Inter Press Service » Trade & Investment http://www.ipsnews.net News and Views from the Global South Sat, 27 Aug 2016 16:06:01 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.12 Ships Bring Your Coffee, Snack and TV Set, But Also Pests and Diseaseshttp://www.ipsnews.net/2016/08/ships-bring-your-coffee-snack-and-tv-set-but-also-pests-and-diseases/?utm_source=rss&utm_medium=rss&utm_campaign=ships-bring-your-coffee-snack-and-tv-set-but-also-pests-and-diseases http://www.ipsnews.net/2016/08/ships-bring-your-coffee-snack-and-tv-set-but-also-pests-and-diseases/#comments Tue, 23 Aug 2016 13:22:26 +0000 Baher Kamal http://www.ipsnews.net/?p=146649 Containers pile up in the Italian port of Salerno. Photo: FAO

Containers pile up in the Italian port of Salerno. Photo: FAO

By Baher Kamal
ROME, Aug 23 2016 (IPS)

“Every evening, millions of people all over the world will settle into their armchairs to watch some TV after a hard day at work. Many will have a snack or something to drink…

… That TV probably arrived in a containership; the grain that made the bread in that sandwich came in a bulk carrier; the coffee probably came by sea, too. Even the electricity powering the TV set and lighting up the room was probably generated using fuel that came in a giant oil tanker.”

This is what the International Maritime Organisation (IMO)  wants everybody to keep in mind ahead of this year’s World Maritime Day. “The truth is, shipping affects us all… No matter where you may be in the world, if you look around you, you are almost certain to see something that either has been or will be transported by sea, whether in the form of raw materials, components or the finished article.”

Yet few people have any idea just how much they rely on shipping. For the vast majority, shipping is out of sight and out of mind, IMO comments. “This is a story that needs to be told… And this is why the theme that has been chosen for the World Maritime Day 2016 is “Shipping: indispensable to the world.” The Day is marked every year on 29 September.


Over 80 Per Cent of Global Trade Carried by Sea

Some $1.1 trillion worth of agricultural products are traded internationally each year. Photo: FAO

Some $1.1 trillion worth of agricultural products are traded internationally each year. Photo: FAO

Meanwhile, another UN organisation–the United Nations Conference on Trade and Development (UNCTAD), informs that around 80 per cent of global trade by volume and over 70 per cent of global trade by value are carried by sea and are handled by ports worldwide.

These shares are even higher in the case of most developing countries, says UNCTAD.

“There are more than 50,000 merchant ships trading internationally, transporting every kind of cargo. The world fleet is registered in over 150 nations and manned by more than a million seafarers of virtually every nationality.”

A Floating Threat

All this is fine. But as another major United Nations organisation also reminds that not all is great about sea-born trade. See what happens.

A Floating Threat: Sea Containers Spread Pests and Diseases’  is the title of an information note issued on August 17 by the Rome-based Food and Agriculture Organisation of the United Nations (FAO).

FAO highlights  that that while oil spills garner much public attention and anguish, the so-called “biological spills” represent a greater long-term threat and do not have the same high public profile. And gives some good examples.

“It was an exotic fungus that wiped out billions of American chestnut trees in the early 20th century, dramatically altering the landscape and ecosystem, while today the emerald ash borer – another pest that hitch-hiked along global trade routes to new habitats – threatens to do the same with a valuable tree long used by humans to make tool handles, guitars and office furniture.”

FAO explains that perhaps the biggest “biological spill” of all was when a fungus-like eukaryotic microorganism called Phytophthora infestans – the name of the genus comes from Greek for “plant destroyer” – sailed from the Americas to Belgium. Within months it arrived in Ireland, triggering a potato blight that led to famine, death and mass migration.

“The list goes on and on. A relative of the toxic cane toad that has run rampant in Australia recently disembarked from a container carrying freight to Madagascar, a biodiversity hotspot, and the ability of females to lay up to 40,000 eggs a year make it a catastrophic threat for local lemurs and birds, while also threatening the habitat of a host of animals and plants.”

In Rome, FAO informs, municipal authorities are ramping up their annual campaign against the tiger mosquito, an invasive species that arrived by ship in Albania in the 1970s. Aedes albopictus, famous for its aggressive biting, is now prolific across Italy and global warming will make swathes of northern Europe ripe for colonisation.

“This is why the nations of the world came together some six decades ago to establish the  International Plant Protection Convention (IPPC) as a means to help stem the spread of plant pests and diseases across borders boundaries via international trade and to protect farmers, foresters, biodiversity, the environment, and consumers.”

“The crop losses and control costs triggered by exotic pests amount to a hefty tax on food, fibre and forage production,” says Craig Fedchock, coordinator of the FAO-based IPPC Secretariat. “All told, fruit flies, beetles, fungi and their kin reduce global crop yields by between 20 and 40 per cent.”

Credit: IMO

Credit: IMO

Trade as a Vector, Containers as a Vehicle

Invasive species arrive in new habitats through various channels, but shipping, is the main one, FAO reports.

“And shipping today means sea containers: Globally, around 527 million sea container trips are made each year – China alone deals with over 133 million sea containers annually. It is not only their cargo, but the steel contraptions themselves, that can serve as vectors for the spread of exotic species capable of wreaking ecological and agricultural havoc.”

For example, an analysis of 116,701 empty sea containers arriving in New Zealand over the past five years showed that one in 10 was contaminated on the outside, twice the rate of interior contamination.

“Unwelcome pests included the gypsy moth, the Giant African snail, Argentine ants and the brown marmorated stink bug, each of which threaten crops, forests and urban environments. Soil residues, meanwhile, can contain the seeds of invasive plants, nematodes and plant pathogens,” FAO informs.

“Inspection records from the United States, Australia, China and New Zealand indicate that thousands of organisms from a wide range of taxa are being moved unintentionally with sea containers,” the study’s lead scientist, Eckehard Brockerhoff of the New Zealand Forest Research Institute, told a recent meeting at FAO of the Commission on Phytosanitary Measures (CPM), IPPC’s governing body.

These phytosanitary (the health of plants) measures are intended to ensure that imported plants are free of specified pests.

Here, FAO warns that damage exceeds well beyond agriculture and human health issues. Invasive species can cause clogged waterways and power plant shutdowns.

Biological invasions inflict damages amounting to around five per cent of annual global economic activity, equivalent to about a decade’s worth of natural disasters, according to one study, Brockerhoff said, adding that factoring in harder-to-measure impacts may double that.

Around 90 per cent of world trade is carried by sea today, with vast panoply of differing logistics, making agreement on an inspection method elusive. Some 12 million containers entered the U.S. last year, using no fewer than 77 ports of entry.

“Moreover, many cargoes quickly move inland to enter just-in-time supply chains. That’s how the dreaded brown marmorated stink bug – which chews quickly through high-value fruit and crops – began its European tour a few years ago in Zurich.”

This animal actively prefers steel nooks and crannies for long-distance travel, and once established likes to set up winter hibernation niches inside people’s houses.

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Uruguay’s Victory over Philip Morris: a Win for Tobacco Control and Public Healthhttp://www.ipsnews.net/2016/08/uruguays-victory-over-philip-morris-a-win-for-tobacco-control-and-public-health/?utm_source=rss&utm_medium=rss&utm_campaign=uruguays-victory-over-philip-morris-a-win-for-tobacco-control-and-public-health http://www.ipsnews.net/2016/08/uruguays-victory-over-philip-morris-a-win-for-tobacco-control-and-public-health/#comments Mon, 22 Aug 2016 08:49:27 +0000 German Velasquez http://www.ipsnews.net/?p=146586 Credit: Bigstock

Credit: Bigstock

By Germán Velásquez
GENEVA, Aug 22 2016 (IPS)

In a landmark decision that has been hailed as a victory of public health measures against narrow commercial interests, an international tribunal has dismissed a claim by tobacco giant company Philip Morris that the Uruguay government violated its rights by instituting tobacco control measures.

The ruling had been much anticipated as it was the first international case brought against a government for taking measures to curb the marketing of tobacco products.

Philip Morris had started proceedings in February 2010 against Uruguay at the International Centre for Settlement of Investment Disputes (ICSID) under a bilateral investment treaty (BIT) between Uruguay and Switzerland. The decision was given on 8 July 2016.

Under the BIT, foreign companies can take cases against the host state on various grounds, including if its policies constitute an expropriation of the companies” expectation of profits, or a violation of “fair and equitable treatment” These investment treaties and arbitration tribunals like ICSID have been heavily criticised in recent years for decisions favouring companies and that critics argue violate the right of states to regulate in the public interest.

In this particular case, the tribunal gave a ruling that dismissed the tobacco giant’s claims and upheld that the Uruguayan pro-health measures were allowed.

President Tabaré Vázquez of Uruguay, responding to the ruling, stated on 8 July:: “We have succeeded to prove at the International Centre for Settlement of Investment Disputes that our country, without violating any treaty, has met its unwavering commitment to defend the health of its people… From now on, when tobacco companies try to undermine the regulations adopted in the context of the framework tobacco convention with the threat of litigation, they (countries) will find our precedent.”

Germán Velásquez

Germán Velásquez

Philip Morris International (PMI) started legal proceedings against Uruguay’ government at the International Centre for Settlement of Investment Disputes (ICSID), based at the World Bank, in February 2010. This was the first time the tobacco industry challenged a state in front of an international tribunal.

Philip Morris claimed that the health measures imposed by the Ministry of Health of Uruguay violated its intellectual property rights and failed to comply with Uruguay’s obligation under its bilateral investment treaty (BIT) with Switzerland.

Two specific measures were contested by Philip Morris. The first measure was the Single Presentation Requirement introduced by the Uruguayan Public Health Ministry in 2008, where tobacco manufacturers could no longer sell multiple varieties of one brand. Philip Morris had to withdraw 7 of its 12 products and alleged that the restriction to market only one variety substantially affected its company’s value.

The second measure contested by Philip Morris was the so-called “80/80 Regulation”. Under a presidential decree, graphic health warnings on cigarette packages should cover 80 percent instead of 50 percent, of the packaging, leaving only 20 percent for the tobacco companies’ trademarks and advertisement.

Uruguay adopted strict tobacco control policies to comply with the World Health Organization’s Framework Convention on Tobacco Control (WHO FCTC), in light of evidence that tobacco consumption leads to addiction, illness, and death.

According to the Ministry of Health, since Uruguay introduced its tobacco control programme in 2003, its comprehensive tobacco control campaign has resulted in a substantial and unprecedented decrease in tobacco use.

From 2005 to 2011 per person consumption of cigarettes dropped by 25.8 %. Tobacco consumption among school-going youth aged 12­17 decreased from over 30 percent to 9.2 percent from 2003 to 2011. Ministry of Health data also indicate that since smoke-free laws were introduced, hospitalization for acute myocardial infarction has reduced by 22 percent.

Since this was the first international litigation, the case is highly important for similar debates taking place in other forums, like the World Trade Organization, where some states are being challenged by other states for their tobacco control measures. It is a significant victory for a state facing commercial threats by tobacco companies fighting control measures.

The decision is supportive of states that choose to exercise their sovereign right to introduce laws and strategies to control tobacco sales in order to protect the health of their population.

This is a David against Goliath victory. The annual revenue of Philip Morris in 2013 was reported at $80.2 billion, in contrast to Uruguay”s gross domestic product of $55.7 billion. The international lawyer and practitioner in investment treaty arbitration Todd Weiler stated in a legal opinion that: “the claim is nothing more than the cynical attempt by a wealthy multinational corporation to make an example of a small country with limited resources to defend against a well-funded international legal action.”

An important aspect of the case was that the secretariats of the World Health Organization and the WHO Framework Convention on Tobacco Control (WHO FCTC) submitted an amicus brief during the proceedings.

The brief provided an overview of global tobacco control, including the role of the WHO FCTC. It set out the public health evidence underlying Uruguay’s tobacco packaging and labelling laws and detailed state practice in implementing similar measures.

This is a David against Goliath victory. The annual revenue of Philip Morris in 2013 was reported at $80.2 billion, in contrast to Uruguay''s gross domestic product of $55.7 billion
The Tribunal accepted the submission of the amicus brief on the basis that it provided an independent perspective on the matters in the dispute and contributed expertise from “qualified agencies”. The Tribunal subsequently relied on the brief at several points of the factual and legal analysis in their decision.

In accepting submission of the amicus brief the Tribunal noted that given the “public interest involved in this case”the amicus brief would “support the transparency of the proceeding”.

The Tribunal ruling upheld that Uruguay could maintain the following specific regulations:

Prohibiting tobacco companies from marketing cigarettes in ways that falsely present some cigarettes as less harmful than others.

Requiring tobacco companies to use 80% of the front and back of cigarette packs for graphic/pictures of warnings of the health danger of smoking.

According to expert Chakravarthi Raghavan there are several specific legal findings of the panel ruling, including:

  1. Uruguay did not violate any of its obligations under the Switzerland/Uruguay Bilateral Investment Treaty, or deny Philip Morris any of the protections provided by that Treaty.
  1. Uruguay’s regulatory measures did not “expropriate” Philip Morris’ property. They were bona fide exercises of Uruguay’s sovereign police power to protect public health.
  1. The measures did not deny Philip Morris “fair and equitable treatment” because they were not arbitrary; instead, they were reasonable measures strongly supported by the scientific literature, and had received broad support from the global tobacco control community.
  1. The measures did not “unreasonably and discriminatorily” deny Philip Morris the use and enjoyment of its trademark rights, because they were enacted in the interests of legitimate policy concerns and were not motivated by an intention to deprive Philip Morris of the value of its investment.

This is a landmark ruling because it supports the case that it is the sovereign right not only of Uruguay but of States in general to adopt laws and regulations to protect public health by regulating the marketing and distribution of tobacco products.

It is hoped that many other countries, which have been awaiting this decision before adopting similar regulations, will follow Uruguay’s example.President Vázquez said it is time for other nations to join Uruguay in this struggle, “without any fear of retaliation from powerful tobacco corporations, as Uruguay has done.”

Nevertheless, there is still a lot of public concern worldwide about the role that bilateral investment treaties has played in curbing the policy space of countries, including for health policies. There have also been serious concerns about the rulings made by other tribunals of ICSID and other arbitration centres, which have favoured the claims of companies and imposed high monetary awards against states. In the case of Philip Morris versus Uruguay, the tribunal’s ruling was correct in supporting the state’s right to regulate in the interest of public health. But the concerns in general are still valid. Other tribunals in other cases may or may not be so sympathetic to the public interest.

This is a reduced version of the article published in www.southcentre.int.

 

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TPPA could be discarded due to US political dynamicshttp://www.ipsnews.net/2016/08/tppa-could-be-discarded-due-to-us-political-dynamics/?utm_source=rss&utm_medium=rss&utm_campaign=tppa-could-be-discarded-due-to-us-political-dynamics http://www.ipsnews.net/2016/08/tppa-could-be-discarded-due-to-us-political-dynamics/#comments Wed, 17 Aug 2016 10:13:21 +0000 Martin Khor http://www.ipsnews.net/?p=146585

Martin Khor is the Executive Director of the South Center, based in Geneva

By Martin Khor
PENANG, Aug 17 2016 (IPS)

No country was more active in pushing for the Trans Pacific Partnership (TPP).  In the five years of negotiations, the United States cajoled, persuaded and pressurised its trade partners take on board its issues and positions.

Finally, when the TPP was signed in February by 12 countries, it was widely expected the agreement will come into force within two years, after each country ratifies it.

But now there are growing doubts if the TPP will become a reality. Ironically it may become a victim of US political dynamics as the TPP has become a toxic issue in its Presidential elections.

Opposing the TPPA is at the centre of Republican nominee Donald Trump’s campaign.He has declared the TPP would be a disaster, it would encourage US companies to move their production abroad and weaken domestic jobs, and called for the US to withdraw from the agreement.  In his typical extreme style, Trump said at a recent rally that the TPP “is another disaster, done and pushed by special interests who want to rape our country.”

Martin Khor

Martin Khor

Bernie Sanders, the Democrat Presidential candidate who ran a surprisingly close contest with Hillary Clinton, championed the anti-TPP cause, saying:  “We shouldn’t re-negotiate the TPP. We should kill this unfettered FTA which would cost us nearly half a million jobs.”

Hillary Clinton also came out against the TPPA, a turn-around from her position when she was Secretary of State and decribed it as a gold-standard agreement.  To counter suspicions that she would again switch positions if she becomes President, Clinton stated: “I am against the TPP, and that means before and after the elections.”

They may all be reflecting popular sentiment that trade agreements have caused the loss of millions of manufacturing jobs, stagnation in wages and contributed to the unfair distribution of benefits in US society, much of which has accrued to the top 1 or 10 per cent of income earners.

An article in New York Times (29 July 2016) began as follows:  “Democrats and Republicans agreed on almost nothing at their conventions this month, except this: free trade, just a decade ago the bedrock of the economic agendas of both parties, is now a political pariah.”

Besides the Presidential candidates, two other players will decide the TPPA’s fate:  President Obama and the US Congress.

Obama has been the TPPA’s main champion, passionately arguing that it will bring economic benefits, raise environmental and labour standards and give the US an advantage over China in Asian geo-politics.

Considering the TPP to be a key legacy of his presidency, Obama wants Congress to ratify the

agreement before his term ends.  But till now he has been unable to get the bill tabled because it would be certainly defeated in the election season, given the TPP’s unpopularity.

His last opportunity is to get the TPP passed during the lame-duck Congress session after the election on 8 November and before mid-January 2017.

“I am against the TPP, and that means before and after the elections.” Hillary Clinton
However, it is unclear whether there is enough support to table a lame-duck TPP bill, and if tabled whether it will pass.

Last year, a related fast-track trade authority bill was adopted with only slim majorities. Now, with the concrete TPPA before them, and the swing in mood, some Congress members who voted for fast track are indicating they won’t vote for TPP.

For example, Clinton’s running mate for Vice President, Senator Tim Kaine, who supported had fast track has now proclaimed his opposition to TPP.  Other leading Democrats who have publicly denounced TPP include  House Minority Leader Nancy Pelossi, and House Ways & Means Committee Ranking Member Sandy Levin who said:“It is now increasingly clear that the TPP agreement will not receive a vote in Congress this year, including in any lame duck session, and if it did, it would fail.”

Congress Republican leaders have also voiced their opposition.  Senate Majority Leader Mitch McConell said that the presidential campaign had produced a political climate that made it virtually impossible to pass the TPP in the “lame duck” session.

House Speaker, Republican Paul D. Ryan (R-Wis.) who played a leading role in writing the fast-track bill, said he sees no reason to bring TPP to the floor for a vote in the lame duck session because “we don’t have the votes.”

Meanwhile, six House Republicans  sent a letter to President Obama in early August last week asking him not to try to move TPP in a “Lame Duck”.

Though the picture thus looks grim for Obama, he should not be under-estimated. He said when the elections are over he will be able to convince Congress to vote for TPP.

“I will actually sit down with people on both sides, on the right and on the left,” he told the media. “We’ll go through the whole provisions….I’m really confident I can make the case this is good for American workers and the American people.”He added many people thought he would fail to obtain the fast track legislation, but he succeeded.

On  12 August, the Obama administration submitted a draft Statement of Administration Action, as required by the fast-track processfor introducing a TPP bill.  The document describes the steps the administration will take to implement changes to U.S. law required by the TPP.  Obama can later send a final statement and the draft of the implementing bill describing the actual changes to US law needed to comply with the TPP agreement.

Following that, a lot of deal-making is expected between the President and Congress members.  Obama will doubtless offer incentives or privileges to some of the demanding Congress members in order to obtain their votes, as was seen in the fast-track process.

To win over Congress, Obama will have to respond to those on the right and left who are upset on specific issues such as the term of monopoly for biologic drugs, or the inclusion of  ISDS (investor-state dispute settlement) in  the TPP.

To pacify them, Obama will have to convince them that what they want will anyway be achieved, even if these are not legally part of the TPP because the TPP text cannot be amended..

He can try to achieve this through bilateral side agreements on specific issues.  Or he can insist that some countries take on extra obligations beyond what is required by the TPP as a condition for obtaining a US certification that they have fulfilled theirTPP  obligations.  This certification is required for the US to provide the TPP’s benefits to its partners, and thus the US has previously made use of this to get countries to take on additional obligations, which can then be shown to Congress members that their objectives have been met.

Obama could theoretically also re-negotiate to amend specific clauses of the TPP in order to appease Congress.  But this option will be unacceptable to the other TPP countries.

In June, Malaysia rejected any notion of renegotiating the TPPA.  The question of renegotiating the TPPA does not arise even if there are such indications by US presidential candidates, said Tan Sri Dr Rebecca Fatima Sta Maria, then the secretary general of the International Trade and Industry Ministry.

“If the US does not ratify the TPPA then it will not be implemented,”  she said.  The other TPP members would have to resort to a ”different form of cooperation.”

Singapore Prime Minister Lee HsienLoong, on a recent visit to Washington, dismissed any possibility of reopening parts of the TPP as some Congress members are seeking. “Nobody wants to reopen negotiations,” he said. “We have no prospect of doing better and every chance of having it fall apart.”

In January, Canadian Trade Minister Chrystia Freeland said a renegotiation of the TPP is not possible. Japan also rejected renegotiations, which it defined as including changing existing side agreements or adding new ones.  This is not going to happen, said Japan’s Deputy Chief of Missions Atsuyuki Oike.

What happens if the US Congress does not adopt the TPP during the lame-duck period?  The 12 countries that signed the agreement in February are given 2 years to ratify it.

Enough countries to account for 85% of the combined GNP of the 12 countries must ratify it for the TPP to come into force.  As the US accounts for over 15% of the combined GNP, a prolonged non-ratification by it would effectively kill the TPPA.

Theoretically, if the TPP is not ratified this year, a new US President can try to get Congress to adopt it in the next year.  But the chances for this happening are very slim.

That’s why the TPP must be passed during the lame duck session.  If it fails to do so, it would mark the dramatic change in public opinion on the benefits of free trade agreements in the United States, the land that pioneered the modern comprehensive free trade agreements.

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Arable Lands Lost at Unprecedented Rate: 33,000 Hectares… a Day!http://www.ipsnews.net/2016/08/arable-land-lost-at-unprecedented-rate-33000-hectares-a-day/?utm_source=rss&utm_medium=rss&utm_campaign=arable-land-lost-at-unprecedented-rate-33000-hectares-a-day http://www.ipsnews.net/2016/08/arable-land-lost-at-unprecedented-rate-33000-hectares-a-day/#comments Tue, 16 Aug 2016 17:50:46 +0000 Baher Kamal http://www.ipsnews.net/?p=146571 Desert, drought advancing. Photo UNEP

Desert, drought advancing. Photo UNEP

By Baher Kamal
ROME, Aug 16 2016 (IPS)

Humankind is a witness every single day to a new, unprecedented challenge. One of them is the very fact that the world’s arable lands are being lost at 30 to 35 times the historical rate. Each year, 12 million hectares are lost. That means 33,000 hectares a day!

Moreover, scientists have estimated that the fraction of land surface area experiencing drought conditions has grown from 10-15 per cent in the early 1970s to more than 30 per cent by early 2000, and these figures are expected to increase in the foreseeable future.

While drought is happening everywhere, Africa appears as the most impacted continent by its effects. According to the Bonn-based United Nations Convention to Combat Desertification (UNCCD), two-thirds of African lands are now either desert or dry-lands.

The challenge is enormous for this second largest continent on Earth, which is home to 1.2 billion inhabitants in 54 countries and which has been the most impacted region by the 2015/2016 weather event known as El-Niño.

Daniel Tsegai

Daniel Tsegai

IPS interviewed Daniel Tsegai, Programme Officer at UNCCD, which has co-organised with the Namibian government the Africa Drought Conference on August 15-19 in Windhoek.

“Globally, drought is becoming more severe, more frequent, increasing in duration and spatial extent and its impact is increasing, including massive human displacement and migration. The current drought is an evidence. African countries are severely affected,” Tsegai clarifies.

The African Drought Conference focus has been put on the so-called “drought resilience.”

IPS asks Tsegai what is this all about? “Drought resilience is simply defined as the capacity of a country to survive consecutive droughts and be able to recover to pre-drought conditions,” he explains.

“To begin with there are four aspects of Drought: Meteorological (weather), Hydrological (surface water), Agricultural (farming) and socioeconomic (effects on humans) droughts.”

 

The Five Big “Lacks”

Asked for the major challenges ahead when it comes to working on drought resilience in Africa, Tsegai tells IPS that these are mainly:

a) Lack of adequate data base such as weather, water resources (ground and surface water), soil moisture as well as past drought incidences and impacts;

b) Poor coordination among various relevant sectors and stakeholders in a country and between countries in a region;

c) Low level of capacity to implement drought risk mitigation measures (especially at local level);

d)    Insufficient political will to implement national drought policies, and

e) Economics of drought preparedness is not well investigated, achieving a better understanding of the economic benefits of preparing for drought before drought strikes is beneficial.

As for the objectives of the UNCCD, Tsegai explains that they are to seek to improve land productivity, to restore (or preserve) land, to establish more efficient water usage and improve the living conditions of those populations affected by drought and desertification.

According to Tsegai, some of the strategies that can be adopted to build drought resilience include:

First: a paradigm shift on the way we deal with drought. We will need to change the way we think about drought.

“Drought is not any longer a one time off event or even a ‘crisis’. It is going to be more frequent, severe and longer duration. It is a constant ‘risk’, he tells IPS.

“Thus, we need to move away from being reactive to proactive; from crisis management approach to risk management; from a piecemeal approach to a more coordinated/integrated approach. Treating drought as a crisis means dealing with the symptoms of drought and not the root causes,” Tsegai explains.

“In short, developing national drought based on the principles of risk reduction is the way forward.”

Second: Strengthening Drought Monitoring and early warning systems (both for drought and the impacts);

Third: Assessing vulnerability of drought in the country (Drought risk profiling on whom is likely to be affected, why? Which region and what will be the impacts?);

Fourth: Carrying out practical drought risk mitigation measures including the development of sustainable irrigation schemes for crops and livestock, monitoring and measuring water supply and uses, boasting the recycling and reuse of water and waste-water, exploring the potential of growing more drought tolerant crops and expanding crop insurance.

 

The Five Big Options

Asked what is expected outcome of the African Drought Conference, Tsegai answers:

  1.  To come up with a Common Strategy document at Africa level, a strategy that strengthens African drought preparedness that can be implemented and further shared at country level.
  1. To lead to the development of integrated national drought policies aimed at building more drought resilient societies based on the sustainable use and management of natural resources (land / soil, forest, biodiversity, water, energy, etc.).
  1. Countries are expected to come up with binding Drought Protocol- to adopt Windhoek Declaration for African countries-, which would be presented at the African Ministerial Conference on the Environment next year and expected to be endorsed at the African Union summit.
  1. With this in mind, the outcomes of the conference will be brought to the attention of the African Union for the collective African heads of states and governments’ endorsements, and
  1. It is further expected that the conference will strengthen partnerships and cooperation (South-South) to support the development of new and the improvement of existing national policies and strategies on drought management.

 

Droughts, The “Costliest” Disasters

It has been estimated that droughts are the world’s costliest natural disasters and affect more people than any other form of natural disaster, Tsegai tells IPS.

Race against time in drought-ravaged Southern Africa to ensure 23 million people receive farming support | Photo: FAO

Race against time in drought-ravaged Southern Africa to ensure 23 million people receive farming support | Photo: FAO

“Droughts are considered to be the most far-reaching of all natural disasters, causing short and long-term economic and ecological losses as well as significant spiralling secondary and tertiary impacts.”

To reduce societal vulnerability to droughts, a paradigm shift of drought management approaches is required to overcome the prevailing structures of reactive, post-hazard management and move towards proactive, risk based approaches of disaster management, he stresses.

“Risk based drought management is, however, multifaceted and requires the involvement of a variety of stakeholders, and, from a drought management policy perspective, capacities in diverse ministries and national institutions are needed.”

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The Economic Partnership Agreement has never made much sense for Tanzaniahttp://www.ipsnews.net/2016/08/the-economic-partnership-agreement-has-never-made-much-sense-for-tanzania/?utm_source=rss&utm_medium=rss&utm_campaign=the-economic-partnership-agreement-has-never-made-much-sense-for-tanzania http://www.ipsnews.net/2016/08/the-economic-partnership-agreement-has-never-made-much-sense-for-tanzania/#comments Tue, 16 Aug 2016 17:02:17 +0000 Benjamin W. Mkapa http://www.ipsnews.net/?p=146567

Benjamin William Mkapa is a former President of Tanzania and the Chair of the South Centre Board

By Benjamin W. Mkapa
GENEVA, Aug 16 2016 (IPS)

The EPA issue has once again re-emerged when, in early July, Tanzania informed East African Community( EAC) members and the European Union (EU) that it would not be able to sign the Economic Partnership Agreement (EPA) between European Union (EU)  and the six EAC member states.

The European Commission reportedly proposed signature of the EAC EPA in Nairobi, on the sidelines of the 14th session of the UN Conference on Trade and Development (UNCTAD XIV).

Benjamin William Mkapa

Benjamin William Mkapa

This is a major quadrennial event where all United Nations member states negotiate guidance for UNCTAD. For the European Commission, it would have been a propitious place for a signature ceremony as it would have projected the EPA as a “trade and development” agreement to the benefit of EAC.

Nevertheless, the agreement is antithetical to Tanzania’s as well as the region’s trade and development prospects.

The EPA for Tanzania and the EAC never made sense. The maths just never added up. The costs for the country and the EAC region would have been higher than the benefits.

As a least developed country (LDC), Tanzania already enjoys the Everything but Arms (EBA) preference scheme provided by the European Union.

In other words, we can already export duty-free and quota-free to the EU market without providing the EU with similar market access terms. If we sign the EPA, we would still get the same duty-free access, but in return, we would have to open up our markets for EU exports.

The EPA is a free trade agreement. Under it, Tanzania would have to reduce to zero the tariffs on 90 per cent of all its industrial goods trade with the EU, according duty-free access for almost all the EU’s non-agricultural products into the country.

Such a high level of liberalisation vis-à-vis a very competitive partner is likely to put our existing local industries in jeopardy and discourage the development of new industries.

Research using trade data shows that Tanzania currently produces and exports on 983 tariff lines (at the HS 6 digit level.) The EU produces and exports on over 5,000 tariff lines. If the EPA were implemented, 335 of the 983 products we currently produce would be protected in the EPA’s “sensitive list,” but 648 tariff lines would be made duty-free.

So the existing industries on these 648 tariff lines would have to compete with EU’s imports without the protection of tariffs. Will these sectors survive the competition?

These 648 tariff lines include agricultural products (maize products, cotton seed oil cake); chemical products (urea, fertilisers); vehicle industry parts (tyres); medicaments; intermediate industrial products ( plastic packing material, steel, iron and aluminium articles, wires and cables); parts of machines and final industrial products (weighing machines, metal rolling mills, drilling machines, transformers, generating sets, prefabricated buildings etc); parts of machines (parts of gas turbines, parts of cranes, work-trucks, shovels, and other construction machinery, parts of machines for industrial preparation/ manufacturing of food, aircraft parts etc).

We can already export duty-free and quota-free to the EU market without providing the EU with similar market access terms. If we sign the EPA, we would still get the same duty-free access, but in return, we would have to open up our markets for EU exports
The list does not stop here. Liberalisation (zero tariffs) also applies to the many industrial sectors that Tanzania and the EAC do not yet have existing production/exports ­ about 3,102 tariff lines for Tanzania.

Statistics show that in fact, for the EAC region, the African market is the primary market for its manufactured exports. In contrast, 91% of its current trade with the EU is made up of primary commodity exports (agricultural products such as coffee, tea, spices, fruit and vegetables, fish, tobacco, hides and skins etc).

Only a minuscule 6% or about $200,000 of EAC exports to the EU is composed of manufactured goods.In contrast, of the total EAC exports to Africa, almost 50% is made up of manufactured exports – about $2.5 billion – according to 2013 ­ 2015 data. Of this, $1.5 billion are EAC country exports to other EAC countries.

These figures tell two stories: One; the importance of the African market for EAC’s aspirations to industrialise. In contrast, the EU market plays almost no role in this. Two the EAC internal market makes up 60% of EAC’s manufactured exports to Africa, i.e., the EAC regional market is extremely valuable in supporting EAC’s industrialisation efforts.

The EPA would threaten this regional industrialisation opportunity that is currently blossoming since most EU manufactured products would enter the EAC market dutyfree. Just as our manufactured products are not competitive in the EU market, even though they can be exported dutyfree, might it not be the case that when EU manufactured products can come duty-free into the EAC market, EAC manufactured products may also not sell? The EPA could in fact destroy our economic regional integration efforts.

The pains EAC has taken to build a regional market may instead help serve EU’s commercial interests by offering the EU one EAC market, rather than ensuring that that market can be accessed by our own producers.

The other area where EPA hits the heart of our industrialisation aspirations are its disciplines on export taxes. At the World Trade Organization, export taxes are completely legal.The logic of export taxes is to encourage producers to enter into value-added processing, hence encouraging diversification and the upgradation of production capacities. Developed countries themselves had used these policy tools when they were developing.

The EU has a raw materials initiative aimed at accessing non-agricultural raw materials found in other countries. According to the European Commission, ‘securing reliable and unhindered access to raw materials is important for the EU. In the EU, there are at least 30 million jobs depending on the availability of raw materials.’ In implementing this initiative, the EU has used trade agreements to discipline export taxes.

The EPA prohibits signatories from introducing new export taxes or increase existing ones. For Tanzania and the EAC region with its rich deposits of raw material, including tungsten, cobalt, tantalum etc; such disciplines in the long-run would be incongruent with our objective to industrialise and add value to our resources.

The other area of loss resulting from the EPA is tariff revenue, and the numbers are not small. Conservative estimates (assuming import growth of 0.9% year on year) show that for the EAC as a whole tariff revenue losses would amount to $251 million a year by the end of the EPA’s implementation period Cumulative tariff revenue losses would amount to USD 2.9 billion in the first 25 years of the EPA’s life.

For Tanzania, the losses based on 2013/­2014 import figures are about $71 million a year by year 25. Cumulatively, just for Tanzania, they come up to $700 million over the first 25 years.

Where is the Promised Development Aid?

EU has made many promises that the EPA would be accompanied by development assistance. Hence the EAC EPA incorporates a ‘Development Matrix’ containing a list of economic development projects for the EAC. The price tag of implementing this Development Matrix is $70 billion.

The Matrix and assistance is to be reviewed every 5 years. For the time-being, the EU has pledged to contribute a paltry $3.49 million, which translates into 0.005% of the total required funds!This is also a far cry from the tariff revenue losses the region faces ­the $251 million a year mentioned above.

The only area where the EPA is supposed to serve the interest of the EAC is by providing duty-free access to Kenya. As a non-LDC, Kenya does not have duty-free access via the EU’s EBA. Kenya’s main export item to the EU is flowers ­ just over $500,000 a year.

Without the EPA, Kenyan’s flowers would be charged a 10% customs duty. There are other Kenyan exports also ­vegetables, fruit, fish – that will face tariffs. However, the flower industry has thus far been the most vocal. Nevertheless, all in all, Kenyan exports to the EU market (including the UK) amounts to about $1.5 billion.

If no EPA is signed, the extra duties charged to Kenyan exports amounts to about $100 million a year. Is this worth signing an EPA for? — The avoidance of duties of $100 million? The tariff revenue losses as the EPA is implemented (and more tariff lines are liberalised) would be comparable.

This does not even include the tariff revenue losses of the other EAC LDCs, nor the challenges posed to domestic/ regional industries. In addition, the Brexit development is further reason for the region to pause and reconsider.

The UK is a major export market for Kenya, absorbing 28% of Kenya’s exports to the EU. This reduces the EPA’s supposed ‘benefits’ by a quarter for Kenya. There is a possible solution for Kenya ­ to apply for the EU’s Generalised System of Preferences Plus scheme (GSP+). Under this, almost all of Kenya’s current exports could enter EU duty-free including flowers and fish.

This option could be explored. Alternatively all EAC countries would do well to attempt to diversify production and exports away from primary commodities towards value-added products, and also to diversify our export destinations. Africa is a critical market for EAC’s manufactured goods. Regional integration and trade is the most promising avenue for EAC’s industrial development. The EPA would derail us from that promise.

This article was published firstly in Daily News of Tanzania

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Youth Key to the Success of the SDGs in Kenyahttp://www.ipsnews.net/2016/08/youth-key-to-the-success-of-the-sdgs-in-kenya/?utm_source=rss&utm_medium=rss&utm_campaign=youth-key-to-the-success-of-the-sdgs-in-kenya http://www.ipsnews.net/2016/08/youth-key-to-the-success-of-the-sdgs-in-kenya/#comments Fri, 12 Aug 2016 13:52:23 +0000 Siddharth Chatterjee and Werner Schultink http://www.ipsnews.net/?p=146531 Siddharth Chatterjee (@sidchat1) is the United Nations Resident Coordinator a.i for Kenya and the UNFPA Representative. Werner Schultink (@janwerners) is the UNICEF Representative to Kenya.]]> Elected national Children’s Government of Kenya for 2016. Photo credit: UNICEF Kenya\2016\Gakuo.

Elected national Children’s Government of Kenya for 2016. Photo credit: UNICEF Kenya\2016\Gakuo.

By Siddharth Chatterjee and Werner Schultink
NAIROBI, Kenya, Aug 12 2016 (IPS)

Consider this: in 1956 Sweden and Kenya’s population was roughly at 7 million. Today Sweden has about 9.8 million, while there are about 44 million Kenyans.

Fertility levels are declining gradually and Kenyans are living longer. It is estimated that there will be 85 million people in Kenya by 2050, with three quarters of these being below 35 years. While Kenya’s median age is 19, Sweden’s is 42.

Kenya’s mushrooming population presents an extraordinary opportunity and several challenges. The opportunity lies in the potential for a so-called demographic dividend of sustained rapid economic growth in the coming decades. There is reason for optimism that Kenya can benefit from a demographic dividend within 15 to 20 years. It is estimated that Kenya’s working age population will grow to 73 percent by year 2050, potentially bolstering the country’s GDP per capita 12 times higher than the present, with nearly 90 percent of the working age in employment. (NCPD Policy Brief: Demographic dividend opportunities for Kenya, July 2014.)

But Kenya’s demographic dividend is not guaranteed by its changing demographics alone. Key actions are required if children of today – who will be entering the labor force a decade’s time – are skilled, dynamic and entrepreneurial.

Unemployment among Kenya’s youth is now estimated to stand at 17.3 per cent compared to six per cent for both Uganda and Tanzania. A World Bank report says mass unemployment continues to deny Kenya the opportunity to put its growing labour force to productive use, thereby “denying the economy the demographic dividend from majority young population”.

Investment in children is Kenya’s best hope to set the right pre-conditions for this potentially transformative demographic dividend. Properly harnessed, the potential of the youth could propel the country forward as a dynamic and productive engine of growth in all the 17 Sustainable Development Goals (SDGs) set out last September.

At the beginning of this year, UN member states started the long journey to implement the SDGs and they all have 169 targets to achieve by end of December 2030. Some countries have already made good progress on the localization and mainstreaming of the SDGs in their development plans and budgeting processes. In fact, 22 of the 193 Member States that endorsed the SDGs voluntarily reported on their progress at the High-level Political Forum (HLPF) held last month in New York.

The Government Kenya played a very important role in the design of the global development agenda. About 20,000 Kenyans participated in the MyWorld Survey, in which they voted on the kind of world they wanted after the MDGs. Kenya was also one of many countries that commissioned consultations at national, regional and community levels to discuss the Post-2015 development agenda, and these culminated into a position paper that was presented for inclusion into the post-2015 development agenda.

The global development agenda dovetails with Kenya’s Vision 2030 in terms of timeline and key strategic focus and seeks as well to make Kenya globally competitive and prosperous for all citizens. Kenya Vision 2030 does capture the three dimensions of sustainable development including economic, social and environment. This makes it much easier to align the national development plan of Kenya to the SDGs.

However, as was evident with the millennium development goals (MDGs), the work of translating SDGs into results requires strategic actions. It requires that countries exploit fully the resources within in order to make the giant leaps needed to meet the targets.

Experts agree that for Kenya and the rest of Africa, these giant leaps will come through the youthful human resource, but only when the working age population becomes larger than people of non-working age.

In Kenya, there are about eight dependents for every working person, meaning that the state faces very high costs associated with economically unproductive populations. It means that Kenya must invest to create jobs, and invest in the young people with the skills to fill those jobs.

A society that wants to diversify its economy, achieve industrialization and socio-economic transformation and the SDGs must invest heavily in a strong, dynamic and empowered youth and women to drive this agenda. Kenya’s children will need quality learning that leads to educational attainment that is relevant to their lives, and gives them with the skills needed for the country’s changing labor market. Protection from ill health, malnutrition, violence, conflict, abuse and exploitation are also crucial for children – and their nation – to prosper.

In Kenya, the youth constitute an important segment of the country’s population, accounting for 35.4% of the total population and 66.7% of the adult population in 2009. The proportion of the youth category is expected to remain relatively high at 35.4% of the population in 2015, 34.8% in 2020, 34.6% in 2025 and 35.2% by 2030. This means that at least one in every three Kenyans will continue to be young.

Therefore, if Kenya and all other developing countries must successfully implement the SDGs, it is very important that young people, both boys and girls, no longer remain passive beneficiaries of development but must become equal and effective partners for development. This means that the problem of youth must be addressed as a policy and development issue, which must be mainstreamed in all planning and budgeting processes.

In addition, strong political commitment and leadership must be demonstrated at both national and local levels to address the problems of youth in Kenya. High growth rates must be translated into skills and jobs for the increasing young population and workforce in Kenya. Such actions will indeed help to keep young people away from being targets of youth radicalization and violent extremism.

Investing in youth is not only an investment in the future but also fundamental for the successful implementation of the SDGs.

Today 12 August 2016 is International Youth Day. Let’s commit to investing in youth. It is not only an investment in the future but also fundamental for the successful implementation of the SDGs.

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Youth Employment: Turning Workplace Partnerships into Opportunityhttp://www.ipsnews.net/2016/08/youth-employment-turning-workplace-partnerships-into-opportunity/?utm_source=rss&utm_medium=rss&utm_campaign=youth-employment-turning-workplace-partnerships-into-opportunity http://www.ipsnews.net/2016/08/youth-employment-turning-workplace-partnerships-into-opportunity/#comments Fri, 12 Aug 2016 09:53:45 +0000 Sofia Garcia http://www.ipsnews.net/?p=146528 Sofía García García is the SOS Children’s Villages Representative to the United Nations in New York.]]> Sofía García García is the SOS Children’s Villages Representative to the United Nations in New York.]]> http://www.ipsnews.net/2016/08/youth-employment-turning-workplace-partnerships-into-opportunity/feed/ 0 War on Climate Terror (II): Fleeing Disasters, Escaping Drought, Migratinghttp://www.ipsnews.net/2016/08/war-on-climate-terror-ii-fleeing-disasters-escaping-drought-migrating/?utm_source=rss&utm_medium=rss&utm_campaign=war-on-climate-terror-ii-fleeing-disasters-escaping-drought-migrating http://www.ipsnews.net/2016/08/war-on-climate-terror-ii-fleeing-disasters-escaping-drought-migrating/#comments Thu, 11 Aug 2016 16:13:57 +0000 Baher Kamal http://www.ipsnews.net/?p=146520 Young, new arrivals from Sudan’s Darfur region endure a sandstorm in the border town of Bamina, eastern Chad. Rainfall in this region has been in decline since 1950. This, coupled with deforestation, has had a devastating effect on the environment. Credit: ©UNHCR/H.Caux

Young, new arrivals from Sudan’s Darfur region endure a sandstorm in the border town of Bamina, eastern Chad. Rainfall in this region has been in decline since 1950. This, coupled with deforestation, has had a devastating effect on the environment. Credit: ©UNHCR/H.Caux

By Baher Kamal
ROME, Aug 11 2016 (IPS)

“No one can deny the terrible similarities between those running from the threat of guns and those fleeing creeping desertification, water shortages, floods and hurricanes.”

Hardly a short, simply-worded statement could so sharply describe the ignored human drama of millions of victims of man-made wars, violence, poverty and disasters like the one spelled out by the authoritative voice of Prof. Dr. Konrad Osterwalder, the former rector of United Nations University, a global think tank and postgraduate teaching organisation headquartered in Japan.

But while widespread violence and climate catastrophes are common to all continents and countries, there is an overwhelming consensus among experts, scientific community and international specialised organisations that Africa is the most impacted region by them.

Only second to Asia, both extension and population wise, Africa is on the one hand home to nearly half of some 40 on-going armed conflicts. On the other, this continent made of 54 states and 1,2 billion inhabitants, is the most hit region by all sorts of consequences of growing climate change—to which by the way it is the least originator.

Key Facts

The cause-effect relationship between climate and massive population movement is already an indisputable fact. See what world specialised organisations say:

1. – Droughts combined with population growth, a lack of sustainable land and water management, natural disasters, political conflicts and tensions and other factors have resulted in massive population movements across Africa, the United Nations Environment Programme (UNEP) reports.

Somali refugees flee flooding in Dadaab, Kenya. The Dadaab refugee camps are situated in areas prone to both drought and flooding, making life for the refugees and delivery of assistance by UNHCR challenging. Credit:©UNHCR/B.Bannon

Somali refugees flee flooding in Dadaab, Kenya. The Dadaab refugee camps are situated in areas prone to both drought and flooding, making life for the refugees and delivery of assistance by UNHCR challenging. Credit:©UNHCR/B.Bannon

Displacement in Africa is the result of a multitude of causes including struggles for political power, communal violence, disputes over land, floods, storms and other such natural hazards, it adds. More than half of the world’s fragile states are in sub-Saharan Africa, and some of these states have the largest numbers of internally displaced persons (IDPs).

“Africa has more countries affected by displacement than any other continent or region, and was home to more than 15 million internally displaced persons in 2015.”

In short, “the relationship between displacement and the environment is well established in Africa. People leave places with slow-onset environmental degradation, such as drought and desertification and continue to flee rapid on-set environmental emergencies such as tropical storms and flash floods,” says Saidou Hamani, Regional Coordinator for Disasters and Conflict sub-programme, UNEP Regional Office for Africa.

2. – According to the 2016 Global Report on Internal Displacement, there were 27.8 million new displacements in 127 countries during 2015, roughly the equivalent of the populations of New York City, London, Paris and Cairo combined; of the total, 8.6 million were associated with conflicts and violence in 28 countries, while 19.2 million were associated with disasters in 113 countries.

Famine refugees in East Africa are caught in a dust storm. Photo credit: flickr/Oxfam International

Famine refugees in East Africa are caught in a dust storm. Photo credit: flickr/Oxfam International

The growing intensity of meteorological disasters due to climate change, coupled with the effects of environmental degradation is likely to continue being a factor behind human displacement.

The International Organization of Migration (IOM) predicts there will be 200 million environmentally-displaced people by the year 2050 with major effects on countries of origin, transit countries, as well as receiving countries.

Individuals and communities displaced by disasters and climate change and those displaced by conflicts often experience similar trauma and deprivation. They may have protection needs and vulnerabilities comparable to those whose displacement is provoked by armed violence or human rights abuses. “Climate change is expected to further exacerbate the stress that fragile states are already facing.”“Africa has more countries affected by displacement than any other continent or region, and was home to more than 15 million internally displaced persons in 2015” - UNEP

In Africa, environmental degradation and food insecurity are related to floods and other factors such as diminishing pasture for cattle as well as water, firewood and other natural resource scarcities, says IOM. Such factors contribute to displacement, resulting in increasing competition for scarce resources, which also contributes to armed conflict, particularly between pastoralists and sedentary communities.

This is especially pronounced in the Sahel (Lake Chad Basin), Sudan, South Sudan, Djibouti, Somalia, Ethiopia and Kenya, all of which have large pastoralist populations who migrate according to seasonal patterns and climatic variations.

Future forecasts vary from 25 million to 1 billion environmental migrants by 2050, moving either within their countries or across borders, on a permanent or temporary basis, with 200 million being the most widely cited estimate. This figure equals the current estimate of international migrants worldwide.

3. – “Changes in the regional climate are impacting issues linked to the availability of natural resources essential to livelihoods in the region, as well as food insecurity. Along with important social, economic and political factors, this can lead to migration, conflict or a combination of the two,” according to Livelihood Security Climate Change, Migration and Conflict in the Sahel.

4. – It is evident that gradual and sudden environmental changes are already resulting in substantial population movements, the UN Refugee agency (UNHCR) reports.

“The number of storms, droughts and floods has increased threefold over the last 30 years with devastating effects on vulnerable communities, particularly in the developing world.”

“Climate change and the environment have a big impact on the lives of millions of forcibly uprooted people around the world.”

Many of them rely on the environment for survival, particularly during emergencies – for food, shelter, energy, fire and warmth, medicine, agriculture, income-generation activities and more, adds UNHCR.

“Unsustainable use of natural resources can lead to environmental degradation, with lasting impacts on natural resources and on the well-being of the displaced and host communities. Additionally, competition over scarce natural resources, such as firewood, water and grazing land, can lead to friction.”

5. – Gradual changes in the environment tend to have an even greater impact on the movement of people than extreme events. For instance, over the last thirty years, twice as many people have been affected by droughts as by storms (1.6 billion compared with approx. 718m),according to the International Disaster Database.

In 2008, 20 million persons have been displaced by extreme weather events, compared to 4.6 million internally displaced by conflict and violence over the same period.

6. – Disasters and climate change are a growing concern. Since 2009, an estimated one person every second has been displaced by a disaster, with an average of 22.5 million people displaced by climate or weather-related events since 2008, according to the International Displacement Monitoring Centre www.internal-displacement.org report. (IDMC 2015).

7. – The Intergovernmental Panel on Climate Change, the UN’s science advisory board, projects an increase in the number of displaced over the course of this century. The majority of the people of concern to UNHCR are concentrated in the most vulnerable areas around the world.

Climate change will force people into increasing poverty and displacement, exacerbating the factors that lead to conflict, rendering both the humanitarian needs and responses in such situations even more complex.

Now two key related events are scheduled to take place in the coming days: Africa Drought Conference in Windhoek, Namibia, August 15-19, and the World Humanitarian Day, August 19.

Will this growing, unstoppable human drama deserve the attention of world politicians or at least of the mainstream

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Expansionary fiscal consolidation mythhttp://www.ipsnews.net/2016/08/expansionary-fiscal-consolidation-myth/?utm_source=rss&utm_medium=rss&utm_campaign=expansionary-fiscal-consolidation-myth http://www.ipsnews.net/2016/08/expansionary-fiscal-consolidation-myth/#comments Thu, 11 Aug 2016 12:15:03 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=146514 Anis Chowdhury was Professor of Economics, University of Western Sydney, and held various senior United Nations positions in New York and Bangkok. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development.]]>

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

By Anis Chowdhury and Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Aug 11 2016 (IPS)

The debt crisis in Europe continues to drag on. Drastic measures to cut government debts and deficits, including by replacing democratically elected governments with ‘technocrats’, have only made things worse. The more recent drastic expenditure cuts in Europe to quickly reduce public finance deficits have not only adversely impacted the lives of millions as unemployment soared. The actions also seem to have killed the goose that lay the golden egg of economic growth, resulting in a ‘low growth’ debt trap.

Government debt in the Euro zone reached nearly 92 per cent of GDP at the end of 2014, the highest level since the single currency was introduced in 1999. It dropped marginally to 90.7 per cent at the end of 2015, but is still about 50 per cent higher than the maximum allowed level of 60 per cent set by the Stability and Growth Pact rules designed to make sure EU members “pursue sound public finances and coordinate their fiscal policies”. The debt-GDP ratio was 66 per cent in 2007 before the crisis.

High debt is, of course, of concern. But as the experiences of the Euro zone countries clearly demonstrate, countries cannot come out of debt through drastic cuts in spending, especially when the global economic growth remains tepid, and there is no scope for the rapid rise of export demand. Instead, drastic public expenditure cuts are jeopardizing growth, creating a vicious circle of low growth-high debt, as noted by the IMF in its October 2015 World Economic Outlook.

Deficits, debt and fiscal consolidation

Using historical data, a number of cross-country studies claimed that fiscal consolidation promotes growth and generates employment. Three have been the most influential among policy makers dealing with the economic crisis unleashed by the 2008-2009 global financial meltdown.

First, using data from advanced and emerging economies for 1970-2007, the IMF’s May 2010 Fiscal Monitor claimed a negative relationship between initial government debt and subsequent per capita GDP growth as a stylized fact. On average, a 10 percentage point increase in the initial debt-GDP ratio was associated with a drop in annual real per capita GDP growth of around 0.2 percentage points per year. By implication, a reduction in debt-GDP ratio should enhance growth. Released just before the G20 Toronto Summit, it provided the ammunition for fiscal hawks urging immediate fiscal consolidation. The IMF has since admitted that its fiscal consolidation advice in 2010 was based on an ad-hoc exercise.

Using a different methodology, the IMF’s 2010 World Economic Outlook reported that reducing fiscal deficits by one per cent of GDP “typically reduces GDP by about 0.5% within two years and raises the unemployment rate by about 0.3 percentage point”. Domestic demand—consumption and investment—falls by about 1%”. Similarly, a 2015 IMF research paper concluded that “Empirical evidence suggests that the level at which the debt-to-GDP ratio starts to harm long-run growth is likely to vary with the level of economic development and to depend on other factors, such as the investor base”.

The second study, of 107 episodes of fiscal consolidation in all OECD countries during 1970-2007 by Alberto Alesina and Silvia Ardagna, found 26 cases (out of 107) of fiscal consolidation associated with resumed growth, probably influenced policy makers most. This happened despite the actual finding that “…sometimes, not always, some fiscal adjustments based upon spending cuts are not associated with economic downturns.”

Yet, in Harvard Professor Alesina’s public statement, “several” became “many” and “sometimes” became “frequently”, and mere “association” implied “causation”. In April 2010, Alesina told European Union economic and finance ministers that “large, credible and decisive” spending cuts to rescue budget deficits have frequently been followed by economic growth. Alesina was even cited in the official communiqué of an EU finance ministers’ meeting.

Jonathan Portes of the UK Treasury has acknowledged that Alesina was particularly influential when the UK Treasury argued in its 2010 ‘Emergency Budget’ that the wider effects of fiscal consolidation “will tend to boost demand growth, could improve the underlying performance of the economy and could even be sufficiently strong to outweigh the negative effects”. Christina Romer, then Chair of the US President’s Council of Economic Advisors, also acknowledged that the paper became ‘very influential’, noting exasperatedly that “everyone has been citing it”.

Researchers have found serious methodological and data errors in this work. Historical experience, including that of current Euro zone economies, suggests that the probability of successful fiscal consolidation is low. These successes depended on factors such as global business cycles, monetary policy, exchange rate policy and structural reforms.

Drawing on the IMF’s critique of Alesina and his associates, even the influential The Economist (30 September, 2010) dismissed the view that fiscal consolidation today would be “painless” as “wishful thinking”. Nevertheless, the IMF’s policy advice remained primarily in favour of fiscal consolidation regardless of a country’s economic circumstances or development level. There seems to be a clear disconnect between the IMF’s research and its operations.

The third study, by Harvard Professors Carmen Reinhart and Kenneth Rogoff on the history of financial crises and their aftermaths, claimed that rising government debt levels are associated with much weaker economic growth, indeed negative rates. According to them, once the debt-to-GDP exceeds the threshold ratio of 90 per cent, average growth dropped from around 3 per cent to -0.1 per cent in the post-World War II sample period. Since then, however, significant data omissions, questionable weighting methods and elementary coding errors in their original work have been uncovered. Nevertheless, the Reinhart-Rogoff findings were seized upon by the media and politicians around the world to justify austerity policies and drastic public spending cuts.

Bill Clinton, fiscal hawk?

Supporters of austerity based fiscal consolidation often cite President Bill Clinton’s second term in the late 1990s. However, the data shows that fiscal consolidation was achieved through growth, contrary to the claim that austerity produced growth. Clinton broke with the traditional policy of using the exchange rate to address current account or trade imbalances, opting for a strong dollar. Thus, the US dollar rose against major currencies from less than 80 in January 1995 to over 100 by January 2000.

The strong US dollar lowered imported inflation, allowing the Fed to maintain low interest rates even though unemployment fell markedly. The low interest rate policy not only boosted growth, but also helped keep bond yields close to nominal GDP growth rates. Thus, the interest burden was kept under control, with primary balances stable at close to zero.

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The Wild Cardshttp://www.ipsnews.net/2016/08/the-wild-cards/?utm_source=rss&utm_medium=rss&utm_campaign=the-wild-cards http://www.ipsnews.net/2016/08/the-wild-cards/#comments Wed, 10 Aug 2016 15:59:32 +0000 Rafia Zakaria http://www.ipsnews.net/?p=146500 By Rafia Zakaria
Aug 10 2016 (Dawn, Pakistan)

The Rio Olympics began with the signature fanfare that accompanies the Games every four years. However, unlike every year, the nature and size of the spectacle, the synchronised dancers, over-the-top fireworks and the millions spent brought a new set of disappointments with them.

The writer is an attorney teaching constitutional law and political philosophy.

The writer is an attorney teaching constitutional law and political philosophy.

Brazil is one of the BRICS nations, the Brazil, Russia, India, China and South Africa constellation that is supposed to represent the hope of the global south — a discourse of globalism not centred on the West, standing up to the colonial underpinnings of so much of the world order.

Yet, if you were holding your breath to see any of this reflected in the opening ceremony of the Rio Olympics, you waited in vain. True, the indigenous tribes of the country, disenfranchised, marginalised and fetishised, were included in the ceremony; but they were forced into the same round of antics and acrobatics that could have belonged in any nation with less of an anti-colonial agenda. If anything, the tributes to all things specifically Brazilian melded in with the general rituals of pomp and pageantry.

A better Olympics, one that is not exploitative, may simply not be possible.

It is not Brazil’s fault and, in a sense, Brazil’s failure underlines the elusiveness of a decolonial discourse that recognises histories of oppression and exclusion, and yet imagines and believes in the possibility of participating in global discourse. Take, for instance, the parade of nations. Out of the 206 nations participating in the Rio Olympics, 75 have never won a medal. The meaning of this statistic is that for the vast majority of participants, this parade at the beginning of the Games was the single moment in which their participation and their nation had a fleeting moment of recognition.

In Rio this year, this moment was even more fleeting. In a noble effort to thumb their nose at the dominance of English, which can in some rough approximation be equivocated with the omniscience of the colonial worldview, this parade was held in the order prescribed by the Portuguese and not the English alphabet.

It was a great idea, one no doubt adding to what the local organisers may have deemed their moment of anti-colonial independence. Its actual consequence, sadly, was rather dismal. Many countries that do not speak Portuguese but may have had some bare familiarity with the English alphabet (admittedly only owing to the colonial excesses of the British) waited in vain and then abandoned altogether their wait for their nation’s moment.

Brazil’s use of the Portuguese alphabet may have been successful in thumbing its nose at America, but it also ended up excluding several hundreds of millions of others who could make little sense of the means via which the parade of nations was being conducted (not to mention that the Portuguese themselves were colonists, their language an export to Brazil).

The case of Brazil and the Rio Olympics, then, represents the larger problem inherent in decolonisation: the efforts of emerging powers to have it both ways. In this case, Brazil wants millions to watch and the millions spent on the opening ceremony are evidence of that. Millions earned, pro-Olympic Brazilians could argue, means more available to solve the problems of inflation, homelessness, epidemic diseases and all the rest that plague Brazil in its Olympic moment.

It is possibly because of just this that the general framework of Olympic largesse was replicated with such a lack of originality, such a seeming concern toward staying close to what has been done before.

This, it was probably estimated, would ensure an audience and, with the revenue from advertising and endorsements, guarantee the avalanche of cash that all Olympic host nations await. Homage to the uniqueness of Brazil, its efforts to recapture a pre-colonial past, to restore the dignity of its own indigenous people and to present the possibility of a discourse not dominated by imperial erasures, were to be fitted into the details.

The middle ground — a more cheerful anti-colonialism that courts capitalist spending while showing off its local colour, reclaims pre-colonial history without bitterness, shakes hands with former oppressors only to spit behind their backs — is rather marshy and inhospitable. In this sense, the tenacious protesters that picketed outside the selfie-ridden enforced cheer of the inside of the stadium are probably correct; there can be no “moderate exploitation of the poor” and no “thoughtful presentation of over-the-top spending”.

It is perhaps the very framework of the Games, their crucial reliance on inducing awe in the onlooker, an effect that in turn relies essentially on power fitfully and thoughtlessly paraded, that is flawed. A better Olympics, one that is not exploitative, that truly respects and reifies marginalised narratives, may simply not be possible.

While it may not have been intentional, Pakistan’s minimal participation can be justified on the basis of these noble reasons, a disavowal of the Games as showcasing the rich and powerful and their attendant advantages. Pakistan sent perhaps its smallest Olympic squad ever to Rio, a majority of the members of its delegation participating only as wild-card entries. In reality, the small size of the delegation was a product of inattention to procedures: some athletes could not participate because they did not apply for Brazilian visas far enough in advance. This detail is admittedly the fault and product of the neglect-afflicted ranks of Pakistani sports (other than cricket), so commonplace and unsurprising that they no longer make the news.

If Brazil was in search of a real post-colonial gesture, it could have considered loosening its ever-tight visa regime to permit more athletes from poor countries to attend without being subject to the inefficiencies of their nation’s bureaucrats. Unlike white and wealthy others, these left-out athletes would not have worried about the Zika virus or the size of their quarters, relishing instead the very opportunity to compete. Brazil did not choose to follow this path and so the Olympic Games in Rio are a disappointment — a dimmer, more budget-conscious, more mosquito-infested, replication of Olympics past.

The writer is an attorney teaching constitutional law and political philosophy.
rafia.zakaria@gmail.com
Published in Dawn, August 10th, 2016

This story was originally published by Dawn, Pakistan

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Kenya’s Health Sector Challenges Present the Ideal Setting for Creating Shared Valuehttp://www.ipsnews.net/2016/08/kenyas-health-sector-challenges-present-the-ideal-setting-for-creating-shared-value/?utm_source=rss&utm_medium=rss&utm_campaign=kenyas-health-sector-challenges-present-the-ideal-setting-for-creating-shared-value http://www.ipsnews.net/2016/08/kenyas-health-sector-challenges-present-the-ideal-setting-for-creating-shared-value/#comments Wed, 10 Aug 2016 11:36:53 +0000 Siddharth Chatterjee and Amit Thakker http://www.ipsnews.net/?p=146495 Siddharth Chatterjee, (@sidchat1) is the United Nations Population Fund (UNFPA) Representative to Kenya. Dr. Amit Thakker (@docthakker) is the chairman of Kenya Healthcare Federation. ]]> UNFPA and private sector representatives in Mandera county in Northern Kenya to develop solutions with the community and the county government. Credit: © Ilija Gudnitz Weber

UNFPA and private sector representatives in Mandera county in Northern Kenya to develop solutions with the community and the county government. Credit: © Ilija Gudnitz Weber

By Siddharth Chatterjee and Dr. Amit Thakker
Mandera County, Kenya, Aug 10 2016 (IPS)

The increased budgetary allocations to the health sector by county governments point to an acknowledgement not only of the enormous challenges facing the sector, but also of good health as a prerequisite to overall development.

There has never been a better time for partnerships that harness the power of business to drive prosperity by tackling health challenges. The combination of a growing population and preventable infections means that companies with a focus on solving consumer challenges can expect to record impressive profits while at the same time serving a social good.

This is the approach that has brought together several public, private and non-profit partners to reduce illness and deaths among mothers and children in six counties in Kenya. Coordinated by the United Nations Population Fund (UNFPA), the Private Sector Health Partnership (PSHP) is an Every Woman Every Child joint commitment whose other partners include the Kenya Healthcare Federation, Philips, Huawei, Safaricom, MSD, and GSK.

The partnership aims to harnesses the strength, resources and expertise of the private sector, in close collaboration with the Government of Kenya and the six County Governments of Mandera, Wajir, Marsabit, Isiolo, Lamu and Migori. These counties contribute close to 50% of the country’s maternal deaths. ¬

The partnership seeks to significantly improve health outcomes in the counties, while also potentially creating shared value business opportunities, ensuring a sustained engagement that has a social as well as economic return on investment.

With support from the World Economic Forum, PSHP Kenya has built a strong platform to engage with key public and private stakeholders, create political support for the initiative as well as catalyse expertise for design of leapfrogging innovations.

It is not a partnership that is led by any one sector, but a coalition model where all players can see opportunity in line with their individual missions.

The active participation of the county governments and community organisations is helping to tweak technologies to suit local purposes. This approach is working impressively for instance in Mandera where Philips is establishing a Community Life Centre.

The Life centre is a health facility for providing vital primary care to mothers and children as well as a community hub. The local community can buy clean water and sustainable products like smokeless stoves and home solar lighting products, and benefit from solar-powered LED outdoor lighting that illuminates the area at night, improving security and extending daylight hours.

Other players like Safaricom and Huawei have started to pool their unique expertise and services in IT and mobile connectivity to design and test transformational digital health solutions. MSD has announced a USD 1.5 million grant, through its Merck for Mothers initiative, to a new project by JHPIEGO which will engage with the Kenya Red Cross Society (KRCS) in Mandera and Migori.

UNFPA has also partnered with the Kenyan innovation incubator Nailab to support young Kenyan entrepreneurs and we have partnered with the First Lady of Kenya, Ms. Margaret Kenyatta’s Beyond Zero campaign to bring together government, private sector and the thriving civil society.

The situation in the six counties has in the past contributed to the country’s reputation as a dangerous place for a woman to give birth. Reduction of maternal and child mortality rates are some of the Millennium Development Goal targets that Kenya missed last year. However, it is clear that it is also an opportunity for collective action and a commitment to shared value creation.

In the words of Michael Porter; “for too long have business and society been pitted against each other”. The PSHP is showing the way in how different sectors with separate mission statements can be galvanized to find intersections in solving social problems.

For long, suspicions about the private sector’s motives have created a wedge, preventing social programmes from accessing the knowledge, ideas, capabilities and resources that abound in private companies.

Shared value propositions will enable different sectors to leverage each other’s assets, connections, creativity and expertise to achieve mutually beneficial outcomes.

We must continue finding new and creative ways to increase collaboration between government, the private sector and non-profits if we hope to reach Sustainable Development Goals.

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War on Climate Terror (I): Deserts Bury Two Thirds of African Landshttp://www.ipsnews.net/2016/08/war-on-climate-terror-i-deserts-bury-two-thirds-of-african-lands/?utm_source=rss&utm_medium=rss&utm_campaign=war-on-climate-terror-i-deserts-bury-two-thirds-of-african-lands http://www.ipsnews.net/2016/08/war-on-climate-terror-i-deserts-bury-two-thirds-of-african-lands/#comments Tue, 09 Aug 2016 15:21:35 +0000 Baher Kamal http://www.ipsnews.net/?p=146481 "No one can deny the terrible similarities between those running from the threat of guns and those fleeing creeping desertification, water shortages, floods and hurricanes," Konrad Osterwalder, the United Nations University. Photo: UNCCD

"No one can deny the terrible similarities between those running from the threat of guns and those fleeing creeping desertification, water shortages, floods and hurricanes," Konrad Osterwalder, the United Nations University. Photo: UNCCD

By Baher Kamal
ROME, Aug 9 2016 (IPS)

Two-thirds of the African continent is already desert or dry-lands. But while this vast extension of the second largest continent on Earth after Asia is “vital” for agriculture and food production, nearly three-fourths of it is estimated to be degraded to varying degrees.

This shocking diagnosis illustrating the current situation of this continent of over 30 million km², home to 1,2 billion human beings living in 54 countries, comes from the top world body dealing with desertification.

In fact, in its report “Addressing desertification, land degradation and drought in Africa”, the Bonn-based UN Convention to Combat Desertification (UNCCD) explains that the continent is affected by frequent and severe droughts, which have been particularly severe in recent years in the Horn of Africa and the Sahel.

“Poverty and difficult socio-economic conditions are widespread, and as a result many people are dependent on natural resources for their livelihoods,” it says.

On this, another UN agency has once more warned, “With only a few weeks before land preparation begins for the next main cropping season, some 23 million people in Southern Africa urgently need support to produce enough food to feed themselves and thus avoid being dependent on humanitarian assistance until mid 2018.”

The Rome-based UN Food and Agriculture Organisation (FAO) on 28 July alerted against what it called “race against time in drought-ravaged Southern Africa to ensure 23 million people receive farming support.” As little as just 109 million dollars are urgently required for the provision of seeds and other agricultural inputs and services.

Two billion hectares of land are badly degraded as a result of desertification. Credit: Bigstock/IPS

Two billion hectares of land are badly degraded as a result of desertification. Credit: Bigstock/IPS

FAO reports that its prepared response plan aims to ensure that seeds, fertilisers, tools, and other inputs and services, including livestock support, are provided to smallholder farmers, agro-pastoralists and pastoralists to cope with the devastating impact of an El Niño-induced drought in the region.

“Farmers must be able to plant by October and failure to do so will result in another reduced harvest in March 2017, severely affecting food and nutrition security and livelihoods in the region.”

Desperate Situation

Africa’s near, medium-term future looks any thing but bright–by 2020, between 75 and 250 million people in Africa are projected to be exposed to increased water stress due to climate change. Also by 2020, in some African countries, yields from rain-fed agriculture could be reduced by up to 50 per cent.“The continent is affected by frequent and severe droughts, which have been particularly severe in recent years in the Horn of Africa and the Sahel” -- UNCCD

The situation is so dire that the African Union (AU) along with the UNCCD and other partners, have organised the Africa Drought Conference in Windhoek, Namibia.

The conference, which is expected to bring together around 700 participants, on August 15-19 will focus on ways to halt and continue to prevent the rapid advance of the desert in the continent. Specifically, participants will concentrate their attention on mitigating the impacts of droughts and the development of national drought policies.

This event comes at an opportune time, as East and Southern Africa suffer from the worst recorded drought in the past 50 years, induced by El Niño.

Namibia appears as one of the most appropriate venues for such an event for several reasons, one of them being the fact that it was ranked 51 out of 120 countries by the 2014 Global Hunger Index, which measures the levels of hunger in the world’s countries.

While Namibia has improved, this ranking still indicates “a serious food problem,” says the UN Development Programme (UNDP). Critical water shortages are impacting harvests and the livestock industry in the agricultural sector, which sustains about 70 per cent of the Namibian population.

“Continued episodes of drought threaten to unravel the gains made in poverty alleviation, and thus drought is an issue that needs collective response.” In 2015 drought reduced Namibia’s national crop yields to 46 per cent below the sixteen-year average, and as a result, around 370,316 people are estimated to be vulnerable to Hunger in Namibia, UNDP reports.

Here, the three top UN agencies dealing with food—FAO, the International Fund for Agriculture Development (IFAD) and the World Food Programme (WFP), informed in their joint World Report on The State of Food Insecurity 2015, that 42.7 per cent of Namibian population was undernourished.

Looking beyond Namibia’s borders, humanitarian and development bodies estimate that over 52 million people are food insecure in East and Southern African Countries, and that number could increase. Alarmingly four of the 15 South African Development Community member states have already declared national drought disaster with 2 additional countries having declared partial emergencies.

Namibian Prime Minister Saara Kuugongelwa-Amadhila, reminded “Water resources play a defining role in economic development between and across sectors. Investment in water security is not only a matter of protecting society from specific water risks; it is an investment in enabling economic growth.”

This desperate situation pushed FAO to talk about a race against time in drought-ravaged Southern Africa to ensure 23 million people receive farming support. “Widespread crop failure has exacerbated chronic malnutrition in the region.”

With only a few weeks before land preparation begins for the next main cropping season, some 23 million people in Southern Africa urgently need support to produce enough food to feed themselves and thus avoid being dependent on humanitarian assistance until mid 2018, FAO on 28 July said.

Worst Drought in 35 Years

Two consecutive seasons of droughts, including the worst in 35 years that occurred this year, have particularly hit vulnerable families in rural areas, as prices of maize and other staple foods have risen, it added.

“The result is that almost 40 million people in the region are expected to face food insecurity by the peak of the coming lean season in early 2017. All countries in Southern Africa are affected.”

On this, David Phiri, FAO’s Sub-regional Coordinator for Southern Africa, warned, “The high levels of unemployment and sluggish economies, means that the main way people are able to access food is through what they themselves produce. Assisting them to do this will provide lifesaving support in a region where at least 70 per cent of people rely on agriculture for their livelihoods.”

FAO project in Mauritania is a text book case on halting desertification in Africa. Photo: FAO

FAO project in Mauritania is a text book case on halting desertification in Africa. Photo: FAO

Moreover, widespread crop failure has exacerbated chronic malnutrition in the region. More than 640,000 drought-related livestock deaths have been reported in Botswana, Swaziland, South Africa, Namibia and Zimbabwe alone due to lack of pasture, lack of water and disease outbreaks.

FAO urges investments that equip communities with the ability to produce drought-tolerant seed and fodder, along with climate-smart agriculture technologies like conservation agriculture. The aim is to enable rural families to build resilience and prepare for future shocks, especially that more challenges are still to come.

“El Niño’s counter-phenomenon, La Niña, is likely to occur later this year and while it could bring good rains that are positive for agriculture, measures must be taken to mitigate the risk of floods which could destroy standing crops and threaten livestock, including making them more vulnerable to disease.”

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Blame It on Cronyism, Not the Free Markethttp://www.ipsnews.net/2016/08/blame-it-on-cronyism-not-the-free-market/?utm_source=rss&utm_medium=rss&utm_campaign=blame-it-on-cronyism-not-the-free-market http://www.ipsnews.net/2016/08/blame-it-on-cronyism-not-the-free-market/#comments Mon, 08 Aug 2016 21:02:42 +0000 Eresh Omar http://www.ipsnews.net/?p=146470 By Eresh Omar Jamal
Aug 8 2016 (The Daily Star, Bangladesh)

The current condition of global economic inequality should be of concern to all. An Oxfam report published this year titled, An economy for the 1%, revealed that “the richest 1% now have more wealth than the rest of the world combined.” It also said that “62 of the richest people now own more wealth than the bottom half of the world’s population. In 2015 it was the 80 richest, in 2014 it was 85 and in 2010, only six years back, it was 388 richest that owned similar wealth”, showing that inequality is actually growing at an increasing rate. This is also made evident by the fact that “the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 38 percent” while “the wealth of the richest 62 has increased [during the same period] by more than half a trillion dollars to $1.76 trillion.”

op_3__Whereas many people around the world rightly blame the existing global economic system for the growing inequality, they also wrongly blame the free market. Wrongly because the system we have is anything but a free market, something that most fail to recognise. As Oxfam reported, “The 80 richest people have doubled their wealth between 2009 and 2014” during the period of austerity and quantitative easing. And as any economist that is not bought and paid for by the top 1 percent will tell you, neither of these have anything to do with the free market — they are a part of the cronyism that exists in our society.

The idea of a free market is based on the relationship between risk and reward, which determines the interest rate. When borrowers take out loans, they often put up their owned assets as collateral against the loan. They then try to invest what they borrowed prudently, hoping to earn a ‘reward’, pay back the loan and not lose the asset they had ‘risked’ as collateral against the borrowed amount. This is perhaps well understood. But as there are always two parties to any such transaction, lenders too are exposed to ‘risks’ because of which they acquire an ‘interest’ — reward — on the loan. As both parties face certain risks in going ahead with such transactions, both parties are also ‘liable’ to do their own ‘risk analysis’ — whether taking or giving the loan is beneficial.

This means that when there is a non-payment, the borrower and the lender are both liable, as both were supposed to do their own risk analysis which, in case of a default, they failed to do properly (except for in cases of force majeure). Yet, we have seen borrowers losing their homes through foreclosures or going bankrupt because of their failure to repay loans throughout the world, whereas big banks were bailed out using public funds for their ‘failed risk assessments’ or lack of ‘due diligence’, as was also the case in Bangladesh.

Just think about it. When you make bad decisions in your professional life, does the government ever bail you out? I would not think so. If we truly had a free market, these banks too would not have been bailed out. They would have gone bankrupt for making bad decisions like they should have in a free market. Furthermore, that alone would have discouraged most of these banks with highly ‘skilled professionals’ from making such ‘amateurish mistakes’.

In reality, however, they were anything but mistakes. For example, in Bangladesh, even the finance minister had said in Parliament that the loan scams in the banks were ‘dacoity’ (robberies). And it is because we do not have a free market and instead, have such ‘selective interventions’ by states that are largely serving the interest of the top 1 percent — bailing them out for committing robberies — that inequality throughout the world has increased and continues to do so. Meanwhile, those who are poor and have no involvement in these robberies have to endure extreme austerity measures that are literally inhumane, enhancing economic inequality in the process. For example, the current government budget saw the lowest allocation of funds to the healthcare sector since 2010-11 and to the education sector since 2009-10, while the proposed budget for the next fiscal year has a provision of Tk. 2,000 crore for investment in recapitalisation of the state-owned banks despite massive amounts of money being already injected into them over the past years, to save them from the consequences of their own disastrous policies.

All this combined is simply a form of wealth transfer that is being facilitated by the collusion between states and big banks. It has nothing to do with the free market and is, in fact, the opposite of it. Ironically, however, more and more people throughout the world, as they wake up to the fact that the current economic system is flawed, are starting to blame everything on the free market. And this is perhaps what we should be most concerned about, our lack of understanding of economics.

Such a lack of understanding can also be seen on part of the pro-free market economists who can identify that we do not have a free market but then say that if we did, we would have perfect equality by misquoting Adam Smith, the father of modern economics. Because what Mr Smith said was that the free market would only produce equality “in a society where things were left to follow their natural course, where there was perfect liberty [emphasis mine], and where every man was perfectly free both to chuse [choose] what occupation he thought proper, and to change it as often as he thought proper” (The Wealth of Nations, Adam Smith). Given, however, that we have never had conditions of ‘perfect liberty’, it is impossible to say whether Mr Smith’s assumption was right or wrong.

But regardless, what is important for people to realise is that the economic despairs plaguing the majority of the world’s population today, has very little (if at all) to do with the free market, and more to do with the fact that states are ‘selectively’ allocating resources to ‘special interests’ groups — largely the 1 percent. Because in order to cure the patient (economy), we must not get distracted by the symptoms; we have to first, identify, and second, treat the disease. To be able to do that, however, we must first educate ourselves in economics rather than letting the talking heads on TV, bought and paid for by the 1 percent, define what it is for us.

Henry George, one of the best economists of the 19th century, prophetically identified the tendency for such problems to arise in his book Poverty and Progress and how they can be best addressed, as so brilliantly defined by Cliff Cobb in more recent times, in the foreword to that book: “Many economists and politicians foster the illusion that great fortunes and poverty stem from the presence or absence of individual skill and risk-taking. Henry George, by contrast, showed that the wealth gap occurs because a few people are allowed to monopolise natural opportunities and deny them to others. If we deprived social elites of those monopolies, the whole facade of their greater ‘fitness’ would come tumbling down. George did not advocate equality of income, the forcible redistribution of wealth, or government management of the economy. He simply believed that in a society not burdened by the demands of a privileged elite, a full and satisfying life would be attainable by everyone.”

The writer is a member of the Editorial team.

This story was originally published by The Daily Star, Bangladesh

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African Farmers Can Feed the World, If Only…http://www.ipsnews.net/2016/08/african-farmers-can-feed-the-world-if-only/?utm_source=rss&utm_medium=rss&utm_campaign=african-farmers-can-feed-the-world-if-only http://www.ipsnews.net/2016/08/african-farmers-can-feed-the-world-if-only/#comments Mon, 08 Aug 2016 14:29:24 +0000 Baher Kamal http://www.ipsnews.net/?p=146449 Climate-smart agriculture (CSA) is an approach that helps to guide actions needed to transform and reorient agricultural systems to effectively support development and ensure food security in a changing climate. Photo: FAO

Climate-smart agriculture (CSA) is an approach that helps to guide actions needed to transform and reorient agricultural systems to effectively support development and ensure food security in a changing climate. Photo: FAO

By Baher Kamal
ROME, Aug 8 2016 (IPS)

Can African farmers feed the world?. Apparently the answer is “yes.” Bold as it may sound, this statement is based on specific facts: Africa is home to 60-65 per cent of the world’s uncultivated arable land and 10 per cent of renewable freshwater resources, and it has registered a 160 per cent increase in agricultural output over the past 30 years.

This data was provided in July this year by the NEPAD (New Partnership for Africa’s Development), which is the technical body of the African Union (AU), and it reminds that the global population continues to soar, to approach around 10 billion by 2050.

“We’ll need to boost agricultural production by at least 70 per cent,” the Rome-based United Nations Food and Agriculture Organisation (FAO) consequently alerted.

NEPAD goes further and states that, given Africa’s share of the global population is forecast to rise from 15 per cent to 25 per cent, there’s a mounting appreciation that farmers on the second-largest continent –after Asia– will have to play a key role if this boom is to be managed successfully.

“We can and would be happy to feed the world,” said Raajeev Bopiah, general manager of the East Usambara Tea company, which produces over 4 million kilograms of tea a year on its 5,000 acres of land in Tanzania, NEPAD tells. “We just need the knowledge and the funding.”

Roadblocks

Through a new global video and poster contest, FAO is asked the world's children to help it highlight how climate change is making the task of feeding a growing world population all the more challenging - and what we can all do, together, to meet that challenge. Image: FAO

Through a new global video and poster contest, FAO is asked the world’s children to help it highlight how climate change is making the task of feeding a growing world population all the more challenging – and what we can all do, together, to meet that challenge. Image: FAO

There are a number of hurdles to boosting the fortunes of Africa’s farmers, says the NEPAD Planning and Coordinating Agency (NEPAD Agency), which is the AU implementing body that facilitates and coordinates the development of the continent-wide programmes and projects, mobilises resources and engages world’s institutions, regional economic communities and member states.

“One of the biggest obstacles is the messy system of tariffs and inflexible border policies that govern relations between many of the continent’s 55 states. Only 13 countries offer visa-free or visa-on-arrival entry to all Africans, according to this year’s Africa Visa Openness Report.

Businesses in landlocked nations in particular complain that shifting their produce across frontiers to ports is such a fraught exercise that they often incur huge losses in the process, the technical bit of the African Union reminds.

“Transportation in Africa is so hard. It’s expensive and sometimes risky,” NEPAD quoted Ahmad Ibrahim of African Alligator, a mostly Ugandan firm that started off hauling carpets and elevators before moving into the sesame and peanut trade. Ibrahim says border waits “can be long, and goods perish.”

Regional economic bodies like the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS) have enjoyed some success in harmonising customs forms and improving at least a few cross-border transport links, but many say they don’t go far enough, says NEPAD in its report titled “African farmers say they can feed the world and we might soon need them” .

“Within their own states too, governments have exhibited a tendency to inadvertently stymie trade. Tanzania’s inconsistent tax regime, for example, has bounced farmers from one tax bracket to another. Those charged with balancing the books say it’s hard to plan far in advance for fear of finding oneself on the hook for unexpectedly high bills.”"African farmers say they can feed the world and we might soon need them” - NEPAD

“There’s no guarantee that it will remain constant for a long time, and that hurts. You can’t plan long-term when new taxes are imposed without taking into consideration what is affordable and what isn’t,” NEPAD quoted Raajeev.

Shoddy infrastructure also haunts large swathes of the continent. The transport network in northern Tanzania is so poor that Bopiah’s tea-producing company is severely limited in the weight of goods it can haul on the 70km journey to the port at Tanga on the Indian Ocean.

“You can’t transport more than four tons in a truck on mud roads-as opposed to the 20 tons I could do on proper roads. It’s costing me five times more!” Bopiah said.

In the most egregious recent example of the pitfalls of overwhelmed harbour facilities, at least 10 ships carrying 450,000 tons of emergency wheat for drought-stricken parts of Ethiopia earlier this year were kept waiting out at sea for weeks because the port at Djibouti couldn’t cope with the volume of incoming cargo, NEPAD reports.

And FAO adds that a shortage of silos and an erratic power supply also forces many food producers to turn to expensive diesel-fuelled generators in order to fire their water pumps and greenhouses. Some 30 per cent of all food produced across the world is lost to spoilage or waste.

A lack of adequate storage means “the continent loses food worth 4 billion dollars annually as post-harvest loss,” says Richard Munang, a senior official at the UN’s Environment Program. “Inefficiencies along Africa’s agro-value chains are the basis of food problems.”

By upgrading and expanding facilities, while also boosting low electricity output, Africa could fast become food self-sufficient, just to start with.

Beyond infrastructure issues, corruption continues to undermine the hard work of small landholders and large agribusinesses alike. For companies that must haul their wares long distances or navigate bribe-happy transport hubs, it all cuts deep into their bottom line.

Farmers also face limited funding opportunities. Most countries on the continent lack agricultural banks and commercial banks tend to see agriculture as an overly risky bet. “They think the gestation period is just too long,” Bopiah said.

“For example, if you want to plant a certain crop, it could take five years for it to start paying itself back.”

Deprived of access to proper loans, many farmers are unable to buy some of the tools or chemicals that might enable them to boost their yields. In a continent where wheat yields can be as low as 1-1.5 tons per hectare (in comparison to 3 or 4 tons elsewhere), these limitations are intensely problematic.

As far as leading African agronomists are concerned, Africa is playing a desperate game of catch-up, according to the technical body of the African Union.

“We don’t have the time [that] developing countries had in the 60s. Today in Africa, not only do you have to produce better, but in a globalised world, you have to sell better too,” said Ousmane Badiane, Africa Director at the Washington D.C-based International Food Policy Research Institute (IFPRI), NEPAD reported.

“With a quarter of people in Sub-Saharan Africa currently going hungry, the stakes are desperately high, and states will have to deploy the full arsenal of modern tools if they’re to feed not only themselves but booming populations elsewhere.”

Now there is an additional huge hurdle challenging the capacity and willingness of African farmers to feed the world: a monster called climate change.

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Developing Nations Seek Tax Body to Curb Illicit Financial Flowshttp://www.ipsnews.net/2016/08/developing-nations-seek-tax-body-to-curb-illicit-financial-flows/?utm_source=rss&utm_medium=rss&utm_campaign=developing-nations-seek-tax-body-to-curb-illicit-financial-flows http://www.ipsnews.net/2016/08/developing-nations-seek-tax-body-to-curb-illicit-financial-flows/#comments Mon, 08 Aug 2016 10:04:04 +0000 Thalif Deen http://www.ipsnews.net/?p=146440 http://www.ipsnews.net/2016/08/developing-nations-seek-tax-body-to-curb-illicit-financial-flows/feed/ 0 The Devil in Developmenthttp://www.ipsnews.net/2016/08/the-devil-in-development/?utm_source=rss&utm_medium=rss&utm_campaign=the-devil-in-development http://www.ipsnews.net/2016/08/the-devil-in-development/#comments Fri, 05 Aug 2016 05:54:16 +0000 Sushmita Preetha http://www.ipsnews.net/?p=146405 By Sushmita S. Preetha
Aug 5 2016 (The Daily Star, Bangladesh)

The word “development” – eliciting as it does grandiloquent notions of progress – has become, at least in Bangladesh, something of a red herring. It is used as a catch-all phrase to justify just about anything — from eviction of slum-dwellers to make way for high-rise housing projects to forceful grabbing of ancestral lands to build eco-parks and tourism spots, from rampant deforestation of our woodlands to unapologetic pollution of our rivers, from undemocratic and top-down imposition of anti-people projects to suppression of dissent through violence both sponsored or otherwise. It matters little that such so-called development only exacerbates the extreme vulnerabilities of people already on the margins, destroys scarce natural resources and intensifies the ever-widening gap between the haves and the have-nots; that it does precisely the opposite of what “development”—real, pro-people development—ought to do. If one protests these actions as unjust, undemocratic or inequitable, one can be easily dismissed as being “anti-development”, and by extension, “unpatriotic”, making it ever more difficult to have any sort of constructive conversation about Bangladesh’s development priorities (or the lack thereof).

devil_And, thus, in the name of “development”, we are now witnessing an unprecedented attack on one of our most valuable natural resources, the Sundarbans. (I say unprecedented not because other regimes have not tried to sell off our natural resources to multinational corporations at a fraction of the real cost to the country, but because no prior case has involved as ecologically sensitive an area as the Sundarbans.)If development was the real goal of the construction of the Rampal power plant, if people were the focus of this intervention, why would the government displace thousands of people from their homesteads without so much as following the proper rehabilitation procedures? Why would they jeopardise, in one broad stroke, an entire ecosystem of the world’s largest mangrove forest, and the source of livelihood of around 40 lakh people? Why would they discount the grave ecological danger of the construction of this coal power plant, when national and international environmental experts, including Unesco and Ramsar (“Protecting the Sundarbans is our national duty”, TDS, March 22, 2016), have made it abundantly clear that this would be nothing less than a suicidal move for Bangladesh? Why would they risk our national heritage without even conducting a fair, independent and scientific Environmental Impact Assessment (for a more comprehensive criticism of the current EIA, please refer to “Sundarbans under Threat,” TDS July 25, 2016)?

What gives a government the power to be so reckless when they are not the owners, but rather the guardians, on behalf of the people, of Bangladesh’s natural resources?

For those who consider “environment” to be a “soft” issue that has no place in the more “grave” and “grown-up” discussions on development, let’s talk economics. Let’s talk about the fact that three French banks and two Norwegian pension funds pulled out their investment last year from the Rampal power plant because the “failure to comply with minimum social and environmental standards and the corresponding financial risks made the project a clear ‘no-go’ for financial institutions.” Let’s talk about the economic reality that Bangladesh will be financially responsible for 85 percent of the project, even though Bangladesh and India are supposed to be 50:50 partners. Let’s talk about fact that, as per a comprehensive report by the US-based Institute for Energy Economics and Financial Analysis (IEEFA), which conducts research and analyses on financial and economic issues related to energy and the environment, the plant will actually lead to higher electricity rates in Bangladesh. Published in June 2016, the report says: “The revenue requirements of the Rampal plant would require tariff levels that are 32 percent higher than the current average cost of electricity production in Bangladesh and will therefore increase electricity rates in Bangladesh. Without subsidies, the plant’s generation costs are 62 percent higher than the current average cost of electricity production in Bangladesh.” The true cost of the plant, it adds, is being hidden by three subsidies worth more than US $3 billion.

rampal_power_plant_0_

That the Indian government would want to pursue this case, at only a fraction of the cost and risk associated with Bangladesh, is obvious enough. IEEFA suspects “that the project is being promoted as a means to sell Indian coal to Bangladesh and as a way to skirt Indian policy against building a coal plant so near the Sundarbans, a protected forest and World Heritage Site.” But we are at a complete loss to understand what possible economic benefit there could be to Bangladesh pursuing a project that has been deemed financially unviable by major international financial and research institutes. We respectfully ask the government to explain to its people the cost-benefit analysis on the basis of which it is so eagerly risking the world’s largest mangrove forest, home of the Bengal Tigers, and a forest that saves us from natural disasters by providing a barrier to storms.

While we understand the need to generate power, and applaud the government for its crucial role inmitigating Bangladesh’s energy crisis, we cannot comprehend why the government is remaining oblivious to what has now become a slogan for the anti-Rampal movement: “There are many alternatives to generating electricity, but no alternative to the Sundarbans”. The National Committee to Protect Oil-Gas-Mineral Resources, Port and Power (NCBD), which consists of engineers, energy experts, activists and environmentalists, have proposed alternative strategies for generating electricity without jeopardising the environment and people’s lives and livelihoods. Rather than engage with such groups and explore sustainable solutions for a greener Bangladesh, the government has thus far not only chosen to ignore their repeated pleas to relocate the plant, but actually responded to oppositionto the Rampal project with barricades, batons, tear shells and arbitrary arrests.

Are we to deduce, from its reaction to the mass demonstration on July 28, 2016, that violence is the only language the state understands best, or at any rate, the only language it is willing to deploy to suppress its critics? The space for democratic expression has shrunk so much so that it seems naïve to decry the violation of our constitutional rights. The arbitrary arrests of unarmed protestors, and indiscriminate beating and use of tear gas, resulting in injuries to at least 50 demonstrators, is just another “day-in-the-life-of” example in a woefully long list of attempts to suppress people’s voices against harmful development projects through force, rather than productive dialogue.

It angers me, frustrates me, but mostly, scares me that the government feels that it has the power to do anything it wants – no matter the facts, no matter the consequences – and that it considers itself above and beyond all accountability to the people. As we remain distracted with our daily lives, horrific news of terror attacks and new fads on the internet, the government acts and plans in the shadows of neoliberalism, knowing fully well that the masses, at the end of the day, are too apathetic to take to the streets to demand a greener, more sustainable future, to claim from the government what is their right.

We must, for our sake, prove the ‘power’ wrong. We must shake off our cocoon of complicity, and ask ourselves why we cannot fight to protect our environment, the livelihood of lakhs of people and the Tigers of the Sundarbans with the same passion as we take to the streets to celebrate the Tigers’ win in a cricket match; why we remain unmoved to act, content to play the part of a fool chasing after a Pokemon as the cries of the dolphins and deer of the Sundarbans fall on our deaf ears (there are headphones to block off the reality, after all). We must act, and we must act NOW, if we are to have any chance of preserving the Bangladesh that we recognise and love. The only power we need, after all, is power to the people to decide its development priorities.

The writer is a rights activist and freelance journalist.

This story was originally published by The Daily Star, Bangladesh

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Climate-Smart Agriculture for Drought-Stricken Madagascarhttp://www.ipsnews.net/2016/08/climate-smart-agriculture-for-drought-stricken-madagascar/?utm_source=rss&utm_medium=rss&utm_campaign=climate-smart-agriculture-for-drought-stricken-madagascar http://www.ipsnews.net/2016/08/climate-smart-agriculture-for-drought-stricken-madagascar/#comments Thu, 04 Aug 2016 22:55:45 +0000 Miriam Gathigah http://www.ipsnews.net/?p=146396 As a result of farmers embracing Climate Smart Agriculture, some fields are still green and alive even as drought rages in the south of Madagascar. Credit: Miriam Gathigah/IPS

As a result of farmers embracing Climate Smart Agriculture, some fields are still green and alive even as drought rages in the south of Madagascar. Credit: Miriam Gathigah/IPS

By Miriam Gathigah
AMBOASARY, Madagascar, Aug 4 2016 (IPS)

Mirantsoa Faniry Rakotomalala is different from most farmers in the Greater South of Madagascar, who are devastated after losing an estimated 80 percent of their crops during the recent May/June harvesting season to the ongoing drought here, said to be the most severe in 35 years.

She lives in Tsarampioke village in Berenty, Amboasary district in the Anosy region, which is one of the three most affected regions, the other two being Androy and Atsimo Andrefana.FAO estimates that a quarter of the population - five million people - live in high risk disaster areas exposed to natural hazards and shocks such as droughts, floods and locust invasion.

“Most farms are dry, but ours has remained green and alive because we dug boreholes which are providing us with water to irrigate,” she told IPS.

Timely interventions have changed her story from that of despair to expectation as she continues harvesting a variety of crops that she is currently growing at her father’s farms.

Some of her sweet potatoes are already on the market.

Rakotomalala was approached by the U.N. Food and Agriculture Organisation (FAO) as one of the most vulnerable people in highly affected districts in the South where at least 80 percent of the villagers are farmers. They were then taken through training and encouraged to diversify their crops since most farmers here tend to favour maize.

“We are 16 in my group, all of us relatives because we all jointly own the land. It is a big land, more than two acres,” she told IPS.

Although their form of irrigation is not sophisticated and involves drip irrigation using containers that hold five to 10 liters of water, it works – and her carrots, onions and cornflowers are flourishing.

“We were focusing on the challenges that have made it difficult for the farmers to withstand the ongoing drought and through simple but effective strategies, the farmers will have enough to eat and sell,” says Patrice Talla, the FAO representative for the four Indian Ocean Islands: Madagascar, Comoros, Seychelles and Mauritius.

Experts such as Philippison Lee, an agronomist monitor working in Androy and Anosy regions, told IPS that the South faces three main challenges – “drought, insecurity as livestock raids grow increasingly common, and locusts.”

FAO estimates that a quarter of the population – five million people – live in high-risk disaster areas exposed to natural hazards and shocks such as droughts, floods and locust invasion.

As an agronomist, Lee studies the numerous ways plants can be cultivated, genetically altered, and utilized even in the face of drastic and devastating weather patterns.

Talla explains that the end goal is for farmers to embrace climate-smart agriculture by diversifying their crops, planting more drought-resistant crops, including cassava and sweet potatoes, and looking for alternative livelihoods such as fishing.

“Madagascar is an island but Malagasy people do not have a fish-eating culture. We are working with other humanitarian agencies who are training villagers on fishing methods as well as supplying them with fishing equipment,” Talla told IPS.

“Madagascar is facing great calamity and in order to boost the agricultural sector, farming must be approached as a broader development agenda,” he added.

He said that the national budgetary allocation – which is less than five percent, way below the recommended 15 percent – needs to be reviewed. The South of Madagascar isalso  characterized by poor infrastructure and market accessibility remains a problem.

According to Talla, the inability of framers to adapt to the changing weather patterns is more of a development issue “because there is a lack of a national vision to drive the agriculture agenda in the South.”

Lee says that farmers lack cooperative structures, “and this denies the farmers bargaining power and they are unable to access credit or subsidies inputs. This has largely been left to humanitarian agencies and it is not sustainable.”

Though FAO is currently working with farmers to form cooperatives and there are pockets of them in various districts in the South including Rakotomalala and her relatives, he says that distance remains an issue.

“You would have to cover so many kilometers before you can encounter a village. Most of the population is scattered across the vast lands and when you find a group, it is often relatives,” he says.

Lee noted that farmers across Africa have grown through cooperatives and this is an issue that needs to be embraced by Malagasy farmers.

Talla says that some strides are being made in the right direction since FAO is working with the government to draft the County Programming Framework which is a five-year programme from 2014 to 2019.

The framework focuses on three components, which are to intensify, diversify and to make the agricultural sector more resilient.

“Only 10 percent of the agricultural potential in the South is being exploited so the target is to diversify by bringing in more crops because most people in the North eat rice and those in the South eat maize,” Talla explained.

The framework will also push for good governance of natural resources through practical laws and policies since most of the existing ones have been overtaken by events.

Talla says that the third and overriding component is resilience, which focuses on building the capacity of communities – not just to climate change but other natural hazards such as the cyclone season common in the South.

“FAO is currently working with the government in formulating a resilience strategy but we are also reaching out to other stakeholders,” he says.

Since irrigation-fed agriculture is almost non-existent and maize requires a lot of water to grow, various stakeholders continue to call for the building of wells to meet the water deficit, although others have dismissed the exercise as expensive and unfeasible.

“We require 25,000 dollars to build one well and chances of finding water are often 50 percent because one in every two wells are not useful,” says Lee.

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Poverty, Vulnerability and Social Protectionhttp://www.ipsnews.net/2016/08/poverty-vulnerability-and-social-protection/?utm_source=rss&utm_medium=rss&utm_campaign=poverty-vulnerability-and-social-protection http://www.ipsnews.net/2016/08/poverty-vulnerability-and-social-protection/#comments Thu, 04 Aug 2016 14:11:45 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=146391 Jomo Kwame Sundaram was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.]]>

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

By Jomo Kwame Sundaram
KUALA LUMPUR , Aug 4 2016 (IPS)

According to the World Bank, the MDG target of halving the share of the poor was achieved by 2008, well in advance of 2015, the target year. However, increased unemployment and lower incomes in recent times remind us that poverty is not an unchanging attribute of a shrinking group, but rather, a condition that billions of vulnerable persons risk experiencing.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

Despite the various shortcomings of money measures of poverty, they nevertheless reflect the extent of vulnerability. For example, the estimated number of poor globally in 2012 more than doubles from 902 million to 2.1 billion when one raises the poverty line by 63% from $1.90/day to $3.10/day per person, suggesting that a very large number of those not deemed poor by the World Bank are very vulnerable to external economic shocks or changes in personal circumstances, such as income losses or food price increases.

Of the world’s poor, three-quarters live in rural areas where agricultural wage workers suffer the highest incidence of poverty, largely because of low productivity, seasonal unemployment and low wages paid by most rural employers. Vulnerability and economic insecurity have increased in recent decades with rising insecure, casual and precarious jobs involving part-time employment, self-employment, fixed-term work, temporary work, on-call work and home-working – often mainly involving women.

Such trends have grown with labour market liberalization, globalization, and declining union power. To make matters worse, macroeconomic policies in recent decades have focused on low inflation, rather than full employment, while limited social protection has exacerbated economic insecurity and vulnerability.

Additionally, lower economic growth rates, following the global financial crisis, would push 46 million more people into extreme poverty than expected before the crisis. This figure was later revised to 64 million, implying over 200 million people fell into extreme poverty due to food-fuel price hikes and the global financial crisis.

While some of these figures were subsequently revised downward, they suggest widespread vulnerability and economic insecurity, due to the inability of governments to respond with adequate counter-cyclical policies and in the absence of comprehensive universal social protection measures. During the East Asian financial crisis of 1997-1998, the official poverty rate in Indonesia shot up from 11% to 37% in just one year following the massive depreciation of the Indonesian rupiah.

Working poor

The working poor are defined as those employed, but earning less than the international poverty line ($1.25 a day in 2005 and $1.90 a day in 2011 in purchasing power parity [PPP] terms). Despite working, they cannot earn enough to get out of poverty. In most developing countries, most poor adults have to work, if only to survive, in the absence of adequate social protection.

According to the International Labour Organization (ILO), an estimated 375 million workers lived below the international poverty line in 2013. The number of working poor rises dramatically to close to 800 million when a $2-a-day poverty line is used. Women comprise the majority of the working poor, accounting for about 60%. It also found that progress in reducing the number of working poor has slowed markedly since 2008.

An estimated 1.42 billion people globally were in vulnerable employment in 2013, still increasing by around 1% in 2013, well above the 0.2% average increase in the years prior to 2008. The number was projected to exceed 1.44 billion in 2014, accounting for 45% of total world employment.

Social Protection

Most people who fall under the international poverty line are vulnerable, with no basic social protection. The lack of comprehensive universal social protection is a major obstacle to economic and social development, exacerbating high and persistent levels of poverty, economic insecurity, and inequality. Most countries do not have unemployment insurance or other similar social protection. In the most vulnerable countries, more than 80% have neither social security coverage nor access to health services.

The ILO’s World Social Protection Report, 2014/15 found a high or very high vulnerability in terms of poverty and labour market informality. Only 27% of the global population enjoy access to comprehensive social security systems, whereas 73% are only covered partially, or not at all. This means that about 5.2 billion people do not have access to comprehensive social protection, and many of them – in the case of middle- and low-income countries, nearly half their populations – live in poverty. About 800 million of them are working poor, of whom most work in the informal economy.

Although 2.3% of GDP worldwide is allocated to public social protection expenditure for income security during working age, there are wide regional, national and local variations, e.g. ranging from 0.5% in Africa to 5.9% in Western Europe. Only 28% of the global labour force is potentially or legally eligible for unemployment benefits. Yet, only 12% of unemployed workers worldwide actually receive unemployment benefits, with effective coverage ranging from 64% of unemployed workers in Western Europe to just over 7% in the Asia and Pacific region, 5% in Latin America and the Caribbean, and less than 3% in the Middle East and Africa.

Globally, about 39% and more than 90% of the population living in low-income countries have no right to healthcare. About 18,000 children die every day, mainly from preventable causes. On average, governments allocate 0.4% of GDP to child and family benefits, ranging from 2.2% in Western Europe to 0.2% in Africa, Asia, and the Pacific.

Fiscal austerity measures since the 2008-2009 global financial and economic crises have exacerbated the situation. Such measures are not limited to Europe; many developing countries have also adopted such measures, including reducing or ending food and fuel subsidies; cutting or capping wages; more narrowly targeting social protection benefits, and reducing public pension and health care systems.

These are contrary to the pledges countries made in adopting Agenda 2030 for the Sustainable Development Goals which include achieving universal protection and health care. Not surprisingly, fiscal austerity measures, including cuts in social protection expenditure, have not helped economic recovery, but instead, have exacerbated inequality

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Preventing the Next Panichttp://www.ipsnews.net/2016/08/preventing-the-next-panic/?utm_source=rss&utm_medium=rss&utm_campaign=preventing-the-next-panic http://www.ipsnews.net/2016/08/preventing-the-next-panic/#comments Tue, 02 Aug 2016 19:21:26 +0000 Robert Samuelson http://www.ipsnews.net/?p=146370 By Robert J. Samuelson
WASHINGTON, DC, Aug 2 2016 (Manila Times)

The hostility toward Wall Street remains so great that both political parties say, in their platforms, that they’d like to break up America’s biggest banks. But before engaging in this drastic economic surgery, it’s worth examining whether Dodd-Frank is working. Recall that the law, named after its congressional sponsors, former Sen. Senator Christopher Dodd and former Rep. Barney Frank, overhauled the financial system to make it more panic proof. Is it? The answer may surprise.

Robert J. Samuelson

Robert J. Samuelson

The Obama administration’s position is clear: “We can say without question that Wall Street reform has made our financial system safer and sounder,” Treasury Secretary Jacob Lew recently said on the sixth anniversary of the law’s signing. Up to a point, this is true. Banks are required to have more capital than before the 2008-09 financial crisis, and this creates a larger buffer against losses.

Capital typically — but not always — consists of shareholders’ investments in banks. In 2016, the ratio of the biggest bank-holding companies’ common stock to risk-weighted assets (loans, securities) was 12.2 percent, more than double its level in early 2009, says the Federal Reserve.

This means that banks can better survive severe economic shocks — deep recessions or speculative excesses. Since 2009, the Fed regularly subjects major banks to a computer-driven “stress test.” It simulates a deep slump and examines how banks would fare. In the latest stress test, unemployment was assumed to double to 10 percent, the stock market to lose half its value, and the economy’s output to drop nearly 8 percent, larger than the decline in the Great Recession.

Under these conditions, estimated bank losses were huge: $385 billion, says the Fed. Borrowers defaulted; bonds lost value. Still, sufficient capital remained that all 33 bank holding companies — those with assets exceeding $50 billion, representing about four-fifths of the banking sector — continued to meet regulatory capital requirements. The capital ratio dropped from 12.2 percent to 8.4 percent. But that was well above the 4.5 percent required minimum (for large banks, the minimum can be higher).

This is good news. The essence of the 2008-09 financial crisis was a panic among large depositors (hedge funds, pension funds, corporations) — a bank “run.” They withdrew their money from banks, because they didn’t know whether the banks were solvent. If banks’ capital cushions had been larger, these fears might have been allayed and the withdrawals limited. In reality, the outflows threatened a second Great Depression, as banks cut lending and dumped bonds to meet depositor demands.

What avoided another Depression was the quick response of the Federal Reserve, which — acting in its role as “lender of last resort” — supplied trillions of dollars of credit to banks and other financial institutions to offset the loss of private credit. Without these infusions, who knows what would have happened.

Now, the bad news. In Dodd-Frank, Congress makes it much harder for the Fed to act as lender of last resort, says Hal Scott, a professor at Harvard Law School and a respected expert on financial regulation, in his book “Connectedness and Contagion: Protecting the Financial System from Panics.” The consequences, argues Scott, could be catastrophic. A US depression would “pose challenges to our political system,” as well as spreading abroad and undermining the US global role.

During the financial crisis, the Fed relied on section 13(3) of the Federal Reserve Act. This provision gave the Fed wide discretion in making loans when “unusual and exigent” circumstances prevailed. Now, Dodd-Frank has imposed restrictions on 13(3). As Scott shows, these include: The secretary of the treasury must approve all nonbank loans; there can be no nonbank programs for a single borrower; collateral requirements are toughened; loans must be disclosed within a year. Some of these may be sensible alone; together, they create an obstacle course for crisis lending.

Scott estimates that $7 trillion in funds are potentially vulnerable to panicky investor runs. Breaking up the big banks is no solution if, say, the investor run strikes money-market mutual funds.

There is a real issue here. The Fed has enormous powers; democratically elected officials think they should exercise some control over those powers. But a financial crisis — a panic — is by its very nature a rapidly moving event that usually was unpredicted. (If anticipated, it could likely be defused.) Unless the crisis is dealt with decisively, it could become a monster that cannot be contained.

The verdict on Dodd-Frank is mixed. One goal was to improve short-term financial stability. That has been achieved. The other goal was political: to handcuff those who engineered the financial “bailout,” which — though necessary — is immensely unpopular. That explains why Congress restricted the Fed. Ironically, legislation designed to protect us from financial panic may make some future panic more likely.

©2016, THE WASHINGTON POST WRITERS GROUP

This story was originally published by The Manila Times, Philippines

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New Alliance to Shore Up Food Security Launched in Africahttp://www.ipsnews.net/2016/08/new-alliance-to-shore-up-food-security-launched-in-africa/?utm_source=rss&utm_medium=rss&utm_campaign=new-alliance-to-shore-up-food-security-launched-in-africa http://www.ipsnews.net/2016/08/new-alliance-to-shore-up-food-security-launched-in-africa/#comments Tue, 02 Aug 2016 17:59:47 +0000 Desmond Latham http://www.ipsnews.net/?p=146365 PAP officials attend the workshop for members of the Pan African Parliament and FAO to advance the Food and Nutrition Security Agenda. Credit: Desmond Latham/IPS

PAP officials attend the workshop for members of the Pan African Parliament and FAO to advance the Food and Nutrition Security Agenda. Credit: Desmond Latham/IPS

By Desmond Latham
CAPE TOWN, Aug 2 2016 (IPS)

As over 20 million sub-Saharan Africans face a shortage of food because of drought and development issues, representatives of the U.N. Food and Agriculture Organisation (FAO) and the Pan African Parliament (PAP) met in Johannesburg to forge a new parliamentary alliance focusing on food and nutritional security.

Monday’s meeting here came after years of planning that began on the sidelines of the Second International Conference on Nutrition organised by the FAO in late 2014.“The first port of call when there are food security issues is normally the parliament. We should be at the forefront of moving towards what is known as Zero Hunger." -- Dr. Bernadette Lahai

Speaking at the end of the day-long workshop held at the offices of the PAP, its fourth vice president was upbeat about the programme and what she called the “positive energy” shown by attendees.

“We have about 53 countries here in the PAP and the alliance is going to be big,” said Dr. Bernadette Lahai. “At a continental level, once we have launched the alliance formally, we’ll encourage regional parliaments so the whole of Africa will really come together.”

“This will be a very big voice,” she said on the sidelines of the workshop.

FAO Rome Special Co-ordinator for parliamentary alliances, Caroline Rodrigues Birkett, said her role was to ensure that parliamentarians take up food security as a central theme.

“The reason why we’re doing this is because based on the evidence that we have in the FAO, is that once you have the laws and policies on food and nutrition security in place there is a positive correlation with the improvement of the indicators of both food and security of nutrition,” she told IPS.

“Last year we facilitated the attendance of seven African parliamentarians to a Latin American and Caribbean meeting in Lima, and these seven requested us to have an interaction with parliamentarians of Africa,” she said.

A small team of officials representing Latin America and the Caribbean had traveled to Johannesburg to provide some details of their own experience working alongside the FAO in an alliance which had focused on providing food security to the hungry in South America and the island nations of the Caribbean.

These included Maria Augusta Calle of Ecuador, who told the 20-odd PAP representatives that in her experience working alongside officials from the FAO had helped eradicate hunger in much of the region.

From left to right: FAO Rome Special Co-ordinator for parliamentary alliances, Caroline Rodrigues Birkett, Maria Augusta Calle, and PAP Vice-President Dr Bernadette Lahai. Credit: Desmond Latham/IPS

From left to right: FAO Rome Special Co-ordinator for parliamentary alliances, Caroline Rodrigues Birkett, Maria Augusta Calle, and PAP Vice-President Dr Bernadette Lahai. Credit: Desmond Latham/IPS

Caribbean representative Caesar Saboto of Saint Vincent and the Grenadines was also forthright about the opportunities that existed in the developing world to deal with hunger alleviation.

“It’s the first time that I’m traveling to Africa,” he said, “and it’s not for a vacation. It’s for a very important reason. I do not want to go back to the Caribbean and I’m certain that Maria Augusta Calle does not want to go back only to say that we came to give a speech.”

Saboto delivered a short presentation where he outlined how a similar programme to the foundation envisaged by those attending the workshop had drastically reduced hunger in his country.

“In 1995, 20 percent of my country of 110,000 people were undernourished,” he said. “Over 22,000 were food vulnerable. But do you know what? Working with communities and within governments we managed to drive down that number to 5,000 in 2012 or 4.9 percent of the population. And I’m pleased to announce here for the first time, that in 2016 we are looking at a number of 3,500 or 3.2 percent,” he said to applause from the delegates.

PAP members present included representatives of sectors such as agriculture, gender, transport and justice as well as health. Questions from the floor included how well a small island nation’s processes could be used in addressing the needs of vastly larger regions in Africa.

“Any number can be divided,” said Saboto. “First you have to start off with the political will, both government and opposition must buy into the idea. If you have 20 million people you could divide them into workable groups and assign structures for management accountability and transparency,” he said.

African delegates queried the processes which the Latin American nations have used to set up structures in particular.  Dr. Lahai wanted the Latin American delegates to assist the African parliament in planning the foundation.

“Food security is not only a political issue but a developmental issue,” she told IPS in an interview.

“The first port of call when there are food security issues is normally the parliament. We should be at the forefront of moving towards what is known as Zero Hunger,” she said.

But major challenges remain. After a meeting in October last year, the FAO had contracted the PAP with a view to targeting hunger in a new alliance. The PAP is a loose grouping of African nations and members pointed out that they were unable to get nation states to support an initiative without a high-level buy in of their political leadership.

Dr. Lahai was adamant that the workshop should begin addressing issues of structure. She stressed that co-ordination between the PAP, various countries and other groupings such as Ecowas (the Economic Community of West African States) and SADC (Southern African Development Community) should be considered.

“We need a proper framework,” she said. “It’s important to engage our leaderships in this process. With that in mind, I would suggest that we learn a great deal from our visitors who’ve had a positive experience in tackling nutrition issues in Latin America.”

In an earlier presentation, FAO representative for South Africa Lewis Hove had warned that a lack of access to food and nutrition had created a situation where children whose growth had been stunted by this reality actually were in the most danger of becoming obese later in life. The seeming contradiction was borne out by statistics presented to the group showing low and middle income countries could see their benefit cost ratio climb to 16-1.

Africa’s Nutritional Scorecard published by NEPAD in late 2015 shows that around 58 million children in sub-Saharan regions under the age of five are too short for their age. A further 163 million women and children are anaemic because of a lack of nutrition.

The day ended with an appeal for further training and facilitation to be enabled by the FAO and PAP leadership. With that in mind, the upcoming meeting of Latin American and Caribbean states in Mexico was set as an initial deadline to begin the process of creating a new secretariat. It was hoped that this would prompt those involved in the PAP to push the process forward and it was agreed that a new Secretariat would be instituted to be headquartered at the PAP in South Africa.

Dr Lahai said delegates would now prepare a technical report which would then be signed off at the next round of the PAP set for Egypt later this year.

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