Inter Press ServiceTrade & Investment – Inter Press Service http://www.ipsnews.net News and Views from the Global South Fri, 18 Aug 2017 11:32:17 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.1 When Policies Speak the Same Language, Africa’s Trade and Investment Will Listenhttp://www.ipsnews.net/2017/08/policies-speak-language-africas-trade-investment-will-listen/?utm_source=rss&utm_medium=rss&utm_campaign=policies-speak-language-africas-trade-investment-will-listen http://www.ipsnews.net/2017/08/policies-speak-language-africas-trade-investment-will-listen/#respond Thu, 17 Aug 2017 11:21:24 +0000 Busani Bafana http://www.ipsnews.net/?p=151709 The rising Maputo-Catembe Bridge is a hard-to-miss addition to Mozambique’s shoreline. The 725-million-dollar bridge – billed to be the largest suspension bridge in Africa on its completion in 2018 – represents Mozambique’s new investment portfolio and a show of its policy commitment to boosting international trade. But the country can improve on its trade and […]

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Mozambique is open for business. A new suspension bridge rises on Maputo Bay. Credit: Busani Bafana/IPS

Mozambique is open for business. A new suspension bridge rises on Maputo Bay. Credit: Busani Bafana/IPS

By Busani Bafana
MAPUTO, Aug 17 2017 (IPS)

The rising Maputo-Catembe Bridge is a hard-to-miss addition to Mozambique’s shoreline.

The 725-million-dollar bridge – billed to be the largest suspension bridge in Africa on its completion in 2018 – represents Mozambique’s new investment portfolio and a show of its policy commitment to boosting international trade.“African governments have identified policy incoherence as the elephant in the room." --Wadzanai Katsande of FAO

But the country can improve on its trade and investment if it can effectively align its national trade and agricultural policies to ensure sufficient coordination between trade and agricultural policymakers, experts say.

Initiatives to improve agricultural productivity, value chain development, employment creation, and food security are often constrained by market and trade-related bottlenecks which are a result of the misalignment between agricultural and trade policies.

This was part of findings discussed at a meeting convened by the United Nations’ Food and Agriculture Organisation (FAO) in the Mozambican capital earlier this month. The high-level meeting attracted decision makers from the ministries of agriculture, finance, trade, industry and commerce, private sector representatives and donor groups.

To help address this challenge, FAO, in collaboration with Enhanced Integrated Framework (EIF) at the World Trade Organisation and the European Centre for Development Policy Management (ECDPM), has piloted a regional project to help countries coordinate policy making processing, starting with agriculture and trade.

Mozambique is one of four countries in East and Southern Africa targeted in the pilot project aimed at developing a model for best practices in policy development and harmonization in enhancing economic development.

An assessment of the agriculture and trade policy framework and policymaking processes in Mozambique has been done to understand decision making in setting objectives and priorities for the country’s agriculture and trade sector.

The assessment also sought to contribute to the development of a coherent national policy framework on agricultural trade in Mozambique, said Wadzanai Katsande, Outcome Coordinator for the Food Systems Programme of the FAO.

Though listed as one of the Least Developed Countries (LDC) in the world, Mozambique is rich in natural and mineral resources including gas. The country is a bright investment destination in Africa.

Policy alignment is the key

“On paper, policies sound well and good, but in practice the story is different. There are still coordination and consistency issues in the policy formulation and implementation processes within and between agriculture and trade and these need to be addressed,” says Samuel Zita, an International Trade and Development Consultant, who recently led on an analytical study commissioned by the FAO on “Coordination between agriculture and trade policy making in Mozambique.”

“When agriculture and trade policies speak the same language that creates some predictability to investors, any disconnect between the two can have a negative effect on foreign direct investment,” Zita told IPS.

The study which focused on the country’s Comprehensive Africa Agriculture Development Programme (CAADP) and Enhanced Integrated Framework (EIF) processes also looked at the policy documents from these processes such as the CAADP National Agricultural Investment Plan (PNISA)] and the Diagnostic Trade Integration Strategy (DTIS). It recommended that Mozambique should improve the dissemination of policies, plans and strategies to stakeholders through various media. In addition, there should be an improvement in the description and publication of agricultural production and trade data.

Agriculture – defined by the national constitution as the basis of the country’s economic development – contributes 25 percent to Mozambique’s GDP of nearly 14 billion dollars. Raw aluminium, electricity, prawns, cotton, cashew nuts, sugar, citrus, coconuts and timber are major exports.

Policy cohesion can help facilitate trade development by simplifying the regulatory and policy environment for small businesses, so countries can attract private sector investment at local and international levels, says Jonathan Werner, Country Coordinator, Executive Secretariat of the Enhanced Integrated Framework at the WTO.

“We are facing many challenges for regional trade integration in Africa,” Werner Told IPS. “Our findings have shown that aligned policy processes can help create an enabling environment for trade and development.”

Policy cementing the SDGs

African governments have committed themselves to a multitude of agreements, protocols and declarations meant to promote greater agriculture productivity and trade which are major drivers of economic growth, but something is still missing in getting it all together: effective policies both at national and regional levels. Until the well-meaning policies trade and agriculture are aligned, Africa will continue to miss out on attracting the level of investment it should.

Mozambique has taken the first steps towards aligning its national agriculture and trade sector policies to boost economic development.

“African governments have identified policy incoherence as the elephant in the room and getting the policies in trade and agriculture to speak to each other is key to turning policies into action,” Katsande said noting that agriculture and trade development form the basis of key initiatives such as the Comprehensive Africa Agriculture Development Programme (CAADP), the Malabo Declaration and African Union’s Agenda 2063.

A boost for Inter-Africa trade

Africa has no less than 14 regional trading blocs but inter-Africa trade is low at 12 percent of the continent’s trade, according to statistics from the Common Market for Eastern and Southern Africa (COMESA). However, Africa’s trade with Europe and Asia is at nearly 60 percent. Some of the bottlenecks to Africa trading with Africa include trade policy harmonization, reducing export/import duties low production capacity, differing production quality standards and poor infrastructure.

The United Nations Conference on Trade and Development (UNCTAD) estimates that the Continental Free Trade Area (CFTA) set to be signed into operation by December 2017 will help double inter African trade. In 2012 African head of state endorsed the establishment of the free trade area by 2017. Trade is one of the pathways to unlocking economic growth in Africa to boost employment and foster innovation in a continent replete with opportunities.

Gerhard Erasmus, an associate at the Trade Law Centre, a trade law capacity building institution based in Cape Town, South Africa, said low inter-Africa trade was a real issue which has been blamed by some economists on the fact that African nations often produce the same goods (mostly agriculture and basic commodities) for which the intra-African export opportunities are limited.

“Unless we move up the ladder of value addition, industrialization and services we will remain stuck,” Erasmus said. “Thus domestic development plans need adjustment and targeted investments are necessary. There are many trade facilitation challenges, from long queues at border posts, corruption, uncoordinated technical standards and requirements, to red tape and inadequate infrastructure.”

Eramus said regional economic communities and even the African Union had policies and plans to address the many trade challenges, but implementation often encountered problems at national levels regarding political buy-in, lack of resources, technical capacity problems, and plain bad governance.

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Leadership Failure Perpetuates Stagnationhttp://www.ipsnews.net/2017/08/leadership-failure-perpetuates-stagnation/?utm_source=rss&utm_medium=rss&utm_campaign=leadership-failure-perpetuates-stagnation http://www.ipsnews.net/2017/08/leadership-failure-perpetuates-stagnation/#respond Wed, 09 Aug 2017 16:33:34 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151629 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Growing income inequality in most countries before the Great Recession has only made things worse, by reducing consumer demand and household savings, and increasing credit for consumption and asset purchases. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR , Aug 9 2017 (IPS)

What kind of leadership does the world need now? US President Franklin Delano Roosevelt’s leadership was undoubtedly extraordinary. His New Deal flew in the face of the contemporary economic orthodoxy, begun even before Keynes’ General Theory was published in 1936.

Roosevelt’s legacy also includes creating the United Nations in 1945, after acknowledging the failure of the League of Nations to prevent the Second World War. He also insisted on ‘inclusive multilateralism’ – which Churchill opposed, preferring a bilateral US-UK deal instead – by convening the 1944 United Nations Conference on Monetary and Financial Affairs at Bretton Woods with many developing countries and the Soviet Union.

The international financial institutions created at Bretton Woods were set up to ensure, not only international monetary and financial stability, but also the conditions for sustained growth, employment generation, post-war reconstruction and post-colonial development.

Debt bogey
In resisting painfully obvious measures, the current favourite bogey is public debt. Debt has been the pretext for the ongoing fiscal austerity in Europe, which effectively reversed earlier recovery efforts in 2009. With private sector demand weak, budgetary austerity is slowing, not accelerating recovery.

Much has been made of sovereign debt on both sides of the north Atlantic and in Japan. In fact, US debt interest payments come to only 1.4 percent of annual output, while Japan’s very high debt-GDP ratio is not considered a serious problem as its debt is largely domestically held. And, as is now well known, the major problems of European debt are due to the specific problems of different national economies integrated sub-optimally into the Eurozone.

The international community has, so far, failed to develop effective and equitable debt workout, including restructuring arrangements, despite the clearly dysfunctional and problematic international consequences of past sovereign debt crises. The failure to agree to sovereign debt workout arrangements will continue to prevent timely debt workouts when needed, thus effectively impeding recovery as well.

Meanwhile, earlier international, including US tolerance of the Argentine debt workout of a decade and a half ago had given hope of making progress on this front. However, this has now been undermined by the Macri government’s recent concession, on worse terms and conditions than previously negotiated, to ‘vulture capitalists’.

Golden cages of the mind
Most major deficits now are due to the collapse of tax revenues following the growth downturn and costly financial bailouts. Slower growth means less revenue, and a faster downward spiral. While insisting on fiscal deficit reduction, financial markets also recognize the adverse growth implications of such ‘fiscal consolidation’.

Many policymakers are now insisting on immediate actions to rectify various imbalances, pointing not only to fiscal deficits, but also to trade and bank imbalances. While these undoubtedly need to be addressed in the longer term, prioritizing them now effectively blocks stronger, sustained recovery efforts.

Recent recessionary financial crises have been caused by bursting credit and asset bubbles. Recessions have also been deliberately induced by public policy, such as the US Fed raising real interest rates from 1980. Internationally, this contributed not only to sovereign debt and fiscal crises, but also to protracted stagnation outside East Asia, including Latin America’s ‘lost decade’ and Africa’s ‘quarter century retreat’.

Yet another distraction is exaggerating the threat of inflation. Much recent inflation in many countries has been due to higher international commodity, especially fuel and food prices. Domestic deflationary policies in response only slowed growth while failing to stem imported inflation. In any case, the collapse of most commodity prices since 2014 has rendered this bogey irrelevant.

Market vs recovery
Strident recent calls for structural reforms mainly target labour markets, rather than product markets. Labour market liberalization in such circumstances not only undermines worker protections, but is also likely to diminish real incomes, aggregate demand and, hence, recovery prospects. Nevertheless, these have become today’s priorities, detracting from the urgent need to coordinate and implement strong and sustained efforts to raise and sustain growth and job creation.

Meanwhile, cuts in social and welfare spending are only making things worse – as employment and consumer demand fall further. In recent decades, profits and rents have risen at the expense of wages, but also with much more accruing to finance, insurance and real estate (FIRE) compared to other sectors.

The outrageous increases in financial executive remuneration in recent years, which cannot be attributed to increased productivity by any stretch of the imagination, have exacerbated problems of financial sector short-termism. Regulations are urgently needed to limit short-termism, including the ability of corporations to reap greater profits in the short-term while worsening risk exposure in the longer term, thus exacerbating systemic macro-financial vulnerability.

Growing income inequality in most countries before the Great Recession has only made things worse, by reducing consumer demand and household savings, and increasing credit for consumption and asset purchases – instead of augmenting investments in new economic capacities and capabilities.

Reform bias
Current policy is justified in terms of ‘pro-market’ – effectively pro-cyclical – choices when counter-cyclical efforts, institutions and instruments are sorely needed instead. Unfortunately, global leadership today seems held to ransom by financial interests, and associated media, ideology and ‘oligarchs’ whose political influence enables them to secure more rents and pay less taxes in what must truly be the most vicious of circles.

John Hobson – the English liberal economist in the tradition of John Stuart Mill – noted that ‘economic imperialism’ emerged from the inherent tendency for economic power to concentrate and the related influence of oligopolistic rentiers on public policy. Selective state interventions to bail out and protect such interests nationally and internationally, while not subjecting them to regulation in the national interest, must surely remind us of the dangers of powerful, but unaccountable oligarchies in a systemically unstable market economy and politically volatile societies.

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UN Analytical Leadership in Addressing Global Economic Challengeshttp://www.ipsnews.net/2017/08/un-analytical-leadership-addressing-global-economic-challenges/?utm_source=rss&utm_medium=rss&utm_campaign=un-analytical-leadership-addressing-global-economic-challenges http://www.ipsnews.net/2017/08/un-analytical-leadership-addressing-global-economic-challenges/#respond Thu, 03 Aug 2017 07:42:45 +0000 Jose Antonio Ocampo and Jomo Kwame Sundaram http://www.ipsnews.net/?p=151552 José Antonio Ocampo was Executive Secretary of the UN-ECLAC from 1998 to 2003 and UN Under-Secretary-General for Economic and Social Affairs from 2003 to 2007. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development from 2005 to 2015.

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International solidarity is necessary for reinvigorating and rebuilding the global economy as well as inclusive and equitable development. Credit: Jenny Lopez-Zapata/IPS

By José Antonio Ocampo and Jomo Kwame Sundaram
KUALA LUMPUR, Aug 3 2017 (IPS)

The United Nations recently released the 70th anniversary issue of its flagship publication, the World Economic and Social Survey (WESS). First published in January 1948 as the World Economic Report, it is the oldest continuous publication analyzing international economic and social challenges. The 2017 issue reviews 70 years of WESS policy recommendations, many of which remain relevant today to address global challenges and to achieve the 2030 Agenda or Sustainable Development Goals.

Created in 1945 to ensure world peace, the United Nations charter recognized that economic and social progress for all is fundamental for ensuring sustainable peace. The UN has thus been monitoring socio-economic developments globally since the 1940s. Its analyses have long highlighted the interdependence of the global economy, and advocated international policy coherence and coordination for sustainable, inclusive and balanced socio-economic progress.

The picture which emerges is that the UN has been ahead of the curve on many issues, especially on closing gaps in human well-being between and within countries. From early on, it has urged developed countries to support socio-economic progress in developing countries, not only in their own interest as trading partners, but also to maintain conditions for greater economic stability and more equitable global development. It has also long called for predictable transfers of finance and technology to developing countries, and for opening up developed country markets to developing countries’ exports.

The UN has also pioneered innovative multilateral institution building to fill lacunae. In the 1960s, WESS provided the analytical rationale for establishing the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Industrial Development Organization (UNIDO) to support developing countries seeking to equitably benefit from international trade and investment, and to industrialize.

The 2017 review of issues WESS has underscored the importance of its analyses. The 1951-52 issue identified three major challenges: “maintenance of economic stability, those concerned with persistent disequilibrium in international payments, and those arising from the relatively slow advance of the under-developed countries”. Needless to say, these challenges remain relevant today.

The 1956 issue warned against monetarism and monetary policy solutions, arguing that “a single economic policy seems no more likely to overcome all sources of imbalance … than is a single medicine likely to cure all diseases”. Along these lines, the 1959 issue acknowledged the “evils of large-scale inflation”, but argued that “economic stagnation or large-scale unemployment is not an acceptable cost to pay for price stability or equilibrium in the balance of payments”.

The 1965 issue warned that tying aid would reduce aid effectiveness, external debt burdens were rising rapidly, and capital would flow from developing to developed countries.

The 1971 issue warned of the “unsettling effects of massive movements of short-term capital” and argued for an “international code of conduct and mechanism for surveillance” to curb their disruptive effects. It also warned that IMF governance arrangements dangerously limited developing country voice, and called for Special Drawing Rights to be used to provide development finance.

In the 1970s and 1980s, WESS repeatedly warned that putting the burden of adjustment on deficit countries alone would not only stifle their growth, but also exert deflationary pressure on the world economy. The UN urged provision of additional finance by surplus countries and international financial institutions on less stringent terms and conditions to support robust recoveries and prevent widespread welfare losses.

The 1982 issue warned against the reluctance to undertake expansionary policies at a time of a global crisis for fear of undermining investor confidence: “without more vigorous expansionary policies, recovery will lack strength, levels of demand will not be sufficient to bring present productive capacity into full use, and the incentive to undertake new investment will remain weak”.

WESS’s rich legacy reminds us of the continuing relevance of multilateral institutions, especially in facing major challenges. The global economy needs strong institutions and coordinated international actions, with adequate voice and participation by developing countries. This is particularly true for ensuring international monetary stability and trade dynamism, which remain crucial for global development.

It also underscores that international solidarity is necessary for reinvigorating and rebuilding the global economy as well as inclusive and equitable development. Sustainable development is necessarily multidimensional and often context-specific; requiring strengthened state capacities and capabilities, strategic development planning and appropriate adaptation to local conditions.

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“The Time is Now” to Invest in Youth, Girlshttp://www.ipsnews.net/2017/07/time-now-invest-youth-girls/?utm_source=rss&utm_medium=rss&utm_campaign=time-now-invest-youth-girls http://www.ipsnews.net/2017/07/time-now-invest-youth-girls/#respond Fri, 28 Jul 2017 05:52:39 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=151466 The demographic dividend: though not a new concept, it is one of the major buzzwords at the UN this year. But what does it really mean? There are 1.8 billion young people between the ages of 10 and 24 around the world, the most in the history of humankind. In Africa alone, approximately 60 percent […]

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The demographic dividend - “The Time is Now” to Invest in Youth, Girls

Natalia Kanem, Acting Executive Director the United Nations Population Fund (UNFPA). Credit: UN Photo/Mark Garten

By Tharanga Yakupitiyage
UNITED NATIONS, Jul 28 2017 (IPS)

The demographic dividend: though not a new concept, it is one of the major buzzwords at the UN this year. But what does it really mean?

There are 1.8 billion young people between the ages of 10 and 24 around the world, the most in the history of humankind.

In Africa alone, approximately 60 percent of its population is currently under 25 years old and this figure is only expected to rise.

With this change in demographics comes more working-age individuals and thus the potential to advance economic growth and sustainable development, known as the demographic dividend.

However, this will not happen on its own.

Investments are required in areas such as education and sexual and reproductive healthcare in order to provide youth with opportunities to prosper, major components of the globally adopted 2030 Agenda for Sustainable Development.

The UN Population Fund’s (UNFPA) new acting executive director Natalia Kanem, who assumed her new role after the unexpected death of former executive director Babatunde Osotimehin, sat down with IPS to discuss the issues, challenges, and goals towards achieving the demographic dividend and the Sustainable Development Goals (SDGs).

Q: What is the demographic dividend and why is it so important?

A: The demographic dividend is the economic boost that happens in a country when you have more people in productive working ages employed and contributing to the economy compared to the categories of young people or elderly who are dependents in economic terms.

For many of the countries which dwell in poverty today, we are seeing this transition that was predicted to happen.

Through the success in healthcare and sanitation, society has been able to increase life expectancy—people are getting older so we are getting lower death rates.

At the same time, we are getting lower birth rates, which are happening in some of these countries, and that means the working-age population is going to have fewer mouths to feed, fewer shoes to put on the school-aged child’s feet.

Many things have to also happen at the same time—it’s not just simply lowering the birth rate.

You have to equip people to be able to be productive members of a society, and this means education is very important. Adolescent girls in particular should be equipped to reach their potential by providing education of certain types of skills or training.

All of this is going to add up to much more societal progress, potential of young people fulfilled, and human rights being enjoyed.

Q: Where does this fit in and how does it inform UNFPA’s work under your leadership? Does it signal a paradigm shift?

A: We do feel that it is a paradigm shift, and what we are doing at UNFPA is making it accessible so that governments understand its relevance.

The mandate of UNFPA is to promote universal access to sexual and reproductive health and reproductive rights, and we feel that a woman’s choice is at the center of all of this.

Right now, as girls get married young and are having coerced sexual activity young, they are really not able to decide for themselves about how many children they want, when they want to have them, and how they would like to space them.

By giving women the choice to exercise their reproductive wishes and educating them—all of these things are going to ignite the potential of young people.

These people have potential, they want to work, they want to be educated, they want to contribute—so let’s make it easier for them, let’s not hide sexual and reproductive health information.

Not every method is going to work for every person, so we really look at human rights across the spectrum of choice.

We also have a lot of experts who have been very strategic in thinking through what really makes a difference, and we can say emphatically that investment in sexual and reproductive health way outweighs the costs—you at least double your money, and if you do the whole package, you can actually get 122 times the investment.

There is nothing on the planet that gives you that kind of payback.

Q: Why isn’t it enough to just equip youth with skills and jobs?

A: The young person exists in a societal environment like we all do, and girls tend to get left out of that picture.

In the past, when we were thinking of farmers, we didn’t realize that more than half of the farmers were women. So we were giving all of the agricultural resources to the wrong people.

And here we are saying the adolescent girl is half of the world and she also needs to be deliberately included.

The cards will be stacked against her if we don’t protect her so she doesn’t fall into the trap of sexual and reproductive dis-ease—so she’s pregnant before she wants to be, she is having her kids too close together, she is physically exhausted, and if she doesn’t finish her education, all of these things work together.

So that’s why we keep harping on this balance of all of these different elements.

The Republic of Korea is the classic example of how its gross domestic product (GDP) grew over 2,000 percent in the 50 odd years when they were investing in voluntary family planning coupled with educating the population and preparing them for the types of jobs that were going to be available.

South Korea’s population pyramid went from looking like a triangle, where there wasn’t enough working age people to take care of those at the bottom, to where there were fewer children per family and greater ability to invest more into nutrition and education and all of the things families want for their children.

And it’s not just fewer families alone, because if you have fewer families but she doesn’t have an education, then it won’t work. You need the packaged deal.

We are ultimately talking about a social revolution which sees young people as an asset to their family, community, and country.

Q: How accepted is the correlation between growth and issues that may not be so obvious such as sexual and reproductive health or child marriage? Has there been pushback on that?

A: First of all, there was lack of recognition. It seems like the dots are very far apart until you paint the picture, but we have been explaining that better.

The regional report card atlas which we just launched earlier this month for the African Union Summit is very telling. We looked at those same parameters for every single African country, one of which was early marriage, and it varies so much.

In some countries, it can be up to 70 percent of girls getting married before the age of 17. In Rwanda it’s under 10 percent, and they have very good family planning which they’ve been working on for a while.

Uganda is a very good example of how pushback was transformed.

President Museveni came in as a strong proponent of big families and said that they need a big population in order to have more workers. But after a lot of discussion, he saw that Uganda already has a big population but it wasn’t enough.

So later, the President started advocating strongly for voluntary family planning services and services like midwives because again, the woman has to be sure that when she does get pregnant she and her baby are going to survive.

Uganda has now transformed its economy and is starting to see that demographic dividend boost.

Q: Where do the resources come from for countries to invest in youth?

A: Many countries are looking to invest their own resources in this proposition because the return on investment argument is highly persuasive.

We have also garnered the interest of development banks. The World Bank is working very closely with UNFPA on the Sahelian Women’s Economic Development and Demographic Dividend (SWEDD) program. It’s only been active for a little while now but it is wildly successful because it looks at rural women in countries of the Sahel.

There is also a huge role for the private sector.

Government is very important because of policies and setting the tone and norms and laying down the expectations.

But the reality is that the private sector employs 90 percent of people in the developing world.

This coupling of the public government side and the private investment side is very crucial to ensure rights, freedoms, services, and accurate information—all of that together is needed for development and for this bonus that we call the demographic dividend.

Q: How are the recent funding cuts by the United States affecting UNFPA’s work? Is it hindering progress on the demographic dividend and/or the sustainable development goals?

A: First of all, I would like to say that UNFPA is moving forward.

We are steadfastly committed to our three goals: Zero preventable maternal deaths, zero unmet need for family planning, and the elimination of harmful practices including violence that affect women and girls.

We are very focused on these three goals in our work with governments, civil society, private sector, and other actors in over 150 countries to honor the legacy of our late boss as well as those who preceded him.

There are still 214 million women who want family planning and don’t have modern contraception.

We have a funding gap that stands at about 700 million dollars from now to 2020, and we have been looking for additional funding because we need to reach more and more women and girls without cutting the programs we already have.

The United States’ defunding was such a disappointment in terms of our good standing in the world and our regret that the decision was based on an erroneous claim.

Ultimately, I think our regret on the decision is certainly monetary because we were using that money very effectively in humanitarian core operations.

But we also regret it because of the stature of the U.S. in the fight to make sure that there is gender equality as well as reproductive health and rights.

We are really looking forward to continuing a dialogue and hopefully keeping an open door because the U.S. and U.S. Agency for International Development (USAID) have been very good partners with UNFPA.

The time is now for young women to be protected from it being their fault that they got raped, for them feeling shame when they have been assaulted.

Let’s turn that around so that men and boys, women and girls live peacefully with the resources they want and need to survive and thrive.

No one of us can do it alone and I think that UNFPA is a good partner, and that we deserve to be supported.

*Interview edited for length and clarity.

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Migrant Contributions to Development: Creating a “New Positive Narrative”http://www.ipsnews.net/2017/07/migrant-contributions-development-creating-new-positive-narrative/?utm_source=rss&utm_medium=rss&utm_campaign=migrant-contributions-development-creating-new-positive-narrative http://www.ipsnews.net/2017/07/migrant-contributions-development-creating-new-positive-narrative/#respond Wed, 26 Jul 2017 14:42:44 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=151437 Despite the “undeniable” benefits of migration, barriers including public misconceptions continue to hinder positive development outcomes, participants said during a series of thematic consultations here on safe, orderly, and regular migration. At a time where divisive rhetoric on migration can be seen around the world, member State representatives, UN agencies, and civil society gathered at […]

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Though the benefits of migration outweigh the costs, public perception is often the opposite and negatively impacts migration policy.

Pakistani migrant workers build a skyscraper in Dubai. Credit: S. Irfan Ahmed/IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Jul 26 2017 (IPS)

Despite the “undeniable” benefits of migration, barriers including public misconceptions continue to hinder positive development outcomes, participants said during a series of thematic consultations here on safe, orderly, and regular migration.

At a time where divisive rhetoric on migration can be seen around the world, member State representatives, UN agencies, and civil society gathered at the UN for a two-day meeting to discuss migrants’ contributions to sustainable development as well as the challenges in harnessing such contributions.

In her opening remarks, Special Representative for International Migration Louise Arbour noted that though the benefits of migration outweigh the costs, public perception is often the opposite and negatively impacts migration policy.

“This must be reversed so that policy is evidence-based and not perception-driven. Policies responding to false perceptions reinforce the apparent validity of these erroneous stereotypes and make recourse to proper policies that much harder,” she added.

Among such evidence is the 575 billion dollars in global remittances transferred by international migrants to their families, almost 430 billion of which went to developing countries.

These essential lifelines, which are are three times larger than official development assistance (ODA) and more stable than other forms of private capital flows, have contributed to progress on key aspects of the 2030 Agenda for Sustainable Development in migrants’ countries of origin, including poverty reduction, food security, and healthy families.

Benefits can also be seen in the countries where migrants reside as 85 percent of migrant workers’ earnings remain in the countries of destination.

Migrants also tend to fill labour market gaps at all skill levels in countries of destination, advancing economic growth, job creation, and service delivery.

Participants noted that this contributes to a “triple win” scenario for the country of origin, country of destination, and the migrants themselves.

“When migrants succeed, societies do too,” said Assistant Foreign Minister for Multilateral Affairs and International Security of Egypt and one of the sessions’ moderators, Hisham Badr.

Contributions of migrants to development in origin and destination countries go beyond financial remittances and include transfers of skills and knowledge and entrepreneurship.

Despite representing 13 percent of the overall population in the United States, immigrants made up over 20 percent of entrepreneurs, building businesses from popular search engines to environmentally-friendly cars.

In fact, 40 percent of Fortune 500 companies in 2016 had at least one founder who immigrated to the U.S. or was the child of immigrants. According to the New American Economy, those firms alone employed almost 20 million globally and generated more than 5 trillion dollars in revenue.

This diaspora is also often “bridge-builders,” maintaining strong links to their countries of origin.

However, participants noted that inadequate policies stand in the way of positive development outcomes.

“The crucial issue is not that migration and development are linked, but how they can be leveraged to create positive development outcomes,” Badr told delegates.

Arbour noted that that cost of sending and receiving remittances remains excessively high. Currently, the global average cost of transactions is over 7 percent, significantly greater than the Sustainable Development Goals (SDG) target of 3 percent.

The lack of access to financial services also poses a major obstacle as it prevents the investment of remittances into productive activities and sustainable development in remittance recipients’ communities.

Arbour stressed the need to boost financial inclusion, calling it “low hanging fruit.”

Participants particularly highlighted the importance of integrating migration into development planning, including the need to engage with the diaspora to create more effective migration and development policies.

Numerous UN member States have already launched initiatives to include the diaspora, including Jamaica, which hosts a biennial conference to motivate greater involvement in the country’s socio-economic development.

During the consultations, the International Organisation for Migration (IOM) launched a similar platform for diaspora communities to contribute to the Global Compact for Safe, Orderly, and Regular Migration (GCM), the UN’s first intergovernmentally negotiated and comprehensive agreement on international migration, which is expected to be adopted in 2018.

“Diaspora communities have emerged as key influencers in global development practices,” said iDiaspora Forum moderator Martin Russell.

“The iDiaspora Forum is a platform designed to initiate ideas, learn lessons, and share best practices. Diaspora engagement is a booming industry,” he added.

In the final panel of the meeting, which aims to gather input and recommendations to feed into the GCM, Overseas Development Institute’s (ODI) Managing Director Marta Foresti pointed to the compact as a unique opportunity that the international community cannot afford to miss.

“With the global compact, we can create a new positive narrative,” she concluded.

Organized by the president of the General Assembly and co-facilitators including the Permanent Missions of Mexico and Switzerland, the informal session is the fourth in a series of six to take place this year.

The last two consultations will take place in Vienna from 4-5 September and Geneva from 12-13 October on the issues of smuggling of migrants and irregular migrants, respectively.

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Alcoholism Cannot Explain Russian Mortality Spikehttp://www.ipsnews.net/2017/07/alcoholism-cannot-explain-russian-mortality-spike/?utm_source=rss&utm_medium=rss&utm_campaign=alcoholism-cannot-explain-russian-mortality-spike http://www.ipsnews.net/2017/07/alcoholism-cannot-explain-russian-mortality-spike/#respond Tue, 25 Jul 2017 14:42:49 +0000 Vladimir Popov and Jomo Kwame Sundaram http://www.ipsnews.net/?p=151424 Vladimir Popov was a Senior Economics Officer in the United Nations Secretariat. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development.

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In Russia, the simultaneous increase in the total death rate, deaths due to external causes, and alcohol consumption were all driven by stress. Credit: Pavol Stracansky/IPS

By Vladimir Popov and Jomo Kwame Sundaram
MOSCOW and KUALA LUMPUR, Jul 25 2017 (IPS)

The steep upsurge in mortality and sudden fall in life expectancy in Russia in the early 1990s were the highest ever registered anywhere in recorded human history in the absence of catastrophes, such as wars, plague or famine. The shock economic reforms in the former Soviet economies after 1991 precipitated this unprecedented increase in mortality, shortening life expectancy, especially among middle-aged males.

Shock therapy
During 1987-1994, the Russian mortality rate increased by more than half, from 1.0% to 1.6%, as life expectancy fell from 70 to 64 years! Economic output fell by almost half during 1989-1998 as wealth and income inequalities as well as crime, murder and suicide rates soared.

The dramatic increase in mortality – most pronounced for middle-aged men, mostly due to cardiovascular diseases – has been explained in terms of various factors like falling real incomes, poorer nutrition, environmental degradation, the collapse of Soviet health care, and surges in alcoholism and smoking.

However, dietary changes – less meat and dairy products, yet more bread and potatoes – could not have quickly increased cardiovascular diseases.

Deterioration of health care, smoking and changes in diet would require much more time to increase mortality by so much, while increased pollution is not an acceptable explanation due to the collapse of industrial output.

While deterioration of the Russian diet, the collapse of its health care system as well as increased deaths due to accidents, murders and suicides undoubtedly contributed to increased mortality in Russia, they cannot explain the sudden magnitude of the increase. This leaves two major competing explanations for the mortality crisis – either increased alcohol consumption or heightened stress factors.

Alcoholism

The major explanation popular in the West, as it absolves the West of responsibility, attributes the mortality spike to increased alcohol consumption in the late 1980s and early 1990s after Gorbachev’s anti-alcoholism campaign.

Deaths due to alcohol poisoning are generally considered a better indicator of actual alcohol consumption as some alcohol consumed is produced illegally or smuggled into the country. Such deaths per 100,000 inhabitants increased from 10 in 1990-1991 to nearly 40 in 1994, exceeding the number of deaths due to suicide and murders.

The increased intake of alcohol can, in turn, be attributed to the lower prices of spirits in the early 1990s. But this alcohol explanation does not stand up to critical scrutiny. After all, as with most other goods, demand for alcohol is inversely related to price and positively to personal income and spending capacity.

First, during some periods, per capita alcohol consumption and death rates moved in opposite directions, e.g., alcohol consumption rose or remained stable during 2002-2009, while death rates – also due to external causes, accidents, murders, suicides and poisoning – fell.

Second, per capita alcohol consumption levels in the 1990s were equal to or lower than in the early 1980s, whereas the total death rate increased by over half and deaths due to external causes doubled!

Although strongly correlated with the mortality rate, higher alcohol consumption was not an important independent cause, but also exacerbated by the same stress factors as the mortality rate itself.

The simultaneous increase in the total death rate, deaths due to external causes, and alcohol consumption were thus all driven by another factor, namely stress.

Stress
What were these sources of increased stress and why did they increase premature deaths? Stress factors due to the economic ‘shock therapy’ following the demise of the Soviet Union are associated with the rise in unemployment, labour mobility, migration, divorce, wealth, and income inequalities.

A stress index incorporating these variables turns out to be a surprisingly good predictor of changes in life expectancy in post-communist economies, especially in the Russian Federation.

The evidence shows that many men in their 40s and 50s – who had lost their jobs or had to move to another job and/or another region, or experienced increases in inequalities in their country/region, or had divorced their wives – were more likely to die prematurely in the 1990s.

To reiterate, the Russian mortality crisis of the 1990s was mainly due to the shock economic reforms that led to mass, especially labour dislocations, much greater personal and family economic insecurity and sharp increases in inequalities. The resulting dramatic rise in stress factors was therefore mostly responsible for the sharp rise in mortality.

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Kenya and Ethiopia Join Forces to Advance Peace, Security, Development and Hopehttp://www.ipsnews.net/2017/07/kenya-ethiopia-join-forces-advance-peace-security-development-hope/?utm_source=rss&utm_medium=rss&utm_campaign=kenya-ethiopia-join-forces-advance-peace-security-development-hope http://www.ipsnews.net/2017/07/kenya-ethiopia-join-forces-advance-peace-security-development-hope/#respond Mon, 24 Jul 2017 06:59:56 +0000 Siddharth Chatterjee http://www.ipsnews.net/?p=151414 Siddharth Chatterjee is the United Nations Resident Coordinator to Kenya.

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President Uhuru Kenyatta of Kenya and Prime Minister Hailemariam Desalegn of Ethiopia have a shared vision of turning this once violent and fragile region into a prosperous & peaceful area. Moyale-07 Dec 2015. Credit: UNDP Kenya

By Siddharth Chatterjee
NAIROBI, Kenya, Jul 24 2017 (IPS)

The Horn of Africa is often synonymous with extreme poverty, conflict, demographic pressure, environmental stress, and under-investment in basic social services such as health, education, access to clean water and infrastructure.

In Kenya’s Turkana, Marsabit, Wajir and Mandera counties, for instance, between 74% and 97% of the people live below the absolute poverty line and literacy rates and school enrollment rates are well below the national average. Conditions here are rife with flashpoints for potential conflict over natural resources and access to limited government services, and all too fertile for discontent, radicalization, violent extremism and recruitment of adolescents and youth into armed groups as an economic survival mechanism.

Confronting the challenges of radicalization and terrorist threats in the region calls for a focused strategy on a compendium of socio-cultural, economic, political and psychological factors. While extremism and related violence have traditionally been driven by exclusion and poverty, this paradigm is no longer adequate. As shown during the attack at Kenya’s Garissa University, not all extremists are uneducated or from poor families.

Complex, interlinked and rapidly evolving circumstances have brought about the need for a raft of interventions geared towards fostering sustainable peace in the border areas. One of the most promising initiatives to-date involves establishing social and economic interdependence across border communities.

This is the powerful rationale behind the pact between the Governments of Ethiopia and Kenya, who established a cross-border programme which straddles Marsabit County, Kenya and the Borana/Dawa Zones of Ethiopia known as the “Integrated Programme for Sustainable Peace and Socio-economic Transformation.”

This initiative was launched in December 2015 by President Uhuru Kenyatta of Kenya, and Prime Minister Hailemariam Desalegn of Ethiopia and the Inter-Governmental Authority on Development (IGAD) Executive Secretary, Ambassador Mahboub Maalim. A short video.

The programme, which is implemented in partnership with IGAD and the UN Country Teams of Ethiopia and Kenya, aims at preventing and mitigating potential violent conflicts and extremism in the borderland areas through conflict prevention mechanisms, addressing the root causes of violent extremism and focusing on the humanitarian, security and development nexus.

To take this programme another step forward, the Kenyan and Ethiopian Governments signed the programme document on 22 June 2017.

Kenya’s Minister Henry Rotich and Ethiopia’s Minister Kassa Tekleberhan exchange the joint agreement. Kenya’s Foreign Minster Amina Mohamed and EU Ambassador to Kenya, Stefano Dejak look on. Credit: UNDP Kenya


To galvanize support for the programme, an event titled “From Barriers to Bridges: The Ethiopia-Kenya Cross-Border Programme” was organized on 10 July 2017 at UNDP New York. It was co-chaired by the Permanent Representatives of Kenya and Ethiopia to the United Nations.

Taking stock of the programme to-date, one cannot help but marvel at how far the two countries have come and what can still be achieved. As confirmed by local community elders, local conflicts have diminished and the programme has achieved impressive results in reducing the allure of extremist groups such as Al-Shabaab among local youth, ever since joint interventions by the Government of Kenya, the UN and civil society partners started in 2015.

There have been significant socio-economic gains as well. The Isiolo-Merille-Marsabit-Moyale road, which is partially financed by the European Union (EU), is now complete and is expected to be a game-changer in enhancing integration, connectivity and promoting trade between Ethiopia and Kenya.

The World Bank has also embarked on a huge infrastructure development programme to link Isiolo with Mandera. The EU is already proposing that the Ethiopia-Kenya cross-border programme be scaled up to include the Mandera Triangle, the Omo and Karamoja clusters.

These are all welcome developments for a region with substantial development needs and considerable potential. The areas involved are home to more than half of Kenya’s livestock, which can be harnessed to create bigger and better agro-business industries.

The region’s diverse and rich culture and heritage, evidenced by local historical and geographical sites, can be an asset in developing eco-tourism. There is also a latent resource for clean and renewable energy exploitation, as proven by the recent launch of the Lake Turkana Wind Power Project, which is expected to generate 310MW.

Once operational, the wind farm will provide 310MW of reliable, low cost energy to Kenya’s national grid (i.e. approx. 15% of the country’s installed capacity). Credit: Lake Turkana Wind Power Project


The recent discovery of major groundwater aquifers and massive oil deposits in Turkana provides further reason for optimism.

Cross-border trade could have a positive ripple effect. It is poised to generate tremendous revenue for both countries, reduce risks of conflict, facilitate prevention of violent extremism efforts (particularly if tied to approaches that aim to strengthen social cohesion and societal resilience as well as paying attention to the social/cultural/political dimensions that drive radicalization and extremism), and improve livelihoods, especially among the marginalized and poor communities to expedite the achievement of a core goal of the SDGs – ending poverty by 2030.

The UN Assistant Secretary General and UNDP Regional Director for Africa Mr. Abdoulaye Mar Dieye has said, “The Ethiopia Kenya Cross Border Programme has a high peace and development return. If we invest in the region we can boost development and reduce insecurity. This Cross Border Programme is a regional public good. It resonates far beyond Kenya and Ethiopia and can serve the entire continent”.

Mr Abdoulaye Mar Dieye flanked by the Permanent Representative of Kenya Ambassador Macharia Kamau and the Permanent Representative of Ethiopia, Ambassador Tekeda Alemu said, “The Ethiopia Kenya Cross Border Programme has a high peace and development return”. Credit: UNDP Africa


The Kenya Ethiopia cross-border programme may well hold the key to an innovative approach to operationalizing Mr António Guterres, the UN Secretary General’s prevention agenda by addressing marginalization, radicalization and prevent violent extremism using human development and economic growth to spur peace.

Norway’s Ambassador to Kenya, Victor Ronneberg says. “this programme is a testimony of the UN’s convening role, to spur dialogue & engagement & reiterates the primacy of multilateralism even more in this day and age.”

The momentum has to be maintained and should not falter due to absence of resources. It is therefore critical for the international community to strongly support this initiative.

Siddharth Chatterjee is the United Nations Resident Coordinator to Kenya. Follow him on twitter.

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Early Death in Russiahttp://www.ipsnews.net/2017/07/early-death-russia/?utm_source=rss&utm_medium=rss&utm_campaign=early-death-russia http://www.ipsnews.net/2017/07/early-death-russia/#respond Thu, 20 Jul 2017 16:09:37 +0000 Vladimir Popov and Jomo Kwame Sundaram http://www.ipsnews.net/?p=151376 Vladimir Popov was a Senior Economics Officer in the United Nations Secretariat. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development.

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The Russian mortality crisis underscores the impact of stress on life expectancy. Credit: Alexey Yakushechkin/IPS

By Vladimir Popov and Jomo Kwame Sundaram
MOSCOW and KUALA LUMPUR, Jul 20 2017 (IPS)

The transition to market economy and democracy in the Russian Federation in the early 1990s dramatically increased mortality and shortened life expectancy. The steep upsurge in mortality and the decline in life expectancy in Russia are the largest ever recorded anywhere in peacetime in the absence of catastrophes such as war, plague or famine.

During 1987-1994, the Russian mortality rate increased by 60%, from 1.0% to 1.6%, while life expectancy went down from 70 to 64 years. Although life expectancy declined from 1987, when Mikhail Gorbachev was still in charge, its fall was sharpest during 1991-1994, i.e., during Boris Yeltsin’s early years.

In fact, mortality increased to levels never observed during the 1950s to the 1980s, i.e., for at least four decades. Even in the last years of Stalin’s rule (1950-1953), mortality rates were nearly half what they were in the first half of the 1990s.

Economic output fell by 45% during 1989-1998, while negative social indicators, such as the crime rate, murder rate, suicide rate and income inequalities, rose sharply as well, but even these alone cannot adequately explain the unprecedented mortality spike.

Distress
This Russian mortality crisis underscores the impact of stress on life expectancy. Anne Case and Angus Deaton have linked deteriorating American white male real incomes to various distress indicators since the turn of the century. Their careful work helps us better understand the election of US President Trump, thanks to the electoral majorities he secured in the ‘rust belt’ states, so crucial in the American ‘electoral college’ system.

During the Enclosure movement and the Industrial Revolution in Britain from the 16th to the 18th century, mortality increased and life expectancy fell by about a decade – from about 40 to slightly over 30 – due to lifestyle changes, increased income inequalities and mass impoverishment.

Other instances of life expectancy reduction due to social changes – without wars, epidemics and natural disasters – are very few and never involved a fall in life expectancy by five years, from 69 to 64 years, in the three years from 1991 to 1994 for the entire population of a large country like Russia!

This dramatic fall has been obscured in much of the Western media coverage, although some academic research has been more accurate. Thus, the Economist implied that the fall was greater during Gorbachev’s final years (1987-1992) compared to Yeltsin’s early years (1992-1997).

Why premature death?
What kinds of stress did the transition induce, and why did they lead to premature death? Stress is correlated to the rise in unemployment, labour mobility, migration, divorce, and income inequalities.

These stress indicators turn out to be good predictors of changes in life expectancy in Russia during the ‘post-Soviet’ transition. Men in their forties and fifties who had lost their jobs, or had to move to another job and/or region, or lived in regions with greater inequality or higher divorce rates, were more likely to die prematurely in the 1990s.

The major popular alternative ‘explanation’ is increased alcoholism, which does not stand up to closer critical scrutiny for several reasons. First, during some periods, per capita alcohol consumption and death rates moved in opposite directions, e.g., during 2002-2007, death rates due to external causes – including murders, suicides and poisoning – fell as alcohol consumption rose.

Second, according to both official statistics and independent estimates, per capita alcohol consumption levels in the 1990s were equal to or lower than in the early 1980s, whereas death rates due to external causes doubled, and the total death rate increased by half. This simultaneous increase in indicators (total death rate, death rate due to external causes, and alcohol consumption) appear to be driven by another factor, namely stress.

Post-communist transitions varied
But not all post-communist transitions had equally traumatic consequences. Countries which proceeded more gradually – such as China, Uzbekistan and Belarus – managed to preserve institutional capacities and capabilities, thus avoiding or at least mitigating the output collapse and the sudden, dramatic increase in socio-economic stress indicators.

China and Vietnam did not experience any recession during their transitions, while life expectancy in both these countries continued to rise, although more slowly in China compared to before the 1980s, and to other countries with similar per capita GDPs and life expectancy levels.

In the case of Cuba, the 40% output reduction during 1989-1994 did not result in a mortality crisis. Instead, life expectancy in Cuba increased from 75 years in the late 1980s to 78 years in 2006.

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Brazil’s Shipyards – Victims of a Failed Reindustrialisation Processhttp://www.ipsnews.net/2017/07/brazilian-shipyards-no-reindustrialisation-horizon/?utm_source=rss&utm_medium=rss&utm_campaign=brazilian-shipyards-no-reindustrialisation-horizon http://www.ipsnews.net/2017/07/brazilian-shipyards-no-reindustrialisation-horizon/#respond Tue, 18 Jul 2017 00:33:01 +0000 Mario Osava http://www.ipsnews.net/?p=151342 “I have lived through three good periods and two bad ones,” prior to the present crisis in the Brazilian shipping industry, said Edson Rocha, a direct witness since the 1970s of the ups and downs of a sector where nationalist feelings run high. Now as the president of the Niteroi Metalworkers Union in this city […]

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An Atlantic Ocean deepwater oil platform moored at the Astillero Maua (Maua Shipyard) in Niteroi, in southeast Brazil, after being repaired, while awaiting being hired out to resume its activities. Credit: Mario Osava/IPS

An Atlantic Ocean deepwater oil platform moored at the Astillero Maua (Maua Shipyard) in Niteroi, in southeast Brazil, after being repaired, while awaiting being hired out to resume its activities. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Jul 18 2017 (IPS)

“I have lived through three good periods and two bad ones,” prior to the present crisis in the Brazilian shipping industry, said Edson Rocha, a direct witness since the 1970s of the ups and downs of a sector where nationalist feelings run high.

Now as the president of the Niteroi Metalworkers Union in this city near Rio de Janeiro Rocha has to battle with mass unemployment of shipyard workers, bearing a collective responsibility that he had not faced in previous shipyard crises.

“Out of the 14,500 people employed directly by the shipbuilding sector in 2014, only around 1,500 are left,” the union leader told IPS. He estimates that 2,500 indirect jobs, beyond the union’s control, have been lost out of a total of 4,000 such jobs in that year."Building ships abroad, although it may be cheaper, means paying attention only to shareholders’ profits and not to the overall interests of Brazil. Every job in the shipbuilding industry generates four or five indirect jobs, and domestic costs can be negotiated." -- Jesus Cardoso

For a city of half a million people and few alternative employment opportunities, the impact has been devastating. “This time the decline was abrupt,” with thousands of workers suddenly being made redundant at the 10 large and medium-sized local shipyards when construction of ships and other oil industry equipment stopped.

Rocha joined the shipbuilding sector when it was at its peak in the 1970s, when strong government stimulus policies promoted the production of dozens of ships, mainly for the export of Brazilian iron ore.

Then in the 1980s the industry went broke during the “lost decade” of foreign debt. It recovered slightly in 1993-1994, only to practically disappear in the years that followed.

But it made a strong recovery after 2002, based on the big increase in offshore oil production, Rocha, a qualified project design technician, told IPS.

The discovery in 2006 of vast pre-salt oil deposits in deep Atlantic ocean waters, some 200 kilometres off the Brazilian coast, accelerated national plans to become a new oil superpower.

The dream of reactivating and expanding the shipbuilding industry was consequently renewed. The industry depends on domestic demand because its costs are too high to compete internationally.

Large shipyards were buillt at various points on the Atlantic coast, joining dozens already in existence and under expansion, to provide the ships and equipment needed for exploration, production and transport of fossil fuels.

There was plenty of finance available, as well as a protectionist policy requiring at least 60 percent national content in such equipment.

Ricardo Vanderlei, the president of Maua Shipyard, next to the repairs dock where a dredging platform is moored. The company, located in Niteroi on Guanabara bay, near Rio de Janeiro, is suffering from the serious crisis affecting Brazil’s shipbuilding industry. Credit: Mario Osava/IPS

Ricardo Vanderlei, the president of Maua Shipyard, next to the repairs dock where a dredging platform is moored. The company, located in Niteroi on Guanabara bay, near Rio de Janeiro, is suffering from the serious crisis affecting Brazil’s shipbuilding industry. Credit: Mario Osava/IPS

The house of cards collapsed at the end of 2014. The fall in oil prices, the domestic economic crisis and the losses sustained by the state oil group Petrobras, owing to corruption and bad management, interrupted projects, contracts and payments to shipbuilding suppliers.

A total of 82,472 workers were employed by Brazil’s over 40 shipyards in late 2014. In November 2016, the National Naval Industry Union had only 38,452 registered members, and the figure is still dropping.

The Maua Shipyard, which has been operating since 1845 in Niteroi, ceased receiving payments in July 2015 and has had to suspend construction of three Panamax ships – the largest that could pass through the locks of the Panama Canal before the canal was enlarged in June 2016 – contracted by Transpetro, the logistical subsidiary of Petrobras.

“Two of the ships are 90 percent finished and the third is half built,” Ricardo Vanderlei, the president of the company since 2013, told IPS during a visit to the shipyard.

The cancellation of the contract forced the immediate redundancy of 3,500 workers. Today the shipyard, which also carries out repairs and other services, employs about 500 people, compared to an average of 350 in 2016.

“Our problem is how to survive until 2020,” when oil extraction is projected to increase, and demand for equipment and transport is expected to recover, in Vanderlei’s view.

The solution for his shipyard seems clear: finishing the three partly built ships in the yard would represent two years’ work and allow for the recall of 1,800 workers, he said.

The Zelia Gatai, one of the three unfinished tankers in the Maua Shipyard in southeast Brazil, waiting for renewal of the contract suspended two years ago in order to complete the remaining 10 percent of its construction. This Panamax ship has a length of 228 metres. Credit: Mario Osava/IPS

The Zelia Gatai, one of the three unfinished tankers in the Maua Shipyard in southeast Brazil, waiting for renewal of the contract suspended two years ago in order to complete the remaining 10 percent of its construction. This Panamax ship has a length of 228 metres. Credit: Mario Osava/IPS

At the moment there is a surplus of workers available in an economy that has been in recession for three years, he said, but the most highly skilled workers will be lost if the period of unemployment is further extended.

“Most of the workers laid off by the shipyards have resorted to the informal sector, like street sales and occasional services,” said Rocha, whose union is still claiming the labour rights of metalworkers, who are owed wages since they were made redundant two years ago.

A recovery in the shipbuilding industry, beginning by finishing partly built ships, platforms and drill rigs required for oil production, unites the interests of unionised workers and shipyards threatened by economic collapse. At least 12 shipyards are in the hands of the receivers with the courts setting measures such as long-term payment agreements.

There would be many advantages and limited costs in the case of Maua, but the process has been blocked by court procedures and by the paralysis of Transpetro, under new management since the resignation of its former president, Sergio Machado, in February 2015 after 12 years in office.

After being accused of corruption, Machado cooperated with the justice system, recording conversations with several of the political leaders involved. He was given a reduced sentence of only three years’ house arrest, and the return of 75 million reals (23 million dollars) that he had siphoned off from the company.

Transpetro cancelled 17 contracts in 2016 and put a halt to its Fleet Modernisation and Expansion Programme, initiated in 2004 for building 49 ships, more than half of which are completed or nearly completed.

Some, like the three ships being built by Maua in association with Ilha Shipyards S.A., are waiting on court judgments and the weakened decision-making power of Transpetro, Vanderlei said.

Large bore tubes abandoned in the Maua Shipyard, in southeast Brazil, after the cancellation of the contract for building three large ships for transporting fossil fuels on the part of a subsidiary of the state oil company Petrobras. Credit: Mario Osava/IPS

Large bore tubes abandoned in the Maua Shipyard, in southeast Brazil, after the cancellation of the contract for building three large ships for transporting fossil fuels on the part of a subsidiary of the state oil company Petrobras. Credit: Mario Osava/IPS

Losses are accumulating because of the need to maintain deteriorating equipment and the continued occupation of the shipyard’s whole industrial area of 180,000 square metres.

With a length of 228 metres, width of 40 metres and height of 18.5 metres, each Panamax ship is equivalent to a city block bearing six-storey buildings. Those built at Maua have the capacity to transport 72,000 tons.

The shipyards did not participate in “the business of bribery, and they lost market position” in an increasingly complex production sector, without budget add-ons that promoted corruption and recently benefited other large Brazilian projects, Vanderlei complained.

The Maua Shipyard survives thanks to its traditions, the diversification of its services including repair work on various ships and its privileged location at the entrance of Guanabara bay, shared between Niteroi and Rio de Janeiro, and its mooring facilities for large ships, Vanderlei said.

“Shipyards have an assured future as demand is bound to increase after 2020, given that the country has an extensive Atlantic coastline and needs to increase oil production,” he said.

“The initial costs of industrial infrastructure in Brazil have already been paid. We have already delivered dozens of ships to Transpetro, proving our capacity,” he argued. Production in Brazil is more expensive, but meets local requirements that are not satisfied by standard ships built abroad, he added.

Jesus Cardoso, president of the Rio de Janeiro Metalworkers’ Union, told IPS that “building ships abroad, although it may be cheaper, means paying attention only to shareholders’ profits and not to the overall interests of Brazil. Every job in the shipbuilding industry generates four or five indirect jobs, and domestic costs can be negotiated,” he said.

Rio de Janeiro, with 6.5 million inhabitants, has lost 15,000 shipyard jobs since 2015, contributing to the halving of the total number of local metalworkers which had reached a peak of 70,000, Cardoso said.

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How to Achieve Universal Goals, Strategicallyhttp://www.ipsnews.net/2017/07/achieve-universal-goals-strategically/?utm_source=rss&utm_medium=rss&utm_campaign=achieve-universal-goals-strategically http://www.ipsnews.net/2017/07/achieve-universal-goals-strategically/#comments Mon, 17 Jul 2017 16:49:00 +0000 Roshni Majumdar http://www.ipsnews.net/?p=151328 Discussion around the 2030 Agenda for Sustainable Development, a list of 17 goals listed by the UN, was all the buzz in the conference rooms of UN headquarters this week. Forty-four countries came together in a series of high-level political forum meetings to assess their standing and discuss their challenges in the fight to achieve […]

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By Roshni Majumdar
UNITED NATIONS, Jul 17 2017 (IPS)

Discussion around the 2030 Agenda for Sustainable Development, a list of 17 goals listed by the UN, was all the buzz in the conference rooms of UN headquarters this week.

A view of the Trusteeship Council Chamber during the Ministerial Segment of the ECOSOC (Economic and Social Council) High-level Political Forum on Sustainable Development. Credit: UN Photo/JC McIlwaine

Forty-four countries came together in a series of high-level political forum meetings to assess their standing and discuss their challenges in the fight to achieve the 2030 universal goals—such as eradication of poverty and hunger.

“We have come to New York in order to find common solutions for common problems,” said Debapriya Bhattacharya, a top expert on policies on the Global South, to IPS News.

Debapriya Bhattacharya, among other key panelists, led discussions on the exchange of information, also addressed as interlinkages, between countries in one such panel, called Leveraging Interlinkages for Effective Implementation of SDGs.

The main goal of the panel was to identify the different ways in which different targets and goals could be mix and matched to produce maximum results.

For example, the goal of eradicating hunger necessarily means a sustainable chain of food production and consumption. Food production relies on fertile soil, which ultimately caters to goals of environmental conservation. This pattern of information in an interdependent ecosystem sits at the heart of reviews and assessment to improve implementation of the Sustainable Development Goals (SDGs).

Crucial information, such as who needs the most help and how to provide it, are collected by different agencies, governmental and non-governmental, in every country. While this exchange of information becomes important to identify synergies between countries, they are not enough to bring the goals to a vivid global reality.

“Setting up various kinds of agencies is important to ensure the flow of information is important, but are not fully adequate. We need to assess how to build one policy over another, so that two policies don’t add up to two, but more than two,” Debapriya Bhattacharya told IPS news.

The next crucial part of this flow is establishing a relationship—or seeking leverage—with the global community.

This partnering with a resourceful global community is especially important for countries to mitigate financial and technological issues. For example, a landlocked country with varying special needs can also quickly benefit from a global partnership.

To achieve this partnership, panelists stressed on the importance of political leadership.

Ultimately, with the help of newer technologies, this wide array of information coalesces into quantitative and qualitative data, and guides policy making.

Hopefully, in the next and complimentary step—the implementation of the data to deliver on the goals—all that glitters will turn to gold.

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Civil Society on SDG Engagement: “We Are Not Guests”http://www.ipsnews.net/2017/07/civil-society-sdg-engagement-not-guests/?utm_source=rss&utm_medium=rss&utm_campaign=civil-society-sdg-engagement-not-guests http://www.ipsnews.net/2017/07/civil-society-sdg-engagement-not-guests/#respond Mon, 17 Jul 2017 08:55:10 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=151313 Showing up in record numbers, civil society groups are urging greater inclusion and accountability in sustainable development processes at a UN high level meeting. Almost 2,500 representatives are currently gathered at the UN for its High Level Political Forum(HLPF), a meeting to monitor and review progress towards the 2030 Agenda for Sustainable Development adopted in […]

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Indigenous children hold signs supporting the struggle in Cherán. Credit: Daniela Pastrana/IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Jul 17 2017 (IPS)

Showing up in record numbers, civil society groups are urging greater inclusion and accountability in sustainable development processes at a UN high level meeting.

Almost 2,500 representatives are currently gathered at the UN for its High Level Political Forum(HLPF), a meeting to monitor and review progress towards the 2030 Agenda for Sustainable Development adopted in 2015.

Concerned about the slow progress towards sustainable development by governments after two years, civil society organisations (CSOs) from around the world have descended upon the global meeting to make their voices heard and demand engagement in order to achieve the ambitious agenda.

“One thing that is very different in the 2030 Agenda is the call for inclusion of all stakeholders and all people…we are not guests, we are not in the shadow, we are part of the implementation of this agenda as we were also part of the crafting of the agenda,” co-chair of the Steering Group of the Coordination Mechanism of Major Groups and other Stakeholders (MGoS) Naiara Costa told IPS.

MGoS is a newly created space to help civil society access information, increase their participation in decision-making processes, and facilitate collaboration across major stakeholder groups including indigenous peoples, women, and persons with disabilities.

“It is an agenda that is attracting so much attention and that civil society is taking so seriously that you need to have a space where people can come and get information and be prepared…if we are not engaged, [the agenda] is not going to be delivered,” Costa added.

Though there has been some progress towards inclusion of marginalised groups, there is still a long way to go.

Yetnebersh Nigussie, who is the senior inclusion advisor of international disability and development organisation Light for the World, told IPS that persons with disabilities have long been neglected, stating: “When talking about persons with disability, we are talking about billions—that’s 1/7th of the global population which is a huge segment of the population that has been highly overlooked.”

Though comprising of 15 percent of the global population, persons with disabilities are overrepresented among those living in absolute poverty.

They encounter exclusion and discrimination on a daily basis, including in development programmes and agendas like the previous Millennium Development Goals (MDGs) which made no reference to persons with disabilities.

Two years into the new 2030 Agenda, participation is still uneven for persons with disabilities, Nigussie said.

“Most of disability organizations were not fully informed—even in cases that they were consulted, accessibility needs were not addressed, and they were not meaningfully included,” she said, adding that there are also cases of exclusion against disability organizations within civil society itself.

Filipino indigenous activist and former Secretary-General of the Asia Indigenous Peoples Pact (AIPP) Joan Carling echoed similar sentiments to IPS on the exclusion of indigenous groups.

“Indigenous people who are defending our lands are being killed. So how can there be effective participation of indigenous peoples if that is the situation at the local level?” she said.

According to Global Witness, more than 200 environmental defenders, including indigenous leaders, were killed trying to protect their land in 2016, more than double the number five years ago.

Almost 100 have already been killed so far in 2017, including Mexican indigenous leader and illegal logging opponent Isidro Baldenergo Lopez.

States often exclude indigenous groups in development processes because it is too political otherwise, Carling noted.

“[States] are threatened by our demand of our rights to our territories and resources…so they try to avoid any reference to indigenous peoples because once they call us indigenous peoples, then they have to recognize our rights,” she told IPS.

Both Carling and Nigussie also highlighted the shrinking space for civil society around the world.

CIVICUS has found that civic space is severely constrained in 106 countries, over half of the UN’s members, through practices such as forced closure of CSOs, violence, and detentions.

Civil society activists are imprisoned most when they criticise the government and its policies or call attention to human rights abuses, the group noted.

Nigussie told IPS that achieving the Sustainable Development Goals (SDGs) is a “joint responsibility” between governments and civil society and that if they fail, they are “mutually accountable.”

To promote such accountability, the SDGs must be linked to the human rights model which will entail frequent consultations with persons with disabilities from the grassroots to the international levels.

Though engagement at the local and national levels are most important to successfully achieve sustainable development, global forums like HLPF at the UN allow civil society to make sure their concerns are heard.

“There is a lot of interest in bring the issue of lack of consultations at the global level simply because the space at the national levels are not provided,” Carling told IPS.

She highlighted the importance of indigenous peoples to identify, support, and have ownership of their own solutions.

“The goal is leaving no one behind—so if it is not participatory or rights-based, then it will end up as business as usual again,” Carling said.

Costa urged for nations to bring lessons learned back home, concluding: “It cannot stop here, [countries] need to bring the discussion back home. Otherwise its just a talk shop and we cannot allow this to happen.”

This year’s HLPF is held at the UN from 10-19 July with the theme of “eradicating poverty and promoting prosperity in a changing world.” It will focus on evaluating implementation of SDGs in 44 countries including Argentina, Ethiopia, and Thailand.

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Reforming the International Financial Systemhttp://www.ipsnews.net/2017/07/reforming-international-financial-system/?utm_source=rss&utm_medium=rss&utm_campaign=reforming-international-financial-system http://www.ipsnews.net/2017/07/reforming-international-financial-system/#respond Thu, 13 Jul 2017 15:27:43 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151294 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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The 1997-1998 East Asian crises provided major lessons for international financial reform. Two decades later, we appear not to have done much about them

In Southeast Asia, existing mechanisms and institutions for preventing financial crises remain grossly inadequate. Credit: Sandra Siagian/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jul 13 2017 (IPS)

When we fail to act on lessons from a crisis, we risk exposing ourselves to another one. The 1997-1998 East Asian crises provided major lessons for international financial reform. Two decades later, we appear not to have done much about them. The way the West first responded to the 2008 global financial crisis should have reminded us to do more. But besides accumulating more reserves, Southeast Asia has not done much else.

Crisis prevention and management
First, existing mechanisms and institutions for preventing financial crises remain grossly inadequate. Financial liberalization continues despite the crises engendered. Too little has been done by national authorities and foreign advisers to check short-term capital flows while unwarranted reliance has been put on international adherence to codes and standards. There is also little in place to address the typically exaggerated effects of movements among major international currencies.

Second, existing mechanisms and institutions for financial crisis management are grossly inadequate. The greater likelihood, frequency and severity of currency and financial crises in emerging market economies in recent times — with devastating consequences for the real economy and innocent bystanders — makes speedy crisis resolution imperative.

Economic liberalization has also compromised macro-financial instruments available to governments for crisis management and recovery. Instead, governments have little choice but to react pro-cyclically, which tends to exacerbate economic downturns. Governments thus fail to act counter-cyclically to avoid and overcome crises, which have been more devastating in developing countries.

There is a need to increase emergency financing during crises and to establish adequate new procedures for timely and orderly debt standstills and work-outs. While IMF financing facilities were significantly augmented in 2009, little else has changed.

Only governance reform of international financial institutions can ensure more equitable participation and decision-making by developing countries. The concentration of power in some apex institutions can be reduced by delegating authority to others, and by encouraging decentralization, devolution, complementarity and competition with other international financial institutions, including regional ones.
International financial institutions, including regional institutions, should be able to provide adequate counter-cyclical financing, including for ‘social protection’. Instead of current arrangements which mainly benefit foreign creditors, new procedures and mechanisms can help ensure that they too share responsibility for the consequences of their lending practices.

Developmental reforms
Third, international financial reform needs to go beyond crisis prevention and resolution to improve provision of development finance, especially to small and poor countries that face limited and costly access to funding their development priorities. For years now, the World Bank and other multilateral development banks have abandoned or cut industrial financing.

Fourth, powerful vested interests block urgently needed international institutional reforms. Only governance reform of international financial institutions can ensure more equitable participation and decision-making by developing countries. The concentration of power in some apex institutions can be reduced by delegating authority to others, and by encouraging decentralization, devolution, complementarity and competition with other international financial institutions, including regional ones.

Fifth, reforms should restore and ensure greater national economic authority and autonomy, which have been greatly undermined by national level deregulation as well as international liberalization and new regulation. These can enable more effective, especially expansionary and counter-cyclical macroeconomic management, as well as adequate development and inclusive finance facilities.

One size clearly cannot fit all. Policy ownership will ensure greater legitimacy, and should include capital account regulation and choice of exchange rate regime. As likely international financial reforms are unlikely to adequately provide what most developing countries need, national policy independence in regulatory and interventionist functions must be assured.

Regional cooperation
Finally, appreciation is growing of the desirability of regional monetary cooperation in the face of growing international financial challenges. The Japanese proposal for an Asian monetary facility soon after the outbreak of the 1997 crises could have helped check and manage the crises, but US opposition blocked it. With its opposition to more pro-active global initiatives, alternative regional arrangements cannot also be blocked.

Such regional arrangements also offer an intermediate alternative between national and global levels of action and intervention, besides reducing the monopoly power of global authorities. To be effective, regional arrangements must be flexible, but also credible and capable of both crisis prevention and management.

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We Have to Reclaim the Public Policy Space for SDGshttp://www.ipsnews.net/2017/07/reclaim-public-policy-space-sdgs/?utm_source=rss&utm_medium=rss&utm_campaign=reclaim-public-policy-space-sdgs http://www.ipsnews.net/2017/07/reclaim-public-policy-space-sdgs/#respond Thu, 13 Jul 2017 14:28:36 +0000 Jens Martens http://www.ipsnews.net/?p=151286 Jens Martens is Executive Director of Global Policy Forum and coordinates the Reflection Group on the 2030 Agenda for Sustainable Development

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New report states that various forms of privatization and corporate capture have become obstacles to implement the 2030 Agenda and its SDGs

Open drains in Ankorondrano-Andranomahery, Madagascar. Credit: Lova Rabary-Rakotondravony/IPS

By Jens Martens
BONN, Jul 13 2017 (IPS)

At the High-Level Political Forum which currently takes place at the United Nations in New York several events, for instance a SDG Business Forum, are devoted to the critical role of business and public-private partnerships (PPPs) in implementing the 2030 Agenda for Sustainable Development.

New report states that various forms of privatization and corporate capture have become obstacles to implement the 2030 Agenda and its SDGsBut many civil society organizations and trade unions warn in their joint report Spotlight on Sustainable Development 2017 that the various forms of privatization and corporate capture have become obstacles to implement the 2030 Agenda and its goals.

Weakening the State: A vicious circle

The trend towards partnerships with the private sector is based on a number of assumptions, not least the belief that global problems are too big and the public sector is too weak to solve them alone.

But why is it apparently a matter of fact that the public sector is too weak to meet the challenges of the 2030 Agenda? Why are public coffers empty?

In fact, the lack of capacity and financial resources is not an inevitable phenomenon but has been caused by deliberate political decisions. To give just one example, over the past three decades corporate income tax rates have declined in both countries of the global North and South by 15 to 20 percent. Hundreds of billions of US dollars are lost every year through corporate tax incentives and various forms of tax avoidance.

Through their business-friendly fiscal policies and the lack of effective global tax cooperation, governments have weakened their revenue base substantially. This has been driven not least by corporate lobbying.

A recent analysis by Oxfam America estimates that between 2009 and 2015, the USA’s 50 largest companies spent approximately US$ 2.5 billion on lobbying, with approximately US$ 352 million lobbying on tax issues. In the same period, they received over US$ 423 billion in tax breaks.

What we see is a vicious circle of weakening the State: the combination of neoliberal ideology, corporate lobbying, business-friendly fiscal policies, tax avoidance and tax evasion has led to the massive weakening of the public sector and its ability to provide essential goods and services.

These failures have been used by the proponents of privatization and PPPs to present the private sector as the better alternative and to demand its further strengthening. This in turn further weakened the public sector – and so on….

In parallel, the same corporate strategies and fiscal and regulatory policies that led to the weakening of the public sector enabled an unprecedented accumulation of individual wealth and increasing market concentration, often at the expense of small and medium-sized enterprises.

Concentrated power

According to various statistics of the largest national economies, transnational corporations, banks and asset management firms, among the 50 largest global economic entities are more private corporations than countries. The assets under management by the world’s largest asset management company BlackRock are US$ 5.12 trillion (end of 2016), thus higher than the GDP of Japan or Germany.

Large institutional investors such as pension funds and insurance companies are also the drivers of a new generation of PPPs in infrastructure, forcing governments to offer ‘bankable’ projects that meet the needs of these investors rather than the needs of the affected population.

Particularly alarming for the implementation of SDG 2 on food security and sustainable agriculture are the announced mega-mergers in the food and agriculture sector, especially the acquisition of Syngenta by China National Chemical Corporation (ChemChina), the merger of Dow Chemical and DuPont and the takeover of Monsanto by Bayer.

If all of these mergers are allowed, the new corporate giants will together control at least 60 percent of global commercial seed sales and 71 percent of global pesticide sales.

Devastating impacts

The Spotlight Report 2017 clearly shows, that privatization, PPPs and the rise of corporate power affect all areas and goals of the 2030 Agenda. One example is the mushrooming of private, fee-charging, profit-making schools in Africa and Asia.

Detrimental corporate influence occurs in the energy sector with the still dominant role of coal and fossil fuel industries, undermining effective measures against climate change and the transformation towards sustainable energy systems.

But why is it apparently a matter of fact that the public sector is too weak to meet the challenges of the 2030 Agenda? Why are public coffers empty?
Studies by scholars, CSOs and trade unions like Public Services International (PSI) have shown that the privatization of public infrastructure and services and various forms of PPPs involve disproportionate risks for the affected people and costs for the public sector. They can even exacerbate inequalities, decrease equitable access to essential services, and thus jeopardize the fulfilment of human rights, particularly the rights of women.

Counter-movements and breaking ranks

Responding to the experiences and testimonies from the ground about the devastating impacts of privatization and PPPs, counter-movements emerged in many parts of the world. Over the past 15 years there has been a significant rise in the number of communities that have taken privatized services back into public hands – a phenomenon called “remunicipalization”. Remunicipalization refers particularly to the return of water supply and sanitation services to public service delivery. Between March 2000 and March 2015 researchers documented 235 cases of water remunicipalization in 37 countries, affecting more than 100 million people.

Furthermore, some pioneering companies are already on the path towards – at least environmentally – sustainable development solutions, for instance in the area of renewable energies.

The private sector is in no way a monolithic bloc. Firms in the social and solidarity economy, social impact investors and small and medium-sized businesses are already making a positive difference, challenging the proponents of global techno-fix solutions and the dinosaurs of the fossil fuel lobby.

Even the firm opposition to international corporate regulation in the field of business and human rights by those pretending to represent business interests is showing cracks. A survey by The Economist Intelligence Unit revealed that 20 percent of business representatives who responded to the survey said that a binding international treaty would help them with their responsibilities to respect human rights.

What has to be done?

To be sure, the business sector certainly has an important role to play in the implementation process of the 2030 Agenda, as sustainable development will require large-scale changes in business practices.

However, acknowledging corporations’ role should not mean promoting the accumulation of wealth and economic power, giving them undue influence on policy-making and ignoring their responsibility in creating and exacerbating many of the problems that the 2030 Agenda is supposed to tackle.

Instead of further promoting the misleading discourse of ‘multi-stakeholderism’ and partnerships between inherently unequal partners a fundamental change of course is necessary. In order to achieve the SDGs and to turn the vision of the transformation of our world, as proclaimed in the title of the 2030 Agenda, into reality, we have to reclaim the public policy space.

Governments should strengthen public finance at all levels, fundamentally rethink their approach towards trade and investment liberalization, reconsider PPPs, create binding rules on business and human rights, take effective measures to dismantle corporate power and prevent the further existence of corporate ‘too big to fail’ entities.

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Argentina Plans Billions of Dollars in Railway Projectshttp://www.ipsnews.net/2017/07/argentina-plans-billions-dollars-railway-projects/?utm_source=rss&utm_medium=rss&utm_campaign=argentina-plans-billions-dollars-railway-projects http://www.ipsnews.net/2017/07/argentina-plans-billions-dollars-railway-projects/#respond Wed, 12 Jul 2017 03:11:50 +0000 Daniel Gutman http://www.ipsnews.net/?p=151244 Development in Argentina in the second half of the 19th century and the first half of the 20th century was closely tied to that of the railway. The eighth largest country in the world, Argentina’s economy grew through exporting agricultural and livestock products, and the railways were key to founding centres of population and transporting […]

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After decades of decline, Argentina has a recovery plan for its railways, involving investments of billions of dollars, for freight and passenger transport

One of the new locomotives, imported from China to modernise Argentina’s freight railway network, being unloaded in the port of Buenos Aires in May. Credit: Ministry of Transport

By Daniel Gutman
BUENOS AIRES, Jul 12 2017 (IPS)

Development in Argentina in the second half of the 19th century and the first half of the 20th century was closely tied to that of the railway. The eighth largest country in the world, Argentina’s economy grew through exporting agricultural and livestock products, and the railways were key to founding centres of population and transporting goods to the ports.

“The railways had an enormous social and cultural impact, and often arrived in areas where there was little or no population. Around the middle of the last century there were 48,000 kilometres of track, at which point the railway system was nationalised as Ferrocarriles Argentinos (Argentine Railways), the largest railway company in the world,” historian Eduardo Lazzari told IPS.

But by 1950, decline had set in. Branch lines were closed and the track network was almost halved, in this country with an area of 2.8 million square kilometres and an estimated population of 43.5 million.

This decline is viewed by some Argentines as a cause, by others as a consequence, but nearly all of them see it as symbolic of the fate of the country, which has suffered countless economic crises in recent decades, and where according to official figures one-third of the population lives in poverty.. “We have to think about what kind of railway we want, because for many years the main problem has not been lack of investment but bad management. It makes no sense to try to go back to the railway system the country once had, because needs have changed." -- Alberto Muller

Argentina now has a recovery plan for the railways, involving investments of billions of dollars and addressing both freight carriage as well as passenger transport in the Buenos Aires metropolitan area, where 15.2 million people live, representing 35 percent of the country’s total population.

There are also plans, on a lower key, to renovate intercity rail links in this, the third largest economy of Latin America.

“In the last few years there have been investments on a scale that I have never seen before, especially in the metropolitan railway network. Some of them have not been particularly well planned,” transport expert Alberto Muller, the head of a research centre at the Faculty of Economic Sciences of the University of Buenos Aires (UBA) told IPS.

Muller voiced the doubts entertained by many experts in the field about the priorities that have been adopted. “We have to think about what kind of railway we want, because for many years the main problem has not been lack of investment but bad management. It makes no sense to try to go back to the railway system the country once had, because needs have changed,” he said.

In 2008 the state began to buy new railway carriages for metropolitan trains, which it had not done since 1985.

The railway sector was privatised in the 1990s as part of the neoliberal reforms undertaken by the government of Carlos Menem (1989-1999).

The visible deterioration in services and infrastructure began to be reversed in recent years, when the state recovered ownership of the majority of branch lines.

But it took a major tragedy to give the railways top political priority and accelerate investments.

On a Wednesday morning in February 2012 a train carrying 1,200 passengers on the Sarmiento line drove into Once, one of the four main stations in Buenos Aires used daily by thousands of suburban commuters. The brakes failed and it crashed into the buffers..

The crash killed 51 people and led to a trial that riveted the nation and sentenced transport officials and private railway company administrators to prison terms.

In their verdict, the judges determined that the accident had been caused by the “deplorable lack of maintenance that affected safety conditions.”

The weight of public opinion led to 1.2 billion dollars being spent by 2015 to modernise the metropolitan railway lines.

In 2016, in the first year of the government of president Mauricio Macri, an investment plan was announced for nearly 14.2 billion dollars up to 2023. The goal is that trains entering and leaving Buenos Aires should have a daily passenger transport capacity of five million people, compared with their current capacity of 1.2 million passengers.

The plan will be financed by the Inter-American Development Bank (IDB), credits from Brazil’s National Development Bank, and contributions from the Argentine Treasury.

Multimillion dollar investments are also planned to modernise the freight railroad network.

China will contribute four billion dollars to the renewal of more than 1,500 kilometres of track in Belgrano Norte and San Martin, carrying freight from the north and west of the country to the ports of Rosario, on the Parana river, and Buenos Aires, on the Rio de la Plata, to be shipped for export.

The agreement includes the purchase of 3,500 railway carriages and 107 locomotives from China.

“The railroad must play a key role in Argentina’s economic recovery,” Transport Minister Guillermo Dietrich said on May 30 upon receiving 10 of the Chinese locomotives.

As for intercity railways, services between Buenos Aires and the city of Mar del Plata were reinaugurated on July 3. The 400 kilometre journey takes nearly seven hours, giving rise to heavy criticism.

A 60-year-old newsreel video, showing the same journey taking four and a half hours, rapidly went viral on the social networks.

“Argentine society has a nostalgic vision of the railroads, and official policies tend to go along with this, which is a mistake. Intercity trains, for example, have little chance of surviving because this is a very large and relatively underpopulated country, and so the costs are too high,” Jorge Wadell, the co-author of “Historia del Ferrocarril en Argentina” (History of the Railroad in Argentina), told IPS.

One of the most important works in progress is laying the Sarmiento line, which was the scene of the 2012 disaster, underground. This railway line connects the centre of the capital with the west of the conurbation, and practically cuts the City of Buenos Aires in two. At present there are dozens of level crossings that are dangerous and complicate rail traffic.

The project has a budget of three billion dollars and involves digging a 22-kilometre long tunnel with tracks for two trains, one in each direction.

The initiative has been on the drawing board for decades and while many people have called for its completion, some experts have criticised the concept.

“At present there are four tracks on the Sarmiento line, but with the tunnel there will only be two, and all the trains will have to stop at all the stations, so there will be no more fast trains. Nowhere in the world is railway capacity being reduced in this way,” the head of the Instituto Ciudad en Movimiento, Andres Borthagaray, told IPS.

The other major project is the Regional Express Network, consisting of the construction of 20 kilometres of tunnels and a network of underground stations to link the different railway lines arriving in Buenos Aires from the suburbs.

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Mexico’s Methane Emissions Threaten the Environmenthttp://www.ipsnews.net/2017/07/mexicos-methane-emissions-threaten-environment/?utm_source=rss&utm_medium=rss&utm_campaign=mexicos-methane-emissions-threaten-environment http://www.ipsnews.net/2017/07/mexicos-methane-emissions-threaten-environment/#respond Sat, 08 Jul 2017 17:27:48 +0000 Emilio Godoy http://www.ipsnews.net/?p=151219 Mexico is in transition towards commercial exploitation of its shale gas, which is being included in two auctions of 24 hydrocarbon blocks, at a time when the country is having difficulty preventing and reducing industrial methane emissions. Increasing atmospheric release of methane, which is far more polluting than carbon dioxide (CO2) and which is emitted […]

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Two chimney stacks (left) burning gas at the Tula refinery in the state of Tulio, adjacent to Mexico City. Burning and venting gas at facilities of the state group PEMEX increases methane emissions in Mexico. Credit: Emilio Godoy/IPS

Two chimney stacks (left) burning gas at the Tula refinery in the state of Tulio, adjacent to Mexico City. Burning and venting gas at facilities of the state group PEMEX increases methane emissions in Mexico. Credit: Emilio Godoy/IPS

By Emilio Godoy
MEXICO CITY, Jul 8 2017 (IPS)

Mexico is in transition towards commercial exploitation of its shale gas, which is being included in two auctions of 24 hydrocarbon blocks, at a time when the country is having difficulty preventing and reducing industrial methane emissions.

Increasing atmospheric release of methane, which is far more polluting than carbon dioxide (CO2) and which is emitted along the entire chain of production, is threatening the climate goals adopted by Mexico within the Paris Agreement which aims to contain global warming.

“Shale gas is the last gas that is left to exploit after reserves that are easier to access have been used up. Its production entails higher economic, environmental and energy costs. It is practically impossible for a shale gas well to be non-polluting,” researcher Luca Ferrari, of the Geosciences Institute at the state National Autonomous University of Mexico (UNAM) told IPS.

The state-run but autonomous National Hydrocarbons Commission (CNH) issued a resolution on Jun. 22 calling for bids for the two auctions of 24 blocks of gas and oil in five basins, located in the north, southeast and south of the country. For the first time, shale gas reserves are included. Bidding will take place on Jul. 12, and total estimated reserves of 335 million barrels are being offered.

By refraining from producing non-conventional fuels (like shale gas) itself, the government is partially opening the energy sector to participation by private enterprise to supply the country’s industrial gas needs.

Mexico’s energy reform, introduced in August 2014, opened up exploitation, refining, distribution and sales of hydrocarbons, as well as electricity generation and sales, to national and foreign private sectors.

In shale gas deposits, hydrocarbon molecules are trapped in sedimentary rocks at great depths. Large quantities of a mixture of water, sand and chemical additives, which are harmful to health and the environment, have to be injected to recover shale gas and oil.

The “fracking” technique used to free shale gas and oil leave huge volumes of liquid waste that has to be treated for recycling, as well as methane emissions that are more polluting than CO2, the greenhouse gas responsible for most global warming.

Mexico, shale superpower

An analysis of 137 deposits in 41 countries by the U.S. Energy Information Administration (EIA) puts Mexico in sixth place worldwide for technically recoverable shale gas reserves, behind China, Argentina, Algeria, the United States and Canada, with reserves of 545 trillion cubic feet. The country occupies seventh place for shale oil.

However CNH quotes more moderate estimates of probable reserves, of the order of 81 trillion cubic feet.

“Current regulations are based on best practices, but the philosophy of environmental protection has been abandoned. Exploitation is deepening inequities in a negative way, such as environmental impact. It is irresponsible to auction reserves without a proper evaluation of environmental and social impacts,” researcher Ramón Torres, of UNAM’s Development Studies Programme, told IPS.

In March, the national Agency for Industrial Safety and Environmental Protection, responsible for regulating the hydrocarbons sector, published a regulatory package on exploitation and extraction of non-conventional reserves.

The regulations identify the risks of fracking fluid leaks, heightened demand for water, pollution caused by well emissions of methane and other volatile organic compounds, pollution caused by toxic substance release and by the return of injected fluid and connate water to ground level from the drill hole.

The regulations indicate that 15 to 80 percent of fracking fluid returns to the surface, depending on the well. As for atmospheric pollutants, they mention nitrogen oxides, benzene, toluene, methane and coal.

Measures are imposed on companies, such as verifying the sealing of wells, applying procedures for preventing gas leaks, and disclosing the composition of drilling fluids. Gas venting is prohibited, and burning is restricted.

Since 2003, Petroleos Mexicanos (PEMEX) has used hydraulic fracking – applicable not only to shale extraction – to drill at least 924 wells in six of the country’s 32 states, according to CartoCritica, a non-governmental organisation. At least 28 of these were confirmed to be of non-conventional crude.

Gas emissions

Within this context, Mexico faces problems in reducing methane emissions.

In 2013 the country emitted 126 million tonnes of methane into the atmosphere, of which 54 million were from the stock rearing sector, 31 million from oil and gas, and 27 million from waste products. The rest was from electricity generation, industry and deforestation. Use of gas for electricity generation contributed at least 0.52 million tonnes.

Mexico, Latin America’s second largest economy, emitted a total of 608 million tonnes of CO2 during the same year.

Pemex Exploration and Production, a subsidiary of the state PEMEX group, reported that in 2016 its total methane emissions were 641,517 tonnes, 38 percent higher than the previous year.

Shallow water undersea extraction contributed 578,642 tonnes, land based fields 46,592 tonnes, hydrocarbon storage and distribution 10,376 tonnes, gas fields not associated with oil fields 5,848 tonnes, and non-conventional fields 57 tonnes.

In 2016, PEMEX changed the way it reported emissions of CO2 and other greenhouse gases (GHG). Previously these volumes were reported by production region, making comparative analysis difficult.

In 2015, the Northeast Marine Region comprising the Gulf of Mexico, where the largest underwater oil deposits are located, emitted 287,292 tonnes.

The emissions reduction was presumably associated with reduced fossil fuel production due to a fall in international prices and PEMEX’s own lack of financial resources.

But between 2012 and 2014 emissions increased by 329 percent, leaping from 141,622 tonnes to 465,956 tonnes, presumably because of increased venting and burning of gas (whether or not associated with crude oil wells). PEMEX lacked the technology for gas recovery.

By reducing venting and burning, PEMEX was able to reduce its emissions between 2009 and 2011, after GHG emissions grew from 2007 to 2009.

In Ferrari’s view, the problem is a technical and economic one. “The first step is to prevent venting,” but that requires investment, he said.

According to the Global Gas Flaring Reduction Partnership (GGFR) led by the World Bank, in 2015 Mexico burned 5 billion cubic metres of gas, putting it in eighth place in the world, the same as for venting intensity, the relation between cubic metres of gas burned to barrels of oil produced.

The aim of the GGFR is to eradicate such practices by 2030.

Mexico is one of 24 goverrnments participating in the initiative, together with French Guiana and Peru in the Latin American region. Thirty-one oil companies – not including PEMEX – and 15 multilateral financial institutions are also involved. The World Bank will publish its first report on burning and venting gas this year.

Torres and Ferrari agree that the volume of gas produced by hydraulic fracking will not be sufficient to satisfy domestic demand.

“The volume that can be exploited is small and insufficient,” said Torres. Ferrari’s calculations indicate that shale gas would only supply domestic needs for 10 months.

In May Mexico produced 5.3 billion cubic feet of gas per day, and imported 1.79 billion cubic feet. Meanwhile, it extracted 2.31 million barrels of crude per day.

In the same month, the Energy Ministry updated its Five Year Plan for Oil and Gas Exploration and Extraction 2015-2019 and set a new target to auction reserves of nearly 31 billion barrel equivalents of non-conventional fuels.

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1997 Asian Crisis Lessons Losthttp://www.ipsnews.net/2017/07/1997-asian-crisis-lessons-lost/?utm_source=rss&utm_medium=rss&utm_campaign=1997-asian-crisis-lessons-lost http://www.ipsnews.net/2017/07/1997-asian-crisis-lessons-lost/#respond Wed, 05 Jul 2017 07:27:42 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151164 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Washington Consensus policy advocacy of financial liberalization from the 1980s had uneven consequences for the East Asia region. Credit: Kara Santos/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jul 5 2017 (IPS)

After months of withstanding speculative attacks on its national currency, the Thai central bank let it ‘float’ on 2 July 1997, allowing its exchange rate to drop suddenly. Soon, currencies and stock markets throughout the region came under pressure as easily reversible short-term capital inflows took flight in herd-like fashion. By mid-July 1997, the currencies of Indonesia, Malaysia and the Philippines had also fallen precipitously after being floated, with stock market price indices following suit.

Most other economies in East Asia were also under considerable pressure. In November 1997, despite South Korea’s more industrialized economy, its currency also collapsed following withdrawal of official support. Devaluation pressures also mounted due to the desire to maintain a competitive cost advantage against the devalued currencies of Southeast Asian exporters.

Blind spot
Mainstream or orthodox economists first attempted to explain the unexpected events from mid-1997 in terms of orthodox theories of currency crisis. Many made much of current account or fiscal deficits, real as well as imagined.

When the conventional wisdom clearly proved to be unconvincing, the East Asian miracle was turned on its head. Instead, previously celebrated elements of the regional experience, e.g., government interventions and ‘social capital’, were blamed for the crises.

The media emphasized ‘cronyism’, i.e., government favouritism for particular business interests, and poor corporate governance. These were real problems, but irrelevant to explaining the crisis. Increasingly, blame was put on poor sequencing of financial liberalization, but not on capital account liberalization itself.

This blind spot has helped ensure that the most important lessons from the crisis have been largely lost. Other currency and financial crises from the 1990s make clear that key lessons have not been appreciated. Instead, erroneous lessons drawn by orthodox economists, financial analysts and the media have muddied the policy discourse. Also, the policies and policymakers responsible for the crisis need to be identified and addressed as they have come back, albeit in different guises.

Wrong lessons have diverted attention away from the intellectual and ideological bases of the erroneous thinking, analyses and policies responsible for the crises. Such ideas are largely, though not exclusively associated with Washington Consensus’ advocacy of economic liberalization at both national and global levels. Thus, drawing critical lessons would undermine the intellectual, analytical and policy authority of the interests and institutions involved.

Finance rules
Although there was analytical work critical of East Asia’s ‘miracle’ before the crisis, none actually anticipated the debacle or saw its roots in financial liberalization. Meanwhile, transnational dominance of industry in Southeast Asia facilitated the ascendance and consolidation of financial interests and politically influential rentiers, later deemed ‘cronies’ after 1997.

This increasingly powerful alliance successfully promoted financial liberalization in the region, both externally and internally. Southeast Asian financiers were quick to identify and capture rents from arbitrage and other opportunities offered by international financial integration. Little caution was urged in the face of greater foreign capital flows in Southeast Asia, which became more pronounced in the 1990s.

Washington Consensus policy advocacy of financial liberalization from the 1980s had uneven consequences and implications for the region. This eventually led to new kinds of currency and financial crises due to easily reversed capital inflows, including foreign bank borrowings and portfolio capital flows.

As the interests of domestic financial capital did not fully coincide with those of international finance, the impact of financial globalization was partial and uneven. For instance, both Malaysia and Thailand wanted capital inflows to finance current account deficits. This was largely due to their service account deficits, mainly for imported services and investment income payments abroad. Such deficits grew with imports for consumption and construction, as well as greater ease of investment, including speculation, abroad.

There is no evidence that such capital inflows contributed significantly to accelerating the growth of export earnings. Instead, they blew up asset price bubbles, which inevitably burst with devastating economic, social and political consequences.

Lessons not learnt

Two decades later, there is apparently still no consensus on the East Asian crises and their causes. But contrary to the impression conveyed by the Western media, most serious analysts now agree that the crises essentially began as currency crises of a new type, different from those previously identified with current account deficits, or fiscal profligacy, or even macroeconomic indiscipline more generally.

They also agree that the crises started off as currency crises and quickly became more generalized financial crises, before affecting the real economy. Reduced financial liquidity, inappropriate official policy responses and ill-informed, ‘herd’-like market responses then exacerbated this chain of events.

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Ending Child Marriage Could Add Trillions to World Economyhttp://www.ipsnews.net/2017/06/ending-child-marriage-add-trillions-world-economy/?utm_source=rss&utm_medium=rss&utm_campaign=ending-child-marriage-add-trillions-world-economy http://www.ipsnews.net/2017/06/ending-child-marriage-add-trillions-world-economy/#respond Fri, 30 Jun 2017 06:07:19 +0000 Roshni Majumdar http://www.ipsnews.net/?p=151120 The benefits of ending child marriage are many—boosting a young girl’s morale and increasing her chances of education and work, and by that virtue, curbing high population rates in developing economies and boosting growth. Still, more than 15 million children, under 18 years of age, are married each year. A new study published by the […]

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In Nepal, many children who suffer from malnutrition belong to young mothers. In fact, teen marriages and pregnancies are common and over 23 percent of women give birth before they are 18 years old. Credit: Naresh Newar/IPS

By Roshni Majumdar
UNITED NATIONS, Jun 30 2017 (IPS)

The benefits of ending child marriage are many—boosting a young girl’s morale and increasing her chances of education and work, and by that virtue, curbing high population rates in developing economies and boosting growth.

Still, more than 15 million children, under 18 years of age, are married each year.

A new study published by the World Bank and the International Center for Research on Women (ICRW) estimates that from now until 2030, the largely outlawed practice of child marriage is going to cost developing countries trillions of dollars.

“We haven’t seen real investments needed to end the practise. Policy makers have increasingly acknowledged child marriage as a human rights abuse, but we didn’t have a sense of the economic impact, which we thought might spur increased funding by donors and governments,” Suzanne Petroni, one of the lead authors of the report, told IPS.

The burden is borne mainly by poor economies with a large population of children under 18. The UN estimates that Africa, by the end of 2050, will be home to the largest population of children under 18.

In the Republic of Niger, for instance, 77 percent of women between the ages of 18 and 22 were married before they turned 18.

Given the high numbers, Niger also stands to curb its population growth by as much as 5 percent if it ended the practice, and trigger growth of 1.7 billion dollars in additional welfare, 327 million in savings to the education budget, and 34 million through reduced infant mortality.

Similarly, In Uganda, the economy stands to gain 2.4 billion dollars by curbing its population growth, as does Nepal, which stands to gain almost a billion dollars.

Globally, the amount adds up to 500 billion dollars, picked up by related benefits—fewer instances of malnutrition, for example—by the end of 2030.

“Many countries have laws on the books. In Bangladesh, for instance, half of the girls are married before 18, even though the country has banned child marriage since 1929. So clearly, laws are not sufficient to create change,” Petroni explained.

Besides the glaring benefits of a surge in economic growth in developing countries, ending the practise will ensure better prospects for young girls— better education, higher incomes, and finally, as better decision makers.

In fact, child marriage and higher school dropout rates hamper the chances of earning better wages by 9 percent on average.

The UN aims to abolish the practise by 2030, as a part of its broader mission to achieve the Sustainable Development Goals (SDGs).

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Southeast Asia: From Miracle To Debaclehttp://www.ipsnews.net/2017/06/southeast-asia-miracle-debacle/?utm_source=rss&utm_medium=rss&utm_campaign=southeast-asia-miracle-debacle http://www.ipsnews.net/2017/06/southeast-asia-miracle-debacle/#respond Thu, 29 Jun 2017 14:40:13 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151104 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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For many, the "Southeast Asian" has turned out to be nothing more than a misleading illusion. Credit: IPS

For many, the "Southeast Asian" has turned out to be nothing more than a misleading illusion. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jun 29 2017 (IPS)

The World Bank and other influential international financial institutions and development agencies have been touting Southeast Asian (SEA) newly industrializing countries as models for emulation, especially by African developing countries seeking to accelerate their development transformations. But these recommendations are usually based on misleading analysis of their rapid growth and structural transformation.

Sub-regional differences
Typically, various cultural and other justifications are offered to justify recommending SEA, rather than Northeast Asia (NEA), as the better sub-region for emulation. Consequently, important lessons from East Asian experiences have been misrepresented, drawing erroneous lessons from the region’s undoubtedly impressive economic performance during its high growth periods.

Despite SEA’s much greater resource wealth, NEA’s growth performance was superior over the long term in the second half of the 20th century until the 1990s, when Japanese economic growth collapsed following its financial liberalization ‘big bang’ shock and the strong yen (endaka) decade from 1985. For over two decades, growth in Japan, Korea and Taiwan averaged 8 percent, compared to 6 percent in Malaysia, Thailand and Indonesia.

Population growth has been much lower in NEA, increasing per capita differences over at least a quarter century. While income inequalities have grown in most of SEA, they have remained lower in NEA. Hence, economic welfare improvements have been much greater in NEA.

Education
Most accounts of the ‘East Asian miracle’ emphasize education. But educational achievements in Indonesia, Malaysia and Thailand have been greatly inferior to NEA’s. Ironically, the Philippines, which long had the highest share of tertiary educated in East Asia, has not had an impressive economic growth record.

Thus, actual experience compels scepticism about the facile policy recommendations that governments should enhance human resources, but only subsidize primary schooling. Instead, there is now compelling evidence that industrialization and productivity gains have been slowed by the region’s modest progress on education.

Foreign direct investment
Greater SEA dependence on foreign direct investment (FDI) has impeded the development of industrial and technological capacities and capabilities, raising concerns as to whether their industrialization processes were sustainable.

The region has become less attractive for new FDI in the face of growing competition from alternative locations seeking to be part of ‘global value chains’. Meanwhile, the supposed ‘middle income country’ trap in SEA is essentially due to limited development of indigenous industrial and technology capacities owing to modest ‘technological learning’ from the presence of ‘foot-loose’ FDI temporarily locating parts of their ‘value chains’ in the country.

Investment policy reform to promote more sophisticated industries in SEA is long overdue and needs to be coordinated with technology policy reform. SEA governments have not been conducive to elaborating and implementing appropriate investment and technology policies. The rest of SEA has not emulated Singapore’s pro-active technology policy attracting desired investments in line with its own national development priorities besides developing capacities and capabilities using government investments.

Financial havoc

Favouring FDI has weakened the influence of domestic industrial capital in the region, allowing financial interests, both domestic and foreign, to become more influential. Finance capital has developed symbiotic relations with other politically influential rentiers, dubbed ‘cronies’ following the 1997-1998 (mainly Southeast) Asian financial crisis. This powerful alliance successfully promoted partial financial liberalization in the region before the crisis.

Although capital account liberalization greatly increased short-term capital flows, which precipitated the 1997 crisis without increasing FDI, the region has opened up again to short-term capital inflows after accumulating reserves believed sufficient to withstand future crises. This is wrongly referred to as ‘self-insurance’ although there is no insurance element involved. Meanwhile, regional monetary cooperation has advanced beyond earlier bilateral swap arrangements, but there has been little progress beyond that.

Policies
After 1997, the ‘Asian model’ fell into disrepute as the East Asian miracle was written off as a debacle. Hence, it is crucial to also recognize the reasons for its inferiority and vulnerability during the high growth period from the 1960s to the 1990s when the Asian financial crisis exposed its new vulnerabilities.

But it would be a mistake to throw the baby out with the bathwater as there are undoubtedly important lessons to be learnt from SEA as well. Also, some of the very policies that the West has criticized were actually crucial for rapid growth and structural transformation in East Asia.

NEA has generally had more sophisticated and effective industrial policy compared to SEA. This accounts, in no small way, for the major differences in industrial and technological capabilities between the two East Asian sub-regions. Of course, there have also been different industrial policy orientations, emphases and instruments within SEA, sometimes involving discernible contrasts in investment and technology policies.

As these policies were inappropriately or prematurely undermined or terminated, the ‘miracle’ ended, often rather abruptly, due to the financial crises precipitated by liberalization. Contrary to popular Western narratives of the debacle, East Asia’s previously successful ‘catch-up’ efforts had in fact been undermined by financial liberalization promoted by the Washington Consensus.

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China Drives Nuclear Expansion in Argentina, but with Strings Attachedhttp://www.ipsnews.net/2017/06/china-drives-nuclear-expansion-argentina-strings-attached/?utm_source=rss&utm_medium=rss&utm_campaign=china-drives-nuclear-expansion-argentina-strings-attached http://www.ipsnews.net/2017/06/china-drives-nuclear-expansion-argentina-strings-attached/#respond Tue, 27 Jun 2017 23:30:36 +0000 Daniel Gutman http://www.ipsnews.net/?p=151073 Two new nuclear power plants, to cost 14 billion dollars, will give a new impetus to Argentina’s relation with atomic energy, which began over 60 years ago. President Mauricio Macri made the announcement from China, the country that is to finance 85 per cent of the works. But besides the fact that social movements quickly […]

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The first of Argentina’s three existing nuclear plants, Atucha I, is located 100 km from Buenos Aires. China has offered to finance 85 percent of the 14 billion dollar cost of two other plants. Credit: CNEA

The first of Argentina’s three existing nuclear plants, Atucha I, is located 100 km from Buenos Aires. China has offered to finance 85 percent of the 14 billion dollar cost of two other plants. Credit: CNEA

By Daniel Gutman
BUENOS AIRES, Jun 27 2017 (IPS)

Two new nuclear power plants, to cost 14 billion dollars, will give a new impetus to Argentina’s relation with atomic energy, which began over 60 years ago. President Mauricio Macri made the announcement from China, the country that is to finance 85 per cent of the works.

But besides the fact that social movements quickly started to organise against the plants, the project appears to face a major hurdle.

The Chinese government has set a condition: it threatens to pull out of the plans for the nuclear plants and from the rest of its investments in Argentina if the contract signed for the construction of two gigantic hydroelectric power plants in Argentina’s southernmost wilderness region, Patagonia, does not move forward. The plans are currently on hold, pending a Supreme Court decision.“China has an almost endless capacity for investment and is interested in Argentina as in the rest of Latin America, a region that it wants to secure as a provider of inputs. Of course China has a strong bargaining position and Argentina’s aim should be a balance of power.“ -- Dante Sica

Together with Brazil and Mexico, Argentina is one of the three Latin American countries that have developed nuclear energy.

The National Commission for Atomic Energy was founded in 1950 by then president Juan Domingo Perón (1946-1955 and 1973-1974) and the country inaugurated its first nuclear plant, Atucha I, in 1974. The development of nuclear energy was halted after the 1976-1983 military dictatorship, by then-president Raúl Alfonsín (1983-1989), but it was resumed during the administration of Néstor Kirchner (2003-2007).

According to the announcement Macri made during his visit to Beijing in May, construction of Atucha III, with a capacity of 745 MW, is to begin in January 2018, 100 km from the capital, in the town of Lima, within the province of Buenos Aires.

Atucha I and II, two of Argentina’s three nuclear power plants, are located in that area, while the third, known as Embalse, is in the central province of Córdoba.

Construction of a fifth nuclear plant, with a capacity of 1,150 MW, would begin in 2020 in an as-yet unannounced spot in the province of Río Negro, north of Patagonia.

Currently, nuclear energy represents four per cent of Argentina’s electric power, while thermal plants fired by natural gas and oil account for 64 per cent and hydroelectric power plants represent 30 per cent, according to the Energy Ministry. Other renewable sources only amount to two per cent, although the government is seeking to expand them.

Besides diversifying the energy mix, the projected nuclear and hydroelectric plants are part of an ambitious strategy that Argentina set in motion several years ago: to strengthen economic ties with China, which would buy more food from Argentina and boost investment here.

During his May 14-17 visit to China, Macri was enthusiastic about the role that the Asian giant could play in this South American country.

“China is an absolutely strategic partner. This will be the beginning of a wonderful era between our countries. There must be few countries in the world that complement each other than Argentina and China,” said Macri in Beijing, speaking to businesspeople from both countries.

During his May 14-17 visit to China, Argentina President Mauricio Macri announced the construction of two new nuclear power plants. Argentina, Brazil and Mexico are the three Latin American countries that use nuclear energy. Credit: Argentine Presidency

During his May 14-17 visit to China, Argentina President Mauricio Macri announced the construction of two new nuclear power plants. Argentina, Brazil and Mexico are the three Latin American countries that use nuclear energy. Credit: Argentine Presidency

“Argentina produces food for 400 million people and we are aiming at doubling this figure in five to eight years,“ said Macri, who added that he expects from China investments in “roads, bridges, energy, ports, airports.“

Ties between Argentina and China began to grow more than 10 years ago and expanded sharply in 2014, when then president Cristina Fernández de Kirchner (2007-2015) received her Chinese counterpart Xi Jinping in Buenos Aires, where they signed several agreements.

These ranged from the construction of dams in Patagonia to investments in the upgrading of the Belgrano railway, which transports goods from the north of the country to the western river port of Rosario, where they are shipped to the Atlantic Ocean and overseas.

On Jun. 22, 18 new locomotives from China arrived in Buenos Aires for the Belgrano railroad.

However, relations between China and Argentina are not free of risks for this country, experts warn.

“China has an almost endless capacity for investment and is interested in Argentina as in the rest of Latin America, a region that it wants to secure as a provider of inputs. Of course China has a strong bargaining position and Argentina’s aim should be a balance of power,“ economist Dante Sica, who was secretary of trade and industry in 2002-2003, told IPS.

“They are buyers of food, but they also want to sell their products and they generate tension in Argentina´s industrial structure. In fact, our country for several years now has had a trade deficit with China,“ he added.

Roberto Adaro, an expert on international relations at the Centre for Studies in State Policies and Society, told IPS that “Argentina can benefit from its relations with China if it is clear with regard to its interests. It must insist on complementarity and not let China flood our local market with their products.“

Adaro praised the decision to invest in nuclear energy since it is “important to diversify the energy mix“ and because the construction of nuclear plants “also generates investments and jobs in other sectors of the economy.“

However, there is a thorn in the side of relations between China and Argentina regarding the nuclear issue: the project of the hydroelectric plants. These two giant plants with a projected capacity of 1,290 MW are to be built at a cost of nearly five billion dollar, on the Santa Cruz River, which emerges in the spectacular Glaciers National Park in the southern region of Patagonia, and flows into the Atlantic Ocean.

In December, when the works seemed about to get underway, the Supreme Court suspended construction of the dams, in response to a lawsuit filed by two environmental organisations.

The three Chinese state banks financing the two projects then said they would invoke a cross-default clause included in the contract for the dams, which said they would cancel the rest of their investments if the dams were not built.

To build the two plants, three Chinese and one Argentine companies formed a consortium, but after winning the tender in 2013, construction has not yet begun.

Under pressure from China, the government released the results of a new environmental impact study on Jun. 15 and now plans to convene a public hearing to discuss it, so that Argentina’s highest court will authorise the beginning of the works.

Added to opposition to the dams by environmentalists is their rejection of the nuclear plants. In the last few weeks, activists from Río Negro have held meetings in different parts of the province, demanding a referendum to allow the public to vote on the plant to be installed there.

They have even generated an unusual conflict with the neighbouring province of Chubut, where the regional parliament unanimously approved a statement against the nuclear plants. The governor of Río Negro, Alberto Weretilnek, asked the people of Chubut to “stop meddling.“

“Argentina must start a serious debate about what these plants mean, at a time when the world is abandoning this kind of energy. We need to know, among other things, how the uranium that is needed as fuel is going to be obtained,“ the director of the Environment and Natural Resources Foundation, Andrés Nápòli, told IPS.

Argentina now imports the uranium used in the country’s nuclear plants, but environmentalists are worried that local production, which was abandoned more than 20 years ago, will restart.

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East Asia’s Real Lessonshttp://www.ipsnews.net/2017/06/east-asias-real-lessons/?utm_source=rss&utm_medium=rss&utm_campaign=east-asias-real-lessons http://www.ipsnews.net/2017/06/east-asias-real-lessons/#respond Wed, 21 Jun 2017 17:20:45 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=150996 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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International recognition of East Asia’s rapid economic growth, structural change and industrialization ("East Asian Miracle") grew from the 1980s.

To better learn from ostensible miracles, it is necessary to demystify them. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jun 21 2017 (IPS)

International recognition of East Asia’s rapid economic growth, structural change and industrialization grew from the 1980s. In Western media and academia, this was seen as a regional phenomenon, associated with some commonality, real or imagined, such as a supposed ‘yen bloc’.

Others had a more mythic element, such as ‘flying geese’, or ostensible bushido and Confucian ethics. Every purported miracle claims a mythic element, invariably fit for purpose. After all, miracles are typically attributed to supernatural forces, and hence, cannot be emulated by mere mortals. Hence, to better learn from ostensible miracles, it is necessary to demystify them.

The World Bank’s 1993 East Asian Miracle (EAM) volume is the most influential document on the subject. It identified eight high-performing Asian economies: Japan, Hong Kong, three first-generation newly industrialized economies, namely South Korea, Taiwan and Singapore, and three second-generation South East Asian newly industrializing countries, viz, Malaysia, Thailand and Indonesia. Despite a title implying geo-spatial commonality, the study denied the significance of geography and culture, and specifically excluded China, the elephant in the region.

Strategic interventions?

The book identified six state interventions as important, approving of four ‘functional’ interventions, but sceptical of two ‘strategic’ interventions. Functional interventions supposedly compensated for market failures, while strategic interventions were deemed more market-distortive.

These two ‘strategic’ interventions are in the areas of finance, specifically what it calls directed (targeted) and subsidized credit, and international trade, particularly what is often referred to as ‘industrial policy’, or more rarely as ‘investment and technology policy’.

Careful consideration of the accelerated East Asian growth and transformation experiences underscore that such interventions were mainly responsible for the superior performance of the Northeast Asian HPAEs compared to their Southeast Asian counterparts.

Industrial investments

Debates over Northeast Asian industrialization continue, but the pioneering work of American political economists Chalmers Johnson and Alice Amsden was undoubtedly seminal. Both showed that Japanese, Korean and Taiwanese government measures were quite different from typical World Bank development policy advice.

Successful finance ministry and central bank efforts to keep interest rates positive, but low, were crucial for accelerating industrial investments. From the mid-1970s, more orthodox Western economists began to characterize this as constituting ‘financial repression’, for depressing interest rates, the incentive to save and funds available for investment.

Only later did other Western economists explain this Korean anomaly in terms of ‘financial restraint’ to overcome financial market failures. But few have noted that savings rates actually follow, rather than determine investment rates. Meanwhile, cultural explanations have also been invoked to explain East Asia’s high savings and investment rates.

Ownership matters
Subsidized and directed (or targeted) credit also promoted desired investments. Fiscal and other policies also encouraged reinvestment of profits, rather than maximizing ‘shareholder value’, while other incentives encouraged desired investments. Where private investments were not forthcoming, the governments themselves made needed investments despite active discouragement by international development banks.

Strict controls on capital outflows, especially when foreign exchange resources were still scarce, also served to discourage capital flight. Northeast Asian economies were also careful to distinguish between long-term foreign direct investment (FDI) and short-term portfolio investment, or ‘hot money’.

Perhaps owing to Bank preference for FDI, ostensibly to close both the ‘savings-investment’ and ‘foreign exchange’ gaps, the EAM also favoured FDI and did not consider ownership important. However, during the early decades of high growth before the 1990s, Northeast Asian governments encouraged national ownership of industrial enterprises.

This policy served to promote vertically and horizontally integrated industrial conglomerates in the case of Korean chaebol and Japanese keiretsu. (Zaibatsu were suppressed after the Second World War as they were held responsible for the pre-war Japanese military industrial complex.) Instead of FDI, South Korea encouraged licensing and, if necessary, joint-ventures to promote technology transfer.

Singapore and Malaysia in Southeast Asia have especially sought to attract FDI, initially for political reasons. Singapore desired strong Western support after establishing a new state in 1965. Since then, FDI has been attracted as part of a pro-active technology policy complemented by government policies, including investments. Attracting FDI to accelerate technology development is quite different from capital account liberalization enabling short-term financial inflows.

Trade policies
The Japanese, Korean and Taiwanese governments pursued import substituting industrialization policies from the 1950s, but later encouraged export orientation as well. Infant industries were provided with effective protection conditional on export promotion, effectively requiring firms to quickly become internationally competitive.

By protecting firms temporarily, depending on the product to be promoted, and by requiring certain output shares be exported within pre-specified periods, discipline was imposed on firms in return for the support provided. Such policies forced firms to achieve greater economies of scale and accelerate learning to reduce production costs quickly.

Requiring exports has also meant producers have had to achieve international consumer quality standards quickly, which accelerated progress in product and process technology. This ‘carrot and stick’ approach induced many firms to rapidly become internationally competitive.

Thus, the very industrial, trade and financial policies rejected by the Bank were in fact necessary for East Asia’s achievements. Some policies were inappropriately and prematurely undermined or terminated, e.g., with Japan’s financial ‘big bang’, with disastrous consequences.

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