Inter Press Service » Inequity http://www.ipsnews.net News and Views from the Global South Mon, 29 May 2017 18:23:18 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.18 International Finance Governance Undemocratichttp://www.ipsnews.net/2017/05/international-finance-governance-undemocratic/?utm_source=rss&utm_medium=rss&utm_campaign=international-finance-governance-undemocratic http://www.ipsnews.net/2017/05/international-finance-governance-undemocratic/#comments Tue, 23 May 2017 17:01:51 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=150548 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. ]]> Current international coordination leaves a lot to be desired. Credit: IPS

Current international coordination leaves a lot to be desired. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, May 23 2017 (IPS)

Why is it so difficult to achieve meaningful coordination when everybody agrees that it is desirable, if not necessary? President Richard Nixon’s withdrawal of the US from and hence termination of the Bretton Woods system in 1971 confirmed the end of the post-war Golden Age. This led to slower growth, greater volatility, more instability, and reduced progress in raising economic welfare, among other consequences.

Multilateral governance compromised
The Bretton Woods institutions (BWIs) — World Bank and International Monetary Fund (IMF) — were initially conceived as part of a post-war system of multilateral governance to ensure the conditions for peace, growth, development, employment and prosperity. Today, however, their governance arrangements are very different from those of rest of the UN system, despite all its variety, and this is part of the problem. In New York, the UN is governed by ‘one country, one vote’, at least at the General Assembly.

The role of the BWIs and their relationship with the rest of the UN system have also changed significantly over time. Europe is over-weighted in the BWIs while developing countries are under-weighted by the formula for determining voting weights. These governance arrangements have created a sense of exclusion as developing countries feel they have not been fairly represented, especially after decades of dilution of the weight of the ‘basic vote’.

For example, in the mid-1940s, there were 44 members, with the weight of their collective ‘basic votes’ totaling 11.4 per cent. Today, there are 189 members, so if the weight of the basic vote remained the same, the total weight of the members would be just under half (189/44 x 11.4%). A few years ago, total basic votes only accounted for 2.2 per cent, or less than 5% of what they should have been!

Governance vacuum

While the IMF is undoubtedly influential in various matters under its jurisdiction, there is no overall governance mechanism for finance comparable to the World Trade Organization (WTO) for trade. Through the General Agreement on Trade in Services (GATS), it has been the WTO which has been facilitating, without supervising, financial services liberalization.

Besides the WTO, the Bank of International Settlements, the Basel Committee on Banking Supervision, the Financial Stability Board and other international organizations have limited jurisdiction in other cross-border financial matters. Meanwhile, important UN initiatives, e.g., the Financing for Development (FfD) conferences, have been largely stymied and ignored in various discussions on international financial reform as the governments of OECD economies prefer the grossly undemocratic decision making arrangements in the Bretton Woods institutions to those of the rest of the UN system.

North Atlantic divide

Such governance issues inevitably undermine legitimacy, and thus constrain more effective global coordination, but of course, there are other problems as well. For many years, there have been some important differences across the Atlantic, arguably since the 1960s.

During the recent crisis, the European approach initially relied on long-standing ‘automatic stabilizers’, arguing that Europe did not need the big fiscal stimuli which the US and the UK – untypically — advocated in 2009. Later, the European Central Bank warned incessantly of the threat of inflation, while the IMF inconsistently shared the view of the rest of the UN system, that the bigger threat was that of deflation and stagnation.

Instead of providing a desperately needed, coordinated, counter-cyclical fiscal stimulus to the world economy, under the leadership of the then UK Prime Minister Gordon Brown, the G-20 committed to a huge capital infusion for the IMF. It would have been better if the G-20 had provided this capital boost on condition that the IMF reforms itself to pro-actively revive and sustain global economic growth and to better serve developing countries. Without sufficiently reforming itself, the IMF has continued to suffer from legitimacy and credibility problems, undermining its ability to provide more effective leadership.

From G-7 to G-20
Although current international coordination leaves a lot to be desired, there have been some modest and generally unsuccessful efforts to improve the situation. For instance, there were some efforts to improve coordination by the G-7 as well as in Europe at the annual IMF-World Bank meetings in October 2008 and soon afterwards as well, but these efforts did not achieve much.

Meanwhile, then President Sarkozy of France initiated an unprecedented G-20 summit to be held at the UN with Secretary-General Ban. US President George W Bush later insisted on hosting the summit in mid-November 2008 in Washington DC. (The G-20 group of Finance Ministers had been meeting for a decade after it was created by then US Treasury Secretary Larry Summers and Canadian Finance Minister Paul Martin after the 1997-1998 Asian crisis.) In the following month, the G-20 heads of government met for the very first time, and have continued to meet since with limited consequence after 2009.

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The ‘Public’ in Public Healthhttp://www.ipsnews.net/2017/05/the-public-in-public-health/?utm_source=rss&utm_medium=rss&utm_campaign=the-public-in-public-health http://www.ipsnews.net/2017/05/the-public-in-public-health/#comments Mon, 22 May 2017 22:08:43 +0000 Vani Kulkarni http://www.ipsnews.net/?p=150532 Vani S. Kulkarni teaches Sociology at University of Pennsylvania, Philadelphia]]> hospital2

By Vani S. Kulkarni
PHILADELPHIA, May 22 2017 (IPS)

 

The discourse must move beyond a top-down approach to listen to the people and formulate best insurance practices

Much ink has been spilled in documenting the inadequacy of budgetary allocations for public health insurance, specifically for the Rashtriya Swasthya Bima Yojana (RSBY), the world’s largest publicly-funded health insurance (PFHI) scheme. Though the 2017-18 budget allocation has marginally increased from last year’s revised estimates, it has declined relative to last year’s budgeted amount by about ₹500 crore. However, higher budgetary allocation can only constitute a small part of the solution to the scheme’s mixed, if not lacklustre, performance.

Vani S. Kulkarni

Vani S. Kulkarni

Under the scheme, a Below Poverty Line (BPL) family of five is entitled to more than 700 treatments and procedures at government-set prices, for an annual enrolment fee of ₹30. However, even nine years after its implementation, it has failed to cover a large number of targeted families — almost three-fifths of them. Their exclusion has been due to factors like the prevalent discrimination against disadvantaged groups; a lack of mandate on insurance companies to achieve higher enrolment rates; and an absence of oversight by government agencies.

Increase in hospitalisation
True, there has been a substantial increase in hospitalisation rates. However, it is unclear if it has enabled people to access the genuinely needed, and hitherto unaffordable, inpatient care. Often, doctors and hospitals have colluded in performing unnecessary surgical procedures on patients to claim insurance money. For instance, hospitals have claimed reimbursements worth millions of rupees for conducting hysterectomies on thousands of unsuspecting, poor women. Indeed, in the absence of regulations and standards, perverse incentives are created for empanelled hospitals to conduct surgeries. It is thus not surprising that there is no robust evidence of an improvement in health outcomes.

Evidence on the financial protection front is conflicting as well. One study revealed that poorer households in districts exposed to the RSBY and other PFHIs recorded an increase in out-of-pocket (OOP) expenditures for hospital care, and a corresponding rise in incidence of catastrophic expenditure. There is near-consensus that the RSBY has resulted in higher OOP expenditures. Though it is a cashless scheme, many users are exploited by unscrupulous hospital staff.

So, what is the solution? There is a need to bring the ‘public’ back into the discourse on public health to highlight its present culture. The conversation needs to move beyond a top-down approach specifying budget allocation and administrative and technical efficiency. It needs to involve listening to the real public to deliberate on various health practices and policies.

My ethnographic study of the RSBY in Kalaburagi and Mysuru districts between 2014 and 2016 brought to light that a top-down approach on allocation and coverage was important but, by itself, did not translate to expected outcomes. What mattered more was the existing culture of health insurance — how it was perceived, practised and experienced in the everyday, local worlds of the enrolled households. Though they valued aspects like the money available and the number of illnesses covered, they were more deeply affected by how other actors — doctors, local officials, neighbours and even relatives — related to health insurance.

Card not accepted
The disillusionment of Savitri, one of the beneficiaries, after obtaining the plastic card said it all: “If public officials only give us the card without telling us how to use it, the card is just plastic material. Sometimes information is also not correct, making us feel that the card is of no real value if we do not know how to use it.” Further, many hospitals refused to acknowledge the card’s value. Shivakumar’s observation summed it well: “We went to the hospital with the card. Not only could it not be used but also the doctors did not even acknowledge us as patients… We just brought the card home and tossed it to the shelf.” Many bemoaned the absence of public debate on health issues and the RSBY card. Deva’s pithy response was illustrative: “If it is not talked about and debated, we can only think that there is no big value that we should pay attention to.”

Households clearly separated the economic value from social ones. A section saw health insurance as a bad omen, one that announced arrival of illness. Ramesh Kumar, among those in his neighbourhood who refused to enrol, explained: “This card is not a solution for illness, it is a cause of it. You see, when you people knock on our doors to give us the card, it feels like an illness is knocking on our doors. The farther away we are from the card, the further we are from health problems.”

Overall, while the discourse on a greater allocation to RSBY and enhancement of cost-effectiveness are important, a shift of emphasis is needed, bringing the ‘public’ back into the sphere of public health.

The oped first appeared in The Hindu.

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At the UN Oceans Forum in June, Will the US Play a Bit Part?http://www.ipsnews.net/2017/05/at-the-un-oceans-forum-in-june-will-the-us-play-a-bit-part/?utm_source=rss&utm_medium=rss&utm_campaign=at-the-un-oceans-forum-in-june-will-the-us-play-a-bit-part http://www.ipsnews.net/2017/05/at-the-un-oceans-forum-in-june-will-the-us-play-a-bit-part/#comments Thu, 18 May 2017 18:54:11 +0000 Lori Silberman Brauner http://www.ipsnews.net/?p=150466 Oceans contribute substantially to US wealth, but it’s unclear how much the government will participate in the UN’s first oceans conference. Lucena, Philippines, above. JOE PENNEY

Oceans contribute substantially to US wealth, but it’s unclear how much the government will participate in the UN’s first oceans conference. Lucena, Philippines, above. JOE PENNEY

By Lori Silberman Brauner
UNITED NATIONS, May 18 2017 (IPS)

In just a few weeks, the United Nations is convening a world gathering to discuss the health of the world’s oceans and seas, with member states, government and nongovernmental organizations, corporations and members of the scientific community and academia signed up to take part.

Yet while representatives from America’s private sector and academic community — even the state of California — will be participating, so far it is not clear what role, if any, the United States government, the UN’s most important member, will take in the conference.

To be held June 5 to 9 at UN headquarters in New York City, the main objective of the conference is to support the implementation of sustainable development goal No. 14, which calls to “conserve and sustainably use the oceans, seas and marine resources for sustainable development.”

The predecessor to the SDGs, as they are called, did not reference the ocean or seas in a single goal. The conference agenda is wide ranging, with panel discussions on financing the “blue economy” for small island developing nations to “women and girls in science for ocean.”

“If the cycle of decline that accumulated human activity has brought upon the ocean is not reversed, the implications for us all cannot be good,” said UN General Assembly President Peter Thomson in a newsletter from the conference’s co-chairs, Sweden and Fiji. (Thomson is Fijian.) “Anyone who cares about the health of the ocean can and should get involved.”

While the US has agreed to participate in the conference — showing up, at a minimum — a State Department press officer said that planning for the meeting, which is the first to focus on a single development goal, was “ongoing.” The office added that it had nothing else to offer at this time.

Another State Department official, who also asked not to be named, told PassBlue that the US was finalizing its delegation, including who would serve as the delegation’s head, and that “we intend to be actively engaged in the June Conference.”

Press officers at the US mission to the UN, which is still in a period of transition since Trump took office, did not respond to emails for comment.

Low-ranking US mission employees have been attending negotiations on the conference’s summary statement, or “call for action.” Moreover, the State Department maintains a Bureau of Oceans and International Environmental and Scientific Affairs; its acting assistant secretary is Judith Garber.

While the conference will attract governments and other major representatives from across the world — as every nation has a connection to the ocean — a UN organizer said that the hope was that a powerful country or individual would initiate actions to get the world to pay closer attention to SDG 14 and the state of the oceans, which cover 75 percent of the planet.

That could mean the US, the person said. After all, Trump owns many resorts located on oceanfront property, deriving profit from such views, access and cooling effects. Mar-a-Lago, his private home and private golf club in Palm Beach, Fla., is minutes from the Atlantic.

“Oceans contributed more than 3 million jobs and $300 billion to the U.S. GDP,” Jacqueline Savitz, a senior vice president for U.S. Oceans and Global Fishing Watch at Oceana, an advocacy group, noted. “Much of that depends on ocean health, which in turn depends on international action. That’s why the U.S. simply can’t afford not to lead on ocean protection, so we hope to see a continuation of U.S. leadership at the UN Oceans Conference.”

The conference comes on the heels of the Arctic Council ministerial-level meeting held earlier this month in Fairbanks, Alaska, offering a window as to how the US may approach the UN event. The Council, comprised of eight Arctic nations that include the US, completed its two-year chairmanship at the gathering.

The ministers issued a final statement, the Fairbanks Declaration 2017, reaffirming the Council’s commitment to maintaining peace, stability and constructive cooperation, among other crucial aspects to the future of the Arctic Circle.

Climate change was on the Fairbanks agenda. “Noting with concern that the Arctic is warming at more than twice the rate of the global average,” the declaration also recognized “the entry into force of the Paris Agreement on climate change and its implementation, and reiterating the need for global action to reduce both long-lived greenhouse gases and short-lived climate pollutants.”

US Secretary of State Rex Tillerson attended the conference as chairman of the Council and signed the declaration, despite the Trump administration’s wavering over whether to remain a party to the Paris Agreement. (Garber of the Oceans bureau in the State Department also attended.)

US Secretary of State Rex Tillerson attended the meeting of the Arctic Council as chairman, May 11, 2017.

US Secretary of State Rex Tillerson attended the meeting of the Arctic Council as chairman, May 11, 2017.

The Council meeting also follows an executive order issued by Trump directing a review of offshore oil and gas exploration in the Arctic, reversing Obama’s Arctic leasing ban. (A question by this reporter to Garber’s office about the order was directed to the White House.)

Negotiators on the Oceans Conference call for action are also wrestling with references to the Paris Agreement. The latest version of the document said it recognized “the particular importance of the Paris Agreement,” but discussions continue from May 22 to 25 at the UN, so that language could be dropped or changed.

Many environmental challenges hurt the ocean, as a background note for the conference said: “Marine pollution and litter, 80 percent of which come from land-based sources, compromise ocean health.”

A quarter of all carbon dioxide released through human activity is absorbed by the oceans and raises the seawaters’ acidity, and nearly one-third of all fish stocks are below sustainable levels, up from 10 percent in 1974. The note also stated that the deterioration of coastal and marine ecosystems and habitats has a more severe and immediate impact on vulnerable groups, such as small island developing states like Fiji.

The conference will feature plenary meetings, partnership “dialogues” in which less-developed nations will chair events with richer countries, and a commemoration of World Oceans Day on June 8.

In February, when negotiations began on the call for action and the partnership-dialogue themes, the US participated in both segments.

“The United States views the Conference as an opportunity to focus on tangible areas for cooperation, without developing a new or amended UN ocean agenda,” its official meeting statement read.

It added, more critically, “While we remain flexible on the content of the Call for Action at this time, we would not want to see inclusion in the document of the creation of new bodies or high-level positions, language that would pre-judge the outcomes of any ongoing negotiations, nor do we believe the Call for Action should call for additional, follow-on conferences for SDG 14 considering the overlap and synergies among the various SDGs.”

A key focus of the conference is the presenting of voluntary commitments by governments, companies and others pledging action on conservation. With 189 commitments so far, these pledges represent governments that include France, Spain, Nigeria, Indonesia, Belgium, Grenada, Fiji, Palau and Sweden.

California, with its long Pacific Ocean border, has seven commitments registered, such as a plan to preserve its coastal ecosystems and prepare for rising sea levels.

University involvements include Arizona State’s Biogeography, Conservation and Modeling Laboratory, which researches fishery policies; and Northeastern University, which has created a Coastal Sustainability Institute to respond to environmental threats facing marine habitats.

In the private sector, Envision Plastics, from North Carolina, has announced a goal of removing up to 10 million pounds of plastic that could pollute the oceans over the next two years. Dell has committed to processing plastics collected from beaches, waterways and coasts to incorporate in new packaging of its computers.

The following countries will be paired for the partnership dialogues, emphasizing the rich state-developed state theme: Australia-Kenya, Iceland-Peru, Canada-Senegal, Estonia-Grenada, Italy-Palau, Monaco-Mozambique and Norway-Indonesia.

The US, notably, is not among them.

An annual Our Oceans global conference — not focused on SDG 14 — has been held for the last three years at different locations; this year, it is to be hosted in Malta in October.

Our Oceans is meant to enlist specific steps by nations to protect and mitigate climate effects on the world’s vast waters. Last year, the forum convened in Washington, led by Secretary of State John Kerry, an ocean lover cultivated through a family-owned island off Massachusetts, called Naushon, and a house on Nantucket (recently sold for a move by Kerry and his wife, Teresa Heinz, to Martha’s Vineyard).

“We have to keep the momentum going so that we can come together and protect our ocean,” Kerry said at the conference. “Why? Because our ocean is absolutely essential for life itself — not just the food, but the oxygen and weather cycles of the planet all depend on the ocean.”

(Brought to IPS readers courtesy of PassBlue, online independent coverage of the UN, a project of the Ralph Bunche Institute, City University of New York (CUNY) Graduate Center)

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World Bank fudges on inequalityhttp://www.ipsnews.net/2017/05/world-bank-fudges-on-inequality/?utm_source=rss&utm_medium=rss&utm_campaign=world-bank-fudges-on-inequality http://www.ipsnews.net/2017/05/world-bank-fudges-on-inequality/#comments Tue, 09 May 2017 14:24:31 +0000 Jomo Kwame Sundaram and Anis Chowdhury http://www.ipsnews.net/?p=150363 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. 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. ]]> Demonstrations against austerity measures in Athens. The World Bank's Doing Business Report 2017 finds that the greatest increase of inequality during 2008-2013 occurred in Greece. Credit : IPS

Demonstrations against austerity measures in Athens. The World Bank's Doing Business Report 2017 finds that the greatest increase of inequality during 2008-2013 occurred in Greece. Credit : IPS

By Jomo Kwame Sundaram and Anis Chowdhury
KUALA LUMPUR and SYDNEY, May 9 2017 (IPS)

The 17 Sustainable Development Goals (SDGs) – collectively drafted and then officially agreed to, at the highest level, by all Member States of the United Nations in September 2015 – involves specific targets to be achieved mainly by 2030. The Agenda seeks to “leave no-one behind” and claims roots in universal human rights. Thus, addressing inequalities and discrimination is central to the SDGs. Poverty and Shared Prosperity 2016: Taking on Inequality is the World Bank’s first annual report tracking progress towards the two key SDGs on poverty and inequality.

Annual reporting on poverty, inequality
This particular report evaluates progress towards reducing extreme poverty to 3% of the global population and sustaining per capita income growth of the bottom 40% of the population faster than the national average. According to the Bank, with global economic growth slowing, reduction of income inequality will be necessary to ending poverty and enhancing shared prosperity.

The report focuses on inequality, which was generally neglected until fairly recently by most international organizations other than the UN itself. It provides some useful analyses of inequality, including discussion of its causes. However, it does not explain its claim of a modest partial reversal of previously growing inequality in the years 2008-2013 which it examines.

However, the report’s policy recommendations are surprisingly limited, perhaps because it neither analyses nor proposes measures to address wealth inequality, which is much greater than and greatly influences income inequality. Although it recognizes that increasing minimum wages and formalizing employment can contribute to reducing income inequalities, it does not talk about the determinants of wages, working conditions and employment. It also has nothing to say about land reform – an important factor contributing to shared prosperity in East Asia, China, Vietnam, Japan, Korea and Taiwan.

Its discussion of fiscal consolidation’s impact on inequality is misleading, even claiming, “European Union (EU) countries have embarked on comprehensive fiscal consolidations based on clear equity considerations in response to the 2008–09 financial crisis”. This implies that fiscal consolidation yields long-run equity gains at the cost of short-run pains which can be cushioned by safety-net measures – a finding contrary to International Monetary Fund (IMF) research findings!

Instead of the more conventional inequality measures such as the Gini coefficient or the more innovative Atkinson index, the World Bank has promoted “boosting the bottom 40 percent”. Yet, in much of its discussion, the report abandons this indicator in favour of the Gini index. Nevertheless, the report dwells on its “shared prosperity premium”, defined as the difference between the increased income of the bottom 40% and the growth in mean income.

Meanwhile, the World Bank’s Doing Business Report 2017 implies labour market regulations adversely impact inequality, even though it admits that they can “reduce the risk of job loss and support equity and social cohesion”. Yet, the report promotes fixed term contracts with minimal benefits and severance pay requirements.

The Bank’s Doing Business Report 2017 also implies that lower business regulation results in lower inequality. It claims this on the basis of negative associations between Gini coefficients and scores for starting a business and resolving insolvency. However, curiously, it does not discuss the association between other Doing Business scores, e.g., paying tax or getting credit, etc., and the Gini index.

Recent progress?
About two-thirds of the 83 countries analysed had a shared prosperity premium during 2008-2013, a period characterized by asset price collapses and sharply increased youth unemployment in many OECD economies. This unrepresentative sample is uneven among regions, and surprisingly, even some large rich countries such as Japan, South Korea and Canada are missing.

Recognizing that the shared prosperity premium is generally low, the report concedes that “the goal of ending poverty by 2030 cannot be reached at current levels of economic growth” and that “reduction of inequality will be key to reaching the poverty goal”.

The global Gini index has declined since the 1990s due to rapidly rising incomes in China and India, while within-country inequality has generally increased. More optimistically, the Bank notes that Gini coefficients fell in five of seven world regions during 2008-2013 despite or perhaps because of much slower growth. The report notes that the “progress is all the more significant given that it has taken place in a period marked by the global financial crisis of 2008-09”. As others have noted, the 2008 financial crisis and the subsequent Great Recession may have only temporarily reversed growing inequality.

Greek tragedy
After very impressive growth for a decade, the Greek economy went into recession in 2008-2009, together with other European countries. With severe austerity measures imposed by the EU and the IMF as bailout conditions, Greece fell into a full-blown depression with various adverse income and distributional impacts.

The report finds that the greatest increase of inequality during 2008-2013 occurred in Greece, where the mean household income of the bottom 40% shrunk by an average of 10% annually. Fortunately, as the Bank notes, some measures – such as lump sum transfers, introduced in 2014 for low-income families and the vulnerable, along with ‘emergency’ property taxes – “prevented additional surges in inequality”.

Brazil progress at risk

Brazil is the most significant of its five “best performers” in narrowing income inequality, with its Gini coefficient falling from 0.63 in 1989 to 0.51 in 2014. The report attributes four-fifths of the decline in inequality in 2003-2013 to “labor market dynamics” and social program expansion. Alarmingly, the new government has threatened to end regular minimum wage increases and to limit social program expenditure.

“Labor market dynamics” – deemed far more important by other analysts – include regular minimum wage increases, formalization of unprotected workers and strengthened collective bargaining rights. Social pensions and other social program benefits account for much more of the decline in inequality than the much touted Bolsa Familia.

The report makes recommendations on six “high-impact strategies”: early childhood development, universal health coverage, universal access to quality education, cash transfers to the poor, rural infrastructure and progressive taxation. While certainly not objectionable, the recommendations do not always draw on and could easily have been made without the preceding analysis.

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Growing Inequality under Global Capitalismhttp://www.ipsnews.net/2017/05/growing-inequality-under-global-capitalism/?utm_source=rss&utm_medium=rss&utm_campaign=growing-inequality-under-global-capitalism http://www.ipsnews.net/2017/05/growing-inequality-under-global-capitalism/#comments Thu, 04 May 2017 14:41:32 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=150295 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 and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]> The World Economic Forum (WEF) has described severe income inequality as the biggest risk facing the world. Credit: IPS

The World Economic Forum (WEF) has described severe income inequality as the biggest risk facing the world. Credit: IPS

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, May 4 2017 (IPS)

Income and wealth inequality has increased in recent decades, but recognition of the role of economic liberalization and globalization in exacerbating inequality has never been so widespread. The guardians of global capitalism are nervous, yet little has been done to check, let alone reverse the underlying forces.

Global elite alarmed by growing inequality
The World Economic Forum (WEF) has described severe income inequality as the biggest risk facing the world. WEF founder Klaus Schwab has observed, ‘We have too large a disparity in the world; we need more inclusiveness… If we continue to have un-inclusive growth and we continue with the unemployment situation, particularly youth unemployment, our global society is not sustainable.’

Christine Lagarde, IMF Managing Director, told political and business leaders at the WEF, “in far too many countries the benefits of growth are being enjoyed by far too few people. This is not a recipe for stability and sustainability”. Similarly, World Bank President Jim Yong Kim has warned that failure to tackle inequality risked causing social unrest. “It’s going to erupt to a great extent because of these inequalities.”

In the same vein, the influential US Council of Foreign Relations’ journal, Foreign Affairs carried an article cautioning, “Inequality is indeed increasing almost everywhere in the post-industrial capitalist world…. if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.”

Much ado about nothing?

Increasingly, the main benefits of economic growth are being captured by a tiny elite. Despite global economic stagnation for almost a decade, the number of billionaires in the world has increased to a record 2,199. The richest one per cent of the world’s population now has as much wealth as the rest of the world combined. The world’s eight richest people have as much wealth as the poorer half.

In India, the number of billionaires has increased at least tenfold in the past decade. India now has 111 billionaires, third in the world by country. The largest number of the world’s abject poor also live in the same country — over 425 million, a third of the world’s poor, and well over a third of the country’s population.

Africa had a resource boom for a decade until 2014, but most people there still struggle daily for food, clean water and health care. Meanwhile, the number of people living in extreme poverty, according to the World Bank, has grown substantially to at least 330 million from 280 million in 1990!

In Europe, poor people bore the brunt of draconian austerity policies while bank bailouts mainly benefited the moneyed. 122.3 million people, or 24.4 per cent of the population in the EU-28, are at risk of poverty. Between 2009 and 2013, the number of Europeans without enough money to heat their homes or cope with unforeseen expenses, i.e., living with ‘severe material deprivation’, rose by 7.5 million to 50 million people, while the continent is home to 342 billionaires!

In the United States, the income share of the top one per cent is at its highest level since the eve of the Great Depression, almost nine decades ago. The top 0.01 per cent, or 14,000 American families, own 22.2 per cent of its wealth, while the bottom 90 per cent, over 133 million families, own a meagre four per cent of the nation’s wealth. The top five per cent of households increased their share of US wealth, especially after the 2008 financial crisis. Meanwhile, the richest one per cent tripled their share of US income within a generation.

This unprecedented wealth concentration and the corresponding deprivation of others have generated backlashes, arguably contributing to the victory of Donald Trump in the US presidential election, the Brexit referendum, the strength of Marine Le Pen in France and the Alternative for Germany, and the ascendance of the Hindutva right in secular India.

‘Communist’ China and inequality
Meanwhile, China has increasingly participated in and grown rapidly as inequality has risen sharply in the ostensibly communist-ruled country. China has supplied cheaper consumer goods to the world, checking inflation and improving living standards for many. Part of its huge trade surplus — due to relatively low, albeit recently rising wages — has been recycled in financial markets, mainly in the US, which helped expand credit at low interest rates there.

Thus, cheap consumer products and cheap credit have enabled the slowly shrinking ‘middle class’ in the West to mitigate the downward pressure on their living standards despite stagnating or falling real wages and mounting personal and household debt.

China’s export-led development on the basis of low wages has sharply increased income inequality in the world’s largest country for more than three decades. Beijing is the new ‘billionaire capital of the world’, no longer New York. China now has 594 billionaires, 33 more than in the US!

Since the 1980s, income inequality in China has risen faster than most! China now has one of the world’s highest levels of income inequality, rising mainly in the last three decades. The richest one per cent of households own a third of the country’s wealth, while the poorest quarter own only one per cent. China’s Gini coefficient for income rose to 0.49 in 2012 from 0.3 over three decades before when it was one of the most egalitarian countries in the world. Another survey put China’s income Gini at 0.61 in 2010, greatly exceeding the US’s 0.45!

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Climate-Smart Agriculture – From Tanzania to Vietnamhttp://www.ipsnews.net/2017/04/climate-smart-agriculture-from-tanzania-to-vietnam/?utm_source=rss&utm_medium=rss&utm_campaign=climate-smart-agriculture-from-tanzania-to-vietnam http://www.ipsnews.net/2017/04/climate-smart-agriculture-from-tanzania-to-vietnam/#comments Fri, 28 Apr 2017 16:52:53 +0000 IPS World Desk http://www.ipsnews.net/?p=150208 Farmers clear weeds from a trench, which retains water and prevents soil erosion during rains, as part of the FAO project to strengthen capacity of farms for climate change in Kiroka, Tanzania. Credit: FAO

Farmers clear weeds from a trench, which retains water and prevents soil erosion during rains, as part of the FAO project to strengthen capacity of farms for climate change in Kiroka, Tanzania. Credit: FAO

By IPS World Desk
ROME, Apr 28 2017 (IPS)

As part of efforts to move towards “climate-smart” agriculture, several countries have shared In a meeting in Rome new experiences on how to produce food in ways that help farmers cope with the impacts of climate change and to reduce greenhouse gas emissions in agriculture.

The exchange took place at a special 26 April side-event during a session of the UN Food and Agriculture OrganizationFAO’s executive Council.

While countries are embarking on the implementation of the Nationally Determined Contributions –the actions nations are taking under the Paris Agreement– the event provided an opportunity to learn from countries that have championed climate-smart agriculture in different regions, FAO informed.

Climate-smart agriculture is an approach aimed at transforming food systems. It involves pursuing sustainable productivity increases while implementing climate adaptation strategies and reducing greenhouse gas emissions where possible, to achieve food security in the face of increasing climate change.

Tanzania

In Tanzania, the UN specialised body reports, estimated loss in the agriculture sector due to climate change is about 200 million dollars per year.

To tackle this problem the government has brought the climate agenda in line with agriculture development and food security policies, and climate change considerations are now mainstreamed into national development planning and budget allocations, it added.

Tanzania also intends to invest more in research on climate-smart agriculture to inform decision-making and involve private partners to catalyse additional investment in the sector.

The national policy focus in Tanzania has hence shifted towards building resilience of agricultural and food production systems in the face of climate change and fostering adoption of climate smart agriculture, particularly among vulnerable, smallholder farmers, according to FAO.

For example, rice-farming techniques that use less water were introduced several years ago in five Tanzanian regions –Morogoro, Iringa, Lake Zone, Shinyanga and Mbeya– are used now by around 30 per cent of all rice producers in those areas.

The farmers have already seen their yields increase while using less water resources – which is particularly important for these drought-prone areas – and are eager to switch to new varieties of rice seeds.

Conservation agriculture practices, implemented in the Lake Zone, have also shown their efficiency, the UN agency said.

These have included the use of improved seed varieties of cassava, maize, sorghum and cotton, which are tolerant to droughts and water scarcity, and the use of organic fertilizers such as manure to increase soil fertility. As a result, the productivity in the areas practicing conservation agriculture has increased by about four times compared to the traditionally cultivated areas.

National researchers have also developed special breeds of high-yielding dairy cows and introduced them to livestock farmers in the field enabling them to cut down the number of cattle while increasing their income. This in turn has helped reduce greenhouse gas emissions in livestock production and prevent grazing damage to crops.

Vietnam

In Vietnam, about 700 000 hectares of rice and other food crops were heavily damaged by climate-induced natural disasters in 2016. As a result, rice production fell by 800 000 tons, and about 1.1 million people in affected areas were put at a greater risk of food insecurity.

To reverse the dire situation, numerous climate change adaptation and disaster-risk management measures have been implemented at national, subnational and local levels.

For example, rice cultivation area in several Central provinces has been converted to other crops such as fruit trees and grapes, which require less water for raising and can serve as an alternative source of income for farmers. When weather permits, the land can be easily switched back to rice production.

On sloping land areas of Vietnam’s Northern mountainous regions and Central provinces, annual food crops are intercropped with forests, fruit or industrial trees, reported FAO.

Such agro-forestry systems help farmers diversify their income, control soil erosion, and improve ecosystems and the environment. In addition, they help reduce greenhouse gas emissions and sequester carbon.

Integrating crops or forests with aquaculture is also widely practiced in Vietnam. For example, the ecological shrimp-mangrove forests in the country’s coastal provinces provide sustainable livelihoods for vulnerable coastal communities while protecting natural resources.

“Furthermore, organic farming products can fetch premium prices due to the high food safety standards employed in their production. With more than 180 000 hectares of the shrimp-mangrove forests having been cultivated to date, farmers are receiving a stable income of 1 600 dollars per hectare per year. Meanwhile, the coastal protection value is estimated at about 800 dollars per hectare per year.”

In household pig production, livestock farmers are being encouraged to use bio-digesters, which allow them to convert wastes into biogas used for daily cooking and lighting. They also create nutrient-rich slurry for fertilizing paddy rice fields. More than 35 000 bio-digesters have already been installed, which resulted in a 40 per cent reduction in greenhouse gas emissions.

During the FAO-hosted event, the participants also highlighted the importance of embedding climate-smart agriculture in national policies and programmes, and promoting climate-smart practices in the field through trainings and farmer field schools in various ecological zones.

They also stressed the need to provide accurate climate information to farmers, and investing in evidence-based research on climate-smart agriculture.

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20 Million People Could ‘Starve to Death’ in Next Six Monthshttp://www.ipsnews.net/2017/04/20-million-people-could-starve-to-death-in-next-six-months/?utm_source=rss&utm_medium=rss&utm_campaign=20-million-people-could-starve-to-death-in-next-six-months http://www.ipsnews.net/2017/04/20-million-people-could-starve-to-death-in-next-six-months/#comments Fri, 28 Apr 2017 15:49:49 +0000 Baher Kamal http://www.ipsnews.net/?p=150200 A livestock owner in Yemen tends her goats. Livestock production fell by more than 35 per cent in 2016 compared to the pre-crisis period. Credit: FAO

A livestock owner in Yemen tends her goats. Livestock production fell by more than 35 per cent in 2016 compared to the pre-crisis period. Credit: FAO

By Baher Kamal
ROME, Apr 28 2017 (IPS)

Urgent action is needed to save the lives of people facing famine in North Eastern Nigeria, Somalia, South Sudan and Yemen, the UN leading food and agriculture agency’s chief on April 28 warned. “If nothing is done, some 20 million people could starve to death in the next six months.”

“Famine does not just kill people, it contributes to social instability and also perpetuates a cycle of poverty and aid dependency that endures for decades,” the UN Food and Agriculture Organization (FAO) the Director-General Jose Graziano da Silva added.

At a media briefing ahead of the conclusive session of the this UN specialised agency’s executive arm—the FAO Council, he launched a new appeal for voluntary contributions, that are “of vital importance to FAO, now more than ever.”

“I will be always committed to finding more savings and promoting more efficiency, as I have done over the last five years. But I have already cut to the bone. There is no more fat left.”

On this, Graziano da Silva emphasised the need to work with everyone on the basis of the 2030 agenda for sustainable development –“Leaving No One Behind”, in order to save all the affected people.

He also announced that agreement will be signed among FAO and the other two Rome-based UN agencies: the International Fund for Agriculture (IFAD) and the World Food Programme (WFP) on how to tackle the current famine in those 4 countries– Nigeria, Somalia, South Sudan and Yemen.

The FAO Council, which has met in FAO-headquarters in Rome on 24 – 28 April, convenes between sessions of the main Conference to provide advice and oversight related to programmatic and budgetary matters.

The Council’s 49 elected members have been briefed on the extent of the hunger crises, and the steps required to preventing catastrophe.

Making Funds Go Further

The organisation’s executive body has also approved FAO‘s Programme of Work and Budget 2018-2019, which prioritises areas where FAO can deliver the greatest impact to member countries to achieve the Sustainable Development Goals, including climate change mitigation and adaptation, sustainable agriculture production, water scarcity management, and building the resilience of poor family farmers.

Famine has officially been declared by the South Sudanese government for some parts of the country. Credit: FAO

Famine has officially been declared by the South Sudanese government for some parts of the country. Credit: FAO

Food and agriculture are central to the sustainable development agenda, and FAO’s work is projected to contribute to the achievement of 40 targets across 15 of the 17 goals.

Ahead of the FAO Council’s meeting, Graziano da Silva had on 25 April stated in Geneva that a combination of food assistance and food production assistance is the only way to avoid famine in conflict-ridden Yemen where two-thirds of the population –17 million people– are suffering from severe food insecurity.

“As the conflict continues, food security and nutrition will also continue to deteriorate,” he stressed in his address to a United Nations High-Level Pledging conference for Yemen organised in Geneva and co-hosted by the governments of Switzerland and Sweden.

“To put these figures into perspective, we are talking about the double of Switzerland’s population being unable to meet their basic daily food needs.”

He stressed how livelihoods support, especially for agriculture and fishing, must be an integral part of the international community’s response to the crisis in Yemen.

Over 17 Million Yemenis, Acutely Food Insecure

More than 17 million people around Yemen’s rugged landscape are acutely food insecure, and the figure is likely to increase as the on-going conflict continues to erode the ability to grow, import, distribute and pay for food, Graziano da Silva wrote on IPS.

“More than 7 million people are on the verge of famine, while the rest are marginally meeting the minimum day-to-day nutritional needs thanks to external humanitarian and livelihoods support. Large-scale famine is a real risk that will cast an awful shadow for generations to come.”

According to Graziano da Silva, only a political solution can end the suffering in Yemen, as there can be no food security without peace. And the longer the delay to draft an adequately funded recovery plan, the more expensive the burden will be in terms of resources and human livelihood.

In 2016, agriculture production in Yemen and the area under cultivation shrank by 38 per cent due to the lack of inputs and investments. Livestock production fell by 35 per cent.

“Agricultural assistance in a humanitarian crisis can no longer be an afterthought,” the FAO Director-General said. “We need to seize every opportunity to support communities in Yemen to continue producing food, even under difficult circumstances.”

In Geneva, Graziano da Silva met Yemen’s Prime Minister Ahmed Obaid Bin Daghr, for talks on FAO’s support to the country to deliver emergency livelihood assistance and kick-start food production, especially when resources pledged to tackle the crisis are concretely made available.

The Geneva pledging conference on April 25 mobilised half of the 2,1 billion dollars urgently required to rescue the starving Yemeni population.

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Indigenous Women: The Frontline Protectors of the Environmenthttp://www.ipsnews.net/2017/04/indigenous-women-the-frontline-protectors-of-the-environment/?utm_source=rss&utm_medium=rss&utm_campaign=indigenous-women-the-frontline-protectors-of-the-environment http://www.ipsnews.net/2017/04/indigenous-women-the-frontline-protectors-of-the-environment/#comments Thu, 27 Apr 2017 13:23:04 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=150174 The Bhumia tribal community practices sustainable forestry: these women returning from the forest carry baskets of painstakingly gathered tree bark and dried cow dung for manure. Credit: Manipadma Jena/IPS

The Bhumia tribal community practices sustainable forestry: these women returning from the forest carry baskets of painstakingly gathered tree bark and dried cow dung for manure. Credit: Manipadma Jena/IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Apr 27 2017 (IPS)

Indigenous women, while experiencing the first and worst effects of climate change globally, are often in the frontline in struggles to protect the environment.

A forum organized by the Women’s Earth and Climate Action Network (WECAN) brought together indigenous women from around the world to discuss the effects of climate change in their communities and their work towards sustainable solutions.

“This forum is very much dedicated to frontline communities around climate change issues…we really wanted to take the time to visibilise women’s leadership and their calls for action,” said WECAN’s Executive Director Osprey Orielle Lake.

She added that indigenous women are “drawing a red line to protect and defend mother earth, all species, and the very web of life itself.”

Among the forum’s participants was Executive Director of the Indigenous Information Network Lucy Mulenkei who works with indigenous communities in Kenya on sustainable Development.

She told told IPS how Kenyan indigenous women are bearing the brunt of climate change, stating: “We have been experiencing a lot of prolonged droughts…so it leaves women with added workload [because] getting water is a problem, you have to go father.”

In February, the Kenyan Government declared a national drought emergency which has doubled the number of food-insecure people, increased the rate of malnutrition to emergency levels, and left millions without access to safe water.

Because of climate change, the country also experiences heavy rains which lead to floods, impacting indigenous communities as a whole, Mulenkei said.

Such extreme weather is largely attributed to the fossil fuel industry whose greenhouse gas emissions are contributing to global warming. The United States is responsible for almost 20 percent of the world’s greenhouse gas emissions, making it one of the top emitters.

Despite being over 8,000 miles away from Kenya, Mulenkei told IPS that “whatever you do from far away impacts us here.”

The fossil fuel industry is also impacting indigenous communities within the U.S. through its mega infrastructure projects.

“You cannot imagine how much things changed when the oil came,” Kandi Mossett, Indigenous Environmental Network’s (IEN) Extreme Energy and Just Transition Campaign Organiser, said in reference to the discovery of oil in the Bakken Shale formation in North Dakota.

“The air is being poisoned, the water is being destroyed,” she continued.

Mossett is among the frontline indigenous women in the movement against the Dakota Access Pipeline (DAPL) which garnered international attention in 2016 after thousands of protestors were met with violence by security forces.

She told IPS that indigenous communities are disproportionately targeted for such projects. “You don’t see a frack well in Hollywood or in the White House lawn. You see it in low-income, minority populations.”

Women return from fetching water after the water in their homes was cut off during the water rationing. Credit: Charles Mpaka/IPS

Women return from fetching water after the water in their homes was cut off during the water rationing. Credit: Charles Mpaka/IPS

Mossett highlighted the importance of consent prior to the approval of such development projects as cited in the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), adding that neither the company or government officials did as such in the case of DAPL.

“Consultation is not consent,” she told attendees.

Indigenous communities are facing similar issues as the economy and companies shift to renewable energy.

In Kenya, indigenous communities are seeing the construction of renewable energy projects on their land and without their consent, including the Ngong Hills and Kipeto wind power projects on Maasai territory.

“I feel neglected, I feel marginalized, I feel isolated,” Mulenkei told IPS regarding the lack of consent and consultation of indigenous groups on such projects, adding that the projects would be beneficial if only they were participatory.

Indigenous peoples at times face more extreme violations in the increasingly green economy including the displacement of Maasai communities following the expansion of geothermal energy production in Kenya. In Honduras, indigenous environmental activist Berta Caceres was shot and killed in her home in March 2016 after opposing the development of a hydroelectric dam.

According to a report by the Business and Human Rights Resource Center, five out of 50 renewable energy companies reported that they are committed to following UNDRIP.

Both Mossett and Mulenkei stressed the need to respect indigenous rights as a whole and urged for human rights-based collective actions to protect the environment.

“We have to do nonviolent direct actions on the ground and we have to take back the power in our communities because nobody is going to do it for us,” Mossett stated.

The Indigenous Women Protecting Earth, Rights, and Communities forum was hosted in parallel to the 16th session of the UN Permanent Forum on Indigenous Issues (UNFPII) being held from 24 April to 5 May at the UN Headquarters in New York.

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World Bank Must Stop Encouraging Harmful Tax Competitionhttp://www.ipsnews.net/2017/04/world-bank-must-stop-encouraging-harmful-tax-competition/?utm_source=rss&utm_medium=rss&utm_campaign=world-bank-must-stop-encouraging-harmful-tax-competition http://www.ipsnews.net/2017/04/world-bank-must-stop-encouraging-harmful-tax-competition/#comments Wed, 26 Apr 2017 14:33:16 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=150163 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. ]]>

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.

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Apr 26 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”.

The World Bank has been promoting tax cuts and tax competition as magic bullets to boost investment. As a result, tax revenues in developing countries continue to fall. Credit: IPS

The World Bank has been promoting tax cuts and tax competition as magic bullets to boost investment. As a result, tax revenues in developing countries continue to fall. Credit: IPS

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.

The World Bank’s Enterprise Surveys also 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

However, 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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No One is Left Behindhttp://www.ipsnews.net/2017/04/no-one-is-left-behind/?utm_source=rss&utm_medium=rss&utm_campaign=no-one-is-left-behind http://www.ipsnews.net/2017/04/no-one-is-left-behind/#comments Tue, 25 Apr 2017 13:22:08 +0000 Kakoli Ghosh http://www.ipsnews.net/?p=150143 Dr. Kakoli Ghosh, Coordinator, Academia and Research Organisations, Partnerships, Advocacy and Capacity Development Division, Food and Agriculture Organization of the United Nations (FAO) ]]>

Dr. Kakoli Ghosh, Coordinator, Academia and Research Organisations, Partnerships, Advocacy and Capacity Development Division, Food and Agriculture Organization of the United Nations (FAO)

By Kakoli Ghosh
ROME, Apr 25 2017 (IPS)

In the context of global development, ‘no one is left behind’ brings with it a powerful message. It emphasizes progress- one that is inclusive, fair, integrated and empowering. The phrase ‘No one is left behind’ is mentioned some five times in the 2030 Agenda for Sustainable Development that was adopted by all governments at the United Nations in 2015. The Agenda is a plan of action for people, planet, peace and prosperity. It has globally agreed 17 Sustainable Development Goals and 169 ambitious targets, and should be achieved within the next decade ‘to end poverty and hunger everywhere; to combat inequalities within and among countries; to build peaceful, just and inclusive societies; to protect human rights and promote gender equality and the empowerment of women and girls; and to ensure the lasting protection of the planet and its natural resources.’

Kakoli Ghosh

Kakoli Ghosh

To keep these commitments and uphold the values that underpin them, a necessary corollary is that ‘every one’, irrespective of geography and circumstances, participates in this collective journey. Is that the case? Consider women and girls for instance. Although they are 51 percent of the world, women and girls continue lag behind on most counts. Women are often patronized or objectified and have far fewer possibilities for accessing and climbing the economic, professional or political ladder. Despite years of dedicated programs by governments, the UN and the civil societies, gender inequality is acute in rural settings, although their pivotal contribution to farming and rural economy is widely acknowledged. The Agenda recognises this, and Goal 5 is to ‘Achieve gender equality and empower women and girls’. Furthermore, Goals 2, 3 and 4 also have specific targets with indicators to measure progress on women’s participation, income and education. However, almost 80 percent of the indicators for gender equality across the Goals lack data- a severe limitation- that policy and governance has to overcome to create bottom–up solutions. Another necessary step has to be a better and greater convergence of all the big and small efforts being undertaken to tackle gender inequality in development.

Another important group that must not be left behind are the teenagers. Currently there are some 1.2 billion young people, of which 88 percent live in developing countries. Should the Goals be achieved by 2030, the youth of today could be the biggest beneficiaries. Much will depend on policy environment in a country, but in my view, the academic community can play a critical role. Science, technology, analytical data and multidisciplinary approaches are required for almost all the goals. Therefore, teachers- as the custodians of future generations – could lead by promoting a systems-based approach, revising outdated curricula, applying the indicators in their own settings as well as participating in monitoring progress at the national level. Creating awareness among the students can encourage their buy-in early on, which in turn can lead to quicker solutions and new possibilities. In fact, Goal 4 ‘Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all’ focuses on youth; this focus is also in Goals 8 and 13. There needs to be a strategy in place to mobilise academia to support the implementation of these Goals. Strengthening education quality and increasing investment in universities today, particularly in developing countries, can position youth to cope with the challenges of tomorrow.

Women and youth may not be the only groups falling behind when one considers the status of migrants. As Agenda was being adopted in 2015, a number of countries were dealing with an unprecedented migration including in Europe, the Near East and Sub-Sahara Africa. Immediate attention had to be given to the availability of food, shelter and safety of the new refugees. It is estimated that there are some 244 million international migrants today, of which a third are young adults leaving their countries due to conflicts, climate change and political instability. Their education, aspirations, prospects are being left behind. For the first time the issues of migration are recognized with the Goals 10 calling for ‘well-managed migration policies’ and Goal 8 focuses on the situation of migrant workers.

Looking ahead, there is a lot to do. What will it take for each of us to step up, to achieve gender equality in our own sphere? How can young adults benefit from the Goals? How to promote integration of diverse communities in a sustainable way? It is not possible to do it alone. Perhaps it is time to revive ‘partnerships’ as a fundamental tool for delivery. Partnerships not as an association for the few but as a mechanism for collective achievements. As Swami Vivekananda said ‘There cannot be any progress without the whole world following in the wake, and it is becoming every day clearer that the solution of any problem can never be attained on racial, or national, or narrow grounds. Every idea has to become broad till it covers the whole of this world, every aspiration must go on increasing till it has engulfed the whole of humans, nay the whole of life within its scope’.

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

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Building resilient rural livelihoods is key to helping Yemenhttp://www.ipsnews.net/2017/04/building-resilient-rural-livelihoods-is-key-to-helping-yemen/?utm_source=rss&utm_medium=rss&utm_campaign=building-resilient-rural-livelihoods-is-key-to-helping-yemen http://www.ipsnews.net/2017/04/building-resilient-rural-livelihoods-is-key-to-helping-yemen/#comments Mon, 24 Apr 2017 08:37:39 +0000 Jose Graziano da Silva http://www.ipsnews.net/?p=150106 José Graziano da Silva is Director-General of the Food and Agriculture Organization of the United Nations (FAO).]]> Al Hudaydah, Yemen.  Dairy cattle seek shade. Credit: FAO/Chedly Kayouli

Al Hudaydah, Yemen. Dairy cattle seek shade. Credit: FAO/Chedly Kayouli

By José Graziano da Silva
ROME, Apr 24 2017 (IPS)

People in Yemen are currently suffering from the world’s largest humanitarian crisis.

More than 17 million people around Yemen’s rugged landscape are acutely food insecure, and the figure is likely to increase as the ongoing conflict continues to erode the ability to grow, import, distribute and pay for food. More than 7 million people are on the verge of famine, while the rest are marginally meeting the minimum day-to-day nutritional needs thanks to external humanitarian and livelihoods support. Large-scale famine is a real risk that will cast an awful shadow for generations to come.

Only a political solution can end the suffering in Yemen, as there can be no food security without peace. And the longer the delay to draft an adequately funded recovery plan, the more expensive the burden will be in terms of resources and human livelihood.

José Graziano da Silva. Credit: FAO

José Graziano da Silva. Credit: FAO

Keep in mind that Yemen has a very young population, yet some 2.2 million children under the age of five are suffering from acute malnutrition. As inadequate nutrition in a child’s early years can permanently damage an individual’s lifetime potential, it is imperative to stop a generational doomsday loop.

To prevent the food security situation from worsening, immediate livelihoods support – mainly agriculture and fishing – must be an integral part of the humanitarian response. This year, FAO Yemen is appealing for USD 48.4 million in funding to reach 3 million people.

While Yemen is widely noted as being dependent upon imports for almost all of its wheat and rice demands, people can and do produce a lot of food on their own. This requires the provision of seeds, fertilizers and fuel for equipment and irrigation to the 2 million households who currently lack access to such basic agricultural inputs.

In 2016, agricultural production and area under cultivation shrank by 38 percent due to this lack of inputs. Livestock production fell by 35 percent. The situation in 2017 is not expected to improve without the international community’s intervention.

Al Hudaydah, Yemen. A female dairy farmer milks her cow.  Credit: FAO/Chedly Kayouli

Al Hudaydah, Yemen. A female dairy farmer milks her cow. Credit: FAO/Chedly Kayouli


FAO is on the ground in Yemen, working around the clock to deliver emergency livelihood assistance to kick-start food production. This assistance comprises inputs like quick turnaround backyard food production kits, which includes vegetable seeds, egg-laying chickens and rainwater storage tanks, solar pumps, feed, fertilizer, fishery boats, engines, fishing nets and continuous operational equipment and material support.

These home production kits, designed to help feed a household of 20 people for six months, constitute cost-effective humanitarian assistance that can be scaled up to reach more people more quickly. This is especially pertinent for internally displaced people – who now constitute more than 10 percent of the population, and the vast majority of whom traditionally relied on agriculture and livestock. They now live in camps, with relatives or on empty lots and helping them relieve pressure on host communities can pay a double dividend in terms of food and social cohesion.

The kits also have the virtue of being simple, and in the case of Yemen – enduring a combination of several worst-case scenarios at once – simple translates into being implementable.

Simplicity is especially essential to support isolated rural households, almost half of whom live more than six kilometres from any local market at a time when travel is dangerous and roads have been destroyed. For many of these families, these food production kits are their only lifeline to food.

In a bid to restore agricultural livelihoods, FAO is also offering starter kits for beekeepers, replacing fishing equipment that has been destroyed or lost, and giving rural households modern butter churns that enable the production to increase tenfold and help offset Yemen’s serious dairy deficit.

Al Hudaydah, Yemen. A livestock market. Credit: FAO/Chedly Kayouli

Al Hudaydah, Yemen. A livestock market. Credit: FAO/Chedly Kayouli


As many families have had to sell their animals, a key productive asset, and restocking has slowed down due to lack of access to fodder, FAO is also distributing vouchers to distressed households in order to purchase livestock. At the same time, FAO is bolstering veterinary networks to vaccinate and treat ailing livestock as well as monitor and contain potential transboundary livestock diseases, which pose an enormous risk both for households living in Yemen’s remote and isolated areas as well as livestock trade across the region.

Making Yemen’s food system more sustainable will be a long-term effort, requiring important changes to which crops are grown and the rebooting or creation of value chains and improved logistics for what is destined to be the country’s primary economic sector. Agriculture already employs more than half of the workforce and is the main source of income for around 60 percent of households.

Even in peacetime, Yemen will face huge challenges, as only 4 percent of its land is arable and water resources are extremely limited. However, its people can and must be enabled to create a viable and more sustainable food system. This requires a simultaneous approach of providing humanitarian assistance along with resilience-building initiatives.

There is no time to lose. The alternative is dismal and threatens to catalyse more conflicts in the future, for there can be no peace without food security.

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Dispute Settlement Becomes Speculative Financial Assethttp://www.ipsnews.net/2017/04/dispute-settlement-becomes-speculative-financial-asset/?utm_source=rss&utm_medium=rss&utm_campaign=dispute-settlement-becomes-speculative-financial-asset http://www.ipsnews.net/2017/04/dispute-settlement-becomes-speculative-financial-asset/#comments Wed, 19 Apr 2017 14:46:24 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=150047 Jomo Kwame Sundaram was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.]]> Investor-state dispute settlement (ISDS) will thus strengthen perverse incentives for foreign investors at the expense of local businesses and the public interest. Credit: IPS

Investor-state dispute settlement (ISDS) will thus strengthen perverse incentives for foreign investors at the expense of local businesses and the public interest. Credit: IPS

By Jomo Kwame Sundaram
KUALA LAMPUR, Apr 19 2017 (IPS)

Investor-state dispute settlement (ISDS) provisions in bilateral investment treaties (BITs) and free trade agreements (FTAs) have effectively created a powerful and privileged system of protections for foreign investors that undermines national law and institutions.

ISDS allows foreign corporations to sue host governments for supposedly causing them losses due to policy or regulatory changes that reduce the expected profitability of their investments. Very significantly, ISDS provisions have been and can be invoked, even when rules are non-discriminatory, or profits come from causing public harm. ISDS will thus strengthen perverse incentives for foreign investors at the expense of local businesses and the public interest.

New opportunity for speculation
In recent years, ISDS provisions of investment treaties, free trade and other agreements have increasingly provided an investment opportunity to make money by speculating on lawsuits, winning huge awards and forcing foreign governments, and taxpayers, to pay. Financial speculators have increasingly purchased corporations deemed capable of profitably bringing winnable ISDS claims, sometimes using ‘shell companies’.

Some hedge funds and private equity firms even finance ISDS cases as third parties, with ISDS itself the raison d’etre for such investments. Such ‘third-party funding’ of ISDS claims has been expanding quickly as financing such claims has proven to be very lucrative.

Third-party financing reduces litigation costs to the corporations themselves, making it easier, and thus encouraging them to sue. Foreign corporations typically do not have to declare receiving third-party funding for an ISDS case. Not surprisingly then, the ISDS claims-financing industry is booming as different types of investors have been attracted by and drawn into financing lawsuits, treating ISDS claims as speculative assets.

The International Council for Commercial Arbitration estimates that at least three fifths of those considering ISDS claims have inquired about possible third-party financing before pursuing them. Financing firms provide clients with litigation packages from the outset, advising on what treaties to exploit and which law firms to hire, even recommending arbitrators.

While bondholders do not actually develop productive capacities or sell services in a host country, they too can resort to ISDS arbitration to maximize returns to their debt purchases. Thus, bond-holders who have lost value can use the ISDS back door to sue countries for compensation, thus encouraging a new speculative investment option for ‘vultures’. Hence, ISDS allows investors with little connection to the ‘aggrieved’ initial investment to benefit financially as well.

Ripe for the picking
ISDS advocates claim that case outcomes remain uncertain, with foreign corporations only winning about a quarter of the cases they initiate. But this proportion does not include settlements agreed to before arbitration proceedings are concluded when the foreign corporations secure huge gains. ISDS arbitration is very attractive, even tempting to foreign investors who would otherwise not pursue claims in national courts against host governments.

Recent ISDS arbitrations have seen much greater delegation of authority to arbitrators in interpreting and applying agreements, without any option to appeal or otherwise challenge the arbitrators’ decisions. There is no way to ensure that arbitration tribunals will interpret and apply treaty provisions in ways consistent with governments’ understandings of what treaty obligations imply.

Those investing in ISDS cases recognize that the most vulnerable governments for investors to sue are typically those already in some trouble. For example, when a country resorts to emergency economic measures to protect its citizens, investors can easily claim that these undermine earlier understandings of international agreements. Ensuing lawsuits typically hurt the country’s credit rating, raising capital costs and undermining its ability to attract investment.

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Economic Recovery Crucial to Sustainable Developmenthttp://www.ipsnews.net/2017/04/economic-recovery-crucial-to-sustainable-development/?utm_source=rss&utm_medium=rss&utm_campaign=economic-recovery-crucial-to-sustainable-development http://www.ipsnews.net/2017/04/economic-recovery-crucial-to-sustainable-development/#comments Tue, 11 Apr 2017 14:08:49 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=149903 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 and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]> The World Economic Situation and Prospects (WESP) was the only such report to identify risks to the global economy before the 2008-2009 global financial crisis, while both the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) largely ignored them. Credit: IPS

The World Economic Situation and Prospects (WESP) was the only such report to identify risks to the global economy before the 2008-2009 global financial crisis, while both the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) largely ignored them. Credit: IPS

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Apr 11 2017 (IPS)

More than eight years after the global financial crisis exploded in late 2008, economic growth remains generally tepid, while ostensible recovery measures appear to have exacerbated income and other inequalities. Yet, despite the G-20 group of the world’s largest economies raising the level, frequency and profile of its meetings, effective multilateral cooperation and coordination remains a distant dream.

Little reason to cheer
The United Nations’ recent World Economic Situation and Prospects (WESP) 2017 offers little cause for comfort:
• the world economy has not yet emerged from the protracted slow growth following the 2008 financial crisis;
• significant uncertainties and risks weigh heavily on its projected modest global recovery for 2017-2018;
• despite modest economic growth, global carbon emissions have not declined in the last two years;
• more alarmingly, new investment in renewable energy dropped sharply in the first half of 2016, as progress in emissions mitigation in recent years could easily be reversed;
• growth in the least developed countries (LDCs) will remain well below the sustainable development goals (SDGs) target in the near term; and
• below-target growth and tax revenue threaten critical public expenditure on healthcare, education, social protection, and climate change adaptation.

Credibility
Unfortunately, the WESP does not attract as much media attention or fanfare as other similar global reports, such as the International Monetary Fund’s (IMF) World Economic Outlook or the OECD’s Global Economic Outlook. Nevertheless, WESP was the only such report to identify risks to the global economy before the 2008-2009 global financial crisis, while both the IMF and OECD largely ignored them.

Even after US sub-prime housing debt problems became apparent and Lehman Brothers had collapsed, both remained optimistic, predicting a soft-landing in the US at worst, which they suggested would be off-set by robust growth in Europe. Both supported the turn to ‘fiscal consolidation’ as soon as ostensible ‘green shoots of recovery’ were spotted in 2019. Despite greater consideration of ostensibly Keynesian policy options since, seriously Keynesian macroeconomic analysis remains largely off-limits.

Global recovery?
WESP 2017 identifies policy paralysis and lack of policy coordination as among the main factors holding back global economic recovery. Over-reliance on unconventional monetary policy and fiscal consolidation in major economies, especially in Europe, are contributing not only to policy uncertainty, but also to growing inequality.

Protracted weak global demand – due to fiscal contraction, high household debt and growing inequality – has reduced incentives for firms to invest. Political and policy uncertainties, due to events such as ‘Brexit’, have also discouraged private investment. Thus, investment has slowed significantly in major developed and emerging economies. The extended period of weak investment is driving the slowdown in productivity growth.

Meanwhile, international trade expanded by just 1.2 per cent in 2016, the third-lowest rate in the past three decades. Slow world trade growth is both contributing to and symptomatic of the global economic slowdown.

What needs to be done?
Thus, WESP 2017 calls for a more balanced policy mix – moving beyond excessive reliance on monetary policy – to restore a healthy growth trajectory over the medium-term for the global economy as well as to tackle some social and environmental dimensions of sustainable development.

Government support for public goods, such as combating climate change, remains crucial, as private investors tend to evaluate risk and return over short-term horizons and under-invest in public priorities. Investment in research and development, education and infrastructure would promote sustainable development as well as social and environmental progress, while supporting productivity growth.

WESP 2017 also calls for greater international coordination to ensure complementarities among trade, investment, and other public policies, and to better align the multilateral trading system with the 2030 Agenda for Sustainable Development to ensure inclusive growth and decent work for all.

Global Green New Deal

Any recession or economic crisis also offers the opportunity to weed-out lagging activities or obsolete practices, and to restructure the economy to put it on a more sustainable path. Thus, to tackle the global financial crisis, in early 2009, the UN proposed a Global Green New Deal (GGND) comprising of public work programmes and social protection, including in developing countries. This bold proposal remains relevant as the global economy struggles to recover, and achievement of the SDGs is threatened.

Most critically, public works programmes should be launched, not only in developed countries, which can resort to deficit financing, but also in developing countries, where resources are more limited and policies are generally more hostage to the global financial system. Thus, GGND can not only accelerate economic recovery and job creation, but also address sustainable development challenges more generally. To be more effective, GGND should be part of a broader international counter-cyclical effort comprising three main elements:
1. Financial support for developing countries, provided through the multilateral system, to prevent their economic slowdown.
2. National government-led investment packages in developed and developing countries to revive and ‘green’ national economies.
3. International policy coordination to ensure that developed countries’ investment packages not only create jobs in developed countries, but also have strong developmental impacts in developing countries. These should involve collaborative initiatives among governments of developed and developing countries.

The window of opportunity to restructure the global economy towards a more sustainable path has been closing as governments procrastinate, adopt self-defeating fiscal consolidation policies, and give up economic management responsibility to the monetary authorities. ‘Quantitative easing’ has not only failed to ensure a robust recovery, but has also exacerbated the inequalities and disparities breeding ethno-chauvinist populism. Bold, internationally well-coordinated actions are needed now more than ever.

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Can the SDGs be financed?http://www.ipsnews.net/2017/03/can-the-sdgs-be-financed/?utm_source=rss&utm_medium=rss&utm_campaign=can-the-sdgs-be-financed http://www.ipsnews.net/2017/03/can-the-sdgs-be-financed/#comments Wed, 29 Mar 2017 14:26:28 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=149701 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 and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]> The United Nations Conference on Trade and Development's 2014 World Investment Report estimated that developing countries would need US$2.5 trillion annually until 2030 to achieve their SDGs. Credit: IPS

The United Nations Conference on Trade and Development's 2014 World Investment Report estimated that developing countries would need US$2.5 trillion annually until 2030 to achieve their SDGs. Credit: IPS

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Mar 29 2017 (IPS)

Investment in the least developed countries (LDCs) will need to rise by at least 11 per cent annually through 2030, a little more than the 8.9 per cent between 2010 and 2015, in order for them to achieve the Sustainable Development Goals (SDGs). The United Nations’ World Economic Situation and Prospects (WESP) 2017 focuses on the difficulties in securing sufficient financing for the SDGs given the global financial system and current economic environment.

Big financing gaps
The United Nations Conference on Trade and Development (UNCTAD)’s 2014 World Investment Report estimated that developing countries would need US$2.5 trillion annually until 2030 to achieve their SDGs. According to UNCTAD’s 2016 Development and Globalization: Facts and Figures, to close the large infrastructure deficit in developing countries, spending must reach US$1.8–2.3 trillion per year by 2020, compared with the current US$0.8–0.9 trillion.

These UN estimated financing gaps have been corroborated by others, such as the World Bank, OECD and World Economic Forum (WEF). For example, the estimated annual investment needed to attain the SDGs, according to the WEF, is US$3.9 trillion against the current average of US$1.4 trillion, a shortfall of US$2.5 trillion yearly.

Avoidable financing gaps
Unfortunately, the financing gap is not due to global shortages, but rather, to problems of allocation due to global economic governance and geopolitics, influencing investors, donor and developing countries. The current global environment – characterized by weak economic growth, slow trade expansion, soft commodity prices and volatile international capital flows – has made things worse.

If rich countries had met the 0.7% aid target from 2002, developing countries would now been at least US$2 trillion better off. But overall aid has never ever reached even half the target since the 1960s and currently stands at 0.30%. The aid gap for 2014 alone was more than US$192 million. Furthermore, refugee spending is reducing country programmable aid.

Meanwhile, developing countries are losing a great deal to tax havens, and transfer pricing, or trade mis-invoicing, by transnational corporations (TNCs). As the Panama papers revealed, tax-havens not only enable TNCs to evade taxes, but also launder ‘dirty money’.

Illicit financial flows (IFFs) from developing and emerging economies between 2004 and 2013 were estimated at US$7.8 trillion, greater than combined aid and FDI flows to poor countries. Between 2010 and June 2012, OECD countries froze US$1.4 billion of corruption-related assets, but only returned US$147 million to the countries of origin! Thus, preventing or even reducing IFFs and returning the confiscated resources can help close the funding gap.

Generating revenue
Imposition of a small tax on short-term capital flows – known as the ‘Tobin tax’ – can not only reduce their volatility, but also the risk of financial crises. This can reduce the need for holding foreign reserves for protection, and enhance the development impact of capital flows. A global Tobin tax could generate between US$147 billion and US$1.6 trillion annually depending on the rate and coverage. Similarly, a global financial transactions tax (FTT) system could generate very significant resources, at least as much as aid, if not more. .

Institutional investors hold trillions of dollars in liquid assets, instead of investing in long-term projects. For example, pension funds hold around US$34 trillion in assets, with the largest ones holding 76 per cent of their portfolios in liquid assets. Meanwhile, sovereign wealth funds hold most of their funds in liquid financial assets in developed economies, with less than 5 per cent in direct investments. Rising political risks have made raising long-term investments particularly challenging.

The only bright spot is improvements in developing countries’ domestic resource mobilization. Developing countries have increased tax revenue collection over the last 15 years as tax incidence has become more regressive. The largest increases in revenues were in LDCs, economies in transition and countries in Latin America and the Caribbean. But their domestic resources still remain far short of development finance needs.

Debt crisis threat
As most types of capital inflows decline, more developing countries are borrowing externally, resulting in a rising foreign debt-GDP ratio, reversing the trend in the last decade. Although modest, the recently rising external debt-GDP ratio is more pronounced in low-income countries, increasing from 31 to 35 per cent of GDP during 2014-2015.

Twenty low-income countries are at high risk of debt distress, compared to 13 in April 2015; three of them are considered to actually be in debt distress. The sharp fall in commodity prices, rising US interest rates and protracted slow growth are likely to worsen the situation, particularly for LDCs and small island developing states.

Greater vulnerability to climate change and natural disasters will further exacerbate their sovereign debt problems. Developing countries often get stuck in debt crises because there is no internationally agreed framework for timely, orderly and fair sovereign debt work-outs.

UN response
It has also supported developing countries’ call for an internationally agreed legal framework for timely, orderly and fair sovereign debt work-outs. It endorses developing countries’ call to strengthen international efforts to combat illicit financial flows, and continues to remind developed countries to meet their aid commitment.

The UN has long argued for the reform of global economic governance in line with changing global economic circumstances and to better serve developing countries’ interests. It has also called for a truly international reserve currency (e.g., Special Drawing Rights, or SDRs) not linked to any country’s currency, and for the fair allocation of newly issued SDRs for international development finance.

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Discrimination Compounds Global Inequality: UN Reporthttp://www.ipsnews.net/2017/03/discrimination-compounds-global-inequality-un-report/?utm_source=rss&utm_medium=rss&utm_campaign=discrimination-compounds-global-inequality-un-report http://www.ipsnews.net/2017/03/discrimination-compounds-global-inequality-un-report/#comments Wed, 22 Mar 2017 04:34:24 +0000 Lyndal Rowlands http://www.ipsnews.net/?p=149536 UNDP Administrator, Helen Clark. Credit: UN Photo/Rick Bajornas

UNDP Administrator, Helen Clark. Credit: UN Photo/Rick Bajornas

By Lyndal Rowlands
UNITED NATIONS, Mar 22 2017 (IPS)

Despite 25 years of impressive global development, many people are not benefiting from progress due to persistent discrimination, according to a UN report released Tuesday.

The 2017 Human Development Report found that overall human development has improved significantly across all regions of the world since 1990. Yet despite these general improvements, poverty and inequality have persisted.

“The world has come a long way in rolling back extreme poverty, in improving access to education, health and sanitation, and in expanding possibilities for women and girls,” said UN Development Program Administrator Helen Clark at the report’s launch. “But those gains are a prelude to the next, possibly tougher challenge, to ensure the benefits of global progress reach everyone.”

The report described how poverty and exclusion have remained, even in developed countries, where over 300 million people – including more than one-third of all children – live in relative poverty.

“We place too much attention on national averages, which often mask enormous variations in people’s lives,” -- Selim Jahan

The reasons for poverty and exclusion are often related to discrimination based on race, gender or migration status, the report found. Some of those most likely to live in poverty include indigenous people and people with disabilities. Meanwhile, more than 250 million people worldwide face discrimination solely on the basis of caste or another similar inherited lower status within society.

“By eliminating deep, persistent, discriminatory social norms and laws, and addressing the unequal access to political participation, which have hindered progress for so many, poverty can be eradicated and a peaceful, just, and sustainable development can be achieved for all,” Helen Clark said.

The largest group to be discriminated against globally is women and girls. Women are still poorer and earn less than men in every country globally and in 18 countries, women need their husband’s approval to work, the report found. Women now make up slightly less than half of the world’s population due to discrimination before and at birth through sex-selective abortion and infanticide.

“We place too much attention on national averages, which often mask enormous variations in people’s lives,” said Selim Jahan. “In order to advance, we need to examine more closely not just what has been achieved, but also who has been excluded and why.”

Other examples in this years report include the indigenous Parakanã, Asurini and Parkatêjê peoples of Brazil who were among more than 25,000 people forced to relocated due to the construction of the Tucuruí Dam in Brazil.

“Poor resettlement planning split up communities and forced them to relocate several times,” the report found.

Norway, Australia and Switzerland again topped the annual report as the world’s three most developed countries. Those countries with the lowest levels of human development were mostly in Sub-Saharan Africa and the Pacific. Syria was ranked at 149 of 188 countries, a sharp fall from 107 in 2009 before the Syrian conflict began.

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No Water, No Life – Don’t Waste It!http://www.ipsnews.net/2017/03/no-water-no-life-dont-waste-it/?utm_source=rss&utm_medium=rss&utm_campaign=no-water-no-life-dont-waste-it http://www.ipsnews.net/2017/03/no-water-no-life-dont-waste-it/#comments Tue, 21 Mar 2017 14:55:15 +0000 Baher Kamal http://www.ipsnews.net/?p=149521 This story is part of IPS coverage of World Water Day, observed on March 22]]> Pastoralists in the Ufeyn region of Puntland are walking further and further to find water for their livestock. Credit: @WFP/K Dhanji

Pastoralists in the Ufeyn region of Puntland are walking further and further to find water for their livestock. Credit: @WFP/K Dhanji

By Baher Kamal
ROME, Mar 21 2017 (IPS)

During the final exams of Spanish official high school of journalists, a student was asked by the panel of professors-examiners: If scientists discover that there is water in Planet Mars, how would you announce this news, what would be your title? The student did not hesitate a second: “There is life in Mars!” The student was graduated with the highest score.

In spite of this simple truth, human beings have been systematically wasting this primordial source of life. So much, that the United Nations has warmed ahead of this year’s World Water Day, marked on March 22, “We’re all wasters when it comes to wastewater.”

In fact, the world body reminds that every time “we use water, we produce wastewater. And instead of reusing it, we let 80 per cent of it just flow down the drain. We all need to reduce and reuse wastewater as much as we can. Here are three ideas for all us wasters!”

“Water is finite. It has to serve the need of more and more people and we only have one ecosystem from which to draw our water, “ says the UN-Water’s Chair Guy Ryder, Director-General of the International Labour Organization.

What to Do Then?

Key organisations involved in the hard task of raising awareness among the world’s seven billion inhabitants on the vital importance of not wasting water, now remind, once more, of some simple, obvious recommendations.

Key Facts

• Globally, over 80% of the wastewater generated by society flows back into the ecosystem without being treated or reused.
• 1.8 billion people use a source of drinking water contaminated with faeces, putting them at risk of contracting cholera, dysentery, typhoid and polio.
• Unsafe water, poor sanitation and hygiene cause around 842,000 deaths each year.
• 663 million people still lack improved drinking water sources.
• By 2050, close to 70% of the world’s population will live in cities, compared to 50% today.
• Currently, most cities in developing countries do not have adequate infrastructure and resources to address wastewater management in an efficient and sustainable way.
• The opportunities from exploiting wastewater as a resource are enormous. Safely managed wastewater is an affordable and sustainable source of water, energy, nutrients and other recoverable materials.
• The costs of wastewater management are greatly outweighed by the benefits to human health, economic development and environmental sustainability – providing new business opportunities and creating more ‘green’ jobs.

SOURCE: World Water Day


For instance: to turn off the tap while you’re brushing your teeth or doing dishes or scrubbing vegetables. Otherwise you’re just making wastewater without even using it!

Also to put rubbish, oils, chemicals, and food in the bin, not down the drain. The dirtier your wastewater, the more energy and money it costs to treat it.

And, why not, collect used water from your kitchen sink or bathtub and use it on plants and gardens, and to wash your bike or car.

“The water passing through us and our homes is on a journey through the water cycle. By reducing the quantity and pollution of our wastewater, and by safely reusing it as much as we can, we’re all helping to protect our most precious resource,” says the World Water Day 2017.

Wasting Water in Workplaces

Water wasting is not at all limited to house. Workplaces represent a major focus in the life of workers and employers. Having access to water, sanitation and hygiene (WASH) can contribute greatly to people’s health and productivity, and to making economies grow, says the UN.

Sanitation at the workplace means more than just toilets, it adds. It also refers to proper use and cleaning of toilets, wastewater management, and the promotion of individual employee sanitation behaviour, including the proper use of toilets and prevention of open defecation.

“Sanitation also encompasses interventions that reduce human exposure to diseases by providing a clean environment in which to work.”

There is more to learn about “Wastewater and faecal sludge management” in the International Labour Organization (ILO) toolkit WASH@Work a self-training handbook.

This handbook is a combined training and action tool designed to inform governments, employers, and workers on the needs for WASH at the workplace.

The New Black? What Is That?

The Stockholm Environment Institute (SEI), and the United Nations Environment Programme (UNEP) launched a book at World Water Week 2016 pushing for a radical rethink of the inefficient way we deal with our excreta and wastewater – and illustrating how it can be done.

Credit: UN Water

Credit: UN Water

“We need to recognize wastewater and sanitation waste for what they are –a valuable resource– and their safe management as an efficient investment in long-term sustainability.”

The book provides shocking data. In fact, the Sanitation, Wastewater Management and Sustainability: From Waste Disposal to Resource Recovery, suggests that just the 330 km3 of municipal wastewater produced globally each year is enough to irrigate 40 million hectares – equivalent to 15 per cent of all currently irrigated land – or to power 130 million households through biogas generation.

UNEP and SEI–an international non-profit research organisation that has worked with environment and development issues from local to global policy levels for a quarter of a century– also say,

“When excreta from on-site systems such as pit latrines – still common across much of the world – and other organic waste such as livestock and agricultural residues and food waste are included, the potential for productive reuse gets much greater.”

Furthermore, the publication adds, these waste streams are a rich source of plant nutrients essential for agriculture; globally produced municipal wastewater alone contains the equivalent of 25 per cent of the nitrogen and 15 per cent of the phosphorus applied as chemical fertilizers, as well as vital micro-nutrients and organic matter that chemical fertilizers lack.

“In just one day, a city of 10 million flushes enough nitrogen, phosphorus and potassium to fertilize about 500,000 hectares of agricultural land. In poor rural areas resource recovery could be a lifeline for small farmers.”

“Throughout history, sanitation has catalysed development,” says Kim Andersson, an SEI Research Fellow and head of the SEI Initiative on Sustainable Sanitation. “We’re at a point where it can really do that again. I’d go so far as to say that a transition to sustainable development cannot happen without a radical rethink of the way we deal with our excreta and wastewater.”

The book promises to be a key text in a growing movement to frame wastewater as a resource issue. This trend is clear not only in the number of sessions this year on wastewater and resource recovery, but also in the theme announced for next year’s gathering: “Why Waste Water”.

“How we deal with excreta and wastewater should be front and centre in discussions about water, food security and health and the future of cities – in fact about development and human well-being,” says Sarah Dickin, Research Fellow at SEI. Download the book.

Don’t know how big are you as water-wasters? Take this quick quiz. You will be amazed!

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Three Times as Many Mobile Phones as Toilets in Africahttp://www.ipsnews.net/2017/03/three-times-as-many-mobile-phones-as-toilets-in-africa/?utm_source=rss&utm_medium=rss&utm_campaign=three-times-as-many-mobile-phones-as-toilets-in-africa http://www.ipsnews.net/2017/03/three-times-as-many-mobile-phones-as-toilets-in-africa/#comments Tue, 21 Mar 2017 00:02:57 +0000 Busani Bafana http://www.ipsnews.net/?p=149503 Clean water is still a pipe dream for more than 300 million Africans. Credit: Busani Bafana/IPS

Clean water is still a pipe dream for more than 300 million Africans. Credit: Busani Bafana/IPS

By Busani Bafana
BULAWAYO, Zimbabwe, Mar 21 2017 (IPS)

Though key to good health and economic wellbeing, water and sanitation remain less of a development priority in Africa, where high costs and poor policy implementation constrain getting clean water and flush toilets to millions.

A signatory to several agreements committing to water security, Africa simply cannot afford the infrastructure to bring water to everyone, argues water expert Mike Muller.Lack of access to clean water can contribute to famine, wars and uncontrolled and irregular migration.

Sub-Saharan Africa uses less than five percent of its water resources, but making water available to all can be prohibitively expensive, Muller, of the Wits University School of Governance in South Africa and a former director general of the South African Department of Water, told IPS.

“Domestic water supply is a political priority in Africa and sanitation has grown in importance,” he said, “but the services cost money.”

According to the World Water Council, a global body with over 300 members founded in 1996 to advocate for world water security, the world needs to spend an estimated 650 billion dollars annually from now to 2030 to build necessary infrastructure to ensure universal water security.

Water woes still running

Africa is still far from enjoying the returns from investments in the water sector; for example, it has more citizens with mobile phones than access to clean water and toilets. A 2016 report published by Afrobarometer, a pan-African research network, which explored access to basic services and infrastructure in 35 African countries, found that only 30 percent of Africans had access to toilets and only 63 percent to piped water – yet 93 percent had mobile phone service.

Governments need to invest in water projects that will avail clean water to all in a world where over 800 million people currently do not have access to safe drinking water, and where water-related diseases account for 3.5 million deaths each year, said the World Water Council in a statement ahead of the World Water Day. The WWC warned that water insecurity costs the global economy an estimated 500 billion dollars annually.

“World leaders realize that sanitation is fundamental to public health, but we need to act now in order to achieve the UN’s Global Sustainable Development Goal Number 6 – to deliver safe water and sanitation to everyone everywhere by 2030,” World Water Council President Benedito Braga said in a statement. “We need commitment at the highest levels, so every town and city in the world can ensure that safe, clean water resources are available.”

Noting the key impact of water access, Braga warned that lack of access to clean water can contribute to famine, wars and uncontrolled and irregular migration.

“Water is an essential ingredient for social and economic development across nearly all sectors. It secures enough food for all, provides sufficient and stable energy supplies, and ensures market and industrial stability amongst others benefits,” he said, adding that the world has missed the sanitation target, leaving 2.4 billion people without access to improved sanitation facilities, necessitating the investment in water and sanitation which the World Water Council said brought an estimated 4.3 dollars in return for every dollar invested through reduced health care costs.

Children fetch water from a canal at the Magwe irrigation scheme in south Matabeleland, Zimbabwe. Credit: Busani Bafana/IPS

Children fetch water from a canal at the Magwe irrigation scheme in south Matabeleland, Zimbabwe. Credit: Busani Bafana/IPS

Wealth from wastewater

World Water Day 2017 focuses on waste water, which the United Nations inter-agency entity UN-Water says is an untapped source of wealth if properly treated.

The United Nations defines wastewater as “a combination of domestic effluent consisting of blackwater (excreta, urine and faecal sludge) and greywater (kitchen and bathing wastewater) in addition to water from commercial establishments and institutions, industrial and agricultural effluent.”

According the fourth World Water Development Report, currently only 20 percent of globally produced wastewater receives proper treatment, and this was mainly dependent on a country’s income. This means treatment capacity is 70 percent of the generated wastewater in high-income countries, compared to only 8 percent in low-income countries, according to a UN-Water Analytics Brief, Waste Water Management.

“A paradigm shift is now required in water politics the world over not only to prevent further damage to sensitive ecosystems and the aquatic environment, but also to emphasize that wastewater is a resource (in terms of water and also nutrient for agricultural use) whose effective management is essential for future water security,” said UN-Water.

Muller said Africa cannot talk of waste water without first delivering adequate clean water.

“The focus on waste water reflects the rich world’s desire to reduce pollution, protect the environment and sell technology,” Muller said. “There are some major cities and towns where ‘used’ water is treated and reused, in others untreated water is sought after by peri-urban farmers because it provides valuable fertilizer as well.

“But in places without adequate water supplies or sewers to remove the wastewater, waste water treatment is not yet a priority, [and] without water supply there can be no waste water.”

According to the World Water Council, about 90 percent of the world’s wastewater flows untreated into the environment. More than 923 million people have no access to safe drinking water and 2.4 billion others do not have adequate sanitation.

“Nearly 40 percent of the world’s population already faces water scarcity, which may increase to two-thirds of the population by 2025. In addition, approximately 700 million people are living in urban areas without safe toilets,” the Council said.

Waste water can be a drought-resistant source of water especially for agriculture or industry, nutrients for agriculture, soil conditioner and source of energy.

Some impurities in wastewater are useful as organic fertilizers. With proper treatment, wastewater can be useful in supporting pasture for grazing by livestock.

Clever Mafuta, Africa Coordinator at GRID-Arendal, a Norway-based centre that collaborates with the UN Environment, says an integrated and holistic approach is needed in water management across the world.

“Making strides in safe drinking water alone is a temporary success if other elements such as sanitation and wastewater management are not attended to, especially in urban areas,” Mafuta told IPS. “Wastewater often ends up in drinking sources, and as such if wastewater is not managed well, gains made in the provision of safe drinking water can be eroded.”

The UN estimates that Sub-Saharan Africa alone loses 40 billion hours per year collecting water – the same as an entire year’s labour by the population of France.

The Africa Water Vision 2025 launched by a number of UN agencies and African regional bodies in 2000 noted extreme climate and rainfall variability, inappropriate governance and institutional arrangements in managing national and transactional water basins and unsustainable financing of investments in water supply and sanitation as some of the threats to water security in Africa.

African ministers responsible for sanitation and hygiene adopted the Ngor Declaration on Sanitation and Hygiene in May 2015 in Senegal, committing to access to sanitation and eliminating open defecation by 2030. However, this goal remains extremely distant.

African Ministers Council on Water (AMCOW) has developed an African monitoring and reporting system for the water and sanitation sector. Executive Secretary Canisius Kanangire calls it an important step in ensuring effective and efficient management of the continent’s water resources and the provision of adequate and equitable access to safe water and sanitation for all.

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Women’s Pay Gap “Biggest Robbery in History”: UN Womenhttp://www.ipsnews.net/2017/03/womens-pay-gap-biggest-robbery-in-history-un-women/?utm_source=rss&utm_medium=rss&utm_campaign=womens-pay-gap-biggest-robbery-in-history-un-women http://www.ipsnews.net/2017/03/womens-pay-gap-biggest-robbery-in-history-un-women/#comments Tue, 14 Mar 2017 22:43:20 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=149413 Phumzile Mlambo-Ngcuka, Executive Director of UN Women with actress Patricia Arquette. Credit: UN Women/Ryan Brown.

Phumzile Mlambo-Ngcuka, Executive Director of UN Women with actress Patricia Arquette. Credit: UN Women/Ryan Brown.

By Tharanga Yakupitiyage
UNITED NATIONS, Mar 14 2017 (IPS)

A new UN initiative launched on Monday night calls the women’s pay gap, which sees women paid 23 percent less than men globally: “the biggest robbery in history.”

During the 61st session of the Commission on the Status of Women (CSW) meeting, UN Women and the International Labor Organisation (ILO) launched the high-profile Equal Pay Platform of Champions to raise awareness on the persistent gender wage gap.

The coalition consists of celebrities and activists including award-winning documentary filmmaker Kamala Lopez, Olympic gold medalist Abby Wambach, President of the Garment and Allied Workers Union Anannya Bhattacharjee, and actress Patricia Arquette.

“There has been a normalization for centuries of a bias against women, an acceptance that we are less than…there is no woman that [the wage gap] does not affect,” Lopez said as she moderated the launch.

UN Women’s Executive Director Phumzile Mlambo-Ngcuka echoed similar sentiments, stating that such bias has led women’s work in a range of sectors to be undervalued.

“What does a woman in Wall Street have in common with a woman who has a shop in Brazil? Or in a cane farm in South Africa? Or in a sweatshop in Bangladesh? Chances are that they are all not paid equally by their different employers,“ said Mlambo-Ngcuka to delegates in the filled General Assembly Hall.

Globally, the gender pay gap is at approximately 23 percent as women make 77 cents for every dollar earned by men.

The figure is even higher in some regions and among certain communities. In the U.S., African American women earn only 60 cents, Native American women 59 cents and Hispanic women 55 cents for every $1 that white men earn. In Turkey, women earn up to 75 percent less than their male counterparts.

“What does a woman in Wall Street have in common with a woman who has a shop in Brazil? Or in a cane farm in South Africa? Or in a sweatshop in Bangladesh? Chances are that they are all not paid equally by their different employers,“ -- Phumzile Mlambo-Ngcuka

Retired U.S. soccer player Abby Wambach shared her story and reasons for joining the Platform of Champions, stating: “I have two gold medals, I won a World Cup with my country…but I actually have to worry about paying my bills now.”

Before the enactment of Title IX, which guarantees that no person in the U.S. can be discriminated on the basis of sex in education receiving federal funds, opportunities for women in sports were extremely limited as women received only two percent of academic athletic budgets. It has since increased to 40 percent due to the law, but its existence is now threatened by the new administration.

“I want to make sure that the world that I leave is better than the world that I found,” Wambach said in reference to raising her stepdaughter.

Garment and Allied Workers Union’s President Anannya Bhattacharjee shed light on the plight of garment workers around the world, including those in Asia who are responsible for the production of over 60 percent of the world’s garments.

Bangladesh alone, which is the world’s second largest textile industry, earns more than $25 billion a year from exports and employs over 4 million workers, the majority of whom are women.

“The workers of this industry who are mainly women cannot access their basic human rights…industries that are dominated by women tend to be lower paid, which means that millions of women and generations of families live in poverty,” said Bhattacharjee.

In December, protests erupted in the South Asian nation as garment workers took to the streets to demand a monthly minimum wage increase from 67 dollars to 187 dollars. The call was dismissed, more than 1500 workers were fired, and over 40 arrested.

Bhattacharjee highlighted the need for a living wage, and to recognize the additional unpaid labor that women often take up to care for their families.

ILO estimates that it will take 70 years to close the gender wage gap at the current rate while the World Economic Forum warned that it could take 170 years for women and men to be paid the same for equal work due to reversed progress over the last few years.

Governments also joined in the call to action, including the Government of Iceland who recently became the first country to require equal pay for all.

“We had laws banning pay discrimination since 1961 in Iceland. Still, even though we are leading in equality, we still have a gender pay gap of around 7 percent. And that’s absolutely intolerable,” said Iceland’s Social Affairs and Equality Minister Thorsteinn Viglundsson.

The country says it wants to eradicate the gender pay gap by 2022.

Mlambo-Ngcuka noted the need for a comprehensive response to the complex wage inequality issue including by providing education to promote a shift in societal norms and sharing best practices from around the world to push for laws similar to those of Iceland.

“We can no longer afford to stand by and allow these deeply entrenched discriminations to persist…Every one of us can be a champion for women and girls. There are no superpowers necessary,” Lopez said.

CSW is the largest inter-governmental forum on women’s rights. The Equal Pay Platform of Champions is a part of the broader UN Women-ILO led Global Equal Pay Coalition that helps create concrete targets and laws to reduce the gender pay gap by 2030 at the global, regional and national levels.

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Most Financial Inflows Not Developmentalhttp://www.ipsnews.net/2017/03/most-financial-inflows-not-developmental/?utm_source=rss&utm_medium=rss&utm_campaign=most-financial-inflows-not-developmental http://www.ipsnews.net/2017/03/most-financial-inflows-not-developmental/#comments Tue, 14 Mar 2017 15:11:01 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=149410 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 and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. ]]> The World Economic Situation and Prospect report 2017 calls for a complete revamp of the international financial system to address development finance issues and ensure needed resource transfers to developing countries. Credit: IPS

The World Economic Situation and Prospect report 2017 calls for a complete revamp of the international financial system to address development finance issues and ensure needed resource transfers to developing countries. Credit: IPS

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Mar 14 2017 (IPS)

Recent disturbing trends in international finance have particularly problematic implications, especially for developing countries. The recently released United Nations report, World Economic Situation and Prospects 2017 (WESP 2017) is the only recent report of a multilateral inter-governmental organization to recognize these problems, especially as they are relevant to the financing requirements for achieving the Sustainable Development Goals (SDGs).

Resource outflows rising
Developing countries have long experienced net resource transfers abroad. Capital has flowed from developing to developed countries for many years, peaking at US$800 billion in 2008 when the financial crisis erupted. Net transfers from developing countries in 2016 came close to US$500 billion, slightly more than in 2015.

Most financial flows to developing and transition economies initially rebounded following the 2008 crisis, peaking at US$615 billion in 2010, but began to slow thereafter, turning negative from 2014. Such a multi-year reversal in global flows has not been seen since 1990.

Negative net resource transfers from developing countries are largely due to investments abroad, mainly in safe, low-yielding US Treasury bonds. In the first quarter of 2016, 64 per cent of official reserves were held in US$-denominated assets, up from 61 per cent in 2014.

High opportunity costs

By investing abroad, developing countries may avoid currency appreciation due to rising foreign reserves, and thus maintain international cost competitiveness. But such investment choices involve substantial opportunity costs as such resources could instead be used to build infrastructure, or for social investments to improve education and healthcare.

The African Development Bank estimates that African countries held between US$165.5 and US$193.6 billion in reserves on average between 2000 and 2011, much more than the infrastructure financing gap estimated at US$93 billion yearly. The social costs of holding such reserves range from 0.35% to 1.67% of GDP. Investing about half these reserves would go a long way to meeting infrastructure financing needs on the continent.

This high opportunity cost is due to the biased nature of the international financial system in which the US dollar is the preferred reserve currency. As there is no fair and adequate international financial safety-net for short-term liquidity crises, many developing countries, especially in Asia, have been accumulating foreign reserves for ‘self-insurance’, or more accurately, protection against sudden capital outflows or speculative currency attacks which triggered the 1997-1998 Asian financial crisis.

Foreign capital inflows falling
Less volatile than short-term capital flows, foreign direct investment (FDI) in developing countries was rising from 2000, peaking at US$474 billion in 2011. But since then, FDI has been falling to US$209 billion in 2016, less than half the US$431 billion in 2015.

Most FDI to developing countries continues to go to Asia and Latin America, while falling commodity prices since 2014 have depressed FDI in resource rich Sub-Saharan and South American countries. Falling commodity prices are also likely to reduce FDI flows to least developed countries (LDCs), which need resource transfers most, but only receive a small positive net transfer of resources.

Bank lending to developing countries has been declining since mid-2014, while long-term bank lending to developing countries has been stagnant since 2008. The latest Basel capital adequacy rules also raise the costs of both risky and long-term lending for investments.

Portfolio flows to developing countries have also turned negative in recent years. Developing countries and economies in transition experienced net outflows of US$425 billion in 2015 and US$217 billion in 2016. The expected US interest rate rise and poorer growth prospects in developing countries are likely to cause further short-term capital outflows and greater exchange rate volatility.

Aid trends disappointing
Although aid flows have increased, aid’s share of GDP has declined after 2009. The recent increase has been more than offset by counting expenditure on refugees from developing countries as aid. When refugee expenditures are excluded from the aid numbers, the 6.9 per cent increase in 2015 falls to a meagre 1.7 per cent. In five DAC countries, aid numbers fell once refugee costs were omitted. Thus, WESP 2017 emphasizes the importance of decomposing aid components and of separately tracking country programmable aid (CPA).

At 0.30 per cent of the gross national income (GNI) of OECD DAC members, official aid falls far short of the 1970 commitment by developed countries to provide aid equivalent to 0.7 per cent of GNI. Only six OECD countries – namely Denmark, Luxembourg, Netherlands, Norway, Sweden and the United Kingdom – met or exceeded the UN target in 2015. But aid to LDCs has been declining since 2010; even bilateral aid declined by 16 per cent in 2014.

Meanwhile, disbursements by multilateral development banks only increased marginally in 2015 while new commitments declined. Commitments by the World Bank’s concessional lending arm, the International Development Association (IDA), which relies on donor contributions to provide concessional credits and grants to low-income countries, declined in real terms during 2014-2015.

Reversing resource outflows
Developing countries also lost an estimated US$7.8 trillion in illicit financial flows (IFFs) between 2004 and 2013 through tax avoidance, transfer-pricing, trade mis-invoicing and profit shifting by transnational corporations (TNCs). Over the past decade, IFFs were often greater than combined aid and FDI flows to poor countries.

Hence, WESP 2017 calls for a complete revamp of the international financial system to address these development finance issues and ensure needed resource transfers to developing countries. Failing to do so will put the SDGs at risk.

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16-Hour Days for Zimbabwe’s Womenhttp://www.ipsnews.net/2017/03/16-hour-days-for-zimbabwes-women/?utm_source=rss&utm_medium=rss&utm_campaign=16-hour-days-for-zimbabwes-women http://www.ipsnews.net/2017/03/16-hour-days-for-zimbabwes-women/#comments Tue, 07 Mar 2017 02:00:20 +0000 Sally Nyakanyanga http://www.ipsnews.net/?p=149257 Constance Huku, 29, of the rural town of Masvingo in southeastern Zimbabwe, carries a pile of wood on her head. Credit: Sally Nyakanyanga/IPS

Constance Huku, 29, of the rural town of Masvingo in southeastern Zimbabwe, carries a pile of wood on her head. Credit: Sally Nyakanyanga/IPS

By Sally Nyakanyanga
HARARE, Mar 7 2017 (IPS)

As the cock crows, Tambudzai Zimbudzana, 32, is suddenly awakened from sleep. She quickly folds her blankets and strides outside her three-room, sheet iron-roofed house in rural Masvingo.

Picking up a few logs of firewood from a huge pile, Zimbudzana sets a fire to boil water and prepare food for her husband to bathe and eat before cycling to work.“Men should take the lead to lessen the care burden of women as this has a positive effect on the whole household, community and country at large.” --Kelvin Hazangwi

“Shorai! Shorai! Shorai!” Zimbudzana calls her 14 year-old daughter who is fast asleep to assist her with other duties.

“My day begins at 4 am, cooking, setting a fire, fetching water and spending the rest of the day in the field or garden depending on the season. My day often ends at ten in the evening as I have to ensure all household work is done, including attending to the demands of my six children, before I put my body to rest,” Zimbudzana told IPS.

She said she rarely attends community activities because of time and work that demands her presence.

Many women and girls carry the heavy, unequal and seemingly natural burden of care work, which is rarely appreciated, not financially beneficial and deeply rooted in culture.

“In recent years, significant evidence and research findings demonstrate that investments in addressing unpaid care burden– by governments, civil society and employers – improve wellbeing, women’s enjoyment of their rights, economic development and reduce inequality,” says Anna Giolitto, Oxfam Programs Manager on Women’s Economic Empowerment and Care (WE-Care) program.

Since 2014, Oxfam in Zimbabwe has been working to strengthen women’s economic rights by building data on unpaid care, innovate on interventions and influence policy and practice to address care as part of women’s empowerment.

Oxfam has carried out programmes in three districts since 2014 and developed two tools to assess unpaid household work and care of people in the communities: The Rapid Care Analysis and Household Care Survey.

“The key aim is to reduce the time or labour required for daily housework and caring for people, and thus increase women’s participation, empowerment, leadership and representation in both the public and private spheres,” Giolitto told IPS.

Results of the survey showed that women do 3–6 times more hours of care work than men.

Charity Ncube, 30, of the rural town of Masvingo in southeastern Zimbabwe, carries her child and a 20-litre container of water. Credit: Sally Nyakanyanga/IPS

Charity Ncube, 30, of the rural town of Masvingo in southeastern Zimbabwe, carries her child and a 20-litre container of water. Credit: Sally Nyakanyanga/IPS

On Mar. 8, countries around the world will come together to commemorate International Women’s Day, under the theme “Women in the Changing World of Work”.

According to UN Women, the world of work is evolving, with significant implications for women. There is globalization, technological and digital revolutions and opportunities for women.

However, the growing informality of labour, unstable livelihoods and incomes, new fiscal and trade policies, and environmental impacts have a negative effect on the well-being of many women in Zimbabwe and the world. As such, they must be addressed in the context of women’s economic empowerment.

Women in the informal economy in Zimbabwe grapple with a hostile economic environment, security and customs officials on a daily basis.

Lorraine Sibanda, President of the Zimbabwe Chamber of Informal Economy Associations (ZCIEA), says, “Our goods are confiscated at border posts due to the limited amount of goods one is allowed to bring into the country. We end up paying more money to transporters in order to get reasonable stock across the border.”

Sibanda added that the transporters’ charges are not consistent and one may pay several times for the same goods.  Further, they have to carry heavy loads of goods over a long period of time, which can have health implications for these women involved with cross-border trading.

“Little or lack of knowledge of customs and exercise procedures such as declaration of goods also contributes traders falling prey to predatory transporters, immigration personnel and other elements who prowl the border post for a living,” Sibanda told IPS.

The Zimbabwe National Statistics Office (ZimStats) has noted that 84 percent of the country’s working class are in the informal sector, with 11 percent in formal employment. Further, ZCIEA told IPS that 65 percent of its members are women.

Though Oxfam does not work with women cross-border traders in Zimbabwe, it has used the “four R’s” approach for change.

  • Recognize care work at policy, community and household level, make it visible and value it. Change the idea that it’s just natural activity of women, it’s work.
  • Reduce care work through using time labour saving technologies and services;
  • Redistribute responsibility for care more equitably – from women to men, and from families to the State/employers.
  • Represent carers in decision making.

“Women will be able to do more when there are men sharing the responsibility at home as well as playing a key role in decisions at their households,” Giolitto said.

Kelvin Hazangwi from Padare (Men’s Forum on Gender) also emphasized the need to share unpaid care work.

“Men should take the lead to lessen the care burden of women as this has a positive effect on the whole household, community and country at large,” says Hazangwi.

Padare is a men’s forum advocating for gender equality in Zimbabwe.

ZCIEA believes the informal sector is the future, thus gender-inclusive economic policies, formalization of informal trading, decent infrastructure, provision of social protection, healthcare services, recognition of informal traders as key economic players will result in sustainable, inclusive growth.

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