Inter Press ServiceTrade & Investment – Inter Press Service http://www.ipsnews.net News and Views from the Global South Mon, 21 Jan 2019 15:41:01 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.8 Asia’s Landlockedhttp://www.ipsnews.net/2019/01/asias-landlocked/?utm_source=rss&utm_medium=rss&utm_campaign=asias-landlocked http://www.ipsnews.net/2019/01/asias-landlocked/#respond Mon, 21 Jan 2019 15:41:01 +0000 Andrzej Bolesta http://www.ipsnews.net/?p=159730 Andrzej Bolesta is Economic Affairs Officer, Macroeconomic Policy and Financing for Development Division at the UN Economic and Social Commission for Asia and the Pacific (ESCAP)

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Tackling Development Challenges through Structural Transformation and Trade

By Andrzej Bolesta
BANGKOK, Thailand, Jan 21 2019 (IPS)

Structural economic transformation and the expansion of international trade are among the most pressing issues to be addressed, if Asia’s landlocked developing countries (LLDCs) are to overcome the development challenges related to their geographical locations.

The situation is worrying. The share of LLDCs in global merchandise exports has decreased in recent years. Among Asia’s LLDCs, it is lower than among the least developed countries (LDCs) and landlocked developing countries in general.

At the same time, exports remain highly concentrated in a few commodities and has not changed significantly since 2000.

In Asia, export concentration remains consistently higher than in LLDCs as a whole (see figure below). The United Nations Conference on Trade and Development (UNCTAD) lists Azerbaijan, as the economy with the highest product concentration in the group.

Crude petroleum, petroleum gas and refined petroleum constituted 88 per cent of export revenue in 2016. A high level of concentration, due to the reliance on exports of minerals is also recorded by Kazakhstan, Turkmenistan, Mongolia and Uzbekistan.

Andrzej Bolesta

According to an ESCAP study, Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan have captured more than 87 per cent of the Asian LLDC group’s total exports. As a result, the overall share of the manufacturing sector in LLDCs has been stagnant at around 13-14 per cent of GDP since 2000.

High trade and transit costs due to the landlocked-ness do not help, making imported inputs expensive and manufacturing exports uncompetitive.

While growth based on resource-intensive industries has managed to accelerate development in some of the landlocked developing economies, such growth is highly vulnerable to external shocks and fluctuations in the global economy.

In contrast, growth based on more diversified exports is more sustainable. The importance of expanding the manufacturing sector as a source of productivity gains cannot be underestimated and LLDCs should therefore increase efforts to structurally transform their economies.

Naturally, these are not the only predicaments to the transformation from being “landlocked” to being “land-linked”. LLDCs also face institutional and physical challenges which undermine their participation in the global economy, such as non-tariff barriers and inadequate infrastructure.

Source: UNCTAD

For example, there are missing links in the Trans-Asian Railway network, which account for around 1,400 km in Central Asia and some transit countries, 3,400 km in Northeast Asia and 340 km in Caucasus.

Vienna Programme of Action to the Rescue

The plethora of challenges – transit policies, infrastructure, trade, regional integration and cooperation, structural transformation and means of implementation – are listed as priorities of the Vienna Programme of Action (VPoA) for Landlocked Developing Countries 2014-2024.

The VPoA is the international community’s primary action plan to “to address the special development needs and challenges of landlocked developing countries arising from landlocked-ness, remoteness and geographical constraints in a more coherent manner and thus contribute to an enhanced rate of sustainable and inclusive growth, which can contribute to the eradication of poverty by moving towards the goal of ending extreme poverty”.

ESCAP assists landlocked developing countries in overcoming their development challenges in various ways. At a recent capacity building workshop for government experts, the conclusions were clear.

In addressing development predicaments, efforts should be focused on LLDCs’ structural economic transformation and greater participation in the global economy. Sectoral strategies should, however, be well thought through and aligned with overall national developmental objectives.

For example, value addition can be created through activities linked to regional and global value chains. Asia’s LLDCs should identify higher-productivity sectors to support and promote. For this, they need to channel the inflows of FDI accordingly, so that investment generates productive jobs and allow for technological advancements.

Asia’s LLDCs have been increasingly resorting to industrial policies to facilitate structural transformation, explicitly targeting industrial sectors for development. Perhaps this should be seen as part of the solution.

Indeed, all the available means and instruments must be used to address the challenges of landlocked-ness. To facilitate further progress, ESCAP is hosting the Euro-Asia Regional Midterm Review of the Vienna Programme of Action on 11 and 12 February 2019.

With the participation of landlocked developing countries, transit countries, international organisations and donor states, the event will be crucial in assessing achievements and determine future actions.

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Excerpt:

Andrzej Bolesta is Economic Affairs Officer, Macroeconomic Policy and Financing for Development Division at the UN Economic and Social Commission for Asia and the Pacific (ESCAP)

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A New Spectre is Haunting Europehttp://www.ipsnews.net/2019/01/new-spectre-haunting-europe/?utm_source=rss&utm_medium=rss&utm_campaign=new-spectre-haunting-europe http://www.ipsnews.net/2019/01/new-spectre-haunting-europe/#respond Thu, 17 Jan 2019 10:16:26 +0000 Roberto Savio http://www.ipsnews.net/?p=159673 Roberto Savio is founder of IPS Inter Press Service and President Emeritus

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Roberto Savio is founder of IPS Inter Press Service and President Emeritus

By Roberto Savio
ROME, Jan 17 2019 (IPS)

After Theresa May’s defeat in the British parliament it is clear that a new spectre is haunting Europe. It is no longer the spectre of communism, which opens Marx’s Manifesto of 1848; it is the spectre of the failure of neoliberal globalisation, which reigned uncontested following the fall of the Berlin Wall, until the financial crisis of 2009.

Roberto Savio

Roberto Savio

In 2008, governments spent the astounding amount of 62 trillion dollars to save the financial system, and close to that amount in 2009 (see Britannica Book of the Year, 2017), According to a US Federal Reserve study, it cost each American 70,000 dollars.

Belatedly, economic institutions left macroeconomics, which were until then used to assess GNP growth and started to look at how growth was being redistributed. And the IMF and the World Bank, (also because of the prodding of civil society studies, foremost those of Oxfam), concluded that there was a huge problem in the rise of inequality.

Of course, if the 117 trillion dollars had gone to people, that money would have led to a jump in spending, an increase in manufacturing, services, schools, hospitals, research, etc. But people were totally absent from the priorities of the system.

Under the Matteo Renzi government in Italy, 20 billion dollars went to save four banks, while in the same year total subsidies for Italian youth could be calculated at best at 1 billion dollars.

Then after the crisis of 2008-9, all went haywire. In every country of Europe (except for Spain, which has now caught up), a populist right-wing party came to life, and the traditional political system started to crumble.

The new parties appealed to the losers of globalisation: workers whose factories has been delocalised for the cheapest possible place to maximise gains; small shop owners displaced by the arrival of supermarkets; those made redundant by new technologies, by Internet like secretaries; retired people whose pensions were frozen to reduce the national deficit (in the last 20 years public debts have doubled worldwide). A new divide built up, between those who rode the wave of globalisation and those who were its victim.

Obviously, the political system felt that it was accountable to the winners, and budgets were stacked in their favour. Priority went to towns, where over 63% of citizens now live. The losers were more concentrated in the rural world, where few investments were made in infrastructure. On the contrary, in the name of efficiency, many services were cut, railway stations closed, along with hospitals, schools and banks.

In order to reach work, people often had to go several kilometres from home by car. A modest increase in the cost of petrol fuelled the rebellion of the ‘yellow jackets’. It did not help that out of the 40 billion that the French government obtains from taxes on energy, less than one-quarter went back into transportation infrastructure and services.

Universities, hospital and other services in towns suffered much less, were points of excellence, public transportation was available, and a new divide arose between those in towns and those from the rural world, those with studies and education and those who were far away and atomised in the interior.

A new divide had come about, and people voted out the traditional party system, which ignored them. This device brought Trump to power and led to the victory of Brexit in the United Kingdom. This divide is wiping the traditional parties, and bringing back nationalism, xenophobia and populism. It is not bringing back the ideological right wing, but a gut right and left with little ideology …

All this should be obvious.

Now, for the first time, the system is turning its attention to the losers, but is too late. The left is paying the dramatic illusion of Tony Blair who, considering globalisation inevitable, decided that it would be possible to ride its wave. So, the left lost any contact with the victims, and kept the fight on human rights as its main identity and difference with the right.

That was good for towns, where gays and LGBTs, minorities (and majorities like women), could congregate, but it was hardly a priority for those of the interior.

Meanwhile, finance continued to grow, become a world by itself, no longer linked to industry and service, but to financial speculation. Politics became subservient. Governments lowered taxes on the who stashed the unbelievable amount of 62 trillion dollars in tax havens, according to the Tax Justice Network. The estimated yearly flow is 600 billion dollars, double the cost of the Millennium Goals of the United Nations.

And the Panama Papers, which revealed just a small number of the owners of accounts, identified at least 140 important politicians among them from 64 countries: the prime minister of Iceland (who was obliged to resign), Mauricio Macri of Argentina, President Petro Poroshenko of Ukraine, a bunch of close associates of Vladimir Putin, David Cameron’s father, the prime minister of Georgia, and so on.

No wonder that politicians have lost their shine, and are now considered corrupt, or useless, or both.

In the current economic order, Emmanuel Macron acted rationally by lowering the tax on the rich people to attract investments. But he totally ignored that for those French who have difficulty in reaching the end of the month, this was proof that they were being totally ignored. And sociologists agree that the real ‘Spring’ of the yellow jackets was their search for dignity.

Ironically, British parties, and especially the Conservative and Labour parties, should be thankful to the debate on Brexit. It is clear that the United Kingdom is committing suicide, in economic and strategic terms. With a ‘hard’ Brexit, without any agreement with the European Union, it could lose at least seven percent of its GDP.

But the divide which makes Brexit win with all towns, the City, the economic and financial sector, academics, intellectuals and all institutions has confirmed the fear of those of the interior. Belonging to the European Union was profitable for the elites, and not for them. Scotland voted against, because it has now a different agenda from England. And this divide is not going to change with a new referendum.

That the cradle of parliamentarian democracy, Westminster, is not able to reach a compromise is telling proof that the debate is not political but a clash of mythologies, like the idea of returning to the former British Empire. It is like Donald Trump’s idea of reopening coal mines. We look at a mythical past as our future. This is what led to the explosion of Vox in Spain, by those who believe that under Franco life was easier and cheaper, that there was no corruption, woman stayed in their place, and Spain was a united country, without separatists in Catalonia and the Basque Country. It is what Jair Bolsonari in Brazil is exploiting, presenting the military dictatorship at a time when violence was limited. Our future is the past …

So this divide – once in one way or another the United Kingdom solves its Brexit dilemma – will pass into normal politics, and will bring about a dramatic decline, like elsewhere, of the two main traditional parties. Unless, meanwhile, populist, xenophobe and nationalist parties take over government and show that they do not have the answer to the problems they have rightly identified.

In that sense, the Italian experience could be of significant help … look how the government has performed with the European Union.

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Excerpt:

Roberto Savio is founder of IPS Inter Press Service and President Emeritus

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Why We Should Care about Vulnerable Coastal Communitieshttp://www.ipsnews.net/2019/01/care-vulnerable-coastal-communities/?utm_source=rss&utm_medium=rss&utm_campaign=care-vulnerable-coastal-communities http://www.ipsnews.net/2019/01/care-vulnerable-coastal-communities/#respond Wed, 16 Jan 2019 11:47:24 +0000 Nigel Brett http://www.ipsnews.net/?p=159661 Nigel Brett is Director of the Asia and Pacific Division at the International Fund for Agricultural Development

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Meity Masipuang is a member of an enterprise group in Papusungan village, Lembeh island, Indonesia. Their women’s group purchases fish to smoke and resell. They are participants of the IFAD-funded Coastal Community Development project in Indonesia. Credit: IFAD/Roger Arnold

By Nigel Brett
ROME, Jan 16 2019 (IPS)

According to UN statistics, approximately 40 per cent of the world’s population lives within 100 kilometers of the coast, and overall the world’s coastal population is increasing faster than the total global population. At the same time, global warming is causing sea levels to rise and increasing extreme weather incidents on coastlines.

The impacts are well publicized and alarming. But what we may not realize is that the people who are the most vulnerable to climate change are often the poorest. It is essential that we act upon what we know in order to mitigate the effects of climate change and build resilience in the poorest communities. In all of our development work, we cannot regard climate change and the plight of vulnerable coastal communities as a niche issue.

A large portion of the world’s poor people live in Asia and the Pacific: 347 million people in the region live on less than US$1.90 a day, almost half of the 736 million people living in extreme poverty worldwide. Rising sea level exposes large areas of Asia and the Pacific to potential floods, coastline damage and increased salinity of agricultural lands. Climate change and environmental degradation (including in small island developing states, or SIDS) is harming the poor rural population’s ability to produce food and income, which calls for urgent action to help people safeguard their assets and fragile resources, while also diversifying their income base.

The International Fund for Agricultural Development (IFAD) works with people in vulnerable coastal communities across the world to build resilience and institute sustainable agricultural practices so that vulnerable people can make a living while also preserving the environment and the resources that are the foundation of their way of life.

Nigel Brett Credit: IFAD/Flavio Ianniello

Some livelihood practices are not sustainable and can exacerbate climatic vulnerability. For example, unsustainable fishing destroys corals and depletes fish stocks, and the cutting down of mangroves for firewood results in coastal land that cannot resist flooding, cyclones and coastal erosion. Since 66 per cent of the fish that is eaten worldwide is caught by small-scale fishers, it is in everybody’s best interest to help them to improve their ability to make a living while protecting the environment.

In over 180 villages in Indonesia, the IFAD-supported Coastal Community Development Project introduced aquaculture and supported initiatives to make fishing and processing techniques more efficient and sustainable. By providing rudimentary refrigeration techniques such as ice coolers, and by forming and training women’s groups to process some of the fish into fish paste and dried fish snacks, fishermen were able to fish less because they did not have to factor in the amount of fish wasted by lack of refrigeration or low market demand. These measures also had a substantial impact on food security and actually reduced acute child malnutrition in the areas by half. And through community-based coastal resource management groups, marine resources have been maintained or improved.

In the Asia and the Pacific region overall, vulnerable communities are a prominent focus of our investment portfolio. Just under one third of our current $2.7 billion portfolio in the region is invested in improving the lives of 15,360,000 poor rural people living within five kilometers of the coastline.

One thing we’ve learned is that there is no such thing as a one-size fits all approach in working with vulnerable coastal communities. Context matters. Bangladesh suffers from overcrowding on its limited land, while the Pacific Islands suffer from not only extreme weather but a remote and dwindling population. In Tonga the rural population is declining due to migration and a lack of incentives for youth to remain. It is also classified as the second most at-risk country in the world in terms of its exposure and susceptibility to natural hazards and the effects of climate change. Development approaches need to be different.

Up to 80 million people live in flood-prone or drought-prone areas in Bangladesh, and thousands of vulnerable families eke out a living on river islands known as chars. The Char Development and Settlement Project has developed roads that remain intact even after they have been repeatedly submerged in water. It has also helped communities (especially women) to develop small businesses that can withstand floods, such as raising ducks. But, one of the most important aspects of the project’s work is land titling—which is particularly important for women. With land as collateral, women can access credit and acquire labour-saving machinery, including small irrigation pumps and rice threshers, and build small storage sheds to protect harvested rice from rain and floods.

In Tonga, we are helping communities to develop high-value crops that can be exported in order to boost the rural export market. The project is also planting tree species that can protect the coastline from tornados and cyclones. The project is working with communities to identify where improved infrastructure is needed (such as weather-resistant roads and waterfronts), and get them directly involved in investing in and supervising construction and maintenance.

After 40 years of working with poor rural people around the world, IFAD has learned that no one can hope to face these challenges alone. In a rapidly changing world we need to work together to channel support where it is most needed. Rural transformation can increase production and incomes, reduce hunger, and at the same time protect natural resources. With the right support, vulnerable coastal communities can play a part in securing a sustainable future.

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Excerpt:

Nigel Brett is Director of the Asia and Pacific Division at the International Fund for Agricultural Development

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Gloom Ahead of World Economic Stormhttp://www.ipsnews.net/2019/01/gloom-ahead-world-economic-storm/?utm_source=rss&utm_medium=rss&utm_campaign=gloom-ahead-world-economic-storm http://www.ipsnews.net/2019/01/gloom-ahead-world-economic-storm/#respond Tue, 15 Jan 2019 07:50:43 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=159629 In light of the uncertainty caused by the US-China trade war, the IMF expects the US economic growth to slow from a three-year high of 2.9 per cent in 2018 to 2.5 per cent in 2019, while China’s expansion has already slowed in recent years, albeit from much higher levels. Trump stimulus dissipates US President […]

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By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY & KUALA LUMPUR, Jan 15 2019 (IPS)

In light of the uncertainty caused by the US-China trade war, the IMF expects the US economic growth to slow from a three-year high of 2.9 per cent in 2018 to 2.5 per cent in 2019, while China’s expansion has already slowed in recent years, albeit from much higher levels.

Trump stimulus dissipates
US President Trump and the previous GOP-controlled US Congress claimed to be breathing new life into the US economy with generous tax cuts. The US economy is now overheating, with inflation rising above target, causing the Federal Reserve to continue raising the federal funds rate to dampen demand.

Anis Chowdhury

As most families hardly gained from the tax changes, US purchases of houses and consumer durables continued to decline through 2018. Instead of investing in expanding productive capacity, US companies spent much of their tax savings on a $1.1 trillion stock buy-back spree in 2018.

Hence, the positive impacts of tax cuts were not only modest, but are also diminishing. Nearly half of 226 US chief financial officers recently surveyed believe that the US will go into recession by the end of 2019, with 82 per cent believing that it will have begun by the end of 2020. Wall Street’s biggest banks, JP Morgan and Bank of America, are also preparing for a slowdown in 2019.

As if to confirm their concerns, both the Dow Jones Industrial Average and the S&P 500 had their worst ever December performance since 1931, when stocks were battered after the Great Crash.

European recession
Meanwhile, the European Central Bank is expecting sluggish 1.7 per cent regional growth in 2019. Europe is close to recession with the collapse of industrial output in Germany, France, UK and Italy.

Jomo Kwame Sundaram

Germany’s industrial output fell by 1.9 per cent month-on-month in November 2018, and was in negative territory in 5 of the 6 months before December. Its GDP fell by 0.2 per cent in the 3rd quarter of 2018. France’s industrial production fell 1.3 per cent in November 2018, reversing a 1.3 per cent growth recovery in October from a 1.7 per cent decline in September. Italy, Europe’s third largest economy, recorded negative growth in the 3rd quarter of 2018 as GDP fell by 0.1 per cent in July-September 2018 with weaker domestic demand.

As the UK remains mired in its Brexit mess, GDP growth was dragged down to 0.3 per cent in the three months to November with the biggest industrial output contraction since 2012. 2018 final quarter growth is expected to be 0.1 per cent, i.e., negligible.

Not preparing for the inevitable?
David Lipton, the first deputy managing director of the IMF, warned in early January 2019, “The next recession is somewhere over the horizon, and we are less prepared to deal with that than we should be . . . [and] less prepared than in the last [crisis in 2008].”

Although the IMF had projected 3.7 per cent global economic growth for 2019 in October 2018, Lipton’s statement suggests that the IMF is likely to revise its 2019 growth forecast downward.

There have also been growing concerns over the continued efficacy of unconventional monetary policy since the 2008-2009 global financial crisis (GFC). Undoubtedly, countries now have less fiscal space than in 2009, and overall borrowing, including public debt has risen since.

Reaping what you sow
The policy blunders since the GFC have only made things much worse. The ideologically driven case for fiscal consolidation did not boost investor confidence for a robust recovery, as promised.

Despite acknowledging false claims cited to justify fiscal consolidation, including the IMF’s admission that its early advice was based on faulty calculations, there was no recommended change in policy course.

Instead, all responsibility for recovery was put on the monetary authorities who resorted to unconventional policies, especially ‘quantitative easing’ (QE). However, the global economic recovery since then has remained tepid and easily reversible.

Additional liquidity, made available by QE, has largely been used to buy financial assets and for speculation, amplifying the financial vulnerability of emerging market economies, which have experienced increased volatility.

Governments also failed to take advantage of historically low, even negative real interest rates to borrow and invest to boost productive capacity in the longer term.

By mainly benefiting financial asset holders, QE has exacerbated wealth concentration. Meanwhile, cuts in public services and social spending have worsened social polarization, as tax cuts for the rich have failed to generate promised additional investments and jobs growth.

The failure to achieve a robust recovery has not only worsened the debt situation, but also made lives harder for ordinary people. Growing polarization has also worsened resentments, eroding trust, undermining solidarity and progressive alternatives.

Ethno-populist jingoism undermines cooperation
But lack of preparedness can hardly be due to ignorance as there have been many such predictions recently, certainly more than in 2007-2008, before the GFC.

The cooperation that enabled co-ordinated actions to prevent the Great Recession from becoming a depression has not only waned, but major countries are now at loggerheads, preventing collective action.

National political environments are also more hostile. In Europe, the rise of ethno-populist nationalism is making it harder to pursue EU-level policies and to act together to prevent and mitigate the next financial crisis and downturn.

The “new sovereigntists” and false prophets of American exceptionalism are undermining multilateral cooperation when needed most. Thus, a recession in 2019 may well elevate geo-political tensions, exacerbating the negative feedback loop for a ‘perfect storm’.

Anis Chowdhury, Adjunct Professor at Western Sydney University and the University of New South Wales (Australia), held senior United Nations positions in New York and Bangkok.
Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Blue Economy Can be a Lifeline for Africahttp://www.ipsnews.net/2019/01/blue-economy-can-lifeline-africa/?utm_source=rss&utm_medium=rss&utm_campaign=blue-economy-can-lifeline-africa http://www.ipsnews.net/2019/01/blue-economy-can-lifeline-africa/#respond Fri, 11 Jan 2019 15:43:45 +0000 Ruth Waruhiu http://www.ipsnews.net/?p=159588 By efficient management, the sustainable exploitation of resources in oceans, seas, lakes and rivers—also known as the blue economy—could contribute up to $1.5 trillion to the global economy, according to the Organisation for Economic Cooperation and Development, an intergovernmental organization comprising of 36 countries. Last November experts, government officials, environmental activists, policy makers and academics […]

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By Ruth Waruhiu
UNITED NATIONS, Jan 11 2019 (IPS)

By efficient management, the sustainable exploitation of resources in oceans, seas, lakes and rivers—also known as the blue economy—could contribute up to $1.5 trillion to the global economy, according to the Organisation for Economic Cooperation and Development, an intergovernmental organization comprising of 36 countries.

Last November experts, government officials, environmental activists, policy makers and academics converged in Nairobi, Kenya, for the Sustainable Blue Economy Conference. With the theme “Blue Economy and the 2030 Agenda for Sustainable Development,” the conference, convened and hosted by Kenya, with Canada and Japan as cohosts, looked at new technologies and innovation for oceans, seas, lakes and rivers as well as challenges, potential opportunities, priorities and partnerships.

Africa has 38 coastal and island states and a coastline of over 47,000 km, and hence presents an enormous opportunity for the continent to develop the sectors typically associated with the blue economy, says Cyrus Rustomjee, a blue economy expert and a senior fellow at the Centre for International Governance Innovation.

Nairobi Blue Economy conference was dedicated to realizing the untapped potential found in our oceans, seas, lakes and rivers.

“Expanding fisheries, aquaculture, tourism, transportation and maritime and inland ports can help to reduce African poverty and enhance food and energy security, employment, economic growth and exports, ocean health and sustainable use of ocean resources,” says Dr. Rustomjee.

He notes that more than 12 million people are employed in fisheries alone, the largest of the African blue economy sectors, providing food security and nutrition for over 200 million Africans and generating value added estimated at more than $24 billion, or 1.26% of the GDP of all African countries. Of concern at the Nairobi conference was the current wanton and large-scale exploitation of the world’s waters, especially in developing countries.

President Uhuru Kenyatta of Kenya expressed concern over the “massive pollution of our water bodies; the evident overexploitation of water resources and their related biodiversities, as well as the specific challenge of insecurity, more so in the high seas.” Pre-conference advocacy by Kenya, Canada and Japan, the main organisers of the event, focused on many issues central to Africa’s development, including food security for vulnerable groups and communities, malnutrition, sustainable food production and gender equality in blue economy industries.

Kenya’s Foreign Affairs Cabinet Secretary, Monica Juma, said the discussions were “dedicated to realizing the untapped potential found in our oceans, seas, lakes and rivers; and focused on integrating economic development, social inclusion and sustainability which promotes a blue economy that is prosperous, inclusive and sustainable.” While emphasizing the importance of unlocking the full productive potential of Africa’s waters, Ms. Juma said she especially hoped to see increased participation of women and youth in all areas of the blue economy.

A recurring theme at the conference was that the blue economy could boost a country’s economic growth and environmental protection and, by extension, help achieve the Sustainable Development Goals of the 2030 Agenda. According to Macharia Kamau, the Principal Secretary in Kenya’s Ministry of Foreign Affairs, overall the conference presented “immense opportunities for the growth of our economy, especially sectors such as fisheries, tourism, maritime transport, offshore mining, among others, in a way that the land economy has failed to do.”

The strategic importance of the blue economy to trade is clear, notes the International Maritime Organization, a specialised agency of the United Nations responsible for regulating shipping. For instance, up to 90% of global trade facilitation by volume and 70% by value is carried out by sea. One challenge is that the oceans and seas absorb about 25% of the extra carbon dioxide emissions added to earth’s atmosphere through the burning of fossil fuels. Oil and gas remain major sources of energy, with approximately 30% of production carried out offshore.

Before the event in Kenya, the organisers highlighted current challenges within the blue economy, including a lack of shared prosperity, maritime insecurity and unsustainable human activities around and in oceans, seas, lakes and rivers, including overfishing. Other challenges are pollution, invasive species and ocean acidification, which lead to biodiversity loss and compromise human health and food security. In addition, a weak legal, policy, regulatory and institutional framework and poorly planned and unregulated coastal development exacerbate existing challenges.

To address these problems, participants called on leaders and policy makers to implement appropriate policies and allocate significant capital to sustainable investment in the sector to boost production, inclusiveness and sustainability. The Nairobi conference drew global attention to the blue economy; the challenge is ensuring concrete actions follow the vigorous discussion.

*The link to the original article from Africa Renewal, published by the United Nations: https://www.un.org/africarenewal/magazine/december-2018-march-2019/blue-economy-can-be-lifeline-africa

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A Closer Look at the World Bank’s Sizable China Portfoliohttp://www.ipsnews.net/2019/01/closer-look-world-banks-sizable-china-portfolio/?utm_source=rss&utm_medium=rss&utm_campaign=closer-look-world-banks-sizable-china-portfolio http://www.ipsnews.net/2019/01/closer-look-world-banks-sizable-china-portfolio/#respond Thu, 10 Jan 2019 09:56:38 +0000 Scott Morris and Gailyn Portelance http://www.ipsnews.net/?p=159577 Scott Morris is a senior fellow and director of the US Development Policy Initiative at the Center for Global Development  
Gailyn Portelance is an MA candidate at Stanford University.

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Scott Morris is a senior fellow and director of the US Development Policy Initiative at the Center for Global Development  
Gailyn Portelance is an MA candidate at Stanford University.

By Scott Morris and Gailyn Portelance
WASHINGTON DC, Jan 10 2019 (IPS)

China continues to borrow an average of $2 billion a year from the World Bank, making it one of the Bank’s top borrowers—despite being the world’s second-largest economy and itself a major global lender, according to our study released today.

By doing a project-level analysis of recent World Bank loans to China, we found that the World Bank’s International Bank for Reconstruction and Development (IBRD)—which offers loans to middle-income and credit-worthy lower-income countries—has loaned more than $7.8 billion to China since the country surpassed the bank’s “graduation” income threshold for lending in 2016. The World Bank’s current threshold to trigger IBRD country graduation discussions is $6,895 in gross national income (GNI) per capita.

Lending to countries above this threshold has been controversial, with the United States particularly critical of ongoing lending to China. Critics have pushed for strict graduation standards that would make wealthier borrowers ineligible for bank loans (i.e., “graduation”). Under the 2018 agreement, World Bank shareholders agreed to limit loans to countries above the threshold to only projects that focus on:

• global public goods (projects that benefit the world at large); and,
• capacity-building (projects that help the countries “graduate” away from World Bank lending).

 

China continues to borrow an average of $2 billion a year from the World Bank, making it one of the Bank’s top borrowers—despite being the world’s second-largest economy and itself a major global lender

 

 

As shown in the figure above, less than half of China’s lending has gone to either of the approved categories, by strict definitions of these categories, since China crossed the income threshold in 2016. Capacity-building projects contribute to only 5 percent of its portfolio, and global public goods make up 38 percent of China’s borrowing portfolio.

However, a broader conception of capacity-building, which focuses on the allocation of resources to the poorest provinces within China improves that picture. Fifty-eight percent of lending to China has been directed to provinces with per capita incomes below the graduation income threshold.

And with a third of the portfolio supporting the reduction of carbon emissions in the country, the bank is meeting a clear global public good mandate. As the world’s largest polluter, China will need to make sizeable investments in climate-friendly finance if we are to make meaningful progress on this critical agenda.

The world has a lot to gain from a sustainable and productive China-World Bank relationship. To lower political heat from the United States and other critics, the Bank should request more from China in terms of interest charges on loans and ensure that all project lending adheres to the 2018 standards.

You can read the full study here.

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Excerpt:

Scott Morris is a senior fellow and director of the US Development Policy Initiative at the Center for Global Development  
Gailyn Portelance is an MA candidate at Stanford University.

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Rethinking Free Trade Agreements in Uncertain Timeshttp://www.ipsnews.net/2019/01/rethinking-free-trade-agreements-uncertain-times/?utm_source=rss&utm_medium=rss&utm_campaign=rethinking-free-trade-agreements-uncertain-times http://www.ipsnews.net/2019/01/rethinking-free-trade-agreements-uncertain-times/#comments Tue, 08 Jan 2019 16:28:47 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=159545 After US President Donald Trump withdrew from Obama’s Trans-Pacific Partnership (TPP), involving twelve countries on the Pacific rim, on his first day in office, Japan, Australia and their closest allies proposed and promoted the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) to draw the US back into the region to counter China’s fast-growing power and influence. […]

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By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jan 8 2019 (IPS)

After US President Donald Trump withdrew from Obama’s Trans-Pacific Partnership (TPP), involving twelve countries on the Pacific rim, on his first day in office, Japan, Australia and their closest allies proposed and promoted the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) to draw the US back into the region to counter China’s fast-growing power and influence.

Jomo Kwame Sundaram

Geostrategic deal to re-engage US in East Asia
The modest projected gains claimed by the most popularly used trade models are based on dubious methodologies. President Obama had explicitly promoted the TPP for geostrategic reasons even though both US government cost-benefit analyses found very modest gains from the free trade agreement (FTA).

With miniscule real trade gains from the original TPP, US withdrawal has made benefits from the regional agreement even more trivial. Without the US market, the TPP’s supposed benefits largely disappeared with the CPTPP. Hence, while its proponents hope the CPTPP will re-engage the US as hegemon in the region, TPP advocates have become even more desperate for US participation.

The Peterson Institute for International Economics (PIIE), the main TPP and CPTPP advocate, claimed most (85%) growth gains from non-trade measures (NTMs), not trade liberalization per se. Such claims were largely refuted by the 2016 US International Trade Council (ITC) report.

The World Bank used PIIE consultants to make even more exaggerated claims of TPP gains in early 2017, ignoring most costs and risks. CPTPP advocates have made even more extravagant claims about supposed benefits since.

To make matters worse, besides the meagre trade gains, enhanced intellectual property rights (IPRs) and investor-state dispute settlement (ISDS) provisions will fetter developing countries’ ‘catch-up’ economic prospects. Besides raising costs, e.g., for buying medicines and technologies, strengthened IPRs will further limit technology transfer.

ISDS will enable foreign investors to sue CPTPP governments, not in national courts, but rather, private arbitration tribunals. Besides undermining national judicial sovereignty, small country governments with limited legal resources will be disadvantaged. Ironically, Trump’s US Trade Representative now rejects reciprocal ISDS for undermining US sovereignty!

From the frying pan into the fire
Informed analysts know that CPTPP losses, costs and risks are much greater than for the TPP while gains will be more trivial despite cheerleaders’ claims to the contrary. More worryingly, very few developing country negotiators have actually scrutinized and understood the likely implications of the 6350 page TPP agreement.

Some minor changes were made to the TPP agreement for the CPTPP. Several onerous provisions were amended, and some others suspended, leaving most unchanged. Only a few CPTPP governments secured ‘side letters’, exempting them from some specific clauses.

Thus, most onerous TPP provisions remain. The CPTPP has committed Malaysia to further trade liberalization, accelerating deindustrialization, besides constraining the growth of modern services, development finance and ‘policy space’.

With the economic slowdown of the last decade wrongly attributed to the end of trade expansion since 2009, and the more recent ‘populist-nationalist’ reversal of trade liberalization, wishful thinking has emerged that the CPTPP will somehow magically enhance economic growth and progress.

Developmental, multilateral FTA needed
Increased market access for exports typically requires trade liberalization by others, but trade liberalization also undermines food and industrial production. Recognizing such problems after the end of the Uruguay Round of trade talks led to the creation of the World Trade Organization (WTO) in the mid-1990s, most developing country members have since sought to ensure that WTO rules are more development-friendly, launching a Development Round at its Doha biennial ministerial conference in late 2001.

As trade liberalization advocate Jagdish Bhagwati has argued, bilateral and plurilateral FTAs have long undermined WTO-led trade multilateralism. At the national level, developing country governments should amend legislation and policy in line with their needs, especially for development, not at the behest of corporate lobbyists or geostrategic priorities.

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Veterans of the Global Financial Crisis Pass their Wisdom on to the Next Generationhttp://www.ipsnews.net/2019/01/veterans-global-financial-crisis-pass-wisdom-next-generation/?utm_source=rss&utm_medium=rss&utm_campaign=veterans-global-financial-crisis-pass-wisdom-next-generation http://www.ipsnews.net/2019/01/veterans-global-financial-crisis-pass-wisdom-next-generation/#respond Wed, 02 Jan 2019 14:08:56 +0000 Chris Wellisz http://www.ipsnews.net/?p=159458 Chris Wellisz is on the staff of Finance & Development at the International Monetary Fund (IMF)

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Credit: IMF

By Chris Wellisz
WASHINGTON DC, Jan 2 2019 (IPS)

It happened again and again in a career punctuated by upheavals: the peso crisis of 1994, the Asian crisis of 1997, and finally, the big one—the global financial crisis of 2008.

Each time he started a new government job, Timothy Geithner hoped to find a letter from his predecessor, explaining what to do and whom to call if things fell apart. The desk drawer was always empty.

“Financial crises are probably the most devastating economic events that can happen to a country,” says Geithner, who fought the last conflagration as president of the Federal Reserve Bank of New York and later US Treasury secretary. “I’d like our successors to have a better base of knowledge.”

So every summer, Geithner takes time off from his job as president of Warburg Pincus, a private equity firm, to help teach a two-week crisis management workshop for regulators from around the world.

It’s one part of the Yale Program on Financial Stability, which also offers a master’s degree and is undertaking an ambitious project to create, on a very large scale, what Geithner never found in that desk drawer—a manual for crisis managers.

“A lot of times we’ve made the same mistakes in fighting financial crises over time simply because there was no body of knowledge that people had jointly studied and debated,” says Andrew Metrick, a professor of finance at Yale who founded and runs the program. “It’s almost like you show up at the emergency room and the doctor says, ‘It looks like a broken arm. I think I’ve seen someone once do something for a broken arm.’”

Metrick was one of those emergency room financial doctors. Six months after the collapse of Lehman Brothers in September 2008, he got a call from the Obama administration.

They desperately needed a financial economist. So Metrick moved to Washington to work for the Council of Economic Advisers. There, as chief staff economist, he helped develop programs to revive housing and financial markets.

When it came time to propose legislation, he discovered that academic research wasn’t very useful.

“There was no real great connection between academic knowledge, economic intuition, and what we actually could put in the law because there just wasn’t a good body of research there,” Metrick says. “I was determined that when I came back to the academy I would try to be part of something that would help to fill that gap.”

That was the genesis of the Yale Program on Financial Stability, which got off the ground in 2014 with donations from organizations including the Alfred P. Sloan Foundation.

Geithner joined soon after, teaching, raising money, and chairing the advisory board, which includes former central bankers such as the Federal Reserve’s Ben Bernanke, Mexico’s Agustín Carstens, and Malaysia’s Zeti Akhtar Aziz.

Geithner brought a practical focus to what became known as the New Bagehot Crisis-Response Project, named for Walter Bagehot, a 19th century British economist and author of Lombard Street: A Description of the Money Market, a bible of sorts for the guardians of financial stability.

The project’s 14 researchers compile case studies of responses to the global financial crisis and the euro crisis that followed it. Eventually, they plan to study manias and panics going back to the South Sea Bubble in the 18th century.

While the global crisis spawned countless books, articles, and memoirs, the Bagehot project seeks to analyze it in a systematic way—and determine what kinds of government actions worked, what kinds didn’t, and why. The architects of crisis-fighting programs in various countries are consultants on the project.

“Our focus is really on the technical details of the interventions,” Metrick says.

Their plan is to create an online tool that crisis managers can turn to in real time, in case they need to recapitalize a bank, say, or set up an emergency liquidity facility. They will also learn what to avoid, like Ireland’s decision to guarantee the liabilities of its banks, which transformed a bank run into a far more serious sovereign debt crisis.

“Because the classic panic happens pretty rarely in the same country, even though it happens around the world with pretty appalling frequency, there’s not actually that much institutional memory, and there certainly wasn’t at the Treasury or the Fed, about how you deal with a systemic financial crisis,” Geithner says in an interview.

The summer symposium—Geithner called it a “war college”—was a two-week workshop for central bankers and regulators. The central banks of China, Europe, Japan, and the United States all sent participants, along with agencies like the Bank for International Settlements and the European Stability Mechanism.

Another piece of the Yale program is the two-day Financial Crisis Forum, where veterans including former Treasury Secretary Henry Paulson offer their insights on subjects from capital injections to frozen money markets.

“For the current generation of officials, especially the younger ones who attend the conference, learning from history is vital,” says Paul Tucker, deputy governor of the Bank of England from 2009 to 2013. “Going forward, current officials also need to learn from the crises that, believe it or not, were averted or successfully contained.”

Finally, there is Yale’s one-year master’s degree in systemic risk, which offers early career professionals a chance to hone their skills and develop new ones. A recent graduate is Özgü Özen Çavuşoğlu, who returned to her job in the financial stability division of Turkey’s central bank and is now researching an early-warning system for the country’s economy.

Just as important, she says, was the opportunity to forge bonds with colleagues from across the globe.

“We are living in an interconnected world,” Özen Çavuşoğlu says. “That’s why the network of people with the same understanding will play an important role in having a stable global economy.”

The link to the original article: https://www.imf.org/external/pubs/ft/fandd/2018/12/tim-geithner-yale-program-financial-stability-wellisz.htm?utm_medium=email&utm_source=govdelivery

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Excerpt:

Chris Wellisz is on the staff of Finance & Development at the International Monetary Fund (IMF)

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BAPA+40: An Opportunity to Reenergize South-South Cooperationhttp://www.ipsnews.net/2018/12/bapa40-opportunity-reenergize-south-south-cooperation/?utm_source=rss&utm_medium=rss&utm_campaign=bapa40-opportunity-reenergize-south-south-cooperation http://www.ipsnews.net/2018/12/bapa40-opportunity-reenergize-south-south-cooperation/#respond Fri, 21 Dec 2018 12:35:46 +0000 Branislav Gosovic http://www.ipsnews.net/?p=159409 Branislav Gosovic, worked in UNCTAD, UNEP, UNECLAC, World Commission on Environment and Development, South Commission, and South Centre (1991-2005), and is the author of the recently-published book ‘The South Shaping the Global Future, 6 Decades of the South-North Development Struggle in the UN.’

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Global South-South Development Expo 2018. Credit: UNOSSC

By Branislav Gosovic
GENEVA, Dec 21 2018 (IPS)

The upcoming conference on the Buenos Aires Plan of Action (BAPA+40), scheduled to take place in the Argentine capital on 20-22 March 2019, ought to be more than just another UN conference where the developing countries assemble to present their demands and seek support from the North.

Also, it must not turn out to be a replay of the 2009 1st UN High-level Conference on South-South Cooperation*, i.e. an anodyne event in terms of impact and follow-up, though such a scenario may be preferred by some, risk of which exists since the 2019 gathering is also scheduled to last only three days, not enough time for genuine deliberations and negotiations.

Therefore, it is up to the developing countries to build up BAPA+40 into a major global event.

a. South-South cooperation and the United Nations system

One of the key objectives of the Global South at BAPA+40 should be to place South-South cooperation at the very centre of the UN system of multilateral cooperation.

The UN system needs to recognize the diversity and broad spectrum that SSC subsumes, to resist the limits being imposed on SSC and it being distanced and cut off from its original institutional and political roots and aspirations.

The United Nations ought to introduce clear and specific measures and programmes, necessary human and financial resources, and mandates by “mainstreaming” and “enhancing support” for SSC in every organization and agency of the UN system, to have them incorporate the needs and objectives of South-South cooperation.

It needs also to be reiterated that South-South cooperation is not a substitute for North-South development cooperation, but a parallel and new sphere of multilateral cooperation that opens new and promising opportunities, stimulates North-South cooperation, and provides alternative and innovative approaches in development cooperation.

In the fold of the UN, a significant, yet very limited step to mainstream South-South Cooperation has been taken by upgrading the UNDP Special Unit for TCDC first into a Special Unit for South-South Cooperation and then into the UN Office for South-South Cooperation (UNOSSC).

This cannot and should not be the end-station, but needs to be followed up ambitiously and seriously at the global level, by appointment of a UN Secretary-General’s high level representative who would provide political vision for South-South cooperation and the establishment of a UN specialized entity within the UNDP platform or in the UN Development System (UNDS) in the making, whose mission would be to promote South-South cooperation, as recommended by the Group of 77 Ministerial Meeting.

Any such entity would need to have its own intergovernmental machinery, a major capital development fund for South-South projects, and fully staffed substantive secretariat equipped to perform a number of important functions, including initiating and funding projects, undertaking research, maintaining a data base on SSC and a directory of national actors involved in SSC, and publishing a regular, periodic UN report on South-South Cooperation called for by G77 Summits.

A suggestion has been floated to consider entrusting this task to UNCTAD, given that its mandate concerning North-South issues has been eroded and its role marginalized.

Such a central entity for SSC would need to be backed, at the regional level, by greatly strengthened and invigorated UN regional economic commissions in the South.

These Commissions are the principal UN bodies based in and with a full knowledge of their respective regions. Their key mission should be the promotion of South-South cooperation or “horizontal cooperation”, as traditionally referred to in Latin America.

The proposed structure, drawing also on UN specialized agencies in their areas of competence, would have as one of its tasks to support and energize sub-regional, regional and inter-regional South-South cooperation.

Regular, high-level UN conferences on South-South cooperation would need to be convened, and a consolidated and regular substantive, analytical and statistical UN report on the state of South-South cooperation will need to be prepared.

b. Global South and South-South cooperation

Given the overall global context, the developing countries cannot rely solely on the United Nations, even if and when the suggested institutional improvements are approved and become operational.

South-South cooperation is an opportunity for the Global South to contribute to achieving a number of outstanding goals and aspirations and be a vehicle for reshaping the global system.

For this to happen, however, what is needed on the part of the developing countries is hard work, mobilization of resources and of collective power, major and sustained efforts and commitment/obligation to pursue and attain a series of objectives that need to be identified and agreed on.

In their efforts to follow this advice, in addition to many practical obstacles and problems, the developing countries would also encounter opposition and doubts within their own ranks, not to mention a frontal or undercover resistance by actors of the North.

This resistance would especially come from those who would consider every major move in that direction as a potential threat to their own interests and global designs, and would, very likely, take steps, including within individual developing countries, often with local support and even via ”inconvenient” regime and leadership change, to influence and embroil the collective efforts.

What matters, however, is that today the Global South has the resources and collective power to move forward, and that this is not a “mission impossible”, as some who are familiar with problems and difficulties encountered in South-South cooperation efforts and undertakings and the building and management of joint institutions might point out. There is little that stands in the way of:

    • Undertaking a critical, in-depth review and analysis of: South-South cooperation, important actions and proposals agreed on over the years and their implementation, experiences, public attitudes, performance of individual countries, functioning of joint institutions and mechanisms of cooperation and integration, main obstacles and shortcomings that call for action, including the all too frequent difficulties or failure to follow up on important decisions taken at the political level.
    • Focussing on how to resolve the issue of lack of adequate financing for South-South cooperation, activities, projects and institutions, probably one of the most serious practical obstacles standing in the way of SSC being put into practice as desired and called for.

    • Inspiring, informing about and involving in the South-South cooperation project the public and individuals; with this in mind, applying capacity-building and training to raise the awareness of the existing experiences and opportunities; using to this end also educational, marketing, media and public relations approaches, which are so common in contemporary society and are used not only to advertise and publicize goods and services, but also political and social goals and causes, in this case the common identity of the South as an entity.

    • Setting up a South organization for South-South cooperation, and pooling together and networking intellectual and analytical resources available in the South and internationally to staff and support the work of that institution.

    • Placing on the agenda the challenge of intellectual self-empowerment of the Global South and the harnessing of its intellectual resources and institutions into an interactive network for support of common goals and collective actions.

    • Evolving, at the highest level, a representative system of political authority (e.g., heads of state or government, one delegated from each region) for regular and ad hoc communication, consultations and contacts, for meetings to assess progress in the implementation of agreed SSC goals, and for communication/interaction with all heads of state and/or government in the Global South.

    • Based on the workings and experience of the South Commission, of the now defunct UN Committee on Development Planning and of the G77 High-Level Panel of Eminent Personalities of the South, to consider establishing a permanent South-South commission or committee to bring together, on a regular basis, high-stature personalities and thinkers from the South to reflect and deliberate on challenges faced by the developing countries and by the international community.

    • Elaborating and agreeing on a blueprint for national self-empowerment for South-South cooperation, to guide and be used as a reference by the individual developing countries in line with their own characteristics and capacities, and transforming this blueprint into a legal instrument binding for all developing countries.

    • Nurturing, training and educating future cadres and leaders for South-South cooperation, directly exposing them to and familiarizing them with different problems and different regions of the South, and, when they are ready, deploying them in national, sub-regional, regional and multilateral, including UN, settings.

    • Focussing on the role of “digital South-South cooperation” in the promotion and energizing of all forms of South-South cooperation, including closer contacts, communication, information sharing and interaction, mutual understanding between and among the peoples and countries of the South, transfer of technology, and education and culture.

    • Calling for closer cooperation between and joint initiatives of G77 and NAM, an important pending political and institutional topic on the agenda of the Global South.

There is little new in the above suggestions, which draw on practical experiences and have been articulated over the years and in different contexts. What they propose is within reach, is doable, and would represent a major “leap forward” for South-South cooperation.

What is needed today is firm political will, long-term vision and determined initiative for a group of the South’s countries and leaders to launch such a process on the desired track and, most importantly, sustain it with the necessary political commitment and financial and institutional support.

The 2019 Buenos Aires Conference in March next year is an opportunity for the South to stand up and raise its collective voice, as at the very beginnings of South-South cooperation in Bandung (1955), Belgrade (1961), Geneva (1964) and Algiers (1967).

* This article is a shortened version of the concluding pages of an extensive essay “On the eve of BAPA+40 – South-South Cooperation in today’s geopolitical context”, which was published in VESTNIK RUDN. International Relations, 2018, Volume 18, Issue 03, October 2018, pp. 459-478, the international journal of the Peoples’ Friendship University of Russia (RUDN), formerly Patrice Lumumba University, in a special volume to mark the 40th anniversary of the Buenos Aires Plan of Action. (See http://journals.rudn.ru/international-relations/article/view/20098/16398 )

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Excerpt:

Branislav Gosovic, worked in UNCTAD, UNEP, UNECLAC, World Commission on Environment and Development, South Commission, and South Centre (1991-2005), and is the author of the recently-published book ‘The South Shaping the Global Future, 6 Decades of the South-North Development Struggle in the UN.’

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What the COP24 Needs: A New Emerging Mindsethttp://www.ipsnews.net/2018/12/cop24-needs-new-emerging-mindset/?utm_source=rss&utm_medium=rss&utm_campaign=cop24-needs-new-emerging-mindset http://www.ipsnews.net/2018/12/cop24-needs-new-emerging-mindset/#comments Wed, 19 Dec 2018 20:15:19 +0000 William Mebane http://www.ipsnews.net/?p=159372 William Mebane, former Director of Energy Efficiency Department, ENEA

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UNFCCC Secretariat | COP24 opening plenary

By William Mebane
ROME, Dec 19 2018 (IPS)

An alternative framework of international development and new forms of consumption of good/services are implicit in achieving the goals of UN climate conference recently held in Poland.

With 4.3 billion persons living on $5 or less per day, we cannot expect these persons or their countries to initially participate in the cost of climate change improvement without more favorable development. The reduction of hunger and poverty are inherent in the fight for a better climate because the poor are exactly the most exposed and least protected to adverse climate change. Rather than favor the developing world, the advanced nations have encumbered them with debt and exportation of profits; the net financial flows for the developing world are negative by 26.5 trillion dollars between 1980 and 2012 (Hickel, 2017). A more radical and effective development framework is emerging as proposed by the same author in his book the Divide. Certainly it will be an uphill battle as it involves elimination of debt burdens of developing countries, more global democracy in international financial institutions, more just wages, tax justice and land security.

Obviously the current Western model of production and consumption is highly individualistic, targeting through advertising our desires, by following the trails of our digital lives through almost all of our Internet apps on cell phones and other digital devices. Even our political orientation can be influenced in this way. The consumption is short-term “sugar-high” satisfaction, to be repeated by purchase of another product shortly thereafter. This is extremely costly to the environment, overloading us with the production, consumption and transportation of products that serve secondary needs. The capitalization of companies selling consumer discretionary goods/services is 60 per cent of the capitalization of companies in the entire consumer sector of the S&P500 companies this year (Bespoke, 2018).

And this is in sharp contrast to what really makes us happy: strong social relationships. The famous Harvard Study of Adult Development has proved that embracing community helps us live longer, and be happier. Close relationships, more than money or fame, are what keep people happy throughout their lives. Importantly, international studies on happiness indicate that happy countries have high social capital and strong friendship networks. A cross-national study of 143 countries revealed that high levels of social trust and having someone to count on in case of need are associated with more positive feelings, better life evaluations, and the absence of negative feelings in most countries of the world. Also persons who participate in volunteering activities and with a high level of social trust are more likely than their peers to have better life evaluations and more positive feelings (Calvo et al. 2012).

A new model of consumption is emerging based on social experience and sharing. The experience of culture in a social setting in the form of a concert or intelligent tourism staying with local natives and guides are examples. In the future, services that enhance our sociality will grow. We also have come to realize that we can share under-utilized capacity of our basic properties such as homes and automobiles; and the sharing economy has been born. In the past everyone enjoyed owning a car or a record, instead now use is more important that ownership. This greatly reduces the number of goods that must be produced. Sociality and sharing have a much lighter
ecological footprint than the continuation of individualistic consumption of goods. The long-term gains of the sharing economy in terms of better utilization of capacity have been estimated at 570 billion euro for the EU28, according to the European Parliamentary Research Service (Goudin, 2016).

Developing nations should be aware of these alternatives; otherwise they will develop slowly and fall into the trap of consumerism that business is so anxious to sell, which may lock them into energy infrastructures and greenhouse gas production that they could have, at least in part, avoided. We are reminded that according the latest data 670,000 MW of coal power plant capacity is currently in planning or already under construction in 59 countries (Urgewald, 2018). We are individuals and will always require some satisfaction of individual needs beyond the basic requirements of food, shelter, health and education; but at our best we are social, and should recognize that we have let individualism go too far in consumption and international relations.

References
Bespoke (2018) https://www.bespokepremium.com/think-big-blog/new-sp-500-sector-weightings-what-you-need-to-know/

Calvo R., Zheng Y., Kumar S., Olgiati, A., Berkman L., (2012), Well-Being and Social Capital on Planet Earth: Cross-National Evidence from 142 Countries, https://doi.org/10.1371/journal.pone.0042793

Goudin, P., European Parliamentary Research Service, European Added Value Unit PE 558.777- January 2016

Hickel, J. (2017), The Divide, Windmill Books, London.

Urgewald (2018), https://coalexit.org/report-investments

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Excerpt:

William Mebane, former Director of Energy Efficiency Department, ENEA

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Taking Away the Ladderhttp://www.ipsnews.net/2018/12/taking-away-ladder/?utm_source=rss&utm_medium=rss&utm_campaign=taking-away-ladder http://www.ipsnews.net/2018/12/taking-away-ladder/#comments Tue, 18 Dec 2018 13:18:36 +0000 Jomo Kwame Sundaram and Anis Chowdhury http://www.ipsnews.net/?p=159312 The notion of the BRICS (Brazil, Russia, India, China, and later, South Africa) was concocted by Goldman Sachs’ Jim O’Neill. His 2001 acronym was initially seen as a timely, if not belated acknowledgement of the rise of the South. But if one takes China out of the BRICS, one is left with little more than […]

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

The notion of the BRICS (Brazil, Russia, India, China, and later, South Africa) was concocted by Goldman Sachs’ Jim O’Neill. His 2001 acronym was initially seen as a timely, if not belated acknowledgement of the rise of the South.

But if one takes China out of the BRICS, one is left with little more than RIBS. While the RIBS have undoubtedly grown in recent decades, their expansion has been quite uneven and much more modest than China’s, while the post-Soviet Russian economy contracted by half during Boris Yeltsin’s first three years of ‘shock therapy’ during 1992-1994.

Jomo Kwame Sundaram

Unsurprisingly, Goldman Sachs quietly shut down its BRICS investment fund in October 2015 after years of losses, marking “the end of an era”, according to Bloomberg.

Growth spurts in South America’s southern cone and sub-Saharan Africa lasted over a decade until the Saudi-induced commodity price collapse from 2014. But the recently celebrated rise of the South and developing country convergence with the OECD has largely remained an East Asian story.

Preventing emulation
Increasingly, that has involved China’s and South Korea’s continued ascendance after Japan’s financial ‘big bang’ and ensuing stagnation three decades ago. They have progressed and grown rapidly for extended periods precisely because they have not followed rules set by the advanced economies.

Industrial policy — involving state owned enterprises (SOEs), technology transfer agreements, government procurement, strict terms for foreign direct investment and other developmental interventions — was condemned by the Washington Consensus, promoting liberalization, privatization and deregulation favouring large transnational corporations.

Anis Chowdhury

Well-managed SOEs, government procurement practices and effective protection conditional on export promotion accelerated structural transformation. When foreign corporations were allowed to invest, they were typically required to transfer technology to the host economy.

Countries have only progressed by using industrial policy judiciously when sufficient policy space was available, as was the norm in most developed countries. But such successful development practices have been denied to most developing countries in recent decades. Instead, the North now emphasizes the dangers of industrial policy, subsidies, SOEs and technology transfer agreements, to justify precluding their use by others.

Blocking the alternative
Instead, corporate-led globalization continues to be sold as the way to develop and progress.
Some advocates insist that global value chain participation will provide handsome opportunities for sustained economic development despite the evidence to the contrary.

Major OECD economies appear intent on tightening international rules to further reduce developing countries’ policy space under the pretext of reforming the multilateral trading system in order to save it.

Trump and other challenges to this neoliberal narrative do not offer any better options for the South. Nevertheless, their nationalist and chauvinist rhetoric has undermined the pious claims and very legitimacy of their neoliberal ‘globalist’ rivals on the Right.

Infrastructure finance
UNCTAD’s 2018 Trade and Development Report emphasizes the link between infrastructure and industrialization. It argues that successful industrialization since 19th century England has crucially depended on public infrastructure. Infrastructure investment is thus considered crucial for economic growth and structural transformation.

The ascendance of the neoliberal Washington Consensus agenda has not only undermined public interventions generally, but also state revenue and spending in particular, especially in the developing world. But even the World Bank now admits that it had wrongly discouraged infrastructure financing, which it now advocates.

Most Western controlled international financial institutions have recently advocated public-private partnerships to finance, manage and implement infrastructure projects. The presumption is that only the private sector has the expertise and capacity to be efficient and profitable. In practice, states borrowed and bore most of the risk, e.g., of contingent liabilities, while private partners reaped much profit, often with state guaranteed revenues.

Unexpected policy space
Infrastructure, including both its construction and financing, has been central, not only to China’s own progress, but also to its international development cooperation. China’s financial redeployment of its massive current account surplus has created an alternative to traditional sources of investment finance, both private and public.

The availability of Chinese infrastructure finance on preferential or concessionary terms has been enthusiastically taken up, not least by countries long starved of investible resources. Not surprisingly, this has resulted in over-investments in some infrastructure, resulting in underutilization and poor returns to investment.

The resulting debt burdens and related problems have been well publicized, if not exaggerated by critics with different motivations. Now threatened by China’s rise, Western governments and Japan have suddenly found additional resources to offer similar concessionary financing for their own infrastructure firms.

Thus, not unlike the US-Soviet Cold War, the perceived new threat from China has created a new bipolar rivalry. That has inadvertently created policy space and concessions reminiscent of the post-Second World War ‘Golden Age’ for Keynesian and development economics.

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New Science Shows Climate-Smart Farming is Within Reachhttp://www.ipsnews.net/2018/12/new-science-shows-climate-smart-farming-within-reach/?utm_source=rss&utm_medium=rss&utm_campaign=new-science-shows-climate-smart-farming-within-reach http://www.ipsnews.net/2018/12/new-science-shows-climate-smart-farming-within-reach/#respond Wed, 12 Dec 2018 14:34:59 +0000 Godefroy Grosjean http://www.ipsnews.net/?p=159203 Godefroy Grosjean is Asia Climate Policy Hub Leader, International Center for Tropical Agriculture

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Godefroy Grosjean is Asia Climate Policy Hub Leader, International Center for Tropical Agriculture

By Godefroy Grosjean
KATOWICE, Poland, Dec 12 2018 (IPS)

Until the United Nations climate talks in Bonn last year, no clear plan to include agriculture in climate negotiations existed.

This was troubling, considering agriculture contributes 19-29% of global greenhouse gases, and changing temperatures are making it harder to farm. This is having an increasingly prominent effect on food security — hunger levels have now risen for the third year in a row.

The Koronivia Joint Work on Agriculture, which was agreed this time last year, paves the way for two technical bodies to work together to identify solutions on how the agriculture sector can be part of the solution to climate change.

The question is where to begin.

This week at COP 24 in Katowice, Poland, an international team of researchers laid out a climate-friendly blueprint for agriculture’s future.

The International Center for Tropical Agriculture and the World Bank launched a global synthesis of climate-smart agriculture (CSA) practices, which provides our clearest view yet as to how the world’s 500 million smallholder farmers can reduce their carbon footprint, increase yields and adapt to climate change.

Built from the on-the-ground observations of 1,500 scientists and experts in 33 countries across Africa, Asia and Latin America, the report outlines which site-specific interventions work under which circumstances.

This enables governments, development agencies, private investors – and, crucially, individual farmers and producers’ organizations – to tailor CSA practices to their specific goals and challenges.

Identifying “best-bet” CSA approaches

Our study shows that half of the 1,700 CSA we evaluated fall into just five categories: water management, crop tolerance to stress, intercropping, organic fertilization and pest control, and conservation agriculture. This demonstrates that stakeholders are beginning to find consensus on what they consider climate-smart agriculture.

The study also reveals that many climate-smart agriculture techniques can deliver on all three pillars of CSA: adaptation, mitigation and productivity.

Five technology clusters were ranked in the top 10 for climate-smartness in all three categories: tree management, improved pastures, silvopasture, conservation agriculture and water management.

No one-size-fits-all solutions

The report provides crucial insights when faced with the reality that the majority of smallholders do not yet practice CSA: while interventions are generally similar, there is no one-size-fits-all solution. A technique considered climate-smart in one context is not necessarily climate-smart in another.

The top climate-smart agriculture practices are different in the three continents. In Latin America and the Caribbean smartest technique was silvopasture, whereas intercropping ranked top in Africa. In Asia, biogas harnessing was considered to be the most climate-smart intervention.

Efforts to step up extension are required

While finance is still a barrier to investment in CSA, it is not necessarily the biggest obstacle. The report shows that training and information are actually bigger barriers to CSA implementation. Efforts to scale up CSA interventions, therefore, should focus on delivering expert know-how to farmers that are likely to adopt new practices.

The CSA profiles are an effective entry point to unlock discussions and actions on CSA. They should, however, be embedded within a broader suite of prioritization approaches for CSA interventions.

To support this, CIAT has prepared sub-national climate risks profiles and economic assessments to develop climate smart investment plans (CSIPs). Plans should look beyond on-farm practices and develop strategies that increase the resilience of the whole agricultural value chain, while reducing emissions and improving livelihoods.

CIAT, CCAFS and its partners such as the World Bank are particularly committed to providing support to decision-making to make this agricultural transformation a success.

CSIPs and our better understanding of site-specific CSA interventions will help re-shape the landscape, quite literally. If the future of the world is going to be carbon neutral, nothing less than a large-scale transformation of farming is needed.

For the vast majority of the world’s farmers, this means adopting climate-smart strategies. And for those who have yet start – or those seeking to help them begin – they now have a clearer set of guidelines than ever before.

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Excerpt:

Godefroy Grosjean is Asia Climate Policy Hub Leader, International Center for Tropical Agriculture

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AI to map Chinese strikeshttp://www.ipsnews.net/2018/12/ai-map-chinese-strikes/?utm_source=rss&utm_medium=rss&utm_campaign=ai-map-chinese-strikes http://www.ipsnews.net/2018/12/ai-map-chinese-strikes/#respond Tue, 11 Dec 2018 13:38:41 +0000 Erik Larsson http://www.ipsnews.net/?p=159166 29 years ago, Han Dongfang survived the hail of bullets at Tiananmen Square. Now, he lives in Hong Kong and maps Chinese labour market strikes. Arbetet Global caught up with him at the ITUC World Congress in Copenhagen. Between meetings at Bella Center in Copenhagen, Arbetet Global gets a chat with the man who’s been […]

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Big Business Capturing UN SDG Agenda?http://www.ipsnews.net/2018/12/big-business-capturing-un-sdg-agenda/?utm_source=rss&utm_medium=rss&utm_campaign=big-business-capturing-un-sdg-agenda http://www.ipsnews.net/2018/12/big-business-capturing-un-sdg-agenda/#respond Tue, 11 Dec 2018 09:41:23 +0000 Jomo Kwame Sundaram and Anis Chowdhury http://www.ipsnews.net/?p=159154 Over the last two decades since the Global Compact, the United Nations has increasingly embraced the corporate sector, most recently to raise finance needed to achieve the Sustainable Development Goals (SDGs), i.e., for Agenda 2030. But growing big business influence has also compromised analyses, recommendations, policies and programme implementation, undermining the SDGs. Changing financing arrangements […]

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

Over the last two decades since the Global Compact, the United Nations has increasingly embraced the corporate sector, most recently to raise finance needed to achieve the Sustainable Development Goals (SDGs), i.e., for Agenda 2030. But growing big business influence has also compromised analyses, recommendations, policies and programme implementation, undermining the SDGs.

Changing financing arrangements

Inadequate funding of the UN and its mandates by member States has required this search for additional finance, initially with philanthropy and ‘corporate social responsibility’ efforts by private business, but increasingly, by viewing profit-seeking investments as somehow contributing to achieve the SDGs.

Jomo Kwame Sundaram

While the global economy grew 47 fold from $1.35 trillion in 1960 to $63 trillion in 2010, the UN organization’s regular core budget fell to 0.0037 per cent of global income. Meanwhile, ‘core’ un-earmarked resources fell from nearly half of all UN financial resources in 1997 to less than a quarter today. A recent UN Secretary-General’s report estimated that over 90 per cent of all UN development system activities in 2015 were funded with non-core, earmarked project resources.

An earlier report found total non-core resources for UN-related activities increased 182 per cent in real terms between 1999 and 2014, mostly going through a growing number of UN ‘vertical’ trust funds, beyond Member States’ control, while core resources increased only 14 per cent.

Such ‘siloed’ trust funds – with funding rising three-fold over the last decade – enable both donor governments and corporate interests to determine UN funding, bypassing established decision-making processes. Thus, UN development financing increasingly serves donor priorities.

 

New development finance discourse

Influential quarters claim that in order to achieve Agenda 2030, financing needs have to rise “from billions to trillions” of US dollars, and that this can only be done by engaging the corporate sector.

According to a 2015 World Bank report, while the Millennium Development Goals (MDGs) needed billions in official development assistance, the SDGs require trillions in investments.

Anis Chowdhury

Although most development spending involves national public resources, most Organization for Economic Cooperation and Development (OECD) governments opposed international tax cooperation at the 2015 Addis Ababa third UN Financing for Development conference.

Thus, instead of helping boost national revenue enhancing capacities and capabilities, the Addis Ababa Action Agenda (AAAA) claimed that private capital had “the potential for scaling up to achieve the demands of the Sustainable Development Goals”.

 

Corporate funding for sustainable development?

The three major multilateral agreements of 2015 – the AAAA, the Agenda 2030 for SDGs and the Paris climate agreement – were all premised on private financing, stressing the need to mobilize funding from private business, finance and investment. This premise has been criticized by the Agenda 2030 Reflection Group which argued for public financing instead.

Multi-stakeholder partnerships have long been advocated by many OECD governments, UN agencies and former UN Secretary-General Ban Ki-moon. This envisaged big business working with governments in public-private partnerships (PPPs), blended finance and various other novel financing arrangements.

A 2015 UN Environment Programme (UNEP) report emphasized the need to “access private capital at scale, with banking alone managing financial assets of almost US$140 trillion and institutional investors, notably pension funds, managing over US$100 trillion, and capital markets, including bond and equities, exceeding US$100 trillion and US$73 trillion respectively.”

 

Public-private partnerships

The AAAA promoted PPPs and blended finance arrangements, while the Global Infrastructure Forum was set up at Addis to close the ‘infrastructure gap’ in developing countries, estimated by the outcome document at between “$1 trillion to $1.5 trillion” annually.

Thus far, PPPs have been more significant in developed and upper middle-income countries, as low-income countries are rarely able to attract large private investors. Warnings that PPPs and other such modalities, already problematic in OECD member countries, are even less likely to succeed in developing countries, where cost recovery is more difficult, have been largely ignored.

Instead, PPPs have often worsened national budgetary positions in the long-run due to the contingent liabilities governments are required to take on. Consequently, in most cases, governments bear the most risk, subsidize ventures and guarantee revenues to the private partner.

While PPPs have clearly contributed to national financial difficulties, such problems were largely ignored until recently. With changing international relations, they are now being highlighted as leading to national ‘debt bondage’ to China and other non-traditional sources of finance.

Meanwhile, the US and other developed countries have announced major new infrastructure financing initiatives of their own, to draw developing countries from financial reliance on China. This unexpected political rivalry will have mixed consequences for borrowing developing countries.

PPPs involve many unpredictable risks, primarily borne by governments, as well as side and spill-over effects, with the private partners typically setting most terms. Moreover, PPPs in social sectors, such as health and water, are less inclusive, disadvantaging the poor and the less accessible.

Meanwhile concerns have been raised, even by The Economist, about enthusiasm for blended finance as ‘aid’, which typically favours private partners from the donor country. Such aid diversion — from budgetary support, social programmes and essential services — prioritizes private profits, rather than the public interest.

 

Checks and balances?

The UN Global Compact’s 10 principles from the turn of the century remain the main intergovernmental framework governing non-state partnerships, but remains ill-equipped for meaningful accountability, especially as it pre-dates the SDGs, and hence, are inadequate now.

Promoted and often required by OECD governments, PPPs and blended finance have not received enough critical scrutiny in terms of compatibility with UN mandates, while their extra-budgetary funding status has exempted them from rigorous audit, review and impact assessment.

With financing gap concerns accepted as the rationale for multi-stakeholder partnerships, the private sector is increasingly calling the shots, with occasional lip service to civil society engagement merely providing legitimacy, rather than adequate checks and balances.

 

  • This article was amended on January 10 2019.  An earlier version under the sub-heading, “Corporate funding for sustainable development?”,  inadvertently implied that the Agenda 2030 Reflection Group stressed the need to mobilize funding from private business, finance and investment. In fact, the Group stressed the need for public funding, and criticized the view that the SDGs can only be implemented effectively via  PPPs, blended finance, etc.

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Indonesia Commits to Low Carbon Development and a Green Economy at COP24http://www.ipsnews.net/2018/12/indonesia-commits-low-carbon-development-green-economy-cop24/?utm_source=rss&utm_medium=rss&utm_campaign=indonesia-commits-low-carbon-development-green-economy-cop24 http://www.ipsnews.net/2018/12/indonesia-commits-low-carbon-development-green-economy-cop24/#respond Tue, 11 Dec 2018 09:24:02 +0000 Sohara Mehroze Shachi http://www.ipsnews.net/?p=159150 Although Indonesia has attained decent economic growth of over five percent in the last decade, in order to ensure sustainable growth in the future the switch to renewable energy (RE) will be critical, says the country’s government. “If we don’t focus on low carbon development, we cannot continue this growth,” Bambang Brodjonegoro, Indonesia’s Minister of […]

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A traffic jam, in Indonesia's capital Jakarta. Air pollution in Jarkarta is triple the the maximum “safe” level recommended by the World Health Organisation. The country's government says it is committed to making the switch to renewables. Credit: Alexandra Di Stefano Pironti/IPS

By Sohara Mehroze Shachi
KATOWICE, Poland, Dec 11 2018 (IPS)

Although Indonesia has attained decent economic growth of over five percent in the last decade, in order to ensure sustainable growth in the future the switch to renewable energy (RE) will be critical, says the country’s government.
“If we don’t focus on low carbon development, we cannot continue this growth,” Bambang Brodjonegoro, Indonesia’s Minister of National Development Planning, said yesterday Dec. 10.

He spoke about Indonesia’s shift to a low carbon, climate-friendly development pathway at a high-level panel discussion at the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24), which is currently being held in Katowice, Poland. The panel discussion was organised by the Global Green Growth Institute (GGGI), in partnership with the Ministry of National Development Planning of the Republic of Indonesia (BAPPENAS).

The latest report by the Intergovernmental Panel on Climate Change (IPCC) warns of catastrophic climatic impacts if global warming is not kept below 1.5 degrees Celsius. This will include severe impact on food production and increasing risks of climate-related disasters.

But according to Brodjonegoro, the Indonesian government is taking this issue seriously.
“We are fully committed to steer our economy for low carbon development. We will mainstream a low carbon framework in our medium-term development plan,” he said, adding that low carbon development in Indonesia would involve improving environmental quality, attaining energy efficiency, increasing agriculture productivity, improving reforestation and reducing deforestation simultaneously.

There is a large scope for RE development in Indonesia, as most of its potential is unrealised as of now. According to the International Renewable Energy Agency (IRENA) report on Indonesia’s RE prospects, the country has “an estimated 716 GW of theoretical potential for renewable energy-based power generation”. But of its bioenergy potential of 32.7 GW, it has developed a mere 1.8 GW.

“In order to provide the electricity for remote areas, this is a good time to promote renewable energy as this will increase the percentage of renewable energy in our energy mix,” Brodjonegoro said.

According to the minister, a key issue for scaling up RE in Indonesia lies with developing the capacity of stakeholders to meet the needs of different types of investors to access finance.

Bambang Brodjonegoro, Indonesia’s Minister of National Development Planning, said the switch to renewable energy is critical for his country’s sustainable economic growth. He was speaking at a panel discussion held at COP24 in Katowice, Poland. Credit: Sohara Mehroze Shachi/IPS

Dr. Frank Rijsberman, Director General of GGGI, echoed these thoughts, stating that the critical factor for proliferating renewables in Indonesia is whether it can attract private sector investment.

“Both governments and the private sector have not fully incorporated the idea that green growth is not only nice but it is also affordable,” he said. “Businesses should be investing in renewable energy because there is a business opportunity.”
In this regard, he said that blended finance could be a critical path where every dollar investment from donors could catalyse other investments from private sources.

State Secretary for Climate and Environment in Norway Sveinung Rotevatn, was a panelist at the event. He stated that Norway is encouraged by the low carbon development in Indonesia, and is committing substantial funds to reduce deforestation there. According to Global Forest Watch, Indonesia experienced a drop in tree cover loss in 2017, including a 60 percent decline in primary forest loss. The organisaiton said that this could be in part to the 2016 government moratorium on the conversion of peatland.

“As a developed country we see [Norway] as having a responsibility to contribute,” he said. Norway has been working in partnership with Indonesia since 2010.

The future of oil is not bright, and Rotevatn believes the shift in production to gas from coal could be a useful bridge towards a shift to renewables in the long run. He added that resistance in this transition from fossil fuels to renewables is expected.

“In 1991 Norway introduced a carbon tax. Today we consider it a natural thing but implementing it is always hard,” he said. One estimate from the Norwegian environmental agency shows that since Norway reduced emissions in 1991 it continued healthy economic growth.

However, Indonesia has a long way to go in the transition process as over 90 percent of its energy still comes from fossil fuels. But the government is optimistic of its potential to scale up RE.

“We are focusing on incentivising renewable energy production and increasing infrastructure of renewable energy capacity. We have a lot of isolated islands and remote areas which can be utilised,” said Rida Mulyana, Director General of New, Renewable Energy and Energy Conservation (NREEC) at Indonesia’s Ministry of Energy and Mineral Resources.

However, he noted that several challenges remain. One of these is public acceptance, as there is still a need for systematic and sustainable socialisation and education to minimise community resistance to RE projects.

Moreover, affordability of the available clean energy remains an issue, and the cost needs to be reduced for renewables to be a viable option. This is exacerbated by the fact that liquified petroleum gas is still subsidised, which fosters Indonesia’s dependency on fossil fuels.

While Mulayana pointed out financing as a key issue, he also said the government will not provide any subsidy for renewables and it has to compete with other sources of energy.

David Kerins, Senior Energy Economist at the European Investment Bank and another panelist at the event, said although RE projects are becoming more commercially viable, the private sector is yet to jump in on these investment opportunities. So there is a need to promote investment while providing safeguards to investors on the expected benefits.

“The RE energy sector has moved far beyond the situation it was before. Once people see how possible and straight forward it is, private sector can start targeting projects of its own,” he said.

Glenn Pearce-Oroz, Director for Policy and Programmes, Sustainable Energy for All (SEforALL), one of the attendees of the event, said one of the important next steps will be how to bring along commercial financing for low carbon development.

“Part of what we are seeing is private sector being more and more interested to do business in the green economy. What they are looking for though is clarity of roles and consistency in terms of the markets they are getting into,” he said.

“So the challenge for developing countries is how do you demonstrate that type of consistency and clarity and how do you establish clear rules of the game, good regulatory frameworks, that gives private sector the confidence to come into these markets?” He said Indonesia has the size, dynamism of economy and a lot of favourable elements for attracting private sector investment.

“Green growth as a concept is beginning to take off in different countries,” said Dr. Saleemul Huq, Director of the International Centre for Climate Change and Development (ICCCAD) and a 24-time COP attendee.

“The most important element of any green growth strategy is to make sure it’s nationally determined and nationally owned,” he said, adding that modality of green growth is peculiar to the politics, socio economic conditions and culture of a country.

“Green growth is more of a political process than a technical process. There are vested interests and issues that have to be worked out at the national level,” he said. “The good news is it [green growth] has started to happen.”

 

  • This story has been published with support from Inter Press Service, the Stanley Foundation, Earth Journalism Network and Climate Change Media Partnership.

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The Revolution of Renewable Energy Needs Political Leadershiphttp://www.ipsnews.net/2018/12/revolution-renewable-energy-needs-political-leadership/?utm_source=rss&utm_medium=rss&utm_campaign=revolution-renewable-energy-needs-political-leadership http://www.ipsnews.net/2018/12/revolution-renewable-energy-needs-political-leadership/#respond Thu, 06 Dec 2018 11:29:51 +0000 Rachel Kyte http://www.ipsnews.net/?p=159073 *Interview with Rachel Kyte, Chief Executive Officer of Sustainable Energy for All, and Special Representative of the UN Secretary-General for Sustainable Energy for All. She was also the World Bank Group Vice President and Special Envoy for Climate Change, leading the Bank Group’s efforts to campaign for the Paris Agreement.

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*Interview with Rachel Kyte, Chief Executive Officer of Sustainable Energy for All, and Special Representative of the UN Secretary-General for Sustainable Energy for All. She was also the World Bank Group Vice President and Special Envoy for Climate Change, leading the Bank Group’s efforts to campaign for the Paris Agreement.

By Rachel Kyte
UNITED NATIONS, Dec 6 2018 (IPS)

The cost of renewable energy is low, and at times, less than fossil fuels. What are the barriers to switching to renewables?

Where current energy systems exist, they will need to be upgraded to be able to draw power from modern renewables and to exploit storage solutions that they require.

Rachel Kyte

The institutions and mindsets of current systems are still comfortable with the systems of the past, those that prioritized fossil fuels in centralized grid systems.

The revolution of renewable energy is not just that it’s clean, but that it can be delivered both through the grid as well as decentralized solutions, allowing it to reach those who have never enjoyed access to reliable and affordable energy before.

Yet this change requires political leadership and policy certainty for the levels of investment needed, and we need that renewable investment now.

Q: The recent Cooling for All report highlighted an issue many people didn’t speak of until recently. How does it relate to climate?

A: As the world warms and populations rapidly grow, particularly in the cities of the developing world, we risk creating ‘heat islands’ that could substantially increase energy demands as people seek cooling access for their own health and safety, as well as the safety of medical supplies, fresh food and safe work environments.

At the same time, if we rely on today’s cooling technologies that use high hydroflourocarbons (HFCs) in air conditioning, we will exasperate climate impacts from a growing use of short-lived climate pollutants.

In policy terms, providing everyone with access to the sustainable cooling they need, is the opportunity at the intersections of the Sustainable Development Goals, Paris Agreement and the Kigali Amendment.

In human terms, finding a way to provide hyper efficient pollutant free cooling for people, their vaccines and food is about making sure we leave no one behind. While the Paris Agreement reached almost universal ratification in record time, we now need member states to move with the same swiftness and determination to ratify the Montreal Protocol’s Kigali Amendment.

Q: Can governments, businesses and communities that embrace clean energy solutions survive economically, and where do you see the greatest impact of green energy solutions?

A: The scientific evidence presented in the IPCC report means that all governments, through meeting their fundamental responsibilities in providing a duty of care to their citizens, need to ensure that aggressive and comprehensive policies are in place to speed energy transitions towards clean, affordable and reliable energy for all.

For business, being able to be on the leading edge of this transition means being positioned for profitability, success in attracting and retaining talent, and ensuring that inevitable regulation – and in some cases litigation – is a risk that is understood and well managed.

All businesses must regard carbon as a toxin which needs to be avoided, mitigated and managed to not only support climate action, but help ensure their business is resilient to the ever-growing impacts of climate change.

Q: Can we realistically meet the needs of the just under 1 billion people who don’t have regular access to electricity through renewable energy?

A: Yes. As an immediate step, we all have to be much more efficient in our use of energy. We can provide for many more needs with much less energy through technological innovation and business models. Renewable energy gives us a cost-effective way to meet the needs of those who have never had energy before to help them become economically productive.

By putting the needs of the last mile first, we can build decentralized, digitalized and decarbonized energy systems that meet everyone’s needs. This is not beyond human ingenuity – the cost is estimated at just over US$50 billion a year.

Yet it requires political will and determination. When we consider that US$50 billion leaves the African continent through illegal financial flows, money laundering and tax evasion each year, we must work harder to ensure that the energy needs of these vulnerable populations – women, children, remote rural populations – can be met.

Q: How can we support low-income countries when it comes to innovation and strengthening infrastructure that allow for modern technology approaches?

A: First, we need to support countries put in place robust policy frameworks and investment climates that will spur both domestic investment as well as attract international investment. Secondly, development finance, in partnership with these countries, has to be directed to meet the needs of the most vulnerable.

Our recent Energizing Finance report clearly shows that finance is still not reaching the top 20 countries with the largest electricity and clean cooking access gaps – dramatically slowing down progress to meet global energy goals and our promise to these populations.

Thirdly, we need specific initiatives that provide energy to the growing number of displaced people around the world.

Finally, the 3 billion that don’t have access to clean cooking deserve an urgent response from the international community at scale that connects industries around different fuel sources with new financial innovation that means the billions of women living on low incomes have a range of clean fuel choices, as opposed to the dangerous choice to cook a family meal while putting their health and the health of their children at risk.

*The interview is part of an editorial package from the SDG Media Compact and released by the UN’s Department of Public Information.

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Excerpt:

*Interview with Rachel Kyte, Chief Executive Officer of Sustainable Energy for All, and Special Representative of the UN Secretary-General for Sustainable Energy for All. She was also the World Bank Group Vice President and Special Envoy for Climate Change, leading the Bank Group’s efforts to campaign for the Paris Agreement.

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Q&A: Creating an African Bamboo Industry as Large as China’shttp://www.ipsnews.net/2018/12/qa-creating-african-bamboo-industry-large-chinas/?utm_source=rss&utm_medium=rss&utm_campaign=qa-creating-african-bamboo-industry-large-chinas http://www.ipsnews.net/2018/12/qa-creating-african-bamboo-industry-large-chinas/#respond Wed, 05 Dec 2018 09:57:24 +0000 Jamila Akweley Okertchiri http://www.ipsnews.net/?p=159042 IPS correspondent Jamila Akweley Okertchiri interviews DR. HANS FRIEDERICH, Director General of the International Network for Bamboo and Rattan (INBAR)

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Hans Friederich at a Chinese bamboo plantation. Photo Courtesy of INBAR

By Jamila Akweley Okertchiri
ACCRA, Dec 5 2018 (IPS)

The bamboo industry in China currently comprises up to 10 million people who make a living out of production of the grass. But while the Asian nation has significant resources of bamboo — three million hectares of plantation and three million hectares of natural forests — the continent of Africa is recorded to have an estimated three and a half million hectares of plantations, excluding conservation areas.

This means that there is a possibility of creating a similar size industry in Africa, according to International Network for Bamboo and Rattan (INBAR) director general Dr. Hans Friederich.

“In China, where the industry is developed, we have eight to 10 million people who make a living out of bamboo. They grow bamboo, manufacture things out of bamboo and sell bamboo poles. That has given them a livelihood and a way to build a local economy to create a future for themselves and their children,” he tells IPS.

INBAR is the only international organisation championing the development of environmentally sustainable bamboo and rattan. It has 44 member states — 43 of which are in the global south — with the secretariat headquarters based in China, and with regional offices in India, Ghana, Ethiopia, and Ecuador. Over the years, the multilateral development organisation has trained up to 25,000 people across the value chain – from farmers and foresters to entrepreneurs and policymakers.

Excerpts of the interview follow:

Africa is estimated to have three and a half million hectares of bamboo. While China has about six million hectares of natural forests, almost double the size of Africa’s, experts say there is potential for developing the industry on the continent. Credit: Desmond Brown/IPS

Inter Press Service (IPS): What has been INBAR’s Role in the South-South Cooperation agenda?

Dr. Hans Friederich (DHF): In fact, a lot of our work over the last 21 years is to link our headquarters in China with our regional offices and our members around the world to help develop policies, put in place appropriate legislation and regulations to build capacity, train local people, provide information, and carry out real field research to test new approaches to manage resources in the most efficient way.

I think we [have been] able to help our members more effectively and do more in the way of training and capacity building. I also hope we can develop bamboo and rattan as vehicles for sustainable development with our member countries around the world, especially in the Global South.

IPS: What are the prospects for Africa’s bamboo and rattan industry?

DHF: The recorded statistics say that Africa has about three and half million hectares of bamboo, which excludes conservation [areas].

So, if I were to make a guess, Africa has as much bamboo as China [excluding China’s natural forests] and that means theoretically, we should have the possibility of creating an industry as large as China’s in Africa. That means an industry of 30 billion dollars per a year employing 10 million people.

IPS: How is INBAR helping to develop such a huge potential in Africa?

DHF: The returns we are seeing in China may not happen overnight in Africa, China has had 30 to 40 years to develop this industry.

But what we are doing is working with our members in Africa to kick off the bamboo value chain to start businesses and help members make the most out of these plants.

IPS: Working with countries from the global south means replication of best practices and knowledge sharing among member states. Are there any good examples worth mentioning?

DHF: China is the world’s leading country when it comes to the production and management of bamboo so we have a lot to learn from China. Fortunately China has the financial resources that makes it easy to share that information and knowledge with our members …Looking at land management activities in Ghana, as an example, I think bamboo can really help in restoring lands that have been damaged through illegal mining activities.

Maybe that is actually where we can learn from other African countries because we are already looking at how bamboo can help with the restoration of degraded lands in Ethiopia.

Also, when we had a training workshop in Cameroon last year and we looked at architecture, we brought an architect from Peru who shared his experience of working with bamboo in Latin America, which was quite applicable to Cameroon. So we are using experience from different parts of the world to help others develop what they think is important.

IPS: What is the most important thing in the development of the bamboo and rattan value chain for an African country like Ghana?

DHF: There are a number of things that we can do. One area that Ghana is already working on with regards to bamboo and rattan, is furniture production. I know that there is fantastic work being done with skills development.

The value chain of furniture production is an area where Ghana already has a lot to offer. But if we can improve quality, if we can make the furniture more interesting for consumers, through skills training [of artisans], then that is an area where we can really help.

IPS: Which other opportunity can Ghana look at exploring in the area of Bamboo and Rattan value chain?

DHF: Another area of opportunity is to use bamboo as a source of charcoal for household energy. People depend on charcoal, especially in rural areas in Ghana, but most of the charcoal comes from often illegally-cut trees.

Instead of cutting trees we can simply harvest bamboo and make charcoal from this, which is a legally produced source.

The great thing about Bamboo is that it re-grows the following growing season after harvesting, so it is a very sustainable source of charcoal production.

IPS: What does the future look like for INBAR?

DHF: Two months ago Beijing hosted the China Africa Forum and we were very, very pleased to have read that the draft programme of work actually includes the development of Africa’s bamboo industry. There is a paragraph that says China and Africa will work together to establish an African training centre.

We understand this will most likely be in Ethiopia and it will happen hopefully in the coming years.

Another thing is that China and Africa will work closely together to develop the bamboo and rattan industry. They will also develop specific activities on how to use bamboo for land restoration and climate change mitigation and to see how bamboo can help with livelihood development in Africa in partnership with China.

This is a very exciting development, a new window of opportunity has opened for us to work together to develop bamboo and rattan in Africa.

 

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Excerpt:

IPS correspondent Jamila Akweley Okertchiri interviews DR. HANS FRIEDERICH, Director General of the International Network for Bamboo and Rattan (INBAR)

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Havana Charter’s Progressive Trade Vision Subvertedhttp://www.ipsnews.net/2018/12/havana-charters-progressive-trade-vision-subverted/?utm_source=rss&utm_medium=rss&utm_campaign=havana-charters-progressive-trade-vision-subverted http://www.ipsnews.net/2018/12/havana-charters-progressive-trade-vision-subverted/#respond Tue, 04 Dec 2018 13:36:19 +0000 Jomo Kwame Sundaram and Anis Chowdhury http://www.ipsnews.net/?p=159015 In criticizing the ‘free trade delusion’, UNCTAD’s 2018 Trade and Development Report proposes an alternative to both reactionary nationalism, recently revived by President Trump, and the corporate cosmopolitanism of neoliberal multilateral discourse in recent decades by revisiting the Havana Charter on its 70th anniversary. From ITO to WTO Instead, it urges reconsideration of lessons from […]

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By Jomo Kwame Sundaram and Anis Chowdhury
KUALA LUMPUR & SYDNEY, Dec 4 2018 (IPS)

In criticizing the ‘free trade delusion’, UNCTAD’s 2018 Trade and Development Report proposes an alternative to both reactionary nationalism, recently revived by President Trump, and the corporate cosmopolitanism of neoliberal multilateral discourse in recent decades by revisiting the Havana Charter on its 70th anniversary.

From ITO to WTO
Instead, it urges reconsideration of lessons from the struggle from 1947 for the Havana Charter. Although often depicted as the forerunner of the General Agreement on Tariffs and Trade (GATT), the Charter was far more ambitious.

Jomo Kwame Sundaram

Initially agreed to 70 years ago by over 50 countries — mainly from Latin America, as much of the rest of the developing world remained under European colonial rule — it was rejected by the US Congress, with GATT emerging as a poor compromise.

As envisaged at Bretton Woods in 1944, over 50 countries began to create the International Trade Organization (ITO) from 1945 to 1947. In 1947, 56 countries started negotiating the ITO charter in Havana following the 1947 United Nations Conference on Trade and Employment in Havana, eventually signed in 1948.

The idea of a multilateral trade organization to regulate trade — covering areas such as tariff reduction, business cartels, commodity agreements, economic development and foreign direct investment — was first mooted in the US Congress in 1916 by Representative Cordell Hull, later Roosevelt’s first Secretary of State in 1933.

However, the US Congress eventually rejected the Havana Charter, including establishment of the ITO, in 1948 following pressure from corporate lobbies unhappy about concessions to ‘underdeveloped’ countries. Thus, the Bretton Woods’ and Havana Charter’s promise of full employment and domestic industrialization in the post-war international trade order was aborted.

In their place, from 1948 to 1994, the GATT, a provisional compromise, became the main multilateral framework governing international trade, especially in manufactures, the basis for trade rules and regulations for most of the second half of the 20th century.

The Uruguay Round from 1986 to 1994, begun at Punta del Este, was the last round of multilateral trade negotiations under GATT. It ended the postwar trading order governed by GATT, replacing it with the new World Trade Organization (WTO) from 1995.

Developmental fair trade?
The UNCTAD report urges revisiting the Havana Charter in light of new challenges in recent decades such as the digital economy, environmental stress and financial vulnerabilities. So, what lessons can we draw from the Havana Charter in trying to reform the multilateral trading order?

Anis Chowdhury

In light of economic transformations over the last seven decades, it is crucial to consider how the Havana Charter tried to create a more developmental and equitable trading system, in contrast with actual changes in the world economy since.

After all, the Charter recognized that a healthy trading system must be based on economies seeking to ensure full employment while distributional issues have to be addressed at both national and international levels.

Profitable, but damaging business practices — by large international, multinational or transnational firms, abusing the international trading system — also need to be addressed.

The Charter recognized the crucial need for industrialization in developing countries as an essential part of a healthy trading system and multilateral world order, and sought to ensure that international trade rules would enable industrial policy.

The GATT compromise exceptionally allowed some such features in post-war trade rules, but even these were largely eliminated by the neoliberal Uruguay Round, as concerns about unemployment, decent work and deindustrialization were ignored.

Paths not taken
The evolution of the international trading system has been largely forgotten. Recent and current tensions in global trade are largely seen as threatening to the post-Second World War (WW2) international economic order first negotiated in the late 1940s and revised ever since.

But the international order of the post-WW2 period ended in the 1970s, as policymakers in the major developed economies embraced the counter-revolutionary neoliberal reforms of Thatcherism and Reaganism against Keynesian and development economics after Nixon unilaterally destroyed the Bretton Woods monetary arrangements.

Besides international trade liberalization as an end in itself, financial liberalization and globalization were facilitated as financial markets were deregulated, not only within national economies, but also across international borders.

Industrial policy, public enterprise and mixed economies were purged by the new neoliberal fundamentalists as the very idea of public intervention for healthy, equitable and balanced development was discredited by the counter-revolution against economic progress for all.

With multilateralism and the Doha Development Round under assault, retrieving relevant lessons from the Havana Charter after seven decades can be crucial in steering the world between the devil of reactionary nationalist ‘sovereigntism’ and the deep blue sea of neoliberal corporate cosmopolitanism or ‘globalism’.

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Mobile Phones Exposed to Growing Cyber Threatshttp://www.ipsnews.net/2018/11/mobile-phones-exposed-growing-cyber-threats/?utm_source=rss&utm_medium=rss&utm_campaign=mobile-phones-exposed-growing-cyber-threats http://www.ipsnews.net/2018/11/mobile-phones-exposed-growing-cyber-threats/#respond Thu, 29 Nov 2018 12:27:18 +0000 Paul Makin http://www.ipsnews.net/?p=158939 Paul Makin is the head of mobile money at Consult Hyperion

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Credit: Sarah Farhat / World Bank

By Paul Makin
WASHINGTON DC, Nov 29 2018 (IPS)

Mobile phones are helping millions of low-income customers to access financial services for the first time, but they are also exposing them to new cyber threats they could never have imagined.

A few years ago, a friend of mine in Uganda — let’s call him Jonathon — learned this firsthand. The trouble started when Jonathon happened to glance at his mobile phone and noticed the words “NO SERVICE” on the screen.

At first, he wasn’t concerned. His mobile network occasionally went down, and within a few minutes his phone reconnected to the network.

Later that day, however, he tried to use his mobile money account to send his wife some money so that she could take their son to a doctor, but the transfer failed. When he checked his balance, he learned that the entire amount he thought was in his account — more than $100 — was gone.

What happened to Jonathon is becoming more commonplace in countries where mobile money is popular. For instance, the Serianu 2017 Africa Cyber Security Report estimates that cybercrime in mobile-based transactions costs businesses $140 million per year in Africa.

So, what exactly happened to Jonathon? Why is this becoming more common? And what can providers and policy makers do to prevent it?

This part is easy to explain. A criminal got into Jonathon’s account and sent all his money to a group of friends, perhaps as little as $10 each. After receiving the transfer, each friend went independently to an agent and cashed out.

They gave most of the cash to the criminal, keeping some for themselves. This type of low-level money laundering happens regularly in the modern criminal environment.

A more interesting question is how the criminal got access to Jonathon’s account in the first place. To carry out this type of crime, a criminal needs the victim’s account credentials. Specifically, he or she needs two pieces of information: the victim’s mobile money account number (usually a mobile phone number) and PIN.

Getting someone’s mobile phone number is fairly straightforward. Sometimes the victim is a well-known figure or shares his or her contact details on social media. In other cases, the victim is overheard giving his or her number to a friend in a bar.

Criminals have various ways of obtaining their victims’ PINs too. The old-fashioned way is to stand behind customers at an agent’s shop and watch them complete transactions (i.e. shoulder surfing).

Unfortunately, many people are still unguarded when typing their PINs. Some people even write their PIN on the back of their mobile phone, which displays a disappointing lack of awareness of the implications.

However, industrial-grade PIN harvesting is supplanting these slow approaches to obtaining individual PINs. There are many opportunities to acquire DFS account numbers and the associated PINs without ever meeting (or even knowing) the person whose money is being stolen.

USSD is the most common form of access to mobile money services in developing countries, and it does not offer much protection for these sensitive credentials. Credentials can be collected in a number of ways that providers and policy makers should be aware of.

For example:

• Someone using a laptop in a coffee shop can capture all of the USSD sessions (including PINs) for everyone using a nearby cell tower.

• If a criminal wants to target a specific group of people, such as businesspeople attending a conference in a hotel, he or she can set up a fake cell tower with nothing more than a laptop and a mobile phone attached to it, looking as if it is simply being charged. The criminal can then trick everyone’s cell phones into connecting to the fake cell tower, giving him or her access to the group’s transactions.

• Someone with access to the mobile operator’s network – say, a disgruntled staff member – can connect a laptop to the network and quietly log users’ credentials as they enter them over the network.

• If criminals want to target a particular person (e.g., a high-net worth individual), they can do it from a laptop without even being in the same country. Criminals often do this by using USSD to push a message to the victim’s phone that looks like it is from his or her DFS provider, saying that because of a security issue they need to re-enter their PIN. The information they enter is then returned directly to the criminal.

Obtaining Jonathon’s credentials was only the first part of the attack. In this type of crime, the criminal then has to use the stolen credentials to access his money. For example, through a SIM swap.

A SIM swap is the transfer of a mobile phone number from its original SIM to a new SIM. It is an important service that allows customers to keep their number and account after acquiring a new SIM card.

Unfortunately, the service can be misused to transfer a victim’s mobile phone number to a new SIM (resulting in the “NO SERVICE” message on their mobile phone) without their knowledge or permission.

The new SIM is placed in a mobile phone, at which point the criminal uses the captured PIN to access the target’s account and send money to be cashed out and laundered. Afterwards, the SIM swap is reversed, and the victim’s mobile phone comes back to life — but the money is gone.

By the time Jonathon realized something was wrong, his money was long gone. While it might be possible to trace the people who carried out the money laundering, it is virtually impossible to get Jonathon’s money back – and in his country,

Jonathon is liable for the loss, not the DFS provider. It would have been better if the service had been better secured in the first place. As detailed in the slide deck below, there are some simple measures that providers and policy makers can adopt to protect other mobile financial services users from cyberattacks.

This article was originally published by the Washington-based Consultative Group to Assist the Poor (CGAP) which is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people through financial inclusion.

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Excerpt:

Paul Makin is the head of mobile money at Consult Hyperion

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Multilateralism Undermined by Globalization’s Discontentshttp://www.ipsnews.net/2018/11/multilateralism-undermined-globalizations-discontents/?utm_source=rss&utm_medium=rss&utm_campaign=multilateralism-undermined-globalizations-discontents http://www.ipsnews.net/2018/11/multilateralism-undermined-globalizations-discontents/#comments Wed, 28 Nov 2018 06:17:05 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=158915 On 24 October 1945, the world’s most inclusive multilateral institution, the United Nations, was born to “save succeeding generations from the scourge of war, … reaffirm faith in fundamental human rights, … establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and […]

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By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Nov 28 2018 (IPS)

On 24 October 1945, the world’s most inclusive multilateral institution, the United Nations, was born to “save succeeding generations from the scourge of war, … reaffirm faith in fundamental human rights, … establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and to promote social progress and better standards of life in larger freedom” (UN Charter: Preamble).

Thus, one major purpose of the UN is to foster international cooperation to resolve the world’s socio-economic problems and to promote human rights and fundamental freedoms (UN Charter: Article 1.3).

Anis Chowdhury

Hence, all Members are obliged to “refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state” (Article 1.4), and to give the UN “every assistance in any action it takes in accordance with [its] Charter” (Article 1.5).

For many, however, the world today is increasingly at odds with the ideals of the UN Charter. Wars and conflicts are causing unprecedented humanitarian crises, worsened by rising intolerance and xenophobia.

Important international organizations and treaties are being threatened by unilateral withdrawals, non-payment of dues, virtual vetoes and threats of worse. Meanwhile, bilateral and plurilateral trade and other agreements are undermining crucial features of the post-Second World War order.

Little incentive to cooperate
Before the opening of the General Debate of the UN General Assembly, Secretary-General António Guterres warned that “multilateralism is under attack from many different directions precisely when we need it most.”

Pundits have identified many causes such as the proliferation of multilateral institutions, often with overlapping mandates, undermining one another, sometimes inadvertently, but nonetheless effectively. Institutional resistance to reform has also frequently made them unfit for purpose.

While design of the post-war order at Bretton Woods, Yalta and San Francisco envisaged a post-colonial multilateral order, it was not long before new arrangements for hegemony, if not outright dominance prevailed as the old imperial powers reluctantly retreated from their colonies, often with privileges largely intact.

Jomo Kwame Sundaram

Without Roosevelt, the World War Two Allies were soon engaged in a bipolar ‘Cold War’, demanding the loyalty of others. By the 1960s, many ‘emerging countries’ sought national political and policy space through ‘non-alignment’ and the emerging bloc of developing countries called the Group of 77 (G77).

Profitable globalization
By the 1980s, the Thatcher-Reagan-led ‘neoliberal’ counter-revolution against Keynesian and development economics seized upon Soviet economic decline under Brezhnev to strengthen private corporate interests, by extending property rights, privatization, liberalization and globalization.

The new patterns of international economic specialization saw significant industrialization and growth, especially where governments pro-actively made the most of the new opportunities available to them, especially in East and South Asia.

Much of the new prosperity in the North was neither inclusive nor shared, resulting in new economic polarization unseen since the 1920s. Much of this was easily blamed on the ‘other’, with immigrants and cheap foreign imports blamed for stealing good jobs.

Meanwhile, a new generation of social democrats in the West embraced much of the neo-liberal agenda, even rejecting Keynesian counter-cyclical fiscal policies after failing to check the libertarian revolt against progressive taxation.

Successful in achieving their political ambitions, the ‘new social democrats’ offered a culturally alien, new ‘identity politics’ as ideological surrogate. This, in turn, later served to fuel the reactionary ascendance of ‘ethno-populism’ by the ‘new right’.

Thus, neoliberalism’s triumph – with enhanced corporate prerogatives, privatization, economic liberalization and globalization, in the embrace of Western social democratic leaders’ abandonment of their own purported class base – led to corporatist populist reactions, reminiscent of earlier fascist resurgences.

International solidarity undermined
Narrow reactionary ethno-nationalisms are rarely conducive to international cooperation, often depicted as a variant of their ostensible enemy – (neoliberal) globalism! This has not only weakened international solidarity, but also undermined multilateral engagement, let alone cooperation.

Roosevelt’s protracted leadership of the ascendant post-WW2 US and recognition of the urgent need to transcend the limited imperialist multilateralism of the League of Nations were crucial. Thus, despite its limitations, the UN system met the need for an inclusive post-colonial multilateralism after WW2.

Ironically, the ongoing undermining of multilateralism, especially with the rise of US ‘sovereigntism’ after the end of the Cold War, has gained new momentum as backlashes to globalization and its pitfalls have spread from developing countries to transition economies and declining industrial powers.

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