The proposed treaty on BBNJ will be the third implementing agreement under the UNCLOS.

The seas and oceans, which have acquired unprecedented commercial value and have become a major source of global nutrition, have also been the subject of considerable international rule making, most of it piecemeal. An estimated 200 million people world-wide make a living from fishing and related activities. Mostly in poor developing countries.

Fish provide at least 20 % of the animal protein intake of over 2.6 billion people. A treaty on BBNJ, as envisaged, while filling a gap in the existing global regulatory framework, will also result in significant areas of the oceans being set aside as Marine Protected Areas (MPA) to provide protection to marine biological diversity, its critical habitat, including spawning areas, as well as ensuring the equitable division of the benefits resulting from the scientific exploitation of such resources, especially through the development of new products.

Under the umbrella of UNCLOS, and carefully accommodated within it and its implementing agreements, a number of international instruments (and regimes) at the global and regional levels relevant to the conservation and
sustainable use of marine BBNJ, have been put in place already.

At the global level, these include inter alia, the regulations adopted by the International Seabed Authority for the protection and preservation of the marine environment in the Area; the Convention on Biological Diversity (CBD); instruments adopted by the Food and Agriculture Organization of the United Nations (FAO); measures adopted by the International Maritime Organization; measures relating to intellectual property in the context of the World Trade Organization and the World Intellectual Property Organization.

At the regional level, the relevant measures include those adopted by regional fisheries management organizations and arrangements (RFMO/As) by regional seas organizations having competence beyond areas of national jurisdiction.

A range of non-binding instruments/mechanisms also provide policy guidance of relevance to the conservation and exploitation of marine biodiversity, including beyond areas of national jurisdiction. These include the resolutions of the UN General Assembly on oceans and the law of the sea and on sustainable fisheries, as well as the Rio Declaration and Chapter 17 of Agenda 21 adopted at the 1992 United Nations Conference on Environment and Development, the Johannesburg Plan of Implementation adopted in 2002 at the World Summit on Sustainable Development, the outcome document of the 2012 United Nations Conference on Sustainable Development, i.e. The future we want, and the 2030 Agenda for Sustainable Development, in particular Sustainable Development Goal 14 (Conservation and sustainable use of the oceans, seas and marine resources for sustainable development).

However, despite the existence of the above regimes, the need for a legally binding multilateral instrument to govern the protection, sustainable utilisation and benefit sharing of BBNJ has been advocated by a range of interest groups for some time. A champion of this process has been Argentina.

The negotiation process. Smooth sailing or rough seas ahead?

The UN ad-hoc working group (WG) on BBNJ, established by the GA in 2004, in response to the demands of a majority of the international community, took over ten years to finalise its recommendations in February 2015. Initially, the WG made little progress and was running the risk of being terminated.

Since 2010, it was co-chaired by Sri Lanka (Ambassador Dr Palitha Kohona) and the Netherlands (Dr Liesbeth Lijnzard). While the subject was not easy, and many delegations were only beginning to grasp its complexities, curious coalitions began to form. The Group of 77 (G77) and the European Union (EU) formed a common and a powerful front for different reasons.

Many strategic negotiating approaches were discussed behind the scenes and effectively deployed by these two unlikely allies resulting in a successful outcome to the work of the WG. Basically, the G77 wanted the future exploitation of BBNJ regulated globally so that the anticipated benefits would be distributed more equitably and marine technology transferred consistent with the commitments made under the UNCLOS.

Already significant numbers of patents based on biological specimens, including microorganisms (12,998 genetic sequences), retrieved from the oceans, many from hydrothermal vents, have been registered. (11% of all patent sequences are from specimens recovered from the ocean). 98 per cent of patents based on marine species were owned by institutions in 10 countries.

The German pharmaceutical giant, BASF, alone has registered 47% of the patented sequences. The financial bonanza that was expected from the commercialisation of these patents was hugely tempting. It is estimated that by 2025, the global market for marine biotechnological products will exceed $6.4 billion and was likely to grow further.

The EU, for its part, wanted to reserve large areas of the oceans for marine protected areas for conservation purposes. Conservation in this manner would result in providing space for genetic material to replenish itself naturally. The goals of the two groups were not necessarily contradictory.

The reservations on the need for a global legally binding regulatory mechanism for BBNJ were expressed mainly by the US, Japan, Norway and the Republic of Korea. Their interest was in preserving the unhindered freedom of private corporations to exploit biological specimens to conduct research and produce new materials, including drugs, biofuels and chemicals for commercial purposes.

These corporations needed the assurance that the billions that they were expending on research would produce financially attractive results. The difficulties involved in identifying the sources from where the specimens were recovered (whether beyond national jurisdiction or within), the costs usually associated with a discovery and bringing a commercially viable product into the market place, the actual need for a legally binding instrument in the current circumstances, the possibility of achieving the same goals through a non binding instrument, etc, were some of the concerns articulated.

These concerns are expected to be raised during the treaty negotiations as well. The US which held out to the bitter end preventing consensus at the WG is not even a party to the UNCLOS. A Preparatory Committee established by the UNGA to make recommendations on the elements of a draft of an international legally binding instrument (ILBI) on the conservation and sustainable use of marine BBNJ under UNCLOS, prior to holding an international conference met in four sessions in 2016 and 2017. Treaty negotiations began in September 2018 following the organizational session (in April 2018) and the conclusion of the fourth and concluding session of the Preparatory Committee.

It could be expected that the US and the like-minded group, reflecting a recognisable private enterprise oriented policy bias, would continue to raise objections affecting the smooth progress of the negotiations. The Trump administration, which has made it a habit of distancing itself from compacts to which the US had solemnly subscribed cannot be expected to be more sympathetic to the BBNJ aspirations of the G77 and the EU any more than the Obama administration.

Deposit with the UN Secretary-General

The Secretary-General is the depositary of over 550 multilateral treaties, mostly negotiated under the auspices of the United Nations. The UNCLOS and its two implementing agreements are examples. These are customarily deposited with the SG due to the recognition that he enjoys in the international community as a high level independent global authority.

The proposed treaty on BBNJ would in all likelihood, be deposited with the UN SG, when concluded. The day to day management of activity relating to these multilateral treaties is the responsibility of the Treaty Section of the UN Office of Legal Affairs, a function which dates back to the early days of the creation of the UN. Exceptionally, a major multilateral treaty may be deposited elsewhere.

For example, the NPT is deposited with the governments of the US, UK and Russia. Under Article 102 of the UN Charter all treaties, both multilateral and bilateral are required to be registered with the UN. The UN is the custodian of over 55,000 bilateral treaties so registered, currently available on line.

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Excerpt:

Dr Palitha Kohona is former Ambassador and Permanent Representative of Sri Lanka to the United Nations & former co-Chair of the UN Adhoc Working Group on Biological Diversity Beyond Areas of National Jurisdiction

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Great Recession, greater illusionshttp://www.ipsnews.net/2018/09/great-recession-greater-illusions/?utm_source=rss&utm_medium=rss&utm_campaign=great-recession-greater-illusions http://www.ipsnews.net/2018/09/great-recession-greater-illusions/#comments Tue, 11 Sep 2018 08:01:04 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=157551 In 2009, the world economy contracted by -2.2%. Growth in all developing countries declined from around 8% in 2007 to 2.6% in 2009 as the developed world contracted by -3.8% in 2009. The collapse of the Lehmann Brothers investment bank in September 2008 symbolized the US financial crisis that triggered the Great Recession of 2008-2009. […]

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By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Sep 11 2018 (IPS)

In 2009, the world economy contracted by -2.2%. Growth in all developing countries declined from around 8% in 2007 to 2.6% in 2009 as the developed world contracted by -3.8% in 2009. The collapse of the Lehmann Brothers investment bank in September 2008 symbolized the US financial crisis that triggered the Great Recession of 2008-2009.

Demonstrations against austerity measures in Athens (May, 2010). Credit: Nikos Pilos/IPS

Demise of Keynesian consensus
In its immediate aftermath, a new consensus reversed the neoliberal Washington Consensus of the last two decades of the 20th century. Proclaimed by the G20’s London Summit of 2 April 2009, it envisaged return to Keynesian macroeconomic policies, including large-scale fiscal stimulus, supported by expansionary monetary policy.

The new policies were largely successful in tempering the recession, although much more should have been done. But with modest recovery, public debt, not economic stagnation, was soon sold as public enemy number one again.

G20 leaders at the June 2010 Toronto Summit turned to ‘fiscal consolidation’, with monetary policy accommodation to ‘contain’ its contractionary consequences, and ‘structural’ (mainly labour market) reforms, ostensibly to boost growth, especially in advanced economies. Meanwhile, despite G20 leaders’ pledges eschewing protectionism, trade restrictions grew.

Synchronized fiscal consolidation precipitated some Eurozone sovereign debt crises. Soon, several Eurozone countries experienced double dip recessions, as unemployment in Greece and Spain rose well over 25% following punitive policies required to qualify for European Union and International Monetary Fund (IMF) funding which mainly went to creditors.

Economists’ complicity
Misleading, ideologically-driven empirical analyses claimed to support the new policy reversal. Alesina and his associates promoted the idea of ‘expansionary fiscal consolidation’, that contractionary government expenditure cuts would be more than offset by private spending expansion due to boosted investor confidence.

Then, Reinhart and Rogoff exaggerated the dangers of domestic debt accumulation. Although soon exposed for major methodological flaws and suppressing relevant information, these studies had served their purpose.

The IMF Fiscal Monitor ahead of the June 2010 G20 Summit grossly exaggerated public debt’s destabilizing effects, advocating rapid fiscal consolidation instead. Later, the IMF admitted it had underestimated the fiscal multiplier and hence potential growth from such debt!
Faltering recovery and rising unemployment in the Eurozone caused the public debt-GDP ratio to rise instead. Meanwhile, supposedly unavoidable short-term pain caused prolonged suffering for millions without the promised medium- and long-term gains.

UN ahead of the curve
Besides the Bank of International Settlements’ legendary William White, the United Nations was ahead of the curve, not only in warning of the impending crisis, but also by providing appropriate policy advice, albeit largely ignored.

For example, the United Nations 2006 and 2007 World Economic Situation and Prospects (WESP) warned of instability and growth slowdowns due to disorderly adjustment of growing macroeconomic imbalances among major world economies. WESP warned that falling US house prices could cause defaults to spike, triggering bank crises.

The IMF and the OECD simply ignored such warnings, projecting rosy futures, and a ‘soft landing’ at worst. The April 2007 IMF World Economic Outlook (WEO) emphatically dismissed widely held concerns about disorderly unwinding of global imbalances, claiming economic risks had subsided. The July 2007 issue claimed: “The strong global expansion is continuing, and projections for global growth in both 2007 and 2008 have been revised up”.

The OECD June 2007 Economic Outlook insisted that the US slowdown was not heralding a period of worldwide economic weakness. “Rather, a ‘smooth’ rebalancing was to be expected, with Europe taking over the baton from the United States in driving OECD growth… Indeed, the current economic situation is in many ways better than what we have experienced in years.”

Although the IMF’s November 2008 WEO belatedly acknowledged the crisis’ severity, it forecast global recovery of 2.2% in 2009, suggesting the worst was over, thus supporting the reversal from fiscal expansion to consolidation. Depicting the ‘green shoots’ of recovery as self-sustaining, fiscal stimulus was abandoned after selective financial bailouts.

The IMF and OECD recommendations of structural reforms and fiscal consolidation have since failed to provide the long awaited, sustained global economic recovery.

The President of the UN General Assembly set up a commission led by Nobel laureate Joseph Stiglitz to study the crisis’ impact, especially for development, and recommend policies to prevent future crises. Yet, most remain unaware of its wide-ranging findings and policy recommendations, including international financial architecture reforms and reregulating finance to better serve the real economy.

The UN Secretary-General proposed a Global Green New Deal in 2009 to accelerate economic recovery and job creation while addressing sustainable development, climate change and food security. It envisioned massive, multilateral, cross-subsidized public investments in renewable energy and smallholder food production in developing countries.

The UN also consistently advocated policy coordination and warned against prematurely ending recovery efforts.

Missed opportunity, heightened vulnerability
With UN and similar policy advice largely ignored, global economic recovery has remained tepid for the last decade. This has prompted the ‘secular stagnation’ thesis obscuring the role of political and policy failures and missed opportunities.

Unconventional monetary policy, e.g., ‘quantitative easing’, has also widened income and wealth gaps besides fuelling financial asset bubbles. Earlier capital inflows are now exiting following monetary policy normalization in the West and new fears of emerging market vulnerabilities.

Having failed to ensure robust recovery despite accumulating more debt, both developed and developing countries have less policy and fiscal space to address the looming problems threatening them.

Meanwhile, the redistributive potential of fiscal policy has been weakened by reducing progressive direct taxes and increasing regressive indirect taxes, while cutting social expenditure. Also, powerful vested interests have blocked attempts to limit obscene executive remuneration and enforce minimum wages, arguing that such measures discourage business and job creation.

Also, the hyped notion of ‘inclusive inequality’ has served to justify rising economic disparities, by arguing that deregulation has enabled wealth accumulation and middle class expansion.

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UN Begins Talks on World’s First Treaty to Regulate High Seashttp://www.ipsnews.net/2018/09/un-begins-talks-worlds-first-treaty-regulate-high-seas/?utm_source=rss&utm_medium=rss&utm_campaign=un-begins-talks-worlds-first-treaty-regulate-high-seas http://www.ipsnews.net/2018/09/un-begins-talks-worlds-first-treaty-regulate-high-seas/#comments Fri, 07 Sep 2018 10:22:21 +0000 Thalif Deen http://www.ipsnews.net/?p=157498 After several years of preliminary discussions, the United Nations has begun its first round of inter-governmental negotiations to draft the world’s first legally binding treaty to protect and regulate the “high seas”—which, by definition, extend beyond 200 nautical miles (370 kilometers) and are considered “international waters” shared globally. “The high seas cover half our planet […]

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A trawler in Johnstone Strait, BC, Canada. Human activities such as pollution, overfishing, mining, geo-engineering and climate change have made an international agreement to protect the high seas more critical than ever. Credit: Winky/cc by 2.0

By Thalif Deen
UNITED NATIONS, Sep 7 2018 (IPS)

After several years of preliminary discussions, the United Nations has begun its first round of inter-governmental negotiations to draft the world’s first legally binding treaty to protect and regulate the “high seas”—which, by definition, extend beyond 200 nautical miles (370 kilometers) and are considered “international waters” shared globally.

“The high seas cover half our planet and are vital to the functioning of the whole ocean and all life on Earth. The current high seas governance system is weak, fragmented and unfit to address the threats we now face in the 21stt century from climate change, illegal and overfishing, plastics pollution and habitat loss”, says Peggy Kalas, Coordinator of the High Seas Alliance, a partnership of 40+ non-governmental organisations (NGOs) and the International Union for the Conservation of Nature (IUCN).

“This is an historic opportunity to protect the biodiversity and functions of the high seas through legally binding commitments” she added.

The two-week Intergovernmental Conference (IGC), which concludes 17 September, is described as the first in a series of four negotiating sessions which are expected to continue through 2020.

Asked about the contentious issues facing negotiators, Dr Veronica Frank, Political Advisor at Greenpeace International, told IPS “although it is still early, we can expect that some of the potential issues that will require attention include the relationship between the new Global Ocean Treaty and existing legal instruments and bodies.”

These will include those who regulate activities such as fishing and mining, and what role
these other organizations will play in the management of activities that may impact on the marine environment in future ocean sanctuaries on the high seas.

“Also tricky is the issue of marine genetic resources, especially how to ensure the access and sharing of benefits from their use,” Dr Frank said.

Asked how different the proposed treaty would be from the historic 1994 UN Convention on the Law of the Sea (UNCLOS), Essam Yassin Mohammed, Principal Researcher on Oceans and Environmental Economics at the International Institute for Environment and Development (IIED), told IPS: “This new treaty is particularly significant because it is the first time the high seas will be governed.”

These negotiations are an opportunity, not just to protect the health of the oceans, but also to make sure all countries ― not just the wealthy few ― can benefit from the ocean’s resources in a sustainable way, he pointed out.

“As important as The Law of the Sea is, it only covers the band of water up to 200 miles from the coast. It does not cover the use and sustainable management of biodiversity in areas beyond national jurisdiction,” he added.

While this was acceptable in an era when the technological capacities that enabled people to venture beyond this area were limited, rapid innovation and technological advancement has changed this. Increasingly, economic activities are taking place in the high seas, he noted.

Most are unregulated and pose a major threat to marine biodiversity. It is more urgent than ever to fill this governance gap and monitor and regulate any activity in the high seas and make sure they benefit everyone ― particularly the poorest countries, he argued.

According to the High Seas Alliance, the ocean’s key role in mitigating climate change, which includes absorbing 90% of the extra heat and 26% of the excess carbon dioxide created by human sources, has had a devastating effect on the ocean itself.

Managing the multitude of other anthropogenic stressors exerted on it will increase its resilience to climate change and ocean acidification and protect unique marine ecosystems, many of which are still unexplored and undiscovered. Because these are international waters, the conservation measures needed can only be put into place via a global treaty, the Alliance said.

Dr Frank said the new treaty must create a global process for the designation and effective implementation of highly protected sanctuaries in areas beyond national borders.

Such global process must include the following elements: (a) a clear objective and a duty to cooperate to protect, maintain, and restore ocean health and resilience through a global network of marine protected areas, in particular highly protected marine reserves, and (b) the identification of potential areas that meet the conservation objective.

Asked about the existing law of the sea treaty, she said UNCLOS, which is the constitution of the ocean, sets the jurisdictional framework, ie general rights and obligations of Parties in different maritime zones, including some general obligations to cooperate and protect marine life and marine living resources that also apply to waters beyond national borders.

However, the Convention doesn’t spell out what these obligations entail in practice and puts much more emphasis on the traditional freedoms to use the high seas.

The Convention does not even mention the term biodiversity, she said, pointing out that
the treaty under negotiation will be the third so-called “Implementing Agreement” under UNCLOS – after the agreement for the implementation of Part XI on seabed minerals and one on fish stocks – and it will implement, specify and operationalise UNCLOS broad environmental provisions in relation to the protection of the global oceans.

Dr Frank said this is the first time in history that governments are negotiating rules that will bring UNCLOS in line with modern principles of environmental governance and provide effective protection to global oceans.

The writer can be contacted at thalifdeen@ips.org

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Climate Change Becomes a Reality Check for the Northhttp://www.ipsnews.net/2018/09/climate-change-becomes-reality-check-north/?utm_source=rss&utm_medium=rss&utm_campaign=climate-change-becomes-reality-check-north http://www.ipsnews.net/2018/09/climate-change-becomes-reality-check-north/#comments Wed, 05 Sep 2018 15:53:42 +0000 Friday Phiri http://www.ipsnews.net/?p=157468 “This season, the month of May was particularly hot and dry,” says Leo De Jong, a commercial farmer in Zeewolde, in Flevopolder, the Netherlands. Flevopolder is in the province of Flevoland, the largest site of land reclamation in the world. Here a hectare of land costs up to 100,000 Euros. “At the moment, we are spending […]

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A drought stressed maize crop on Leo De Jong's farm, in the Netherlands. De Jong says he spends between 20,000 and 25,000 Euros per week on irrigation. Credit: Friday Phiri/IPS

By Friday Phiri
WAGENINGEN, The Netherlands, Sep 5 2018 (IPS)

“This season, the month of May was particularly hot and dry,” says Leo De Jong, a commercial farmer in Zeewolde, in Flevopolder, the Netherlands. Flevopolder is in the province of Flevoland, the largest site of land reclamation in the world. Here a hectare of land costs up to 100,000 Euros. “At the moment, we are spending between 20,000 and 25,000 Euros per week on irrigation.”

While most reports point to developing nations being the most vulnerable to the effects of climate change, it is slowly emerging that farmers in the North who generally have more resources are feeling the heat too.

From incessant wild fires and powerful hurricanes in the United States and the Caribbean, to record-breaking high temperatures and droughts in Europe and Asia, the scientific community is unanimously in agreement that climate change is the more likely cause of these extremes in weather.

And it is causing severe disruptions to agricultural production systems, the environment and biodiversity.

This is troubling as, according to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, a rise in temperature of more than 2°C could exacerbate the existing food deficit and prevent the majority of African countries from attaining their Sustainable Development Goals on poverty and hunger.

While De Jong can afford spending thousands of Euros on irrigation each week, he knows it is no longer sustainable for his farming business. He currently grows potatoes, onions and wheat, among other crops, on 170 hectares of reclaimed land.

Leo De Jong in his potato field, in the Netherlands. Credit: Friday Phiri/IPS

Soil health emerges as key

With 18 million inhabitants, the Netherlands is densely populated. Half of the Netherlands is below sea level, but part of the sea was reclaimed for agricultural purposes.

After a flood in 1916, the Dutch government decided that the Zuiderzee, an inland sea within the Netherlands, would be enclosed and reclaimed. And later, the Afsluitdijk was completed—a 32 kilometre dyke which closed off the sea completely. Between 1940 and 1968, part of this enclosed inland sea was converted into land and in 1986 it became the newest province of the Netherlands—Flevoland.

Soil health in the Flevopolder, Flevoland, which sits about four meters below sea level, is of particular importance. De Jong sees it as a hallmark for every farmer in this era of climate change, regardless of their location.

He believes the answer to the climate challenge lies in farmers’ ability to “balance between ecology and economy.” This, he tells IPS, can be achieved through various ways such as improved and efficient irrigation technology, research and innovation, as well as farmer-to-farmer knowledge exchanges like the one to which he belongs—the Skylark Foundation. At the foundation he exchanges knowledge with a group of colleagues, mainly focusing on soil health.

“I have a feeling that the climate is getting extreme but consistent usage of manure, cover crops and other efficient sustainable practices guarantees good soil health, and soil health is the hallmark on which sustainable crop production is built.”

Similarly, Peter Appelman, who specialises in farming broccoli and cabbage, agrees with the soil health argument.

Appelman says that farmers should not be preoccupied with the various systems (conventional and organic farming) currently being propagated by researchers. He says that farmers should rather adopt systems that work for them depending on the type of soils on their farms.

“We have stopped feeding the crop but the soil,” he tells IPS, pointing at a pile of composite manure. “I am not an organic farmer but I try to be sustainable in whatever way because this comes back to you. You can’t grow a good product in bad soil.”

Market access for sustainability

In addressing the production cost side of the business, Appelman points to consumer satisfaction and predictable markets as key enablers to farmers’ sustainability in this era of climate stress.

As consumer preferences become more obvious, Appelman says farmers should not expend their energies complaining about market access and growing consumer demands but should rather work hard to satisfy them.

“I think my fellow farmers complain too much, which is not the best practice for the business,” he says. “As farmers, we should exert this energy in looking for customers, and work to satisfy them—I believe better farmer-to-customer relations should be the way forward.”

According to Appelman, production should be determined by consumer/market preferences. “I travel around the world looking for markets, and through these interactions, I learn and do my work according to the needs of my customers. Look for customers first and then proceed to produce for them, because it is tough in the production stage,” says Appelman, whose farm has an annual turn-over of about two million Euros.

The Appelman family grow broccoli on 170 hectares and red and white cabbage on 60 hectares.

Research and innovation

According to Professor Louise Fresco, president of the research executive board of Wageningen University in the Netherlands, the answer to the global food challenge lies in ensuring that the contribution of agriculture to climate change is positive rather than negative.

This, she says, is only possible through investment in research and innovation in order to achieve maximum efficiency for food production and to minimise waste.

“The agriculture sector therefore needs to do more than produce food—but produce efficiently,” she said in her opening address to the 2018 International Federation of Agricultural Journalists congress held in the Netherlands in July. “Food has to be produced not as a chain, but in a circular way. Water and energy use are highlights.”

Under the theme: Dutch roots—small country, big solutions; the congress highlighted what lies at the centre of the Netherlands’ agricultural prowess.

“Productivity through innovation and efficiency is the answer to why the Netherlands,ca small country, is the second-largest agricultural exporter [in the world],” said Wiebe Draijer, chief executive officer and chairman of Rabobank.

Draijer said Rabobank, which was founded as a cooperative, was happy to be associated with the Dutch agricultural prowess, which is anchored in sustainable and innovative practices.

“In response to the global food challenge, we keep refining our lending modalities to support environmental sustainability. For example, we track farmers that we give loans to to monitor their environmental sustainability practices, and there is an incentive in the form of a discount on their loans.”

Sustainability is the buzz word globally. However, it seems there is much more to be done for farmers to achieve it, especially now that negative effects of climate change are similarly being felt in both the north and the global south.

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Maya Farmers in South Belize Hold Strong to Their Climate Change Experimenthttp://www.ipsnews.net/2018/09/maya-farmers-central-belize-hold-strong-climate-change-experiment/?utm_source=rss&utm_medium=rss&utm_campaign=maya-farmers-central-belize-hold-strong-climate-change-experiment http://www.ipsnews.net/2018/09/maya-farmers-central-belize-hold-strong-climate-change-experiment/#respond Wed, 05 Sep 2018 14:14:45 +0000 Zadie Neufville http://www.ipsnews.net/?p=157466 This is an op-ed contributed by the Caribbean Community Climate Change Centre (CCCCC).

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In one of Belize’s forest reserves in the Maya Golden Landscape, a group of farmers is working with non-governmental organisations to mitigate and build resilience to climate change with a unique agroforestry project.

Magnus Tut a member of the Trio Cacao Farmers Association cuts open a white cacao pod from one of several bearing treen in his plot. The group is hoping to find more buyers for their organic white cacao and vegetables. Credit: Zadie Neufville/IPS

By Zadie Neufville
BELMOPAN, Sep 5 2018 (IPS)

In one of Belize’s forest reserves in the Maya Golden Landscape, a group of farmers is working with non-governmental organisations to mitigate and build resilience to climate change with a unique agroforestry project.

The Ya’axché Conservation Trust helps farmers to establish traditional tree crops, like the cacao, that would provide them with long-term income opportunities through restoring the forest, protecting the natural environment, while building their livelihoods and opportunities. Experts say the farmers are building resilience to climate change in the eight rural communities they represent.

The agroforestry concession is situated in the Maya Mountain Reserve and is one of two agroforestry projects undertaken by the 5Cs, the Caribbean Community Climate Change Centre (CCCCC), in its efforts to implement adaptation and mitigation strategies in communities across the Caribbean.

Close to 6,000 people both directly and indirectly benefit from the project which Dr. Ulric Trotz, science advisor and deputy executive director of the 5Cs, noted was established with funding from the United Kingdom Department for International Development (UK DFID).

“It is easily one of our most successful and during my most recent visit this year, I’ve seen enough to believe that the concept can be successfully transferred to any community in Belize as well as to other parts of the Caribbean,” he told IPS.

The Trio Cacao Farmers Association and the Ya’axché Conservation Trust have been working together since 2015 to acquire and establish an agroforestry concession on 379 hectares of disturbed forest. The agroforestry project was given a much-need boost with USD250,000 in funding through the 5Cs.

According to Christina Garcia, Ya’axché’s executive director, the project provides extension services. It also provides training and public awareness to prepare the farmers on how to reduce deforestation, prevent degradation of their water supplies and reduce the occurrence of wildfires in the beneficiary communities and the concession area.

Since the start, more than 50,000 cacao trees have been planted on 67 hectares and many are already producing the white cacao, a traditional crop in this area. To supplement the farmers’ incomes approximately 41 hectares of ‘cash’ crops, including bananas, plantains, vegetable, corn and peppers, were also established along with grow-houses and composting heaps that would support the crops.

This unique project is on track to become one of the exemplary demonstrations of ecosystems-based adaptation in the region.

The 35 farming families here are native Maya. They live and work in an area that is part of what has been dubbed the Golden Stream Corridor Preserve, which connects the forests of the Maya Mountains to that of the coastal lowlands and is managed by Ya’axché.

Farmers here believe they are reclaiming their traditional ways of life on the four hectares which they each have been allocated. Many say they’ve improved their incomes while restoring the disturbed forests, and are doing this through using techniques that are protecting and preserving the remaining forests, the wildlife and water.

On tour of the Ya’axché Agroforestry Concession in the Maya Golden Landscape. From right: Dr Ulric Trotz, deputy executive director of the Caribbean Community Climate Change Centre (CCCCC); Dr Mark Bynoe, head of project development at the 5Cs; Isabel Rash, chair of the Trios Cacao Farmers Association; Magnus Tut, farmer and ranger and behind him Christina Garcia, executive director Ya’axché Conservation Trust. Credit: Zadie Neufville/IPS

Other members of the communities, including school-age teenagers, were given the opportunity to start their own businesses through the provision of training and hives to start bee-keeping projects. Many of the women now involved in bee-keeping were given one box when they started their businesses.

The men and women who work the concession do not use chemicals and can, therefore, market their crops as chemical free, or organic products. They, however, say they need additional help to seek and establish those lucrative markets. In addition to the no-chemicals rule, the plots are cultivated by hand, using traditional tools. But farmer Magnus Tut said that this is used in conjunction with new techniques, adding that it has improved native farming methods.

“We are going back to the old ways, which my father told me about before chemicals were introduced to make things grow faster. The hardest part is maintaining the plot. It is challenging and hard work but it is good work, and there are health benefits,” Tut told IPS.

The Intergovernmental Panel on Climate Change (IPCC) supports the farmers’ beliefs, reporting that up to 11 percent of greenhouse gases are caused by deforestation and “between 24 and 30 percent of total mitigation potential” can be provided by halting and reversing deforestation in the tropics.

“The hardest part of the work is getting some people to understand how/what they do impacts the climate, but each has their own story and they are experiencing the changes which make it easier for them to make the transition,” said Julio Chun, a farmer and the community liaison for the concession. He told IPS that in the past, the farmers frequently used fires to clear the land.

Chun explained that farmers are already seeing the return of wildlife, such as the jaguar, and are excited by the possibilities.

“We would like to develop eco-tourism and the value-added products that can support the industry. Some visitors are already coming for the organic products and the honey,” he said.

Ya’axché co-manages the Bladen Nature Reserve and the Maya Mountain North Forest Reserve, a combined 311,607 hectares of public and privately owned forest. Its name, pronounced yash-cheh, is the Mopan Maya word for the Kapoc or Ceiba tree (scientific name: Ceiba pentandra), which is sacred to the Maya peoples.

Of the project’s future, Garcia said: “My wish is to see the project address the economic needs of the farmers, to get them to recognise the value of what they are doing in the concession and that the decision-makers can use the model as an example to make decisions on how forest reserves can be made available to communities across Belize and the region to balance nature and livelihoods.”

Scientists believe that well-managed ecosystems can help countries adapt to both current climate hazards and future climate change through the provision of ecosystem services, so the 5Cs has implemented a similar project in Saint Lucia under a 42-month project funded by the European Union Global Climate Change Alliance (EU-GCCA+) to promote sustainable farming practices.

The cacao-based agroforestry project in Saint Lucia uses a mix-plantation model where farmers are allowed to continue using chemicals, but were taught to protect the environment. Like the Ya’axché project, Saint Lucia’s was designed to improve environmental conditions in the beneficiary areas; enhance livelihoods and build the community’s resilience to climate change.

In the next chapter, the Ya’axché farmers project is hoping that, among other things, a good samaritan will help them to add facilities for value-added products; acquire eco-friendly all-terrain vehicles (ATVs) to move produce to access points; and replace a wooden bridge that leads to the main access road.

Tut and Chun both support the views of the group’s chair Isabel Rash, that farmers are already living through climate change, but that the hard work in manually “clearing and maintaining their plots and in chemical-free food production, saves them money”, supports a healthy working and living environment and should protect them against the impacts of climate change.

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Excerpt:

This is an op-ed contributed by the Caribbean Community Climate Change Centre (CCCCC).

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“In Two Years, Duterte Has Crushed All the Progress We’ve Made”http://www.ipsnews.net/2018/09/two-years-duterte-crushed-progress-weve-made/?utm_source=rss&utm_medium=rss&utm_campaign=two-years-duterte-crushed-progress-weve-made http://www.ipsnews.net/2018/09/two-years-duterte-crushed-progress-weve-made/#comments Wed, 05 Sep 2018 10:38:22 +0000 Ivar Andersen http://www.ipsnews.net/?p=157461 The Philippines has been ranked one of the world’s ten worst countries for workers’ rights. Arbetet Global reports from a country which labour union activists brand as fascist.

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The post “In Two Years, Duterte Has Crushed All the Progress We’ve Made” appeared first on Inter Press Service.

Excerpt:

The Philippines has been ranked one of the world’s ten worst countries for workers’ rights. Arbetet Global reports from a country which labour union activists brand as fascist.

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Revisiting privatization’s claimshttp://www.ipsnews.net/2018/09/revisiting-privatizations-claims/?utm_source=rss&utm_medium=rss&utm_campaign=revisiting-privatizations-claims http://www.ipsnews.net/2018/09/revisiting-privatizations-claims/#respond Tue, 04 Sep 2018 15:31:09 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=157453 Advocates made exaggerated claims that privatization would reduce governments’ fiscal problems while ensuring more efficient, productive and competitive economies by promoting private entrepreneurship, innovation and investments.

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Scene from Djibouti Port. Credit: James Jeffrey/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Sep 4 2018 (IPS)

Several arguments have been advanced to justify privatization since the 1980s. Privatization has been advocated as an easy means to:
1. Reduce the government’s financial and administrative burden, particularly by undertaking and maintaining services and infrastructure;
2. Promote competition, improve efficiency and increase productivity in providing public services;
3. Stimulate private entrepreneurship and investment to accelerate economic growth;
4. Help reduce the public sector’s presence and size, with its monopolistic tendencies and bureaucratic support.

Moot case for privatization
First, privatization is supposed to reduce the government’s financial and administrative burdens, particularly in providing services and infrastructure. Earlier public sector expansion was increasingly seen as the problem, rather than part of the solution. Thus, reducing the government’s role and burden was expected to be popular.

Jomo Kwame Sundaram. Credit: FAO

Second, privatization was believed by some to be a means to promote competition, improve efficiency and increase productivity in service delivery. This belief was naïve, confusing the question of ownership with that of promoting competition.

It was believed that privatization would somehow encourage competition, not recognizing that competition and property rights are distinct, and not contingent issues. Associated with this was the presumption that competition would automatically result in greater efficiency as well as improved productivity, not recognizing economies of scale and scope in many instances.

Third, privatization was expected to stimulate private entrepreneurship and investment. There is also a popular, but naïve belief that privatization was going to stimulate private entrepreneurship when, in fact, the evidence is strong, in Malaysia and elsewhere, that privatization often crowds out the likelihood of small and medium-sized enterprises actually emerging to fill the imagined void, presumed to exist following privatization.

Admittedly, there is scope for new entrepreneurship with privatization as new ways and ideas offered by the private sector are considered – or reconsidered – as the new privatized entity seeks to maximize the profits/rents to be secured with privatization.

However, the private purchase of previously public property, in itself, does not augment real economic assets. Private funds are thus diverted, to take over SOEs, and consequently diminished, rather than augmented. Hence, private funds are less available for investing in the real economy, in building new economic capacities and capabilities.

Fourth, privatization was supposed to reduce public sector monopolies, but there is often little evidence of significant erosion of the monopolies enjoyed by privatized SOEs. Arguably, technological change and innovation, e.g., in telecommunications, were far more significant in eroding privatized monopolies and reducing costs to consumers, than privatization per se.

From the 1980s, if not before, various studies have portrayed the public sector as a cesspool of abuse, inefficiency, incompetence and corruption. Books and articles, often with clever titles such as ‘vampire state’, ‘bureaucrats in business’ and so on, provided the justification for privatization.

Undoubtedly, there were some real horror stories, which have been conveniently and frequently cited as supposedly representative of all SOEs. But other experiences can also be cited to show that SOEs can be run quite efficiently, even on commercial bases, confounding the dire predictions of the prophets of public sector doom.

Has privatization improved efficiency?
Although some SOEs have been better run and are deemed more efficient after privatization, the overall record has hardly been consistent. Thus, it is important to ascertain when and why there have been improvements, or otherwise. It is also important to remember that better-run privatized SOEs, in and of themselves, do not necessarily serve the national or public interest better.

Undoubtedly, most SOEs can be better run and become more efficient. But this is not always the case as some SOEs are indeed already well run. For instance, very few privatization advocates would insist that most SOEs in Singapore are poorly run.

As its SOEs are generally considered well-run, public ownership is not used there to explain poor governance, management or abuse; instead, public ownership is recognized there as the reason for public accountability, better governance and management.

Principal-agent managerial delegation dilemma
Hence, in different contexts, with appropriately strict supervision, SOEs can be and have indeed been better run. Privatization, in itself, does not solve managerial delegation problems, i.e., the principal-agent problem, as it is not a problem of public ownership per se.

With SOEs, the principal is the state or the government while the agents are the managers and supervisors, who may — or may not — pursue the objectives intended by the principal.

This is a problem faced by many organizations. It is also a problem for private enterprises or corporations, especially large ones, especially where the principal (shareholders) may not be able to exercise effective supervision or control over the agent.

Also, natural monopolies (such as public utilities) are often deemed inefficient due to the monopolistic nature of the industry or market. The question which arises then is whether private monopoly is better, even with regulation intended to protect the public interest.

The answer needs to be ascertained analytically on the basis of evidence, and cannot be presumed a priori. If an industry is a natural monopoly, what does privatization achieve? Often, it means a transfer to private hands, which can be problematic and possibly dangerous for the public interest.

The post Revisiting privatization’s claims appeared first on Inter Press Service.

Excerpt:

Advocates made exaggerated claims that privatization would reduce governments’ fiscal problems while ensuring more efficient, productive and competitive economies by promoting private entrepreneurship, innovation and investments.

The post Revisiting privatization’s claims appeared first on Inter Press Service.

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New Rules for High Seas Must Include Needs of Poorest Nationshttp://www.ipsnews.net/2018/09/new-rules-high-seas-must-include-needs-poorest-nations/?utm_source=rss&utm_medium=rss&utm_campaign=new-rules-high-seas-must-include-needs-poorest-nations http://www.ipsnews.net/2018/09/new-rules-high-seas-must-include-needs-poorest-nations/#respond Tue, 04 Sep 2018 12:52:23 +0000 Essam Yassin Mohammed http://www.ipsnews.net/?p=157450 Essam Yassin Mohammed is Principal Researcher at the International Institute for Environment and Development (IIED)

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Essam Yassin Mohammed is Principal Researcher at the International Institute for Environment and Development (IIED)

By Essam Yassin Mohammed
LONDON, Sep 4 2018 (IPS)

Over-fishing, warming oceans and plastic pollution dominate the headlines when it comes to the state of the seas. Most of the efforts to protect the life of the ocean and the livelihoods of those who depend on it are limited to exclusive economic zones – the band of water up to 200 nautical miles from the coast.

Fishermen offloading tunas at the industrial fish port of Abidjan, Côte d’Ivoire. Credit: FAO/Sia Kambou

But to be truly effective, all of the ocean needs to be protected. The high-seas that lie beyond national jurisdictions ― two-thirds of the ocean’s surface ― remain largely ungoverned.

The world has a new opportunity this week to move a step closer to addressing these issues as UN members start negotiating an international legally binding treaty to protect the high seas. (United Nations Convention on the Law of the Sea on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction, 4-17 September). The first of four rounds of negotiations that will continue until 2020.

Despite the common perception that the high seas are too remote to matter to coastal communities, strong scientific evidence shows the ocean is a highly interconnected ecosystem. For example, a number of fish species use the high seas at different stages of their lifecycle for feeding and spawning, which is why protecting it is critically important to coastal communities’ livelihoods and economies.

For these negotiations to be effective and fair, it is crucial the people living in coastal communities in the least developed countries (LDCs) and small island developing states (SIDS) are listened to and have an active role in protecting and sustainably managing the ocean. They are among those most affected by the impacts of how the ocean is used and protected, from fishing to conservation measures.

Any measure to govern these waters must make sure that any activity in these waters benefits everyone ― particularly the poorest countries.

The ocean as a whole is recognised by international law as a common heritage of mankind ― it belongs to everyone, now and forever. But most developing countries do not have the financial or technological means to share the benefits it provides.

To make sure they have equal access, it is crucial this treaty establishes a mechanism that enables them to share its benefits. Monetary benefits can be best shared by establishing a trust fund.

This, as is the case with such governing bodies as the International Seabed Authority, would enable coastal communities to build their capacities and become involved in monitoring the environmental health of the seas.

And they would be able to participate proactively in research and development, and sustainably use the high seas as a source for medicines, science and other genetic resources.

It could be financed from a percentage of the profits that wealthier countries make through economic activities on the high seas whether from extraction of marine genetic resources or any other activity.

The equitable distribution of benefits from conservation of the high seas should also be at the core of the negotiations. It is important that any new global agreement recognises that when protected areas are designated they consider how they will affect coastal communities across the global south.

These areas linking territorial waters to the high seas are critical both for protecting marine species and helping to restore coastal fisheries, which are vital to sustaining the livelihoods of people in poor coastal communities.

One of the biggest threats to marine biodiversity in areas beyond national jurisdiction is overfishing. Studies show that fishing in the high seas is unprofitable and are only economically viable because governments subsidies large fishing fleets. It is important that in this first round of talks, governments agree clear steps to end all harmful subsidies.

Instead, these subsidies should be directed towards activities that deliver positive social and environmental results. By providing support for monitoring and surveillance of marine protected areas, giving incentives to fishers for not using damaging fishing practices, and enhancing access to markets and services including by providing support for storage facilities, poor coastal communities and fishers will be able to benefit from ocean-friendly investment.

We cannot afford to keep the status quo. These negotiations are an opportunity to establish a new legally binding treaty that is fair and equitable for everyone. This is about sustainably sharing 50 per cent of the planet with 100 per cent of the world’s population.

It is crucial the needs of the poor are heard at every stage of this process to make sure they are not left behind in the drive to govern the life of the oceans.

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Excerpt:

Essam Yassin Mohammed is Principal Researcher at the International Institute for Environment and Development (IIED)

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China-Africa Cooperation a Vibrant Partnership for Sustainable Developmenthttp://www.ipsnews.net/2018/09/china-africa-cooperation-vibrant-partnership-sustainable-development/?utm_source=rss&utm_medium=rss&utm_campaign=china-africa-cooperation-vibrant-partnership-sustainable-development http://www.ipsnews.net/2018/09/china-africa-cooperation-vibrant-partnership-sustainable-development/#respond Mon, 03 Sep 2018 14:17:19 +0000 Antonio Guterres http://www.ipsnews.net/?p=157439 António Guterres, Secretary-General of the United Nations, in an address to the China-Africa Cooperation Summit in Beijing

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António Guterres, Secretary-General of the United Nations, in an address to the China-Africa Cooperation Summit in Beijing

By António Guterres
BEIJING, Sep 3 2018 (IPS)

This Forum on China-Africa Cooperation is an embodiment of two major priorities of the United Nations: to pursue fair globalization and to promote development that leaves no one behind in the context of a rules-based system of international relations supported by strong multilateral institutions.

António Guterres

China has achieved remarkable development progress in recent years, with an unprecedented reduction in poverty, and I commend its commitment to sharing its successes through different initiatives and namely the Belt and Road.

Africa, too, has made dramatic advances, and hosts some of the world’s most dynamic economies. Together, China and Africa can unite their combined potential for peaceful, durable, equitable progress to the benefit of all humankind.

It is important that current and future development cooperation contributes to peace, security and to building a “community of shared future for mankind.”

China and Africa have strengthened their relationship in recent years, enjoying growing mutual trust and exchanges at all levels.

Development cooperation is increasing, based on the two mutually compatible roadmaps: the United Nations 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063.

I commend this engagement. Cooperation, based on the principles of the UN Charter, can benefit your peoples and can benefit the international community as a whole.

And allow me to mention five areas that will be crucial for the success of this very important partnership.

First, reinforcing the foundations of Africa’s progress. Stronger cooperation between China and Africa can lead to sustainable, environmentally-friendly and resilient development in Africa that is inclusive, reaching first those people that are furthest behind. Financial and technological support for infrastructure development is critical.

So is building capacity on trade as African countries start to realize the potential of the landmark Continental Free Trade Area. And they’re also ready to support the strengthening national data systems to help African countries formulate policy and drive decision-making.

Second, ensuring national ownership and African-led sustainable development.

In the past year, the United Nations has agreed joint frameworks with the African Union on Peace and Security and on supporting Agenda 2063.

These frameworks are based on our commitment to be a steadfast and trusted partner of Africa, with full respect for Africa’s stewardship of its own future.

The China-Africa partnership echoes this collaborative approach to create not just immediate gains but long-lasting value.

And we are ready to support the strengthening of governance and institutional capacities in African countries to ensure country ownership and leadership that fully responds to the needs and aspirations of Africa’s people.

Of particular concern are education and job opportunities for young people, and equality and empowerment for the continent’s women and girls.

Third, deepening South-South cooperation.

I believe this Summit will contribute to preparations for the United Nations Conference on South-South Cooperation in Buenos Aires next year.

South-South cooperation is fundamental for fair globalization. But the dramatic increase in South-South cooperation does not eliminate the need to implement North-South commitments, including those assumed in the context of the Addis Ababa Action Agenda.

We need to ensure that cooperation paves the way for Africa’s economic vitality and greater trade, both at regional and global levels.
Partnership for sustainable development must also give more space for African voices, innovations and perspectives in global development discourse around the world.

Fourth, promoting sustainable fiscal policies.

United Nations Country Teams are fully committed to supporting African nations to seize their full potential of their cooperation with China.

At the same time, we all need to work together to guarantee the financial sustainability of African development.

Sound fiscal policies are an essential pillar for sustainable development. It is imperative that we support Africa to both preserve and create fiscal space for investments.

That includes a concerted global effort to combat tax evasion, money laundering and illicit financial flows allowing to contribute to the success to the strong African commitment to fight corruption as agreed at the African Union Summit in early January 2018.

Fifth, climate change.

Climate change is an existential threat. A sustainable future for China, Africa and the world means climate-friendly and climate-resilient development as it was underlined today by President Xi Jinping.

As we are increasingly aware, climate change and environmental degradation are risk multipliers, especially for fragile states and vulnerable regions.

China is today a global leader in climate solutions.

It is important that it shares its advances with Africa to enable the continent to leapfrog traditional polluting development in favour of green growth.

And also ,to support Africa in adapting to climate change and in building resilience to the impacts that Africans have done so little to cause.

This Summit exemplifies the win-win collaboration that is necessary for the future we want.

The United Nations will continue to support the China-Africa Partnership and more broadly, South-South cooperation, so that all nations – in Africa and beyond – may enjoy sustainable and inclusive development.

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Excerpt:

António Guterres, Secretary-General of the United Nations, in an address to the China-Africa Cooperation Summit in Beijing

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How Guyana Must Prepare to Cope With the ‘Jeopardies and Perils’ of Oil Discoveryhttp://www.ipsnews.net/2018/09/guyana-must-prepare-cope-jeopardies-perils-oil-discovery/?utm_source=rss&utm_medium=rss&utm_campaign=guyana-must-prepare-cope-jeopardies-perils-oil-discovery http://www.ipsnews.net/2018/09/guyana-must-prepare-cope-jeopardies-perils-oil-discovery/#respond Mon, 03 Sep 2018 08:27:20 +0000 Desmond Brown http://www.ipsnews.net/?p=157432 Recent huge offshore oil discoveries are believed to have set Guyana– one of the poorest countries in South America–on a path to riches. But they have also highlighted the country’s development challenges and the potential impact of an oil boom. Oil giant ExxonMobil has, over the last three years, drilled eight gushing discovery wells offshore […]

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The Essequibo River is the longest river in Guyana, and the largest river between the Orinoco and Amazon. As oil production in Guyana is expected to commence in the first quarter of 2020, experts say the increasing environmental risks of more oil wells require increasing capacity to understand and manage these risks. Courtesy: Conservation International Guyana.

By Desmond Brown
GEORGETOWN, Guyana, Sep 3 2018 (IPS)

Recent huge offshore oil discoveries are believed to have set Guyana– one of the poorest countries in South America–on a path to riches. But they have also highlighted the country’s development challenges and the potential impact of an oil boom.

Oil giant ExxonMobil has, over the last three years, drilled eight gushing discovery wells offshore with the potential to generate nearly USD20 billion in oil revenue annually by the end of the next decade.“These are the jeopardies and these are the perils that we have to prepare for. We should not take them for granted or believe that we are dealing with something that is so far removed from our consciousness or our reality that we don’t have to be prepared.” -- minister of natural resources Raphael Trotman

“For Guyana where the current oil sector is located offshore, the direct environmental risks are primarily associated with oil spills, but will also include emissions from the operations, and from seismic activities that can affect marine species,” Dr David Singh, executive director of Conservation International Guyana, told IPS.

“The environmental risk increases with the number of oil wells in any one area.”

Singh said increasing environmental risks require increasing capacity to understand and manage these risks.

From a regulatory standpoint, he said this means building the institutional capacity in step with the development of the industry.

“For civil society, the responsibility is ours to learn about the industry, to contribute to the creation of good policies and laws related to the industry, and to ensure the highest levels of accountability from the industry and from the state towards the environment,” he said.

“It also requires us to support companies and initiatives that are in the business of clean, renewable energy generation, and in supporting efforts to reduce our ecological footprint. Even as we focus on these efforts we are cognisant of the limited human and institutional capacity of the country which will have an impact on the design and application of good and responsible environmental and social safeguards.”

Several commentators have observed that senior government officials here have little experience regulating a big oil industry or negotiating with international companies.

But minister of natural resources Raphael Trotman said Guyana is prepared and has been building and strengthening its capacity to deal with the potential hazards that come with the development of an oil and gas sector.

He said no effort will be spared to ensure that Guyana puts a sound disaster risk reduction and management system in place so that it is prepared to prevent an oil spill or respond effectively should there be an accident in that regard.

“These are the jeopardies and these are the perils that we have to prepare for. We should not take them for granted or believe that we are dealing with something that is so far removed from our consciousness or our reality that we don’t have to be prepared,” Trotman told a national consultation on the drafting of the National Oil Spill Response Contingency Plan at the Civil Defence Commission’s.

“It has to be taken seriously and whilst the industry standards are very high, we do have a risk. We recognise that there is a risk. However, government is making every effort to prepare for that risk. We expect that in 24 months when we go to production in the first quarter of 2020, we will meet not only minimum standards expected, but we will go past that and dare to say to ourselves and particularly to the world that we are ready for any eventuality,” he said.

Meanwhile, Tyrone Hall, a PhD Candidate at York University, is urging those involved in civil society in Guyana, especially its environmental sector, to assess the exemplary efforts underway in Belize.

Hall, who has been studying the issue, notes Belize recently found itself at the centre of rare positive environmental news of global importance.

Its portion of the Mesoamerican Barrier Reef System, arguably the world’s longest living barrier reef and certainly this region’s most iconic marine asset, was removed from the World Heritage Sites’ endangered category after nearly a decade (mid-2009 to June 2018), according to the United Nations Educational, Scientific and Cultural Organisation World Heritage Centre.

The decision was taken after Belize ditched plans to rapidly expand its nascent oil industry.

“There are lesson we can draw from the Belizean experience for raising the bar and boldly re-imagining environmental responses in the face of a petro-economic reorientation,” Hall said.

“In other words, while oil exploration is unlikely to be halted in Guyana at this point, the environmental community, and broader civil society must not settle into vassal like, aid-recipient disposition.

“It should raise its expectations, and also challenge, contextualise and transcend the singularly economistic conventions being drawn from distance places,” Hall added.

ExxonMobil has made eight discoveries in Guyana’s waters to date.

Production is expected to commence in the first quarter of 2020 with an estimated 120,000 barrels per day. This should increase to 220,000 barrels per day by 2022.

“What the oil revenues will allow us to do is to fulfil these dreams of the Guyanese people and to ensure that the quality of life for every citizen dramatically improves over a period of a few short years,” Trotman said.

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Striking the Right Note: a History of Paper Moneyhttp://www.ipsnews.net/2018/08/striking-the-right-note-a-history-of-paper-money/?utm_source=rss&utm_medium=rss&utm_campaign=striking-the-right-note-a-history-of-paper-money http://www.ipsnews.net/2018/08/striking-the-right-note-a-history-of-paper-money/#respond Wed, 29 Aug 2018 10:18:18 +0000 Tadeusz Galeza and James Chan http://www.ipsnews.net/?p=157388 TADEUSZ GALEZA is a research officer in the IMF’s Monetary and Capital Markets Department. JAMES CHAN is a senior information management assistant in the IMF’s Statistics Department.

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TADEUSZ GALEZA is a research officer in the IMF’s Monetary and Capital Markets Department. JAMES CHAN is a senior information management assistant in the IMF’s Statistics Department.

By Tadeusz Galeza and James Chan
WASHINGTON DC, Aug 29 2018 (IPS)

From strings of shells in the Solomon Islands to large stone disks on the Micronesian isle of Yap or wheels of Parmigiano-Reggiano cheese in Italy, money has taken many forms throughout history.

Striking the Right Note: a History of Paper MoneyToday, banknotes are an artistic expression of national sovereignty, with many countries choosing to immortalize famous authors and activists, local wildlife, and iconic national landmarks. In other words, modern paper money represents the essence, history, beauty, and ideals to which each country aspires.

To see this diversity in action, we need look no further than the 189 member countries of the IMF that churn out 136 unique national currencies and form four currency unions.

Standouts include the Malawian kwacha, the smallest banknote in our study at about 87 percent the size of the US dollar bill. At the other end of the spectrum are the Brunei and the Singapore dollars, the largest banknotes in circulation, each with a total area of more than 150 percent of the US dollar bill—calling for a really deep wallet.

Banknotes across the world are rectangular, but most are wider rather than they are tall. Swiss francs, for example, tend to be very slender, while British pounds and Kenyan shillings are more square.

Yet despite the variations in design, the properties that define currency are the same: they are a unit of measure, a store of value, and a medium of exchange. Paper bills, or “fiat” money, also have no intrinsic value; their worth is determined solely through supply and demand, and they are declared legal tender by government decree.

The most important element that separates one national currency from another is its value. Central banks decide what the largest note in circulation should be, and its nominal value is determined by the number of zeros—this indicates the purchasing power of the note within the country.

Currently, the largest bills changing hands range from 20 Bahrain dinars to 500,000 Vietnamese dong. Historically, because of hyperinflation, many countries printed banknotes with a cartoonish number of zeros: Yugoslavia issued a 500 billion dinar bill in 1991, and Zimbabwe a 100 trillion dollar bill in 2009.

 

Striking the Right Note: a History of Paper Money

 

Today, a hundred units of currency (for example, 100 US dollars) is most commonly the highest available banknote in each country. But the real value (proxied here by its worth in US dollars) is where the rubber hits the road.

On average, the largest banknote in circulation across countries is equivalent to 33 US dollars, but the difference in real value from country to country could not be more stark. It takes three 100 South Sudanese pound notes (their largest in circulation) to purchase a medium coffee at Starbucks. At the opposite end, it takes only two of Brunei’s largest bills—10,000 dollar notes—to buy a 2018 Toyota Yaris sedan.

Striking the Right Note: a History of Paper MoneyCash, nevertheless, may not be king forever.

With digital currencies and online transactions gaining steam worldwide, the future of paper money may be in jeopardy. What was once valued precisely because of its physicality is giving way to a new global economy where more and more transactions—big and small—are processed electronically.

Perhaps one day countries will design and issue banknotes of the virtual kind, embedded with even richer features to celebrate all they hold dear. Until then, however, paper banknotes will retain an undeniable appeal.

The link to the original article follows:  http://www.imf.org/external/pubs/ft/fandd/2018/06/value-of-paper-money-around-the-world/currency.htm?utm_medium=email&utm_source=govdelivery

PHOTO CREDITS: ISTOCK.COM/BENEDEK, MICHAEL BURRELL, YEVGENROMANENKO, ALAMY.COM/CHRISTOPH RUEEGG, CHRONICLE

Opinions expressed in the article are those of the authors; they do not necessarily reflect IMF policy.

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Excerpt:

TADEUSZ GALEZA is a research officer in the IMF’s Monetary and Capital Markets Department. JAMES CHAN is a senior information management assistant in the IMF’s Statistics Department.

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Crisis alla Turcahttp://www.ipsnews.net/2018/08/crisis-alla-turca/?utm_source=rss&utm_medium=rss&utm_campaign=crisis-alla-turca http://www.ipsnews.net/2018/08/crisis-alla-turca/#respond Tue, 28 Aug 2018 11:05:40 +0000 Yilmaz Akyuz http://www.ipsnews.net/?p=157380 Yilmaz Akyüz is former Director, UNCTAD, and former Chief Economist, South Centre, Geneva

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Yilmaz Akyüz is former Director, UNCTAD, and former Chief Economist, South Centre, Geneva

By Yilmaz Akyüz
GENEVA, Aug 28 2018 (IPS)

The meltdown of the Turkish currency over a matter of a few days in August 2018 has elicited various reactions and interpretations both at home and abroad, and created widespread concern that it could mark the beginning of a series of crisis in emerging economies exposed to a reassessment of risks by international investors and lenders as well as a rapid normalization of monetary policy in the United States.

Some commentators have attributed the crisis to the sanctions imposed by the Trump administration discontent with the foreign policies pursued by Turkey on many fronts.  The Erdogan government has been too happy to put the blame on “the economic warfare launched by the United States”, rather than years of misguided policies that rendered the economy highly susceptible to political and economic shocks.  It has even enjoyed support from some western governments weary of Trump’s errant foreign policy. Others drew parallels with previous crises in emerging economies, notably the East Asian crisis, placing particular emphasis on the role of external debt in dollars, notably excessive short-term borrowing.

Yilmaz Akyüz

In reality Trump sanctions only acted as a trigger as the economy was sitting on a time bomb.  The currency was already under pressure before the sanctions came into force because of growing awareness of the fragility of the economy.  The lira had lost a quarter of its value against the dollar between January and July 2018.

On the other hand, there are some crucial differences between the underlying vulnerabilities culminating in Turkish and East Asian crises, particularly with respect to the size of current account deficits, the foreign presence in domestic securities, credit and deposit markets, the extent of dollarization and the scope for capital flight by residents.  In all these respects Turkey has been much more vulnerable to currency turmoil than were the East Asian economies in the 1990s.

In a book published by OUP last year, I identified Turkey as the most fragile emerging economy highly vulnerable to external financial crisis after examining, as of end 2013, various sources of potential pressure on its currency and drain on its international reserves in the event of a sharp turnaround in market sentiments and a sudden stop of capital inflows.  It was clear that in such an event, Turkey could not at the same time finance its current account deficit, remain current on its external debt payments in dollars and allow a rapid exit of non-resident portfolio investors from domestic financial markets even in the absence of capital flight by residents.  It was also remarked that capital flight for residents often constituted greater pressure on the currency and international reserves. This was a serious potential threat in Turkey as residents could freely buy and sell dollars, hold forex deposits in local banks and transfer their assets abroad.

The economy has become even more fragile since then.  The current account deficit has remained unchecked as the government sought consumption/construction-led, debt-driven economic expansion which has added very little to productive capacity and export potential.  Persistent deficits have been financed by massive sale of national assets and external borrowing, leading to a rapid deterioration of the net international investment position, from around ‒42 per cent of GDP in 2013 to over ‒54 per cent by 2018.

External debt as a proportion of GDP rose from 41 per cent in 2013 to 63 per cent on the eve of the crisis.  A large proportion of this debt, over 25 per cent of GDP, had a remaining maturity of up to one year. The sum total of short-term debt and current account deficits was more than twice as much as international reserves.  Furthermore, the presence of non-resident portfolio investors in domestic markets became more visible and capital flight by residents remained an even more serious source of pressure on the currency and reserves for political as well as economic reasons.

Turkey, as most other major emerging economies, is highly averse to recourse to the IMF for international liquidity because of its appalling record in interventions in past crises in emerging economies

Sovereign external debt now accounts for some 20 per cent of the total while the rest is equally divided between banks and non-financial corporations.  The latter have been allowed to borrow in dollars both at home and abroad irrespective of their potential to earn foreign currency to service it. Such debt poses greater threat to stability than sovereign debt since, at times of currency turmoil, private debtors attempt to close their open positions by purchasing foreign currency in order to avoid further losses and this in turn accelerates the decline of the currency.

Turkey has thus practised an extreme form of laissez faire in financial affairs and, in effect, become a highly dollarized, dual-currency economy.  Not only liabilities and assets are increasingly denominated in the dollar, but also an important part of property prices, incomes and rents, as well as government contracts in public private partnership projects are fixed in dollars.

In such an economy, a significant loss of confidence can exert intense pressure on the currency irrespective of volume and terms of external debt.  With Trump sanctions the lira started a free fall primarily because of flight of residents, both asset holders and dollar debtors, from the currency, sudden stop of capital inflows and the exit of non-residents from local markets.  Besides, the decline was accentuated by speculators, shorting liras in swap operations in anticipation of a significant drop in the currency. The short-term dollar debt to international creditors has not yet come into play. Still, the outcome has been steep falls in the lira and stocks and a hike in yields on local-currency sovereign debt.  The cost of insuring Turkish debt (Credit Default Swaps – CDS) has shot up, reaching 500 basis points compared to 240bp for Brazil and 315bp for Greece.

In view of stern opposition of the President, the Central Bank avoided a hike in lending rates, but closed its low-cost repo funding, forcing banks to borrow at its more expensive overnight rate ‒ something aptly described as “stealth” tactic to hike borrowing costs.  Further, it has limited currency swap transactions to curb speculation against the lira.

Turkey, as most other major emerging economies, is highly averse to recourse to the IMF for international liquidity because of its appalling record in interventions in past crises in emerging economies.  As anticipated in an earlier IPS article, it thus sought help from its close allies, securing a pledge of $15 billion from Qatar.

These measures, together with 9-days respite from Muslim Eid Al-Adha brought some calm to currency and financial markets.  But all is not over yet. The underlying structural fragilities remain unabated and cannot be remedied overnight because they involve severe balance sheet distortions and imbalances.

Even if the lira remains relatively stable from now on, the sharp decline it has so far undergone ‒ by some 40 per cent since the beginning of the year ‒ could impinge heavily on unhedged debtors, resulting in serious debt servicing difficulties and even defaults.  As Bloomberg reports the CDS curve is inverted ‒ as it was in Greece in the worst days of its debt crisis ‒ not only for sovereign debt but also for the debt of some of the biggest commercial banks; that is, it costs more to insure one-year default than to buy five-year protection.  This suggests that markets are expecting imminent debt-servicing difficulties.

As loans and bonds mature in coming months, the country may find it very difficult to persuade creditors to roll over debt or to replace maturing bonds with new ones even at significantly higher rates.  An important part of syndicated bank loans is due for renewal in September 2018. The dispute with the US involving the state-owned Halkbank over Iranian sanctions can make the renewal process complicated (I thank Hakan Ozyildiz for this point).  Thus, with short-term debt coming into play, the crisis could cease to be a currency crisis but a full-blown debt and banking crisis, leading to a deep and protracted economic contraction.

The crisis could also generate severe contagion to the rest of the world.  Defaults by Turkish debtors could squeeze some European creditors, mainly a number of banks in Spain, Italy and France who have relatively high exposure directly or through subsidiaries in Turkey.  This would also have a serious impact on global risk appetite. A sharp reassessment of risks, together with monetary tightening in the US and Trump follies in trade, could wreak havoc in several emerging economies who have gone out of bounds in the years of easy money since 2008.

When so many policy mistakes are committed and so much debt is accumulated and assets are lost, there is no easy way out.  But, it is always possible to ease the pain. It is not clear if the Turkish government will be able to move from populist rhetoric to effective economic measures to address the root causes of the crisis.  On the other hand, should the crisis spread globally, the international community is unlikely to be able to manage it in an orderly and equitable way, rather than muddling through it as in the past, because it is no more prepared to respond to such crises than it had been in previous episodes.

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Excerpt:

Yilmaz Akyüz is former Director, UNCTAD, and former Chief Economist, South Centre, Geneva

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