Inter Press Service » Economy & Trade http://www.ipsnews.net News and Views from the Global South Wed, 22 Feb 2017 02:15:29 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.15 Shrinking and Darkening, the Plight of Kashmir’s Dying Lakeshttp://www.ipsnews.net/2017/02/shrinking-and-darkening-the-plight-of-kashmirs-dying-lakes/?utm_source=rss&utm_medium=rss&utm_campaign=shrinking-and-darkening-the-plight-of-kashmirs-dying-lakes http://www.ipsnews.net/2017/02/shrinking-and-darkening-the-plight-of-kashmirs-dying-lakes/#comments Wed, 22 Feb 2017 02:00:16 +0000 Kitty Stapp http://www.ipsnews.net/?p=149017 Fayaz Ahmad Khanday plucks a lotus stem from Wullar Lake in India’s Kashmir. He says the fish population has fallen drastically in recent years. Credit: Umer Asif/IPS

Fayaz Ahmad Khanday plucks a lotus stem from Wullar Lake in India’s Kashmir. He says the fish population has fallen drastically in recent years. Credit: Umer Asif/IPS

By Kitty Stapp
SRINAGAR, Feb 22 2017 (IPS)

Mudasir Ahmad says that two decades ago, his father made a prophecy that the lake would vanish after the fish in its waters started dying. Three years ago, he found dead fish floating on the surface, making him worried about its fate.

Like his father, Ahmad, 27, is a boatman on Kashmir’s famed Nigeen Lake, located north of Kashmir’s capital, Srinagar. He says the lake has provided a livelihood to his family for generations, but now things are taking an “ugly turn”.“The floods of September 2014 wreaked havoc and caused heavy loss to property and human lives. That was the first signal of how vulnerable have we become to natural disasters due to environmental degradation." --Researcher Aabid Ahmad

The gradual algae bloom in the lake, otherwise known for its pristine beauty, led to oxygen depletion. Fish began to die. Environmentalists termed the development the first visible signs of environmental stress in the lake.

But no one was more worried than Mudasir himself. “We have been rowing boats on the lake for centuries. My grandfather and my father have been fed by this lake. I also have grown up here and my livelihood is directly dependent on the lake,” Ahmad told IPS.

He believes the emergence of rust-coloured waters is the sign of the lake dying a silent death, and he holds everyone responsible. “We have built houses in an unprecedented way around its banks. The drainage from the households directly drifts into the lake, making it more polluted than ever,” Ahmad said.

Blessed with over 1,000 small and large water bodies, the landlocked Kashmir Valley, located northern India, is known as the land of lakes and mountains. However, due to large scale urbanization and unprecedented deforestation, most of the water bodies in the region have disappeared.

A recent study by Kashmir’s renowned environmentalists Gowher Naseem and  Humayun Rashid found that 50 percent of lakes and wetlands in the region’s capital have been lost to other land use/land cover categories. During the last century, deforestation led to excessive siltation and subsequent human activity brought about sustained land use changes in these assets of high ecological value.

The study concludes that the loss of water bodies in Kashmir can be attributed to heavy population pressures.

Research fellow at Kashmir University, Aijaz Hassan, says the Kashmir Valley was always prone to floods but several water bodies in the region used to save the local population from getting marooned.

“All the valley’s lakes and the vast associated swamps played an important role in maintaining the uniformity of flows in the rivers. In the past, during the peak summers, whenever the rivers would flow high, these lakes and swamps used to act as places for storage of excessive water and thereby prevented large areas of the valley from floods,” Hassan said.

Fishermen cover their heads and part of their boats with blankets and straw as they wait to catch fish Kashmir's Dal Lake. Credit: Umer Asif/IPS

Fishermen cover their heads and part of their boats with blankets and straw as they wait to catch fish Kashmir’s Dal Lake. Credit: Umer Asif/IPS

India’s largest freshwater lake, Wullar Lake, is located in North Kashmir’s Bandipora area. It too is witnessing severe degradation due to large-scale human intervention. Wullar Lake, which claimed an area of 217.8 sq. km in 1911, has been reduced to about 80 sq. km today, with only 24 sq. km of open water remaining.

Environmentalist Majid Farooq says large areas of the lake have been converted for rice cultivation and tree plantations. According to him, pollution from fertilizers and animal waste, hunting pressure on waterfowl and migratory birds, and weed infestation are other factors contributing to the loss of Wullar Lake’s natural beauty. The fish population in the lake has witnessed a sharp decline due to depletion of oxygen and ingress of pollutants.

Another famed lake known as Dal Lake has shrunk by 24.49 per cent in the past 155 years and its waters are becoming increasingly polluted.

The lake, according to research by the University of Kashmir’s Earth Science Department, is witnessing “multiple pressures” from unplanned urbanisation, high population growth and nutrient load from intensive agriculture and tourism.

Analysis of the demographic data indicated that the human population within the lake areas had shown “more than double the national growth rate.”

Shakil Ahmad Ramshoo, head of Department of Earth Sciences at University of Kashmir, told IPS that the water quality of the lake is deteriorating and no more than 20 percent of the lake’s water is potable.

“As the population increased, all the household sewage, storm runoff goes into the Dal Lake without any treatment — or even if there is treatment done, it is very insufficient. This has increased the pollutant load of the Dal Lake,” he said.

According to Ramshoo, when the study compared the past water quality of the lake with the present, it found ingress of the pollutants has increased and the lake water quality has deteriorated significantly.

According to the region’s tourism department, over one million tourists visit Dal Lake annually and around 300,000 people are directly and indirectly dependent on the lake for their livelihood. The multimillion-dollar handicrafts industry of Kashmir, which gives employment to over 200,000 people, is also heavily dependent upon the arrival of tourists in the region.

A study on the Impact of Tourism Industry on Economic Development of Jammu and Kashmir says that almost 50-60 percent of the total population of Jammu and Kashmir is directly or indirectly engaged in tourism related activities. The industry contributes 15 percent to the state’s GDP.

However, Mudasir Ahmad, whose livelihood is directly dependent on the lake, says every time he takes tourists to explore the lake in his Shikara (a boat), he is asked about the murkier water quality.

“My grandfather and even my father used to drink from this lake. The present situation is worrisome and if this goes unabated, tourists would cease to come. Who would spend money to see cesspools?” Ahmad said.

Fayaz Ahmad Khanday, a fisherman living on Wullar Lake, says the fish production has fallen drastically in the last three years, affecting both him and hundreds of other fishermen.

“Fish used to be present in abundance in the lake but now the scarcity of the species is taking toll. Every day we see dead fish floating on the lake’s waters. We really are concerned about our livelihood and the fate of the lake as well,” Khanday lamented.

The fisherman holds unplanned construction around the lake responsible for its pollution. Aabid Ahmad, a research scholar in Environmental Studies, says Kashmir has become vulnerable to natural disasters as region’s most of the water bodies have either disappeared or are shrinking.

“The floods of September 2014 wreaked havoc and caused heavy loss to property and human lives. That was the first signal of how vulnerable have we become to natural disasters due to environmental degradation,” Ahmad told IPS.

But, for Shakeel Ramshoo, it is still possible to restore the lakes and water bodies of Kashmir.

“Don’t move the people living on these water bodies out.  You just allow them to stay in the lake. We have to control the haphazard constructions that are taking toll around these water bodies,” he said.

“Hutments in the water bodies should be densified with STPs (Sewage Treatment Plants) installed in every household. Land mass can be removed and the area of the water bodies would increase. Also, the sewage treatment mechanism should be better so that the ingress of pollutants is ceased,” Ramshoo said.

]]>
http://www.ipsnews.net/2017/02/shrinking-and-darkening-the-plight-of-kashmirs-dying-lakes/feed/ 0
Trump Marks the End of a Cyclehttp://www.ipsnews.net/2017/02/trump-marks-the-end-of-a-cycle/?utm_source=rss&utm_medium=rss&utm_campaign=trump-marks-the-end-of-a-cycle http://www.ipsnews.net/2017/02/trump-marks-the-end-of-a-cycle/#comments Tue, 21 Feb 2017 18:14:27 +0000 Roberto Savio http://www.ipsnews.net/?p=149052 Roberto Savio is co-founder of Inter Press Service (IPS) news agency and its President Emeritus. He is also publisher of OtherNews.]]>

Roberto Savio is co-founder of Inter Press Service (IPS) news agency and its President Emeritus. He is also publisher of OtherNews.

By Roberto Savio
ROME, Feb 21 2017 (IPS)

Let us stop debating what newly-elected US President Trump is doing or might do and look at him in terms of historical importance. Put simply, Trump marks the end of an American cycle!

Roberto Savio

Roberto Savio

Like it or not, for the last two centuries the entire planet has been living in an Anglophone-dominated world. First there was Pax Britannica (from the beginning of the 19th century when Britain started building its colonial empire until the end of the Second World War, followed by the United States and Pax Americana with the building of the so-called West).

The United States emerged from the Second World War as the main winner and founder of what became the major international institutions – from the United Nations to the World Bank and the International Monetary Fund (IMF) – with Europe reduced to the role of follower. In fact, under the Marshall Plan, the United States became the force behind the post-war reconstruction of Europe.

As winner, the main interest of the United States was to establish a ‘world order’ based on its values and acting as guarantor of the ‘order’.

Thus the United Nations was created with a Security Council in which it could veto any resolution, and the World Bank was created with the US dollar as the world’s currency, not with a real world currency as British economist and delegate John Maynard Keynes had proposed. The creation of the North Atlantic Treaty Organisation (NATO) – as a response to any threat from the Soviet Union – was an entirely American idea.

The lexicon of international relations was largely based on Anglo-Saxon words, and often difficult to translate into other languages – terms such as accountability, gender mainstreaming, sustainable development, and so on. French and German disappeared as international languages, and lifestyle became the ubiquitous American export – from music to food, films and clothes. All this helped to reinforce American myths.

The United States thrust itself forward as the “model for democracy” throughout the world, based on the implied assertion that what was good for the United States was certainly good for all other countries. The United States saw itself as having an exceptional destiny based on its history, its success and its special relationship with God. Only US presidents could speak on behalf of the interests of humankind and invoke God.

The economic success of the United States was merely confirmation of its exceptional destiny – but the much touted American dream that anyone could become rich was unknown elsewhere.

The first phase of US policy after the Second World War was based on multilateralism, international cooperation and respect for international law and free trade – a system which assured the centrality and supremacy of the United States, reinforced by its military might,

The United Nations, which grew from its original 51 countries in 1945 to nearly 150 in just a few decades, was the forum for establishing international cooperation based on the values of universal democracy, social justice and equal participation.

In 1974, the UN General Assembly unanimously adopted the Charter of Economic Rights and Duties of States – the first (and only) plan for global governance – which called for a plan of action to reduce world inequalities and redistribute wealth and economic production. But this quickly became to be seen by the United States as a straitjacket.

The arrival of Ronald Reagan at the White House in in1981 marked an abrupt change in this phase of American policy based on multilateralism and shared international cooperation. A few months before taking office, Reagan had attended the North-South Economic Summit in Cancun, Mexico, where the 22 most important heads of state (with China as the only socialist country) had met to discuss implementation of the General Assembly resolution.

Reagan, who met up with enthusiastic British Prime Minister Margaret Thatcher, stopped the plan for global governance dead in its tracks. I was there and saw how, to my dismay, the world went from multilateralism to the old policy of power in just two days. The United State simply refused to see its destiny being decided by others – and that was the start of the decline of the United Nations, with the United States refusing to sign any international treaty or obligation.

America’s dream and its exceptional destiny were strengthened by the rhetoric of Reagan who even went as far as slogan sing “God is American”.

It is important to note that, following Reagan’s example, all the other major powers were happy to be freed of multilateralism. The Reagan administration, allied with that of Thatcher, provided an unprecedented example of how to destroy the values and practices of international relations and the fact that Reagan has probably been the most popular president in his country’s history shows the scarce significance that the average American citizen gives to international cooperation.

Under Reagan, three major simultaneous events shaped our world. The first was deregulation of the financial system in 1982, later reinforced by US President Bill Clinton in 1999, which has led to the supremacy of finance, the results of which are glaringly evident today.

The second was the creation in 1989 of an economic vision based on the supremacy of the market as the force underpinning societies and international relations – the so-called Washington Consensus – thus opening the door for neoliberalism as the undisputed economic doctrine.

Third, also in 1989, came the collapse of the Berlin Wall and the end of the “threat” posed by the Soviet bloc.

It was at this point that the term “globalisation” became the buzzword, and that the United States was once again going to be the centre of its governance. With its economic superiority, together with the international financial institution which it basically controlled, plus the fact that the Soviet “threat” had now disappeared, the United States was once again placing itself at the centre of the world.

As Henry Kissinger, Secretary of State under presidents Richard Nixon and Gerald Ford, once said, “Globalisation is another term for U.S. domination.”

This phase ran from 1982 until the financial crisis of 2008, when the collapse of American banks, followed by contagion in Europe, forced the system to question the Washington Consensus as an undisputable theory.

Doubts were also being voiced loudly through the growing mobilisation of civil society /the World Social Forum, for example, had been created in 1981) and by the offensive of many economists who had previously remained in silence.

The latter began insisting that macroeconomics – the preferred instrument of globalisation – looked only at the big figures. If microeconomics was used instead, they argued, it would become clear that there was very unequal distribution of growth (not to be confused with development) and that delocalisation and other measures which ignored the social impact of globalisation, were having disastrous consequences.

The disasters created by three centuries of geed as the main value of the “new economy” were becoming evident through figures showing an unprecedented concentration of wealth in a few hands, with many victims – especially among the younger generation.

All this was accompanied by two new threats: the explosion of Islamic terrorism, widely recognised as a result of the invasion of Iraq in 2003, and the phenomenon of mass migration, which largely came after the Iraq war but multiplied after the interventions in Syria and Libya in 2011, and for which the United States and the European Union bear full responsibility.

Overnight, the world passed from greed to fear – the two motors of historical change in the view of many historians.

And this is brings us to Mr. Trump. From the above historical excursion, it is easy to understand how he is simply the product of American reality.

Globalisation, initially an American instrument of supremacy, has meant that everyone can use the market to compete, with China the most obvious example. Under globalisation, many new emerging markets entered the scene, from Latin America to Asia. The United States, along with Europe, have become the victims of the globalisation which both perceived as an elite-led phenomenon.

Let us not forget that, after the collapse of the Berlin Wall, ideologies were thrown by the wayside. Politics became mere administrative competition, devoid of vision and values. Corruption increased, citizens stopped participating, political parties became self-referential, politicians turned into a professional caste, and elite global finance became isolated in fiscal paradises.

Young people looked forward to a future of unemployment or, at best temporary jobs, at the same time as they watched over four trillion dollars being spent in a few years to save the banking system.

The clarion call from those in power was, by and large, let us go back to yesterday, but to an even better yesterday – against any law of history. Then came Brexit and Trump.

We are now witnessing the conclusion of Pax Americana and the return to a nationalist and isolationist America. It will take some time for Trump voters to realise that what he is doing does not match his promises, that the measures he is putting in place favour the financial and economic elites and not their interests.

We are now facing a series of real questions.

Will the ideologue who helped Trump be elected – Stephen Bannon, chief executive officer of Trump’s presidential campaign – have the time to destroy the world both have inherited Will the world will be able to establish a world order without the United States at its centre? How many of the values that built modern democracy will be able to survive and become the bases for global governance?

A new international order cannot be built without common values, just on nationalism and xenophobia.

Bannon is organising a new international alliance of populists, xenophobes and nationalists – made up of thee likes of Nicholas Farage (United Kingdom), Matteo Salvini and Beppe Grillo (Italy), Marine Le Pen (France) and Geert Wilders (Netherlands) – with Washington as their point of reference.

After the elections in the Netherlands, France and Germany this year, will know how this alliance will fare, but one thing is clear – if, beyond its national agenda, the Trump administration succeeds in creating a new international order based on illiberal democracy, we should start to worry because war will not be far away.

]]>
http://www.ipsnews.net/2017/02/trump-marks-the-end-of-a-cycle/feed/ 0
Tax Evasion Lessons From Panamahttp://www.ipsnews.net/2017/02/tax-evasion-lessons-from-panama/?utm_source=rss&utm_medium=rss&utm_campaign=tax-evasion-lessons-from-panama http://www.ipsnews.net/2017/02/tax-evasion-lessons-from-panama/#comments Tue, 21 Feb 2017 14:44:28 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=149048 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]>

Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

By Jomo Kwame Sundaram
KUALA LAMPUR, Feb 21 2017 (IPS)

Unlike Wikileaks and other exposes, the Panama revelations were carefully managed, if not edited, quite selective, and hence targeted, at least initially. Most observers attribute this to the political agendas of its main sponsors. Nevertheless, the revelations have highlighted some problems associated with illicit financial flows, as well as tax evasion and avoidance, including the role of enabling governments, legislation, legal and accounting firms as well as shell companies.

US President Obama criticized ‘poorly designed’ laws for allowing illicit money transfers worldwide. He noted that “Tax avoidance is a big, global problem…a lot of it is legal, but that’s exactly the problem”.

US President Obama criticized ‘poorly designed’ laws for allowing illicit money transfers worldwide. He noted that “Tax avoidance is a big, global problem…a lot of it is legal, but that’s exactly the problem”.

The political tremors generated by the edited release of 1.1 million documents were swift. No one expected Iceland’s prime minister to resign in less than 48 hours, or that the then British prime minister would soon publicly admit that he had benefited from the hidden wealth earned from an opaque offshore company of his late father.

Panama Papers
The Panama Papers help us understand how shell companies and trusts operate. The documents, from the law firm Mossack Fonseca, involved 210,000 legal entities. The Panama-based law firm has worked with some of the world’s biggest banks — including HSBC, Société Générale, Credit Suisse, UBS and Commerzbank — to set up thousands of offshore companies to circumvent tax and law enforcement authorities worldwide.

The accounts enabled by just one law firm in Panama is the tip of a massive iceberg still hidden from public view as many other such firms in different locations provide similar services. High net-worth individuals and corporations have a far greater ability to evade taxes by paying tax advisers, lawyers and accountants, and by opening undeclared companies and financial accounts in low-tax jurisdictions. The expose shows that the firm aided public officials, their cronies and large corporations to avoid taxes.

Not surprisingly, Mossack Fonseca claims it has never been accused or charged in connection with criminal wrongdoing. This only underscores the fact that Panama’s financial regulators, police, judiciary and political system are very much part of the system. Similarly, many clients believe that they have not violated national and international regulations.

‘Offshore’ tax havens

Total global wealth was estimated, by a 2012 Tax Justice Network (TJN) USA report, entitled The Price of Offshore Revisited, at US$231 trillion in mid-2011; this was roughly 3.5 times the global GDP of US$65 trillion in 2011. It conservatively estimated that, of this, US$21 to US$32 trillion of hidden and stolen wealth has been stashed secretly, ‘virtually tax-free’, in and ‘through’ more than 80 secret jurisdictions.

According to Oxfam, at least US$18.5 trillion is hidden in undeclared and untaxed tax havens worldwide, with two thirds in the European Union, and a third in UK-linked sites. After the Panama Papers leak, Oxfam revealed that the top 50 US companies have stashed US$1.38 trillion offshore to minimize US tax exposure. The 50 companies are estimated to have earned some US$4 trillion in profits across the world between 2008 and 2014, but have only paid 26.5 per cent of it in US tax.

In a 5 April 2016 speech, following the US Treasury’s crackdown on corporate tax ‘inversions’, US President Obama criticized ‘poorly designed’ laws for allowing illicit money transfers worldwide. He noted that “Tax avoidance is a big, global problem…a lot of it is legal, but that’s exactly the problem”.

It was also estimated that this costs poor countries over US$100 billion in lost tax revenues every year. Oxfam also found that tax dodging by transnational corporations alone costs the developing world between US$100 to US$160 billion yearly. If ‘profit shifting’ is taken into account, about US$250 to US$300 billion is lost. After all, many countries and institutions actively enable—and profit handsomely from—the theft of massive funds from developing countries.

More so now than ever before, the term ‘offshore’ for tax havens refers less to physical locations than to virtual ones, often involving “networks of legal and quasi-legal entities and arrangements”. Private banking ‘money managers’ provide all needed services — including financial, economic, legal, accounting and insurance services — to facilitate such practices, making fortunes for themselves by doing so. Thousands of shell banks and insurers, 3.5 million paper companies, more than half the world’s registered commercial ships over 100 tons, and tens of thousands of ‘shell’ subsidiaries of giant global banks, accounting firms and various other companies operate from such locations.

Reforming tax havens?
In recent years, amid increased public scrutiny, the global tax haven landscape has changed. The Organization of Economic Cooperation and Development (OECD), the Paris-based club of rich nations, has been developing a global transparency initiative to crack down on tax haven secrecy. But Panama is refusing to participate seriously, with the OECD tax chief calling it a jurisdiction “that welcomes crooks and money launderers”.

To qualify for the OECD’s ‘white list’ of approved jurisdictions, almost 100 countries and other jurisdictions have agreed, since 2014, to impose new modest disclosure requirements for international customers. Hence, the Swiss government has now relaxed confidentiality-cum-secrecy provisions, allowing information sharing about illegal or unauthorized deposits with other countries, subject to certain conditions. Consequently, the world of illegal and unaccounted cash has moved in response.

Facilitating tax evasion
Only a handful of nations have declined to sign on. The most prominent is the US. Another is Panama. As Panama has dodged, delayed and diluted compliance with OECD regulations, many accounts moved to Panama from other signatory tax havens. As Bloomberg noted earlier in 2016, “Panama and the U.S. have at least one thing in common: Neither has agreed to new international standards to make it harder for tax evaders and money launderers to hide their money.”

Rothschild, the centuries-old European financial institution, is now moving the fortunes of wealthy foreign clients out of offshore havens subject to the new international disclosure requirements, to Rothschild-run trusts in Nevada, which are exempt.

It has acknowledged that the US itself is the world’s single greatest tax haven, while the UK plays a disproportionately greater role as a tax haven, considering the smaller size of its population and economy. A TJN study found that the US continues to facilitate financial secrecy and tax evasion. “Due to lax requirements…, it is far easier to set up an anonymous shell company in the US than it is in well-known tax havens”, according to the Financial Transparency Coalition.

The US does not accept a lot of international standards, and can get away with it because of its economic and political clout, but is probably the only country that can continue to do that. It has taken steps to keep track of American assets abroad, but not of foreign assets in the US.

]]>
http://www.ipsnews.net/2017/02/tax-evasion-lessons-from-panama/feed/ 0
Making the Deep Blue Sea Green Againhttp://www.ipsnews.net/2017/02/making-the-deep-blue-sea-green-again/?utm_source=rss&utm_medium=rss&utm_campaign=making-the-deep-blue-sea-green-again http://www.ipsnews.net/2017/02/making-the-deep-blue-sea-green-again/#comments Mon, 20 Feb 2017 04:17:29 +0000 Lyndal Rowlands http://www.ipsnews.net/?p=149021 A young boy stands near mangroves planted near his home in the village of Entale in Sri Lanka’s northwest Puttalam District. Credit: Amantha Perera/IPS

A young boy stands near mangroves planted near his home in the village of Entale in Sri Lanka’s northwest Puttalam District. Credit: Amantha Perera/IPS

By Lyndal Rowlands
UNITED NATIONS, Feb 20 2017 (IPS)

Kids growing up in the Seychelles think of the ocean as their backyard, says Ronald Jean Jumeau, Seychelles’ ambassador for climate change and SIDS.

“Our ocean is the first and eternal playground of our children, they don’t go to parks they go to the ocean, they go to the beach, they go to the coral reefs, and all that is just collapsing around them,” Jumeau told IPS.

The tiny country off the East Coast of Africa is one of 39 UN member states known as small island states, or as Jumeau likes to call them: “large ocean states.”

Ambassadors and delegations from these 39 countries often speak at UN headquarters in New York steadfastly sounding the alarm about the changes to the world’s environment they are witnessing first hand. Jumeau sees these island states as sentinels or guardians of the oceans. He prefers these names to being called the canary in the gold mine because, he says: “the canaries usually end up dead.”

Yet while much is known about the threats rising oceans pose to the world’s small island states, much less is known about how these large ocean states help defend everyone against the worst impacts of climate change by storing “blue carbon.”

“We are not emitting that much carbon dioxide but we are taking everyone else’s carbon dioxide into our oceans,” says Jumeau.

"There’s 3 billion people around the world that are primarily dependent on marine resources for their survival and so they depend on what the ocean can produce,” -- Isabella Lövin, Sweden’s deputy prime minister.

Despite decades of research, the blue carbon value of oceans and coastal regions is only beginning to be fully appreciated for its importance in the fight against climate change.

“There’s proof that mangroves, seas salt marshes and sea grasses absorb more carbon (per acre) than forests, so if you’re saying then to people don’t cut trees than we should also be saying don’t cut the underwater forests,” says Jumeau.

This is just one of the reasons why the Seychelles has banned the clearing of mangroves. The temptation to fill in mangrove forests is high, especially for a nation with so little land, but Jumeau says there are many benefits to sustaining them.

Mangroves guard against erosion and protect coral reefs. They are also provide nurseries for fish.

But its not just coastal forests that take carbon out of the atmosphere. Oceans also absorb carbon, although according to NASA their role is more like inhaling and exhaling.

The Seychelles, whose total ocean territory is 3000 times larger than its islands, is also thinking about how it can protect the oceans so they can continue to perform this vital function.

The nation plans to designate specific navigation zones within its territories to allow other parts of the ocean a chance to recover from the strains associated with shipping.

The navigation zones will “relieve the pressure on the ocean by strengthening the resilience of the oceans to absorb more carbon dioxide and ocean acidification,” says Jumeau. He acknowledges the plan will only work if all countries do the same but says you have to start somewhere.

Fortunately other countries are also beginning to recognise the importance of protecting the world’s oceans.

Isabella Lövin, Sweden’s deputy prime minister and climate minister told IPS that the world is going “in the totally wrong direction,” when it comes to achieving the goal of sustainable oceans and life below water.

“If you look at the trends right now, you see more and more overfishing, we are seeing more and more pollution, plastic litter coming into our oceans, and we’re also seeing all the stress that the ocean is under due to climate change, acidification of the water, but also the warming and sea level rises and all of this is putting a tremendous, tremendous pressure on our oceans,” said Lövin.

Together with Fiji, Sweden is convening a major UN Ocean Conference in June this year.

The conference aims to bring together not only governments but also the private sector and non-governmental organisations to create a more coordinated approach to sustaining oceans. It will look at the key role that oceans play in climate change but also other issues such as the alarming prospect that there will be more plastic in our seas than fish by the year 2050.

“There’s 3 billion people around the world that are primarily dependent on marine resources for their survival and so they depend on what the ocean can produce, so it’s about food security, it’s also about livelihoods for hundreds of millions of people that depend on small scale fisheries mostly in developing countries,” said Lövin.

Lövin also noted that rich countries need to work together with developing countries to address these issues, because the demand for fish in rich countries has put a strain on the global fish stocks that developing countries rely on.

“Rich countries … have been over-fishing with industrial methods for decades and now when they European oceans are being emptied more or less we have depleted our resources and then we import and we fish (over long distances in) developing countries’ waters.”

“We need to make sure that fish as a resource is conserved and protected for future generations.”

]]>
http://www.ipsnews.net/2017/02/making-the-deep-blue-sea-green-again/feed/ 1
Alternative Mining Indaba Makes Its Voice Heardhttp://www.ipsnews.net/2017/02/alternative-mining-indaba-makes-its-voice-heard/?utm_source=rss&utm_medium=rss&utm_campaign=alternative-mining-indaba-makes-its-voice-heard http://www.ipsnews.net/2017/02/alternative-mining-indaba-makes-its-voice-heard/#comments Sat, 18 Feb 2017 04:00:11 +0000 Mark Olalde http://www.ipsnews.net/?p=149007 A delegate from the Alternative Mining Indaba dances during a protest march on Feb. 8, 2017. About 450 representatives of civil society mining-affected communities attended the conference in Cape Town. Credit: Mark Olalde/IPS

A delegate from the Alternative Mining Indaba dances during a protest march on Feb. 8, 2017. About 450 representatives of civil society mining-affected communities attended the conference in Cape Town. Credit: Mark Olalde/IPS

By Mark Olalde
CAPE TOWN, South Africa, Feb 18 2017 (IPS)

“Comrades, we have arrived. This cherry is eight years awaited. We have made it to this place,” Bishop Jo Seoka told the crowd, pausing to allow for the whistles and cheers.

Seoka, the chairman of a South African NGO called the Bench Marks Foundation, presided over the crowd of protesters that was busy verbally releasing years of frustration at the continent’s mining industry. The protest on Feb. 8 was part of the Alternative Mining Indaba (AMI) held in Cape Town.“We want transparency, we want accountability and, most importantly, we want participation of the people affected by mining." --Mandla Hadebe

The annual gathering brings together residents of mining-affected communities and civil society representatives to discuss common problems caused by the mining industry in Africa. On its third and final day, the AMI took to the streets to deliver its declaration of demands to industry and government representatives.

While police temporarily blocked the march from reaching the convention center hosting the Mining Indaba, the industry’s counterpart to the AMI, protesters were angry after years of having their side of the story largely ignored.

They marched up to the line of police and private security guarding the doors to the conference hall and demanded to speak with members of the Mining Indaba.

“As citizens and representations (sic) citizen-organisations we wish to express our willingness to work with African governments and other stakeholders in the quest to harness the continent’s vast extractive resources to underpin Africa’s socio-economic transformation and the [Africa Mining Vision] lays a foundation for this,” the declaration stated.

“I very much appreciate the willingness to engage in dialogue, and I think this is the first step towards establishing a common vision,” Tom Butler, CEO of the International Council on Mining & Metals, told the crowd before signing receipt of the declaration and handing it over for the managing director of the Mining Indaba to also sign.

Alternative Mining Indaba participants dance and sing struggle songs during their march on Feb. 8, 2017. Individual countries have begun holding their own alternative indabas, with South Africa’s first country-specific conference held this year in Johannesburg. Credit: Mark Olalde/IPS

Alternative Mining Indaba participants dance and sing struggle songs during their march on Feb. 8, 2017. Individual countries have begun holding their own alternative indabas, with South Africa’s first country-specific conference held this year in Johannesburg. Credit: Mark Olalde/IPS

While Butler came to the AMI to give a presentation on the mining industry’s behalf, few other members of government or the industry made an attempt to engage with the AMI. The Mining Indaba’s Twitter account even blocked some AMI delegates who took to social media to air their grievances.

The official Mining Indaba is a place for mining ministers, CEOs of mining houses and other industry representatives to network and strike deals. During the event, South Africa and Japan, for example, signed a bilateral agreement to boost collaboration along the mining value chain.

“This Indaba has affirmed South Africa’s status as a preferred investment destination,” Mosebenzi Zwane, the country’s minerals minister, said in a statement following the event. “As government, we are heartened by this and recommit to ensuring the necessary regulatory and policy certainty to attract even more investment into our country.”

In his opening address at the Mining Indaba, Zwane also announced that the draft of the new Mining Charter, a document guiding the country’s mining industry, would be published in March.

The AMI, however, was born as a community-level response to the fact that such decisions are usually made without consulting those most impacted by mining.

“They are going to find this huddled mass of people,” Mandla Hadebe, one of the event organizers, said of the protest’s goals in the first year. Only 40 delegates were present.

An Alternative Mining Indaba delegate from Swaziland sings protest songs. There was a feeling of triumph among the delegates after achieving even a degree of acknowledgement from industry representatives. Credit: Mark Olalde/IPS

An Alternative Mining Indaba delegate from Swaziland sings protest songs. There was a feeling of triumph among the delegates after achieving even a degree of acknowledgement from industry representatives. Credit: Mark Olalde/IPS

In its eighth year, the AMI has grown to about 450 participants representing 43 countries. Delegates came from across Africa – from Egypt to the Democratic Republic of the Congo and Malawi – as well as the rest of the world – from Cambodia to Bolivia and Australia – to share their stories.

“It just shows that our struggles are common and that we’ve decided to unite for a common purpose,” Hadebe said of the growth. “We want transparency, we want accountability and, most importantly, we want participation of the people affected by mining.”

A number of panels dedicated to community voices gave activists a platform to share their stories and methods of resistance. Translators in the various conference rooms translated among English, French and Portuguese, a necessity as well as a tacit nod to the ever-present effects of the same colonialism that brought mining.

“What we heard first were promises,” a woman from Peru recounted. “Thirty years passed, and now I call the second part of this process ‘the lies.’”

“We are trying to build a critical mass that is angry enough to oppose irresponsible mining,” a delegate from Kenya explained.

Some panels addressed specific issues facing Africa’s extractive industry. One discussion explained the need to move away from indirect taxes toward direct ones focused on mining houses. The presenter, a member of Tax Justice Network-Africa, said that an increase in government audits had led to a surge in tax revenue since 2009, a rare success story.

Another panel dealt with the realities of impending job loss due to widespread mechanization, while others took on the need for governments to strike better deals with international corporations.

Side events provided forums for more nuanced learning on topics such as the corruption involved with mining on communal land. At the showing of a documentary following South African land rights activist Mbhekiseni Mavuso, delegates from other countries such as Sierra Leone compared and contrasted their own forced relocations.

Mavuso said, “We are regarded as people who do not count. We have now become what we call ‘victims of development,’ and so that is also making us to become victims of democracy. We are fighting, so let us all stand up and fight.”

Occasionally, delegates took to the microphone to lament continued talk with minimal action. Much of the AMI focused on the Africa Mining Vision, a document produced by the African Union. While its goal is to make mining beneficial for all Africans, the document is a high-level policy discussion lacking a direct connection to affected communities.

The three-day conference has outgrown its ability to delve deeply into every issue impacting the represented countries, so delegates have taken the idea to their home nations. In the past year, Madagascar, Angola, Swaziland and others held their first country-specific alternative indabas.

Only a week before the AMI, South Africa hosted its first such conference in Johannesburg.

Despite many delegates expressing feelings of helplessness or anger, the march to the Mining Indaba provided a temporary sense of victory.

After finally obtaining some level of acknowledgment from industry representatives, the AMI participants danced and took selfies outside the Mining Indaba, far from the townships and rural villages adjacent to mines.

As the delegates boarded busses to depart the event, the vehicles shook from stomping and singing, and some protesters leaned out the windows to shout their last parting sentiments on behalf of mining-affected communities around the country and the continent.

*Mark Olalde’s mining reporting is financially supported by the Pulitzer Center on Crisis Reporting, the Fund for Environmental Journalism and the Fund for Investigative Journalism.

]]>
http://www.ipsnews.net/2017/02/alternative-mining-indaba-makes-its-voice-heard/feed/ 1
Expansion of Renewable Energies in Mexico Has Victims, Toohttp://www.ipsnews.net/2017/02/expansion-of-renewable-energies-in-mexico-has-victims/?utm_source=rss&utm_medium=rss&utm_campaign=expansion-of-renewable-energies-in-mexico-has-victims http://www.ipsnews.net/2017/02/expansion-of-renewable-energies-in-mexico-has-victims/#comments Fri, 17 Feb 2017 22:34:19 +0000 Emilio Godoy http://www.ipsnews.net/?p=149013 In Mexico, wind farms spark controversy due to complaints of unfair treatment, land dispossession, lack of free, prior and informed consent and exclusion from the electricity generated. In the photo, wind turbines frame the horizon of the northern city of Zacatecas. Credit: Emilio Godoy/IPS

In Mexico, wind farms spark controversy due to complaints of unfair treatment, land dispossession, lack of free, prior and informed consent and exclusion from the electricity generated. In the photo, wind turbines frame the horizon of the northern city of Zacatecas. Credit: Emilio Godoy/IPS

By Emilio Godoy
KIMBILÁ, Mexico, Feb 17 2017 (IPS)

The growing number of wind and solar power projects in the southern Mexican state of Yucatán are part of a positive change in Mexico’s energy mix. But affected communities do not see it in the same way, due to the fact that they are not informed or consulted, and because of how the phenomenon changes their lives.

“We have no information. We have some doubts, some people say it’s good and some say it’s bad. We have heard what is said in other states,” small farmer Luis Miguel, a Mayan Indian, told IPS.

He lives in Kimbilá, a town in the municipality of Izmal, which is the site of an up-to-now failed private wind power venture that has been blocked by opposition from the area’s 3,600 inhabitants and in particular from the ejido or communal land where the wind farm was to be installed.“There is a lack of information going to the communities, who don’t know the scope of the contracts; (the companies and authorities) don’t explain to them the problems that are going to arise. Conflicts are generated, and manipulation is used to get the permits. Social engineering is used to divide the communities.” -- Romel González

“We fear that they will damage our crops,” said Miguel, whose father is one of the 573 members of the Kimbilá ejido, located in the Yucatán Peninsula, 1,350 km southeast of Mexico City.

The questioned project, run by the Spanish company Elecnor, includes the installation of 50 wind turbines with a capacity of 159 MW per year.

The company installed an anemometric tower in 2014, but the local population, who grow maize and garden vegetables, raise small livestock and produce honey for a living, did not find out about the project until January 2016.

Since then, the ejido has held two assemblies and cancelled another, without reaching an agreement to approve a 25-year lease on the lands needed for the wind farm.

Meanwhile, in February 2016, the members of the ejido filed a complaint against the Procuraduría Agraria – the federal agency in charge of protecting rural land – accusing it of defending the interests of the company by promoting community assemblies that were against the law.

The wind farm is to have an operating life of 30 years, including the preparatory phase, construction and operation, and it needs 77 hectares of the 5,000 in the ejido.

The company offered between five and 970 dollars per hectare, depending on the utility of the land for a wind farm, a proposition that caused unrest among the ejido members. It would also give them 1.3 per cent of the turnover for the power generated. But the electricity would not be used to meet local demand.

“We haven’t been given any information. This is not in the best interests of those who work the land. They are going to destroy the vegetation and 30 years is a long time,” beekeeper Victoriano Canmex told IPS.
This indigenous member of the ejido expressed his concern over the potential harm to the bees, “because new roadswould be opened with heavy machinery. They said that they would relocate the apiaries but they know nothing about beekeeping. It’s not fair, we are going to be left with nothing,” he said.

Canmex, who has eight apiaries,checks the beehives twice a week, together with four of his six children. He collects about 25 30-kg barrels of honey, which ends up on European tables. Yucatan honey is highly appreciated in the world, for its quality and organic nature.

Luis Miguel, a Mayan farmer from Kimbilá, in the southeastern state of Yucatán, Mexico, fears that the installation of a wind farm in his community will damage local crops of corn and vegetables.  Credit: Emilio Godoy/IPS

Luis Miguel, a Mayan farmer from Kimbilá, in the southeastern state of Yucatán, Mexico, fears that the installation of a wind farm in his community will damage local crops of corn and vegetables. Credit: Emilio Godoy/IPS

Yucatán, part of the ancient Mayan empire, where a large part of the population is still indigenous, has become a new energy frontier in Mexico, due to its great potential in wind and solar power.

This state adopted the goal of using 9.3 per cent non-conventional renewable energies by 2018. In Yucatán, the incorporation per year of new generation capacity should total 1,408 MW by 2030.

Leaving out the big hydropower plants, other renewable sources account for just eight per cent of the electricity produced in Mexico. According to official figures, in December 2016, hydropower had an installed capacity of 12,092 MW, geothermal 873 MW, wind power 699 MW, and photovoltaic solar power, six MW.

According to the Mexican Wind Energy Association, which represents the industry, in Mexico there are at least 31 wind farms located in nine states, with a total installed capacity of 3,527 MW of clean energy for the northeast, west, south and southeast regions of this country of 122 million people.

Besides the lack of information, and of free, prior and informed consent, as the law and international conventions require, indigenous people complain about impacts on migratory birds, rise in temperatures in areas with solar panels and water pollution caused by leaks from wind towers.

For Romel González, a member of the non-governmental Regional Indigenous and Popular Council of Xpujil, a town in the neighboring state of Campeche, the process of energy development has legal loopholes that have to do with superficial contracts and environmental impact studies.

“There is a lack of information for the communities, who don’t know the scope of the contracts; (the companies and authorities) don’t explain to them the problems that are going to arise. Conflicts are generated, and manipulation is used to get the permits. Social engineering is used to divide the communities,” González told IPS.

He said that in the region, there are “previously untapped” natural resources that are attracting attention from those interested in stripping the communities of these resources.

The state is experiencing a clean energy boom, with plans for five solar plants, with a total capacity of 536 MW, and five wind farms, with a combined capacity of 256 MW. The concessions for the projects, which are to operate until 2030, have already been awarded to local and foreign companies.

In the first national power generation auction organised by the government in March 2016, four wind power and five solar power projects won, while in the second one, the following September, two new wind projects were chosen.

The change in the electricity mix is based on Mexico’s energy reform, in force since August 2014, which opened the industry to national and international private capital.

Local authorities project that by 2018, wind power generation will amount to 6,099 MW, including 478 from Yucatán, with the total increasing two years later to 12,823 MW, including 2,227 MW from this state.

Yucatán will draw a projected 52 million dollars in investment to this end in 2017 and 1.58 billion in 2018.

The Electricity Industry Law, in effect since 2014, stipulates that each project requires a social impact assessment. But opponents of the wind power projects have no knowledge of any assessment carried out in the state, while there is only evidence of two public consultations with affected communities, in the case of two wind farms.

“The electricity will not be for us and we don’t know what will happen later (once the wind farm is installed). That is why we have our doubts,” said Miguel.

People in Yucatán do not want to replicate the “Oaxaca model”. That is the southern state which has the largest number of wind farms, which have drawn many accusations of unfair treatment, land dispossession and lack of free, prior and informed consent.

“The authorities want to do this by all means, they are just trying to get these projects approved,” said Canmex.

González criticised the government for failing to require assessments. “We have asked for them and the government has responded that there aren’t any. The community response to the projects will depend on their level of awareness and social organisation. Some communities will react too late, when the project is already underway,” he said.

]]>
http://www.ipsnews.net/2017/02/expansion-of-renewable-energies-in-mexico-has-victims/feed/ 0
The Planned US Border Tax Would Most Likely Violate WTO Rules – Part 2http://www.ipsnews.net/2017/02/the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2/?utm_source=rss&utm_medium=rss&utm_campaign=the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2 http://www.ipsnews.net/2017/02/the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2/#comments Fri, 17 Feb 2017 15:52:20 +0000 Martin Khor http://www.ipsnews.net/?p=148999 The tax on US imports, without the same being applied to US-made products, discriminates against foreign products, and US exports being exempted from taxes is tantamount to being an export subsidy. How will this be taken at the WTO, the guardian of the multilateral trading system? Credit: Amantha Perera/IPS

The tax on US imports, without the same being applied to US-made products, discriminates against foreign products, and US exports being exempted from taxes is tantamount to being an export subsidy. How will this be taken at the WTO, the guardian of the multilateral trading system? Credit: Amantha Perera/IPS

By Martin Khor
PENANG, Feb 17 2017 (IPS)

As American lawmakers and the Trump administration prepare the ground for introducing a border adjustment tax, many controversial issues have emerged, including whether they go against the rules of the World Trade Organisation (WTO).

The border tax is part of the overhaul of the US corporate tax system proposed by Republican Congress leaders and appears to have the support of President Donald Trump.

If adopted, the tax measure is sure to attract the opposition of the United States’ trading partners, as their exports to the US will have the equivalent of a 20% tax imposed on them, whereas the exports from the US will be exempted from a 20% corporate tax.

The tax on US imports, without the same being applied to US-made products, discriminates against foreign products, and US exports being exempted from taxes is tantamount to being an export subsidy.

How will this be taken at the WTO, the guardian of the multilateral trading system?

US Congressman Kevin Brady, chairman of the House Ways and Means Committee, and the plan’s main advocate, is convinced the plan is WTO-consistent, but has yet to explain why.

On the other hand, many trade and legal experts think the plan violates the principles and rules of the WTO, although they caution that a final opinion is possible only when the language of the law is known.

Their general view is as follows: Firstly, the inability to deduct import expenses from a company’s tax (while allowing deductions for locally sourced products and services and wages) discriminates against imports vis-à-vis domestic products, and violates the national treatment principle of the WTO and the rules of the General Agreement on Tariffs and Trade (GATT) which specify that imports must be treated no less favourably than similar locally produced goods.

Secondly, the exemption of export revenues from the taxable income would be most likely assessed as a prohibited export subsidy under the WTO’s subsidies agreement.

The renowned international trade expert, Bhagirath Lal Das, says that there are two separate issues to be considered:  the differential treatment of domestic and imported materials, and the differential tax treatment of income based on whether the product is domestically consumed or exported.

Martin Khor

Martin Khor

Says Das:   “It appears that the proposal is to deduct the cost of domestic input (product) from a company’s income while computing the tax, whereas there is no such deduction if a like imported input is used in the production.

“If this be the case, such a provision will clearly violate the principle of national treatment contained in Article III of the GATT 1994.”     Under that article, imported products must be accorded treatment no less favourable than that given to similar domestic products in respect of laws and regulations.

Added Das:  “If the use of the domestic product results in tax reduction whereas the use of the like imported product does not get similar treatment, clearly the imported product will get “less favourable” treatment. And that will violate the principle of national treatment, and it can be successfully challenged in the WTO on this ground.”

On the second issue, the proposal is to differentiate between the earning from domestic sale and that from export in the matter of taxation in respect of a product.

Commented Das:  “Here it would appear that the exemption of the tax is conditional on export. This practice will clearly qualify for being categorised as export subsidy which is prohibited under Article 3 of the WTO’s Subsidy Agreement.”

Das cites a case of an American company, the Domestic International Sales Corporation (DISC).  A portion of its profit which was engaged in export was tax free.  The EEC, the predecessor of EC, raised a dispute in the GATT in 1973. The matter was delayed for a long time until in 1999 a panel at the WTO ruled that the US practice was in fact an export subsidy and was prohibited.

“This case may not be exactly the same as the currently anticipated proposal, but it does point to the fallibility of providing government benefit contingent on export,” says Das.

Das was formerly Chairman of the General Council of GATT,  Indian Ambassador to GATT, and subsequently Director of Trade in the UN Conference on Trade and Development, and has written many books on the WTO and its agreements.

According to another eminent expert on the WTO, Chakravarthi Raghavan, whether the US law is considered “legal” depends on the language of the law and its actual effects.

“There is little doubt that the “pith and substance” of the Republican border tax proposal or ideas will be in violation of Articles II and III of GATT and Article 3.1 of the Subsidies Agreement.”

Raghavan, Chief Editor Emeritus of the South-North Development Monitor, followed and analysed the negotiations of the Uruguay Round and of the WTO on a daily basis ever since.

There are many shortcomings with the WTO dispute system. Few countries have the courage or financial resources to take up cases against the US.
Countries can challenge the US at the WTO and if they succeed the US has to change its law or face retaliatory action.  The winning party can block US exports to it equivalent in value to the loss of its exports to the US.

However, there are many shortcomings with the WTO dispute system.  Few countries have the courage or financial resources to take up cases against the US.

If some countries do take up cases, it takes as long as three to four years for a case in the WTO to wind its way through panel hearings and to a final verdict at the Appellate Body, and for the winning Party to get the go-ahead to take retaliatory action.  During that period, the US can continue with its laws and practices.

If the US loses, it need not pay any compensation to the successful Party for having suffered losses.   Moreover, in the past, when it loses cases at the WTO, the US has typically not complied with the orders made on it.  Even if it does comply, it needs to do so only in respect of the Parties that brought the action against it; it need not do so for other Parties.

If it does not comply, the complainant countries are allowed to take retaliatory action by blocking US goods and services from entering their markets up to an amount equivalent to the losses they have suffered.  This retaliatory action can only be taken by those countries that successfully took up the cases.

Thus, the US may decide to implement the border adjustment taxes and wait two to four years before a final judgment is made at the WTO, and for retaliatory action to be allowed by the WTO.   It can meanwhile reap the benefits of its border tax measures.

Another possibility is that Trump may make good his threat to leave the WTO, if important cases go against it.  That would cause a major crisis for the WTO and for international trade.

With regard to the WTO process, Raghavan said:   “Apart from the difficulties of taking up cases in the WTO, including costs, the lengthy process and no retrospective damages when any WTO member, raises a dispute, the onus of proving the violation is on them.

“To the best of my knowledge, in none of the rulings against US, requiring changes in law or regulations, has the US implemented them, and even major trading partners have been chary of taking retaliation action.

“Countries that are affected, could act to unilaterally deny the US some rights; but they cannot justify that this is retaliation, until there is a ruling in their favour.”

American advocates of the border adjustment tax plan have claimed that it is similar to a value added tax (VAT) which is considered by the WTO to be a legitimate measure;  and thus that the border adjustment tax would also be compatible with the WTO.

Almost all major developed countries have instituted the VAT system, with the notable exception of the US.  The Republican Congress leaders and Trump have argued  that this places the US at a disadvantage in its trade relations because the VAT system imposes a tax on imports, whilst allowing companies to obtain a refund for taxes paid on their exports.

They claim the border tax would correct this disadvantage that the WTO should similarly recognise the border tax as legitimate.

However, several well-known economists and lawyers are of the opinion that there are important differences between the VAT and the border tax.

There are two parts of their arguments.  Firstly, the VAT imposes taxes on both imports and locally produced goods and services and therefore does not discriminate against imports;  whereas the border tax system imposes a tax on imports whilst excluding domestic inputs and wages from tax, which therefore discriminates against imports.  Secondly, the VAT system does not subsidise exports, whereas the border tax system does.

In a 1990 paper, Martin Feldstein and Paul Krugman found that the VAT does not improved the trade competitiveness of countries using it.  They said:  “The point that VATs do not inherently affect international trade flows has been well recognised in the international tax literature…A VAT Is not a protectionist measure.”

Krugman, in a recent blog, reiterated that “a VAT does not give a nation any kind of competitive advantage, period.”  But a destination-based cash flow tax like the border adjustment tax has a subsidy element that “would lead to expanded domestic production.”

In another paper, Reeven Avi-Yonah and Kimberly Clausing  from Michigan Law School and Reed College respectively analyse the difference between the VAT and the proposed border adjustment tax and why the former is WTO-consistent whereas the latter would violate WTO rules.

They said:   “U.S. trading partners are likely to be hurt in several ways. The effects of the wage deduction render the corporate cashflow tax different from a VAT, and these differences have the net effect of increasing the incentive to operate in the United States

“In addition, such a tax system would exacerbate the profit shifting problems of our trading partners, since the United States will appear like a tax haven from their perspective.”

Economists also agree that the border tax will raise the value of the US dollar but there is a debate as to how long this will take and by how much it will rise. If the dollar appreciation is significant, this may have an adverse effect on countries that hold debt in US dollars, as they would have to pay out more in their domestic currency to service their loans. This would include many developing countries with substantial dollar-denominated debts of the public or private sectors, and some of them may tip into new debt and financial crises.    According to former US Treasury Secretary Lawrence Summers:  “Proponents of the plan anticipate a rise in the dollar by an amount equal to the 15 to 20 per cent tax rate.  This would do huge damage to dollar debtors all over the world and provoke financial crises in some emerging markets.”           

This article is the second in a two-part series on the border adjustment tax, which would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax. You can find Part 1 here

]]>
http://www.ipsnews.net/2017/02/the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2/feed/ 0
Still in Limbo, Somaliland Banking on Berberahttp://www.ipsnews.net/2017/02/still-in-limbo-somaliland-banking-on-berbera/?utm_source=rss&utm_medium=rss&utm_campaign=still-in-limbo-somaliland-banking-on-berbera http://www.ipsnews.net/2017/02/still-in-limbo-somaliland-banking-on-berbera/#comments Fri, 17 Feb 2017 13:10:31 +0000 James Jeffrey http://www.ipsnews.net/?p=148992 In the capital people encounter a mishmash of chaotic local market commerce existing alongside diaspora-funded construction including glass-fronted office buildings, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with characteristic Somali energy and dynamism. Credit: James Jeffrey/IPS

In the capital people encounter a mishmash of chaotic local market commerce existing alongside diaspora-funded construction including glass-fronted office buildings, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with characteristic Somali energy and dynamism. Credit: James Jeffrey/IPS

By James Jeffrey
HARGEISA, Somaliland, Feb 17 2017 (IPS)

Crossing African borders by land can be an intimidating process (it’s proving an increasingly intimidating process nowadays in Europe and the US also, even in airports). But crossing from Ethiopia to Somaliland at the ramshackle border town of Togo-Wuchale is a surreally pleasant experience.

Immigration officials on the Somaliland side leave aside the tough cross-examination routine, greeting you with big smiles and friendly chit chat as they whack an entry stamp on the Somaliland visa in your passport.“If you look at the happiness of Somalilanders and the challenges they are facing, it does not match.” --Khadar Husein, Operational director of the Hargeisa office of Transparency Solutions.

They’re always happy to see a foreigner’s visit providing recognition of their country that technically still doesn’t exist in the eyes of the rest of the political world, despite having proclaimed its independence from Somalia in 1991, following a civil war that killed about 50,000 in the region.

A British protectorate from 1886 until 1960 and unifying with what was then Italian Somaliland to create modern Somalia, Somaliland had got used to going on its own since that 1991 declaration, and today exhibits many of the trappings of a functioning state: its own currency, a functioning bureaucracy, trained police and military, law and order on the streets. Furthermore, since 2003 Somaliland has held a series of democratic elections resulting in orderly transfers of power.

Somaliland’s resolve is most clearly demonstrated in the capital, Hargeisa, formerly war-torn rubble in 1991 at the end of the civil war, its population living in refugee camps in neighbouring Ethiopia. An event that lives on in infamy saw the jets of military dictator Mohammed Siad Barre’s regime take off from the airport and circle back to bomb the city.

But visitors to today’s sun-blasted city of 800,000 people encounter a mishmash of impassioned traditional local markets cheek by jowl with diaspora-funded modern glass-fronted office blocks and malls, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with typical Somali energy and dynamism.

“We are doing all the right things that the West preaches about but we continue to get nothing for it,” says Osman Abdillahi Sahardeed, minister for the Ministry of Information, Culture and National Guidance. “This is a resilient country that depends on each other—we’re not after a hand out but a hand up.”

Non-statehood deprives Somaliland of direct large-scale international support from the likes of the World Bank and International Monetary Fund. For these members of the Somaliland Seaman’s Union at Berbera Port’s docks, it means they are not paid the same wages—they earn about $220 a month—as paid to foreign workers due to not belonging to an internationally recognised organisation. Credit: James Jeffrey/IPS

Non-statehood deprives Somaliland of direct large-scale international support from the likes of the World Bank and International Monetary Fund. For these members of the Somaliland Seaman’s Union at Berbera Port’s docks, it means they are not paid the same wages—they earn about $220 a month—as paid to foreign workers due to not belonging to an internationally recognised organisation. Credit: James Jeffrey/IPS

Increasing levels of exasperation within Somaliland’s government and among the populace are hardly surprising. Somaliland’s apparent success story against the odds remains highly vulnerable. Its economy is perilously fragile. Non-statehood deprives it of direct large-scale international support and access to the likes of the World Bank and International Monetary Fund (I.M.F.).

As a result, the government has a tiny budget of about 250 million dollars, with about 60 percent spent on police and security forces to maintain what the country views as one of its greatest assets and reasons for recognition: continuing peace and stability. Also, it relies heavily on the support of local clan elders—it is hard for any government to prove its legitimacy when essential services need the help of international humanitarian organizations, local NGOs and the private sector.

Indeed, Somaliland survives to a large extent on money sent by its diaspora—estimated to range from $400 million to at least double that annually—and by selling prodigious quantities of livestock to Arab countries.

All the while, poverty remains widespread and swathes of men on streets sipping sweet Somali tea and chewing the stimulating plant khat throughout the day testify to chronic unemployment rates.

“About 70 percent of the population are younger than 30, and they have no future without recognition,” says Jama Musse, a former mathematics professor who left Italy to return to Somaliland to run the Red Sea Cultural Foundation center, which offers cultural and artistic opportunities for Hargeisa’s youth. “The world can’t close its eyes—it should deal with Somaliland.”

Peace and security hold in Somaliland, so effectively that moneychangers can safely stash bundles of cash on the street. Credit: James Jeffrey/IPS

Peace and security hold in Somaliland, so effectively that moneychangers can safely stash bundles of cash on the street. Credit: James Jeffrey/IPS

For now, Somaliland’s peace holds admirably well.

“If you look at the happiness of Somalilanders and the challenges they are facing it does not match,” says Khadar Husein, operational director of the Hargeisa office of Transparency Solutions, a UK-based consultancy focused on civil society capacity building in Somaliland and Somalia. “They are happy because of their values and religion.”

But others speak of the risks of encroaching Wahhabism, a far more fundamental version of Islam compared to Somaliland’s conservative though relatively moderate religiousness, and a particular concern in a volatile part of the world.

“Young men are a ready-made pool of rudderless youth from which militant extremists with an agenda can recruit,” says Rakiya Omaar, a lawyer and Chair of Horizon Institute, a Somaliland consultancy firm helping communities transition from underdevelopment to stability.

Almost everyone acknowledges the country’s present means of sustainment—heavily reliant on the private sector and diaspora—must diversity. Somaliland needs greater income to develop and survive.

Abdi Muhammad, a veteran of the Somali civil war, makes his feelings clear. Credit: James Jeffrey/IPS

Abdi Muhammad, a veteran of the Somali civil war, makes his feelings clear. Credit: James Jeffrey/IPS

For many, the key to Somaliland’s much needed economic renaissance lies in tapping into the far stronger economy next door: Ethiopia, Africa’s second most populous country and its fastest growing economy, according to the I.M.F.

Crucial to achieving this is Berbera, a name conjuring images of tropical quays and fiery sunsets. Once an ancient nexus of maritime trade, Berbera has long been eclipsed by Djibouti’s ports to the north. But Berbera Port is now on the brink of a major expansion that could transform and return it to a regional transportation hub, and also help fund Somaliland’s nation-building dreams.

In May 2016, Dubai-based DP World was awarded the concession to manage and expand Berbera for 30 years, a project valued at about 442 million dollars, including expanding the port and refurbishing the 268-kilometer route from the port to the border with Ethiopia.

Landlocked Ethiopia has long been looking to diversify its access to the sea, an issue of immense strategic anxiety. Currently 90 percent of its trade goes through Djibouti, a tiny country with an expanding network of ports that scoops at least 1 billion dollars in port fees from Ethiopia every year.

Somaliland would like about 30 percent of that trade through Berbera, and Ethiopia is more than happy with that, allocating such a proportion in its latest Growth and Transformation Plan that sets economic policy until 2020.

Ethiopia and Somaliland had already signed a Memorandum Of Understanding (MOU) covering trade, security, health and education in 2014, before in March 2016 signing a trade agreement on using Berbera Port. And Ethiopia could just be the start.

“It would be a gateway to Africa, not just Ethiopia,” says Sharmarke Jama, a trade and economic adviser for the Somaliland government during negotiations on the port concession. “The multiplying benefits for Somaliland’s economy could be endless.”

Somaliland officials hope increased trade at the port will enable greater self-sufficiency to develop the country, while also chipping away at the international community’s resistance over recognition.

“As our economic interests align with the region and we become more economically integrated, that can only help with recognition,” Sharmarke says.

Perhaps. The political odds are stacked against Somaliland due to concerns that recognizing Somaliland would undermine decades of international efforts to patch up Somalia, and open a Pandora ’s Box of separatist claims in the region and further afield around Africa.

But greater self-sufficiency would undoubtedly result from a resurgent Berbera, and without this crucial infrastructure revival Somaliland’s economic potential will remain untapped, trapping its people in endless cycles of dependence, leaving those idle youth on street corners.

On April 13, 2016, up to 500 migrants died after a boat capsized crossing the Mediterranean. Most media reported that a large portion of those who died were from Somalia. But in Hargeisa following the tragedy, locals noted how many of those who died were more specifically Somalilanders.

“Why are they leaving? Unemployment,” says Abdillahi Duhe, former Foreign Minister of Somaliland and now a consultant in the Ethiopian capital, Addis Ababa. “Now is a very important time: we’ve passed the stage of recovery, we have peace—but many hindrances remain.”

]]>
http://www.ipsnews.net/2017/02/still-in-limbo-somaliland-banking-on-berbera/feed/ 0
Beware of the New US Protectionist Plan, the Border Adjustment Tax – Part 1http://www.ipsnews.net/2017/02/beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax/?utm_source=rss&utm_medium=rss&utm_campaign=beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax http://www.ipsnews.net/2017/02/beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax/#comments Fri, 17 Feb 2017 12:37:51 +0000 Martin Khor http://www.ipsnews.net/?p=148990 If the tax plan is implemented it will have serious adverse effects on many contries, like China or Mexico, which sell hundreds of billions of dollars of manufactured products to the US. Credit: Bigstock

If the tax plan is implemented it will have serious adverse effects on many contries, like China or Mexico, which sell hundreds of billions of dollars of manufactured products to the US. Credit: Bigstock

By Martin Khor
PENANG, Feb 17 2017 (IPS)

A new and deadly form of protectionism is being considered by Congress leaders and the President of the United States that could have devastating effect on the exports and investments of American trading partners, especially the developing countries.

The plan, known as a border adjustment tax, would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax.

The aim is to improve the competitiveness of US products, drastically reduce the country’s imports while promoting its exports, and thus reduce the huge US trade deficit.

On the other hand, if adopted, it would significantly reduce the competitiveness or viability of goods and services of countries presently exporting to the US.  The prices of these exports will have to rise due to the tax effect, depressing their demand and in some cases make them unsalable.

And companies from the US or other countries that have invested in developing countries because of cheaper costs and then export their products to the US will be adversely affected because of the new US import tax.

Some firms will relocate to the US.   Potential investors will be discouraged from opening new factories in the developing countries.  In fact this is one of the main aims of the plan – to get companies return to the US.

The plan is a key part of the America First strategy of US President Donald Trump, with his subsidiary policies of “Buy American” and “Hire Americans.”

The border adjustment tax is part of a tax reform blueprint “A Better Way” whose chief advocates are Republican leaders Paul Ryan, speaker of the House of Representatives and Kevin Brady, Chairman of the House Ways and Means Committee.

President Trump originally called the plan “too complicated” but is now considering it seriously.  In a recent address to congressional Republicans, Trump said:  “We’re working on a tax reform bill that will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the (border) wall.”

Martin Khor

Martin Khor

The proposal has however generated a tremendous controversy in the US, with opposition coming from some Congress members (including Republicans), many economists and American companies whose business is import-intensive.

It however has the strong support of Republican Congress leaders and some version of it could be tabled as a bill.

Trump had earlier threatened to impose high tariffs on imports from countries having a trade surplus with the US, especially China and Mexico.

This might be a more simple measure, but is so blatantly protectionist that it would be sure to trigger swift retaliation, and would also almost certainly be found to violate the rules of the World Trade Organisation (WTO).

The tax adjustment plan may have a similar effect in discouraging imports and moreover would promote exports, but it is more complex and thus difficult to understand.

The advocates hope that because of the complexity and confusion, the measure may not attract such a strong response from US trading partners.  Moreover they claim it is permitted by the WTO are presumably willing to put it to the test.

In the tax reform plan, the corporate tax rate would be reduced from the present 35% to 20%.   The border adjustment aspect of the plan has two main components. Firstly, the expenses of a company on imported goods and services can no longer be deducted from a company’s taxable income.  Wages and domestically produced inputs purchased by the company can be deducted.

The effect is that a 20% tax would be applied to the companies’ imports.

This would especially hit companies that rely on imports such as automobiles, electronic products, clothing, toys and the retail and oil refining sectors.

The Wall Street Journal gives the example of a firm with a revenue of $10,000 and with $5,000 imports, $2 000 wage costs and $3,000 profit.  Under the present system, where the $5,000 imports plus the $2,000 wages can be deducted, and with a 35% tax rate, the company’s taxable total would be $3,000, tax would be $1,050 and after-tax profit would be $1,950.

Under the new plan, the $5,000 imports cannot be deducted and would form part of the new taxable total of $8,000.  With a 20% tax rate, the tax would be $1,600 and the after-tax profit $1,400.

Given this scenario, if the company wants to retain his profit margin, it would have to raise its price and revenue significantly, but this in turn would reduce the volume of demand for the imported goods.

For firms that are more import-dependent, or with lower profit margin, the situation may be even more dire, as some may not be financially viable anymore.

Take the example of a company with $10,000 revenue, $7,000 imports, $2,000 wages and $1,000 profit.   With the new plan, the taxable total is $8,000 and the tax is $1,600, so after tax it has a loss of $600 instead of a profit of $1,000.

The company, to stay alive, would have to raise its prices very significantly, but that might make its imported product much less competitive.  In the worst case, it would close, and the imports would cease.

The economist Larry Summers, a former Treasury Secretary, gives a similar example of a retailer who imports goods for 60 cents, incurs 30 cents in labour and interest costs and then earns a 5 cent margin.  With 20% tax, and no ability to deduct import or interest costs, the taxes will substantially exceed 100% of profits even if there is some offset from a stronger dollar.

On the other hand, the new plan allows a firm to deduct revenue from its exports from its taxable income.  This would allow the firm to increase its after-tax profit.

The Wall Street Journal article gives the example of a firm which presently has export sales of $10,000, cost of inputs $5,000, wages $2,000 and profit $3,000.  With the 35% corporate tax rate, the tax is $1,050 and after-tax profit is $1,950.

Perhaps the most vulnerable country is Mexico, where many factories were established to take advantage of tariff-free entry to the US market under the North American Free Trade Agreement. President Trump has warned American as well as German and Japanese auto companies that if they make new investments in Mexico, their products would face high taxes or tariffs on entry, and called on them to invest in the US instead.
Under the new plan, the export sales of $10,000 is exempt from tax, so the company has zero tax.  Its profit after tax is thus $3,000.   The company can cut its export prices, demand for its product increases and the company can expand its sales and export revenues.

At the macro level, with imports reduced and exports increased, the US can cut its trade deficit, which is a major aim of the plan.

On the other hand, the US is a major export market for many developing countries, so the tax plan if implemented will have serious adverse effects on them.

The countries range from China and Mexico, which sell hundreds of billions of dollars of manufactured products to the US; to Brazil and Argentina which are major agricultural exporters; to Malaysia, Indonesia and Vietnam which sell commodities like palm oil and timber and also manufactured goods such as electronic products and components and textiles, Arab countries that export oil, and African countries that export oil, minerals and other commodities, and countries like India which provide services such as call services and accountancy services to US companies.

American industrial companies are also investors in many developing countries. The tax plan if implemented would reduce the incentives for some of these companies to be located abroad as the low-cost advantage of the foreign countries would be offset by the inability of the parent company to claim tax deductions for the goods imported from their subsidiary companies abroad.

Perhaps the most vulnerable country is Mexico, where many factories were established to take advantage of tariff-free entry to the US market under the North American Free Trade Agreement.  President Trump has warned American as well as German and Japanese auto companies that if they make new investments in Mexico, their products would face high taxes or tariffs on entry, and called on them to invest in the US instead.

After the implications of the border adjustment plan are understood, it is bound to generate concern and outrage from the United States’ trading partners, in both South and North, if implemented.  They can be expected to consider immediate retaliatory measures.

A former undersecretary for international business negotiations of Mexico (2000-2006), Luis de la Calle, said  in a media interview:  “If the US wants to move to this new border tax approach, Mexico and Canada would have to do the same….We have to prepare for that scenario.”

In any case, it can be expected that countries will take up complaints against the US at the WTO.   The proponents claim the tax plan will be designed in a way that is compatible with the WTO rules.

But many international trade law experts believe the tax plan’s measures will violate several of the WTO’s principles and agreements, and that the US will lose if other countries take up cases against it in the WTO dispute settlement system.

This prospect may however not decisively deter Trump from championing the Republicans’ tax blueprint and signing it into law, should Congress decide to adopt it.

The President and some of his trade advisors have criticised the WTO’s rules and have mentioned the option of leaving the organisation if it prevents or impedes the new America First strategy from being implemented.  If the US leaves the WTO, it would of course cause a major crisis for international trade and trade relations.

There are many critics of the plan.  Lawrence Summers, a former US Treasury Secretary, warns that the tax change will worsen inequality, place punitive burdens on import-intensive sectors and companies, and harm the global economy.

The tax plan is expected to cause a 15-20% rise in the US dollar.  “This would do huge damage to dollar debtors all over the world and provoke financial crises in some emerging markets,” according to Summers.

While export-oriented US companies are supporters, other US companies including giants Walmart and Apple are strongly against the border tax plan, and an influential Republican, Steven Forbes, owner of Forbes magazine, has called the plan “insane.”

It is not yet clear what Trump’s final position will be. If he finds it too difficult to use the proposed border tax, because of the effect on some American companies and sectors, he might opt for the simpler use of tariffs.

In any case, whether tariffs or border taxes, policy makers and companies and employees especially in developing countries should pay attention to the trade policies being cooked up in Washington, and to voice their opinions.

Otherwise they may wake up to a world where their products are blocked from the US, the world’s largest market, and where the companies that were once so happy to make money in their countries suddenly pack up and return home.

This article is the first in a two-part series on the border adjustment tax, which would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax. You can find Part 2 here

]]>
http://www.ipsnews.net/2017/02/beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax/feed/ 1
Washington Rules Change, Againhttp://www.ipsnews.net/2017/02/washington-rules-change-again/?utm_source=rss&utm_medium=rss&utm_campaign=washington-rules-change-again http://www.ipsnews.net/2017/02/washington-rules-change-again/#comments Thu, 16 Feb 2017 13:33:45 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=148980 Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]> South-south cooperation represents a progressive alternative to the Washington Consensus. Credit: IPS

South-south cooperation represents a progressive alternative to the Washington Consensus. Credit: IPS

By Jomo Kwame Sundaram
KUALA LAMPUR, Feb 16 2017 (IPS)

Over the last four decades, the Washington Consensus, promoting economic liberalization, globalization and privatization, reversed four decades of an earlier period of active state intervention to accelerate and stabilize more inclusive economic growth, associated with Franklin Delano Roosevelt and John Maynard Keynes.

The Golden Age
The US Wall Street Crash of 1929 led to the Great Depression, which in turn engendered two important policy responses in 1933 with lasting consequences for generations to come: US President Roosevelt’s New Deal and the 1933 Glass-Steagal Act.

While massive spending following American entry into the Second World War was clearly decisive in ending the Depression and for the wartime boom, the New Deal clearly showed the way forward and suggested what could be achieved if more public money had been deployed consistently to revive economic growth.

Michal Kalecki and Keynes provided robust analytical justification for counter-cyclical fiscal and other policies to maintain aggregate demand, very much contravening earlier received wisdom. Post-war decolonization gave birth to the academic field of development economics from the 1950s, initially pioneered by Central Europeans striving not to be left behind by the earlier ascendance of Western Europe and then the United States of America after its Civil War.

For about a quarter of a century after the end of the Second World War, the post-war ‘Golden Age’ saw rapid post-war reconstruction in Western Europe. This was crucially supported by the generous Marshall Plan, arguably the first, largest and most successful development cooperation program, triggered by the beginning of the Cold War. Similar economic development policies and assistance were introduced in Japan, Taiwan and South Korea, following the Korean War and the establishment of the People’s Republic of China.

US Secretary of State General George Marshall understood that inclusive economic development would help ensure a cordon sanitaire against the Soviet-led camp. Thus, thanks to the Cold War, Western Europe and Northeast Asia recovered quickly, industrialized rapidly and achieved sustained, rapid growth with interventionist policies which would be widely condemned by today’s conventional wisdom. While national economic capacities and capabilities had to be nurtured to ensure sustainable development, Marshall also recognized that aid should be truly developmental, not piecemeal or palliative.

Washington Consensus

The ‘Washington Consensus’ – uniting the American government and the Bretton Woods institutions located in the US capital city – emerged from the early 1980s to prescribe neo-liberal economic policies for developing countries for the ‘counter-revolutions’ against development economics, Keynesian economics and progressive state interventions.

Macroeconomic policies became narrowly focused on balancing annual budgets and attaining predictably low inflation – instead of the earlier post-colonial emphasis on achieving and sustaining rapid growth and full employment without runaway inflation. A ‘neo-liberal’ wave of deregulation, privatization and economic globalization followed, supposedly to boost economic growth. Economic growth was expected to trickle down to reduce poverty, with broader sustainable development and inequality concerns consigned to the garbage bin.

But the Washington Consensus policies not only failed to sustain economic growth, largely due to the greater instability and volatility associated with financial liberalization, especially across borders. But premature trade liberalization also undermined existing production and export capacities and capabilities without enabling the development of new ones. For the poorest countries, the loss of tariff revenue also undermined government revenues, expenditure and hence, the capacity to provide badly needed infrastructure, social protection and support for developmental initiatives.

Globalization’s Contradictory Discontents
Instead, those developing countries which achieved rapid growth and structural transformation were typically those which defied conventional wisdom by adopting pragmatic ‘heterodox’ developmental economic policies appropriate to their respective circumstances. Meanwhile, financial and other economic crises of various types became more frequent and disruptive, undermining sustained growth.

In the meantime, the more liberal developed economies experienced spurts of rapid growth as well as greater volatility and instability while most developed economies became more vulnerable to institutional stasis as they abandoned Keynesian policies for neo-liberal policies demanded by markets and their champions.

With European social democrats turning their backs on Keynes in favour of neoliberal economics, and often barely distinguishable from the centre-right in this regard, dissent against economic liberalization and its discontents moved to the ‘extremes’. With the left often on the backfoot in most developed economies for more than a quarter century, it has been the right which has successfully mobilized against cultural ‘others’ often divided among themselves.

While the rhetoric of the national chauvinist ‘new right’ rejects globalization and multiculturalism, it also rejects international solidarity, cooperation and multilateralism. Its rejection of the neoliberal Washington Consensus does not imply opposition to contemporary imperialism, but rather threatens a return to old — and new — forms of domination, economic and otherwise.

More than ever, it will be crucial for developing countries to work together, not only to ensure that South-South and ‘triangular’ (with the North) cooperation represents a progressive alternative to the Washington Consensus and its national chauvinist successors. Such solidarity will determine how well the South — and the world as a whole — will fare during the coming eclipse.

]]>
http://www.ipsnews.net/2017/02/washington-rules-change-again/feed/ 2
Energy Access Builds Inclusive Economies and Resilient Communitieshttp://www.ipsnews.net/2017/02/energy-access-builds-inclusive-economies-and-resilient-communities/?utm_source=rss&utm_medium=rss&utm_campaign=energy-access-builds-inclusive-economies-and-resilient-communities http://www.ipsnews.net/2017/02/energy-access-builds-inclusive-economies-and-resilient-communities/#comments Thu, 16 Feb 2017 11:34:56 +0000 Manipadma Jena http://www.ipsnews.net/?p=148974 More girls in rural Bihar, India are going to school after mini-grid-powered household lights give mothers and children two extra hours of evening work and study time. Credit: Manipadma Jena/IPS

More girls in rural Bihar, India are going to school after mini-grid-powered household lights give mothers and children two extra hours of evening work and study time. Credit: Manipadma Jena/IPS

By Manipadma Jena
NEW DELHI, Feb 16 2017 (IPS)

Jaipal Hembrum runs three one-man home enterprises – a bicycle repair shop, a tiny food stall and a tailoring unit in Kautuka, a remote village in eastern India. Sewing recycled clothes into mattresses late into the evening, the 38-year-old father of three girls says two light bulbs fed by a solar power system have changed his life.

Given the trajectory of development India is currently pursuing, energy access for its rural population could bring dramatic economic improvement. Yet 237 million people — a fifth of its 1.3 billion people, many of them in remote villages with few livelihood options — do not have any access to it.The challenge India faces is how to meet its energy requirements while also meeting its emission reduction commitment to the global climate deal.

The Delhi-based research organisation Centre for Science and Environment (CSE) stipulates that if even half of households deemed electrified through the national power grid are not receiving the guaranteed six hours uninterrupted supply, the number of people who are electricity-poor in India totals 650 million.

In this scenario, renewable energy-based mini-grids, particularly in remote villages, are considered the best option to manage local household and commercial energy demand efficiently by generating power at the source of consumption.

This is being proven true by the Rockefeller Foundation’s Smart Power for Rural Development (SPRD) initiative in two of India’s poorest states, Bihar and Uttar Pradesh, where 16 and 36 percent of households respectively are electrified. In India, 55 percent rural households have energy access, often of unreliable quality.

Started in 2014, the SPRD project has helped set up close to 100 mini-grid plants, covering the states of Uttar Pradesh, Bihar and lately, in Jharkhand too. According to Rockefeller Foundation sources, these plants are serving a customer base of around 38,000 people. Over 6,500 households are benefitting, along with 3,800 shops and businesses, and over 120 institutions, telecom towers and micro-enterprises.

Over 2014 – 2017, the Rockefeller Foundation aims to make a difference to 1,000 energy-poor villages in India, benefitting around a million rural people. For this effort, the Foundation has committed 75 million dollars, partnering and funding Smart Power India (SPI) a new entity designed to work closely with a wide range of stakeholders who help scale-up the market for off-grid energy.

Jaipal Hembrum stitches old clothes mattresses in the evening by the light of a solar-powered bulb. The 50 dollars a day he earns is kept aside for schooling and marriages of his three daughters. Credit: Manipadma Jena/IPS

Jaipal Hembrum stitches old clothes mattresses in the evening by the light of a solar-powered bulb. The 50 dollars a day he earns is kept aside for schooling and marriages of his three daughters. Credit: Manipadma Jena/IPS

What can mini-grids can do? Plenty

A recent evaluation of the mini-grids’ impact on communities they serve in Bihar and Uttar Pradesh already show a broad range of economic, social and environmental benefits.

Entrepreneurship and new businesses have grown, with 70 percent existing micro-businesses reporting increased number of costumers after connecting to the mini-grids and 80 percent planned to expand.

Nine in 10 household users said their children’s daily study time has increased by two hours since they got the lights. Women said they had increased mobility after dark and theft cases had fallen. Use of kerosene and diesel has fallen dramatically — to virtually zero, according to Khanna.

Micro-businesses like cyber cafes, fuel stations, mobile and fan repair shops, banks, schools and hospitals are the fastest growing commercial customer section of mini-grids constructed under Smart Power India.

In Shivpura village of Uttar Pradesh, where TARA Urja, a small energy service company (ESCO), started providing reliable electricity from a 30-KW solar plant, Sandeep Jaiswal set up a water purification processor in 2015. In just over a month he was rushing 1,200 litres of water on his new mini-truck to 40 customers. TARA, also a social business incubator, has financially supported Jaiswal with 530 dollars, in return for a one-year contract to source electricity from TARA.

Smart Power India supports the development of rural micro-enterprises through loans, community engagement and partnerships with larger companies with rural value chains, for instance, city malls that source vegetables from rural farms.

India confronts a demographic youth ‘bulge’ with 64 percent in the working age group in 2020, requiring 10 million new jobs every year in the coming decade. Using green mini-grids to create rural livelihoods can also reduce urban migration.

Innovating a business model that propels construction of mini-grids

Mini-grids are a decentralized system providing a renewable energy-based electricity generator with a capacity of 10 kilowatts or more, with a target consumer group it supplies through a stand-alone distribution network.

The sustainability of private companies in the rural power supply sector depends on generating sufficient revenue long-term. To make it profitable for smaller-scale ESCOs to bring electricity to rural parts of the developing world, the Smart Power model ensures fast-growing sectors with significant energy needs such as telecom towers in rural areas, to provide steady revenue. In return, the ESCOs provide contractual guarantee of reliable power supply to the towers.

“There is an opportunity to catalyze the telecommunication and off-grid energy sectors. Currently cell phone towers in rural areas are often powered by expensive diesel generators and companies are looking for cheaper alternatives, thereby creating the possibility for a strong anchor,” says Ashvin Dayal, Managing Director, Asia, of the Rockefeller Foundation.

Telecom towers — by becoming the ‘anchor’ customers – help make ESCOs bankable. They then can expand supply into rural household lighting and local enterprises.

Government figures say 2 billion litres of diesel is annually consumed by the 350,000  existing telecom towers in India, including those in remote rural regions. The challenge India faces is how to meet its energy requirements without compromising environmental sustainability, while meeting its emission reduction commitment to the global climate deal.

Solar power cost per unit has fallen in India to 0.045 cents, which makes it increasingly feasible to shift to renewable powered mini-grids, saving substantial subsidies spent on fossil fuels. The government in 2016 decided to construct 10,000 mini-grids in the next five years of 500 megawatt (MW) capacity, but this is clearly not enough, say experts.

India has a potential for 748,990 MW of solar power. Fourteen states, including Bihar and Uttar Pradesh, receive irradiance above the annual global average of 5 kilowatt-hours per square meter per day.

Around the world, approximately 1.3 billion people lack access to reliable and affordable means of electricity without which, growing their incomes, improving food security and health, educating children, accessing key information services becomes a major challenge. Energy access is critical to achieving several UN Sustainable Development Goals by 2030.

]]>
http://www.ipsnews.net/2017/02/energy-access-builds-inclusive-economies-and-resilient-communities/feed/ 0
Corruption Brings Down an Empire: Odebrecht in Brazilhttp://www.ipsnews.net/2017/02/corruption-brings-down-an-empire-odebrecht-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=corruption-brings-down-an-empire-odebrecht-in-brazil http://www.ipsnews.net/2017/02/corruption-brings-down-an-empire-odebrecht-in-brazil/#comments Thu, 16 Feb 2017 00:29:24 +0000 Mario Osava http://www.ipsnews.net/?p=148966 The American Airlines Arena, a stadium and entertainment complex in Miami, Florida, is one of the many projects carried out by Odebrecht in the United States, where prosecutors have begun to produce figures reflecting the scope of the company’s corruption. Credit: Odebrecht

The American Airlines Arena, a stadium and entertainment complex in Miami, Florida, is one of the many projects carried out by Odebrecht in the United States, where prosecutors have begun to produce figures reflecting the scope of the company’s corruption. Credit: Odebrecht

By Mario Osava
RIO DE JANEIRO, Feb 16 2017 (IPS)

People in Brazil have been overwhelmed by the flood of news stories about the huge web of corruption woven by the country’s biggest construction company, Odebrecht, which is active in dozens of fields and countries.

The business empire built by three generations of the Odebrecht family is falling apart after three years of investigation by the Lava Jato (car wash) operation launched by the Federal Public Prosecutor’s office in Brazil, which is investigating the corruption that diverted millions of dollars in bribes in exchange for major public works contracts from the state-run oil giant Petrobras.The business group had created a specialised bribe department. According to U.S. justice authorities, every dollar “invested” in bribes produced 12 dollars in contracts.

Marcelo Odebrecht, who headed the company from 2008 to 2015, was arrested in June 2015 and was initially sentenced to 19 years in prison.

In October he and the company reached plea bargain deals to cooperate with the investigation. A total of 77 former and present Odebrecht executives provided over 900 sworn statements to Lava Jato prosecutors, causing a political earthquake in Brazil and throughout Latin America.

In December, the U.S. Justice Department revealed that Odebrecht allegedly spent 1.04 billion dollars in bribes to politicians and government officials in ten Latin American and two African countries, including Brazil, which accounted for 57.7 per cent of the total.

The United States is carrying out its own investigation, which could end in criminal convictions, since several Odebrecht subsidiaries, such as the petrochemical company Braskem, operate there, and their shares are traded on the New York Stock Exchange.

That is also happening in the case of Petrobras, implicated in the corruption scandal and under investigation at the initiative of shareholders in the U.S.

The U.S. and Switzerland, where banks were allegedly used to funnel bribes or launder money, signed cooperation agreements with legal authorities in Brazil, as part of the ongoing offensive against corruption in Latin America’s giant.

The impacts are overwhelming. In Brazil, the revelations about Odebrecht are expected to provoke a tsunami in the political system. Two hundred parliamentarians and government officials may have received bribes, including senior members of the current administration and legislature.

The business group had created a specialised bribe department. According to U.S. justice authorities, every dollar “invested” in bribes produced 12 dollars in contracts.

That estimate is based on more than 100 projects carried out or in progress in Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru and Venezuela, plus Angola and Mozambique in Africa.

Part of the Caracas valley seen from the San Agustín Metrocable, one of the many works assigned to Odebrecht in Venezuela during the government of Hugo Chávez (1999-2013), when the Brazilian company became the biggest construction firm in the country. Credit: Raúl Límaco/IPS

Part of the Caracas valley seen from the San Agustín Metrocable, one of the many works assigned to Odebrecht in Venezuela during the government of Hugo Chávez (1999-2013), when the Brazilian company became the biggest construction firm in the country. Credit: Raúl Límaco/IPS

The arrest warrant issued by a court in Peru against former Peruvian president Alejandro Toledo (2001-2006), who has been living in the United States, and allegations implicating current Colombian President Juan Manuel Santos and Panamanian President Juan Carlos Varela, are just the tip of the iceberg.

What was revealed by Odebrecht executives and former executives, as well as former directors of different departments, such as external affairs, infrastructure, industrial engineering or logistics, has not yet been made public.

New figures involving alleged bribes are expected to come out over the next few months, added to those already disclosed in the United States, including 599 million dollars distributed in Brazil, 98 million in Venezuela, 92 million in the Dominican Republic, 59 million in Panama and 50 million in Angola.

In Peru the total revealed so far is “only” 29 million dollars since 2005. The sum is small, considering that for the Southern Peru pipeline – still under construction – alone, the projected investments amount to seven billion dollars. The Peruvian government has decided to terminate the contract with Odebrecht for the project.

Besides Odebrecht, the Inter-Oceanic Highway, which runs across southern Peru from the Brazilian border to Pacific Ocean ports, is being built by three other Brazilian construction firms – Camargo Correa, Andrade Gutierrez and Queiroz Galvão – which are also under investigation for suspicion of corruption.

During the presidency of Alan Garcia (2006-2011), Peru and Brazil signed an agreement for the construction of five large hydropower plants in Peru, which was cancelled by his successor, Ollanta Humala (2011-2016), who, however, is suspected of receiving three million dollars from Brazil for his election campaign.

Odebrecht, which has a concession to manage Chaglla, the third biggest hydroelectric plant in Peru, with a capacity of 462 MW, was to be the main construction company in charge of building the new plants.

The growing wave of local and industry scandals sheds light on the reach of Odrebrecht’s tentacles. Braskem is accused of distributing 250 million dollars in bribes to sustain its leadership position in the Americas in the production of thermoplastic resins, with 36 plants spread across Brazil, Mexico, the United States, as well as Germany.

The empire, born in 1944 as a simple construction company, started diversifying in the last half century into activities as diverse as the sugarcane business, the development of military technologies or oil services, logistics or shipbuilding companies.

In the early 1970s the group built the Petrobras headquarters in Rio de Janeiro, sealing a connection that led to the current disaster which destroyed the reputation of the company that was so proud of its “Entrepreneurial Technology”, a set of ethical and operational business principles to which its fast expansion was attributed.

But Odebrecht’s success could actually be attributed to a strategic vision and a modus operandi that proved successful until the Lava Jato operation. Part of its methods included being “friends with the king”.

Angola is the best example. The current chairman of the company’s board of directors, Emilio Odebrecht, son of founder Norberto Odebrecht, meets every year with Angolan President José Eduardo dos Santos in Luanda, to discuss projects for the country.

Officially, what they do is assess the projects carried out by the company and define new goals.

The explanation given for the special treatment received by Odebrecht is that it has such a strong presence in vital infrastructure works in the country in areas such as reconstruction, energy, water, highways and urbanisation.

Odebrecht has great prestige in Angola, since it built the Capanda hydroelectric plant on the Kwanza River between 1984 and 2007, facing delays and risks due to the 1975-2002 civil war. Now it is building the biggest plant in Angola, Lauca, also on the Kwanza River, with a capacity to produce 2,067 MW.

The conglomerate is ubiquitous in the country, managing the Belas Mall – an upscale shopping centre in the south of Luanda, Angola’s capital – implementing the water plan to supply the capital, developing the first part of the industrial district in the outskirts of Luanda, building housing developments and playing a key role in saving the national sugarcane industry.

In Cuba it also led the strategic project of expanding the Mariel Port and managing a sugar plant, to help boost the recovery of this ailing sector of the Caribbean nation’s economy.

In other countries, such as Panama, Peru and Venezuela, the number of works and projects in the hands of the Brazilian conglomerate is impressive, in fields as diverse as urban transport, roads and bridges, ports, power plants, fossil fuels, and even agriculture.

But that cycle of expansion came to an end. Heavily indebted, with a plummeting turnover and no access to loans, not even from Brazilian development banks, and carrying the stigma of corruption, the conglomerate is trying to cooperate with justice authorities in the involved countries, seeking agreements to allow it to keep operating and eventually recover.

Now it remains to be discovered whether Odebrecht is “too big to go bankrupt,” as was said of some banks at the start of the global crisis that broke out in 2008.

]]>
http://www.ipsnews.net/2017/02/corruption-brings-down-an-empire-odebrecht-in-brazil/feed/ 0
St Valentine’s Day: Celebrating Healthy Relationships; Challenging Violencehttp://www.ipsnews.net/2017/02/st-valentines-day-celebrating-healthy-relationships-challenging-violence/?utm_source=rss&utm_medium=rss&utm_campaign=st-valentines-day-celebrating-healthy-relationships-challenging-violence http://www.ipsnews.net/2017/02/st-valentines-day-celebrating-healthy-relationships-challenging-violence/#comments Tue, 14 Feb 2017 12:57:48 +0000 Bethan Cansfield and Lourdes Montero http://www.ipsnews.net/?p=148940 Bethan Cansfield, Head of Enough Campaign, (Oxfam International) & Lourdes Montero, Gender Justice Manager, Oxfam Bolivia]]> Richly embroidered cloth hearts at Heartworks, Cape Town. /Stephanie Nieuwoudt/IPS

Richly embroidered cloth hearts at Heartworks, Cape Town. /Stephanie Nieuwoudt/IPS

By Bethan Cansfield and Lourdes Montero
LA PAZ, Bolivia, Feb 14 2017 (IPS)

Today, many couples, in many countries will be celebrating Saint Valentine’s Day – or ‘El día de los enamorados’ (‘Day of Lovers’) in some Latin American countries.

Whilst a chance to celebrate the spectrum of healthy loving relationships; it is also an important opportunity to highlight a crisis affecting women and girls in every corner of the world – 30% of women will experience physical or sexual violence perpetrated by a current or former partner or husband.

This figure of 30% does not take into account coercive control – a pattern of domination through intimidation, isolation, degradation and deprivation, including psychological and economic control. So whilst the figure of 30% is shockingly – we know it is just the tip of the iceberg.

No single factor alone causes partner violence, however evidence shows that one of the strongest factors that predicts this form of abuse is discriminatory shared beliefs (social norms) about what is normal and appropriate in relationships. These can include that a man has a right to assert power over a woman or that a man has a right to discipline women. Societies across the world promote masculine jealously and control as a desirable way to demonstrate love. Films, music, soap operas reinforce these ideas, as can parents and friends.

Unhealthy relationships often start early – with young men and women thinking behaviors such as teasing and name calling are normal parts of relationships. The Government of Australia has just released a powerful advert demonstrating how these early notions of relationships between boys and girls can lead to other more serious forms of violence. In one scene, a young boy slams a door on a young girl, causing her to fall over. “He just did it because he likes you,” the mother explains.

Other identities can intersect with gender to influence what is considered normal and appropriate within a relationship. For instance, in Latin American cultures, ‘concepts of machismo dictate that boys and men should be tough, sexually assertive, and dominating, whereas marianismo stresses that girls and women should be submissive and passive in their relationships with boys and men.’

To address this the Colectivo Rebeldía, Oxfam Bolivia and the Women’s Coordinator are today launching a new campaign ‘ACTÚA, detén la violencia’ to tackle violence in young people’s relationships.

Bolivia has the highest rates of physical violence against women in Latin America and the Carribean – 53.3% of Bolivian women have experienced physical or sexual partner violence and every three days a woman dies because of femicide.

Oxfam Bolivia’s research has found that nearly half of urban youth (men and women) promote sexist beliefs that normalize violence. This includes “the way you dress provokes rape”, “jealousy is part of love” or “if you really love, you forgive violence”. The study also found that 9 out of 10 youths know a friend is suffering from violence from her partner and that the majority state it is better not to intervene – 33% said that if their friend beats their partner, they do not get in because it’s their private life.

Despite this apparent indifference, 43% of young people consider that violence can decrease if the whole society gets involved, 54% believe that the fight against violence is a priority for the development of the country and 85% of young people would be willing to act to stop the violence.

In its first stage, the ACTÚA campaign aims to tackle the indifference of the friend of someone in a violent relationship or perpetrating violence in a relationship. It will develop circles of friends that socially sanction violent behaviors and develop support networks for young women facing violence. Using public and peer pressure, the campaign hopes to decrease violence in young relationships.

Whether in Bolivia or anywhere else in the world, we all need to take a stand against notions of harmful love and instead promote positive and healthy relationships with our family, friends and colleagues.

]]>
http://www.ipsnews.net/2017/02/st-valentines-day-celebrating-healthy-relationships-challenging-violence/feed/ 0
The World Faces a ‘Terrible Lack of Trust’http://www.ipsnews.net/2017/02/the-world-faces-a-terrible-lack-of-trust/?utm_source=rss&utm_medium=rss&utm_campaign=the-world-faces-a-terrible-lack-of-trust http://www.ipsnews.net/2017/02/the-world-faces-a-terrible-lack-of-trust/#comments Tue, 14 Feb 2017 09:51:32 +0000 IPS World Desk http://www.ipsnews.net/?p=149045 Antonio Guterres, UN Secretary General. Credit: UN Photo/Jean-Marc Ferré

Antonio Guterres, UN Secretary General. Credit: UN Photo/Jean-Marc Ferré

By IPS World Desk
DUBAI/ROME, Feb 14 2017 (IPS)

The world faces a “terrible lack of trust,” United Nations Secretary-General Antonio Guterres said addressing the World Government Summit in the Emirati city of Dubai, and called for reconciliation between people, their governments and global multilateral institutions.

The UN chief’s speech has been one of the most strait full bold statements made in this 5th annual World Government Summit 2017 (WGS), which brought together some 4,000 world leaders and experts at the fifth annual conference in the Middle East (12-14 February).

Improving governance, and improving confidence between governments and people, is essential and it is a condition to improve the confidence in the relations between countries, Gutterres said while describing the progress globalisation has brought to parts of the world, but also “the rust belts” where people feel left behind by their governments.

“If one looks at today’s governance problems at the country level, between countries or at multilateral governance in the world, we face a terrible lack of trust… As a result, in a world in which everything is global, in which the problems are global – from climate change to the movement of people – there is no way countries can do it by themselves.”

Guterres stressed the need for global responses, and global responses need multilateral institutions able to play their role”, and called for a surge of diplomacy for peace with “honest brokers” who can address the root causes of conflict and an international community that is organised to respond.

The UN chief also singled out the Security Council, which he said no longer corresponds to the logic of today’s world in relation to what the world was after the Second World War when the UN and its main body for maintaining peace and security were created.

Speaking at the opening of the World Government Summit in Dubai, Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said economic openness is a ground reality.

“We, as Arabs, should not lean towards economic isolation as the global market is open,” he said, adding, “We should not lose hope that we can achieve Arab progress and development, despite challenges and problems surrounding us.“

The UAE prime minister underlined that success is not measured by the size of a population nor by the modernity of countries or oil resources, but by will and management.

Tolerance, a Fundamental Value

Against this backdrop, the UAE minister of State for Tolerance, Sheikha Lubna Al Qasimi, focused on her country’s policy of promoting tolerance and fighting extremism.

Sheikha Lubna bint Khalid Al Qasimi

Sheikha Lubna bint Khalid Al Qasimi


This year, more than ever, people from all over the world should continue their dialogue and together find ways to promote coexistence and acceptance – and counter the waves of division that are increasingly inciting hatred and extremism, she said.

“Extremism has no religion or nationality, and violent terrorist groups threaten the safety of all countries and people. Securing borders and strengthening immigration and refugee policies alone are not the answer.”

According to Sheikha Lubna, facilitating dialogue that builds understanding between cultures is important. But governments, too, have a critical role to play, the UAE minister of State for Tolerance stressed, reminding that in her country, for example, new policies and initiatives are promoting greater understanding among all people and bringing cultures together.

An ‘Incubator’ of Tolerance

“Recently, I had the honour to be entrusted with our newly-established National Programme for Tolerance as Minister tasked with strengthening the government’s role as an “incubator” of tolerance, promoting tolerance, coexistence and respect for others throughout the UAE.

The UAE’s philosophy of acceptance is deeply rooted in our history and heritage, she said. “We have always been a gateway to the world, a hub for trade, culture and industry.”

Sheikha Lubna also underlined the fact that the UAE is home to over 200 nationalities from almost every corner of the world, with 80 per cent of its population being expatriates.

“It fills me with pride to see people of many faiths and backgrounds coexisting peacefully,” she said. “That’s part of our history.”

The UAE’s minister of State for Tolerance added “Earlier this month, I accompanied nearly 30 Christian leaders, including American Evangelicals, Catholics and Arab Christians, on a visit to a key part of the UAE’s heritage, a 7th Century monastery west of our capital, Abu Dhabi.”

The late Sheikh Zayed bin Sultan Al Nahyan, the UAE’s founder and first president, was an advocate of peace among all cultures, a strong believer that hatred and terrorism have no place within humanity, Sheikh Lubna reminded.

Then she underlined the fact that today, the UAE is part of an international coalition combatting extremism, on and off the battlefield. “We and our partners have developed initiatives to counter extremist rhetoric, understand the root cause of dangerous ideology and provide hope and opportunity for those seeking a more peaceful path.”

Freedom for All to Practice Religious Worship

The UAE minister recalled that her country’s Constitution guarantees freedom for all to practice religious worship of their choosing. “The UAE’s anti-discriminatory law enacted in 2015 forbids discrimination against anyone because of nationality, race, class, culture, gender or religion.”

The WGS brings together prominent leaders from the public and private sectors, as well as international thought leaders and pioneers. They engage in inspirational, thought-provoking, and future-focused dialogues that aim to shape the future of governments and help improve the lives of citizens worldwide.

This year’s edition of the Summit gathered high representative from over 130 countries, with more than 100 key speakers and around 4,000 participants.

The Summit’s key themes included: Innovation of Government; the Future of Government; Government Services, and Smart Government.

The World Government Summit Organization regularly produces series of specialized studies and reports published for the first time in the region, seeking to be a platform for regional exchange of knowledge and expertise in the field of shaping the future governments.

Some key reports have dealt with the Future of Money; Best Government Emerging Technologies; Pro-Active Government and the Future of Cities.

]]>
http://www.ipsnews.net/2017/02/the-world-faces-a-terrible-lack-of-trust/feed/ 0
Mistrust Hindering Global Solutions, says Secretary Generalhttp://www.ipsnews.net/2017/02/mistrust-hindering-global-solutions-says-secretary-general/?utm_source=rss&utm_medium=rss&utm_campaign=mistrust-hindering-global-solutions-says-secretary-general http://www.ipsnews.net/2017/02/mistrust-hindering-global-solutions-says-secretary-general/#comments Mon, 13 Feb 2017 23:55:31 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=148935 By Tharanga Yakupitiyage
UNITED NATIONS, Feb 13 2017 (IPS)

The global lack of confidence and trust is undermining the ability to solve the world’s complex problems, said UN Secretary-General during an international conference.

UN Secretary-General António Guterres. Credit: UN Photo

UN Secretary-General António Guterres. Credit: UN Photo

The 5th Annual World Government Summit (WGS), hosted by Dubai from February 12-14, has brought together over 4000 participants from more than 130 countries.

Speaking at the second day of the conference, Secretary-General Antonio Guterres noted the growing lack of confidence in institutions, as many people feel left behind from progress.

“It is clear that globalisation has been an enormous progress…but globalisation had its losers,” Guterres said, pointing to the example of frustrated youth in countries unable to find jobs or “hope.”

“Lots of people [feel] they were left behind and that the political establishments of their countries have not taken care of them,” he continued.

The former High Commissioner for Refugees cited the migration crisis in Europe, stating that countries’ inability to implement a fair and coordinated response spurred a sense of abandonment, fear and frustration among the public.

“This is the best ground for populists, for xenophobes, for those that develop forms of anti-Muslim hatred, or anti-Semitism…to play a role in our societies. And I think that it is not enough to condemn xenophobia, it is not enough to condemn populism, I think we need to be able to engage in addressing the root causes that lead to the fact that to be populist is so simple in today’s world,” Guterres told delegates, urging for reform to reconcile people with political institutions and to empower citizens and young people.

He also noted that the deep mistrust between countries is contributing to the multiplication of conflicts and the difficulties in solving them.

Most recently, the U.S. blocked the Secretary General’s appointment of former Palestinian Prime Minister Salam Fayyad as the new UN peace envoy in Libya after U.S. Ambassador to the UN Nikki Haley said the UN has been “unfairly biased” for too long in favor of the Palestinian Authority.

Though he highlighted the need for impartiality, Guterres said that there was no valid reason to have rejected the nomination.

“[Fayyad] is the right person for the right job at the right moment…he has a competence that nobody denies and Libya requires the kind of capacity that he has and I think it’s a loss for the Libyan peace process and for the Libyan people that I am not able to appoint him,” he stated, adding that bringing an end to the conflict in Libya is in everybody’s interest.

When moderator and CNN anchor Becky Anderson asked about the new U.S. administration’s “America First” principle, Guterres noted the need for the UN to respect its values but also stressed the importance of multilateral solutions to global problems.

“In a world in which everything is global, in which the problems are global – from climate change to the movement of people – there is no way countries can do it by themselves. We need global responses, and global responses need multilateral institutions able to play their role,” Guterres stated.

“That is where the other gap of confidence becomes extremely important,” he continued, proposing reforms in the UN system to help build trust in such institutions.

Despite 2016 being a “chaotic” year, Guterres followed after French diplomat Jean Monnet in expressing his hope for the future.

“I’m not optimistic, I’m not pessimistic, I am just determined,” he concluded.

]]>
http://www.ipsnews.net/2017/02/mistrust-hindering-global-solutions-says-secretary-general/feed/ 0
Dubai Ruler Warns Against Economic Isolation at Summit Meetinghttp://www.ipsnews.net/2017/02/dubai-ruler-warns-against-economic-isolation-at-summit-meeting/?utm_source=rss&utm_medium=rss&utm_campaign=dubai-ruler-warns-against-economic-isolation-at-summit-meeting http://www.ipsnews.net/2017/02/dubai-ruler-warns-against-economic-isolation-at-summit-meeting/#comments Mon, 13 Feb 2017 14:50:36 +0000 Razeena Raheem http://www.ipsnews.net/?p=148932 By Razeena Raheem
ROME, Feb 13 2017 (IPS)

Speaking at the opening of the two-day World Government Summit in Dubai, Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said economic openness is a ground reality.

Sheikh Mohammad Bin Rashid Al Maktoum

Sheikh Mohammad Bin Rashid Al Maktoum

“We, as Arabs, should not lean towards economic isolation as the global market is open,” he told a gathering of nearly 4,000 global leaders and experts from 139 countries at the 5th annual World Government Summit.

“We should not lose hope that we can achieve Arab progress and development, despite challenges and problems surrounding us. The GCC’s (Gulf Cooperation Council) achievements over the past four years are equal to achievements made by the GCC over the past 40 years, he added.

He said success is not measured by the size of a population nor by the modernity of countries or oil resources, but by will and management.

“The GCC under the leadership of Saudi Arabia’s King Salman Bin Abdul Aziz, will have a major role and positive impact on the Arab level,” he added.

Referring to the rise of terrorism worldwide, he said: “We have those who kill others in the name of the Holy Quran, and they blow themselves up in the Arab, Europe and the US. But they have nothing to do with Islam, which is innocent and a religion of tolerance. Prior to Islam, tribes were fighting and invading each other. With the advent of Islam, a great civilisation was built, one that benefitted the entire world.”

Asked about the relationship with the United States and newly-elected President Donald Trump, Sheik Mohammad said: “Our relationship with the United States is a relationship between countries and governments, not with individuals. He went on to say that, “The UAE will continue to prioritize its interests to guide its foreign policy agenda.”

In his opening address, he also said the policy of the United Arab Emirates (UAE) is based on placing the interests of its people over any other considerations. The previous US administration committed a series of mistakes, such as the invasion of Iraq and supporting revolutions, he said.

“The UAE, like any other country, was subjected to plots, however this never prevented us from working hard and accomplishing achievements. I believe that there are conspiracies targeting countries, and this has existed for thousands of years. Each country works for their own interests, but this will not stop us,” Shaikh Mohammad added.

“Mankind creates civilisations, and the Arab people have the cultural fundamentals to rise again,” he added.

Among the keynote speakers on the opening day February 12 were the Founder and Chairman of the World Economic Forum, Klaus Schwab, who cautioned governments about the global ‘emotional turmoil’ saying, “If we want to go forward, we need a completely new system where the human-being is at the center, and societal advancement is the key.”

Speaking at a panel discussion, US economist and Columbia University Professor Jeffrey Sachs, said the success of a government must be defined by its ability to facilitate the happiness and well-being of its citizens, and should replace old paradigms that focus overwhelmingly on economic performance.

Awa Marie Coll-Seck, Senegal’s Minister of Health & Social Interaction, was presented with the “2017 World’s Best Minister Award”.

The award was based on four parameters of excellence – innovation, leadership, impact, and reputation. She was honoured for her contributions towards the eradication of Ebola, reduction of child mortality rates and the prevention of malaria in Senegal.

]]>
http://www.ipsnews.net/2017/02/dubai-ruler-warns-against-economic-isolation-at-summit-meeting/feed/ 0
Major Crisis, Minor Reformshttp://www.ipsnews.net/2017/02/major-crisis-minor-reforms/?utm_source=rss&utm_medium=rss&utm_campaign=major-crisis-minor-reforms http://www.ipsnews.net/2017/02/major-crisis-minor-reforms/#comments Fri, 10 Feb 2017 16:24:29 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=148889 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]> A growing realization in the West that economic conditions for working people have been slowly, but steadily deteriorating in recent decades. Credit: IPS

A growing realization in the West that economic conditions for working people have been slowly, but steadily deteriorating in recent decades. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Feb 10 2017 (IPS)

The 2008-2009 financial breakdown, precipitated by the US housing mortgage crisis, has triggered an extended stagnation in the developed economies, initially postponed in much of the developing world by high primary commodity prices until 2014. Yet, the financial crisis and protracted economic slowdown since has not led to profound changes in the conventional wisdom or policy prescriptions, especially at the international level, despite global economic integration since the 1980s.

To be sure, the spread of the crisis caused the G20 group of US-selected important economies to convene for the first time at a heads of government level in a mid-November 2008 White House summit instigated by then French President Sarkozy. Various national initiatives to save their financial sectors were followed by a Gordon Brown UK initiative to significantly augment IMF resources. Soon, however, the appearance of supposed ‘green shoots of recovery’ led to premature abandonment of fiscal recovery efforts, reinforced by Eurozone fiscal rules, the powerful influence of financial rentier interests and bogus academic claims of impending doom due to public debt growth.

Weak response, weak recovery
The uneven and lacklustre economic recovery and worsening conditions for many in the world since then have been accompanied by a tremendous new concentration of wealth. Meanwhile, there has been a growing realization in the West that economic conditions for working people, which had been rising rapidly in the post-war decades, have been slowly, but steadily deteriorating in recent decades.

This has been associated in the popular imagination with globalization and some of its major manifestations, including increased inflows of cheaper goods and migrants. Widespread political, social and cultural reactions were summarily dismissed by political and media establishments as unfounded populisms of one kind or another.

To be sure, the dominant tendencies have often been xenophobic, culturally chauvinist and intolerant, and sometimes, downright racist. Ostensibly to secure electoral majorities and to move with the times, most European social democrat leaders have joined the consensus of the financial rentiers, discrediting the ‘centre-left’ and strengthening the ‘popularity’ of the ‘far right’ and exceptionally, the left.

Despite this vortex of globalization, financial crisis, stagnation, rising inequality and populism, somewhat reminiscent of the 1930s, there has been no comparable policy or analytical response, and most certainly, no leadership comparable to, say, Roosevelt’s New Deal or the Marshall Plan.

Some rethinking, but to no end
Besides the brief rediscovery of Hyman Minsky’s work, Joseph Stiglitz, Robert Shiller, Thomas Piketty and other dissenters have received far more attention than if not for the crisis. Meanwhile, some distinguished mainstream economists have been forced by recent realities to reconsider elements of the conventional wisdom, without requiring abandonment of the creed.

Since the leadership of IMF Managing Director Dominic Strauss-Kahn, the Fund’s Research Department has contributed to such rethinking, especially on financial regulation, fiscal policy and income inequality. The Fund has been re-legitimized in the eyes of some of its critics elated by its research findings and their policy implications. In some instances, the nature and significance of the research findings have been exaggerated by erstwhile critics pleasantly surprised by the researchers’ apparently critical turn.

Such research results have broadened the scope of what is deemed acceptable economic policy discourse. But in fact, these research findings have had rather limited and mixed consequences for its operations, including its policy advice and conditionalities.

Meanwhile, the Fund has already begun to back-pedal on some of its bolder critical publications, e.g., on neo-liberalism’s responsibility for slower growth and greater inequality in its Finance and Development periodical in June 2016. Thus, while there has undoubtedly been a welcome shift in the Fund’s research findings, it is important not to exaggerate their actual significance for its role, impact and operations.

Before his passing a decade ago, neoclassical economics guru Paul Samuelson had raised concerns about the biased, one-dimensional and exaggerated claims of the benefits from international trade liberalization. But even now, the Washington Consensus presumption that trade liberalization raises all boats without any need for compensatory mechanisms, continues to be the conventional wisdom.

One step forward, two steps back
Worse still, so-called free trade agreements have less and less to do with reducing barriers to trade, but instead have become major instruments for advancing powerful corporate interests abroad, and certainly not for enhancing prospects for sustainable development and food security. Meanwhile, as Jagdish Bhagwati has long emphasized, the prospects for multilateral trade liberalization are being undermined by non-trade conditionalities as well as bilateral and plurilateral agreements driven by other considerations.

Much more remains to be done if economic research and policy advice are to rise to meet the challenges of our times. Unfortunately, for the time being, it is not clear that political conditions and leadership are conducive to such shifts in the near future.

To be sure, some of the recent rethinking is significant, with important policy implications, and could lead to state and collective international intervention mechanisms to rein in the neo-liberal paradigm in extremis. But most actual policy and regulatory reform initiatives have been limited in scope so far, and continue to be deeply compromised by powerful rentier interests and their proponents in the ‘deep state’, academia and the media.

]]>
http://www.ipsnews.net/2017/02/major-crisis-minor-reforms/feed/ 1
No Hidden Figures: Success Stories Can Help Girls’ STEM Careershttp://www.ipsnews.net/2017/02/no-hidden-figures-success-stories-can-help-girls-stem-careers/?utm_source=rss&utm_medium=rss&utm_campaign=no-hidden-figures-success-stories-can-help-girls-stem-careers http://www.ipsnews.net/2017/02/no-hidden-figures-success-stories-can-help-girls-stem-careers/#comments Fri, 10 Feb 2017 06:24:07 +0000 Phumzile Mlambo-Ngcuka http://www.ipsnews.net/?p=148885 Phumzile Mlambo-Ngcuka is UN Under-Secretary-General & Executive Director of UN Women]]>

Phumzile Mlambo-Ngcuka is UN Under-Secretary-General & Executive Director of UN Women

By Phumzile Mlambo-Ngcuka
UNITED NATIONS, Feb 10 2017 (IPS)

What makes a young girl believe she is less intelligent and capable than a boy? And what happens when those children face the ‘hard’ subjects like science, technology, engineering and mathematics (STEM)? A recent study, ‘Gender stereotypes about intellectual ability emerge early and influence children’s interests’ showed that by the age of 6, girls were already less likely than boys to describe their own gender as ‘brilliant’, and less likely to join an activity labelled for ‘very, very smart’ kids.

Phumzile Mlambo-Ngcuka

Phumzile Mlambo-Ngcuka

Research tells us repeatedly that girls and boys are strongly influenced in the development of their thinking and sense of themselves by narratives and stereotypes that start to be learnt at home and continue at school and through life, reinforced by the images and the roles they see in advertising, in films, books and news stories. 

So, how do we change this, and what should girls learn now that sets them up to thrive in a transformed labour market of the future? The answer is not simply more and better STEM subject teaching. They must also learn that girls have an equal place in that future. This isn’t a given. A major and underestimated obstacle for girls in STEM is the stereotype that has been created and perpetuated that boys are better at these subjects and careers.

Not only do we have to ensure that children enter and stay in education, we must equally pay close attention to what they are learning. The changing future of jobs means that fields of study for children now in school should include equipping them for ‘new collar’ jobs in the Fourth Industrial Revolution. Jobs that do not exist today may be common within the next 20 years, in the green economy, or areas like robotics, artificial intelligence, biotechnology and genomics.

The media plays a powerful role in biases, with the power through effective storytelling to reinforce negative perceptions and norms or to set the record straight and create new role models. ‘Hidden Figures’, Margot Lee Shetterly’s book, that tells the ‘untold story of the black women mathematicians who helped win the space race’ is now released as a film and brings recognition to those who were doubly invisible at NASA—as women and as black women. Making accomplished women scientists visible is important for the accuracy of news and of history. It is also an essential part of building further scientific success.

Census data in the United States of America shows that women comprise 39 per cent of chemists and material scientists, and 28 per cent of environmental scientists and geoscientists. These are not the equal proportions that we ultimately want—but they are far higher levels of success in science than fiction tells us. Alarmingly, best-selling movies have tended to significantly underrepresent the facts. A 2015 global study supported by UN Women showed that, of the onscreen characters with an identifiable STEM job, only 12 per cent were women.  This tells us that women are still hidden figures in science—and it has a chilling effect on girls’ ambitions.

According to a 2016 Girl-guiding survey, fewer than one in ten girls aged 7 to 10 in the UK said they would choose a career as an engineer or scientist. Un-learning this bias and changing the stereotypes is not a simple matter, yet it’s essential if we are to see boys and girls able to compete on a more equal footing for the jobs of the future. This goes hand in hand with the practical programmes that teach immediately relevant skills.

UN Women is working with partners around the world to close the gender digital gap. For example, in Moldova, GirlsGoIT teaches girls digital, IT and entrepreneurial skills and specifically promotes positive role models through video; similarly in Kenya and South Africa, 20 Mozilla Clubs for women and girls teach basic coding and digital literacy skills in safe spaces.

We need to deliberately and urgently un-stereotype the ecosystems in which children play, learn and grow up. Across the world, in schools, at home, in the work place and through the stories we tell—we all need to reflect and enable a world where girls can thrive in science, so that their success becomes as probable as they are capable.

*This article is being published in advance of International Day of Women and Girls in Science, 11 February

]]>
http://www.ipsnews.net/2017/02/no-hidden-figures-success-stories-can-help-girls-stem-careers/feed/ 1
Dubai Global Centre of Green Economy in UAE’s Vision 2021http://www.ipsnews.net/2017/02/dubai-global-centre-of-green-economy-in-uaes-vision-2021/?utm_source=rss&utm_medium=rss&utm_campaign=dubai-global-centre-of-green-economy-in-uaes-vision-2021 http://www.ipsnews.net/2017/02/dubai-global-centre-of-green-economy-in-uaes-vision-2021/#comments Thu, 09 Feb 2017 13:01:03 +0000 Razeena Raheem http://www.ipsnews.net/?p=148870 By Razeena Raheem
ROME, Feb 9 2017 (IPS)

When former UN Secretary-General Ban K-moon was in Abu Dhabi for the World Future Energy Summit last year, he singled out the key role played by the United Arab Emirates (UAE) in “safeguarding the future of our planet” by showcasing clean, sustainable energy — a centre piece of the UN’s post-2015 development agenda.

wgs_As one of the countries leading a major campaign for both renewable energy and solar energy, the UAE will be hosting the World Government Summit 2017, scheduled to take place in Dubai on February 12-14, under the theme “Shaping Future Governments”.

Described as a global platform dedicated to shaping the future of governments worldwide, the fifth annual Summit sets the agenda for the next generation of governments with a focus on how they can harness innovation and technology to solve universal challenges facing humanity.

The Summit takes place under the patronage of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

Ahead of the Summit, Dubai Electricity and Water Authority (DEWA) has been selected as its Sustainable Energy Partner.

Selecting DEWA as a partner to the summit reflects the vision of Sheikh Al Maktoum, to develop government services based on innovation to make customers happier and contribute to achieving the UAE Vision 2021.

“The partnership with the World Government Summit supports DEWA’s strategy and efforts to develop its services, by encouraging creativity and innovation in developing its services, initiatives and programmes. The summit has become a key knowledge platform, presented from the UAE to the world to foresee and shape the future, which emphasises the prominent position and effective role of the UAE to promote sustainable development to the world,” said Saeed Mohammad Al Tayer, MD & CEO of DEWA, during a press conference to announce the Summit’s partners.

“We are pleased to share our experiences and expertise in shaping the future of energy and in developing Disruptive Technologies and long-term plans to cope with the fourth industrial revolution. This supports our efforts to achieve the directives of Sheikh Mohammed bin Rashid Al Maktoum, who sees that the future holds opportunities, challenges, and knowledge, and that defining these opportunities and challenges as soon as possible is the most important way of dealing with them,” said Al Tayer.

“At DEWA, we realise that the early recognition of future opportunities and challenges and analysing them, while developing long-term proactive plans, are key enablers to ensure the success of the governments of the future, to enhance government services and achieve happiness of individuals and society as a whole”.

“We are working to achieve the Dubai Clean Energy Strategy 2050, to increase the share of clean energy to 75% by 2050 and transform Dubai into a global centre for clean energy and green economy”.

“We will also work to achieve the Demand Side Management Strategy to reduce consumption by 30% by 2030. At the World Government Summit 2017, we will highlight a number of key initiatives and programmes we are implementing to help provide world-class long-and-medium-term sustainable electricity and water services,” he added.

He also said: “We will announce a number of initiatives and mega projects that we are implementing to improve our electricity and water generation efficiency. We recorded a continuous and sustainable improvement in our electricity and water projects, and we have achieved an efficiency of 90% in fuel utilisation in our major power stations. Our projects will have positive environmental and economic outcomes and will contribute in reducing the carbon footprint and ensure the sustainability of our resources to achieve Dubai’s strategic goals. This in turn will achieve AED 60 billion in savings and reduce 201 million Tonnes of by 2030,” he noted.

“I would like to thank the World Government Summit and those involved in it, for their considerable efforts, and for providing us the opportunity to be part of the largest and most important event for shaping future governments,” concluded Al Tayer.

Participants from 150 countries are expected to attend the Summit, including government leaders, international experts and prominent speakers in key interactive sessions, bringing together leaders, decision makers, ministers, CEOs, thought leaders in government innovation, officials, and experts.

They will present their opinions, ideas, and views on the future of government services in 50 specialised sessions.

]]>
http://www.ipsnews.net/2017/02/dubai-global-centre-of-green-economy-in-uaes-vision-2021/feed/ 1
Innovative Credit Model Holds Out Lifeline to Farmers in Hondurashttp://www.ipsnews.net/2017/02/innovative-credit-model-holds-out-lifeline-to-farmers-in-honduras/?utm_source=rss&utm_medium=rss&utm_campaign=innovative-credit-model-holds-out-lifeline-to-farmers-in-honduras http://www.ipsnews.net/2017/02/innovative-credit-model-holds-out-lifeline-to-farmers-in-honduras/#comments Wed, 08 Feb 2017 01:33:26 +0000 Thelma Mejia http://www.ipsnews.net/?p=148852 Employees of Grupo Ideal, a participatory company in the village of Paso Real, pull out tilapias ready to be sold, from the José Cecilio del Valle reservoir. An innovative credit system is helping family farmers in poor rural areas of Honduras, who have been excluded by the banking system. Credit: Thelma Mejía/IPS

Employees of Grupo Ideal, a participatory company in the village of Paso Real, pull out tilapias ready to be sold, from the José Cecilio del Valle reservoir. An innovative credit system is helping family farmers in poor rural areas of Honduras, who have been excluded by the banking system. Credit: Thelma Mejía/IPS

By Thelma Mejía
PASO REAL, Honduras, Feb 8 2017 (IPS)

In this village in southern Honduras, in one of the poorest parts of the country, access to credit is limited, the banking sector is not supportive of agriculture, and nature punishes with recurrent extreme droughts.

But over the past two years, the story has started to change in Paso Real, a village of about 60 families, with a total of just over 500 people, in the municipality of San Antonio de Flores, 72 kilometres from Tegucigalpa.

A group of family farmers here, just over 100 people, got tired of knocking on the doors of banks in search of a soft loan and opted for a new financing model, which the United Nations Food and Agriculture Organisation (FAO) decided to test in this impoverished Central American country.

The initiative involves the creation of development financing centres (FCD), so far only in two depressed regions in Honduras: Lempira, to the west, and the Association of Municipalities of North Choluteca (Manorcho), to the south.

Both areas form part of the so-called dry corridor in Honduras, that runs through 12 of the country’s 18 departments, which are especially affected by the impacts of climate change.

Paso Real is part of Manorcho, composed of the municipality of San Antonio de Flores plus another three –Pespire, San Isidro and San José – which have a combined population of more than 53,000 people in the northern part of the department of Choluteca, where people depend on subsistence farming and small-scale livestock-raising.

Rafael Núñez is one of the leaders of Grupo Ideal, a company that is an association of family farmers who also breed and sell tilapia, a freshwater fish very popular in Central America. In addition, they raise cattle and grow vegetables.

Núñez is pleased with what they have achieved. Even though his family already owned some land, “it was of no use because nobody would grant us a loan.”

“The banks would come to assess our property, but offered loans that were a pittance with suffocating interest rates. They never gave us loans, even though we knocked on many doors,” Nuñez told IPS.

“But now we don’t have to resort to them, we have gained access to loans at the development financing centre in Menorcho, at low interest rates,” he said, smiling.

Nuñez said that because the banks would not lend them money, they had to use credit cards at annual interest rates of 84 per cent, which were strangling them. Now the loans that they obtain from the FCD are accessible, with an annual interest rate of 15 per cent.

Farmer Rafael Núñez told Central American visitors how the banking system mistreats small farmers in Honduras, and how the introduction in their municipality, San Antonio de Flores, of a financial centre for development which the FAO is testing in two depressed areas in the country, has improved their lives.  Credit: Thelma Mejía/IPS

Farmer Rafael Núñez told Central American visitors how the banking system mistreats small farmers in Honduras, and how the introduction in their municipality, San Antonio de Flores, of a financial centre for development which the FAO is testing in two depressed areas in the country, has improved their lives. Credit: Thelma Mejía/IPS

“It has not been easy to get on our feet because the banking system here doesn’t believe in agriculture, let alone family farming. I collect the bank books that you see and someday I will frame them and I’ll go to those banks and tell them: thanks but we don’t need you anymore, we have forged ahead with more dignified options offered by people and institutions that believe in us,” said Nuñez with pride.

He shared his experience during a Central American meeting organised by FAO, for representatives of organisations involved in family farming and the government to get to know these innovative experiences that are being carried out in the Honduran dry corridor.

Nuñez showed the participants in the conference the tilapia breeding facilities that his association operates at the José Cecilio del Valle multiple-purpose dam, located in the village.

Grupo Ideal is a family organisation that divides the work among 11 siblings and offers direct jobs to at least 40 people in the area and generates indirect employment for just over 75 people. They are convinced that their efforts can be replicated by other small-scale producers.

Among the things that make him happy, Nuñez says they have started to improve the diet of people in the local area.

 

 

 Marvin Moreno, the FAO expert technician behind this solidarity-based and inclusive innovative microcredit model, which so far has helped change the lives of 800 poor families. Credit: Thelma Mejía/IPS


Marvin Moreno, the FAO expert technician behind this solidarity-based and inclusive innovative microcredit model, which so far has helped change the lives of 800 poor families. Credit: Thelma Mejía/IPS

“We eat with the workers, we work with them, side by side, and at lunch they used to only bring rice, beans and pasta, but now they bring chicken, beef, tilapia and even shrimp,” he said.

One requirement for working in the company is that employees have to send their children to school. “This is an integral project and we want to grow together with the village because there are almost no sources of employment here,” he said.

Marvín Moreno, the FAO expert who has been the driving force behind the two experimental FCD finance centres, told IPS that the new model of financing has allowed families to organise to access opportunities to help them escape poverty.

Participating in the FCDs are local governments, development organisations that work in the area and groups of women, young people and farmers among others, which are given priority for loans.

The innovative initiative has two characteristics: solidarity and inclusiveness. Solidarity, because when someone gets a loan, everyone becomes a personal guarantor, and inclusive because it doesn’t discriminate.

“The priority are the poor families with a subsistence livelihood, but we also have families with more resources, who face limited access to loans as well,” Moreno said.

“It’s a question of giving people a chance, and we’re showing how access to credit is changing lives, and from that perspective it should be seen as a right that must be addressed by a country’s public policies,” he said.

Abel Lara, a Salvadoran small-scale farmer, highlighted the experience of the financial centres developed by FAO in Honduras, which he says show that concentrating on local solutions close to farmers is key for supporting family agriculture. Credit: Thelma Mejía/IPS

Abel Lara, a Salvadoran small-scale farmer, highlighted the experience of the financial centres developed by FAO in Honduras, which he says show that concentrating on local solutions close to farmers is key for supporting family agriculture. Credit: Thelma Mejía/IPS

This view is shared by Abel Lara, a small-scale farmer from El Salvador, who after learning about the experience, told IPS that this “basket of funds that makes available loans with joint efforts only comes to prove that it is possible to get family agriculture back on its feet, from the communities themselves..”

The two FCDs established by FAO in Honduras have managed to mobilise about 300,000 dollars through a public-private partnership between the community, organisations and local governments.

That has enabled more than 800 small farmers to access loans ranging from 150 to 3,000 dollars, payable in 12 to 36 months.

In the case of Manorcho, César Núñez, the mayor of San Antonio de Flores, said that “people are starting to believe that the financial centre offers a real opportunity for change and our aim here is to help these poor municipalities, which are hit hard by nature but have potential, to move forward.”

In a country of 8.4 million people, where 66.5 per cent of the population lives in poverty, access to loans as a boost to family agriculture can change the prospects for some 800,000 poor families living in the dry corridor.

These experiences, according to FAO representative in Honduras María Julia Cárdenas, will be part of the proposals for regional dialogue that the Central American Agricultural Council will seek to put the development of family agriculture on the regional agenda.

]]>
http://www.ipsnews.net/2017/02/innovative-credit-model-holds-out-lifeline-to-farmers-in-honduras/feed/ 1