Inter Press Service » Globalisation News and Views from the Global South Sat, 13 Feb 2016 08:49:07 +0000 en-US hourly 1 TPP: Lessons from New Zealand Tue, 02 Feb 2016 12:42:44 +0000 Jomo Kwame Sundaram

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

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Feb 2 2016 (IPS)

A new paper* on the implications of the Trans-Pacific Partnership (TPP) Agreement for New Zealand examines key economic issues likely to be impacted by this trade agreement. It is remarkable how little TPP brings to the table. NZ’s gross domestic product will grow by 47 per cent by 2030 without the TPP, or by 47.9 per cent with the TPP. Even that small benefit is an exaggeration, as the modelling makes dubious assumptions, and the real benefits will be even smaller. If the full costs are included, net economic benefits to the NZ economy are doubtful. The gains from tariff reductions are less than a quarter of the projected benefits according to official NZ government modelling. Although most of the projected benefits result from reducing non-tariff barriers (NTBs), the projections rely on inadequate and dubious information that does not even identify the NTBs that would be reduced by the TPP!

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

The main beneficiaries in NZ will be agricultural exporters, but modest tariff reductions of 1.3 per cent on average by 2030 are small compared to ongoing commodity price and exchange rate volatility. Extensive trade barriers to agricultural exports in the Japanese, Canadian and US food markets remain, and will be locked in under TPP. TPP has also failed to tackle agricultural subsidies that are a major trade distortion. Significant tariff barriers remain in some sectors in Japan, Canada and the US likely to be ‘locked in’ under the TPP that are almost impossible to remove in the future. TPP’s Sanitary and Phytosanitary Measures limits on labelling may also restrict opportunities for food exporters to build high quality, differentiated niche market positions.TPP has also been used to undermine negotiations in the World Trade Organization, the only forum for removing such trade distorting subsidies.

TPP’s investor-state dispute settlement (ISDS) provisions and restrictions on state-owned enterprises will deter future NZ governments from regulations and policies in the public interest, for fear of litigation by corporate interests. The threat, if not actual repercussions, are good enough to ‘discipline’ governments by causing ‘regulatory chill’. TPP is very much a charter for incumbent businesses, especially US transnational corporations. Thus, it inadvertently holds back the economic transformation the world needs. The agreement’s TPP’s benefits are likely to be asymmetric as it is more favourable to big US business practices and will deepen the disadvantages of small size and remoteness. Potential ISDS compensation payments or settlements could far outweigh the limited economic benefits of TPP. Even when cases are successfully defended, the legal costs will be very high.

TPP can both help and hinder ambitions to add value to raw materials and commodities, and to progress up value chains. However, it is likely to reinforce NZ’s position as a commodity producer and thus hinder progress up the value chain where greater economic prosperity lies. More analysis based on the actual agreement is required to ascertain the conditions for and likelihood of such progress. TPP will limit government’s ability to innovate and address national challenges and is likely to worsen rapidly escalating problems such as environmental degradation and climate change.

Furthermore, TPP is projected to reduce employment and increase income inequality in NZ. In its analysis, the government has not considered the likely costs, which are probably going to be very significant, and may well outweigh economic benefits.

TPP thus falls well short of being “a trade agreement for the 21st century”, as its cheerleaders claim. A more comprehensive, balanced and objective cost-benefit analysis on the basis of the October 2015 deal should be completed before ratifying the TPP.

*The report is available at:

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United Arab Emirates Strengthens Ties with Argentina’s New Government Mon, 01 Feb 2016 17:20:02 +0000 Fabiana Frayssinet The Four Seasons hotel in the upscale Buenos Aires neighbourhood of Recoleta was remodeled this decade with a multi-million dollar investment by the Dubai-based Albwardy Investment Group. This is just one example of investment in Argentina by the United Arab Emirates, which is expected to increase in different sectors as a result of the visit here by the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan. Credit: Fabiana Frayssinet/IPS

The Four Seasons hotel in the upscale Buenos Aires neighbourhood of Recoleta was remodeled this decade with a multi-million dollar investment by the Dubai-based Albwardy Investment Group. This is just one example of investment in Argentina by the United Arab Emirates, which is expected to increase in different sectors as a result of the visit here by the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
BUENOS AIRES , Feb 1 2016 (IPS)

The new government of Argentina and the United Arab Emirates (UAE) are strengthening the relationship established by the previous administration, at a time when this South American country is seeking to bring in foreign exchange, build up its international reserves and draw investment, in what the authorities describe as a new era of openness to the world.

Bilateral ties will be boosted during a visit to the Argentine capital by the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan, on Feb. 4, the start of his Latin America tour which will also take him to Ecuador, Colombia, Panama and Costa Rica before he flies out of the region on Feb. 12.

After several high-level meetings on Feb. 5, the minister’s visit will end with the signing of five agreements on taxation, sports, cooperation between the state news agencies Telam (Argentina) and WAM (UAE), and an Emirati loan to the southern province of Neuquén.

Mauricio Macri, who was sworn in as president of Argentina on Dec. 10, already indicated his interest in stronger ties when he met on Jan. 20, during the World Economic Forum in Davos, Switzerland, withHamad Shahwan al Dhaheri, executive director of the private equities department of the Abu Dhabi Investment Authority (ADIA).

ADIA, considered the second-largest sovereign wealth fund in the world, manages the excess oil revenues of the UAE, a federation of seven emirates: Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain.

The centre-right Macri, of the Cambiemos coalition, and Al Dhaheri“discussed the prospects opening up for Argentina and were enthusiastic about this new era for the country,” Telam reported from Davos.

The news agency was referring to the end of 12 years of government by the late Néstor Kirchner (2003-2007) and his widow and successor, Cristina Fernández (2007-2015), of the Front for Victory, the Justicialista (Peronist) Party’s centre-left faction, which defines itself as anti-neoliberal.

“Argentina has to position itself as a serious, predictable interlocutor,” this country’s foreign minister, Susana Malcorra, said in Davos.

“The question of economic opening, the search for investment and business opportunities is essential in our agenda,” she stressed.

According to a report from its embassy in Buenos Aires, the UAE has a significant presence in international capital markets through different investment institutions, such as ADIA, Dubai Ports World, Dubai Holding and Abu Dhabi’s International Petroleum Investment Co.

The then president of Argentina, Cristina Fernández, with her host, United Arab Emirates President Khalifa bin Zayed Al Nahyan, at a January 2013 meeting in Abu Dhabi during her official visit to the Gulf nation when bilateral relations were given a major boost. Credit: Government of Argentina

The then president of Argentina, Cristina Fernández, with her host, United Arab Emirates President Khalifa bin Zayed Al Nahyan, at a January 2013 meeting in Abu Dhabi during her official visit to the Gulf nation when bilateral relations were given a major boost. Credit: Government of Argentina

The UAE is a timely interlocutor for Argentina, Luis Mendiola, an expert on the Middle East, the Arab world and Africa with the Argentine Council for Foreign Relations (CARI), underlined in an interview with IPS.

“Their biggest problem is the extraordinary abundance of capital…the question is where to put it to get the best returns on the extraordinary surplus capital they produced during nearly a decade and a half of high oil prices,” added Mendiola, who served as ambassador to Saudi Arabia from 1996 to 2005.

New opportunities

As part of its strategy of strengthening ties with Latin America, the foreign ministry of the United Arab Emirates held a workshop in Abu Dhabi in December with diplomats from Argentina, Colombia, Ecuador and Panama, with the participation of some 70 UAE governmental, semi-governmental and private organisations.

At the workshop, the director of the foreign ministry’s department of economic affairs and international cooperation, Fahad al Tafaq, stressed the UAE’s interest in taking ties with Latin America “to a higher level” in order to serve common interests, WAM, the Emirates news agency, reported from Abu Dhabi.

The participants in the workshop discussed opportunities for investment and strategic alliances in sectors like energy, environment, technology, tourism, agriculture, mining, peaceful uses of nuclear energy, infrastructure and natural resources.

These funds, he said, could go into major infrastructure projects in areas like housing, energy, transport and communications.

In January 2015, the authorities in the southern Argentine province of Neuquén reported that they had secured an 18 million dollar loan from the Abu Dhabi Fund for Development, to finance the Nahueve Hydroelectric Project for the promotion of irrigation in new productive areas, among other aims.

The two countries established diplomatic ties in 1975 and opened embassies in 2008. But relations moved to a new plane when President Fernández visited Abu Dhabi in January 2013, where she met with UAE President Khalifa bin Zayed al Nahyan.

During that visit, cooperation agreements were signed in the area of food, with the opening of the Emirati market to non-traditional Argentine products, and this country opened its first business office in the UAE.

In 2014, as the Argentine-Arab Chamber of Commerce informed IPS, trade between Argentina and the UAE amounted to 228 million dollars, with this South American country enjoying a surplus, exporting 198.9 million dollars in mainly foodstuffs and steel pipe and tube products.

But Mendiola believes there is greater potential to tap because besides boasting one of the highest per capita incomes in the Gulf, the UAE is a business hub which re-exports products to third countries and large markets, such as Saudi Arabia, India, Iran and Pakistan.

Bilateral ties were reinforced in April 2014, with a visit to Argentina by Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and emir of Dubai.

A memorandum of understanding for cooperation in the peaceful use of nuclear energy was signed during that visit.

On that occasion, Fernández emphasised the Argentina forms part of the “exclusive club” of nations “that can produce nuclear energy, but that do so on a non-proliferation basis.”

The then president also referred to the UAE’s “enormous interest” in investing in Argentina and financing projects aimed at bolstering food security.

In November 2015, with support from the local government, five family farming cooperatives from Argentina took part in an international specialty food festival in Dubai.

During the meeting in Buenos Aires, agreements were also reached to promote tourism initiatives and projects in renewable energy – an area in which the UAE, despite its status as one of the world’s largest oil producers, is considered a pioneer among the Gulf countries and even at the international level, Mendiola noted.

“The Emiratis are very good at forging ahead and moving into new areas, and in that sense they are a model, at least in the Gulf region,” he added.

During his visit to Argentina, Al Maktoum remarked that his country did not invest “according to preferences or political motives, but based on economic questions.”

For that reason Mendiola said he was not “surprised” by the UAE’s interest in Latin America “because the Gulf countries in general have always had extremely pragmatic foreign policies which are at the same time modest, in terms of maintaining a low profile.”

“I think the difference now is they are taking advantage of the fact that there is a new government in Argentina, which presents itself to the world as very different from the last one, and that is raising a lot of interest because they have an extraordinary level of reserves as well as investment abroad,” he said.

Mendiola pointed out that the UAE did not have a “clear” presence in Latin America until recently, unlike in Africa and Asia.

“Up to now, South America was a caboose for the Gulf countries, from the point of view of their economic interests. And the change in government without a doubt awakened curiosity and interest in seeing how to best take advantage of these opportunities,” he added.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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The Trans-Pacific Partnership Fraud Tue, 26 Jan 2016 14:51:53 +0000 Jomo Kwame Sundaram Jomo Sundaram was an Assistant Secretary-General responsible for analysis of economic development in the United Nations system during 2005-2015, and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.]]>

Jomo Sundaram was an Assistant Secretary-General responsible for analysis of economic development in the United Nations system during 2005-2015, and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jan 26 2016 (IPS)

The Trans Pacific Partnership Agreement (TPPA), negotiated in Atlanta in October 2015 and to be signed in Auckland in February 2016, privileges foreign investors while imposing substantial costs on partner countries. Touted as a ‘gold standard’ 21st century trade deal, it is critical to ascertain what gains can really be expected and whether these exceed costs.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

Modest trade gains
Mainly using methodologically-moot computable general equilibrium (CGE) models, all studies so far project modest direct economic growth gains from TPP trade liberalization. Actual net gains may be even more modest, if not negative, as many assumptions in projection exercises are not in the final trade deal.

To make the case for the TPP, some studies looked for benefits elsewhere, mainly from supposedly projected investment boosts, while ignoring costs or presenting them as benefits. The most widely cited study was issued in 2014 by the well known US globalization cheerleader, the Peterson Institute of International Economics.

Wide-ranging expected TPP provisions were fed into the economic models as simple cost reductions, with no consideration given to downside risks and costs, e.g. due to reductions in national regulatory autonomy resulting from the TPP. As such, costs are not included, they do not provide a real cost-benefit assessment.

By excluding crucial costs, TPP advocates exaggerate projected trade benefits by claiming dubious gains. For example, they view provisions to extend intellectual property rights (IPRs) as cost reductions that will increase the trade in services.

Provisions allowing foreign investors to sue governments in private tribunals or undermining national bank regulation, are seen as trade-promoting cost reductions, ignoring the costs and risks of side-lining national regulation.

The study claimed huge benefits by assuming that the TPP will catalyse large exports by lowering the fixed costs of entering foreign markets. Although the huge gains claimed have no analytical bases, it assumed that half the impact of the TPP would be from cutting fixed trading costs.

If the modelling used conventional methods for estimating gains from trade, the results would have been much more modest, as per the only US government study of TPP impacts.

Fantastic foreign investment effects
The remaining benefits projected by the Peterson Institute study are mainly from a foreign direct investment (FDI) boom. It arbitrarily assumed that every dollar of FDI within the TPP bloc would generate additional annual income of 33 cents, divided equally between source and host countries without any economic theory, modelling procedure or empirical evidence for this supposition.

Paltry gains
Thus, the study greatly overstates the benefits to be derived from the TPP. While most of its claims lack justification, the only quantified benefits consistent with mainstream economic theory and evidence, are tariff-related benefits that make up an unknown but very small share of the projected gains.

The gains are much smaller than claimed by the TTP governments citing them. Less than a quarter of overall gains claimed can be considered seriously. Even these need to be compared against costs conveniently ignored by the study as well as actual details of the final deal. Needless to say, ostensible country gains calculated similarly need to be discounted for the same reason.

Even unadjusted, the gains are small relative to the GDPs of TPP partner economies. Also, while projected trade benefits will take a decade to realize, the major risks and costs will be more immediate. They represent one-time gains, and have no recurring annual benefit, i.e. they do not raise the economies’ growth rates.

The distribution of benefits has not been sufficiently analysed in these exercises; if they mainly go to a few big businesses, with losses borne by others, the TPP would exacerbate inequality.

Net gain or loss?
The TPP goes much further into how governments operate than needed to facilitate trade. Such ‘disciplines’ significantly constrain the policy space needed for countries to accelerate economic development and to protect the public interest.

The modest benefits projected make it crucial to consider the nature and scale of costs currently ignored by all available modelling exercises. The TPP will impose direct costs, e.g. by extending IPRs and by blocking or delaying generic production and imports.

The TPPA’s investor state dispute settlement (ISDS) provisions will enable foreign investors to sue a government in an offshore tribunal if they claim that new regulations reduce their expected future profits, even when such regulations are in the public interest. As private insurance is already available for this purpose, ISDS provisions are completely unnecessary.

Jagdish Bhagwati, a leading advocate of free trade and trade liberalization, along with others, have sharply criticized the inclusion of such non-trade provisions in ostensible free trade agreements. Instead of being the regional free trade agreement it is often portrayed as, the TPP seems to be “a managed trade regime that puts corporate interests first”.

The TPP, offering modest quantifiable benefits from trade liberalization, is really the thin edge of a wedge package which will fundamentally undermine the public interest. Net gains for TPP partners seem doubtful at this stage.

Only a complete and proper accounting based on the full text can settle this key question. The TPP has, in fact already been used to try to kill the Doha ‘Development’ Round of multilateral trade talks, but may well also undermine multilateralism more broadly in the near future.

– The Peterson Institute report is available at

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Caribbean Journalists Prepare to Report on Climate Change Wed, 06 Jan 2016 03:09:45 +0000 Ivet Gonzalez Dominican journalist Amelia Deschamps addressing a workshop in Santo Domingo on the role of reporters with regard to climate change. Researchers and journalists from Cuba, Haiti and the Dominican Republic took part in the event. Credit: Dionny Matos/IPS

Dominican journalist Amelia Deschamps addressing a workshop in Santo Domingo on the role of reporters with regard to climate change. Researchers and journalists from Cuba, Haiti and the Dominican Republic took part in the event. Credit: Dionny Matos/IPS

By Ivet González

Environmentally committed journalists in the Caribbean point to a major challenge for media workers: communicating and raising awareness about the crucial climate change agreement that emerged from the 21st Conference of the Parties (COP21) in Paris.

“Scientific information must be published in clearer language, and we must talk about the real impact of climate change on people’s lives,” journalist Amelia Deschamps, an anchorwoman on the El Día newcast of the Dominican channel Telesistema 11, told IPS.

She was referring to the communication challenges posed in the wake of COP21 to the United Nations Framework Convention on Climate Change, held Nov. 30 to Dec. 11 in Paris to produce the first universal agreement to cut greenhouse gas emissions and curb the negative impacts of global warming.

“So far good intentions abound, but there are few practical steps being taken in terms of mitigation and adaptation,” said Deschamps.

In the view of this journalist who specialises in environmental affairs, media coverage of global warming “has been very weak and oversimplified,” which she said has contributed to the public sense that it is a “merely scientific” issue that has little connection to people’s lives.

“People are more concerned about things that directly affect them,” said Deschamps, who is also an activist for risk management in poor communities, and considers citizen mobilisation key to curbing damage to the environment.

The 195 country parties to the U.N. Framework Convention on Climate Change meeting in the French capital adopted a binding universal agreement aimed at keeping a global temperature rise this century “well below 2 degrees Celsius” with respect to the pre-industrial era.

Scientists warn that the planet is heating up as a result of human activity, and this is causing extreme weather events such as heat waves, lengthy droughts and heavy rainfall. In addition, clean water, fertile land and biodiversity are all being reduced.

Coastal areas are already suffering the consequences of rising sea levels, a process that according to scientific sources began 20,000 years ago, but has been accelerated by global warming over the last 150 years.

Small island nations such as those of the Caribbean are among the most vulnerable to climate change, while their emissions have contributed very little to the phenomenon.

“As journalists and communicators we have not managed to identify the right messages to make the public feel involved in this issue,” said Deschamps at a workshop organised by the Cuban Environmental Protection Agency, the Dominican Chapter of the Nicolás Guillén Foundation, the Norwegian Embassy and the Inter Press Service (IPS) international news agency.

Marie Jeanne Moisse, a reporter and environmental educator who works in the climate change office in Haiti’s Environment Ministry, spoke during a workshop in Santo Domingo about the media’s role in reporting on and raising awareness about global warming. Credit: Dionny Matos/IPS

Marie Jeanne Moisse, a reporter and environmental educator who works in the climate change office in Haiti’s Environment Ministry, spoke during a workshop in Santo Domingo about the media’s role in reporting on and raising awareness about global warming. Credit: Dionny Matos/IPS

To train reporters from the Caribbean, a group of experts from Cuba, Mexico and the Dominican Republic offered a Nov. 23-26 course on “Social Communication for Risk Prevention, Gender and Climate Change” in the Dominican capital.

The course was attended by 41 journalists from Haiti and the Dominican Republic. It included three talks that experts gave to students from two rural schools and to a group of 25 Haitian-Dominican women.

“The media need to be trained to provide more information at a national level on the phenomenon and about the agreement reached at COP21,” said Marie Jeanne Moise, an official in the climate change office in Haiti’s Environment Ministry.

According to Moise, a communicator and educator on the environment, “there is alarming talk today about global warming, and people are scared. But that doesn’t mean they know about the phenomenon or about how to protect themselves, to reduce the impacts on their lives.”

Moise urged journalists and reporters to “go to the roots of the problem.”

“News coverage focuses on catastrophes and on how vulnerable we are. But little is said about what contribution the media should make to help bring about a positive change in attitude towards the environment.”

The Haitian official said COP21 “created greater unity among the Caribbean as a vulnerable region that needs to adopt a common position.”

The countries in the region that took part in COP21 are negotiating as part of the Caribbean Community (CARICOM), made up of 15 mainly island nations, and as part of the Alliance of Small Island States (AOSIS).

Ahead of COP21, CARICOM launched the “1.5 to Stay Alive” campaign to raise awareness on the effects of climate change, especially on small island states, while strengthening the region’s negotiating position.

CARICOM estimates that inaction could cost its member countries 10.7 billion dollars in losses by 2025, or five percent of GDP, and some 22 billion dollars by 2050, or 10 percent of GDP.

Haiti and the Dominican Republic, which share the island of Hispaniola, are on the list of the 10 countries most vulnerable to natural disasters, according to the Climate Change and Environmental Risk Analytics report published in 2012 by Verisk Maplecroft, a global risk analytics and forecasting company based in Britain.

Besides physical and economic exposure to events like earthquakes and hurricanes, these countries are vulnerable due to social inequality, a lack of preparedness, and unequal distribution of local and regional capacities, said the study, which compared 197 countries using 29 indices and interactive maps analysing major natural hazards worldwide.

Dominican blogger and human rights activist Yesibon Reynoso said that in his country “quite a lot is known and talked about, with regard to the environment, because of the current circumstances.”

But, he said, “for example, deforestation is not always punished. Impunity reigns through exploitation with the support of corruption in the state.”

In his view, “environmental rights are not addressed in accordance with how essential they are to life, in the country and around the globe. There is no traditional social and political respect for the environment.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Oil Giants Punish Venezuela through Dutch treaty Mon, 04 Jan 2016 06:48:05 +0000 Frank Mulder isds_3

By Frank Mulder
UTRECHT, Netherlands, Jan 4 2016 (IPS)

Venezuela doesn’t want investment treaties anymore if they give investors the right to drag the country before a commercial court. “The system has been set up to break down the nation-state.”

All is not going well for Venezuela. While the country is torn apart by poor governance, poverty and polarisation, it is attacked from the outside by oil firms claiming tens of billions of dollars.

The method these firms use is called ISDS, or Investor-State Dispute Settlement. This is a mechanism by which investors can sue a state by means of arbitration, which is a kind of privatized court. Many lawyers stress the advantage that plaintiffs don’t have to go before a local judge whom they feel they cannot trust. You can choose a judge for yourself, the opponent does the same, and the two of those choose a chairman. They are called arbitrators. The case is heard at a renowned institute, like the World Bank. How could it be more fair?


But Bernard Mommer, former vice-minister for oil in the time of Hugo Chavez, now the main witness in different claims against Venezuela, has to laugh a bit. “I won’t say that Caracas is a neutral venue. But don’t be so foolish to say that Washington is neutral. The whole arbitration system is biased in favour of investors.”

After Argentina, no country has been sued as much as Venezuela: until 2014 at least 37 cases have been filed against this Latin American state. However, the fine they can expect now exceeds all of the others. ConocoPhillips, a Texas-based oil company, claims 31 billion dollars and seems to be on the winning side. According to critics, that case represents everything that’s wrong with the ISDS system.

Oil dispute

The dispute about oil began in 2006. Under the activist leadership of Chavez, Venezuela decided to nationalise the oil sector. Also, higher taxes were announced. Mommer was responsible for the negotiations with international oil firms about compensation. Most of the 41 companies in the country agreed with the buyout. Two didn’t. Those were the Texas-based companies ConocoPhillips and Mobil (now ExxonMobil).

“When we started with the expropriation, they went for arbitration,” says Mommer. “I didn’t even know that this was possible. For arbitration two parties need to consent, don’t they? How could they sue a state?” But Mommer discovered that Venezuela signed Bilateral Investment Treaties (BITs) in 1991, among others with the Netherlands. Those treaties give all investors from the given country an offer to arbitration if they feel treated unfairly by the host state.

Dutch sandwich

ConocoPhillips and Mobil quickly moved their Venezuelan holdings to the Netherlands in 2006. That gave them the opportunity to claim, as Dutch investors, that the unexpected policy change violated their BIT rights. Together, they demanded 42 billion dollars.

“This is called the Dutch sandwich”, says George Kahale III, a top lawyer from New York, who defends Venezuela in different cases. “You put a Dutch holding in the middle of your company chain and you can call yourself Dutch.”

Companies are not allowed to do this if the dispute already started. ExxonMobil and Conoco said that their move was made independently of the dispute. However, a remarkable message has been found among the Wikileaks cables. In these a representative of Conoco told someone from the American embassy that they “already” moved to the Netherlands to “safeguard their arbitration rights.”


The cases are still dragging on. ExxonMobil has had no luck. The three arbitrators have judged that the expropriation was lawful. ExxonMobil gets compensation, but not much more than what they were offered earlier, around one billion dollars.

But the Conoco case evolved differently. Two of the three arbitrators found the expropriation unlawful. This means that Venezuela has to compensate the firm, not on the basis of the low oil price in 2006, but on the basis of the much higher price at the time of the claim. This will amount to tens of billions of dollars.

This is insane, says Kahale. “The fact is that four out of six arbitrators found that the expropriation was perfectly lawful. And yet Venezuela can expect a mega award.”


Talking about fairness: among the Wikileaks cables another juicy anecdote has been found. In a cable from 2008, the Conoco representative tells the American ambassador that the negotiations are going well and that Venezuela is being reasonable. This is in contradiction to what Conoco was claiming in public. Yet the arbitrators – at least, two of the three – now say that they can’t change their conclusion anymore and now have to proceed to the next phase, about the damages.

“In other words”, says Mommer, “the investor can lie. We can’t sue them anyway. They alone can sue us. This shows why Western countries have invented this system. It has been set up to break down the nation-state.”


ISDS is structurally flawed, says Kahale. “Who are the judges? They are investment lawyers. Their commercial background shines through in their decisions. Every judge of course always brings his own views to his job. But in arbitration these people are deciding no longer private commercial disputes, but megacases of international significance, with sometimes vital importance for individual states, involving billions of dollars, with very little training in international law.”

Too many, conflicts of interest arise. “You will never see a supreme court judge acting as a counsel in another case. But many arbitrators also act as a counsel. It’s very hard to preside over the legality of something one day, and advocate the same issue the other day. It is natural that I’m holding back in one or the other, depending on which case is more important to me. There are very few checks and balances. Too many mistakes are made.”

Venezuela is fed up with ISDS claims. Soon after the claims were filed, they pulled the plug, not only from the ICSID convention (which acknowledges the World Bank as arbitration court) but also from a number of BITs. The Dutch BIT was the first to be terminated a few years ago. Unfortunately for Venezuela, this treaty contains a clause giving investors the right to arbitration until 2023.

Don’t challenge us

Arbitration can be an elegant method for solving a dispute. But is has developed into an instrument for multinational companies to pressure states.

“These oil firms were offered a brilliant compensation,” says Juan Carlos Boue, a Venezuelan researcher at the Oxford Institute of Energy. “But when the oil price rose, they decided to leave the country with as much money as possible.” For ExxonMobil, a giant with a revenue of 400 billion dollars, twice as big as the GDP of Venezuela, there is more at stake. “They have unlimited resources. They want to let the world know what happens if you challenge them.”

And the arbitrators? “Some of them are on the boards of multinational companies. They just don’t want the countries to get away with it. They have an extreme dislike towards countries like Venezuela.”

ExxonMobil and ConocoPhillips refrained from any comment.


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Foreign Direct Investment: Myths and realities Tue, 29 Dec 2015 08:10:27 +0000 Yilmaz Akyuz Yilmaz Akyüz is the chief economist of the South Centre, Geneva.]]>

Yilmaz Akyüz is the chief economist of the South Centre, Geneva.

By Yilmaz Akyüz
GENEVA, Dec 29 2015 (IPS)

Foreign direct investment (FDI) is perhaps one of the most ambiguous and the least understood concepts in international economics. Common debate on FDI is confounded by several myths regarding its nature and impact on capital accumulation, technological progress, industrialization and growth in emerging and developing economies.

Yilmaz Akyüz, chief economist of the South Centre, Geneva.

Yilmaz Akyüz, chief economist of the South Centre, Geneva.

It is often portrayed as a long term, stable, cross-border flow of capital that adds to productive capacity, helps meet balance-of-payments shortfalls, transfers technology and management skills, and links domestic firms with wider global markets.

However, none of these is an intrinsic quality of FDI. First, FDI is more about transfer and exercise of control than movement of capital. Contrary to widespread perception, it does not always involve flows of financial capital (movements of funds through foreign exchange markets) or real capital (imports of machinery and equipment for the installation of productive capacity). A large proportion of FDI does not entail cross-border capital flows but is financed from incomes generated on the existing stock of investment in host countries. Equity and loans from parent companies account for a relatively small part of recorded FDI and even a smaller part of total foreign assets controlled by transnational corporations.

Second, only the so-called greenfield investment makes a direct contribution to productive capacity and involves cross-border movement of capital goods. But it is not easy to identify from reported statistics what proportion of FDI consists of such investment as opposed to transfer of ownership of existing firms (mergers and acquisitions). Furthermore, even when FDI is in bricks and mortar, it may not add to aggregate gross fixed capital formation because it may crowd out domestic investors.

Third, what is commonly known and reported as FDI may contain speculative components and creates destabilizing impulses, including those due to the operation of transnational banks in host countries, which need to be controlled and managed as any other form of international capital flows.

Fourth, the immediate contribution of FDI to balance-of-payments may be positive, since it is only partly absorbed by imports of capital goods required to install production capacity. But its longer-term impact is often negative because of high import content of foreign firms and profit remittances. This is true even in countries highly successful in attracting export-oriented FDI.

Finally, superior technology and management skills of transnational corporations create an opportunity for the diffusion of technology and ideas. However, the competitive advantage these firms have over newcomers in developing countries can also drive them out of business. They can help integrate developing countries into global production networks, but participation in such networks also carries the risk of getting locked into low value-added activities.

These do not mean that FDI does not offer any benefits to developing and emerging countries. Rather, policy in host countries plays a key role in determining the impact of FDI in these areas. A laissez-faire approach could not yield much benefit. It may in fact do more harm than good.

Successful examples are found not necessarily among countries that attracted more FDI, but among those which used it in the context of national industrial policy designed to shape the evolution of specific industries through interventions. This means that developing countries need adequate policy space vis-à-vis FDI and transnational corporations if they are to benefit from it.

Still, the past two decades have seen a rapid liberalization of FDI regimes and erosion of policy space in emerging and developing countries vis-à-vis transnational corporations. This is partly due to the commitments undertaken in the World Trade Organization as part of the Agreement on Trade-Related Investment Measures .

However, many of the more serious constraints are in practice self-inflicted through unilateral liberalisation or bilateral investment treaties signed with more advanced economies – a process that appears to be going ahead with full force, with the universe of investment agreements reaching 3,262 at the end of 2014.

Unlike earlier bilateral treaties, recent agreements give significant leverage to international investors. They often include rights to establishment, the national treatment and the most favoured-nation clauses, broad definitions of investment and investors, fair and equitable treatment, protection from expropriation, free transfers of capital and prohibition of performance requirements.

Furthermore, the reach of bilateral investment treaties has extended rapidly thanks to the use of the so-called Special Purpose Entities which allow transnational corporations from countries without a bilateral treaty with the destination country to make the investment through an affiliate incorporated in a third-party state with a bilateral treaty with the destination country.

Many bilateral investment treaties include provisions that free foreign investors from the obligation of having to exhaust local legal remedies in disputes with host countries before seeking international arbitration. This, together with lack of clarity in treaty provisions, has resulted in the emergence of arbitral tribunals as lawmakers in international investment which tend to provide expansive interpretations of investment provisions in favour of investors, thereby constraining policy further and inflicting costs on host countries.

Only a few developing countries signing such bilateral treaties with advanced countries have significant outward FDI.

Therefore, in the large majority of cases there is no reciprocity in deriving benefits from the rights and protection granted to foreign investors. Rather, most developing countries sign them on expectations that they would attract more FDI by providing foreign investors guarantees and protection, thereby accelerating growth and development. However, there is no clear evidence that bilateral investment treaties have a strong impact on the direction of FDI inflows.


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WTO: Giant Steps in the World Conference Wed, 23 Dec 2015 18:50:42 +0000 Roberto Azevedo

Roberto Azevêdo is the director general of the World Trade Organization (WTO).

By Roberto Azevêdo
NAIROBI, Dec 23 2015 (IPS)

World Trade Organization (WTO) members concluded the Tenth Ministerial Conference in Nairobi on 19 December by securing an historic agreement on a series of trade initiatives. The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.

Roberto Azevêdo

Roberto Azevêdo

The decision on export competition is truly historic. It is the WTO’s most significant outcome on agriculture.

The elimination of agricultural export subsidies is particularly significant.

WTO members, ¬especially developing countries,¬ have consistently demanded action on this issue due to the enormous distorting potential of these subsidies for domestic production and trade. In fact, this task has been outstanding since export subsidies were banned for industrial goods more than 50 years ago.

WTO members’ decision tackles the issue once and for all. It removes the distortions that these subsidies cause in agriculture markets, thereby helping to level the playing field for the benefit of farmers and exporters in developing and least-developed countries.

This decision will also help to limit similar distorting effects associated with export credits and state trading enterprises.

And it will provide a better framework for international food aid ¬ maintaining this essential lifeline, while ensuring that it doesn’t displace domestic producers.

There are also important steps to improve food security, through decisions on public stockholding and towards a special safeguard mechanism, as well as a package of specific decisions for Least Developing Countries (LDCs).

This contains measures to enhance preferential rules of origin for LDCs and preferential treatment for LDC services providers.

And it contains a number of steps on cotton, such as eliminating export subsidies, and providing duty-free-quota-free market access for a range of LDC cotton products immediately.

In addition, we have approved the WTO membership of Liberia and Afghanistan, and we now have 164 member countries.
And I think we are all committed to supporting these two LDCs to boost their growth and development.

We also saw continued commitment to help build the trading capacity of LDCs through the excellent support shown at the Enhanced Integrated Framework (EIF) pledging conference.

And, finally, a large group of members agreed on the expansion of the Information Technology Agreement (ITA). Again, this is an historic breakthrough. It will eliminate tariffs on 10 per cent of global trade ¬ making it our first major tariff cutting deal since 1996.

While we celebrate these outcomes, we have to be clear-sighted about the situation we are in today.

Success was achieved here despite members’ persistent and fundamental divisions on our negotiating agenda – ¬ not because those divisions have been solved.

We have to face up to this problem.

The Ministerial Declaration acknowledges the differing opinions. And it instructs us to find ways to advance negotiations in Geneva.

Members must decide, the world must decide, about the future of this organization.

The world must decide what path this organization should take.

Inaction would itself be a decision. And I believe the price of inaction is too high.

It would harm the prospects of all those who rely on trade today ¬ and it would disadvantage all those who would benefit from a reformed, modernized global trading system in the future ¬ particularly in the poorest countries.

So we have a very serious task ahead of us in 2016.

We came to Nairobi determined to deliver for all those we represent ¬ and particularly for the one billion citizens of Africa.

At the outset, I warned that we were not looking at a perfect outcome. And what we have delivered is not perfect. There are still so many vital issues which we must tackle.

But we have delivered a huge amount. The decisions taken in Nairobi this week will help to improve the lives and prospects of many people ¬ around the world and in Africa.

When we left Geneva, the international media had already written their headlines:

-‘WTO talks break down’

-‘Another failure at the WTO’

That’s exactly how it was in the Ninth Ministerial Conference in Bali two years ago. And we saw it again this year.

Well, we’re getting used to proving those catastrophic headlines wrong.

In the past, all too often, WTO negotiations had a habit of ending in failure.

But, despite adversity ¬ despite real challenges ¬ we are creating a new habit at the WTO: success.


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Companies Sue Developing States through Western Europe Mon, 21 Dec 2015 15:32:38 +0000 Frank Mulder This article is part of a research project by De Groene Amsterdammer, Oneworld and Inter Press Service, supported by the European Journalism Centre (made possible by the Gates Foundation). See]]>

This article is part of a research project by De Groene Amsterdammer, Oneworld and Inter Press Service, supported by the European Journalism Centre (made possible by the Gates Foundation). See

By Frank Mulder
Utrecht, The Netherlands, Dec 21 2015 (IPS)

Many Europeans fear the Transatlantic Trade and Investment Partnership (TTIP) because it could enable American companies to file claims against their states. The strange thing, however, is that Western Europe is becoming a big hub in this mechanism, called the Investor-State Dispute Settlement (ISDS), leading to billion dollar claims against poorer countries.

Imagine this: a country is in the middle of the worst economic crisis in decades. One in four people is unemployed. Tens of thousands are homeless. Four presidents have been replaced in two weeks’ time. To halt the downward spiral, the government decides to nationalize previously privatized sectors and companies. In response, dozens of companies sue the government, because they feel disadvantaged by the new policy. The government is forced to pay hundreds of millions in financial compensation in the years after.

Surreal? It happened to Argentina after the economic crisis early this millennium. Argentina had signed dozens of bilateral investment treaties (BITs) meant to attract foreign direct investments (FDI). The treaties gave investors the right to sue the Argentinean government in case of a conflict. Argentina became easy prey. With 56 claims to date, it is the most-sued country in the world.

ISDS is a mechanism by which a company can sue a state without actually going to court. The investor can bring his dispute before a panel of arbitrators, which acts as a kind of privatized court. The hearings often take place at the World Bank. Both parties appoint one arbitrator, and these two appoint a third one, the chairman. They are usually investment lawyers. The trio then will decide if the state treated the investor unfairly, and if yes, what it has to pay. There is no possibility to appeal.


The world of investment arbitration is very intransparent. After a few months’ research, journalists working for the Dutch magazines Oneworld and De Groene Amsterdammer have published a number of stories about the hidden world of ISDS. The stories are accompanied by an interactive map, showing all ISDS claims ever filed against a state. The database behind this map contains information about the disputes, the awards and the members of the tribunals.

What is remarkable is the rise of the popularity of ISDS. Whereas in 2000 just 15 claims were filed, in 2014 alone nearly 70 new claims saw the light. By 2014, there were a total of 629 ISDS cases filed. This may turn out to be even more, because not all cases are public. The number of billion-dollar claims is growing.

Canada, the US and Mexico are on the top list of most-sued states. The reason is NAFTA, the free trade agreement of which ISDS is a part. However, the US has never lost a case. If we exclude the cases won by the state, a completely different picture emerges: Argentina, Venezuela, India, Mexico, Bolivia. In other words, developing and emerging countries. Many of these countries have now come to the conclusion that this arbitration system is unfair, or even neocolonial.

Dutch sandwich

Where do the claims originate from? In the list of home countries of investors the US is still number one, but in the last few years they have been surpassed by Western Europe. In 2014, more than half of all claims were filed by Western European investors. Claimant country number one is the Netherlands, with more claims than the United States.

However, a closer look at the companies involved shows that more than two-thirds of all Dutch claims have actually been filed by so-called mailbox companies. They choose to settle in the Netherlands for its attractive network of investment treaties, 95 in total, which are deemed investor-friendly.

“This is known as the Dutch sandwich,” says George Kahale III, an American top lawyer, who defends states in large investment cases. “You put a Dutch holding in between, and you can call yourself Dutch. This is how the system is misused.”

White men

In 88 per cent of the cases, the researchers found the names of the arbitrators involved. From this a picture emerges of a highly select club of men – and two women – who are assigned time and again to judge. A top-15 of arbitrators have been involved in a striking 63 per cent of all cases. In 22 per cent of the cases, even two members of the top-15 were involved, which means that they have been able to make or break the case.

“This is not strange,” says Bernard Hanotiau, a Belgian arbitrator who is also a member of the top-15. That a few arbitrators dominate the scene, he says, is just because they are the best ones. “If you look for lung cancer specialists in Belgium, you also end up with a small group. We are specialists.”

Yet this is problematic. After all, the arbitrators are not judges who have sworn an oath and have been appointed publicly. Most of them are commercial lawyers, who even continue to act as counsels next to their work as arbitrators. It is possible that a state is condemned by a judge whose law firm partner is a lawyer for an investor in a comparable case. The possibility of conflicts of interest is big.

According to Kahale, this leads to too many legal mistakes. “Their business background shines through in their decisions. Their background is commercial arbitration. The aim there is not to create correct legal precedents, but to get parties back to business again as soon as possible. Which is very bad. This is not about some little disputes, this is about multi-billion dollar claims, about principles that are crucial for countries, many of which have just a small GDP.”


Criticism against the current system of investment arbitration is rising, as a growing number of countries decide to terminate the investment treaties behind ISDS. Not only countries like Venezuela, but also Indonesia, South Africa, Ecuador and India. Brazil is working on a model in which only states can file a claim on behalf of an investor.

Even the European countries, in their negotiations with the United States about TTIP, have now decided to plead for an independent investment court, in which investment cases are handled by former judges. The Dutch government has announced it will renegotiate existing investment treaties and make it harder for mailbox companies to abuse the system.

Whether these good wishes will be translated into real policy remains to be seen.


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Cubans Want to Know When They Will Feel the Effects of Thaw with U.S. Wed, 16 Dec 2015 17:54:34 +0000 Patricia Grogg A group of women wait their turn to buy rationed food that is sold at subsidised prices, at a government shop in Havana, Cuba on Nov. 21, 2015. Credit: Jorge Luis Baños/IPS

A group of women wait their turn to buy rationed food that is sold at subsidised prices, at a government shop in Havana, Cuba on Nov. 21, 2015. Credit: Jorge Luis Baños/IPS

By Patricia Grogg
HAVANA, Dec 16 2015 (IPS)

While the normalisation of diplomatic relations between the United States and Cuba is moving ahead, and the U.S. and Cuban flags have been proudly waving in Havana and Washington, respectively, since last July, the year gone by since the thaw has left many unanswered questions.

“You shouldn’t ask me, because in my view, nothing has changed,” one slightly angry middle-aged man told IPS while waiting his turn in a barbershop. In a nearby farmers’ market, a woman asked, loudly so that everyone could hear, why a pound of tomatoes cost 25 pesos (nearly a dollar).

Many Cubans feel that they don’t have much to celebrate this Dec. 17, the first anniversary of the day Presidents Raúl Castro of Cuba and Barack Obama of the United States took the world by surprise with their decision to reestablish diplomatic relations, severed in January 1961.

People who got excited about the idea that their daily lives would begin to improve after more than half a century of hostile relations are ending the year with public sector salaries that do not even cover their basic food needs.

The Cuban press reported that Marino Murillo, minister of economy and planning and vice president of the Council of Ministers, admitted at a recent session of the provincial legislature of Havana that the overall economic indicators in the capital had improved, but that this has not yet been reflected in the day-to-day lives of local residents.

The thaw has, however, had a positive impact on tourism, by giving a boost to emerging private enterprises like room rentals and small restaurants, options chosen by many visitors interested in getting to know Cuban society up close.

According to official statistics, in the first half of 2015 this country of 11.2 million people was visited by 1,923,326 people, compared to 1,660,110 in the first half of 2014. Visitors from other parts of Latin America can be frequently heard saying that they wanted to come to Cuba before the “invasion” of tourists from the U.S.

People from the United States can only travel to Cuba with special permits, for religious, cultural, journalistic or educational purposes, or for “people-to-people” contacts. Experts project that 145,000 people from the U.S. will have visited the country this year – 50,000 more than in 2014.

Two primary school students walk by a group of foreign tourists in a plaza in Old Havana. Credit: Jorge Luis Baños/IPS

Two primary school students walk by a group of foreign tourists in a plaza in Old Havana. Credit: Jorge Luis Baños/IPS

The ban on travel to Cuba for the purpose of tourism and the embargo that Washington has had in place against this socialist country since 1962 are among the pending issues to resolve in the process of normalisation of ties promoted over the last year by official visitors to Cuba who have included Secretary of State John Kerry, two other members of Obama’s cabinet, and three state governors.

“Beyond a number of grandiloquent headlines, everything remains to be done,” Cuban journalist and academic Salvador Salazar, who is earning a PhD in Mexico, told IPS. In his view, only the first few steps have been taken towards “what should be a civilised relationship marked by talking instead of shouting, and debating instead of attacking.”

Sarah Stephens, executive director of the Washington-based Center for Democracy in the Americas, concurred that after 55 years of hostile and dangerous relations, the governments of the two countries are learning how to respect each other.

“…[I]f 2015 was about both governments learning to treat each other with dignity and respect, 2016 has to be about building on that progress and using diplomacy to create lasting benefits for both countries in order to make the changes we are seeing irreversible and the further changes we want inevitable,” she told IPS by email.

In September, a binational commission created after the official restoration of diplomatic relations and the reopening of embassies defined the issues for starting talks aimed at clearing the path towards normalisation, including communications, drug trafficking, health, civil aviation and maritime security.

Human rights, human trafficking and demands for compensation by both sides were other questions on the agendas outlined by the delegations from the two countries. The list also includes immigration, an issue that has been discussed for years in periodic talks held to review progress on agreements signed in 1994 and 1995.

The talks about the agreements aimed at ensuring “safe, legal and orderly” immigration are not free of tension, given the Cuban government’s frustrated demand for the repeal of the U.S. Cuban Adjustment Act’s “wet foot, dry foot” policy and other regulations that according to authorities here encourage illegal migration.

Washington has reiterated that it will not modify its immigration policy towards Cuba. The anniversary of the start of the thaw finds some 5,000 Cuban immigrants stranded at border crossings in Costa Rica without any apparent solution, in their quest to reach the United States by means of a route that takes them through Central America and Mexico.

John Gronbeck-Tedesco, assistant professor of American Studies at Ramapo College in New Jersey, believes the Obama administration is doing its part to clear the way towards reconciliation, and says the talks held so far have calmed the “anti-normalisation rhetoric.”

But the academic says he does not yet see a climate favourable to the lifting of the embargo, which can only be done by the U.S. Congress, “especially” given the fact that 2016 is an election year.

According to the Cuban government, the embargo has hindered this country’s development and has caused 121.192 billion dollars in damages over the past five decades.

“I think that before Congress takes up the matter, however, the significant issue of debts still owed will need to be settled more clearly,” added the analyst, referring to the question of compensation that the two countries began to discuss in a Dec. 8 “informational” session in Havana.

“The U.S. has a price for Cuban American property and investments lost (nationalised) due to the revolution, and Cuba has a number in mind regarding the economic harm caused by the embargo. These debts are as politically symbolic as they are materially real for both interested parties,” added Gronbeck-Tedesco, without mentioning specific figures.

In an interview with the press published Monday Dec. 14, Obama reiterated his interest in visiting Cuba, although only if “I get to talk to everybody”.

He said that in his conversations with Castro he has made it clear that “we would continue to reach out to those who want to broaden the scope for, you know, free expression inside of Cuba.”

The two leaders have spoken by phone at least twice and met in person for the first time on Apr. 11, at the seventh Summit of the Americas in Panama. And on Sep. 29 in New York they held the first official meeting between the presidents of the two countries since the 1959 Cuban revolution.

*With reporting by Ivet González in Havana.

Edited by Verónica Firme/Translated by Stephanie Wildes

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2016: The Forthcoming Adjustment Shock Thu, 10 Dec 2015 14:24:17 +0000 Isabel Ortiz Isabel Ortiz, is the director of the Social Protection Department at the International Labour Organization (ILO). This column is based on the working paper “The Decade of Adjustment: A Review of Austerity Trends 2010-2020 in 187 Countries” by Isabel Ortiz, Matthew Cummins, Jeronim Capaldo and Kalaivani Karunanethy, and its policy brief, published by the ILO Social Protection Department, the Initiative for Policy Dialogue at Columbia University and the South Centre.]]> Isabel Ortiz, is the director of the Social Protection Department at the International Labour Organization (ILO). This column is based on the working paper “The Decade of Adjustment: A Review of Austerity Trends 2010-2020 in 187 Countries” by Isabel Ortiz, Matthew Cummins, Jeronim Capaldo and Kalaivani Karunanethy, and its policy brief, published by the ILO Social Protection Department, the Initiative for Policy Dialogue at Columbia University and the South Centre.]]> 0 Cities Emerge as Urgent Climate Solution at COP21 Thu, 10 Dec 2015 08:07:17 +0000 Diego Arguedas Ortiz At COP21 entrance are situated the ‘Wind Trees.’ Each “aeroleaf” generates energy by harnessing the power of the wind. Credit:

At COP21 entrance are situated the ‘Wind Trees.’ Each “aeroleaf” generates energy by harnessing the power of the wind. Credit:

By Diego Arguedas Ortiz
PARIS, France, Dec 10 2015 (IPS)

As the climate conference advances into its final stages amid the colossal challenge of having 195 countries agree on a single and unified global policy on climate change, urban areas appear a a different issue but complementary solution for all.

Cities are undeniably one of the key players in the global warming arena, being the leading source of greenhouse gases, of population settlements and of energy consumption, grouping three highly interconnected driving factors of global warming. As humanity walks deeper into the 21st century their relevance will only grow.

Cities and municipal level government offices have proven to move faster than the international country-driven negotiations in addressing climate change, as international alliances both inside and outside the UN umbrella show.

However, they don’t live in another world and their solution portfolio is intertwined with the fate of the 2015 UN Climate Conference (COP21).

“The way decisions will be made as part of the agreement, including the funding and the agenda of solutions, all these decisions will be implemented at that sub national level so they are key to success,” said French French Minister of Ecology, Energy and Sustainable Development Ségolène Royal.

The minister spoke during the presentation at COP21 of a five-year plan to raise action from cities and regions spanning across five continents representing almost one-fifth of the world’s population.

The plan was launched under the Lima to Paris Action Agenda (LPAA) platform, a mechanism created during last year’s climate conference as a way to include so-called non state actors into the search for the climate solution.

Its urban workstream currently includes over 2200 settlements around the world, from Mongolia’s capital Ulan Bator to globalization strongholds like New York and London and adds to previous efforts like C40.

The United Nations Human Settlements Programme (UN-Habitat) says urban areas are responsible for up to 80 per cent of global greenhouse gas (GHG) emissions and by mid century, they are estimated to hold about seven of every 10 human beings.

Tokyo, for instance, emits as much as 62 million tons of greenhouse gas (GHG) emissions per year, which accounts to the equivalent of the 37 countries least polluting countries in Africa.

Their transition to a greener economy is also an economic necessity. If the world keeps a business-as-usual high-carbon economy, about 90 trillion dollars, or an average of six trillion a year, will be invested in infrastructure in the world’s cities, agriculture and energy systems over the next 15 years, according to the New Climate Economy report “Better Growth, Better Climate”.

But the report adds that only around 270 billion dollars a year would be needed to accelerate the global transition to a low-carbon economy, through clean energy, more compact cities, better public transport systems and smarter land use.

These and other low-carbon local decisions are going to be taken by country delegates at the climate conference, but the actual heavy lifting will come from sub national efforts.

“COP21 is the first time that cities will have their voices fully recognized at a global UN conference on climate change and the first time mayors are gathering in great numbers to demand bold action,” said UN Special Envoy for Cities and Climate Michael Bloomberg during the Cities for Change, a parallel event in Paris.

The conference comes at a crucial moment. Earlier this year, Paris suffered from haze masking city’s landmarks like the Eiffel Tower and this week Beijing raised a “red alert” warning over smog and the city has gone on a shutdown to protect its people, so mayors and city planners are moving fast.

The city of Ghent in Belgium has implemented projects that address climate change. Speaking at a side event in COP21 called “Global Covenant of Mayors: Towards Carbon Neutral and Inclusive Cities,” the city’s mayor Tine Heyset emphasized climate policies at the local level.

“Climate policy should contribute to reduce emissions. It can contribute to a livable city, reduction of poverty, and better housing. Local authorities can demonstrate that local climate policy is not only good for climate but also good for citizens,” she said.

And it’s not just developed cities that are making bold steps of climate action. Mayor Josefa Errazuris of Chile’s Providencia also shared about their city-wide projects such as changing street lights to LED and having a target of 50 per cent carbon reduction of GHG based on 2014 levels.

“In order to protect our commune and the sustainability of our territory, we have efforts to include climate change as part of policies,” she said.

But urban areas also have to carry a heavy burden. During her intervention, minister Royal highlighted the double nature of the cities as “both places with highest greenhouse gases but also where you need concrete and urgent action” to address the negative impacts of climate change.

A 2013 paper published in Nature showed that without major new defences or emissions cuts, the global costs of flooding in cities could rise to one trillion dollars a year in 2050 and the negative effects span to all corners of the world.

As poverty hotspots around the world, cities lack the necessary resilience to withstand climate change and its impacts, which usually harder on the most vulnerable among communities and settlements.

The 2014 World Urbanization Prospects revealed that 828 million people are currently living in slums, as satellites or metropolis in all continents, a number enlarged by 6 million on a yearly basis.

But it’s not only the world’s most vulnerable. A paper published in the Proceedings of the National Academy of Sciences shows that if global warming continues as it is now, half the homes in 21 cities in the United States will be underwater by 2100.

COP21 is scheduled to deliver a final text by Thursday noon, Paris time, in which all 195 countries that signed to the UN Climate Convention agree on a global plan to combat climate change.


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Soy, an Exotic Fruit in Brazil’s Amazon Jungle Tue, 08 Dec 2015 00:36:47 +0000 Fabiana Frayssinet Members of the São Raimundo do Fe em Deus cooperative in the rural municipality of Belterra in Brazil’s Amazon rainforest peel manioc, to make flour. The associations of small farmers help them defend themselves from the negative effects of the expansion of soy in this region on the banks of the Tapajós River. Credit: Fabiana Frayssinet/IPS

Members of the São Raimundo do Fe em Deus cooperative in the rural municipality of Belterra in Brazil’s Amazon rainforest peel manioc, to make flour. The associations of small farmers help them defend themselves from the negative effects of the expansion of soy in this region on the banks of the Tapajós River. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
BELTERRA, Brazil, Dec 8 2015 (IPS)

In the northern Brazilian state of Pará, the construction of a port terminal for shipping soy out of the Amazon region has displaced thousands of small farmers from their land, which is now dedicated to monoculture.

The BR-163 highway, along the 100-km route from Santarém, the capital of the municipality of that name, to Belterra runs through an endless stretch of plowed fields, with only a few isolated pockets of the lush rainforest that used to cover this entire area.

State-of-the-art tractors and other farm machinery, a far cry from the rudimentary tools used by the local small farmers in the surrounding fields, are plowing the soil this month, ahead of the planting of soy in January.

José de Souza, a small farmer who owns nine hectares in the rural municipality of Belterra, sighs.

“Soy benefits the big producers, but it hurts small farmers because the deforestation has brought drought,” he tells IPS. “The temperatures here were pleasant before, but now it’s so hot, you can’t stand it.”

The effects are visible in his fields of banana plants, which have been burnt by the hot sun.

Resigned, De Souza waters a few sad rows of straggling cabbages and scallions.

Like other farmers, he has been hemmed in by the expansion of soy in the municipalities of Santarém and the nearby Belterra and Mojuí dos Campos.

According to the Santarém municipal government, of the 740,000 cultivable hectares in this region, soy now covers 60,000.

But Raimunda Nogueira, rector of the Federal University of Western Pará, offers a much higher figure. “Land-use change has involved 112,000 to 120,000 hectares, which have been turned into soy plantations,” she tells IPS.

And with the soy came the spraying.

“The soy fields bring a lot of pests because the poison they use to fight them drives them off their plantations onto our small fields,” laments De Souza.

The agrochemicals have polluted the soil and poisoned crops and animals, local farmers complain.

“The crops die, and as a result the property becomes completely unproductive – and the solution is to sell,” Jefferson Correa, a representative of the local non-governmental organisation Fase Amazonia, tells IPS.

There are no epidemiological data. But in these rural municipalities, the widespread perception is that health problems like respiratory and skin ailments have become more common.

According to Selma da Costa with the Rural Workers Union of Belterra, the threats to their health and the temptation to sell their land have led 65 percent of local small farmers to leave the municipality, which had a population of 16,500.

“They end up leaving, because who is going to put up with the stench of the pesticides? No one. People are getting sick. Pregnant women often feel ill and they don’t know why,” she tells IPS.

José de Souza waters the garden on his nine-hectare farm in the municipality of Belterra in the northern Brazilian Amazon rainforest state of Pará, where his vegetables grow sparsely due to the effects of the spread of soy monoculture, which has hurt family farmers in the area, who produce 70 percent of the food consumed by the local population. Credit: Fabiana Frayssinet/IPS

José de Souza waters the garden on his nine-hectare farm in the municipality of Belterra in the northern Brazilian Amazon rainforest state of Pará, where his vegetables grow sparsely due to the effects of the spread of soy monoculture, which has hurt family farmers in the area, who produce 70 percent of the food consumed by the local population. Credit: Fabiana Frayssinet/IPS

“They sold their land for a pittance. They practically gave away their land to the big producers, thinking their lives would get better, that they would build a nice house in Santarém But they can’t support themselves because they can’t grow anything,” she explains.

Correa points out that back in 2000, land here was cheap. There were people who sold 100 hectares for 1,000 to 2,000 dollars, and later regretted it.

“They went to the city, spent all the money, and without any formal education, the only solution was to go back to work in the countryside, as rural labourers for the people who had bought their land,” he says.

Others scrape by on the outskirts of Santarém as street vendors or in other informal sector activities.

“The farmers had their property, their own food, like beans, rice, flour and what they could fish and hunt; but in the city they no longer have that,” adds Claudionor Carvalho with the Federation of Agricultural Workers of the State of Pará.

The change, he explains to IPS, has fuelled prostitution in the slums surrounding the city, “because the families weren’t prepared for what they would face.”

The process was accentuated 15 years ago, with the construction of a port facility in Santarém by the US commodities giant Cargill.

Through the new port terminal in Santarém, on the banks of the Tapajós River where it runs into the Amazon River, soy and other grains can be exported to the Atlantic Ocean.

The aim was to reduce the distance and the costs of transporting soy from the neighbouring state of Mato Grosso, Brazil’s biggest producer.

Brazil is the world’s second-largest producer and leading exporter of soy, which it sells to China, Europe and other markets.

Ports like this one in the Amazon basin have nearly cut in half the transport distance from Mato Grosso, which is around 2,000 km from the congested ports in the southeast, such as Santos in the state of São Paulo.

The new Amazon port, with silos that now have a total capacity of 120,000 tons – double the initial capacity – has drawn hundreds of soy producers from the south of the country, leading to a land-buying stampede and driving up property prices.

One of those who came with his family was Luiz Machado, from Mato Grosso.

“We had 90 hectares that we sold to buy a bigger farm here because the land was cheap,” he tells IPS. “Besides, we would be closer to the port, so we could get a better price for our product.”

Machado says the purchase was legal, and that he has left untouched the rainforest surrounding his property, much of which had already been deforested.

But many others did not do this, and the expansion of soy has devastated large swathes of forest, Cándido Cunha with the National Institute of Colonisation and Agrarian Reform explains in a conversation with IPS.

In 2006, in a “soy moratorium,” associations of producers, many of whom had ties to Cargill, pledged not to sell any more soy from deforested areas.

There was a temporary drop in deforestation. But it once again increased because the farmers that sold their land cleared property in other areas.

“What happened was what we call ‘grillaje’ of land: forged documents or illegal appropriation of public land,” which further complicated the already highly irregular land tenure situation in the Amazon region, says Cunha.

Of the two million and a half tons of soy exported annually from Santarém, just six percent is locally grown; the rest comes from Mato Grosso.

But Nelio Aguiar, secretary of planning in Santarém, says it helped modernise the economy, fomenting a shift from family farming to mechanised agriculture.

“Today we have larger scale, dollarised agriculture, and every harvest produces great riches,” he tells IPS.

But while some celebrate the expansion of agribusiness here, others are worried about the future of local food security.

The greater metropolitan region, population 370,000, depends on family farming for 70 percent of the local food supply.

“Now you have to buy everything in the market, even rice and beans – things we didn’t have to buy before because we produced everything ourselves. And we also sold what we produced,” complains De Souza.

“Why are we buying? Because we don’t have land anymore. And what we plant is being poisoned,” says Da Costa.

For Correa, one solution is to expand government programmes that support family farming. De Souza is a beneficiary of one of them.

Another solution is to join together in farming associations or cooperatives.

De Souza proudly takes IPS to the São Raimundo do Fe em Deus cooperative, of which he is a member, where a festive group of men and women are sharing the tasks of peeling, grating and cooking manioc to make the flour that is a staple food in Brazil.

“We have to help each other, because small farmers face a difficult situation today,” he says.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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“París Is Not the End of a Climate Change Process but a Beginning” Fri, 27 Nov 2015 15:45:32 +0000 Marianela Jarroud Chilean President Michelle Bachelet during an exlusive interview with IPS in the Blue Room in the Moneda Palace, the seat of government, in Santiago, before flying to Paris to participate in the Nov. 30 inauguration of the climate summit, to be hosted by the French capital until Dec. 11. Credit: Marianela Jarroud/IPS

Chilean President Michelle Bachelet during an exlusive interview with IPS in the Blue Room in the Moneda Palace, the seat of government, in Santiago, before flying to Paris to participate in the Nov. 30 inauguration of the climate summit, to be hosted by the French capital until Dec. 11. Credit: Marianela Jarroud/IPS

By Marianela Jarroud
SANTIAGO, Nov 27 2015 (IPS)

Chilean President Michelle Bachelet says the climate summit in Paris “is not the end of a process but a beginning,” and that it will produce “an agreement that, although insufficient with respect to the original goal, shows that people believe it is better to move ahead than to stand still.”

In this exclusive interview with IPS, held shortly before Bachelet headed to the capital of France, the president reflected on the global impacts of climate change and stressed several times that the accords reached at the summit “must be binding,” as well as universal.

On Monday Nov. 30 Bachelet will take part in the inauguration of the 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC), which will run through Dec. 11. At the summit, the 196 countries that are parties to the treaty are to agree on a new climate accord aimed at curbing global warming.

The president also said the Paris summit will have a different kind of symbolism in the wake of the terrorist attacks that claimed 130 lives: “It sends out an extremely clear signal that we will not allow ourselves to be intimidated,” she said.

Q: Latin America is a region where the countries face similar impacts from climate change. But it is negotiating with a fragmented voice. Has the region missed a chance for a leadership role and for a better defence of its joint interests?

A: Sometimes it is very difficult to achieve a unified position, because even though there are situations that are similar, decisions must be taken that governments are not always able to adopt, or because they find themselves in very different circumstances.

We belong to the Independent Association of Latin America and the Caribbean (AILAC) in the negotiations on climate change, along with Colombia, Costa Rica, Guatemala, Panama, Paraguay and Peru. All of these countries did manage to work together, and we have a similar outlook on the question of climate change.

The countries in this region are not the ones that generate the most emissions at a global level. And above and beyond the differences we may have, the important thing is that we will all make significant efforts to reduce emissions and boost clean energies and other mechanisms and initiatives.

Q: Will the COP21 manage to approve a new universal climate treaty?

A: COP21 is not the end but a beginning of a process where the countries will turn in their national commitments [Intended Nationally Determined Contributions (INDCS)]. After that will come the mechanisms to assess the implementation of these contributions, and, from time to time, propose other targets, which would be more ambitious in some cases.

This will be the first climate change summit, after the Copenhagen conference [in 2009] where no accord was reached even though the Kyoto Protocol was coming to an end, where we will be able to reach some level of agreement.

It might not be the optimal level; apparently the contributions so far publicly submitted by the states parties would not achieve the objective of keeping global warming down to two degrees Celsius. Nevertheless, it is a major advance, when you look at what has happened in the past.

That said, what Chile maintains is that the contributions should be binding, and we are going to back that position which is clearly not supported by everyone.

Q: So you include yourself among those who believe Paris will mark a positive turning point in the fight against climate change?

Chile’s contribution

Q: Chile carried out a much-praised citizen input process for the design of its Intended Nationally Determined Contributions (INDCS), to be included in the new treaty. But media and business sectors were not pleased with some of the voluntary targets that were set. Will this hinder implementation?

A: Not everyone always agrees, we’ve seen that in different processes. I hope that awareness grows, and that is a task that we also have, as government. Climate change is a reality, not an invention, which will have disastrous consequences for everyone, but also for the economy.

For us it is indispensable, on one hand, to reduce emissions by 30 percent, by 2030. There are some who believe our commitment falls short, but it is what we can commit to today, understanding the economic situation that the country and the world find themselves in. It is a serious, responsible commitment. And obviously, if the economic situation improves, we will set more ambitious goals later.

On the other hand, Chile has an adaptation plan that includes, among other things, the reforestation of more than 100,000 hectares of native forest and an energy efficiency programme.

A: Yes, in the sense that a concrete, definitive agreement will be reached.

But it is, I insist, the start of a path. Later other, more ambitious, measures will have to be adopted, to further reduce global temperatures.

Q: Will the treaty currently being debated include the financing that the Global South and Latin America in particular will need in order to help prevent the planet from reaching a situation that is irreversible for human life?

A: I have a hope that the Green Climate Fund will grow and give more countries access to technology and resources. In this region we will always have the contradiction that we are considered middle-income countries, and thus we are not given priority when it comes to funding, while at the same time our economies are often unable to foot greater costs. And on the other hand, we are the smallest emitters [of greenhouse gases].

This is why in Chile we have set two targets, one without external support and the other with external financing, to reduce emissions by 45 percent. But there is also a possibility of financing through cooperation programmes for the introduction and transfer of new technologies to our countries, which will allow us to live up to the commitments.

Q: As the first executive director of U.N.-Women [2010-2013], you helped establish the idea that women must be taken into account in climate negotiations and actions, because they bear the impacts on a day-to-day basis and are decisive in adapting to and mitigating global warming. What is the central role that women should have in the new treaty?

A: There are a number of day-to-day decisions made by women, which have an influence. For example, energy efficiency is essential when it comes to reducing emissions, and it is often a domestic issue, in questions such as turning off lights, for example.

But in many parts of the world women are also the ones hauling water or cooking with firewood, especially in the most vulnerable areas.

So the importance of women ranges from these aspects to their contribution as citizens committed to the fight against climate change, with the conviction that a green, inclusive and sustainable economy is possible, and to the political role of women at the parliamentary and municipal level, where they are working hard for the adoption of measures and to ensure a livable planet.

Q: As president, and as a Chilean, what worries you most about the current climate situation? What would you see as the highest priority?

A: There are many things that worry me about climate change, ranging from severe drought and flooding to islands that could disappear under water – in other words, how natural events linked to climate change affect the lives of people.

I’m also concerned about two things that are essential for people: clean drinking water and food, two elements that can be profoundly affected by climate change. We have seen that there are areas of the country where people depend on rationed water from tanker trucks.

This not only affects the daily lives of people but also, in agricultural areas, it affects production and incomes. And think about the marvelous variety of fish and seafood that we have in our country, which depends on the temperatures in our oceans.

All of this could be modified. It is all very important, and ends up affecting people’s lives.

Q: Paris was the victim of a Jihadist terrorist attack on Nov. 13, which left 130 people dead. Did these attacks affect the climate surrounding the summit? Will the participation by the heads of state and government also serve as a response to the terrorism?

A: More than 160 heads of state and government have confirmed their attendance at the Paris conference, which sends out an extremely clear signal that we will not allow ourselves to be intimidated.

We are going to Paris first, because the issue to be addressed and discussed is important, but also because we are sending a message that we will not tolerate this kind of action and that we will continue moving forward in the defence of the values that we believe are essential. And we will give a hug of solidarity to our sister republic, France, to President François Hollande and to the French people.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Leading Powers to Double Renewable Energy Supply by 2030 Thu, 12 Nov 2015 20:45:29 +0000 Diego Arguedas Ortiz China has become the world leader in wind energy, although it is still surpassed by many European countries in terms of per capita wind power generation. Credit: Asian Development Bank

China has become the world leader in wind energy, although it is still surpassed by many European countries in terms of per capita wind power generation. Credit: Asian Development Bank

By Diego Arguedas Ortiz
SAN JOSÉ, Nov 12 2015 (IPS)

Eight of the world’s leading economies will double their renewable energy supply by 2030 if they live up to their pledges to contribute to curbing global warming, which will be included in the new climate treaty.

A study published this month by the World Resources Institute (WRI) analysed the Intended Nationally Determined Contributions (INDCs) of the 10 largest greenhouse gas emitters to determine how much they will clean up their energy mix in the next 15 years.

Eight of the 10 – Brazil, China, the European Union, India, Indonesia, Japan, Mexico and the United States – will double their cumulative clean energy supply by 2030. The increase is equivalent to current energy demand in India, the world’s second-most populous nation.

“We looked at renewable energy because it’s a leading indicator for the global transition to a low-carbon economy. We won’t get deep emissions reductions without it,” WRI researcher Thomas Damassa, one of the report’s authors, told IPS.

More than 150 countries have presented their INDCs, most of which commit to actions between 2020 and 2030. They will be incorporated into the new universal binding treaty to be approved at the 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC), to be held Nov. 30 to Dec. 11 in Paris.

Since energy production is the main source of greenhouse gases (GHG), accounting for around 65 percent of emissions worldwide, efforts to curb emissions are essential and must lie at the heart of the new treaty, especially when it comes to the biggest emitters, experts say.

Of the 10 largest emitters, Russia and Canada were not included in the study because they have not announced post-2020 renewable energy targets.

Currently, one-fifth of global demand for electric power is covered by renewable sources, according to a report by the Renewable Energy Policy Network for the 21st Century (REN21), and their cost is swiftly going down. Hydroelectricity still makes up 61 percent of all renewable energy.

But fossil fuels continue to dominate the global energy supply and power generation, making up 78.3 percent and 77.2 percent, respectively, according to REN21.

Studies indicate that in countries like India, where there are serious challenges in terms of access to energy, wind power is now as cheap as coal, and solar power will reach that level by 2019.

“The INDCs collectively send an important financial signal globally that renewables are a priority in the next two decades and a viable, pragmatic solution to the energy challenges countries are facing,” said Damassa.

Coordination between industrialised and emerging countries is crucial, especially the powerful BRICS (Brazil, Russia, India, China and South Africa) bloc.

That is because industrialised nations are historically responsible for GHG emissions but the BRICS and other emerging countries now produce a majority of global emissions.

Part of what will be the Belo Monte hydroelectric plant’s turbine room in the northern Brazilian state of Pará. The dam will be the third-largest in the world when it is completed in 2019. Climate change experts are worried about the impact of the megaproject in the vulnerable Amazon rainforest. Credit: Mario Osava/IPS

Part of what will be the Belo Monte hydroelectric plant’s turbine room in the northern Brazilian state of Pará. The dam will be the third-largest in the world when it is completed in 2019. Climate change experts are worried about the impact of the megaproject in the vulnerable Amazon rainforest. Credit: Mario Osava/IPS

China is the leading emitter of GHG emissions and the biggest consumer of energy. But it is also the largest producer of renewable energy, accounting for 32 percent of the world’s wind power production and 27 percent of hydroelectricity, followed in the latter case by Brazil, which produces 8.5 percent of the world’s hydropower.

The Asian giant aims to increase the proportion of non-fossil fuel sources by 20 percent by 2030. The country currently uses coal for 65 percent of its energy, while mega-dams represent just 15 percent.

In the first meeting of energy ministers of the Group of 20 industrialised and emerging nations, held Oct. 5 in Istanbul, the officials acknowledged the importance of renewable sources and their long-term potential and pledged to continue investing in and researching clean energy.

Of the 127 INDCs presented as of late October – the EU presented the commitments of its 28 countries as a bloc – 80 percent made clean energy a priority.

“They certainly help but clearly countries still need to go farther, faster – and in sectors outside of energy as well – to drive emissions down to the level that is needed,” said Damassa.

The pledges made so far would keep global warming down to a 2.7 degree Celsius increase, according to the UNFCCC secretariat, although other studies are more pessimistic, putting the rise at 3.5 degrees.

To avoid irreversible effects for the planet, global temperatures must not rise more than two degrees C above preindustrial levels, although even with that increase, severe effects would be felt in different ecosystems.

Because of that it will be essential to reassess the national pledges during the climate talks in Paris, and establish a clear mechanism for ongoing follow-up of the actions taken by each country.

“I see all of the BASIC (the climate negotiating group made up of Brazil, South Africa, India and China) pledges as ‘first offers’ that will have to be reassessed after the Paris deal is finalised,” Natalie Unterstell, the negotiator on behalf of Brazil at the UNFCCC, told IPS.

The expert, who is now a Louis Bacon Environmental Leadership Fellow at the John F. Kennedy School of Government at Harvard in the U.S., points to key differences between these four countries and Russia, the fifth member of BRICS.

She also explained that while these four countries agreed to reduce the proportion of fossil fuels in their energy mix, there are differences in how they aim to do so.

Adaptation is a large component in South Africa’s INDCs – a signal that the carbon-based economy understands the need to build a more resilient future. India is putting a strong emphasis on solar energy, and Brazil pledged to raise the share of renewable sources in its energy mix to 45 percent by 2030.

Brazil’s proposal is based partly on large hydropower dams, some of which are in socially and environmentally sensitive areas, like the Amazon rainforest.

Meanwhile, the actions that China takes can, by themselves, facilitate or complicate the talks. According to Untersell, the country “has a comparative advantage as it has committed itself to develop renewables technology and is delivering its promise.”

Ties between these emerging economies and the industrialised powers were strengthened over the last year by a series of bilateral accords that began to be reached in November 2014, with the announcement that China and the United States had agreed on joint actions in the areas of climate and energy.

“These agreements are good signals for the industry to transition (to a cleaner model). However, the private sector needs more than aspirational goals to base their operations,” said the expert.

But she said it was a good thing that the agreement between the two countries was based on actions on an internal level, because this shows concrete changes in the energy policies of both nations.

Besides the agreement with Washington, China has signed another with France, Brazil did the same with Germany, and India did so with the United States, in an effort by these countries to speed up their internal transition before COP21.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Refugee Crisis May Threaten Development Aid to World’s Poor Wed, 11 Nov 2015 21:52:23 +0000 Thalif Deen By Thalif Deen

As the spreading refugee crisis threatens to destabilize national budgets of donor nations in Western Europe, Secretary-General Ban Ki-moon Wednesday appealed to the international community not to forsake its longstanding commitment for development assistance to the world’s poorer nations.

Ban’s appeal comes two days after a UN pledging conference reported a “dramatic decline” in donor commitments: from 560 million dollars in 2014 to 77 million dollars in the most recent pledges, largely covering 2015.

Asked if the Secretary-General’s appeal was the result of the decline in commitments, UN Deputy Spokesman Farhan Haq told IPS: “It’s in response to many factors, including concerns expressed by some states about maintaining aid levels.”

The secretary-general said resources for one area should not come at the expense of another.

Redirecting critical funding away from development aid at this pivotal time could perpetuate challenges that the global community has committed to address, he warned.

“Reducing development assistance to finance the cost of refugee flows is counter-productive and will cause a vicious circle detrimental to health, education and opportunities for a better life at home for millions of vulnerable people in every corner of the world,” Ban declared.

At a summit meeting of political leaders from Europe and Africa in Malta Wednesday, the European Union (EU) was expected to announce plans to create a Special Trust Fund, initially estimated at 1.9 billion dollars, to address the financial problems arising out of the refugee crisis.

Since European countries are expected to boost this fund over the next few months, there are fears these contributions may be at the expense of development assistance.

According to figures released by the Paris-based Organisation for Economic Cooperation and Development (OECD), development aid flows were stable in 2014, after hitting an all-time high in 2013.

But aid to the poorest countries continued to fall, according to official data collected by the OECD Development Assistance Committee (DAC).

Net official development assistance (ODA) from DAC members totalled 135.2 billion dollars, with a record 135.1 billion dollars in 2013, though marking a 0.5% decline in real terms.

Net ODA as a share of gross national income was 0.29%, also on a par with 2013. ODA has increased by 66% in real terms since 2000, when the Millennium Development Goals were agreed, according to OECD.

The secretary-general said that with the world facing the largest crisis of forced displacement since the Second World War, the international community should meet this immense challenge without lessening its commitment to vitally needed official development assistance. (ODA)

He underscored the importance of fully funding both efforts to care for refugees and asylum seekers in host countries as well as longer-term development efforts.

The Secretary-General said he recognized the financial demands faced by host communities and partner governments as they seek to support the international response.

He expressed his “sincere gratitude to governments and their citizens for their generosity.”

Nick Hartmann, Director of the Partnerships Group at UN Development Programme (UNDP) told delegates Monday the important agreements that Member States had come to in 2015 called for increased policy support.

To deliver that, adequate and predictable resources were required.

He said core resources were the foundation of UNDP’s support to the poorest and most vulnerable.

UNDP, he pointed out, had responded to a range of crises over the past year and had ensured that 11.2 million people benefited from improved livelihoods. Almost a million jobs were created in 77 countries, with half of those reaching women.

“However, he said reduced contributions from many top partners and unfavourable exchange rate movements had caused a downward trend in funding.”

Hartmann said a number of partners faced overwhelming pressures, including the migrant crisis, he thanked those who had submitted pledges at Monday’s pledging conference.

The UNDP is described as the UN’s global development network covering 177 countries and territories.

The writer can be contacted at

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Central America Seeks Recognition of Its Vulnerability to Climate Change Fri, 30 Oct 2015 23:21:17 +0000 Diego Arguedas Ortiz In its national contribution, Costa Rica said the sector most vulnerable to climate change is road infrastructure. This highway, which connects San José with the Caribbean coast, and which crosses the central mountain chain, is closed several times a year due to landslides. Credit: Diego Arguedas Ortiz/IPS

In its national contribution, Costa Rica said the sector most vulnerable to climate change is road infrastructure. This highway, which connects San José with the Caribbean coast, and which crosses the central mountain chain, is closed several times a year due to landslides. Credit: Diego Arguedas Ortiz/IPS

By Diego Arguedas Ortiz
SAN JOSE, Oct 30 2015 (IPS)

For decades, the countries of Central America have borne the heavy impact of extreme climate phenomena like hurricanes and severe drought. Now, six of them are demanding that the entire planet recognise their climate vulnerability.

An initiative that has emerged from civil society in Central America wants the new binding universal climate treaty to acknowledge that the region is especially vulnerable to climate change – a distinction currently given to small island developing states (SIDS) and least developed countries (LDCs).

In the climate Oct. 19-23 talks in Bonn, Germany, the proposal found its way into the draft of the future Paris agreement. If it is approved, Central America could be given priority when it comes to the distribution of climate financing for adaptation measures – which would be crucial for the region.

“Civil society – and I would dare to say the governments – have been demanding this because it could give the region access to windows of financing, technology and capacity strengthening,” said Tania Guillén, climate change officer at Nicaragua’s Humboldt Centre.“Civil society – and I would dare to say the governments – have been demanding this because it could give the region access to windows of financing, technology and capacity strengthening.” -- Tania Guillén

These contributions, the expert told IPS, “should go towards the benefit of vulnerable communities” in this region. But for now, only SIDS and LDCs have a priority.

Semantic disputes have taken on great importance, a month before the start of the Nov. 30-Dec. 11 21st session of the Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC) in Paris, where the new climate treaty is to be approved.

That is because the language used will form part of the foundations on which the legal bases of the agreement will be set.

Central America’s 48 million people live on the isthmus that separates the Pacific Ocean from the Caribbean Sea, along whose length stretches a mountain chain and an arid dry corridor.

Nearly half of the region’s inhabitants – 23 million, or 48 percent – live below the poverty line, according to official statistics.

The issue of climate vulnerability – the set of conditions that make a society or ecosystem more likely to be affected by extreme climate events – has been on Central America’s agenda for years, since Hurricane Mitch’s devastating passage through the region in 1998 forced a rethinking of risk management.

As part of this process, the Vulnerable Central America, United for Life Forum was born in 2009 – a civil society collective that has pushed for the region to be declared particularly subject to the consequences of climate change.

Over the last year, climate impacts have caused human and material losses throughout Central America, from the catastrophic mudslide in Cambray on the outskirts of Guatemala City to the sea level rise threatening Panama’s Guna Yala archipelago in the Caribbean Sea.

The most widely extended of these impacts has been the drought associated with the El Niño Southern Oscillation (ENSO), a climate phenomenon which complicated agricultural conditions in Central America’s so-called dry corridor.

The corridor is an arid stretch of dry forest where subsistence farming is the norm and where rainfall was 40 to 60 percent below normal in the 2014-2015 dry season.

Central America accounts for just 0.6 percent of global greenhouse gas emissions. This means it sees reducing its vulnerability to climate change as more urgent than mitigation measures.

If successful, the call for the region to be recognised as especially vulnerable would make it a priority for climate change adaptation financing and technology.

But it will not be easy to reach this goal in the negotiations, as it is hindered by other countries of the developing South and even by some in this region itself.

The tension first arose within the Central American Economic Integration System (SICA), which held three meetings during the October climate change talks in Bonn, but failed to reach a consensus on the initiative, due to internal opposition from Belize.

“It must be pointed out that (SICA members) Belize and the Dominican Republic are SIDS, which means that to avoid problems with that negotiating bloc they did not back the proposal,” Guillén said.

In his view, “the painful thing is what Belize is doing, because the Dominican Republic is in a different situation,” since it is not actually part of the Central American isthmus, but is a Caribbean island nation.

Although Belize is on the mainland, it joined the SIDS in the climate talks.

The head of the Guatemalan government’s delegation to the climate talks, Edwin Castellanos, confirmed to IPS that no consensus was reached within SICA.

For that reason, “the proposal was made by El Salvador, as current president of SICA, but it was not made in the name of SICA because member countries did not back the motion.” It was also signed by Costa Rica, Guatemala, Honduras, Nicaragua and Panama.

Castellanos also noted that there are other countries seeking to be included on the list of the most vulnerable countries, an issue that was addressed within the powerful Group of 77 and China negotiating bloc, which represents the countries of the developing South.

“When Central America presented this initiative, Nepal followed it with a similar proposal for mountainous countries. The problem is that this starts off a list that could be interminable, and which already includes the LDCs, islands, and most recently, Africa,” the negotiator said.

He acknowledged that the initiative came from Central American civil society, and mentioned in particular the Mexico and Central America Civil Society Forum held Oct. 7-9 in Mexico City, ahead of COP21.

Alejandra Granados, a Costa Rican activist who took part in the civil society forum, told IPS that the proposal was set forth by Alejandra Sobenes of the Guatemalan Institute for Environmental Law and Sustainable Development (IDEADS), and that “each organisation sent it to the negotiators for their respective countries” prior to the meeting in Bonn.

The Central American countries that have already submitted their Intended Nationally Determined Contributions (INDCs) to the UNFCCC agreed on including adaptation components to which governments have committed themselves.

El Salvador and Nicaragua have not yet presented their INDCs, the commitments that each nation assumes to reduce carbon dioxide and other greenhouse gas emissions to fight global warming.

Granados said that, if Central America is recognised as especially vulnerable, the countries of the region will have to work hard together with local communities to improve their adaptation plans prior to 2020, when the new treaty will go into effect.

“This recognition is not an end in itself; it is a major responsibility that the region is assuming, because it is as if at an international level all eyes turned towards the region and said: ‘Ok, what are you waiting for, to do something? You wanted this recognition, now assume your responsibility to take action’,” said the Costa Rican activist, who heads the organisation

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Brazil’s Megaprojects, a Short-lived Dream Thu, 29 Oct 2015 23:34:58 +0000 Mario Osava Part of the Rio de Janeiro Petrochemical Complex (COMPERJ) in October, seen from the banks of the Caceribu river, the closest to the installations that the public can get. Credit: Mario Osava/IPS

Part of the Rio de Janeiro Petrochemical Complex (COMPERJ) in October, seen from the banks of the Caceribu river, the closest to the installations that the public can get. Credit: Mario Osava/IPS

By Mario Osava
ITABORAÍ, Brazil , Oct 29 2015 (IPS)

Working as a musician in a military band is the dream of 21-year-old Jackson Coutinho, since hopes that a petrochemical complex would drive the industrialisation of this Brazilian city near Rio de Janeiro have gone up in smoke.

“I’ll try out for the navy, army and even the military police, but only to be a musician, not a police officer,” said Coutinho, who plays the double bass in bands he has set up with friends in Itaboraí.

Until last year he was working for the QGIT consortium on the construction of the Rio de Janeiro Petrochemical Complex (COMPERJ). He was a machine operator assistant on the embankment where the Natural Gas Processing Unit (UPGN), part of the complex, was built.

But he lost his job in early 2015, when lay-offs intensified as a result of the crisis faced by Petrobras, the state oil company that owns COMPERJ.

The initial projected cost of the megaproject was 6.5 billion dollars. But with cost overruns it has risen to twice that amount, even though the project was reduced drastically to a single refinery and the UPGN.

The most expensive part, the petrochemical plant, which would have fuelled industrialisation in this city 45 km from Rio de Janeiro, was cancelled because Petobras did not manage to find partners.

The plunge in oil prices and the corruption scandal shaking the company since March 2014, implicating dozens of politicians and businesspersons for billions of dollars in kickbacks, smothered the plan to build in Itaboraí the biggest petrochemical complex in Latin America.

The losses are huge. “Of 14 plants or buildings where I worked on the construction, only four or five will be used,” said Rogerio Henrique Lourenço, 26, a building technician who was employed by the COMPERJ works for five years.

Besides the white elephants - the shiny modern buildings still empty within the 45 square kilometres of the shrunken megaproject – equipment was purchased and infrastructure was built, which require costly maintenance while the future remains uncertain.

To that is added the expense of the compensation and mitigation of the social and environmental impacts, which has included sanitation, clean-up of rivers, and reforestation – obligations that have not shrunk in accordance with the downsizing of the project.

The municipalities under the influence of COMPERJ, especially Itaboraí, are losing the prospect of development promised in 2006, when then president Luiz Inácio Lula da Silva (2003-2010) announced the project.

At the time he said it would consist of two refineries and two petrochemical units, besides installations for services and training of the necessary technical personnel.

The Getulio Vargas Foundation, a leading economic think tank, predicted that the petrochemical complex would foment the emergence of a plastics industry hub. According to its projections, between 362 companies – a conservative estimate – and 724 companies – a more optimistic forecast – would set up shop in the area.

That fast-forward industrialisation was expected to generate between 117,000 and 168,000 jobs in the southeastern state of Rio de Janeiro – just over one-third of which were to be concentrated in COMPERJ’s direct area of influence.

Itaboraí, as the city where COMPERJ is located, was to reap the greatest benefits, leaving behind its status as one of the poorest municipalities in the state – a commuter town whose residents work in neighbouring cities.

Jackson Coutinho, 21, managed to buy a car after working 18 months in a construction company helping to build the Rio de Janeiro Petrochemical Complex (COMPERJ) in Brazil. Now unemployed, the dream of this worker from the city of Itaboraí is to join a military band as a musician, and study accounting. Credit: Mario Osava/IPS

Jackson Coutinho, 21, managed to buy a car after working 18 months in a construction company helping to build the Rio de Janeiro Petrochemical Complex (COMPERJ) in Brazil. Now unemployed, the dream of this worker from the city of Itaboraí is to join a military band as a musician, and study accounting. Credit: Mario Osava/IPS

“The castle came crumbling down,” said Lourenço, who was laid off in March 2014, when construction of the petrochemical complex began to run out of steam.

The father of three young children now gets by with casual work, mainly on small-scale construction sites. When he talked to IPS he was handing out pamphlets on the main street of Itaboraí.

His dream is to pass a civil service exam and become a public employee, with job stability.
“In COMPERJ I had well-paid jobs, but they were temporary,” he said. His five years there were divided between short-term contracts in a number of different companies.

Francisco Assunção, 22, had a similar experience. He worked for nearly two years in three of the dozens of companies participating in the construction of COMPERJ.

Now he is trying to make a living with his motorcycle taxi, “but people prefer to walk, because they don’t have money,” he said. So he also finds casual or part-time work in the construction industry and restaurants.

“I earned more in the COMPERJ jobs,” he said. Although he was paid just 300 dollars a month, he got an additional 40 percent for food and medical assistance, he explained.

Coutinho stands out because he spent 18 months in the same job, which made it possible for him to be promoted and to earn enough to buy a car. “It was a dream, but it’s over,” he said.

Although he is focused on his musical career, he has a “Plan B”: to study accounting, although he doesn’t like math. “I have friends who are accountants,” he said.

But he is confident that “COMPERJ will resume its original plan (to build a petrochemical complex), because too much money was invested there, and they went beyond the point of no return.” An estimated 80 percent of the construction is complete.

Rogerio Henrique Lourenço, 26, worked for five years on the construction of the Rio de Janeiro Petrochemical Complex (COMPERJ) in Brazil, for several different companies. Now he supports his three young children and their mother in the city of Itaborai, where the shrunken and stalled megaproject is located, with casual work. Credit: Mario Osava/IPS

Rogerio Henrique Lourenço, 26, worked for five years on the construction of the Rio de Janeiro Petrochemical Complex (COMPERJ) in Brazil, for several different companies. Now he supports his three young children and their mother in the city of Itaborai, where the shrunken and stalled megaproject is located, with casual work. Credit: Mario Osava/IPS

For these young men, the well-paying, steady work they enjoyed for several years merely drove home the lack of opportunities in Itaboraí, a 343-year-old city of 230,000 people that has remained faithful to its origins as a town that emerged alongside a highway, which is now its long central avenue.

The scant local productive activity, virtually limited to ceramics and orange groves, offers neither jobs nor intellectual stimulus for young people.

“This is a city that does not cultivate a cultural identity,” Franciellen Fonseca, who is studying to become a social worker and is taking part in the Incid research project, told IPS. “There are no recreational opportunities, plazas or places where locals can gather.”

The study by the Brazilian Institute of Social and Economic Analyses (IBASE) monitors compliance with citizen rights in the 14 municipalities in COMPERJ’s area of influence, based on a system of indicators that the non-governmental organisation developed.

Its most recent study, on “the invisible citizenship rights of COMPERJ workers”, stressed the difficulty of obtaining information about the situation faced by labourers working on the project.

Refusing to provide information on the workers’ conditions is “a serious rights violation, because it makes it impossible to closely monitor the effects and impacts of these megaprojects on people’s lives,” says an Incid research project report.

The number of workers on the COMPERJ construction sites has never been revealed. There was talk of 30,000 at the height of construction, in 2012-2013, and figures have varied widely since then.

The young men who were laid off and talked to IPS say local workers were a minority on the construction sites – running counter to the promise to put a priority on hiring local labour. One of the numerous strikes that brought work temporarily to a halt demanded precisely that more local workers be hired, Coutinho pointed out.

The companies argued that there was not enough skilled local labour. But when people with the necessary training appeared, the companies set impossibly high standards for prior work experience, or simply did not hire them, said Lourenço.

The “invisibility” surrounding workers at COMPERJ was broken by the frequent strikes and rioting, which the old union was unable to handle.

Its successor, the Itaboraí union of assembly and maintenance workers, emerged in June 2014 to confront a different reality: the growing wave of lay-offs.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Opinion: The West Vote for a Better Yesterday Thu, 29 Oct 2015 15:19:16 +0000 Roberto Savio

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

By Roberto Savio
ROME, Oct 29 2015 (IPS)

The recent elections in Switzerland and Poland are good indicators of what will happen elsewhere in Europe, with this irresistible growing wave of refugees. But let us first make some crucial considerations.

Roberto Savio

Roberto Savio

The first is that the present system of international relations and national governance is not functioning any longer. We are in a period of transition, but nobody knows to where. The left is without a manifesto, and the right is just riding the status quo. There is no long term political thinking.

Second, we are in a “new economy,” based on the supremacy of finance over man’s production. Unelected officials, like governors of central banks and bankers, have increasingly more power than before. This “new economy” considers precarious jobs as natural, social inequality as a legitimate reality, the market as the sole basis for societal development and the state as inefficient and a brake to the private sector.

The third,is that political institutions have lost their gloss. No political party has any longer a real youth movement. They are perceived more and more as self referent, considering citizens just as an electorate, and they are seen as more part of the system in power than spokespersons for their citizens.

The cost of politics (and corruption) is growing year by year. The coming elections in the US will cost over 4 billion dollars, and until now just 145 donors have paid for more than 50 per cent of the of the electoral campaign. According to the London School of Economics, the cost of electoral campaigns in Europe has increased by 47 per cent in the last decade. In other words, many consider that we live now in a democracy that is turning into a plutocracy. And Hungary is openly advocating for a autocratic democracy, like Singapore and China, and getting away with it.

The fourth is that multilateralism is in crisis. The US has stopped ratifying any international treaties, from the Right of the Children to the Law of the Sea. The United Nations has been marginalized. The regional organizations, like the African Union, ASEAN or the Organization of American States, are notoriously toothless. And the European Union is going from an existential crisis on the euro (Greece), into a more serious one, the refugees. The United Kingdom is leading a charge for devolution of powers from Brussels that will create a precedent that others will invoke, Hungary and Poland first.

If those considerations are considered valid, then it is not difficult to understand that the European electorates are voting on the basis of political nostalgia and lack of security. In front of an uncertain future, the dream to go back to a better past is strong. Both the Swiss and Polish elections rewarded the party which wanted to defend the national identity against foreigners, especially Muslim, and the national religious traditions against the European values of sexual liberty, gays marriage, free abortion and decaying lifestyles.

The polish case is emblematic. Poland has been one of the greatest recipient of EU aid. East Europe did join the EU to get funds and support, but without any intention to give anything in exchange, as the refusal to accept any immigrant has made clear…

Both the Swiss and Polish elections rewarded the party which wanted to defend the national identity against foreigners, especially Muslim, and defend religion against the European values of sexual liberty, gays marriage, free abortion and decaying lifestyles.

It is worth remembering that until the financial crisis of 2007, xenophobic and rightwing parties were marginal political entities in almost all of Europe. In a short time, they have become important players all over Europe, even in countries known for their civic sense and tolerance, like Netherlands and the Nordic countries.

What bring votes to a xenophobic, right wing and anti-Europe party is the dream to go back to a secure and orderly past. Voters do not want to vote for an uncertain future: they find it more reassuring to vote for a time in which politics where national, there was not a faceless bureaucracy in Brussels dictating how to pack tomatoes, and a supranational currency, the euro, manoeuvred by unelected powerful bankers in Frankfurt, with a hegemonic Germany dictating other countries. It is also worth remembering that a large segment of European citizens has yet to recover the quality of life it had before 2007. and that young people pay a disproportionate cost for a crisis originated by the finance.

The dream of returning to the past is also the reason for the creation in US of the radical wing of the Republican Party, known as the Tea Party, and the victory of Justin Trudeau in Canada. And while the West has a golden recent age on which to dream, in the Global South nationalism, a twin of political nostalgia, is on the rise.

But for the West, there is a problem. There are now 60 million refugees, and in this figure there are not those who escape sex persecutions, like gays in Africa, or woman from Boko Haram in Nigeria. Migrants is a term much more representative of the reality than refugees, which are for Europe those who escape from clearly recognized conflicts. Demography is clear. Africa is going to become one billion people by 2030, and Europe would lose at least 15 million people by then.

The Europe we know – homogenous, white, Christian and tolerant – is going to disappear. But it will not be without lot of suffering. The US has become a multicultural and multiethnic country in over a century ago. According to the records of the most important entry points, Ellis Island in New York, 9 million Irish, Germans, Austrians and Scandinavians entered the country in the steamboat times, with more than 8 million Poles, Bulgarians, Rumanians, Hungarians, Russians and Baltics, and more than 5 million Italians and Greeks. In a few decades, a total of 22.5 million Europeans became Americans. Europe is not ready even to do a tenth of this.


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Opinion: TPP is Bad for One’s Health Thu, 22 Oct 2015 20:14:05 +0000 N Chandra Mohan

Chandra Mohan is an economics and business commentator.

By N Chandra Mohan
Oct 22 2015 (IPS)

Reflecting President Barack Obama’s pivot to Asia, the US, Japan and 10 other Pacific Rim nations have inked a Trans-Pacific Partnership (TPP) agreement. This is the largest mega free trade agreement (FTA) in two decades and represents 40 per cent of the global economy.

N Chandra Mohan

N Chandra Mohan

This pact puts tremendous pressure on the European Union to conclude its Transatlantic Trade and Investment Partnership with the US. China, too, will seek to hasten the Regional Comprehensive Economic Partnership. With the Wold Trade Organization (WTO) unable to conclude the Doha Round, India’s policy makers feel that it is in the country’s interest to be part of at least one of these mega FTAs that reflect the new global architecture for trade.

What are India’s gains if it joins the TPP? According to economic theory, the trade creation after joining this grouping will benefit India as its exports go up manifold. Cheaper imports, in turn, lower inflation. There will also be much greater Indian participation in US and Japanese supply chains in the Indo-Pacific region. Larger export markets would bring economies of scale to textile and other manufacturing firms. But there will be an adverse impact on the demand for its products if it does not join. Vietnam thus will gain at India’s expense in garment exports as it enjoys duty free access to the US while India faces duties of 14-30 per cent.

But TPP is less about trade and more to do with stricter intellectual property rights (IPRs), labour, environment standards and investor-state dispute settlement. Its IPR regime is Big Pharma-driven with provisions that adversely affect the availability of affordable medicines in the developing world. In fact, it would be disastrous for public health in India. The proviso to grant patents to “new uses of a known product” is fraught with grave implications as it may lead to ever-greening of patents. Similarly, the special treatment extended to pharmaceutical patents, placing them in a preferred category compared to other technologies, by patent term adjustment for regulatory delays, also will lead to a longer term for patents, argued TC James, consultant with the think-tank RIS at a recent panel discussion on TPP.

This trade pact thus will bring in new handicaps for India’s pharmaceutical industry, which are mostly generics, from getting marketing approvals. A case in point is the data exclusivity provisions for test data of biologics – which are grown from live cells – for five to eight years. These constitute a major barrier for the entry of cheaper generic versions, or biosimilars, in which India has a proven world-class capability. US law protects data collected during the development of biologics for 12 years. Pressure from Australia and others ensured that this was brought down to five years but this could go up to eight years.

In the fine-print of Article QQ.E.20, Big Pharma ensured that market exclusivity for biologics is provided either through at least eight years of data protection, or at least five years of data protection with other measures to “deliver a comparable outcome in the market,” As the latter option is problematical, market exclusivity will inevitably extend further by another three years. This means a longer period when monopoly pricing can be exercised by Big Pharma that will raise the price of drugs and take them out of reach for many people in India and even in the 12-menber grouping, for that matter.

India will thus seriously compromise its public health objectives if it chooses to join TPP. It has a well-established legal framework for IPRs and its courts have been active in enforcing this regime, exemplified by the denial of a patent for an anti-cancer drug to a foreign drug major in 2013 as it did not meet the criteria of inventiveness in India’s Patent Act. Such judicial activism has also been manifested in the award of a compulsory licence for the local manufacture of an anti-cancer drug due to the unaffordable prices charged by the global pharma giant that held the patent.

Not surprisingly, Big Pharma has for long been up in arms against India’s IPRs and has sought to pressurize the country to dilute some of the rigours of its legislation for drug patents. The United States Trade Representative has listed India under the Priority Watch list for the enforcement of its patent legislation, especially for drugs even though it is Agreement on Trade Related Aspects of Intellectual Property Right-compliant. What better opportunity to make amends under the guise of joining TPP. Compulsory licensing thus is a no-no. So is Section 3(d) of India’s Patent Act, which raises the bar for what is inventive to be granted a patent. These flexibilities provided by WTO’s TRIPS agreement are bound to clash with TPP that has low inventiveness thresholds to be granted patent protection.

India must not buckle under such pressures to weaken its IPR legislation. According to its national policy on IPRs, the right to health is an integral part of the right to life enshrined in the Constitution of India. India is committed to providing its citizens access to affordable medicines, quality healthcare and innovative products and services. The Patents Act as amended in 2005 protects innovation in pharmaceuticals and provides for measures to safeguard public health. India should continue to use the flexibilities available under TRIPS agreement and not compromise on the patent linkage and patent term extensions sought by TPP.

Nonetheless, India shouldn’t desist from efforts to engage with Big Pharma if it entails win-win outcomes that ensure affordable drugs to its people. The US drug major Gilead Sciences Inc introduced tiered pricing, whereby it charges lower prices in India compared to prices in the US. Gilead and nine Indian companies entered into a partnership based on effective IPR protection and licensing to produce an affordable version of a drug for Hepatitis C. India thus has access to patented products at affordable prices while ensuring a decent return for the innovating company. Can’t other US drug majors be persuaded to follow Gilead’s example? India does not need to join the 12-member grouping for such outcomes that further its public health objectives.


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Opinion: From European Union to Just a Common Market Tue, 20 Oct 2015 12:15:17 +0000 Roberto Savio

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

By Roberto Savio
ROME, Oct 20 2015 (IPS)

The success in the recent Swiss elections of the UDC-SVP, a xenophobic, anti European Union, right wing party, opens a number of reflections.

Roberto Savio

Roberto Savio

Seventy years ago Europe came out from a terrible war, exhausted and destroyed. That produced a generation of statesman, who went about creating a European integration, in order to avoid the repetition of the internal conflicts that had created the two world wars. Today a war between France and Germany is unthinkable, and Europe is an island of peace for the first time in its history.

This is the mantra we hear all the time. What is forgotten is that in fact a good part of Europe did not want integration. In 1960, the United Kingdom led the creation of an alternative institution, dedicated only to commercial exchange: the European Free Trade Association (EFTA), formed by the United Kingdom, Austria, Denmark, Norway, Portugal, Sweden, Switzerland, then later Finland and Iceland. It was only in 1972 that, bowing to the success of European integration, the UK and Denmark asked to join the EU. Later, Portugal and Austria left EFTA to join the European Union.

The UK was never interested in the European project and always felt committed to “a special relation” with United States. Union would mean also solidarity and integration, as the various EU treaties kept declaring. The UK was only interested in the market side of the process.

Since 1972, the gloss of European integration has lost much of its shine. Younger generations have no memory of the last war. The EU is perceived far from its citizens, run by unelected officials who make decisions without a participatory process, and unable to respond to challenges. Where is the external policy of the EU? When does it take decisions that are not an echo of Washington?

Since the financial crisis of 1999, xenophobic, nationalistic and right wing parties have sprouted all over Europe. In Hungary, one of them is in power and openly claims that democracy is not the most efficient system. The Greek crisis has made clear that there is a north-south divide, while Germany and the others do not consider solidarity a criterion for financial issues. And the refugee crisis is now the last division in European integration. The UK has openly declared that it will take only a token number of 10,000 refugees, while a new west-east divide has become evident, with the strong opposition of Eastern Europe to take any refugee. The idea of solidarity is again out of the equation.

Germany moved because of its demographic reality. It had 800,000 vacant jobs, and it needs at least 500,000 immigrants per year to remain competitive and keep its pension system alive. But that mentality is even more clear with the East European countries, which experience increasing demographic decline. At the end of communism in 1989, Bulgaria had a population of 9 million. Now it is at 7.2 million. It is estimated that it will lose an additional 7 per cent by 2030, and 28.5 per cent by 2050. Romania will lose 22 per cent by 2050, followed by Ukraine (20%), Moldova (20%), Bosnia and Herzegovina (19.5%), Latvia (19%), Lithuania (17.5%), Serbia (17%), Croatia (16%), and Hungary (16%). Yet, all Eastern Europe countries have followed the British rebellion, and take a strong stance on refusing to accept refugees.

Now the idea of European integration is reaching a crucial challenge: the United Kingdom will hold a referendum by the end of 2017 to decide if remain in the European Union or not. The prime minister David Cameron, has invented this referendum, in order to renegotiate with EU the terms of British participation, get enough concessions to appease the Euro-skeptics and thus win the referendum in favor of Europe.

Only 10 years ago, such a maneuver would have gone nowhere. But now things are different, and there is a general tendency among European countries to take back as much as possible space given to the EU. Germany has already indicated that it is open to debate, and it wants to avoid a Brexit as much as possible. Cameron has not yet indicated the detail of his requests to remain in the EU. But it is widely believed that they will be about unhitching from European political integration, requesting exceptionality for the British financial sector, demanding a voice in decisions in the Eurozone (of which the UK is not a member), eliminating social benefits for European immigrants and giving to the British parliament a strong say over European decisions. Cameron has already indicated that he will withdraw from the European Court of Justice.

Once Great Britain obtains these concessions or even part of them, other countries, beginning with Hungary, will follow. And this will be the end of the process of European integration. We will take the route of EFTA, not the one envisioned by the founding fathers: Konrad Adenauer, Robert Schumann, Paul-Henri Spaak and Alcide De Gasperi.

Meanwhile, Europe will have to accept that it is not going to be the homogenous and white society that the right wing and xenophobic parties dream of reestablishing. The lack of global governability has created a staggering figure of 60 million refugees. Of those, 15 million live in refugee camps. One of them, Dadaab, in Kenya, has now half a million people, more than the population of several members of the United Nations. It is estimated that climate change will create by 2030 another 10 million refugees. Solidarity or not, Europe demography will require the arrival of some million. What will be the Europe of 2030?


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