Inter Press Service » Financial Crisis http://www.ipsnews.net News and Views from the Global South Fri, 29 Jul 2016 18:43:00 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.12 US Government Report Exposes Exaggerated TPPA Growth Claimshttp://www.ipsnews.net/2016/07/us-government-report-exposes-exaggerated-tppa-growth-claims/?utm_source=rss&utm_medium=rss&utm_campaign=us-government-report-exposes-exaggerated-tppa-growth-claims http://www.ipsnews.net/2016/07/us-government-report-exposes-exaggerated-tppa-growth-claims/#comments Thu, 28 Jul 2016 13:29:22 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=146283 Jomo Kwame Sundaram was United Nations Assistant Secretary-General for Economic Development and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.]]>

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

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jul 28 2016 (IPS)

A US government agency acknowledges that the Trans-Pacific Partnership (TPP) will not deliver many economic benefits promised by its cheerleaders. The 2016 report by the United States International Trade Commission (ITC) acknowledges that the TPP will not deliver many gains claimed by the US Trade Representative (USTR) and the Peterson Institute of International Economics (PIIE) although it uses similar methodology and assumes that the TPP will not change the US trade deficit as a share of GDP.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

The ITC’s credibility has declined over the years as it earned a reputation for cheer-leading FTAs. It had grossly underestimated US trade deficit increases following virtually every ‘free trade’ pact it assessed. Its projections understated the large US deficit increase with Mexico following the North American Free Trade Agreement (NAFTA), the huge trade deficit explosion with China following ‘permanent normal trade relations’, and the trade deficit spike with South Korea following the US-Korea trade agreement.

To assess the impact of the TPP, the ITC used its variant of a computable general equilibrium (CGE) model modified to take account of foreign direct investment (FDI) effects. To be sure, the ITC accepts growth to rise due to a significant increase in FDI, although there is no strong evidence or even logic that the TPP provisions will ensure the increase in FDI and growth projected. In fact, the procedure used involves many arbitrary elements, such as the impact on the OECD’s Regulatory Restrictiveness Index (RRI), and the impact of the latter on productivity, FDI flows and GDP, both in the US and abroad.

However, the ITC accepts only a fraction of the overall growth attributed to ‘non-trade measures’ (NTMs) by the 2016 PIIE — and World Bank — assessment, effectively rejecting many claims of growth attributed to other NTMs. Thus, for example, the ITC estimates exports will increase by only 1% due to NTMs by 2032 as against the PIIE’s estimate of 9.1% by 2030.

Thus, the economic gains from the TPP are much more modest for the ITC, with US GDP growing by only $42.7 billion (0.15%) by the year 2032, or by an average of less than 0.01% annually. Indeed, the ITC found that US manufacturing output in 2032 would be $10.843 billion lower with the TPP than without it, with manufacturing employment lowered by 0.2%! And while vehicles production would gain, automotive parts, textiles and chemicals output would contract.

Overall projected gains to US real national income are $57.3 billion, or 0.23%, by 2032, implying an average annual increase of slightly over 0.01% over the next 17 years. The much larger increase in US national income compared to GDP suggests that the TPP will significantly increase (mainly corporate) income from economic activity abroad, presumably from outward FDI. It is not clear how much of this is due to enhanced intellectual property rights (IPRs) or TPP-related financial liberalization, or if such income changes have been considered. An alternative possibility is that the terms of trade will change sufficiently in favour of the US.

US trade balance to worsen

The ITC expects the TPP to have small positive effects on the US economy. Dropping the usual CGE modelling assumption of an unchanging trade balance, it adopts a controversial methodology to project changing trade balances. According to the ITC, US exports and imports would be $27.2 billion (1.0%) and $48.9 billion (1.1%) higher than ‘baseline projections’ without the TPP, thus increasing the US trade deficit to $21.7 billion in 2032. It projects that US exports to new TPP and other FTA partners would grow by $34.6 billion (18.7%) while US imports from them would rise by $23.4 billion (10.4%).

The ITC projects increased exports of $27.2 billion in 2032 (in 2017 US dollars), less than a tenth of the PIIE’s projection of $357 billion in 2030 (in 2015 dollars). It expects manufactured exports to rise by $15.2 billion, while such imports would increase by $39.2 billion, increasing the net manufactures’ trade deficit by $24.0 billion.

Although US services’ output is projected to increase by $42.3 billion (0.1%) due to the TPP, the net services’ trade surplus is expected to contract as the increased services’ imports of $7.0 billion would exceed the increased exports of $4.8 billion. Exports of services to non-TPP partners are projected to fall by $11.8 billion, less than the projected increase of $16.6 billion to TPP partners.

The ITC report also projects worsening trade balances for 16 of the 25 US sectors it featured, including vehicles, wheat, corn, auto-parts, titanium products, chemicals, seafood, textiles and apparel, rice and even financial services. It projects a declining market share of US manufactures, natural resources and energy of $10.8 billion as such exports increase by $15.2 billion while imports rise by $39.2 billion by 2032. In the US, agriculture would gain most, with output $10.0 billion, or 0.5%, higher by 2032. However, the costs and implications of the still growing US agricultural – including biofuel – production subsidies are largely ignored in the report.

Who gains, who loses?

While dropping the typical CGE modelling assumption of constant labour supply, the ITC nevertheless seems to assume that the economy naturally tends to full employment. It thus projects overall employment will increase by 128,000 full-time jobs, or by 0.07%, due to the TPP. The trade deficit increase due to TPP implementation would result in 129,484 American job losses, including a manufacturing employment drop of 0.2%. Hence, this has to be largely attributed to services employment growth despite the expected fall in the services trade surplus.

Even if a more comprehensive and balanced assessment of the costs and risks of TPP provisions finds the potential for improved net economic welfare for all in all TPP countries (which the ITC report does not claim to show), TPP measures will not compensate losing participating economies and stakeholders. And while there may be measures available for beneficiaries to compensate losers in some national economies, nothing in the TPP itself will ensure such compensation, let alone adequately compensate those who will lose.

Furthermore, the ITC analysis does not seem to consider public health and consumer welfare losses due to higher prices, and reduced access due to broader, stronger and longer patent and copyright protection — although higher prices for pharmaceutical drugs, software and other forms of intellectual property will impose substantial costs on the public and governments.

Implementing the TPP will greatly profit some large corporations, especially those getting IPR and financial rents. Meanwhile, real incomes for employees, especially the less skilled, are likely to be further depressed, as in the past, due to international competition following trade liberalization. Compensation for such losers is virtually unheard of in developing countries, and declining in developed countries, as they are hardly ever advocated by current conventional wisdom, let alone in the TPP Agreement’s 6350 pages.

]]>
http://www.ipsnews.net/2016/07/us-government-report-exposes-exaggerated-tppa-growth-claims/feed/ 0
How Did We Arrive at This Chaos?http://www.ipsnews.net/2016/07/how-did-we-arrive-at-this-chaos/?utm_source=rss&utm_medium=rss&utm_campaign=how-did-we-arrive-at-this-chaos http://www.ipsnews.net/2016/07/how-did-we-arrive-at-this-chaos/#comments Tue, 26 Jul 2016 13:28:11 +0000 Roberto Savio http://www.ipsnews.net/?p=146233 Roberto Savio is founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News. ]]>

Roberto Savio is founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News.

By Roberto Savio
ROME, Jul 26 2016 (IPS)

A Chinese curse is “May you live in interesting times”. That meant that too many events would disrupt the essential elements of harmony, on which the Chinese pantheon is based.

We certainly live in very interesting times where every day dramatic events pile on us, from terrorism to coup d’etat, from climate disaster to the decline of institutions and ever increasing social turmoil. It would be important, even if very difficult, to look in a nutshell why we are in this situation now – “lack of harmony” . So here goes a dramatically compressed explanation.

Roberto Savio

Roberto Savio

Let us start from a little known fact. After the Second World War, there was a general consensus on the need to avoid the repetition of its horrors. The United Nations served as the meeting place for all countries, and the Cold War created as a reaction, an association of the newly independent countries, the Non Aligned countries, which acted as a buffer between the East and West camps. More, the North South divide become the most important aspect of international relations. So much so that in 1973, the United Nations General Assembly adopted unanimously a resolution on a New International Economic Order (NIEO).The world agreed to establish a plan of action to reduce inequalities, foster global growth and make of cooperation and international law the basis for a world in harmony and peace.

After the adoption of the NIEO, the international community started to work in that direction and after a preparatory meeting in Paris in 1979, a summit of the most important heads of state was convened in Cancun, Mexico in 1981, to adopt a comprehensive plan of action. Among the 22 heads of state, came Ronald Reagan, who was elected a few weeks before, and this is where he found Margaret Thatcher who was elected in 1979. The two proceeded to cancel the NIEO and the idea of international cooperation. Countries would do policy according to their national interests, and did not bow to any abstract principle. The United Nations started its decline as the meeting place on governance.

The place for decisions became the G7, until then a technical body, and other organizations, which would defend the national interests of the powerful countries.

At the same time, three other events did help Reagan and Thatcher to change the direction of history.

One was the creation of the Washington’s consensus, elaborated in 1989 by the American Treasure, the International Monetary Fund, and the World Bank, which imposed as policy that the market was the only real engine of societies. States were an obstacle, and they should shrink as much as possible (Reagan also considered abolishing the Ministry of Education). The impact of the Washington Consensus on the ‘Third World’ was a very painful one. Structural adjustments severely cut the fragile public system.

The second was the fall of the Berlin Wall, also in 1989, which brought an end to ideologies, and obliged adoption of neoliberal globalization, which turned out to be an even more strict ideology. The main points of neo-liberal globalization included: the rule of the market (liberating “free” enterprise or private enterprise from any bonds imposed by the government); cutting public expenditure for social services (and reducing the social safety net); deregulation (reducing government regulation of everything that could diminish profits); privatization (selling state-owned enterprises, goods and services to private investors); eliminating the concept of “the public good” or “community”and replacing it with “individual responsibility (pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves – then blame them, if they fail, as “lazy”).

The third was the progressive elimination of rules of the financial sector, started by Reagan and completed by Bill Clinton in 1999. Deposit banks were able to use the depositor’s money for speculation. Finance, that was considered to be the lubricant of economy, went on its own way, embarking on very risky operations, not any longer linked to the real economy. Now we have for every dollar of production for goods and services, 40 dollars of financial transactions.

Nobody defends any longer the Washington Consensus, and the neoliberal globalization. It is clear to all that while at macro level, globalization increased trade, finance and global growth, at microeconomic level it has been a disaster. The proponents of neoliberal globalization claimed that the growth would reach everyone in the planet. Instead, growth has been concentrating more and more in fewer and fewer hands. Six years ago, 388 individuals owned the same wealth as that of 3.6 billion people. In 2014, the number of the super wealthy come down to 80 individuals. In 2015, this number came down to 62 individuals. The IMF and the World Bank have been asking to reinforce the state as the indispensible regulator, reversing their policy. But the genie is out of the bottle. Since the fall of the Berlin Wall, Europe has lost 18 million of its middle class citizens and the US 24 million. On the other hand, there are now 1,830 billionaires with a net capital of 6.4 trillion dollars. In the UK, the level of inequality in 2025 is expected to be the same at the time of Queen Victoria in 1850 at the time of the birth of capitalism.

The new world created by Reagan is based on greed. Some historians claim that greed and fear are the two main engines of history; and values and priorities change in a society of greed.

Let us come to our days. We have again a new group of three horses of Apocalypse. The damages of the previous 20 years (1981-2001), are compounded by those of the continuing twenty years (2001-2021) and we are not through yet .

The first, was that in 2008 the banking system of the US went berserk for absurd speculations on mortgages. That crisis moved to Europe in 2009, caused by the falling value of the state’s title, like the Greek ones. Let us recall that to save the banking system, countries have spent close to 4 trillion dollars. An enormous amount, if we consider that banks still have toxic titles for 800 billion dollars. Meanwhile the banks have paid 220 billion dollars in fines for illegal activities. No banker has been incriminated. Europe is not yet back to its pre-crisis level of life. Meanwhile, many jobs have disappeared because of delocalization to the cheapest place of production, and jobs with substandard salaries have increased, together with precarious ones.

According to the Organization for Economic Co-operation and Development (OECD), today a worker makes in real terms 16% less than before the crisis. This has affected especially young people, with a European average of 10.5% of youth unemployment. Yet, the only stimulus for growth is for the banking system, into which the European Central Bank‚ is injecting 80 billion of dollars per month. This would have solved easily the youth’s unemployment.

Economists speak now of a “New Economy”, where unemployment is structural. From 1950 to 1973, world’s growth was over 5% per year. It came down to about 3% during 1973 and 2007 (OPEP’s blockade of petrol price in 1973 marked the shift.). Since 2007 we are not able to reach 1%. We have to add the growing unemployment that the technological development is causing. Factories need a fraction of the workers they had before. The Fourth Industrial Revolution (robotizing), will bring robot production, now at 12%, to 40% in 2025. Some mainstream economists, like Larry Summers, (the establishment voice) say that we are in a period of stagnation that will last for many years. Fear for the future has become a reality, fueled by terrorism and unemployment, with many dreaming that is possible to go back to the better yesterday. This is what populist leaders, from Donald Trump to Le Pen, are riding. A consequence of the crisis was that in several European countries populist parties, engaged in a nationalist call, riding xenophobia and nationalism have emerged, 47 at the last count. Several of them are already in coalitions that govern, or directly, like in Hungary, Poland, Slovakia. Now watch the next Austrian elections.

The second horse of Apocalypse has been the result of the interventions made in Iraq by US, and then Libya and Syria by Europe (with a particular role by former French president Nicolas Sarkozy).

As a result, in 2012 Europe started to receive massive immigration, for which there was no preparation. Suddenly, people were afraid of the human tide coming, and its impact in workplace, culture, religion, etc. That become a major factor for fear.

And then the third horse was the creation of ISIS in Syria, in 2013, one of the gifts of the invasion in Iraq. Let us not forget the global crisis started in 2008, and since then populism and nationalism were on the rise. But ISIS spectacular media impact and the radicalization of many young Europeans from Arab descent, usually from the margin of societies and laws, accentuated Fear, and was a gift for the populist, now able to use xenophobia for mobilizing disaffected and insecure citizens. The decline of European institutions has brought several countries (after Brexit), to call for a deep revision of the European project. Hungary is going for a referendum on 2 of October. Would you accept an immigrant quota imposed by the EU, against the will of the Hungarian parliament? The same day there will be the re-run of Austrian elections, that the extreme right wing lost for 36,000 votes. Then the Netherlands, France and Germany will follow, with an expected increase of the extreme right wing parties. At the same time, Poland and Slovakia also want to have a referendum about the EU. It could well be that at the end of 2017, European institutions will be deeply wounded.

The real problem is that since the failed Cancun Summit in 1981, countries have lost the ability to think together. India, Japan, China, and many other are going through a tide of nationalism. In Cancun, all participants, from Francois Mitterrand to Indira Gandhi, from Julius Nyerere to Pierre Trudeau shared a set of common values.: social justice, solidarity, the respect of international law, and the conviction that strong societies were the basis for democracy (except of course for Reagan and Thatcher). She famously declared: there is no such thing as a society, there are only individuals). They shared many books. They considered peace and development as the paradigm for governance. All this has been swept away. Politicians, left without ideologies, subordinated to finance, have turned mainly to an administrative debate, on singles issues, without a framework, where left or right have become difficult to discern. We are clearly in a period of Greed and Fear.

Time is not helping. In 1900 Europe had 24% of the world population. At the end of this century, Europe will be 4%. Nigeria will be more populous than the US. Africa, now at 1 billion, will be 2 billion by 2050, and 3 billion by 2100. It is time now to engage all together to discuss how to face the coming world. We took 25 years to reach an agreement on climate, maybe it is too late. On migration and employment, two and a half decades is an eternity. But this must be a global agreement, not just a kneejerk reflex by Chancellor Angela Merkel in total solitude, without even consulting French President Francois Hollande. But this kind of agenda is politically unimaginable. How to discuss these issues with Le Pen, Donald Trump, the other emerging populists and the nationalist tide that runs in the world?

]]>
http://www.ipsnews.net/2016/07/how-did-we-arrive-at-this-chaos/feed/ 0
Biswal’s Dreams Just Pretentious Prattlehttp://www.ipsnews.net/2016/07/biswals-dreams-just-pretentious-prattle/?utm_source=rss&utm_medium=rss&utm_campaign=biswals-dreams-just-pretentious-prattle http://www.ipsnews.net/2016/07/biswals-dreams-just-pretentious-prattle/#comments Mon, 25 Jul 2016 13:14:15 +0000 Editor Sunday Times http://www.ipsnews.net/?p=146199 By Editor, Sunday Times, Sri Lanka
Jul 25 2016 (The Sunday Times - Sri Lanka)

So Nisha Biswal, the US State Department’s point person on Sri Lanka, says that Sri Lanka could be another Singapore.

That will be the day. If after six visits to the country in 20 months she has still not grasped the basics of Sri Lanka’s socio-political culture and mores, the lack of respect for law and order and the rule of law infused by political interference and intimidation, she could hardly be a messenger of hope and good sense.

Nisha Biswal told a group of Sri Lankan business leaders that Lee Kuan Yew wanted to model his country on Ceylon and now it is time for Sri Lanka to be turned into a Singapore

Nisha Biswal told a group of Sri Lankan business leaders that Lee Kuan Yew wanted to model his country on Ceylon and now it is time for Sri Lanka to be turned into a Singapore

Perhaps she has become accustomed to the obsequiousness of foreign minister Samaraweera for things western and his habit of clinging on to the hands of every foreign visitor seemingly as a token of eternal friendship but actually in case they make a break for a quick getaway as some suspect.

The other day media carried a picture of our over-zealous foreign minister holding on to the hand of the visiting Chinese foreign minister leaving the latter looking rather perplexed. The Chinese reaction was not surprising given that the pro-western UNP leadership turned its back on Beijing shortly after the “good governance” coalition came to office possibly because China provided financial help to the Rajapaksa government when our so-called western friends would not do so and even refused to provide weaponry to fight an insurgency.

But now that the pro-western UNP finds itself in a financial mess it has no qualms about kowtowing and publicly displaying a willingness to accept its financial help with open arms and empty money bags.

An occasional peck on both cheeks might be considered by some in our diplomatic fraternity as a sign of undying friendship and gratitude. But in the world of diplomacy such over-familiarity especially in public might not always win friends and influence nations.

Speaking to a group of Sri Lankan business leaders during her recent visit, Nisha Biswal said that Singapore’s one time prime minister Lee Kuan Yew had wanted to model his country on Ceylon at the time. But now it is time for Sri Lanka to be turned into a Singapore.

Does Biswal believe that Sri Lankans are gullible or is this an insidious move to make this strategically-located nation an integral cog in Washington’s pivot to Asia policy intended to stymie China’s economic and military advance westward in the Indian Ocean?

If Biswal was even faintly aware of the bedrock on which the nascent Southeast Asian city-state was built she would not be proposing that we turn ourselves into a soulless nation however economically advanced and rich it has turned out to be.

I do not know whether Biswal has met Lee Kuan Yew when he was leading his newly independent state and talked to him. I have when I was working in Hong Kong and Mr. Lee visited the then British colony for a major conference.

So meticulous was the Singaporean he was able to tell me what I had called him in some of my writings – a dictator, an autocrat and a politician who did not tolerate dissent.

He did not entirely disagree but he carefully adduced reasons why he had to act the way he did, to craft a policy framework for a majority Chinese population sandwiched between two huge Malay-dominated nations. He said even Singapore’s language policy was determined by this geopolitical consideration.

Mr. Lee said that when Singapore was heading for independence Ceylon was the model on which he hoped to build the emergent state. Ceylon had a high rate of literacy, an educated people with a good educational system, an efficient civil service, a well-functioning judiciary and a performing economy.

But all these important qualities that made the Ceylonese nation were dissipated and destroyed by over-bearing and obtrusive politics. In later years when his people asked him for democratic rights and political freedoms he asked them whether they wanted to be another Sri Lanka involved in ethnic conflict.

Those who know the real Singapore story – I nearly went to work there when the editor of a new newspaper scheduled for launch invited me to join – how Ceylon born J.B. Jeyaretnam, the only opposition MP was treated (or mistreated) after he entered parliament after several attempts, how several journalists suffered including a friend of mine on the Business Times, Kenneth James, for ‘offences’ that most journalists would have considered normal professional duties.

Space does not permit an elaboration of the restrictions Singapore places on its citizens including the use of laws that a public gathering of five persons or more requires a police permit and charges of contempt of court, criminal and civil defamation and sedition are used to rein in government critics.

Human Rights Watch in its World Report 2015 states that the “Singapore’s government limits political and civil rights—especially freedom of expression, peaceful assembly, and association—using overly broad legal provisions on security, public order, morality, and racial and religious harmony.”

Admittedly some advances have been made – however meager – in the way of democratic freedoms. But the Singapore that Biswal and others speak of glowingly was not build on democratic foundations and the rights and freedoms associated with a free society.

So is Biswal then asking Sri Lanka to dismantle the constitutional and other rights guaranteed to its people, the democratic political system that took root even before independence in 1948 and the free press that politicians unfailingly promise the country?

I dare say Sri Lanka can well do without the corrosive and corrupt politics practiced today by many equally corrupt and abrasive politicians. If a nuclear destruction of the existing political system was possible that would certainly be for the betterment of the country.

Is Biswal able to provide such purifying political cleansing that is surely needed if Sri Lanka is to become another Singapore? Despite the democratic deficit that marks Singapore’s years of independence, it was able to achieve an enviable economic record because there were certain prerequisites that its leaders laid down.

Singapore was founded on meritocracy where only the best entered public service and other institutions and followed professional careers. Equally corruption was stamped on wherever it appeared and the guilty were shown no mercy.

Respect for law and order was inculcated in the populace and those who violated the law paid for it. That was the social order that produce Singapore’s economic miracle and a people who called themselves Singaporeans rather than by their ethnicity.

Moreover the city-state has had a political leadership that placed the country before self and was truly committed to building a prosperous society where the majority of its people were able to lead a comfortable life.

The reverse is surely true of Sri Lanka. Why talk of meritocracy when some of those who occupy official positions probably do not know what it means, where relatives, friends and acolytes are handpicked and planted in jobs for which the public pays. The qualified are deposited in the closest dust bin because they do not belong to the correct party, have not paid pooja to the presiding almighty and have sought to expose corruption and abuse or to indulge in it.

How could we build a meritocracy which is what Singapore has done, if a fundamental principle on which Sri Lankan politics is founded is nepotism and clannishness which this government promised to eliminate but practices with the same vigour as its predecessor?

The promises that the current government made to introduce “good governance” have been shattered long before the first year of this National Unity Government has ended. A classic recent example is the admission in parliament by the Higher Education and Highways Minister Lakshman Kiriella that he recruited 45 persons as consultants to the Southern Transport Development Project of the Road Development Authority at Rs.65,000 a month. If the highest qualification most of them have is the “O” level or some even lower how are they qualified to be consultants and consulted on what?

Lakshman Kiriella, who is increasing becoming an embarrassment to the UNP, admitted they were given these jobs because they helped in bringing his party into power. Whoever consults these unqualified consultants should seek psychiatric assistance.

It was not long ago that he wrote letters to two university authorities seeking to influence the appointment of persons known to him.

Just a few days ago I saw an article in which the writer says that the High Post Committee had advertised in newspaper calling for public comments on three persons whose names were listed for particular appointments.

It seemed that these three persons, one of whom is the President’s brother, was already functioning in those posts and have been doing so for some time. If the story is true then somebody should remind this committee of the bolting horses and the stable door.

So this is the country that Biswal wants to turn into another prosperous Singapore. Either she knows little of what she is talking about or is deliberately trying to sell these ideas to drag Sri Lanka into a tighter embrace with Washington so we will loosen our ties with China.

If this is the kind of rubbish that visiting diplomats oozing with spurious bon homie, lecture us about we could well do without it.

Before she comes here next and the Foreign Minister rushes to offer another handshake she should rid herself of the mental sloth that characterizes her advice.

This story was originally published by The Sunday Times, Sri Lanka

]]>
http://www.ipsnews.net/2016/07/biswals-dreams-just-pretentious-prattle/feed/ 0
Economic Recovery Needed To Enhance Food Securityhttp://www.ipsnews.net/2016/07/economic-recovery-needed-to-enhance-food-security/?utm_source=rss&utm_medium=rss&utm_campaign=economic-recovery-needed-to-enhance-food-security http://www.ipsnews.net/2016/07/economic-recovery-needed-to-enhance-food-security/#comments Thu, 21 Jul 2016 12:40:15 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=146164 Jomo Kwame Sundaram was the Assistant Secretary-General for Economic and Social Development in the United Nations system during 2005-2015and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. ]]>

Jomo Kwame Sundaram was the Assistant Secretary-General for Economic and Social Development in the United Nations system during 2005-2015and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jul 21 2016 (IPS)

After a half century of decline, agricultural commodity prices rose with oil prices in the 1970s, and again for a decade until 2014. Food prices rose sharply from the middle of the last decade, but have been declining since 2012, and especially since last year, triggering concerns of declining investments by farmers.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

Earlier predictions of permanently high food prices have thus become less credible. Higher prices were said to reflect slowing supply growth as demand continues to grow with rising food needs for humans and livestock, and bio-fuel mandates introduced a decade ago on both sides of the North Atlantic.

Prices had become increasingly volatile, with successively higher peaks in 2007-08, 2010-11 and mid-2012. Some food price volatility had its origins in climate change-related extreme weather events in key exporting countries.

‘Financialization’, including linking commodity derivatives with other financial asset markets, also worsened price volatility in the second half of the last decade.

With three food price spikes over five years, food insecurity was widely seen as a major challenge. Higher and more volatile food prices seemed to threaten the lives of billions. But the FAO food price index peaked in 2012, years after the 2007-2008 food price spike triggered many mass protests.

Official development assistance for agriculture has fallen for decades despite the expressed desire by many developing countries to raise such investments. Meanwhile, rich countries have continued to subsidize and protect their farmers, undermining food production in developing countries, and transforming Africa from a net food exporter in the 1980s into a net food importer in the new century.

Food investments for economic recovery

Meanwhile, economic recovery efforts are needed more than ever in the face of protracted economic stagnation. A global counter-cyclical recovery strategy in response to the crisis should contain three main elements.

First, stimulus packages in both developed and developing countries to catalyze and ‘green’ national economies. Second, international policy coordination to ensure that developed countries’ stimulus packages not only ensure recovery in the Northbut also have strong developmental impacts on developing countries, through collaborative initiatives between governments of rich and poor countries. Third, greater financial support to developing countries for their sustainable development efforts, not only aid but also to more effectively mobilize domestic economic resources.

We need more investments that will help put the world on a more sustainable path such as in renewable energy and ecologically sensitive agriculture. After well over half a decade of economic stagnation, with developing countries slowing down dramatically since late 2014, it is still urgent to prioritize economic recovery measures, but also other needed initiatives. Preferably, recovery strategies should help lay the foundations for sustainable development.

Given the large unmet needs for infrastructure, more appropriate investments can contribute to sustainable growth. Such investments should improve the lot of poor and vulnerable groups and regions. In other words, investments should lead to the revival of growth that is both ecologically sustainable and socially inclusive.

Enhancing food security and agricultural productivity should be an important feature of stimulus packages in developing countries dependent on agriculture. Re-invigorating agricultural research, development and extension is typically key to this effort.

The Green Revolution of the 1960s and 1970s – with considerable government and international philanthropic support – increased crop yields and food production. However, the efforts for wheat, maize, and rice were not extended to other crops, such as other major indigenous food crops and those associated with arid land agriculture.

We need a renewed effort to promote sustainable food agricultural productivity. Public investments, including social protection, can and must provide the support needed to accelerate needed farmer investments. There are many socially useful public works, but priorities must be appropriate, considering national and local conditions.

For Sustainable Development

Projects could improve water storage and drainage, and contribute to agricultural productivity or climate adaptation. For example, in many developing countries, simple storage dams, wells, and basic flood barriers/levees could be constructed, and existing drainage and canal networks rehabilitated. Public works programs could prioritize basic sanitation or regeneration of wetland ecosystems that serve as “filters” for watercourses – as appropriate.

To be sure, many complementary interventions will be needed. Food security cannot be achieved without better social protection. This will be critical for the protection of billions of people in developing countries directly affected by high underemployment and unemployment, to reduce their vulnerability to poverty and undernutrition.

But sustainable social protection requires major improvements in public finances. While more revenue generation requires greater national incomes, tax collection can also be greatly enhanced through improved international cooperation on tax and other related financial matters.

Clearly, such an agenda requires not only bold new national developmental initiatives but also far better and more equitable international cooperation offered by a strong revival of the inclusive multilateral United Nations system.

]]>
http://www.ipsnews.net/2016/07/economic-recovery-needed-to-enhance-food-security/feed/ 1
Ramifications of Terror Attacks in Bangladeshhttp://www.ipsnews.net/2016/07/ramifications-of-terror-attacks-in-bangladesh/?utm_source=rss&utm_medium=rss&utm_campaign=ramifications-of-terror-attacks-in-bangladesh http://www.ipsnews.net/2016/07/ramifications-of-terror-attacks-in-bangladesh/#comments Mon, 18 Jul 2016 13:37:34 +0000 Fahmida Khatun http://www.ipsnews.net/?p=146108 By Dr Fahmida Khatun
Jul 18 2016 (The Daily Star, Bangladesh)

At a time when Bangladesh has broken the 6 percent growth trap and has begun its journey towards achieving a faster growth of about 7 percent, and at a time when Bangladesh has achieved the status of a lower middle income country with a per capita income of USD1314 in 2015, it experiences the greatest shock in recent times. This has suddenly changed the perspective on Bangladesh. The ruthless killing of 20 lives, including 17 foreigners at the Holey Artisan Bakery of Gulshan in Dhaka on July 1, 2016, by terrorists has brought new realities for Bangladesh. A country which boasts to be a moderately Islamic country, holding the values of Islam yet being tolerant to other religions and a country that is reputed for its warmth and hospitality towards foreign nationals, has come under the global radar due to the brutality of recent terror attacks. While the grief for the lost lives is going to make a permanent place in our hearts, the implications of this painful episode on other spheres of lives cannot be ignored either.

Photo: Prabir Das

Photo: Prabir Das

Economic development of Bangladesh is apprehended to bear the brunt of this incident. Countries which lost their citizens on that horrifying night – Japan, Italy and India – are all important partners of Bangladesh’s development. Japan is the largest bilateral donor for Bangladesh. In 2015, the country disbursed USD366 million as foreign aid. Recently, Japan signed its 37th Official Development Assistance Loan Package for Bangladesh, which amounts to USD 1.65 billion, the largest ever in the history of Japan’s ODA to Bangladesh, at an interest rate of 0.01 percent and repayment period of 40 years, including a 10-year grace period. About 230 Japanese companies have invested in Bangladesh, mostly in export processing zones; the investment amount is equivalent to USD 250 million. Japanese support and investment are in sectors such as disaster management, infrastructural development including power plants, deep sea port and metro rail. Tragically, the seven Japanese who were killed during the Dhaka terror attack were working for Bangladesh’s metro-rail development project. Bangladesh’s exports to Japan were worth USD 615 million in 2015, of which the share of RMG was USD 448 million.

As for Italy, it is one of the important export destinations for Bangladeshi products, particularly readymade garments. In 2015, Bangladesh exported goods worth USD 1,170 million, of which USD 1,070 million constituted of apparels. Italy is also a source of remittance for Bangladesh. On the other hand, India’s aid disbursement amounted to about USD 93 million, while exports from Bangladesh to India were worth USD 542 million in 2015. Bangladesh expects these countries to continue supporting its efforts in achieving sustainable economic growth and poverty alleviation in the coming days. The assurance of the prime ministers of the respective countries to work together towards counter-terrorism is the recognition of the fact that terrorism is now a global phenomenon which kills people across the globe – Dhaka, Istanbul, Paris, Nice, Iraq.

On its part, Bangladesh has to work hard in bringing back the confidence of investors, development partners and the foreign community. The damage has already been done through worldwide media coverage. Now Bangladesh needs to reassure foreigners working here about their safety. The government has beefed up the security of the diplomatic zone in Gulshan and Baridhara, and other important places, including the Dhaka airport. But there are also foreign consultants and officials involved with projects, who are working at the field level. Their safety should also be ensured. We should also be careful in sending out our messages to the global community. While the Prime Minister fears more terror attacks in the country, some ministers are probably trying to show a brave face, dispelling possible negative impacts of the recent terror attacks in Bangladesh.

But the terror attack at Holey Artisan Bakery has been taken very seriously by the diplomatic community and development partners working in Dhaka. Some of them have given their officials the option to send their families to their respective countries, and many officials have already started to move their families out of Dhaka. Some are considering continuing their operation through regional offices, such as Delhi or Bangkok. We hope that this will not have any negative impact on the size of their operation in Bangladesh. But this obviously is an indication of the insecurity felt by foreigners in Bangladesh. This will have an impact on prospective investors and visitors to Bangladesh. As an important sourcing destination of apparels, the country may face new challenges if buyers do not feel secure to come to Bangladesh, and if they place their orders in other countries.

The shocking revelation of the terrorists’ social background has prompted us to reflect on our education system, particularly that of the private universities where some of these terrorists studied. Run like private banks, some of these universities have made education a commodity, through which they can mint money. Many of these universities do not have a registrar or a proctor, and the Vice Chancellor has no say at the board room. Several of these universities have mushroomed through high profile connections without any plans for human resources and curriculum. Borrowed teachers from public universities often find no reason to be an integral part of the university. The curriculum of these universities does not include holistic education that helps students to become enlightened human beings. Instead, they try to cater to the need of the corporate world, sprinkling a bit of everything in the syllabus. It is time to bring an overall change in the education system.

Globally, the impact of terrorism has been manifested through reduced growth, mainly due to higher government expenditure for actions against counter-terrorism and loss of investment. The new reality dictates that Bangladesh has to strategise its security measures with the help of its friends so that its growth momentum can continue.

The writer is Research Director at the Centre for Policy Dialogue.

This story was originally published by The Daily Star, Bangladesh

]]>
http://www.ipsnews.net/2016/07/ramifications-of-terror-attacks-in-bangladesh/feed/ 0
Increased Adb Aid Will Help Cushion Economic Blowshttp://www.ipsnews.net/2016/07/increased-adb-aid-will-help-cushion-economic-blows/?utm_source=rss&utm_medium=rss&utm_campaign=increased-adb-aid-will-help-cushion-economic-blows http://www.ipsnews.net/2016/07/increased-adb-aid-will-help-cushion-economic-blows/#comments Fri, 15 Jul 2016 16:28:33 +0000 Editor Manila Times http://www.ipsnews.net/?p=146085 By Editor, The Manila Times, Philippines
Jul 15 2016 (Manila Times)

The Philippines faces prospects of slower growth this year because of external factors.

One such factor is the effect of Brexit on the world economy. With Brexit causing the European Union’s already sluggish economy to shrink further, Philippine exports to EU countries in 2016 may end up being less than half of last year’s.

A European freeze, notwithstanding the European countries not being as hot as the US or China or Japan, would also cool down their trade with other countries, including us.

At this point, it is already certain that Philippine exports growth this year will end up less than 2015’s.

The government has cut down its original export growth target of from 6.6 – 8.8 percent to 3 percent. This is a drop of more than 50 percent.

The export growth reductions were seen to be the result of Brexit.

Perhaps the UN Permanent Court of Arbitration’s decision in our favor in the complaint we filed against China over its takeover of our islets and reefs in the West Philippine Sea will also make China deal angrily with us in trade, commercial matters and tourism. So loss of exports to China will probably add to the export growth decline in 2016—and the coming few years.

The website of the Philippine Exporters Confederation includes on its lists of news items on July 14 the Philippine Star story headlined “Philippines likely to miss exports growth target this year.” The Times has a July 13 story, “Exports decline prompts focus on domestic market,” which contains the data in the Star story and a lot more.

That Star story by Richmond Mercurio has the lead: “The Philippines is unlikely to meet its exports growth target this year on account of the ‘Brexit’ event and the country’s continuing political tension with China, an export industry official said.”

The export industry official is Philippine Exporters Confederation, Inc. President Sergio Ortiz-Luis, Jr., who is quoted as saying:

“Lately we have been saying we can’t meet it so we’re looking at the lower end of the target as a six percent growth is very ambitious.”

“So we expect a three percent growth for exports this year. We’re already at half of the year and we’re still negative so for us to be able to beat the target, we have to grow 20 to 25 percent and there’s no way we can get that,” he added.

Ortiz-Luis, who is also the private-sector vice chairman of the Export Development Council, surmises that his lower growth figures are likely also to be the NEDA’s updated numbers if it decides to revise the earlier target.

As if it has come to the rescue in the old cowboys vs Indians movies, ADB announced that it was increasing its aid to the Philippines.

The story on Wednesday, July 13, by The Times’ Mayvelin U. Caraballo said, “The Asian Development Bank (ADB) has expanded the areas where it is ready to support the Duterte administration and affirmed its commitment to boost assistance to the Philippines going forward.”

ADB President Takehiko Nakao had met with President Rodrigo Duterte to discuss how the bank could support the new government in its efforts to achieve sustainable growth, reduce poverty, and increase transparency in government affairs.

Mr. Nakao commended Duterte for his early efforts to consult the private sector, civil society, and other partners to ensure a level playing field for all businesses, and uplift the lives of poor Filipinos that make up one-fourth of our country’s population.

ADB’s increased aid will surely help us ward off economic blows delivered by China.

This story was originally published by The Manila Times, Philippines

]]>
http://www.ipsnews.net/2016/07/increased-adb-aid-will-help-cushion-economic-blows/feed/ 0
Is Sustainable Development Hindering Economic Recovery?http://www.ipsnews.net/2016/07/is-sustainable-development-hindering-economic-recovery/?utm_source=rss&utm_medium=rss&utm_campaign=is-sustainable-development-hindering-economic-recovery http://www.ipsnews.net/2016/07/is-sustainable-development-hindering-economic-recovery/#comments Thu, 14 Jul 2016 13:04:02 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=146053 Jomo Kwame Sundaram was the Assistant Secretary-General for Economic and Social Development in the United Nations system during 2005-2015 and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. ]]>

Jomo Kwame Sundaram was the Assistant Secretary-General for Economic and Social Development in the United Nations system during 2005-2015 and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jul 14 2016 (IPS)

The global economic and employment situation is alarmingly protracted, with recovery not expected any time soon. In October 2012, then IMF chief economist Olivier Blanchard indicated he did not see a global economic recovery before 2016.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

Now, in mid-2016, it is clear that the global crisis has dragged on for several reasons; many governments, especially in advanced economies, still prioritize fiscal austerity and tough labour market reforms, even though such measures undermine livelihoods, incomes, the social fabric and economic recovery prospects.

Meanwhile, despite ‘quantitative easing’, investments remain depressed, blocking employment creation. Easy credit before the crisis led to over-investment in sectors expected to be profitable. Hence, despite low-interest rates, with the overhang of excess capacity, there has been less private investment in recent years.

Since 2007, employment rates have only risen in six of the 36 developed economies, while youth unemployment rates have increased in four-fifths of advanced countries and two-thirds of developing countries.

With higher inequality and unemployment, as well as shrinking incomes and domestic markets, it is obviously unrealistic for everyone to recover by exporting. Even developing countries, long pressed to produce for export, are switching course – producing increasingly for the domestic market once again.

Having suffered more current and capital account difficulties with greater openness, many emerging market economies still feel compelled to accumulate large reserves for ‘self-protection’. Meanwhile, financial globalization has not enhanced growth but has instead exacerbated volatility and instability.

Recovery for All
There have been few efforts since 2008 to enhance national ‘policy space’ for economic recovery, especially for sustainable development. Increased public investment and other spending, including for social protection, can help turn this situation around, creating tens of millions of jobs.

For decades after the end of World War Two, most advanced economies have used counter-cyclical fiscal policy to great effect. Such deficits have not only financed strong, sustained and inclusive recovery, and growth in their own economies but also abroad — as with the US Marshall Plan at the beginning of the Cold War, so crucial to European post-war reconstruction, recovery and take-off.

A cruel logic has been invoked to justify recent inaction. First, huge financial resources were deployed to selectively rescue ‘too big to fail’ private financial interests. Then, the resulting greatly increased sovereign debt was invoked to impose fiscal austerity, ostensibly in deference to bond markets.

To make matters worse, Eurozone countries are not only constrained by this fiscal fetish, but also by their lack of exchange rate policy space, resulting in insurmountable obstacles to recovery in a monetary union not among equals.

And despite strong evidence to the contrary, the presumption that public spending crowds out private investment continues to deter government-led economic recovery efforts.

Perhaps most frustrating in the recent period have been the limited efforts at multilateral cooperation for global recovery since 2009 — the year of the G20’s London and Pittsburgh summits, including the Global Jobs Pact, on which there has been little meaningful progress since.

As a consequence, subsequent years have seen little progress towards a strong, sustained and inclusive recovery. Instead, after decades of promoting globalization, often recklessly, the recent period has seen a gradual turn to creeping protectionism and currency warfare.

Thankfully, after decades of promoting economic, including financial liberalization and pro-cyclical macroeconomic policies, even the IMF, under its recent French leadership, has become more careful, if not skeptical of its own earlier analysis, policy prescriptions, and priorities. But the earlier conventional wisdom still prevails in most of its operations, policy conditions and advice.

Why Sustainable Development?
How can the world get out of this cul-de-sac, worsened by the short-termism of markets, especially financial markets, electoral politics and powerful corporate interests?

Although inclusive multilateralism has been battered by various challenges, including its slow progress, it remains the best option available. Hence, the UN system has to be bolder, but also has to be allowed to play a greater leading role.

In early 2009, the UN Secretary-General proposed a Global Green New Deal. The GGND proposed cross-border public-private partnerships, especially to generate renewable energy and increase food production, recognizing that market forces alone would not generate the investments needed to address climate change as well as to ensure adequate and affordable food production.

If pragmatically implemented, UN initiatives – such as the GGND, the Global Jobs Pact and the Social Protection Floor – can help overcome the current stasis. Likewise, if sufficiently supported, the recently approved UN Decade of Action against Malnutrition can help improve nutrition for all.

As the quadrennial High-Level Political Forum, mandated by the Rio+20 Summit on Sustainable Development in 2012, meets for the first time in mid-July, it is crucial that global leaders recognize that sustainable development is not a luxury which the world cannot afford in these dire times. Instead, it must be recognized as providing the essential sense of common purpose for collective action by the multilateral system, not only for it to stay relevant, but also to lead us all out of the darkness of our times.

]]>
http://www.ipsnews.net/2016/07/is-sustainable-development-hindering-economic-recovery/feed/ 2
Is Federalism Pro-poor?http://www.ipsnews.net/2016/07/is-federalism-pro-poor/?utm_source=rss&utm_medium=rss&utm_campaign=is-federalism-pro-poor http://www.ipsnews.net/2016/07/is-federalism-pro-poor/#comments Thu, 07 Jul 2016 15:25:27 +0000 Jeresa May http://www.ipsnews.net/?p=145966 By Jeresa May C. Ochave
Jul 7 2016 (Manila Times)

Poverty, according to the United Nations, is “a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.”

JERESA MAY C. OCHAVE

JERESA MAY C. OCHAVE

Constitutional experts contend that our unitary system’s centralized form is the culprit for poverty in the country. The top-to-bottom approach (pinatulo governance, as we call it) limits the powers, authority and resources of its own local governments, impairing gravely the decision-making process. Planning and programs for the communities are divorced from the realties on the ground.

In effect, local governance are inefficient in providing even the public services that majority of Filipinos need and expect—health care, education, employment and housing; a state of affairs contrary to the promise of the 1987 Freedom Constitution, where framers have been mandated to create one that is “truly reflective of the aspirations and ideals of the Filipino people.”

A research by the Economic Intelligence Unit (EIU), in 2015, affirms that the Philippines remains one of the poorest in Southeast Asia despite robust economic growth in the past few years.

The current and slow increase of the minimum wage cannot partner with the rising prices of commodities; we have the highest income tax rate (32 percent) compared to our neighboring countries in the Asean: Singapore, 2 percent; Vietnam, 20 percent; Malaysia, 11 percent; Cambodia, 20 percent; Laos, 12 percent. We also are a highly corrupt country, ranked 85th out of 175 countries). “Leakages” in our country are far beyond normal—and we don’t prosecute. (The Napoles corruption cases involving senators and congressmen have barely gone up through our justice system and those nominal “name brands” incarcerated may be freed soon with the advent of a new administration).

Rogier van den Brink, of the World Bank (WB), says the perennial challenge is to channel economic growth toward the poor to make the economy inclusive, thus, ending poverty. Rogier adds this can be achieved if investments in infrastructure, health, and education are increased; including an enhanced competition to level the playing field; simpler regulations to promote job creation, especially for micro and small enterprises; and the protection of property rights.

Karl Kendrick Chua, senior country economist of the WB, says both tax administration and tax policy reforms are needed to generate the revenues required to finance the decades-old investment deficit in infrastructure, health and education.

While tax policy reforms can be implemented, however, under a unitary system, national taxes remitted to the center will still take away much of the wealth and revenues generated by agriculture and other industries in various local communities around the country. Major corporations, including banks, pay their taxes in Metro Manila whose cities benefit more from their activities than the provinces and other cities in which the branches of the corporations operate.

Local officials will continue to spend much of their energy and limited funds seeking the assistance and approval of national government officials in Metro Manila. Local dependence will continue to stifle local initiative and resourcefulness, and hamper local business and development.

Although new taxes and fiscal reforms have been initiated, the government lacks funds and is heavily in debt from too much borrowing.

Federalism, in contrast to our current unitary system (that only concentrates political powers and authority in the national government), emphasizes regional and local self-rule and self-reliance in governance based on the principle of subsidiarity. In short, the decisions are made at the lowest possible level where local problems can be solved. In addition, while regions or state governments are designed to be autonomous, the federal government will provide assistance to various regions and states, especially the less developed ones. In most federal governments this is called the “Equalization Fund,” designed to lift the less endowed states to a decent level, meeting the basic needs of its constituencies. This fund is raised by contributions from all the states in the federal republic and expensed by federal government.

As Atty. Josephus Jimenez emphasized in a Philippine Star column, “Once we are under a federal system, all component states collect their own taxes and contribute only a small fraction of their revenues to the federal or central government for only three centralized functions, namely: National Defense, including the National Police, Justice and Foreign Affairs. All the rest shall be left to each state, including health, education, labor and employment, trade, transportation, communication, agriculture, agrarian reform, justice, environment, natural resources. The states will manage mining and forest matters and shall control all natural resources.”

A federal republic will provide better policies and implementation that will enable the people to raise their standard of living. At the same time,

• Citizens will be more willing to pay taxes that will finance government programs and services for their direct benefits, as they see where their money goes;

• Equitable regional development will be promoted;

• Faster political, economic, social, and cultural development and modernization will take place; and

• There will be inter-regional competition in attracting domestic and foreign investments and industries, professionals, and skilled workers.

It is true that there will be inevitably some “leakages,” but corruption on a local level is much more transparent through a vigilant local community now empowered to run its own affairs.

Let us take note at how America has empowered its people and become the most powerful country in the world through federalism:

“So long as local affairs are reserved to the greatest possible extent for the localities themselves and so long as the people are both interested in and capable of understanding and handling their own problems, then the philosopher’s stone has indeed been discovered and a large measure of both freedom and order are possible.” – Dr. George Charles Roche III.

Ms. Jeresa May C. Ochave is communications director of the Centrist Democracy Political Institute (CDPI). A graduate of the Mass Communications program in Ateneo de Davao University (AdDU), she currently serves as secretary of Centrist Democratic Party of the Philippines (CDP) – Davao Chapter and was elected as regional chairperson of the Centrist Democratic Youth Association of the Philippines (CDYAP) – Region XI. Ms. Ochave is also a part-time professor at the University of the Immaculate Conception, in Davao City, and is taking her masters in Public Administration, major in Public Policy, at the AdDU.

This story was originally published by The Manila Times, Philippines

]]>
http://www.ipsnews.net/2016/07/is-federalism-pro-poor/feed/ 2
The UN and Global Economic Stagnationhttp://www.ipsnews.net/2016/07/the-un-and-global-economic-stagnation/?utm_source=rss&utm_medium=rss&utm_campaign=the-un-and-global-economic-stagnation http://www.ipsnews.net/2016/07/the-un-and-global-economic-stagnation/#comments Thu, 07 Jul 2016 12:06:56 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=145957 Jomo Kwame Sundaram was the Assistant Secretary-General for Economic and Social Development in the United Nations system during 2005-2015, and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. ]]>

Jomo Kwame Sundaram was the Assistant Secretary-General for Economic and Social Development in the United Nations system during 2005-2015, and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jul 7 2016 (IPS)

When the financial crisis preceding the Great Recession broke out in late 2008, attention to the previously ignored UN Secretariat’s analytical work was greatly enhanced. This happened as the UN and the Bank of International Settlements (BIS) had been almost alone in warning, for some years, of the macroeconomic dangers posed by poorly regulated financial sector developments.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

In contrast, most other international organizations – the IMF, World Bank and OECD – which monitor developments in the world economy have failed to see the crisis coming. Until the third quarter of 2008, they were still predicting continued robust growth of the world economy, and, ‘soft landings’ in the unlikely event of financial turmoil, including in the US.

Thus, the UN was in a strong position to lead the global response to the crisis. However, although ‘second opinions’ were offered to Member- States upon request, in practice, it largely remained business as usual. Each part of the international system carried on with their own work programs with obligatory references to the crisis and its impacts. There was no coherent response or sustained attempt to seriously address fundamental issues.

Meanwhile, although there have been some occasional signs of recovery, economic stagnation in most developed economies continues, with high joblessness and underemployment. Occasional signs of recovery have been uneven, and easily reversible. Early withdrawal of stimulus measures in 2009 pushed the global economy into stagnation, especially as private consumption and investment spending remained weak.

Most developing countries have remained vulnerable, with little fiscal space to be able to respond to shocks. Their policy space remains restricted, especially following the collapse of mineral and other primary commodity prices, and continued denial of the need for counter-cyclical macroeconomic policies by most influential policymakers.

The poorest countries and communities also face the prospect of a resurgence of poverty and hunger. In recent years, the push to cut social security institutions and spending threatens to eliminate the main remaining forms of social protection.

Meanwhile, efforts to strengthen prudential regulations in developed countries have been indefinitely postponed since 2009, with the first signs of recovery in response to financial market pressures, once it had been rescued. Since then, there has been little serious discussion of reforms in the international financial system.

In 2009, the UN Secretary-General called for a Global Green New Deal, seeking internationally coordinated fiscal stimuli, involving major investments in renewable energy and other long-neglected global public goods. At its April meeting, the G20 successfully mobilized over a trillion dollars, but these mainly enhanced IMF resources and thus further empowered the Washington-based international financial system.

The UN emphasized the promotion of sustainable energy to address the looming climate change challenge. In the face of limited private investments, it argued that public investments had to take the lead, to help quickly bring down the unit costs of renewable sources.

But the proposal was then rejected as inappropriate owing to the higher costs of renewable energy. In fact, subsequent developments have shown that the UN was too cautious as the costs of renewable energy have fallen much faster than it anticipated although the recent oil price collapse has limited its competitiveness once again.

Another element in the UN proposed New Deal involved strengthening world food security by encouraging investment in food agriculture by small farmers, again with public investment leading, supplemented by ODA.

In addition, there was growing recognition of the need to completely eradicate poverty and hunger with extraordinary measures under the rubric of ‘social protection’. In so far as such measures would also enable beneficiaries to enhance their productive assets and capacities, they would also ensure higher incomes and more investments, thus accelerating economic recovery, greater resilience, and self-reliance in the medium term.

Recognizing the critical role of the 1944 Bretton Woods conference and the institutions it created for post-war recovery and post-colonial development, the UN also called for reforms to the international financial system to better address new circumstances and challenges.

The 2008 second Financing for Development conference in Doha reiterated the Monterrey Conference’s call to mobilize the international community for accelerated debt relief, improve international tax co-operation, better developing countries’ access to developed country markets, and enhance developing country access to technology, especially for life-saving drugs and renewable energy.

If UN initiatives had not been blocked by some OECD countries, it is likely that the world would have developed a debt management framework to address the Icelandic, Greek and other debt crises as well as greater international tax cooperation to better address massive and still growing tax evasion and fiscal constraints faced by so many governments today.

The June 2009 High- Level Conference on the Global Financial and Economic Crisis made specific proposals for urgent actions, many of which were later elaborated by the Stiglitz Commission Report’s recommendations. But some hints of recovery provided the pretext for the U-turn to ‘fiscal austerity’ in Europe once the commanding heights of most powerful financial interests had been rescued.

In early 2009, the UN system committed to supporting Member States to re-orient their macroeconomic policy frameworks to include full employment as an explicit target for both developed and developing countries. But without resources and facilities to support the provision of appropriate policy advice, few countries have sought UN assistance for counter-cyclical macroeconomic management since.

Thus, despite its longstanding mandate and better track record than most other international financial institutions, a greater pro-active role of the rest of the UN system has been denied by a coalition of powerful countries. Sadly for the world, this marginalization threatens the very future of economic multilateralism, as has long been evident from the continued hegemony of the Washington Consensus, and at the Addis Ababa third UN Financing for Development conference last July and the World Trade Organization ministerial in Nairobi in December.

]]>
http://www.ipsnews.net/2016/07/the-un-and-global-economic-stagnation/feed/ 0
How Russia Will Use Brexit to Fight Sanctionshttp://www.ipsnews.net/2016/07/how-russia-will-use-brexit-to-fight-sanctions/?utm_source=rss&utm_medium=rss&utm_campaign=how-russia-will-use-brexit-to-fight-sanctions http://www.ipsnews.net/2016/07/how-russia-will-use-brexit-to-fight-sanctions/#comments Wed, 06 Jul 2016 11:26:23 +0000 Editor Manila Times http://www.ipsnews.net/?p=145953 By Editor, The Manila Times, Philippines
Jul 6 2016 (Manila Times)

FORECAST
EU sanctions against Russia are all but guaranteed to remain in place through 2016, but Moscow will work in the second half of the year to get them eased in 2017.

Russia will capitalize on divisions in the European Union, which will only widen in the wake of Brexit, to oppose sanctions.

Moscow will step lightly, however, to avoid provoking its European rivals ahead of the next sanctions vote.

Europe is not the only region affected by Britain’s vote to leave the European Union. The decision will also have significant effects on Russia, especially where sanctions are concerned. As the Continent focuses on mitigating and managing the fallout from the Brexit vote, it probably will have fewer resources to devote to problems beyond the European Union, namely those in Ukraine, Syria and Nagorno-Karabakh — all areas where Russia plays a major role. The EU is also likely, at least in the immediate term, to have less interest in advancing its political and economic integration projects in the former Soviet periphery, such as the Eastern Partnership program.

Sanctions: Russia’s bugbear
Of particular import to Russia are the sanctions against it, which Moscow would like Europe to lift. The European Union first imposed the sanctions in March 2014, around the time that voters in Crimea resolved in a referendum to leave Ukraine and join Russia. The referendum was held in response to the February 2014 EuroMaidan uprising, which ousted then-President Viktor Yanukovich, an ally of Russia, in favor of a new pro-West government. When the European Union passed initial sanctions, they were limited to 21 people in Russia and Ukraine associated with the Crimea referendum. Beginning in May 2014, the European Union passed new sanctions related to the Russian-backed uprising in eastern Ukraine. These sanctions started as restrictive measures for associated individuals, but by September 2014 — when the fighting had intensified and after Malaysia Airlines flight MH17 was shot down — they expanded to include companies and broader sectors of Russia’s economy. Since passing the measures unanimously, EU member states have reviewed them every six months, agreeing to extend sanctions in June 2015, in December 2015 and again in July 2016.

In upholding the sanctions, the European Union has maintained solidarity with the pro-West government in Ukraine and kept pressure on Russia for more than two years. But recent signs suggest that the bloc’s unity on the issue is becoming strained. Even before the Brexit vote, certain Russia-friendly countries in the European Union — including Italy, Greece and Hungary — pushed for greater discussion and debate on prolonging Russia sanctions. The countries’ leaders argued against an automatic extension of sanctions, and Italian Prime Minister Matteo Renzi even co-hosted a recent economic forum with Russian President Vladimir Putin in St. Petersburg. Of course, the pro-Russia sentiment has not sufficed to break the EU unanimity in an actual vote. Nonetheless, it reveals growing uncertainty over the future of the sanctions — regardless of whether Moscow complies with the Continent’s demands to implement the Minsk accords.

A budding opportunity

Nothing will test EU unity more than negotiating Britain’s exit from the bloc. Since the European Union has already decided to extend sanctions through the end of the year, discord on the Continent will not affect Russia immediately. It does, however, raise the possibility that the European Union’s long-standing consensus on sanctions could break by the time the next vote occurs, probably in January 2017. The United Kingdom was one of the biggest proponents of maintaining strong economic pressure on Russia. Now that its status in the bloc is uncertain, other countries may be more willing to diverge from its position — and Russia is ready to take advantage of any rifts. To that end, Moscow will likely encourage the exit campaigns of anti-EU figures such as France’s Marine Le Pen and the Netherlands’ Geert Wilders while also ramping up its charm offensive on countries more critical of sanctions.

Even so, Moscow will be cautious in exploiting the divisions, well aware that any major action it takes — whether backing a military offensive in Ukraine or trying too aggressively to shape EU decision-making — could backfire and strengthen EU resolve against it. Furthermore, Russia is not immune to the economic repercussions of the Brexit, which crashed global markets. Despite the sanctions, Russia and the EU continue to conduct trade and financial activity with each other, albeit at reduced levels. As it is, Russia’s economy is already suffering the effects of low oil prices; a major political and financial crisis spreading throughout all of Europe is not in Moscow’s interests. Therefore, even as Moscow tries to capitalize on Europe’s rifts in time for the next sanctions vote, it will be careful not to overexert its influence. Lead Analyst: Eugene Chausovsky

©2016 STRATFOR GLOBAL INTELLIGENCE

This story was originally published by The Manila Times, Philippines

]]>
http://www.ipsnews.net/2016/07/how-russia-will-use-brexit-to-fight-sanctions/feed/ 0
Post-Brexit blueshttp://www.ipsnews.net/2016/06/post-brexit-blues/?utm_source=rss&utm_medium=rss&utm_campaign=post-brexit-blues http://www.ipsnews.net/2016/06/post-brexit-blues/#comments Wed, 29 Jun 2016 08:06:06 +0000 Mahir Ali http://www.ipsnews.net/?p=145871 By Mahir Ali
Jun 29 2016 (Dawn, Pakistan)

AGITATED markets, a tumbling pound-sterling, a downgraded credit rating: none of these should have been an unexpected outcome of the British electorate’s decision last weekend to opt out of the European Union.

As for leadership turmoil in the main parties, it was more or less a given that David Cameron’s days as prime minister were numbered if his arguments for remaining in the EU were defeated by the popular verdict. But the concerted move by members of his own shadow cabinet to expel Jeremy Corbyn as leader of the opposition Labour Party was greeted with surprise.

Mahir Ali

Mahir Ali

It shouldn’t have been. The Daily Telegraph reported 10 days before the vote that “Labour rebels believe they can topple Jeremy Corbyn after the EU referendum in a 24-hour blitz”. The result of the referendum was unclear at the time, and it is reasonably clear that the “24-hour blitz” would have occurred even if the popular verdict had gone the other way.

The bulk of the Parliamentary Labour Party was extremely disconcerted by Corbyn’s landslide victory some nine months ago in a leadership contest that, under new rules, for the first time gave each party member an equal say. Corbyn was a backbench maverick in the PLP who frequently voted against New Labour when it was in power under Tony Blair and Gordon Brown, and his triumph was anathema to the bulk of MPs who saw power primarily as a means of consolidating the Thatcherite agenda that Blair, with minor variations, had so blatantly pursued.

A clear majority of Labour members thought otherwise, though, and Corbyn’s ascendancy drew back into the party a substantial number of those who had abandoned it because they considered it too right-wing.

The PLP’s assault against Corbyn — led, somewhat ironically, by former shadow foreign secretary Hilary Benn, whose dad, Tony Benn, a close comrade-in-arms of Corbyn was for decades the most coherent and consistent Labour opponent of the EU on the utterly plausible grounds of its depletion of national sovereignty — has ostensibly been based on the Labour leader’s lackadaisical approach to the ‘remain’ argument ahead of the referendum.

In fact, Corbyn, perhaps against his better judgment, campaigned extensively, if not always enthusiastically, in favour of Britain remaining in the EU. Sure, he was disinclined to rave like Boris (Johnson) and Dave. But that’s not his style. And, more importantly, he had qualms about the EU that his intrinsic honesty prevented him from disregarding.

Yesterday, as Cameron headed for a meeting where he would be obliged to face his EU counterparts, Corbyn faced a PLP vote of no-confidence that was expected to overwhelmingly go against him. Whether his position would remain tenable beyond that is open to question, but there is a fair chance that he could rely on a second leadership vote to retain his post. Where would that leave the conspirators, who until the time of writing had failed to come up with either an alternative candidate or a distinct set of policies?

The move to expel Corbyn was greeted with surprise.
Amid the inevitable turmoil among the Conservatives, commonplace logic pointed to Labour unity behind a democratically elected leader on the basis of a platform that challenged from the left the consequences of a Tory catfight between a pair of more or less equally contemptible former Eton classmates.

Labour’s MPs — and many of Corbyn’s most vociferous opponents belong to constituencies that voted overwhelmingly to leave the EU, but are unwilling to accept responsibility for that outcome — were, until the weekend, in a position to make their party electable in the probable event of a snap election. They have now squandered that chance. Were Labour to win power under a re-elected Corbyn, which is not an impossible dream, it would be despite Hilary Benn & co, caterers to the despondent elites.

Meanwhile, Cameron, who has decided to leave activation of Article 50 — which formally begins the process of UK withdrawal from the EU — to his successor, does not intend to step down until October. Not all of Europe empathises with that approach. France, in particular, wants the exit strategy to be put into action right away, whereas Germany has shown signs of greater patience.

Some constitutional lawyers — of whom there is no dearth in Britain, despite its lack of a formal constitution — have indicated that the nation’s parliament is under no obligation to abide by the referendum verdict, so the UK could remain part of the EU. Direct democracy has also come in for some flak — as, more appropriately, have younger voters who largely opposed a Brexit but did not turn out in sufficient numbers to produce a different verdict.

Amid a sharp rise in instances of racism and profound uncertainty in every sphere, including the UK’s integrity, the only thing Britons are clearly blessed with is the ancient Chinese curse: may you live in interesting times.

mahir.dawn@gmail.com

This story was originally published by Dawn, Pakistan

 

]]>
http://www.ipsnews.net/2016/06/post-brexit-blues/feed/ 0
Little Englandhttp://www.ipsnews.net/2016/06/little-england/?utm_source=rss&utm_medium=rss&utm_campaign=little-england http://www.ipsnews.net/2016/06/little-england/#comments Mon, 27 Jun 2016 19:26:09 +0000 Zarrar Khuhro http://www.ipsnews.net/?p=145843 By Zarrar Khuhro
Jun 27 2016 (Dawn, Pakistan)

Sometimes you just have to lie back and think of England. But how can one think of England without thinking of Shakespeare? And when you think of Shakespeare, how can you ignore Macbeth, his most Scottish of plays, and in particular the line: “we but teach bloody instructions, which being taught, return to plague the inventor”.

zarrar_Finally, how can one think of that line in the context of Brexit and not consider the dramatic irony that a power, famous for dividing and ruling, stands divided by its own ruling?

That irony certainly isn’t lost on those of us who live in the much-partitioned parts of the world, with jokes like ‘the real Brexit was in 1947’ doing the rounds along with snide offers to repay colonial favours by helping divide up what’s left of the Empire with neat little lines and the quintessential disputed areas. Somewhere in an otherworldly bungalow, Mountbatten’s ghost is likely shuddering at all this schadenfreude.

Of course, this is less a partition than a parting of ways, but one that carries with it the promise of partitions to come. While the petition to declare London as an independent city-state is only semi-serious, Scotland is another matter entirely.

The Scots overwhelmingly voted to remain in the EU and are now considering another referendum on whether to remain in the UK. In that great glen in the sky, William Wallace is probably raising a toast.

Scotland brings us back to Macbeth, and in particular the dismissal by his wife: “stand not upon the order of your going, but be gone”. There’s a sliver of that in the statement by the EU leadership for the UK to leave the union “as soon as possible, however painful that process may be.”

Brexit carries with it the promise of future partitions.

Then there’s the theatre of the absurd as a terribly hung-over UK woke as if after a midsummer night’s dream. It is there in David Cameron resigning due to a defeat in a referendum he did not even need to call. It is found in the tragicomic fact that hours after the referendum result came in, the top two googled questions in the UK were ‘what does it mean to leave the EU?’ and ‘what is the EU?’

Then there’s the family, ripe for lampooning on reality TV, who all voted to leave but who are ‘disappointed’ because now — and only now —“the facts are coming in”.

Facts didn’t stand much chance here anyway, with the Brexit camp playing on fears and shouting false promises loudly and often enough for them to be taken as the truth. Just take the strutting and fretting Nigel Farage, who immediately backtracked on his campaign pledge that leaving the EU would free up £350 million to be spent on the National Health Service — a promise that was emblazoned on his campaign bus and which he now calls a ‘mistake’.

Then there’s the media coverage which, according to a detailed Reuters study, was “heavily skewed in favour of Brexit” and you have a coup that Goebbels might have nodded at with approval.

He would also no doubt be amused that the UK had inflicted on itself what it had fought two wars against Germany to avoid: a united Europe with England on the outside. This scenario has been England’s strategic nightmare for centuries, preventing it from coming to pass the foremost plank of its continental policy — the pursuit of which occupied its greatest minds and claimed an even greater number of lives.

Over at the Kremlin, glasses must be clinking as Czar Putin toasts the first real splintering of the Western Alliance that has thwarted Russia’s ambitions for nearly a century now. After all, the EU was the political manifestation of European unity, just as Nato is the manifestation of its US-backed military might — and Nato was created to keep the Russian empire’s Soviet incarnation in check. Ironically, this moment comes mere weeks after Putin’s poking fun at how “200 Russian fans could beat several thousands of the British” in clashes during the Euro cup. Well, in football terms, this was England playing England with England losing thanks to an own goal.

There will be joy among the autocratic and generally anti-democratic the world over, who have already latched on to the vote as proof that giving people a say in how they are ruled is a silly idea, really.

There will be similar cheer in militant camps and right-wing party headquarters alike, a shared delight at the apparent dismantling of what they see as a corrupt and decadent construct.

Granted that referendums are always about more than what’s printed on the ballot paper. This was also a protest vote, a vote of fear, anger and — quite possibly — ignorance; granted that this may end in a reforming of the EU and perhaps even the eventual return of the UK. But before that happens, Lady Britannia will have to wake and realise that the handsome prince she dallied with the night before is, in fact, a fool with a donkey’s head.

The writer is a journalist. Twitter: @zarrarkhuhro

This story was originally published by Dawn, Pakistan

]]>
http://www.ipsnews.net/2016/06/little-england/feed/ 0
From Grexit to Brexit: Eurosceptics Claim their -Exithttp://www.ipsnews.net/2016/06/from-grexit-to-brexit-eurosceptics-claim-their-exit/?utm_source=rss&utm_medium=rss&utm_campaign=from-grexit-to-brexit-eurosceptics-claim-their-exit http://www.ipsnews.net/2016/06/from-grexit-to-brexit-eurosceptics-claim-their-exit/#comments Mon, 27 Jun 2016 18:46:17 +0000 Editor sunday http://www.ipsnews.net/?p=145839 By Editor, Sunday Times, Sri Lanka
PARIS, , Jun 27 2016 (The Sunday Times - Sri Lanka)

AFP – It started with “Grexit” — the long trumpeted but never realised axing of Greece from the European Union. It was then reborn as “Brexit” as Britain started down the — this time voluntary — path of leaving the bloc.

The “-exit” formulation was coined by two economists from US financial giant Citigroup in February 2012 to describe the possible of departure of Greece from the EU.

It has now taken on a life of its own on social media, with eurosceptics across the continent all clamouring for their own vote on EU membership: – “Frexit “: French far-right leader Marine Le Pen called for a “Frexit” shortly after the results of Britain’s membership referendum were announced. “Victory for Freedom! As I have been asking for years, we must now have the same referendum in France and EU countries,” she declared on Twitter.

– “Nexit “: “Now it is our turn,” trumpeted Geert Wilders, the leader of the anti-Islam far-right Freedom Party (PVV) in the Netherlands, after Britain opted out of the EU. Wilders has promised to make a referendum on a “Nexit” a central plank of his party’s election campaign.

– “Oexit “: Austria’s version comes from Oesterreich, the country’s name in Austrian. And the idea is gaining ground in a country where far right party leader Norbert Hofer came within a hair’s width of being elected to the largely ceremonial but coveted post of president last month. “Outstria” has been suggested as an alternative.

– “Swexit “: The far right Sweden Democrats have floated the idea of a “Swexit”, with opinion polls suggesting support for leaving the EU stands at 31 percent.

– “Fixit “: Although the English version doesn’t quite hold the right connotations, a petition calling for a Finnish exit has garnered thousands of signatures.

– “Dexit “: The phrase has emerged in the Danish press, where the populist Danish People’s Party (DPP) has been calling for a renegotiation of its EU accords.

– “Gerxit “: It has appeared in French- and English-language media, but the idea of a “Gerxit” has little traction back at home in Germany. Though right-wing populist Alternative for Germany (AfD) party Frauke Petry did describe “Brexit” as a warning to the EU. “If the EU does not abandon its quasi-socialist experiment of ever-greater integration then the European people will follow the Brits and take back their sovereignty,” he said.

– “Italexit “: A bid to leave the EU has also not gained much ground at home in Italy, a founding member of the union — apart from with the country’s most prominent far-right politician, Matteo Salvini. “Cheers to the bravery of free citizens,” the leader of the anti-immigration, anti-EU Northern League wrote on Twitter. “Heart, head and pride beat lies, threats and blackmail. THANKS UK, now it is our turn #Brexit”.

This story was originally published by The Sunday Times, Sri Lanka

]]>
http://www.ipsnews.net/2016/06/from-grexit-to-brexit-eurosceptics-claim-their-exit/feed/ 0
The Brexit Shock – Now All Is Up in the Air!http://www.ipsnews.net/2016/06/the-brexit-shock-now-all-is-up-in-the-air/?utm_source=rss&utm_medium=rss&utm_campaign=the-brexit-shock-now-all-is-up-in-the-air http://www.ipsnews.net/2016/06/the-brexit-shock-now-all-is-up-in-the-air/#comments Sun, 26 Jun 2016 06:03:00 +0000 Jan Oberg http://www.ipsnews.net/?p=145827 The author is TFF Director & Co-founder, peace studies professor. PhD in sociology, peace and future researcher. Associate professor (Docent) at Lund University, thereafter visiting or guest professor at various universities. Former director of the Lund University Peace Research Institute (LUPRI); former secretary-general of the Danish Peace Foundation; former member of the Danish government’s Committee on security and disarmament.]]>

The author is TFF Director & Co-founder, peace studies professor. PhD in sociology, peace and future researcher. Associate professor (Docent) at Lund University, thereafter visiting or guest professor at various universities. Former director of the Lund University Peace Research Institute (LUPRI); former secretary-general of the Danish Peace Foundation; former member of the Danish government’s Committee on security and disarmament.

By Jan Oberg
Lund, Sweden, Jun 26 2016 (IPS)

The UK, Europe and the rest of the world will be affected. But there has been no planning for this anywhere.

It’s now all up in the air what this Brexit vote will be the starting point of. All we can safely predict is that we are in for interesting times!

Jan Oberg

Jan Oberg

Why did it happen?

Arrogant corporate and other elites continuously enriching themselves against all common social sense and ignoring the legitimate needs and concerns of ordinary citizens, women in particular – so, class and gender.

So too that more highly educated people tended to vote for Remain and older people voting Leave – more interesting sociological analysis here.

Interestingly, the whole art world supported Remain – and now fear for the effects of Brexit on Britain’s cultural development.

An EU that has failed to create a new, better way of doing politics, merely growing its original democratic deficit – so, lack of real democracy.

An EU that has had a woefully inadequate, cynical response to a refugee crisis caused by leading EU member states’ warfare – so, (mis)management and lack of leadership.

Significantly, the leading Muslim Association of Britain, MAB, supported Remain with the argument that ”Exit from the EU runs the risk of perpetuating rifts in British society, which would increase levels of hate crimes against British Muslims.” So, Islamophobia.

A general sense (but sometimes denial) of insecurity about the future all over the Western world, a deep sense of failure, loss, sense of risk of war in Europe and the fact that the rest of the world is moving ahead and will surpass the West; a sense that of the West lead by the the US getting relatively weaker and lacking leadership – so, psycho-political-civilisational insecurity.

A fall-back to ”me and my home” and closing the doors to the wider world world’s problems – nationalism, xenophobia, right-wing, neo-nazism populism and all the things many of us hoped had visited Europe for the last time – so, populism/nationalism/regression.

What could it lead to?

An exit domino effect in a number of countries – referendums and eventually a quite small EU or no EU.

A punishment by Germany and other EU of the UK for leaving, depending somewhat on whether the post-EU Britain will not only move out of the EU but also closer to the US.

It could also, in the best of cases, lead to a re-think throughout the EU and a real effort to do things differently – but unlikely given the EU is already in crisis and lack visionaries in politics.

A referendum in Scotland, further reducing the unitedness of the Kingdom.

A reshuffling in the global economy – London being so much of a global financial centre. Where will the banks and investors go now? What will China do that had London as it’s major hub?

A tumbling of the British £ and turmoil on the financial markets, weakening of the US$?

A Britain in deep economic crisis – or perhaps starting out on a new course with a great future, speeding ahead of the average EU?

A Britain that ties itself (even more) to the US in security political terms and an increasing conflict between those two and EU/NATO countries – spelling the dissolution of NATO.

What does it signify?

That democracy works – and that it doesn’t. The referendum instrument is an utterly democratic method – as Switzerland continues to prove to the world.

But then, is it wise that such an important decision can be made with such a small majority? Wouldn’t it have been reasonable to demand, say, 2/3 majority for Leave?

To ignore now what over 48% wanted isn’t good. But, anyhow, nobody trusts politicians nowadays and perhaps the effects will be smaller than most fear today.

That the – Western centre – doesn’t hold anymore. Such an important country leaving the EU is a blow beyond imagination to the entire idea of that Union.

Basically that the West is getting weaker and while trying to ’divide and rule’ it is fragmenting from inside.

The EU is getting weaker in spite of still being the largest economic bloc in human history. Because of the rise of other economies, the 28 countries accounted for 30% of the world’s total output in 1980 and 16,5% in 2015. With the UK leaving, the EU loses 15% of its GDP.

That the EU construction and Lisbon Treaty, written up by three old men, was wrong and outdated from the outset and lacked every potential to appeal to the diverse citizenry throughout Europe, particularly the younger ones.

That there is no vision and strategy; no one – no one! – seems to have the faintest idea about what will happen now – as Ken Livingstone, London’ former mayor, expressed it on Russia Today the morning after.

Be sure that Brexit on June 23, 2016 will be remembered as a turning point. And be sure that, while we do not know what will happen after Brexit, it’s not a message of good things to come for the already crumbling, vision-losing Western part of our world.

”May you live in interesting times” as the English say, considering it a curse. The Chinese – to whom this phrase is often falsely attributed – expresses it differently: ”Better to be a dog in peaceful time, than to be human in a chaotic (warring) time.”

Both probably meaning that our time is more fraught with insecurity than ever…

 
Jan Oberg’s article was published on 24 June 2016 in: TFF – Transnational Foundation for Peace and Future Research. Go to Original.

The statments and views expressed in this article are those of the author and do nt necessarily represent those of IPS

]]>
http://www.ipsnews.net/2016/06/the-brexit-shock-now-all-is-up-in-the-air/feed/ 0
Brex’it, So Be’it; And Then What?http://www.ipsnews.net/2016/06/brexit-so-beit-and-then-what/?utm_source=rss&utm_medium=rss&utm_campaign=brexit-so-beit-and-then-what http://www.ipsnews.net/2016/06/brexit-so-beit-and-then-what/#comments Sun, 26 Jun 2016 05:19:41 +0000 Johan Galtung http://www.ipsnews.net/?p=145824 The author is professor of peace studies, dr hc mult, is founder of the TRANSCEND Network for Peace, Development and Environment and rector of the TRANSCEND Peace University-TPU. He has published 164 books on peace and related issues, of which 41 have been translated into 35 languages, for a total of 135 book translations, including ‘50 Years-100 Peace and Conflict Perspectives,’ published by the TRANSCEND University Press-TUP.]]> Source: TRANSCEND Media Service

Source: TRANSCEND Media Service

By Johan Galtung
ALICANTE, Spain, Jun 26 2016 (IPS)

The vote turned out like the two referenda held in Norway in 1972 and 1994. And much for the same reason: Protestant break with Rome–Catholic, imperial–Henry VIII made himself head of the Anglican Church in 1534.

Religion was not the only reason, there are Protestant Nordic members of EU, closer to the continent and closer to Russia. World history, a short while after Pope Francis-Patriarch Kirill also made world history, bridging the Catholic-Orthodox 395-1054 gap.

The Disunited Queendom is now London with surroundings; England. The implications are enormous, for UK-GB and the British Isles in general, for EU and Europe in general, USA and the world in general. The US Trojan horse decided to leave the EU on 23 June 2016.

UK-GB and the British Isles in general.

Johan Galtung

Johan Galtung

Goodbye United Kingdom, UK, we may get United Ireland, UI, instead.

Goodbye Great Britain, GB, we may get Scotland in EU instead.

Welcome to Britain of England-Wales, if they care for that vocabulary.

Welcome to new-born England, 23 June being the Day of Independence.

Independence? Washington, having lost its inside EU ally, will soon remind London of their “special relationship” as unsinkable aircraft carrier also doing the killing job–maybe some wanted that.

And yet. England had the whole Global Establishment, if there ever was one, mobilized to pressure them to remain. They did not. There is something very impressive in that, however bad the campaign.

And yet. There is something to those British Isles, a shared and twisted history between Anglo-Saxons and Celts–Vikings, Normans–an enormous impact on the world now torn to pieces, torn into new pieces.

Maybe time has come for something this author proposed in an NGO encounter at the Houses of Parliament on Northern Ireland-Ulster right before the Good Friday Agreement: CBI, a Confederation of the British Isles, with United Ireland, Scotland, England-Wales and smaller islands.

EU and Europe in general.

On the possible positive side is EU independence of the USA, not choosing US foreign-military (and university system!) policy instead of working out its own. EU can now follow France-Germany in a Ukraine they know much better than the USA.

They nay one day meet Russia in some “European House”–may Gorbachev see that before he passes away–and they may one day, hopefully soon, have a European Parliament recognizing Palestine as a state, making it clear this is not anti-Semitic, anti-Israel, but pro the other Semitic, pro-Palestine.

On the possible negative side is Germany winning the two “world wars” in Europe over who shall run Europe: Germany or England-France.

Germany had visions of something close to an EU with economic center in Brussels and political in Berlin. After 1945 it was France, not England that stretched out a hand to beaten Germany, the 1950 coal and steel handshake that morphed into the Treaty of Rome (what a bad choice of name).

France will have to do that again, but this time not from the strong position of being on the winning side of a war, but the weak position of being in layer 3 of the present 5 in EU with Germany on top and Greece at the bottom, the Nordics no 3, then the Latins, then Eastern Europe.

This pyramid has to be flattened; many of the exit movements derive their momentum from that sad EU reality.

But also from a boring EU in spite of having to its credit, “acquis” open borders, the euro, a Europe with war held unthinkable.

Could some of that come from not being masters in their own house, always listening to His Master’s Voice?

Could healthy regionalism inspire a new deal, like healthy nationalism could for England? Freed from fighting US wars, liberated to build peace all over, like in EU?

Making an ever stronger or weaker union? Maybe stronger in peace policy. And maybe with the euro as common, not single currency, and not pressing members into a solidarity with no historical basis?

USA and the world in general.

This might be one more wake-up call for the USA, at a time with everybody but Hillary already awake.

Talk about NATO as out of date, Europe and the Middle East taking care of their own affairs, wars as non-affordable, as counter-productive, some awareness that there are other victims than Americans in the wars, had been unthinkable, unspeakable. But old addictive habits are hard to change.

That opens for a possible widening slit between USA-England and EU-Europe. There is a model: the split between the West Roman (Catholic) and East Roman (Orthodox) empires in 395, the former lasting about 81 more years, the latter more than a thousand.

This time the religious split would be between evangelical-protestant in the West and catholic-orthodox in the East, with a smart federation at the border, Ukraine, as a possible solution. A major test.

Another: defensive defense against IS brutality, negotiations with them, recognizing their right to have an IS when Europe has EU, and a Caliphate when Christianity has Vatican and the Patriarchy(ies).

Learning from Islam about togetherness and sharing, how to overcome loneliness and alienation, admitting that the West needs to learn.

And China? Learning from them like they do from the West, inviting them to join the world from “between heaven and earth”.

The world in general? Moving away from states, toward regions. Be a good, caring Mother of regions, sharing solutions and problems generously with other regions around the world.

With Latin America-Caribbean, Anglo-America–maybe with Mexico as MEXUSCAN–the African Union, the European House, SAARC, ASEAN. And the three badly missing ones in Asia: West Asia with Israel and Palestine, Iraq and Syria; Central Asia with Afghanistan, and Northeast Asia with the two Chinas, the two Koreas, Far East Russia and Japan now at nuclear logger-heads.

EU: a wake-up call! Don’t despair, grow, and help the world.

 
This article originally appeared on Transcend Media Service (TMS) on 24 June 2016: TMS: Brex’it, So Be’it; And Then What?

The statments and views expressed in this article are those of the author and do not necessariliy represente those of IPS.

]]>
http://www.ipsnews.net/2016/06/brexit-so-beit-and-then-what/feed/ 0
Brexit and EUexithttp://www.ipsnews.net/2016/06/brexit-and-ueexit/?utm_source=rss&utm_medium=rss&utm_campaign=brexit-and-ueexit http://www.ipsnews.net/2016/06/brexit-and-ueexit/#comments Sat, 25 Jun 2016 17:12:42 +0000 Roberto Savio http://www.ipsnews.net/?p=145815 Roberto Savio, is founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News. ]]>

Roberto Savio, is founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News.

By Roberto Savio
ROME, Jun 25 2016 (IPS)

The Europeans went to bed Thursday night, with exit polls giving a comfortable margin of victory for those who wanted to Remain. The following morning they awakened to find that the real result was the opposite.

Specialists in polling say that this happens when electors do not feel comfortable to say how they will rally voters because they are not comfortable, on a rational level, with what they will do. In other words, voters act because of their guts, not because of their brain.

Roberto Savio

Roberto Savio

Brexit was really based on gut feelings. It was a campaign of fear. The “Leave” campaign was about the Turks massively invading Great Britain, because of their admittance in the EU (totally false); that Great Britain was paying to the EU 50 million pounds a day (again, a false figure). But the central question raised, especially by Boris Johnson, was: we are not free any longer… Let us get our independence.

And he went to compare the EU to the Nazi Germany who wanted to take over Europe. Of course, his intention was simple: get prime minister David Cameron to resign and take his post. A good example of idealism.

This cry for independence stirred the nationalist nerve of the nostalgia of the imperial times… We are facing enormous tides of foreigners coming if we stay in the EU, and we have no control on our borders, etc. The fact that Great Britain in fact had got from the EU already the control of its frontiers, was totally lost.

But beside this specific trait of British identity, the reasons for Brexit were common to the xenophobic, nationalism and populism tide which is spreading all over Europe. The Brexit campaign did contain all three, plus an emerging fourth factor: the revolt of people against their elites.

The “Remain” campaign had all of them; from the leaders of the Tory and Labour party to all the industrial and financial sectors, from the International Monetary Fund (IMF) to the European Central Bank, from Obama to Merkel, from the elite media (Financial Times, the Economist) to the Soccer League. Their campaign was also of fear: if we get out we will lose markets, our deficit will increase, and our welfare system is at risk.

What now finally analysts are beginning to grasp is that rational arguments are not important any longer. Fear is more important. And anything that smacks of elite and establishment creates an iconoclastic reaction, which is to throw away the icons of the elite. This call for a change is now a new factor of politics all over Europe.

A good example is the town of Turin, where a few days before the Brexit a honest, efficient and respected outgoing mayor Piero Fassino (who did a good job), lost to a young woman without any prior experience. People feel an urge to throw away all the old, because clearly it has failed to address their needs.

It is to soon to predict a dismembering of Great Britain, with Scotland calling this time for its independence. Brexit was decided by England, where a considerable number of citizens suddenly feel a reawakening of their identity.

It is the same call of Marie Le Pen in France (another lost empire), which has opened a debate about French identity, and the need to not get diluted by multiculturalism, immigrants, especially Muslim, and get again the control of the borders, out from the domination of the European Union.

Next year, we have French and German elections. Le Pen is now the leader of the largest party in France, And it will be difficult to keep her out of power. Then elections in Germany will see a rise of Alternative fur Deutschland (AFD), which makes re-appropriation of German identity and sovereignty the basis for leaving Europe.

All the xenophobic right wing parties have expressed their enthusiasm for the Brexit, which is going to give them more push. Brexit comes after the Austrian elections, where the right wing lost for few votes. If elections were held today in the Netherlands, its xenophobic party would be the largest. And in total symmetry, Donald Trump has expressed his enthusiasm for the Brexit.

One of the few positive elements of Brexit is that there is now a growing chorus on the fact that globalisation has not kept its promises.: wealth for everybody.

On the contrary, it has created a dramatic social inequality, with few people having the bulk of national wealth, and many left out. According to OECD statistics, Europe has lost 18 millions of middle class citizens, in the last 10 years.

The fact that bankers were unanimously voicing for “Remain”, had quite the opposite effect on those 27% of British citizens who have difficulty to reach the end of the month, while they see over 1.000 bankers, and 1.500 CEO make more than 1 million pounds a year.

Now even the IMF is publishing studies on how social inequality is a draw to growth, and the importance of investing in welfare policies of inclusion and equal opportunities.

This is happening, some could say, because reaction to globalisation does not create only right-wing waves. With the feeling that all those in the system are ignoring their problems, new mass movements are coming from the left, like Podemos in Spain or Bernie Sanders in the US.

In the coming elections in Spain, the traditional social democrat party, PSOE, risks to be after Podemos. In Italy few days ago, after winning the provincial elections, the 5 Star movement now looks to take over the national government, held by a social democrat party, the PD. After two years in power, the young Matteo Renzi looks already an old establishment figure.

The EU suffers the same problem. Everybody talks of its marginal role in the world, of the fact that the unelected bureaucrats in Brussels live detached from reality and dedicate themselves to discuss rules on how to pack tomatoes, indifferent to the problems of the common European citizen.

We should pause to reflect that this is the same kind of criticism we hear about the United Nations. International organisations can only do what their members allow them to do. The EU is a supranational organisation (the only in existence), yet all the political power is in the hands of the Council of Ministers, where governments sits and take decision.

The Commission is left to implement these and the bureaucrats (the same number of those who run the town of Rome), have autonomy to decide the size of tomato packaging. Then the same national government that has taken the decisions, finds it convenient to denounce the EU inefficiency, and complain that there is an European external policy. This irresponsible game is now seeing the concrete result in Brexit, and governments should think now carefully about continuing on this double standard path.

Anyhow, the king now is finally without clothes. Europe is disintegrating, and a very large responsibility falls on German shoulders.

Germany has been blocking any attempt to create European economic and welfare measures, because they do not want to pay for the mistakes of the debtors countries, Greece, Italy, and the south of Europe. The Economy minister of Germany, Wolfgang Schauble, even went to attribute to Mario Draghi, the BCE governor, 50% of the success of the xenophobe Alternative fur Deutschland in the last elections. Draghi , was doing a policy in the interest of Europe, and not of the German voters. Germany is by far the most powerful country in the EU.

It is ironic to know that all the important posts in the EU bureaucracy have been taken by the British and Germans. In fact, those who control the bureaucracy and the debate on tomato packaging come from those two countries. And chancellor Angela Merkel is considered the one who runs the EU. In fact, the fateful agreement with Turkey on refugees, was decided by the German chancellor, without even consulting France

Now Germany has to decide: or continue on its path to germanize Europe, or to become again a European Germany, as it was when it’s capital was Bonn. Germany has consistently ignored all European and international calls for playing a different policy in the EU. She has refused to increase spending, to share funding of any initiative on European bonds or any measure of socialisation of the crisis.

But it would be a mistake to think that this is due to the peculiar personality traits of Schauble. The large majority of German citizens share the belief that they should not pay for the mistake of others. To be fair, the German government has never tried to educate them on European needs. And now, may be it is too late….

Therefore, the coming elections will be difficult for the government. An ever more insular party, the AfD is expected to have a large increase, and the two traditional parties are very worried. Merkel will try to take away some of the AfD banners further reducing her European policy. What is she Going to do now after the Brexit?

Attempt to start a Europe on two speeds, with Baltic countries, Poland, Hungary and all other Eurosceptics left out? Or she is ready to change her self-centred policy and play a real European role, in spite of AfD rise? Europe now depends clearly on Germany. Here we will see if Merkel is a states-person or just a successful national politician.

]]>
http://www.ipsnews.net/2016/06/brexit-and-ueexit/feed/ 2
To Be Fixed, Europe Needs a Wrecking Ballhttp://www.ipsnews.net/2016/06/to-be-fixed-europe-needs-a-wrecking-ball-3/?utm_source=rss&utm_medium=rss&utm_campaign=to-be-fixed-europe-needs-a-wrecking-ball-3 http://www.ipsnews.net/2016/06/to-be-fixed-europe-needs-a-wrecking-ball-3/#comments Fri, 24 Jun 2016 22:38:25 +0000 David Ignatius2 http://www.ipsnews.net/?p=145810 By David Ignatius
Jun 24 2016 (Manila Times)

One-time shot exclusive for The Manila Times
WASHINGTON: Imagine a young Margaret Thatcher, a politician who deeply mistrusts the political establishment and identifies on a gut level with the frustrations of the middle class. That’s shorthand for what Britain will need as it picks up the pieces after Thursday’s “Brexit” referendum.

DAVID IGNATIUS

DAVID IGNATIUS

Friends of Britain (and Europe, too) need to stop pretending that support for withdrawal from the European Union is simply a product of xenophobic right-wing nationalism. Nearly half the country supports a British exit, according to pre-referendum polls, and these people are not all deluded reactionaries.

The European Union is unpopular in Britain for the same reason it is in many other parts of Europe: It’s seen as the project of a financial and political elite that often operates without regard for public sentiment. Nationalism may be a tarnished, retrograde sentiment, but the fact remains that many people feel deeply attached to their countries.

This patriotic feeling can’t be expunged. But it should be modernized. And that’s where a modern Maggie could do wonders. Think of a restless, mildly rebellious British politician who could find common cause with like-minded Europeans who are tired of being lectured by Brussels.

Thatcher took a wrecking ball to an earlier generation of entrenched, elite opinion in Britain. When she became prime minister in 1979, Britain was still encased in a class system that maintained the conservative status quo at both ends—the power of the aristocratic Tory elite and the Labor Party trade-union bosses, who in tandem resisted any reforms that might challenge their power.

Thatcher, a grocer’s daughter, despised this status quo. She defied a bitter 1983-84 strike by the National Union of Mineworkers where previous prime ministers, Labor and Tory, had caved. She deregulated the financial sector, in what was called the “Big Bang,” restoring the City of London to global primacy.

Britain in recent years has seemed to be slipping backward. David Cameron, the conservative leader, is an Old Etonian who, in form and function, is a latter-day embodiment of the Tory elite. Labor leader Jeremy Corbyn, similarly, is a throwback to the left-wing, union-cosseted yesterday of his party.

The most hopeful aspect of the Brexit debate is that most young British people seem to be instinctively European. They have grown up in a global economy where people move from job to job and country to country. A June 13 poll by ICM for the Guardian found that 56 percent of voters aged 18 to 34 want to remain in the EU, while just 39 percent favor leaving. By contrast, 55 percent of those over 65 favor withdrawal.

Other surveys make the same point: The older people get in Britain, the more they mistrust the EU. That’s the biggest danger of the pro-Brexit campaign, beyond the economic damage it has risked. It would tie the country’s future to the oldest, most conservative cohort of its population.

The EU leadership in Brussels deserves its bad reputation. Lacking the instruments of real governance, the Eurocrats have nibbled around the edges with rules and regulations that imply a common destiny but leave to others the hard questions, such as border security and fiscal discipline.

Germany sits uneasily atop this shaky enterprise. The Germans are lucky to have a chancellor who, no matter how wealthy and privileged her country may be, still acts like the Lutheran pastor’s daughter who was raised in East Germany. Asked once what was distinctive about Germany, she gave this sturdy, if unlikely, answer: “No other country can build such airtight and beautiful windows.” Her power comes in part from her ability to appear ordinary.

Europe is only beginning its process of change. A senior German official told me a few months ago that the strange thing about the Brexit vote was that “the best case and the worst case are so close together.” What he meant was that Germany understands that Europe’s institutions must change, regardless of whether Britain is in or out.

EU purists may still dream of a tighter federalism, but that would involve a surrender of national power that nobody, least of all the Germans or French, really wants. What’s more likely is a core EU that runs at German speed, and allows the periphery some of the leeway that Cameron won for Britain in the negotiation that preceded the wretched Brexit campaign.

Rather than crying crocodile tears for the old version of the EU, modernizing politicians in Britain and on the continent should be thinking about change. It’s time for “Maggie redux.” Bring on the wrecking ball.

©2016 THE WASHINGTON POST WRITERS GROUP

This story was originally published by The Manila Times, Philippines

]]>
http://www.ipsnews.net/2016/06/to-be-fixed-europe-needs-a-wrecking-ball-3/feed/ 0
Cotton Crisishttp://www.ipsnews.net/2016/06/cotton-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=cotton-crisis http://www.ipsnews.net/2016/06/cotton-crisis/#comments Fri, 24 Jun 2016 21:09:30 +0000 Zubeida Mustafa http://www.ipsnews.net/?p=145805 By Zubeida Mustafa
Jun 24 2016 (Dawn, Pakistan)

Pakistan’s economy is in grave trouble. According to the Pakistan Economic Survey 2015-16, it failed to meet the growth target of 5.5pc in FY2016. GDP grew by 4.7 pc. This was mainly due to the ‘major setback’ (to use the finance minister’s words) in agriculture.

www.zubeidamustafa.com

www.zubeidamustafa.com

At the heart of the crisis was a massive decline of 27.8pc in cotton production. It should be remembered that cotton is the mainstay of our agriculture and textile industry. The cotton crisis has emerged as a very controversial issue. Well-informed farmers attribute this disaster to the widespread use of genetically modified seeds that were formally introduced in the country in 2010 but were being smuggled since 2005. Now BT cotton (a genetically modified variety) is grown in 88pc of the cotton-cultivated area.

Genetically modified organisms (GMOs) have been challenged all over the world as some giant seed multinationals have grown phenomenally thanks to their aggressive marketing. If unchecked, they could dominate global agriculture. GM seeds will undermine biodiversity as the manufacturers ensure their monopoly in the seed sector. Being vulnerable to pest attacks, GM crops need pesticides in large quantities that poor farmers cannot afford. It is no coincidence that the manufacturers of these seeds also produce pesticides which account for a big chunk of their revenues.

Farmers are predicting another year of difficulties

Some facts are indisputable. Cotton production has not increased as promised since BT cotton was introduced. The decline is not fully reflected in the data released by the government because it has changed the measure used to determine the output, which is counted in the number of bales. Previously, each cotton bale weighed 176 kilogrammes. Since 2011 it has been reduced to 150kg. Using the old measure we know that cotton production had hit a record figure of 14.6 million bales in 2004. That figure has never been reached again and last year it was less than 9m bales (by the old measure).

The per hectare yield as well as the area of cotton cultivation have been erratic. In FY2012, 2.8m hectares (about seven acres) were cultivated and the yield was 815kg per hectare. In FY2016, these figures were 2.91 hectares with a yield of 587kg per hectare respectively, which means the slight increase in acreage was offset by the lower yield.

The government blames the weather (frequent and excessive rains) and pest attack, mainly bollworms, for the fall in cotton output. In a recent notification, the Punjab government advised farmers to delay planting.

The farmers have another story to tell. They say it is the poor quality of seeds that has led to pest attacks and caused the decline in production. They are predicting another year of crisis. According to one media report this year, many farmers have switched to other crops and the area of cotton cultivation is considerably lower.

In spite of poor results, the government insists on approving GM cotton seeds. Thus in a meeting in February, the National Biosafety Committee (NBC) hastily approved the applications for nearly 100 GM seeds without following prescribed procedures. That is how Monsanto and Dupont were allowed commercialisation of GM corn without large-scale testing and biosafety risk assessment in open fields in Pakistan.

This was reconfirmed by the NBC in another meeting in April on the written orders of the prime minister. This is shocking to say the least. There has been a concerted effort to increase the private sector’s role and space in the seed market. Monsanto, an American biotechnology company, has been a big beneficiary of the changes in the government’s policies. In 2015, the Seeds Act 1976 was changed to “meet the requirements of the modern seed industry”.

Not surprisingly the pressure for change came from the US which wants Pakistan to meet its ‘obligations’ under WTO regulations and create a larger market for private seed producers. Previously, seed manufacturing and its price regulation was in the public sector. Now the private sector — mainly giant biotech companies — has entered the seed market in Pakistan.

WikiLeaks which brought into the open routine exchanges between US diplomatic missions in Pakistan and the State Department in Washington apparently revealed how Monsanto was in the picture in the formulation of cotton policies in the country.

To reject new technologies in a knee-jerk reaction is unwise. But it is worse to accept them indiscriminately without testing them rigorously under local conditions.

The Kissan Board has gone to court to get justice for the farmers. It filed a petition in 2014 challenging the NBC meeting that allowed the commercialisation of BT cotton that year. Its plea was accepted but the government went into appeal and the matter was put on hold. The government has proceeded as usual. Now another case has been filed challenging the government on constitutional grounds and for violation of the Cartagena Protocol. BT’s fate now hinges on the court’s decision.

www.zubeidamustafa.com

This story was originally published by Dawn, Pakistan

]]>
http://www.ipsnews.net/2016/06/cotton-crisis/feed/ 2
Brits Shouldn’t ‘Brexit’http://www.ipsnews.net/2016/06/brits-shouldnt-brexit/?utm_source=rss&utm_medium=rss&utm_campaign=brits-shouldnt-brexit http://www.ipsnews.net/2016/06/brits-shouldnt-brexit/#comments Thu, 23 Jun 2016 16:53:25 +0000 Editor Manila Times http://www.ipsnews.net/?p=145778 By Editor, The Manila Times, Philippines
Jun 23 2016 (Manila Times)

Today the British will vote in their “Brexit” referendum whether to stay in or exit from the European Union.

The United Kingdom applied for the first time to join what was then called the European Economic Community, in 1961. The Brit movers for membership were afraid their country would get politically isolated from Western Europe. At that time the USA’s and its allies’ Cold War with the Soviet Union was still ablaze.

UK’s bid for EEC membership had strong US support but the French Government (with Gen. De Gaulle as President) vetoed it in 1963 and also the second British application in 1967. Only on Jan. 1, 1973 did the UK (along with Denmark and Ireland) get to join the EEC.

At first opposed to EEC membership, the UK Labour Party wanted to renegotiate the membership but settled for a referendum to determine if the people of Britain really wanted to remain in the EEC. In the referendum held in 1975, 67 percent of the Brits voted to remain.

These days, polls show only a slight majority of the British public to be in favor of remaining.

This is because the Brits are doing very well compared to the countries of the EU, whose only solidly rich country is Germany. Europe seems to be in one kind of economic crisis after another.

The problem of refugees flooding into Europe from the Middle East and North Africa has become too much for the EU countries to bear. It has caused anti-immigrant militancy among the poor in nearly every European country. Terrorist ISIS bombings in Paris and Brussels and false-alarm news of new attacks are agitating Europeans, who have lost their former sense of security.

These tensions in the continent have made the anti-Europe side in Britain restive. For decades now they have been calling for their country’s exit from the EU.

Today’s Brexit referendum, if won by the Yes side, would still have to be ratified by the British parliament. The majority and ruling Conservatives would not dare go against the winning public vote.

But for all the mess that Europe is in, it is still in the British people’s best interest to stay in the EU and keep it whole. For if the UK exits it, some other countries, also fed up with having to bear the continent’s troubles and having to share their wealth with the poorer European countries that are always in need of aid, would promptly follow the British lead. Europe would then break up.

The UK would also lose a lot of the economic advantages it has in the continent as an EU member. For one, a lot of the British products that are sold in Europe tariff-free would cost more to EU customers. And it is, despite any cultural protests from Frenchmen, looked up to as the country that is EU’s political leader, and shares EU’s economic leadership with Germany.

It is not true, as Brexit proponents argue, that Britain would become stronger by leaving the EU. It would instead become weaker. And it would begin to face problems in dealing with countries in Europe—as an outsider.

This story was originally published by The Manila Times, Philippines

]]>
http://www.ipsnews.net/2016/06/brits-shouldnt-brexit/feed/ 0
Rethinking Fiscal Policy for Global Recoveryhttp://www.ipsnews.net/2016/06/rethinking-fiscal-policy-for-global-recovery/?utm_source=rss&utm_medium=rss&utm_campaign=rethinking-fiscal-policy-for-global-recovery http://www.ipsnews.net/2016/06/rethinking-fiscal-policy-for-global-recovery/#comments Thu, 23 Jun 2016 14:42:37 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=145763 Anis Chowdhury was Professor of Economics, University of Western Sydney, and held various senior United Nations positions in New York and Bangkok. Jomo Kwame Sundaram was UN Assistant Secretary- General for Economic Development.]]>

Anis Chowdhury was Professor of Economics, University of Western Sydney, and held various senior United Nations positions in New York and Bangkok. Jomo Kwame Sundaram was UN Assistant Secretary- General for Economic Development.

By Anis Chowdhury and Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jun 23 2016 (IPS)

Global economic recovery is being held hostage by the ideological dogma of the last three and a half decades. After long contributing to neo-liberal conventional wisdom, in its October 2015 World Economic Outlook, the IMF identified the vicious circle undermining global recovery and growth. Low aggregate demand is discouraging investment; slower expected potential growth itself dampens aggregate demand, further limiting investment.

Investment in Europe, especially in crisis-ridden economies, has collapsed sharply despite very low interest-rates. The IMF also noted that prolonged recessions may have a permanent negative effect, not only on trend productivity levels but also on trend productivity growth as well as wage growth that, in turn, sustains low aggregate demand.

The rise of fiscal policy

From the mid-1930s until about the mid-1960s, fiscal policy has played a major role, both in developed and developing countries. The fiscal deficit was the main policy instrument to address the Great Depression of the 1930s and later, to maintain full-employment in developed countries. Deficits and surpluses were adjusted counter-cyclically over business cycles. In his 1936 budget speech, President Roosevelt noted, “the deficit of today … is making possible the surplus of tomorrow.”

Governments in developing countries have played a major role in building infrastructure and providing basic public services such as health-care and education. They often did not have the resources, domestic or foreign, as war-torn Europe had with the Marshall Plan, to rebuild their economies.

Thus, the main way to develop their newly decolonized countries was by running deficits, financed by printing money. This was also the case when the US emerged as a newly independent nation. Alexander Hamilton, the first US Treasury Secretary under President Washington, incurred debt to establish “sound credit”, laying the foundation for a robust future market in US debt.

There was a brief revival of fiscal activism when the 2008-2009 financial crisis hit the global economy. Developed countries responded with large fiscal stimulus packages, in addition to bailing out troubled financial institutions. Major developing countries also put in place carefully designed fiscal stimulus packages that included public infrastructure investment and enhanced social protection measures.

But instead of recognizing that deficits and surpluses should be adjusted counter-cyclically over business cycles rather than being held hostage by financial markets, this moment was soon lost to claims of ‘green shoots of recovery’ once the most influential financial interests had been saved.

The fall of fiscal policy

With the counter-revolution against Keynesian and development economics in the late 1970s and early 1980s, budget deficits became taboo. The fall from grace of fiscal policy followed the ascendancy of market-fundamentalist conservative politics with the election of Margaret Thatcher in the UK and Ronald Reagan in the US.

The conservative distrust of governments favoured rule-based policies to curb discretionary government spending, including the US Gramm-Rudman-Hollings deficit-control legislation and the EU’s Stability and Growth Pact that set a 60 percent debt-GDP ratio ceiling. In fact, debt is sustainable if government expenditure enhances both growth and productivity. The claim that government deficits will need to be ‘financed’ with higher tax rates in future is spurious as revenues are bound to rise in an expanding economy.

Understanding this requires abandoning the narrow concept of “sound” finance in favour of “functional” finance, which evaluates government finance based on its impact. Thus, for Abba Lerner, “The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and its withdrawal of money, shall all be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine about what is sound or unsound.”

Crowding-out or -in

A lingering concern is financing the deficit. The first recourse for governments is to borrow domestically, raising the spectre of “crowding-out”, i.e. government borrowings driving up interest rates, adversely affecting private investment. This view ignores the consequences (e.g. low profitability, bankruptcies, etc.) of a depressed economy. After all, government action is necessitated, in the first place, by inadequate private spending.

Moreover, the immediate financial implication of expansionary policy action is to augment the cash reserves of private sector banks where government cheques are deposited. This, in turn, increases (net) liquidity if the central bank does not implement offsetting money market operations. Hence, the actual central bank discount rate should decrease, exerting downward pressure on retail interest rates. This should, therefore, encourage, rather than crowd-out private investment.

In its October 2014 World Economic Outlook, the IMF favoured an infrastructure push in the face of low borrowing costs and weak aggregate demand. It also observed that “debt-financed projects could have large output effects without increasing the debt-to-GDP ratio if clearly identified infrastructure needs are met through efficient investment”. Maintaining this favourable view of debt-financed public investment, the IMF’s October 2015 World Economic Outlook asserted that debt-financed public investment in infrastructure, education, health and social protection would boost aggregate demand and productivity.

As outgoing Reserve Bank of Australia governor, Glenn Stevens has pointed out, “the impediments… are not financial. The funding would be available, with long- term interest rates the lowest we have ever seen or are likely to…The impediments are in our decision-making processes and, it seems, in our inability to find a political agreement on how to proceed.”

]]>
http://www.ipsnews.net/2016/06/rethinking-fiscal-policy-for-global-recovery/feed/ 0