Inter Press ServiceGlobalisation – Inter Press Service http://www.ipsnews.net News and Views from the Global South Tue, 17 Oct 2017 16:18:33 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.2 Trying to Make Immigration an Option Rather than a Need in Latin Americahttp://www.ipsnews.net/2017/10/trying-make-immigration-option-rather-need-latin-america/?utm_source=rss&utm_medium=rss&utm_campaign=trying-make-immigration-option-rather-need-latin-america http://www.ipsnews.net/2017/10/trying-make-immigration-option-rather-need-latin-america/#respond Fri, 13 Oct 2017 16:16:25 +0000 Orlando Milesi http://www.ipsnews.net/?p=152477 This article forms part of the IPS coverage for World Food Day, celebrated on October 16.

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In Vega Central, the biggest fruit and vegetable market in Santiago, the stands of Peruvian migrants, 300,000 of whom live in Chile, offer typical produce and meals from that country. Credit: Orlando Milesi/IPS

In Vega Central, the biggest fruit and vegetable market in Santiago, the stands of Peruvian migrants, 300,000 of whom live in Chile, offer typical produce and meals from that country. Credit: Orlando Milesi/IPS

By Orlando Milesi
SANTIAGO, Oct 13 2017 (IPS)

The aim is for migration to become just one option among others for the rural population of Latin America, says Brazilian expert Luiz Carlos Beduschi, referring to an issue that causes concern in the region due to its impact on food security.

The theme this year of World Food Day, celebrated Oct. 16, is “Change the future of migration. Invest in food security and rural development”, promoted by the United Nations Food and Agriculture Organisation (FAO).

“If living conditions improve in rural areas, people can use more autonomous strategies that can turn the decision of whether or not to migrate into just one more option among other alternatives,” Beduschi, policy officer in FAO’s regional office in Santiago, Chile, told IPS.

The Brazilian academic added that “the tendency to migrate increases or declines” depending on the specific characteristics and circumstances of the potential migrants.

He mentioned, for example, individual circumstances, such as “the search for independence among the young,” and family circumstances, because “among families with members in other countries, the tendency to migrate is stronger.”

Other reasons arise from where people live. With regard to this point, Beduschi explained that “in areas with greater economic opportunities and lower crime rates, better public services, etc, the tendency to migrate is weaker.

“In more remote areas with poorer quality land, where people don’t have savings or cash allowing them to migrate, social protection policies are even more necessary,” he said.

Migration in context

Some 30 million people from Latin America and the Caribbean live outside their home countries, equivalent to four percent of the total population of the region, according to Economic Commission for Latin America and the Caribbean (ECLAC) statistics, which are based on the latest national census information from the different countries. Of that total, some 20 million live in the United States and 11 million of them are undocumented.

Central America and southern Mexico account for the largest number of migrants from the region – 9.7 percent of the total population of this subregion known as “Mesoamerica” – and Mexico represents 40 percent of the region’s total migration, with approximately 12 million Mexicans living abroad, mainly in the United States.

The International Migration Report 2016, prepared by the Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, reported that migrants from Latin America are getting younger: between 2010 and 2015, the median age of immigrants from this region declined from 40 to 36 years.

One significant fact is that around 5.5 million young people between the ages of 15 and 29 are immigrants in the United States, equivalent to 25 percent of the Latin American immigrant population in that country. Another is that 49.4 percent of Latin American immigrants in the United States are women.

Another phenomenon that ECLAC emphasises is that so far this century, inter-regional migration in Latin America has grown at an annual average of 3.5 percent, with more than eight million Latin American immigrants living in other nations in the region, 63 percent in countries that border their own.

Poverty and climate, factors that drive migration

For Víctor Hugo Lagos, a lawyer with the Jesuit Service for Migrants that operates in three Chilean cities, poverty is the main factor driving immigration today.

“Poverty is a factor that makes people decide to leave their home countries and seek opportunities elsewhere. And poverty has different causes, such as a lack of access to education or jobs,” he told IPS.

Jorge Martínez with the Latin American and Caribbean Demographic Centre (CELADE) said that in this region, rural migration to urban areas has declined.

“That was an issue in previous decades, which accompanied broad social and economic changes – migration driven by a lack of opportunities, by modernisation in agriculture, and the simultaneous draw of urban areas,” he told IPS at CELADE headquarters in Santiago.

He added that most of the migrants from Latin America come from urban areas, with a few exceptions, such as Mexico, where migration is still leading to the depopulation of rural areas.

“One factor that can have a potentially heavy influence is natural disasters/climate change, which requires a new assessment of the consequences of mobility, affecting the most disadvantaged and the least resilient,” he warned.

In 2015, more than 19 million people worldwide were displaced within their countries as a result of natural disasters, according to FAO.

Between 2008 and 2015, an average of 26.4 million people a year were displaced by natural catastrophes.

Lagos lamented that “at the level of international law (natural disasters) have not been recognised as grounds for granting refugee status in another country,” because “practice shows that today the environment is one of the main factors leading people to leave their countries.

“One classic example is Haiti, which is not only a country steeped in poverty and whose leaders have shown a high level of corruption, but which has also been plagued by different natural disasters,” he said.

Beduschi, meanwhile, stressed that the projects, programmes and policies supported by FAO seek to strengthen the decision-making autonomy of rural families, including the decision of whether or not to migrate.

The idea is “to change the future of migration, investing in food security and agriculture.

“What we are trying to do in FAO, with a broad, diverse set of partners, is to eradicate rural hunger and poverty, improve nutrition, make better use of natural resources, and strengthen people’s livelihoods,” he said.

“International cooperation is not aimed at reducing the number of migrants, but at helping to make migration a safe, orderly and regular process,” he added. “The idea is also for people and families to decide to migrate, not as the only option for their development, but as one option in a broaders range of opportunities.”
Beduschi said “conflicts over ownership and use of natural resources are also related to migration flows,” as are aspects such as “changes in climate conditions and the exhaustion of natural resources.”

He said that “expanding access to assets and services is part of the response to build up resilience in rural areas, as is promoting more environment-friendly production methods.”

According to FAO, investing in sustainable food production and rural development systems helps to address the main global challenges in feeding the growing global population, protecting the climate, and tackling some of the fundamental causes of migration and displacement.

It adds that the 17 Sustainable Development Goals (SDGs) cannot be reached without putting an end to hunger and without achieving agriculture and food production systems that respect the climate and are sustainable and resilient.

Of 129 countries monitored by FAO, 72 reached the goal of halving the proportion of people suffering from hunger, by 2015, although the U.N. agency issued an alert that in 2016 the fight against malnutrition suffered a setback.

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World Bank Must Stop Encouraging Harmful Tax Competitionhttp://www.ipsnews.net/2017/10/world-bank-must-stop-encouraging-harmful-tax-competition-2/?utm_source=rss&utm_medium=rss&utm_campaign=world-bank-must-stop-encouraging-harmful-tax-competition-2 http://www.ipsnews.net/2017/10/world-bank-must-stop-encouraging-harmful-tax-competition-2/#comments Tue, 10 Oct 2017 18:29:38 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=152413 Anis Chowdhury, a former professor of economics at the University of Western Sydney, held senior United Nations positions during 2008–2015 in New York and Bangkok. Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Instead of encouraging tax competition, the World Bank should help developing countries improve tax administration to enhance collection and compliance, and to reduce evasion and avoidance. Credit: IPS

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Oct 10 2017 (IPS)

One of the 11 areas that the World Bank’s Doing Business (DB) report includes in ranking a country’s business environment is paying taxes. The background study for DB 2017, Paying Taxes 2016 claims that its emphasis is “on efficient tax compliance and straightforward tax regimes”.

Its ostensible aim is to aid developing countries in enhancing the administrative capacities of tax authorities as well as reducing informal economic activities and corruption, while promoting growth and investment. All well and good, until we get into the details.

Tax less
First, the Report advocates not only administrative efficiency, but also lower tax rates. Any country that reduces tax rates, or raises the threshold for taxable income, or provides exemptions, gets approval.

Second, it exaggerates the tax burden by including, for example, employees’ health insurance and pensions and charges for public services like waste collection and infrastructure or environmental levies that the businesses must pay. The IMF’s Government Financial Statistics Manual correctly treats these separately from general tax revenues.

Third, by favourably viewing countries that lower corporate tax rates (or increase threshold and exemptions) and negatively considering those that introduce new taxes, DB is essentially encouraging tax competition among developing countries.

Thus, the Bank is ignoring research at the OECD and IMF which has not found any convincing evidence that lower corporate tax rates or other fiscal concessions have any positive impact on foreign direct investment.

Instead, they found net adverse impacts of tax concessions and fiscal incentives on government revenues. According to the research, factors such as the availability and quality of infrastructure and human resources were more important for investment decisions than taxes.

Moreover, the World Bank’s Enterprise Surveys do not find paying taxes to be high on the list of factors that enterprise owners perceive as important barriers to investment. For example, the Enterprise Survey for the Middle East and North Africa found political instability, corruption, unreliable electricity supply, and inadequate access to finance to be important considerations; paying taxes or tax rates were not.

Yet, the World Bank has been promoting tax cuts and tax competition as magic bullets to boost investment. Not surprisingly, thanks to its still considerable influence, tax revenues in developing countries are not rising enough, or worse, continue to fall. According to some estimates, between 1990 and 2001, reduction in corporate taxes lowered countries’ tax revenue by nearly 20%.

Instead of encouraging tax competition, therefore, the World Bank should help developing countries improve tax administration to enhance collection and compliance, and to reduce evasion and avoidance. According to OECD Secretary-General Angel Gurria, “developing countries are estimated to lose to tax havens almost three times what they get from developed countries in aid”.

Global Financial Integrity has estimated that illicit financial flows of potentially taxable resources out of developing countries was US$7.85 trillion during 2004-2013 and US$1.1 trillion in 2013 alone!

Conflicts of interest
But the Bank’s Paying Taxes and DB reports do little to strengthen developing countries’ tax revenues. This should come as no surprise as its partner for the former study is Pricewaterhouse Cooper (PwC), one of the ‘Big Four’ leading international accounting and consultancy firms. PwC competes with KPMG, Ernst & Young and Deloitte for the lucrative business of helping clients minimize their tax liabilities. PwC assisted its clients in obtaining at least 548 tax rulings in Luxembourg between 2002 and 2010, enabling them to avoid corporate income tax elsewhere.

How are developing countries expected to finance their infrastructure investment needs, increase social protection coverage, or repair their damaged environments? Instead of helping, the Bank’s most influential report urges them to cut corporate tax rates and social contributions to improve their DB ranking, contrary to what then Bank Chief Economist Kaushik Basu observed: “Raising [tax] allows developing countries to invest in education, health and infrastructure, and, hence, in promoting growth.”

How are they supposed to achieve the internationally agreed Agenda 2030 for the Sustainable Development Goals in the face of dwindling foreign aid. After all, only a few donor countries have fulfilled their aid commitment of 0.7% of GNI, agreed to almost half a century ago. Since the 2008 financial crisis, overseas development assistance has been hard hit by fiscal austerity cuts in OECD economies except in the UK under Cameron.

The Bank would probably recommend public-private partnerships (PPPs) and borrowing from it. Countries starved of their own funds would have to borrow from the Bank, but loans need to be repaid.

Governments lacking their own resources are being advised to rely on PPPs, despite predictable welfare outcomes – e.g., reduced equity and access due to higher user fees – and higher government contingent fiscal liabilities due to revenue guarantees and implicit subsidies.

Financially starved governments boost Bank lending while PPPs increase the role of its International Finance Corporation (IFC) in promoting private sector business. Realizing the Bank’s conflict of interest, many middle-income countries ignore Bank advice and seek to finance their investments and other activities by other means. Thus, there are now growing demands that the Bank stop promoting tax competition, deregulation and the rest of the Washington Consensus agenda.

Bank must support SDGs
However, nothing guarantees that the Bank will act accordingly. It has already ignored the recommendation of its independent panel to stop its misleading DB country rankings. While giving lip service to the International Labour Organization (ILO) and others who have asked it to stop ranking countries by labour market flexibility, the Bank continues to promote labour market deregulation by other means.

If the Bank is serious about being a partner in achieving Agenda 2030, it should align its work accordingly, and support UN leadership on international tax cooperation besides enhancing governments’ ability to tax adequately, efficiently and equitably. In the meantime, the best option for developing countries is to ignore the Bank’s DB and Paying Taxes reports.

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Why American Overseas Aid Should Focus on SDGs?http://www.ipsnews.net/2017/10/american-overseas-aid-focus-sdgs/?utm_source=rss&utm_medium=rss&utm_campaign=american-overseas-aid-focus-sdgs http://www.ipsnews.net/2017/10/american-overseas-aid-focus-sdgs/#respond Wed, 04 Oct 2017 14:59:39 +0000 Bjorn Lomborg http://www.ipsnews.net/?p=152347 Bjorn Lomborg is director of the Copenhagen Consensus Center and a visiting professor at the Copenhagen Business School.

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Bjorn Lomborg is director of the Copenhagen Consensus Center and a visiting professor at the Copenhagen Business School.

By Bjorn Lomborg
PRAGUE, CZECH REPUBLIC, Oct 4 2017 (IPS)

The average American believes the US spends a whopping third of its federal budget on foreign aid. Consequently, a majority of people think that too much is spent on foreign aid. That is one reason US President Donald J. Trump, who has campaigned on putting the needs of Americans first, has proposed deep cuts to foreign aid in his 2018 budget.

The problem is, this common understanding is very wrong. US foreign aid in 2017 will cost $41.9 billion out of a total federal budget of $4.15 trillion or one percent. When informed of this, support for cutting aid halves, while support for increasing the budget more than doubles. The aid budget should be maintained. And the far more important question should instead be addressed: how do we get the most possible out of this spending?

We can look to recent history for reassuring evidence that US aid spending can achieve a great deal. A recent Brookings study revealed that the Millennium Development Goals (MDGs) – the development agenda set by the US and others for the first fifteen years of this century – were more successful than anybody knew.

From 2000, the world agreed on 18 key undertakings, including halving the proportion of people in poverty, halving the proportion of people going hungry, and cutting child mortality by two-thirds.

The study concludes, “especially on matters of life and death, 2015 outcomes were not on track to happen anyhow”. The MDGs ensured that more money went to the most important areas. Improvements sped up. At least 21 million more people are alive today as a result.

This tells us that the simple MDG approach worked; the U.S. and other, smaller donors helped save a number of lives equivalent to the entire population of Florida. We know more today than ever before about how to create meaningful change with each dollar spent. More transparency should be encouraged to reassure taxpayers about how money is spent.

When the MDGs were being replaced in 2015 with a new development agenda called the Sustainable Development Goals (SDGs), my think-tank Copenhagen Consensus commissioned economists from around the world to analyze development priorities as they were proposed. The results are a body of work revealing what one aid dollar can achieve if spent in different ways.

I would be the first to argue that the SDGs are problematic: the simple 18 MDG targets were replaced with an impossibly long list of 169 targets. That’s just silly.

Targets such as the development of tools to monitor sustainable tourism or teaching the “knowledge and skills needed to promote sustainable development” don’t deserve priority when malnourishment claims at least 1.4 million children’s lives annually, 1.2 billion people live in extreme poverty, and 2.6 billion lack clean drinking water and sanitation.

But our research conclusively showed that among this list, there are 19 incredibly powerful development targets. If USAID focuses more on the most effective targets, the public could be reassured that every dollar is achieving the most possible.

The reduction of childhood malnutrition does deserve funds. Evidence for Copenhagen Consensus showed that every dollar spent providing better nutrition for 68 million children would produce over $40 in long-term social benefits.

Malaria, too, deserves attention. A single case can be averted for as little as $11. We don’t just stop one persons suffering; we save a community from lost economic productivity. Our economists estimated that reducing the incidence of malaria by 50% would generate a 35-fold return in benefits to society.

Tuberculosis is a disease that has been overlooked and under-funded. Despite being the world’s biggest infectious killer, in 2015 it received just 3.4 per cent of development assistance for health. Reducing TB deaths by 90 per cent would result in 1.3 million fewer deaths. In economic terms, this would bring benefits worth $43 for every dollar spent.

Among the myriad of well-meaning environmental targets, our research shows that protecting coral reefs deserves prioritization. In addition to biodiversity benefits, healthy reefs increase fish stocks, benefitting fishermen and tourism.

Another transformative target would be universal access to contraception and family planning. At an annual cost of just $3.6 billion, allowing women control over pregnancy would mean 150,000 fewer maternal deaths and 600,000 fewer children being orphaned.

There are 19 such targets that deserve prioritization, because each dollar would do a lot to achieve a safer, healthier world – a result that leads to lasting benefits for the US.

If common belief were right and foreign aid really did swallow one-third of all federal resources, it may indeed make sense to focus more on American needs.

But in a world where a few dollars can do a world of difference, spending just one percent of the budget on aid seems a sensible investment.

When it comes to development, everyone’s goal should be the same. Rather than slashing funds for development, the United States should maintain its global leadership by focusing on the areas where every dollar achieves the most good.

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Greater Cooperation To Strengthen Taxationhttp://www.ipsnews.net/2017/10/greater-cooperation-strengthen-taxation/?utm_source=rss&utm_medium=rss&utm_campaign=greater-cooperation-strengthen-taxation http://www.ipsnews.net/2017/10/greater-cooperation-strengthen-taxation/#respond Tue, 03 Oct 2017 10:25:09 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=152323 Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Many tax avoidance schemes are not illegal. But just because it is not illegal does not mean it is not a form of abuse, fraud or corruption. Credit: Servaas van den Bosch/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Oct 3 2017 (IPS)

Since the 1950s, there has been a popular dance called the ‘limbo rock’, with the winner leaning back as much as possible to get under the bar. Many of today’s financial centres are involved in a similar game to attract customers by offering low tax rates and banking secrecy.

How Low Can You Go?
This has, in turn, forced many governments to lower direct taxes not only on income, but also on wealth. From the early 1980s, this was dignified by US President Ronald Reagan’s embrace of Professor Arthur Laffer’s curve which claimed higher savings, investments and growth with less taxes.

Following a long hiatus, Laffer is now making a comeback with the recent election of Donald Trump who has espoused a similar claim that lower taxes will lead to higher growth, lifting all American boats. It remains to be seen how President Trump will reconcile this with his promise to build and improve infrastructure in the US, which many hope will finally create the basis for the long awaited recovery following the 2008 financial crisis and the ensuing Great Recession.

With the decline of government revenue from direct taxes, especially income tax, following Laffer’s advice, many governments were forced to cut spending, often by reducing public services, raising user-fees and privatizing state-owned enterprises. Beyond a point, there seemed to be little room left for further cuts, while governments had to raise revenue to fund its functions.

Regression
This increasingly came from indirect taxes, especially on consumption, as trade taxes declined with trade liberalization. Many countries have since adopted value added taxation (VAT), touted in recent decades by the International Monetary Fund (IMF) and others as the superior form of taxation: after all, once the VAT system is functioning, raising rates is relatively easy.

Instead, a progressive tax system would seek to ensure that those with more ability to do so, would pay proportionately more tax than those with less ability to do so. Instead, tax systems have become increasingly regressive, with the growing middle class bearing the main tax burden.

Meanwhile, tax competition among developing countries has not only reduced tax revenue, but also made direct taxation less progressive, while the growth of VAT has made the overall impact of taxation more regressive as the rich pay proportionately less tax with all the loopholes available to them, both nationally and abroad. Although there are many reasons for income inequality, untaxed assets have undoubtedly also increased both wealth and income inequalities at both national and international levels.

After Panama

Following the Panama revelations, most Western government leaders have pledged tough action against tax evasion and avoidance, especially by those using developing country tax havens. In the face of continued failure to deliver on the almost half-century old United Nations commitment to provide aid to developing countries equivalent to 0.7 per cent of their national incomes, then OECD Development Assistance Committee (DAC) chair, Erik Solheim, proposed greater tax cooperation instead.

After all, many developing countries are not devoid of financial assets, but so much has been taken out and hidden by wealthy elites in private financial institutions, especially in ‘offshore’ tax havens.

But since most using tax havens seek assets in OECD countries, the Paris-based organization has historically focused efforts on very limited matters of concern to their members. Hence, they have blocked efforts to give the UN a stronger mandate to advance international cooperation on taxation, culminating in the modest Addis Ababa Action Agenda declared at the third UN Financing for Development conference in July 2015.

As major users of such facilities themselves, many developing country elites have been conspicuously silent in the face of the Panama revelations of what they have long enabled and practiced. After all, much of what is involved is publicly considered illicit, immoral, and even ‘sinful’, even if not illegal. As Warren Buffett and the group of ‘patriotic millionaires’ in the US have noted, the rich currently pay less in tax than most of their lowest paid employees.

Reversing the slide
Many tax avoidance schemes are not illegal. But just because it is not illegal does not mean it is not a form of abuse, fraud or corruption. To tackle the corruption at the heart of the global financial system, tax havens need to be shut down, not reformed. ‘On-shoring’ such funds, without prohibiting legitimate investments abroad, will ensure that future investment income will be subject to tax as in the US and Canada.

If not compromised by influential interests benefiting from such flows, responsible governments should seek to enact policies to:
• Detect and deter cross-border tax evasion;
• Improve transparency of transnational corporations;
• Curtail trade mis-invoicing;
• Strengthen anti-money laundering laws and enforcement; and
• Eliminate anonymous shell companies.

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Global Companies Give Africa a Second Lookhttp://www.ipsnews.net/2017/09/global-companies-give-africa-second-look/?utm_source=rss&utm_medium=rss&utm_campaign=global-companies-give-africa-second-look http://www.ipsnews.net/2017/09/global-companies-give-africa-second-look/#respond Tue, 26 Sep 2017 15:27:40 +0000 Zipporah Musau http://www.ipsnews.net/?p=152247 When travelling abroad for work and looking for accommodation, Joe Eyango, a Cameroonian living in the US, considers two factors: convenient transportation from the airport and around the city and reliable Internet access. He is a university professor and wants to be able to jet in, hit the ground running, make his presentation and zoom […]

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BMW South Africa announces the production of its one-millionth BMW 3 Series sedan at its manufacturing plant in Rosslyn, Pretoria in South Africa. Credit: BMW Group

By Zipporah Musau, Africa Renewal*
UNITED NATIONS, Sep 26 2017 (IPS)

When travelling abroad for work and looking for accommodation, Joe Eyango, a Cameroonian living in the US, considers two factors: convenient transportation from the airport and around the city and reliable Internet access. He is a university professor and wants to be able to jet in, hit the ground running, make his presentation and zoom off to another destination in a day or two.

Eyango has been to various countries in Africa for business and work but has reasons for preferring South Africa. “South Africa has a lot to offer compared with other African countries. The road system is good, there is adequate electricity and reliable Internet connection, which is necessary for work and business,” Eyango told Africa Renewal in an interview.

Recently, having been invited to present a conference paper on a tight schedule, Eyango flew into Johannesburg from Amsterdam, spent less than 30 minutes in customs at the O. R. Tambo International Airport, took a taxi and was at his hotel in less than an hour since arrival.

South Africa attracts many professionals and big multinationals. It’s currently home to more than 75% of all top global companies in Africa.

“Where these big companies choose to invest depends on whether the environment is right for business. Investors are interested in relatively stable countries, good infrastructure, reliable communication, electricity and labour,” says Dr. John Mbaku, a researcher at Africa Growth Initiative at the Brookings Institution and also a professor of economics at Weber State University, US.

Some of the global companies with a presence in South Africa include luxury car manufacturers BMW, the Standard Bank Group, Barclays Bank, Vodafone (one of the world’s largest communication companies), Volkswagen, and General Electric. There is also FirstRand, Sasol, Sanlam, and MTN Group.

In an earlier interview with South African officials on why they’d chosen the country as an investment destination, Sam Ahmed, then the managing director of Britannia Industries, an India-based manufacturer of biscuits, snacks and confectionery, said his organization had been looking for a country that would give it access to the entire African market while keeping its costs low.

“In South Africa you have first-world infrastructure and third-world cost,” Ahmed said. The company’s production costs in South Africa were much lower than in Southeast Asia, the company headquarters.

Big businesses are also attracted to countries where the legal system works, so they can be assured of justice should legal issues arise. South Africa’s judiciary has been hailed for its sound judgements and independence from political machinations relative to other African countries.

Another attraction for big businesses is human resources. The efficiency and smooth operation of these large companies depend on the calibre of its labour force. Despite many years of apartheid, according to Mbaku, South Africa provides its citizens with relatively good quality education the multinationals are looking for in their labour force.

However, despite its successes, South Africa continues to grapple with a high crime rate (especially in urban areas), graft accusations and the political uncertainty that businesses loathe.

Dr. Mukhisa Kituyi, the secretary-general of the UN Conference on Trade and Development (UNCTAD), the UN body that deals with trade, investment and development issues, acknowledges that South Africa has the oldest and most developed market economy in the whole of Africa for historical reasons: the market grew out of a strong mining and industrial base and the financial industry.

However, according to Kituyi, things are now changing and other African countries are also attracting big investors. “It’s true South Africa has had a head start, but in net terms, there is faster growth in alternative centres for both manufacturing and service delivery than in South Africa. Today, the financial services industry is growing faster in Morocco than in South Africa,” Kituyi told Africa Renewal in an interview.

He notes that some multinational enterprises operating out of South Africa have relocated substantially. “We recently saw the opening of the Volvo truck-manufacturing plant in Mombasa. And similarly, we have seen many other services, particularly IT-based services and telecommunications, growing in new nodes like Nigeria, Kenya and Rwanda.”

Fringe benefits
So why should African governments want to encourage global companies to set up shop in their countries? Driven by insufficient funds, African governments are increasingly turning to private-sector companies for a much-needed boost. Foreign investments provide capital to finance industries, boost infrastructure and productivity, provide social amenities and create jobs, all of which can help a country reach its economic potential. And as countries rush to implement the Sustainable Development Goals, funding is key.

In Africa, governments and industry are gradually forming public-private partnerships (PPPs) in which companies provide capital while governments ensure an environment conducive to business. In the last 10 years, the continent has welcomed PPPs for projects in infrastructure, electricity, health and telecommunications.

Lenders like the African Development Bank are urging African countries to improve business environments by “creating the necessary legal and regulatory framework for PPPs, and to facilitate networking and sharing of experience among regulatory agencies and other similar organizations.”

Tread carefully
However, even as PPPs begin to change the face of Africa, there is need for countries to tread carefully and to learn from failed PPPs when signing up for such partnerships. “Ask yourselves, does the state have the capacity to forge ahead with these partnerships? This is necessary to avoid bad debt,” says Kituyi, adding that governments should not let private companies drive the agenda.

This word of caution is echoed by the Brookings Institution’s Mbaku, who is advising African governments to ensure that PPPs work to their advantage: “If you have a weak or corrupt leadership, you may not have the power or the skills required to negotiate a favourable partnership. You will end up with a PPP that is not really a partnership.”

Mbaku gives the example of oil companies that have been operating in Africa for more than 20 years yet still depend on expatriate labour instead of employing locals. Such companies are reluctant to transfer skills, knowledge and technology to the locals.

Another problem with PPPs is the imbalance of power. “If you are a government engaged in a PPP on a development project, there is inequality in power. The multinational has capital, skilled manpower and [an] external market. The government has no power over these,” says Mbaku.

Despite the challenges, however, PPPs will continue playing a major role in the development of poor countries. For African countries to attract multinationals and other big investors to partner with, their governments need to put their house in order—improve infrastructure, communication, security and the legal system, and fight corruption.

*(Africa Renewal, published by the UN’s Department of Public Information)

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Africa Moves Towards Third Industrial Development Decadehttp://www.ipsnews.net/2017/09/africa-moves-towards-third-industrial-development-decade/?utm_source=rss&utm_medium=rss&utm_campaign=africa-moves-towards-third-industrial-development-decade http://www.ipsnews.net/2017/09/africa-moves-towards-third-industrial-development-decade/#respond Fri, 22 Sep 2017 10:52:54 +0000 Amina Mohammed http://www.ipsnews.net/?p=152199 Amina J. Mohammed, Deputy UN Secretary-General, speaking at the High-Level Event on African Industrialization

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Technical training in Bouaké, Côte d'Ivoire. Credit: UN Photo/Abdul Fatai

By Amina J. Mohammed
UNITED NATIONS, Sep 22 2017 (IPS)

Since the turn of the century, much of Africa has achieved impressive economic growth. Sixteen African countries were among the world’s top 30 fastest growing nations. Last year, the 10 fastest growing African economies posted GDP growth rates exceeding 5 per cent.

On the flip side, continued commodity-dependence – coupled with fluctuations in commodity prices – makes African economies vulnerable and hampers their ability to create decent jobs and effectively tackle poverty.

Hence the need for African countries to take further action to advance inclusive and sustainable industrial development. This is the reason behind the proclamation by the General Assembly last year of the third Industrial Development Decade for Africa. The Decade represents a global initiative in support of African industrialization.

Through it, the international community acknowledges the important link between industrialization and development, and takes note of Africa being the least industrialized, poorest and the most vulnerable continent, in spite of its immense economic and social potential.

The Decade is not an isolated undertaking, but complements other key development initiatives, such as the African Union’s Agenda 2063, the “2030 Agenda for Sustainable Development”, and various bilateral, regional and multilateral initiatives.

There are many requirements needed to make industrialization efforts bear positive outcomes.
Reliable financing is vital, and Africa and its development partners need to mobilize and prudently deploy the necessary funds.

Countries also need to design and implement comprehensive industrial policies, promote industrial entrepreneurship, advance innovation and technology, enhance energy efficiency, and promote climate change resilience.

Fund mobilization for the Decade needs to build on the Addis Ababa Action Agenda, which recognizes the importance of industrial development as a critical source or economic growth, economic diversification, and value addition.

It also highlights several key avenues for financing development initiatives. Equally important is the need to effectively leverage markets through regional integration.

Greater regional integration has the potential to support industrialization by increasing intra-African trade and intra-African investments, through the free movement of capital.

Our goal must be to provide jobs and opportunities, particularly for Africa’s growing population of youth. Industrialization can and must also be a tool for women’s empowerment and gender equality.
For this we must invest in appropriate vocational and skills training and closing the digital divide.

No single country or institution is fully equipped to tackle the challenges of African industrial development on its own. The implementation of the third Industrial Development Decade for Africa requires concerted efforts from a wide range of stakeholders.

Apart from intra-African partnerships, Africa needs to leverage the full potential of its development partners through appropriate bilateral, regional, inter-regional, and multilateral arrangements.

South-South, North-South and triangular co-operation are all necessary. The United Nations system is a key partner, along with the public and private sectors, financial institutions, civil society organizations, academia.

The Programme for Country Partnership approach by the United Nations Industrial Development Organization should be leveraged to explore funding opportunities and to devise concrete projects.
It provides a strong platform for multi-stakeholder partnership to support inclusive and sustainable industrial development.

It will help build partnerships with various stakeholders, including Development Finance Institutions and the private sector, to mobilize resources on a larger scale to achieve greater development impact. To that end, pilot programmes have already been initiated in Ethiopia and Senegal.

As we deliberate on the practical aspects to guide the implementation of third Industrial Development Decade for Africa, I appeal to all partner institutions to use their influence and expertise to promote industrialization and inclusive sustainable development that will benefit all the nations and people of Africa.

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A Trump Doctrine of Hypocrisyhttp://www.ipsnews.net/2017/09/trump-doctrine-hypocrisy/?utm_source=rss&utm_medium=rss&utm_campaign=trump-doctrine-hypocrisy http://www.ipsnews.net/2017/09/trump-doctrine-hypocrisy/#respond Wed, 20 Sep 2017 19:38:46 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=152169 In his first address on the global stage of the General Assembly, United States’ President Donald Trump touted an “America First” approach at the very institution that is meant to inspire collaboration between nations. During his 45-minute speech, President Trump praised national sovereignty, referencing the concept a whopping 21 times. “Our government’s first duty is […]

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By Tharanga Yakupitiyage
UNITED NATIONS, Sep 20 2017 (IPS)

In his first address on the global stage of the General Assembly, United States’ President Donald Trump touted an “America First” approach at the very institution that is meant to inspire collaboration between nations.

Donald J. Trump. Credit: UN Photo/Cia Pak

During his 45-minute speech, President Trump praised national sovereignty, referencing the concept a whopping 21 times.

“Our government’s first duty is to its people, to our citizens — to serve their needs, to ensure their safety, to preserve their rights, and to defend their values,” he told world leaders.

“As President of the United States, I will always put America first, just like you, as the leaders of your countries will always, and should always, put your countries first.”

But in a global world that relies on each other on issues such as economic growth and environmental protection, can a “me first” approach work?

Peace Action’s Senior Director of Policy and Political Affairs Paul Kawika Martin says no.

“To say one country first over the other certainly is not going to deal with these issues,” he told IPS.

Though the President highlighted the need to work together to confront those who threaten the world with “chaos, turmoil, and terror,” his actions seem to imply otherwise.

Starting with withdrawing from the landmark Paris Climate Agreement to tackle global emissions to threatening funding cuts to not only the UN but also to its own State Department which handles diplomacy and foreign assistance, the U.S. seems to be far from working together with the international community.

As Trump received applause upon speaking of the benefits of the U.S.’ programs in advancing global health and women’s empowerment, he has also sought to eliminate such programs including the gender equality development assistance account ambassador-at-large for Global Women’s Issues and has already withdrawn all funds to the UN’s Population Fund.

“Talk is cheap when you don’t fund the efforts you tout,” said Oxfam America’s President Abby Maxman.

“Mr. Trump continues on a path that will cost America its global influence and leadership,” she continued.

Martin echoed similar sentiments to IPS, stating: “We talk about working together but we don’t seem to do the things that you need to do to work together, which is making sure you have the right diplomacy, supporting the UN, and supporting other international fora.”

He particularly pointed the U.S.’ refusal to participate and sign the new nuclear ban treaty.

Adopted in July, the treaty on the prohibition of nuclear weapons is now open for signature and will enter into force 90 days after 50 countries have ratified it.

Brazilian President Michel Temer was the first to sign the treaty.

However, the world’s nine nuclear-armed states including the U.S. boycotted the negotiations and announced they do not ever intend to become party to the document.

Instead, President Trump used his address to lambast both North Korea and Iran for their alleged pursuits of nuclear weapons and make war-inciting claims.

“We will have no choice but to totally destroy North Korea,” Trump said.

“It is time for North Korea to realize that the denuclearization is its only acceptable future.”

Martin noted that no country would act kindly to threats of annihilation.

Such threats have instead only served to increase tensions.

Since Trump threatened “fire and fury” on 8 August, North Korea has conducted four nuclear tests.

The President continued to say that the Iran Deal is the “worst” and most “one-sided” agreements, threatening to withdraw from it.

As nuclear tensions continue escalate, Trump’s threats of war and unwillingness to cooperate gives security to none, particularly not Americans.

U.S. Senator Dianne Feinstein criticized the President for his remarks and noted the hypocrisy in using the UN stage of peace and global cooperation to threaten war.

“He missed an opportunity to present any positive actions the U.N. could take with respect to North Korea…By suggesting he would revisit and possibly cancel the Iran nuclear agreement, he greatly escalated the danger we face from both Iran and North Korea,” she said.

“He aims to unify the world through tactics of intimidation, but in reality he only further isolates the United States.”

Martin highlighted the importance of diplomacy rather than intimidation.

“Diplomacy is the hardest thing. It is harder to get together at a table and work on a deal but that’s what needs to be done.”

President Trump did express his support for the UN and its work, citing former President Harry Truman who helped build the UN and made the U.S. the first nation to join the organization.

He referred to Truman’s Marshall Plan which helped restore post-World War II Europe, but still went on to urge nations to “embrace their sovereignty.”

However, it was Truman that spoke of a “security for all” approach during a conference which established the UN Charter in 1945.

He urged delegates to use this “instrument for peace and security” but warned nations against using “selfishly,” stating: “If any nation would keep security for itself, it must be ready and willing to share security with all. This is the price which each nation will have to pay for world peace.”

“Out of this conflict have come powerful military nations, now fully trained and equipped for war. But they have no right to dominate the world. It is rather the duty of these powerful nations to assume the responsibility for leadership toward a world of peace.

That is why we have here resolved that power and strength shall be used not to wage war, but to keep the world at peace, and free from the fear of war.”

Truman’s collective action approach helped prevent another devastating world war.

However, President Trump’s non-cooperation and combative words signal a darker future in global affairs.

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South-South trade cooperation key to sustainable and inclusive model of globalizationhttp://www.ipsnews.net/2017/09/south-south-trade-cooperation-key-sustainable-inclusive-model-globalization/?utm_source=rss&utm_medium=rss&utm_campaign=south-south-trade-cooperation-key-sustainable-inclusive-model-globalization http://www.ipsnews.net/2017/09/south-south-trade-cooperation-key-sustainable-inclusive-model-globalization/#respond Tue, 12 Sep 2017 06:22:38 +0000 Hanif Hassan Al Qassim http://www.ipsnews.net/?p=152020 Dr. Hanif Hassan Al Qassim, is Chairman of the Geneva Centre for Human Rights Advancement and Global Dialogue

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South-South trade cooperation key to sustainable and inclusive model of globalization

Credit: Amantha Perera/IPS

By Dr. Hanif Hassan Ali Al Qassim
GENEVA, Sep 12 2017 (IPS)

Thanks to globalization and trade liberalization of commodities, services and goods, global trade has reached an unprecedented level. According to the United Nations Conference on Trade and Development, world trade in goods was valued at approximately USD 16 trillion. North-North trade generates the highest trade volume at approximately 6 trillion; trade flows within and between countries of the Global South amounts to 4.6 trillion. Trade between the Global South and the Global North -approximately between 2.5 and 3 trillion – add up to less than the trade flows within the Earth’s two main poles.

Dr. Hanif Hassan Ali Al Qassim

With a rapid population growth on the horizon, the potential to increase South-South trade and South-North trade is crucial to maintain economic growth and promote a sustainable and inclusive model of globalization. With more than 80% of the world population living in developing countries, South-South trade has the potential to increase in the years to come and to become a vector for economic growth and prosperity for a major world region whose potential has not been fully tapped during past decades.

The 2017 International Day for South-South Cooperation is an important opportunity to raise awareness about the importance of strengthening and enhancing economic cooperation between the world’s most populous regions. According to the US Energy Information Administration, 7 out of 10 countries with the highest proven oil reserves in the world are located in the Global South (Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, United Arab Emirates (UAE) and Libya). If we look at the world’s diamond producing countries, 4 out of 7 are in thesub-Saharan Africa region (Botswana, Angola, the Democratic Republic of Congo and Namibia). Not only does the Global South account for more than 80% of the world population, it is also blessed with abundant natural resources.

There are numerous obstacles to unleashing the full potential of South-South trade cooperation, notably in the Arab region. In 1997, 14 Arab countries took the initiative to establish the Greater Arab Free Trade Area – a pan-Arab free trade and economic union – to spur economic growth in the Middle East and North Africa. This initiative can still become a success story if Arab states agree to remove and to eliminate tariffs hindering trade liberalization from taking full effect. The Gulf Cooperation Council is a good starting point. But even within this grouping which is one of the most successful economic trade block, setbacks occur. In addition, the unprecedented rise of military conflicts in the Arab region has hindered trade and economic growth. Ideological and political differences are still dividing Arab states in different sub-camps. These obstacles are also rife in many other regions in the Global South.

Another fundamental problem impeding better South-South trade cooperation is the current structure of the trade system. Many countries in the Global South are raw material producers with a strong primary sector in which the economic backbone is built primarily on the export of raw materials and commodities. Commodity and raw material prices are subject to volatility spurring social instability, as witnessed during the 2007-2008 world food price crisis or in the recent drop in oil prices. Countries in the Global South need to take further steps to move from a monoculture economy or one based on oil rent to an industrialized economy with a growing service sector as witnessed in the developed world. In the Arab region and especially in oil exporting countries, efforts are being made to diversify the economy despite the persistence of what is currently referred to as the “Dutch disease” (the discovery of natural gas in Groningen, Netherlands, drew all economic factors of production to the gas sector which led to the dereliction of the rest of the economy). The UAE, Oman, Saudi Arabia and Kuwait in particular are developing robust economic systems by reducing over-reliance on raw materials such as oil and gas. However, many countries in the Global South have not managed to free themselves from the raw material curse.

Countries in the Global South need to take further steps to move from a monoculture economy or one based on oil rent to an industrialized economy with a growing service sector as witnessed in the developed world.
In order to unleash the potential of South-South trade cooperation and ensure the right to development of their communities, countries in the Global South need to renew their commitments to create a global trade agreement that could bring about a meaningful South-South trade partnership. Although efforts were made to promote the Agreement on the Global System of Trade Preferences among Developing Countries (GSTP) as a blueprint for increased South-South cooperation, the GSTP has not materialized owing to differences in the elimination of trade tariffs. In the latest GSTP negations round that were held in Sao Paolo (Brazil), few countries signed the Sao Paolo Round Protocol despite the fact that the GSTP consisted of – at that time – 43 countries including Algeria, Egypt, Iraq, Libya, Morocco, Sudan and Tunisia. Although the Sao Paolo Round was concluded in 2010, it has not yet become effective owing to the insignificant number of countries signing and ratifying the protocol.

In order for an economic South-South trade agreement to become a reality, countries in the Global South need to ensure that trade policies are in line with the provisions set forth in the 1986 Declaration on the Right to Development. The protection of human rights needs to be embedded in all trade agreements of relevance to the Global South. In addition, developed countries must provide for an enabling environment to boost trade and development in developing countries. Unfair trade tariffs, subsidies and economic sanctions – hindering the realization of free trade between the Global South and the Global North – need to be eliminated so as to promote an inclusive and sustainable model of globalization that would serve the interest of the world society.

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Transformative Power of Literacy in Today’s Digitalized Societyhttp://www.ipsnews.net/2017/09/transformative-power-literacy-todays-digitalized-society/?utm_source=rss&utm_medium=rss&utm_campaign=transformative-power-literacy-todays-digitalized-society http://www.ipsnews.net/2017/09/transformative-power-literacy-todays-digitalized-society/#respond Fri, 08 Sep 2017 05:25:14 +0000 Hanif Hassan Al Qassim http://www.ipsnews.net/?p=151976 Dr. Hanif Hassan Al Qassim, is Chairman of the Geneva Centre for Human Rights Advancement and Global Dialogue

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Dr. Hanif Hassan Al Qassim, is Chairman of the Geneva Centre for Human Rights Advancement and Global Dialogue

By Dr. Hanif Hassan Ali Al Qassim
GENEVA, Sep 8 2017 (IPS)

The vision of a literate world has guided the United Nations in its efforts to eliminate illiteracy worldwide. According to UNESCO, the world literacy rate now stands at 91% up from 79% in 1980. In the Arab region, the literacy rate is currently at 86%; a 22% increase from 1980 where the literacy rate stood at 64%. Although world society has witnessed significant progress in eradicating illiteracy, approximately 750 million adults and 264 million children worldwide are still considered as illiterate. Thus, the cloud of world illiteracy overshadows the geography of world poverty. Nonetheless, the Sustainable Development Goals have translated the vision of a literate world into a concrete action-plan: Sustainable Development Goal 4.6 calls upon all member States of the United Nations to ensure that youth, both men and women, “achieve literacy and numeracy” by 2030. In the words of formerSecretary-General of the United Nations, Kofi Annan

Dr. Hanif Hassan Ali Al Qassim

“Literacy is, finally, the road to human progress and the means through which every man, woman and child can realize his or her full potential.”

The 2017 World Literacy Day addresses a subject that is even more important today owing to the digitalization of our societies. This year’s theme “Literacy in a digital world” explores the transformative power of communication and information technology in addressing illiteracy. In my previous role as the Minister of Education of the United Arab Emirates, numerous initiatives and projects were implemented to empower youth through enhancing literacy in the age of information. The vision was to enable youth to read, reflect and think as the first step towards building a society for the future. Eliminating illiteracy is an investment in educating humanity and in promoting a sustainable future. Access to technology is a prerequisite for a knowledge-based society.

The introduction of digital technologies – against the backdrop of globalization – has brought peoples closer as communication and exchange of information have become seamless. We are more connected than ever. In a heartbeat, we can buy our favourite book on the Internet, read articles on Kindle or even read newspapers on the airplane. The teaching environments in today’s modern classrooms have been transformed, thanksto the Internet. Students now have access to the latest information technology to increase their learning capabilities and gain knowledge through electronic means. Inevitably, digitalization has simplified access to information and knowledge and contributed to the alleviation of literacy at a faster rate than was the case in the past.

Digitalization has also facilitated the emergence of a new concept commonly referred to as digital literacy. Cornell University in the United States defines the latter as “the ability to find, evaluate, utilize, share, and create content using information technologies and the Internet.” It has transformed our traditional understanding of literacy – the ability to read and write – to also include the capability of effectively using technological devices to communicate and access information.

Inevitably, youth – at an early stage of their lives – are not adequately equipped with the required skills to critically analyze or question the validity of information available on the Internet. In this regard, youth are becoming vulnerable to the growing and alarming increase in self-radicalization that occurs through the use of Internet and social media. Online propaganda and ideological inspiration from sources controlled by right-wing and terrorist groups are increasingly exposing youth to heinous ideologies. The United Nations Office on Drugs and Crime have repeatedly warned against the phenomenon of Internet radicalization requiring “a proactive and coordinated response from Member States.” In world society’s attempts to address illiteracy, the ability to learn and to write needs also to include critical thinking so as to avoid self-radicalization which is emerging as a major social ill.

We must respond to the rise of Internet radicalism that is emerging as an invisible force inciting youth to join violent and radical groups whether in the Middle East or in Europe. Supportive settings and safe learning environments fostering social inclusion, open-mindedness and equal citizenship rights are important prerequisites in creating conditions protecting youth from falling prey to misguided ideologies. Critical thinking needs to be integrated in pedagogical teaching methodologies targeted towards youth. Literacy is not a static concept, it evolves in line with the developments of society. Strengthening digital literacy and critical thinking among youth is an investment in the future and one of the solutions to promote enlightenment, cope with radicalization in today’s digital age and realize the vision of a world that both prospers and is at peace with itself.

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Soy Changes Map of Brazil, Set to Become World’s Leading Producerhttp://www.ipsnews.net/2017/08/soy-changes-map-brazil-set-become-worlds-leading-producer/?utm_source=rss&utm_medium=rss&utm_campaign=soy-changes-map-brazil-set-become-worlds-leading-producer http://www.ipsnews.net/2017/08/soy-changes-map-brazil-set-become-worlds-leading-producer/#respond Thu, 17 Aug 2017 17:22:11 +0000 Mario Osava http://www.ipsnews.net/?p=151713 “Our wealth lies in the climate, not in the land,” said Antonio Galván, president of the Rural Union of Sinop, a municipality created just 37 years ago, which has prospered due to the continued expansion of soy in Brazil. Sinop, population 133,000, is the biggest city in northern Mato Grosso, a state in west- central […]

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The soybean harvest this year in Brazil will hit record levels and reaffirm that the country is about to displace the United States as the world’s top producer of soy. Credit: Embrapa

The soybean harvest this year in Brazil will hit record levels and reaffirm that the country is about to displace the United States as the world’s top producer of soy. Credit: Embrapa

By Mario Osava
RIO DE JANEIRO, Aug 17 2017 (IPS)

“Our wealth lies in the climate, not in the land,” said Antonio Galván, president of the Rural Union of Sinop, a municipality created just 37 years ago, which has prospered due to the continued expansion of soy in Brazil.

Sinop, population 133,000, is the biggest city in northern Mato Grosso, a state in west- central Brazil which has experienced a major expansion of the agricultural frontier since the 1970s, and is currently the leading national producer of soy, accounting for 27 per cent of Brazil’s production.

“We have 14 to 15 million hectares of land available to expand soybean crops by 150 per cent in Mato Grosso, with no need to deforest,” Galván told IPS from Sinop.

For this reason, “it is a natural tendency,” he said, for Brazil to soon overtake the United States as the world’s leading producer of soy, as the United Nations Food and Agriculture Organisation (FAO) and the Organisation for Economic Co-operation and Development (OECD) predict, in the report “2017-2026 Agricultural Outlook”.

More or less regular rainfall from October to May is the main factor for the growth of agriculture in northern Mato Grosso, explained Galván.

Besides soy, which is planted at the start of the rainy season and harvested about four months later, other crops are also planted, but at the end of the rainy season – generally cotton and maize, of which Mato Grosso has also become the biggest producer in the country in the past four years.

State-owned lands, divided between the “Cerrado” ecoregion – the Brazilian savannah – and the Amazon forest, used to be undervalued for their low fertility, until they became the new agricultural frontier.

Galván, originally from the far south of Brazil, moved to Sinop in 1986, when land was still cheap. “Soybean was just starting in Sinop when I came, the local economy was only based on livestock and logging,” he recalled.

That year, Mato Grosso produced 1.9 million tons of soybean. But by 2016 the state’s soy crop reached 26.03 million tons, and this year it is expected to increase between 11 and 12 per cent, according to the Agriculture Ministry’s National Supply Agency.

Many of the migrants from southern Brazil who founded and settled in Sinop did not share that prosperity reflected in one of the highest human development rates in Brazil’s hinterland. “They went bankrupt and returned to their places of origin,” defeated by the harsh living conditions and lack of transport at the beginning, lamented Galván.

The city’s name comes from the initials (in Portuguese) of the company that “colonised” the area, the Real Estate Company of Northeastern Paraná (a southern state), buying lands, building the first houses and streets, and attracting families to an illusory El Dorado.

 Complex of soy and maize storehouses and processing plants in Lucas Rio Verde, in the heart of the state of Mato Grosso, the country’s main producer of soy, maize and cotton, in west-central Brazil. Credit: Mario Osava/IPS


Complex of soy and maize storehouses and processing plants in Lucas Rio Verde, in the heart of the state of Mato Grosso, the country’s main producer of soy, maize and cotton, in west-central Brazil. Credit: Mario Osava/IPS

This is how Brazil’s Amazon region was populated, with the 1964-1985 military dictatorship promoting internal migration, which expanded the deforestation and provoked land conflicts, massacres of indigenous people and malaria epidemics.

The production of soy also expanded from south to northwest, although more slowly.

Soy began to be grown in Rio Grande do Sul, the southernmost state, in 1914, because it had the most temperate climate, the only one suitable at the time. The expansion began in 1970, when national output was just 1.5 million tons.

In a decade production rose tenfold, and it more than doubled again in the 1990s, advancing towards the north until Mato Grosso took the lead in production in 2000.

While production stagnated in the south, in Mato Grosso it tripled so far this century, and expanded to previously inconceivable areas, such as the Northeast, including the semi-arid parts, and the humid northern Amazon region.

Soy became the main national agricultural product, representing half of the production of cereals, pulses and oilseeds, and the largest export revenues: 25 billion dollars in 2016. The rural map and economy of Brazil changed radically in the process.

“The main obstacles for the expansion of soy are infrastructure and logistics. On the large agricultural estates technology continues to improve while productivity grows, with yields approaching the U.S. average of 3,730 kilos per hectare,” said Alexandre Cattelan, head of Technology Transfer in Embrapa Soy.

Embrapa (Brazilian Agricultural Research Corporation), created in 1973 by the Agriculture Ministry, is a complex of 47 specialised units, including Embrapa Soy, scattered around the country.

It played a decisive role in the adaptation of soy to Brazil’s tropical climate, with increasing productivity. Output, using new seeds and techniques, increased 6.17 times, while the cultivated area grew 3.82 times since 1980.

“We have the land and know-how to overtake the U.S., but we lack proper roads, ports, railways and sufficient storage facilities,” Cattelan told IPS. This year, because of a record harvest, the storehouses are full and there is no space for the maize that is now being harvested.

Highway BR163, which crosses the most productive area in Mato Grosso and runs to the river ports in the Amazon, is the shortest way for exporting locally produced soy and maize. But it still has an unpaved 100-km stretch and is impassable during the rainy season.

Adequate seeds and the use of lime, fertilisers and micronutrients to improve the soil helped to expand the crop to the Cerrado savannah region, said Cattelan, an agronomist who has a PhD in soil microbiology.

Direct seeding, which excludes plowing of the earth and involves covering it with straw, the inoculation of bacteria which fix nitrogen in the soil, reduce costs and environmental damage, such as the contamination of the water table, he said.

A bottleneck for the production of soy could be a slowdown in the consumption of protein in China, from a 7.9 per cent increase in the last decade to a 2.3 per cent increase over the next decade, according to the FAO and OECD report.

The report also projects a lower level of growth of per capita consumption of food in the countries of the developing South, from 1.1 per cent against the previous 3.1 per cent, and the stabilisation of the use of vegetable oils for making biodiesel.

Moreover, the expansion of soy generates controversy, especially because of the intense use of genetically modified seeds and agrochemicals, sald Alice Thuault, associate director of the non-governmental Instituto Centro de Vida (ICV), which operates in northern Mato Grosso.

In 2011, a study identified toxic agrochemicals in the breastmilk of many women in Lucas do Rio Verde, a municipality next to Sinop.

The production of soy also drives the deforestation of the Amazon forest, although in a much lower proportion than livestock production, which “occupies 50 to 70 per cent of the recently deforested areas,” Thuault told IPS.

Furthermore, soybean growers, mostly producers with large extensions of land, dominate local politics and rule according to their interests, to the detriment of family farmers, the environment and public health. Former Mato Grosso governor Blairo Maggi is currently Brazil’s agriculture minister.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Central America Fights Climate Change with Minimal Foreign Aidhttp://www.ipsnews.net/2017/07/central-america-fights-climate-change-minimal-foreign-aid/?utm_source=rss&utm_medium=rss&utm_campaign=central-america-fights-climate-change-minimal-foreign-aid http://www.ipsnews.net/2017/07/central-america-fights-climate-change-minimal-foreign-aid/#respond Mon, 31 Jul 2017 07:05:54 +0000 Diego Arguedas Ortiz http://www.ipsnews.net/?p=151490 Despite the fact that Central America is one of the regions most vulnerable to climate change, it has half-empty coffers when it comes to funding efforts against the phenomenon, in part because it receives mere crumbs in foreign aid to face the impacts of the rise in temperatures. According to a study released in June, […]

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China Seeks to Export Its Green Finance Model to the Worldhttp://www.ipsnews.net/2017/07/china-seeks-export-green-finance-model-world/?utm_source=rss&utm_medium=rss&utm_campaign=china-seeks-export-green-finance-model-world http://www.ipsnews.net/2017/07/china-seeks-export-green-finance-model-world/#respond Wed, 26 Jul 2017 03:05:44 +0000 Daniel Gutman http://www.ipsnews.net/?p=151431 Hand in hand with UN Environment and the Inter-American Development Bank (IDB), the People’s Bank of China (PBoC) disembarked in the Argentine capital to prompt this country to adopt and promote the agenda of so-called green finance, which supports clean or sustainable development projects and combats climate change. The PBOC, which as China’s central bank […]

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Ma Jun, chief economist at the People’s Bank of China, together with Rubén Mercado, from the United Nations’ Development Programme (UNDP) in Argentina. The high-ranking Chinese official promoted Beijing’s green finance while in Buenos Aires. Credit: UNDP

Ma Jun, chief economist at the People’s Bank of China, together with Rubén Mercado, from the United Nations’ Development Programme (UNDP) in Argentina. The high-ranking Chinese official promoted Beijing’s green finance while in Buenos Aires. Credit: UNDP

By Daniel Gutman
BUENOS AIRES, Jul 26 2017 (IPS)

Hand in hand with UN Environment and the Inter-American Development Bank (IDB), the People’s Bank of China (PBoC) disembarked in the Argentine capital to prompt this country to adopt and promote the agenda of so-called green finance, which supports clean or sustainable development projects and combats climate change.

The PBOC, which as China’s central bank regulates the country’s financial activity and monitors its monetary activity, has been particularly interested in Argentina, because next year it will preside over the Group of 20 (G20) industrialised and emerging economies.

In 2018, Buenos Aires will become the first Latin American city to organise a summit of the G20 forum, in which the major global powers discuss issues on the global agenda.

“China started to develop strategies to promote green finance international collaboration in the G20 framework in 2016, the year when it took over the presidency. And Germany took over this year the presidency and decided to continue. We are looking forward to Argentina to continue with this topic of green finance in 2018,” said Ma Jun, chief economist at the PBoC, in a meeting with a small group of reporters at the UNDP offices in Buenos Aires. “Once the companies begin to release the environmental information, we’ll see that money will begin to change direction. Some of the money which is invested in the polluting sector will be redirected to the green companies. And that costs governments zero. It’s only a requirement for the companies to disclose their environmental information.” -- Ma Jun

Ma, a distinguished economist who has worked at the International Monetary Fund (IMF), the World Bank and the Deutsche Bank, was the keynote speaker at the International Symposium on Green Finance, held Jul. 20-21 at IDB headquarters in Buenos Aires.

At that event, he told representatives of the public sector and private companies from a number of countries that over the past three years China has been making an important effort for its financial system to underpin a change in the development model, putting aside polluting industries and supporting projects that respect the environment and use resources more efficiently.

Ma, a high-ranking PBoC official since 2014, surprised participants in the Symposium stating that in 2015, China decided to change its development model because of the enormous environmental impact it had, which is reflected in the estimate he quoted: that “a million people a year die in China due to pollution-related diseases.“

He said four trillion yuan – approximately 600 billion dollars – will be needed to finance investments in environmentally sustainable projects over the next few years in China.

Simon Zadek, co-director of the UN Environment Inquiry into the Design of a Sustainable Financial System, concurred with Ma.

He explained that the UN agency he co-heads promotes the “mobilisation of private capital towards undertakings compatible with the UN’s Sustainable Development Goals and the commitments made in the Paris Agreement on climate change, by the financial markets, banks, investment funds and insurance companies.“

He added that “many countries have taken steps in that direction and China is one of the most inspiring, most ambitious at an internal level and most active in promoting international cooperation.“

“Financial markets and capital should take environmental and climate issues into account now, not tomorrow. We are hoping for Argentina’s leadership next year on this matter and we are ready to collaborate if it decides to do so,“ said the UN Environment official.

The Symposium was held a few days after this year’s G20 summit, which was hosted Jul. 7-8 by Hamburg, Germany.

During the summit the discrepancy became evident between the rest of the heads of government and U.S. President Donald Trump, who does not believe in climate change and withdrew his country from the Paris Agreement, which in December 2015 set commitments for all governments to reduce global warming.

In Hamburg, a meeting was held by the Green Finance Study Group (GFSG), created in 2016, the year China presided over the G20, and which is headed by Ma and Michael Sheren, senior advisor to the Bank of England, with UN Environment acting as its secretariat.

There are two main issues that the GFSG currently promotes for the financial industry to consider when deciding on the financing of infrastructure or productive projects: setting up an environmental risk analysis and using publicly available environmental data.

“PBoC, the largest Chinese bank, has verified that to invest too much in the polluting sector is not beneficial. The costs are higher and the profits lower, because lots of policies are more and more restrictive in the polluting sector,” Ma said, noting that the bank began to carry out environmental risk analysis two years ago.

For the chief economist, “the other focus is to allow financial markets to distinguish who is green and who is brown,” referring to the predominant model of development, based on draining natural resources and not preserving ecosystems.

“Once the companies begin to release the environmental information, we’ll see that money will begin to change direction. Some of the money which is invested in the polluting sector will be redirected to the green companies. And that costs governments zero. It’s only a requirement for the companies to disclose their environmental information,” added Ma.

An important part of the initiative is the promotion of the emission of so-called green bonds, to finance projects of renewable energy, energy saving, treatment of wastewater or solid waste, the construction of green buildings that emit less pollutants and reduce their energy consumption, and green transport.

But the promotion of green finance does not foresee the arrival of special funds for that purpose to countries of the developing South.

In fact, the “greening of the financial system“ mainly depends on the private sector, especially where the state has limited fiscal capacity, according to the conclusions of the G20’s GFSG.

For Rubén Mercado, UNDP economist in Argentina, governments can facilitate undertakings that are beneficial to the environment by changing policies, without the need for spending additional funds.

“The key issue is that of relative prices. In Argentina we have subsidised fossil fuels for years. Perhaps we would not even have to subsidise renewable forms of energy, but simply reduce our subsidies for fossil fuels so that the other sources can be developed,“ he said.

Ma took a similar approach, pointing out that “You don´t need to spend money, you just need to eliminate the subsidies” that are traditionally granted to fossil fuel producers, which hamper investments in clean energies.

In the Symposium in Buenos Aires a study was released about the economies of Germany, China and India, which revealed that in the last year they have invested in renewable energies just 0.7, 0.4 and 0.1 per cent of GDP, respectively.

“The massive demand for green financing simply cannot be met by the public sector or the fiscal system,” said Ma.

“In a country like China, 90 percent is being covered by the private sector. Globally, my feeling is that in the OECD countries the fiscal capacity is probably higher. Maybe more than 10 percent could be provided by governments,” he said.

“But in other economies with weaker fiscal capacity, the rate should be even lower than in China.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Jens Martens
BONN, Jul 13 2017 (IPS)

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

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

Weakening the State: A vicious circle

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

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

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

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

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

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

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

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

Concentrated power

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

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

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

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

Devastating impacts

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

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

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

Counter-movements and breaking ranks

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

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

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

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

What has to be done?

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

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

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

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

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Global Devaluation of Work Drives Up Unemployment in Brazilhttp://www.ipsnews.net/2017/06/global-devaluation-work-drives-unemployment-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=global-devaluation-work-drives-unemployment-brazil http://www.ipsnews.net/2017/06/global-devaluation-work-drives-unemployment-brazil/#respond Sat, 24 Jun 2017 03:04:37 +0000 Mario Osava http://www.ipsnews.net/?p=151034 In addition to driving up the number of unemployed people to 14.2 million, the severe recession of the last two years led Brazil to join the global trend of flexibilisation of labour laws in order to further reduce labour costs. Creating more jobs without affecting rights is the basic argument of the government and advocates […]

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In addition to driving up unemployment to 13.7%, the severe recession led Brazil to the flexibilisation of labour laws to further reduce labour costs

Police officers use tear gas to crack down on a May 24 trade union march heading towards the Brazilian Congress to protest the projected labour and social security reforms which cut social rights. Credit: UGT

By Mario Osava
RIO DE JANEIRO, Jun 24 2017 (IPS)

In addition to driving up the number of unemployed people to 14.2 million, the severe recession of the last two years led Brazil to join the global trend of flexibilisation of labour laws in order to further reduce labour costs.

Creating more jobs without affecting rights is the basic argument of the government and advocates of the reform that has made its way through the lower house of Congress but is pending a vote in the Senate, announced for the end of the month.

“Increasing job insecurity will be the consequence of this measure,” said Ricardo Antunes, sociology professor at the University of Campinas, in the southern state of São Paulo.

This process, which “completely undermines labour rights,” according to the academic, also includes a law on outsourcing in force since March, and a social security reform still in the initial stages in parliament, and whose approval is unlikely given the requirement of a special two-thirds majority in both houses.“Outsourcing does away with the employee-employer relationship, with workers frequently moved from one worksite or job to another. Workers lose their identity, no longer knowing if they are steelworkers or service providers, or to which category they belong.” -- Wagnar Santana

“This is a global trend that advances in a country depending on the level of resistance it runs into: slower where the trade union movement is strong, like in Germany and France, and faster where trade unionism is weaker, such as Great Britain and the United States,” Antunes told IPS.

In Brazil, workers are facing this offensive already weakened by unemployment, which is projected to remain high for a long time to come.

According to the state Brazilian Institute of Geography and Statistics (IBGE), unemployment stood at 13.7 per cent in the first three months of 2017, or 14.2 million people in a country of 207.6 million with a workforce of 103.1 million.

But underemployment amounted to 24.1 per cent, or 26.5 million people who work part-time or just a few hours a week or are considered only “potential” workers, the IBGE reported.

In addition, the lineup of forces in Congress is highly unfavourable to labour rights, with the government of President Michel Temer enjoying a vast majority, although it is vulnerable to allegations of corruption against the president and almost all of the leaders of the ruling coalition, who face possible prosecution in the Supreme Court.

The legislation proposed by the government “de-regulates labour relations, with arguments that reveal ignorance or bad faith,” argued Wagnar Santana, president-elect of the Union of Steelworkers of the ABC region, an industrial region in greater São Paulo that gave rise to the Workers’ Party (PT) and the CUT central union.

“This de-regulation did not increase employment in countries such as Spain, Mexico and Portugal, but instead drove up the rate of informal work. In Mexico, people who work for Volkswagen need another job as well to have a decent standard of living,” said the trade unionist, who works for the German car-maker.

Keeping formal labour rights such as a weekly day off and health coverage on the books means little without the possibility of enforcing them, due to the growth of informal work, employment instability and outsourcing, and the weakness of the trade union movement, he told IPS.

“Outsourcing does away with the employee-employer relationship, with workers frequently moved from one worksite or job to another. Workers lose their identity, no longer knowing if they are steelworkers or service providers, or to which category they belong,” complained Santana.

Trade unions have trouble organising, in the construction industry for example, where job rotation is frequent, he said.

If collective bargaining agreements between workers and employers trump labour laws, as the government’s proposed reform stipulates, the rights of workers would be undermined.

The strongest and best organised trade unions, such as the ones in large industrial cities, could negotiate better agreements and ensure that they are respected, but many others would not be able to. “That would end up weakening all of us, since we are not isolated,” said the trade unionist.

There are other factors that conspire against labour in Brazil, besides the high unemployment and the economic crisis aggravated by political troubles. The process of deindustrialisation weakens even the most combative trade unions, such as the steelworkers union.

The union of ABC, which represented up to 150,000 workers in the 1980s, currently has only 73,000 members, based in the municipalities of São Bernardo do Campo, Diadema, Ribeirão Pires and Rio Grande da Serra, after many ups and downs over the two past decades, Santana noted.

From the steelworkers of São Bernardo do Campo emerged trade unionist and political leader Luiz Inácio Lula da Silva, who founded the Workers Party (PT) in 1980, which he led to power the first day of 2003 and with which he governed Brazil until the last day of 2011, when he handed over the presidency to his fellow party member Dilma Rousseff, who was removed from office in August 2016.

The crisis and international competition also contributed to the rise in unemployment and to lower participation by industry in Brazil’s GDP.

But it is the devaluation of work at a global scale which Antunes attributes to the transnationalization of large companies, the new modes of production and the hegemony of finance capital, which has led to the setback in labour standards that is being pushed through in Brazil.

It is a return to “archaic” labour relations that is almost like a return to slavery, according to the expert in the sociology of labour. “Slaves used to be sold, now they are rented” through outsourcing, he said.

In 1995, Antunes published the book “Goodbye to Work?”, in which he discusses the trend towards increasing informality and precariousness of labour, and “21st century slavery”. “Precarious work used to be an exception, now it has become the rule,” he said.

One example is the British “zero-hour contract” where the employer is not required to provide any minimum working hours. One million people in the UK are working under these contracts, which puts them at the disposal of the company, to be called in to work when needed, and earning only for the hours they work, without full labour rights, said Antunes.

In Brazil this modality was included in the labour reform as “intermittent employment”.

The incorporation to the labour market of China’s huge reserves of labour power contributed to the devaluation of work around the world.

“They are qualified workers that the revolution fed and educated. Five years ago China offered poor quality industrial goods, today they have cutting-edge technology,” said the sociologist, adding that Asia has an enormous cheap labour force in countries like India, Vietnam, Bangladesh and Indonesia.

The reduction of costs is widespread. “In Italy they are closing factories that are reopening in Poland or Hungary, cutting monthly wages from 2,000 to 300 euros,” he said, to illustrate.

“There is a new morphology of labour. In Brazil we have 1.5 million workers in ‘telemarketing’ that did not exist before. Remote work, through on-line connection by cellphone or computer, has become widespread,” he pointed out.

But the working class has grown, although it is “more fragmented and diverse than before, and subjected to online work”. New forms of protest are emerging, including “picketing and roadblocks”, in Argentina for example, instead of strikes, he said.

“The outlook for the future is one of struggle, rebellions, as well as repression, massacres. The 21st century will be one of social upheavals”, concluded Antunes.

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Crisis in the Gulf: Escalation or negotiation?http://www.ipsnews.net/2017/06/crisis-in-the-gulf-escalation-or-negotiation/?utm_source=rss&utm_medium=rss&utm_campaign=crisis-in-the-gulf-escalation-or-negotiation http://www.ipsnews.net/2017/06/crisis-in-the-gulf-escalation-or-negotiation/#respond Thu, 08 Jun 2017 15:37:23 +0000 James M. Dorsey http://www.ipsnews.net/?p=150821 *Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies & co-director of the University of Würzburg’s Institute for Fan Culture

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By James M. Dorsey
SINGAPORE, Jun 8 2017 (IPS)

Turkey’s parliament is this week fast tracking the dispatch of up to 3,000 troops to Qatar, home to the country’s military base in the Middle East. Certain to stiffen Qatar’s resolve to resist Saudi and UAE-led pressure to force it to change policies, the Turkish move comes amid hints that the kingdom and its allies may seek to undermine the rule of Qatari emir Sheikh Tamim bin Hamad Al Thani.

The stakes for both sides of the Gulf divide could not be higher. Saudi Arabia and the UAE cannot afford to fail in their effort to force Qatar’s hand after leading several Arab and non-Arab states in a rupture of diplomatic relations and declaring an economic boycott that also targets Qatar’s food supplies. By the same token, Qatar cannot afford a cave-in to Saudi and UAE demands that would humiliate the country and effectively turn it in to a Saudi vassal.

The dispatch of Turkish troops as well as Turkish and Iranian offers to help Qatar offset the impact of the boycott by ensuring that its food and water needs are met positions the Gulf crisis and Saudi Arabia’s proxy war with the Islamic republic as a political rather than a sectarian battle. Sunni Turkey and Shiite Iran countering of the Saudi-UAE campaign undermines the kingdom’s effort to project its rivalry with Iran as both a sectarian conflict and a power struggle.

The dispatch of troops and the emergence of a pro-Qatari alliance opposed to that of Saudi Arabia also eases pressure on non-Arab Muslim states to take sides. By raising the stakes, Turkey and Iran could potentially contribute to efforts to find a political solution to the crisis.

The move to quickly dispatch troops to Qatar came a day after Turkish President Recep Tayyip Erdogan condemned the Saudi-UAE effort to isolate sanctions and cripple it with sanctions. Mr. Erdogan warned that the moves would fail to solve problems and said he would do what he could to end the crisis.

Kuwait is already attempting to bridge the gap between the Gulf states and Qatar while the United States and Germany have called for a political solution. Iranian Foreign Minister Javad Zarif was scheduled to visit Ankara to discuss ways of resolving the Gulf crisis.

That may prove to be easier said than done. Saudi Arabia and the UAE are bent on avoiding a repeat of 2014 when Qatar failed to respond to the withdrawal of the Saudi, Emirati and Bahraini ambassadors from Doha by caving in to their demands that it halts its support for Islamists and militants. The three countries were forced to return their ambassadors after an absence of nine months with little to show for their action.

Leaders of Saudi Arabia and the UAE have moreover put their credibility on the line by not only breaking off diplomatic relations but also imposing a harsh boycott. The UAE, apparently concerned that the boycott, and particularly the targeting of food supplies, could spark domestic criticism, made expressions of sympathy with Qatar a criminal offense punishable with up to 15 years in prison and/or a fine of at least US$ 136,000. Up to 40 percent of Qatar’s approximately $1 billion in food exports a year were trucked to Qatar from Saudi Arabia until this week’s eruption of the crisis.

Also raising the stakes is the fact that a Qatar capable of resisting Saudi and UAE pressure would effectively contribute to a Muslim bloc in the Middle East that stands for everything Saudi Arabia and the UAE are seeking to defeat.

Inevitably, closer Qatari ties with Turkey as well as Iran, with which the Gulf state shares the world’s largest gas field, would become a fixture of Middle Eastern geopolitics. Iran is already helping Qatar not only with food but also by allowing Qatar Airways flights to Asia to cross Iranian airspace in their bid to circumvent Saudi, UAE and Bahrain airspace that has been closed to them.

Beyond demonstrating that Qatar is not alone in its fight, the dispatch of Turkish troops would also seek to dissuade Saudi Arabia and the UAE from intervening directly in the Gulf state.

Turkey and Qatar have long pursued similar policies. Both countries supported the 2011 popular Arab revolts.

By contrast, Saudi Arabia and the UAE went to great length to thwart their success., including helping engineer the military coup that in 2013 toppled Mohammed Morsi, a Muslim brother and Egypt’s first and only democratically elected president. Saudi and UAE troops also helped Bahrain brutally squash its 2011 popular uprising.

Turkey and Qatar moreover both support the Muslim Brotherhood, rebels fighting Syrian President Bashar al-Assad, and Islamist groups in divided Libya. The UAE and Saudi Arabia alongside Egypt back the internationally recognized Tobruk-based Libyan government that joined them in breaking off relations with Qatar.

Turkey set up a military base in Qatar with some 150 troops, its first in the Middle East, as part of an agreement signed in 2014. Turkish officials have since said Turkey’s presence would be increased to some 3,000 troops.

Turkey’s move to expedite the dispatch of additional troops to Qatar came as UAE state minister for foreign affairs Anwar Gargash said that one “cannot rule out further measures. We hope that cooler heads will prevail, that wiser heads will prevail and we will not get to that.”

Accusing Qatar of being “the main champion of extremism and terrorism in the region,” Mr. Gargash insisted that “this is not about regime change — this is about change of policy, change of approach.”

Egyptian, Emirati and Saudi newspapers, none of which are known to be truly independent, reported in recent days that domestic opposition to Qatari emir sheikh Tamim was mounting.

“We have long been silent about the irrational practices of the regime in Qatar,” Sheikh Saud bin Nasser Al-Thani, a little known member of the ruling family which is believed to account for up to 20 percent of Qatar’s citizens, told Egypt’s Youm7 newspaper.

The newspaper reported that opponents of Sheikh Tamim would form a London-based opposition paper headed by Sheikh Abdelaziz Bin Khalifa Al-Thani, an uncle of the emir and former oil and finance minister, who was accused of involvement in a failed effort in 2011 by Qatari military officers to overthrow Sheikh Tamim’s father and predecessor, Sheikh Hamad bin Khalifa Al Thani.

Abu Dhabi’s The National newspaper reported that the party would advocate a Qatari policy in line with Saudi and UAE demands, including curbing the activities of Sheikh Hamad’s wife, Sheikha Mozah Al-Misnad, who heads Qatar Foundation; freezing Qatar’s relations with Iran, ending Qatari support for Islamists in Libya and Egypt, and expelling Islamist leaders from the Gulf state.

“On behalf of the Qatari people, we offer the highest apology to the people of Saudi Arabia, the UAE, Kuwait, Bahrain, Egypt, Yemen and other countries that have been abused and harmed by the Qatari regime. We inform you that the Qatari people do not approve of the national policies that seek to shatter the Arab unity,” Sheikh Saud said in a statement carried by Egypt Today.

“Qataris are questioning whether this is going to end up in seeing a change in leadership itself in Qatar,” added Sultan Sooud Al Qassemi, a prominent liberal intellectual, art collector and businessman who is a member of the ruling family of the UAE emirate of Sharjah.

Earlier, Salman al-Ansari, the head of the Saudi American Public Relation Affairs Committee (SAPRAC), a Washington-based lobby, warned Sheikh Tamim that he could meet the same fate as Mr. Morsi, the toppled Egyptian president.

The Arab press reports notwithstanding, there is little by which to gauge possible support for opposition to Sheikh Tamim among the military or the public in Qatar, which like others in the region controls its media but has not imposed the kind of draconic penalties on freedom of expression introduced this week in the UAE.

Whatever the case, Qatar and Turkey hope that a substantial presence of Turkish troops rather than the fact that Qatar also hosts 10,000 US troops on the largest US military facility in the Middle East, would complicate, if not dampen, any plans to force Sheikh Tamim’s exit.

Said Mr. Al Qassemi: “The Qataris should not count on that base as being a guarantee or sort of American protection when it comes to conflict with Saudi Arabia. I think the Americans would choose to side with Saudi Arabia over any other country in the region.”

The statements and views expressed in this article are those of the author and do not necessarily represent those of IPS.

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In Volatile Times, the U.A.E. calls for Tolerancehttp://www.ipsnews.net/2017/06/in-volatile-times-the-u-a-e-calls-for-tolerance/?utm_source=rss&utm_medium=rss&utm_campaign=in-volatile-times-the-u-a-e-calls-for-tolerance http://www.ipsnews.net/2017/06/in-volatile-times-the-u-a-e-calls-for-tolerance/#respond Thu, 08 Jun 2017 06:23:08 +0000 Rose Delaney http://www.ipsnews.net/?p=150804 With terror attacks on the increase worldwide, there are more people today who believe that it has something to do with the religion of Islam. Seeds of misinformation are taking root and the divide between peoples and cultures is ever increasing. The promotion of tolerance is critically important now more than ever. Undoubtedly, bigotry has […]

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By Rose Delaney
MIAMI, Jun 8 2017 (IPS)

With terror attacks on the increase worldwide, there are more people today who believe that it has something to do with the religion of Islam.

Sheikha Lubna Al-Qasimi

Sheikha Lubna Al-Qasimi

Seeds of misinformation are taking root and the divide between peoples and cultures is ever increasing. The promotion of tolerance is critically important now more than ever.

Undoubtedly, bigotry has increased worldwide and violent hate crimes have risen exponentially. The recent epidemic of “fake news” utilized by major media outlets and the outbreak of anti-Islamic sensationalism have only worsened the situation and fueled further conflict and division.

The United Arab Emirates (U.A.E..) is widely considered to be a multicultural “marvel” of the Middle East. The country proudly hosts an ethnically diverse population with over 200 nationalities living in harmony.

The U.A.E.’s leadership promotes a positive image of Islam but also sets an example of peace and tolerance of all world religions in the country.

The U.A.E. and its multi-ethnic population aim to be an international role model for “acceptance, coexistence, and understanding.”

The U.A.E. today is considered a globalized symbol of acceptance and progression. Recently, an anti-discriminatory law was passed which forbids citizens and residents alike from discriminating against anyone on the grounds of caste, creed, culture or religion.

In 2016, U.A.E.’s first Ministry of Tolerance was officially established with Sheikha Lubna Al-Qasimi as its minister. Al-Qasimi believes that the Arab world has a great responsibility when it comes to ensuring the universal spread of tolerance and acceptance. She emphasizes the pivotal role youth and the global media play in the understanding and celebration of religious and ethnic diversity.

To instill values of cultural and religious acceptance everywhere, the government of the U.A.E. believes institutions of tolerance should be established on a global scale, especially in volatile times of terror and extremism.

The proliferation of these institutions would act as symbols of peace and co-existence, ensuring global societies that universal tolerance is achievable and can become a tangible reality.

Al-Qasimi recognizes that transparency in the media is vital during periods of fear and instability and emphasizes that the global dissemination of positive and tolerant news content is a critical form of “protection against extremism”.

At the 16th Arab Media Forum (AMF) held in Dubai last month, Al Qasimi highlighted that the media played a key role in the universal perception of Islam. The rise of “fake news” has proven detrimental to the promotion of universal tolerance. The media has a duty to “correct misconceptions about the image of the Arab world,” Al Qasimi said.

This ties in with the fact that global media content has lately been used as a weapon of divisive manipulation, rather than a method of progressing and sustaining universal harmony and acceptance.

The U.A.E.’s President, Sheikha Khalifa bin Zayed Al Nahyan, also considers the media to be a key player in the advancement of universal tolerance.

For this reason, Al Nahyan has committed to providing full support for the development of transparent media in his home nation. The U.A.E. encourages its media to disseminate, along with other institutions, the values of acceptance and open dialogue across all walks of society.

“Responsible media that fully understands its role and mission is a fundamental tool in countering extremist and terrorist ideology amid the widespread digital media that has a powerful influence on people’s thoughts and orientations,” Al Nahyan says.

Al Nahyan recognizes that the future development of tolerance rests largely on the perceptions and messages spread by the global media. “The media is not just a profession“, Al Nahyan stated. It is rather, in his belief, a vital means to spread the message of global justice and truth. In other words, it is high time the media stop being used a sensationalized tool to stir divisive controversy and “boost ratings” based on the plight of the stigmatized.

Al Nahyan highlighted the fact that the proliferation of positive media could only lead to effective nation-building and progress. Furthermore, it can help break down the negative perceptions surrounding Islam and the Middle East itself by drawing back to the multicultural and accepting values, ethics and traditions of Emirati society.

In an increasingly globalized world dominated by the trends of social media, the voice of youth undoubtedly holds a tremendous degree of power. The multicultural array of young professionals and students that make up U.A.E.’s fast growing population are actively encouraged to act as tomorrow’s leading voices in the pursuit of universal tolerance.

In the U.A.E., “the sky really appears to be the limit” for its young adult population. Its ministry of youth is led by the youngest minister in the world, 23-year-old Shamma bint Suhail Faris Al Mazrui. For many Emirati youths, spreading the principles of harmonious unity and actively condemning all forms of divisive extremism are a core objective, especially for the protection and benefit of upcoming generations.

As the rise of extremism threatens global security, the U.A.E. aims to encourage all forms of tolerance with the belief that through open dialogue and a strong sense of unity, the global community could overcome adversity.

However, the question remains, are other countries willing to follow the U.A.E.’s model of peaceful co-existence, or will ongoing extremism and divisive Islamophobic media campaigns hinder the U.A.E.’s idealistic vision of universal tolerance? Only time will tell.

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Secret Companies Allow Corrupt Cash to Flood Key Real Estate Marketshttp://www.ipsnews.net/2017/03/secret-companies-allow-corrupt-cash-to-flood-key-real-estate-markets/?utm_source=rss&utm_medium=rss&utm_campaign=secret-companies-allow-corrupt-cash-to-flood-key-real-estate-markets http://www.ipsnews.net/2017/03/secret-companies-allow-corrupt-cash-to-flood-key-real-estate-markets/#comments Thu, 30 Mar 2017 12:33:32 +0000 IPS World Desk http://www.ipsnews.net/?p=149703 The governments of Australia, Canada, the UK and the US need to close glaring legal loopholes to prevent the corrupt elite from laundering the proceeds of grand corruption in their local real estate markets, a major anti-corruption watchdog urges. The Berlin-based Transparency International (TI), a global anti-corruption movement working in over 100 countries, on March […]

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"Caution Bribe Coming Through." March in Washington, DC, April 13, 2013, by Represent.Us. Credit: Djembayz. Creative Commons Attribution-Share Alike 3.0 Unported license.

By IPS World Desk
ROME/BERLIN, Mar 30 2017 (IPS)

The governments of Australia, Canada, the UK and the US need to close glaring legal loopholes to prevent the corrupt elite from laundering the proceeds of grand corruption in their local real estate markets, a major anti-corruption watchdog urges.

The Berlin-based Transparency International (TI), a global anti-corruption movement working in over 100 countries, on March 29 issued a new report, Doors Wide Open: Corruption and Real Estate in Key Markets, in which it identifies the 10 main problems related to real estate and money laundering in those four countries and makes recommendations on how to address them.

The report focuses on four countries that are known hot-spots for the corrupt to invest and launder money.

“Governments must close the loopholes that allow corrupt politicians, civil servants and business executives to be able to hide stolen wealth through the purchase of expensive houses in London, New York, Sydney and Vancouver,” said José Ugaz, Chair of Transparency International.

“The failure to deliver on their anti-corruption commitments feeds poverty and inequality while the corrupt enjoy lives of luxury,” Ugaz added.

Real estate has long provided a way for individuals to secretly launder or invest stolen money and other illicitly gained funds, TI informs, adding that according to the Financial Action Task Force (FATF), real estate accounted for up to 30 per cent of criminal assets confiscated worldwide between 2011 and 2013.

“Not only do expensive apartments in New York, London or Sydney raise the social status of their owners and allow them to live in luxury, they are also an easy and convenient place to hide hundreds of millions of dollars from criminal investigators, tax authorities or others tracking criminal behaviour and the proceeds of crime.”

Failure to Detect, Prevent Money Laundering in Real State

The international anti-corruption group found that despite anti-corruption promises by government in the countries covered in the report, current rules and practices have failed to detect and prevent money laundering in the real estate sector.

“Strikingly, Australia, Canada and the US rely almost exclusively on banks to stop money laundering, even though a slew of middlemen including real estate agents, accountants, tax planners, lawyers and others participate in deal-making.“

This makes all-cash deals, which do not require the involvement of a bank and which represent a significant proportion of high-end sales made to overseas investors, especially difficult to track, says TI.

Only the UK requires that checks are made on people selling real estate in order to identify suspicious activity and identify the real owners of the property.

However, TI emphasises that the same checks by real estate agents are not required on the buyers – where the highest risk of money laundering exists – leaving a gaping hole in the sector’s defences against corrupt money.

The report also finds that offshore companies pose a serious risk in all four countries because they are able to purchase property without needing to disclose any information relating to who ultimately owns and controls them to any government authority. The UK has committed to establish a registry to collect and publish this information.

None of the countries analysed have tests in place for professionals working in the real estate sector in order to assess whether they are aware of their anti-money laundering obligations, TI informs and adds that very little information is published regarding any sanctions applied to real estate agents, lawyers, accountants and notaries for facilitating money laundering into the real estate sector.

Transparency International makes the following recommendations:
• Governments should require all middlemen to identify and keep records of the real, beneficial owners of legal entities, trusts and other legal arrangements in real estate sales.
• Governments should require that both domestic and foreign politically-exposed-persons, their family members and close associates purchasing property be automatically identified as high-risk clients. Additional preventive measures such as enhanced due diligence should be implemented.
• Governments should require foreign companies that wish to purchase property to provide beneficial ownership information. This information should be kept in a central beneficial ownership registry and made available to competent authorities and the public in open data format.
• Governments should require real estate agents to register with a designated public authority for anti-money laundering supervision in order to operate in the real estate sector, and be tested to show they know the rules. Anti-money laundering training should be made compulsory upon registration.
• Governments and professional associations should introduce rules requiring lawyers, accountants and other professionals who are not registered with the relevant anti-money laundering supervisor to be prohibited from engaging in real estate deals.

Click here to access both the full report and the full list of the top 10 money laundering loopholes.

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The Robots are Coming, your Job is at Riskhttp://www.ipsnews.net/2017/03/the-robots-are-coming-your-job-is-at-risk/?utm_source=rss&utm_medium=rss&utm_campaign=the-robots-are-coming-your-job-is-at-risk http://www.ipsnews.net/2017/03/the-robots-are-coming-your-job-is-at-risk/#respond Wed, 15 Mar 2017 11:23:54 +0000 Martin Khor http://www.ipsnews.net/?p=149421 Martin Khor is Executive Director of the South Centre, a think tank for developing countries, based in Geneva.

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Credit: John Greenfield/Flickr

Credit: John Greenfield/Flickr

By Martin Khor
PENANG, Mar 15 2017 (IPS)

Last year Uber started testing driver-less cars, with humans inside to make corrections in case something goes wrong. If the tests go well, Uber will presumably replace their present army of drivers with fleets of the new cars.

Some personally owned cars can already do automatic parking.   Is it a matter of time before Uber, taxi and personal vehicles will all be smart enough to bring us from A to B without our having to do anything ourselves?

But in this application of “artificial intelligence”, in which machines can have human cognitive functions built into them, what will happen to jobs?   It is estimated that in the US alone, 4 to 5 million drivers of trucks and taxis could be rendered unemployed.

The driver-less vehicle is just one example of the technological revolution that is going to drastically transform the world of work and living.

The risk of automation to jobs in developing countries is estimated to range from 55 to 85 per cent, according to a study in 2016 by Oxford University’s Martin School and Citi. Major emerging economies will be at high risk, including China (77%) and India (69%), higher than the OECD developed countries’ average risk of 57%.
There is concern that the march of automation tied with digital technology will cause dislocation in many factories and offices, and eventually lead to mass unemployment.

Just a day before he left office, former US President Barrack Obama warned in a farewell interview that “jobs are going away because of automation and that’s going to accelerate,” pointing to “driverless Uber” and “displacement that’s going to take place in office buildings across the country.”

Also voicing concern about the social impact of automation, Microsoft founder Bill Gates recently proposed that governments should impose a tax on robots.  Companies using robots should have to pay taxes on the incomes attributed to the use of robotics.

That proposal has caused an uproar, with mainstream economists like Lawrence Summers, a former US treasury secretary, condemning it for putting brakes on technological advancement.  One critic suggested that the first company to pay taxes for causing automation should be Microsoft.

However, the tax on robots idea is one response to growing fears that the automation revolution will increase inequality as many lose their jobs while a few reap the benefits of increased productivity and profitability.

The new technologies will cause uncontrollable disruption and add to the social discontent and political upheaval in the West which had fuelled the anti-establishment votes for Brexit and Donald Trump.

Recent studies are showing that deepening use of automation will cause widespread disruption in many sectors and even whole economies.  Worse, it is the developing countries that are estimated to lose the most, and this will exacerbate the already great global inequalities.

The risk of automation to jobs in developing countries is estimated to range from 55 to 85 per cent, according to a study in 2016 by Oxford University’s Martin School and Citi.  Major emerging economies will be at high risk, including China (77%) and India (69%), higher than the OECD developed countries’ average risk of 57%.

The Oxford-Citi report, “The future is not what it used to be”, provides many reasons why the automation revolution will be particularly disruptive in the developing countries.

First, there is “premature deindustrialisation” taking place as manufacturing is becoming less labour-intensive and many developing countries have reached the peak of their manufacturing jobs.  Manufacturing processes are more automated today, also in low and middle income developing countries.

Martin Khor

Martin Khor

Second, while 20th century technologies allowed companies to shift production abroad to take advantage of cheap labour, recent developments in robotics and additive manufacturing now enable firms to locate production closer to domestic markets in automated factories.

Seventy per cent of clients surveyed believe automation and 3D printing developments will encourage companies to move their manufacturing close to home.  China, ASEAN and Latin America have the most to lose from this relocation, while North America, Europe and Japan are the main winners.

Thirdly, “the impact of automation may be more disruptive for developing countries, due to lower levels of consumer demand and limited social safety nets” as compared to the developed countries, according to a summary of the Oxford Martin School report.

The report warns that developing countries may even have to rethink their overall development models as the old ones that were successful in generating growth in the past will not work anymore.

“In the light of these technological developments, industrialization is likely to yield substantially less manufacturing employment in the next generation of emerging economies than in the countries preceding them.  Hence it will be increasingly difficult for African and South American manufacturing firms to create jobs in the same numbers that Asian countries have done.  In other words, today’s low-income countries will not have the same possibility of achieving rapid growth by shifting workers from farms to higher-paying factory jobs.”

Instead of export-led manufacturing growth, developing countries will need to search for new growth models, said the report.  “Service-led growth constitutes one option, but many low-skill services are now becoming equally automatable.”

It cites a World Bank report showing developing countries are highly susceptible to their workforce being affected by increasing automation, even relative to advanced economies where labour costs are high.

Moreover, countries with lower levels of GDP per capita typically have a higher share of their workforce “at risk”.   “Thus there are reasons to be concerned about the future of income convergence, as low income countries are relatively vulnerable to automation,” concludes the report.

Another series of reports, by McKinsey Global Institute, found that 49% of present work activities can be automated with currently demonstrated technology, and this translates into US$15.8 trillion in wages and 1.1 billion jobs globally.

About 60% of all occupations could see 30% or more of their activities automated and 5% of jobs can be entirely automated.  But more reassuringly an author of the report James Manyika says the changes will take decades.   How automation affects jobs will not be decided simply by what is technically feasible.   Other factors include economics, labour markets, regulations and social attitudes.

Which jobs are most susceptible to be affected?  While most people think they would be in manufacturing, in fact many jobs in services will also be disrupted.   The McKinsey study lists accommodations and food services as the most vulnerable sector in the US, followed by manufacturing and retail business.

In accommodations and food, 73% of activities workers perform can be automated, including preparing, cooking or serving food; cleaning food-preparation areas, preparing beverages and collecting dirty dishes.

In manufacturing, 59% of all activities can be automated, especially physical activities or operating machinery in a predictable environment.  Activities range from packaging products to loading materials on production equipment to welding to maintaining equipment.

For retailing, 53% of activities are automatable.  They include stock management, packing objects, maintaining sales records, gathering customer and product information, and accounting.

A technology specialist writer and consultant, Shelly Palmer, has also listed elite white-collar jobs that are at risk from “robots” which she defines as technologies, such as machine learning algorithms running on purpose-built computer platforms, that have been trained to perform tasks that currently require humans to perform.

Those she assessed would be displaced include middle managers, salespersons, report writers, journalists and announcers, accountants, bookkeepers and doctors.

While some analysts are enthusiastic about the positive effects of the automation revolution, others are alarmed by its adverse effects.

Certainly, the technological trend will improve productivity per worker that remains, and increase the profitability of companies that survive.

While there are benefits at the micro level for those companies and individuals that thrive in the new environment, there are adverse effects at macro level, especially retrenchment for those whose jobs are no longer needed.

What can be done to slow down automation or at least to cope with its adverse effects?

The Bill Gates proposal to tax robots is one of the most radical.   The tax could slow down the technological changes and the funds generated by the tax could be used to mitigate the social effects.

Another radical idea which is generating a lot of debate is to provide “universal income” to everyone irrespective of whether they are working.  The high productivity will allow everybody to be paid a comfortable income, and thus there is no need to worry that automation will displace jobs.

Governments can also take the attitude of “join them if you can’t beat them.”  For example, China is seeing major opportunities in joining the technological revolution and has drawn up plans to invest in robotics and artificial intelligence.

Other more conventional proposals include upgrading the education of students and present employees to take on the new jobs required in managing or working with the automated production process, and training workers to be made redundant with the new skills needed to work in the new environment.

Overall, however, there is likely to be a net loss of employment, at least in the short term, and thus the potential for social discontent.

As for the developing countries in general, there will have to be much thinking of the implications of the new technologies for their immediate and long-term economic prospects, and a major rethinking of economic and development strategies is also called for.

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