José Antonio Ocampo. Credit: UN Photo/Mark Garten

The 2013 U.N. Human Development Report entitled, “The Rise of the South: Human Progress in a Diverse World” and its lead author, Khalid Malik, suggest that as the South grows economically, its citizens experience an “expansion of human capabilities and choices” that is leading to further social and political development.

Others are more sceptical of the purported “rise of the South”, pointing to the world’s widening income inequality, the lack of correlation between economic growth and equitable and sustainable socio-economic policies, and relatively unchanging global power dynamics.

On Monday, Columbia University’s Committee on Global Thought hosted a conference to discuss these issues with panelists including Malik, U.N. Ambassador Luis Alfonso de Alba of Mexico, and Dr. Jose Antonio Ocampo, a professor at Columbia’s School of International and Public Affairs and a former U.N. Under-Secretary-General of Economic and Social Affairs.

Ocampo called Malik’s characterisation of the rise of the South as a “tectonic change” a bit strong.

While he recognises the important changes that are occurring now, with regard to overall human development Ocampo says, “It’s a process that will have long-term implications.”

Excerpts from IPS’s interview with Ocampo on the impact of newly rising economies in international trade and global governance follow.

Q: Both you and Ambassador de Alba agree on the importance of multilateral global governance in terms of human development. Ambassador de Alba addressed the shortcomings of current institutions and, in particular, the U.N.’s inefficient decision-making processes. Discuss what productive, multilateral global governance would look like.

A: I have written extensively on the G20 and my perspective is that these informal institutions, which I call “elite multilateralism”, are not the best form of global governance. I like “the G’s” when they are part of multilateral institutions.

Global governance derives its legitimacy at the global level just as governance does at a national level, from universality. You have to have universal membership. For that purpose, the best way for these “G’s” to work is within a formal multilateral setting.

At the same time, I agree that you have to have effective decision-making mechanisms. Smaller decision-making bodies, in which everyone is directly represented, are fundamental. In all democracies, decisions are taken by a limited number of actors at the end, but those actors have to be representing all of the membership.

Q: What is the state of South-South trade relationships today? What constitutes an ideal South-South partnership that allows for progress toward a more advanced, dynamic economy?

A: There is one sort of South-South trade that is really part of North-South trade. For example, Southeast Asia is producing parts and capital goods that are assembled in China and then exported to the U.S.

In the case of China-India, it’s a huge deficit for India and surplus for China. There is a second China-centered relationship, in which China essentially imports raw commodities and exports manufactured goods. I would say, for commodity producers – i.e. sub-Saharan African, South America, and some of the Middle East – that’s an opportunity. But it’s still a very imbalanced trade relationship. In the long-term, you have to diversify away from that.

There is a third type which are legitimately South-South flows in which you have, more or less, a balanced relationship. For example, the inter-regional trade in Latin America is one relationship of that type – it starts and ends in developing countries. I think that’s the most positive of all, but it’s less common.

Q: As these newly rising economies close the income gap that separates them from developed countries, what do you think characterises fair and mutually-beneficial North-South partnerships?

A: In the past, the North-South relationship was considered to be an asymmetric relationship in which the North had to support the development of the South so it could cash out. I think that concept has become obsolete because of the heterogeneity of developing countries.

Ambassador de Alba mentioned this almost sacred principle of “common but differentiated responsibilities”. In the past, developing countries wanted to be treated according to the second part of that principle – “differentiated” – and I think, as de Alba pointed out, the “differentiated” still has to be considered today.

Even major emerging economies are developing countries – they are technologically dependent, they still have a large share of the labour force in low productivity activities, and the GDP per capita is still a fraction of that of developed countries. So they have a right to be treated with some differences internationally. But they are, at the same time, responsible and the responsibility those countries have is very important.

Q: How have Southern governments been an obstacle to human development and, on the other hand, what should they be prioritising in order to create positive conditions for growth?

A: The basic problem is that power ends up in the hands of the elite that uses power to further its own interests. This has been associated with developing countries, but it can also happen in developed countries, particularly in the financial sector. There has been a change in that regard during the recent crisis; now there is a bit more hope that financial policy will be detached from financial interests.

Successful human development strategy has to include very active social policy, including education, health, and social protections, and at the same time very active economic development policy, particularly the generation of employment.

We have seen so many cases of countries that have improvements in education and when an educated labour force comes to the market, there is no employment to absorb that population. You have to have an active social policy but also an active economic policy and the basic connection between the two is called employment.

The Palestinian village Zaatara at the foot of Herodion. Credit: Pierre Klochendler/IPS.

If Herod the Great was a controversial figure of his time, 2,000 years on the controversy isn’t about his legacy; it’s about who holds the rights to excavate and preserve his artefacts.

A new exhibition at the Israel Museum which, for the first time, displays the king’s relics, might serve as a great tribute to him, but is also a powerful reminder of how the history of the Holy Land and today’s conflict between Israel and the Palestinians have become intertwined.

On top of a hill “raised to a greater height by the hand of man; rounded off in the shape of a breast,” as Flavius Josephus, Jewish historian of Rome described it, the old monarch had a fortress-palace erected as memorial for himself; and named it after himself – Herodion for Herod.

Herodion, from where the bulk of the exhibition originates, is visible from Jerusalem and dominates the Judaean desert, since 1967 part of the Israeli-occupied West Bank which the Palestinians seek as part of their future state.

Herodion is in Area C, namely 62 percent of the West Bank maintained under full Israeli control since the 1993 Oslo interim peace accords. An Israeli military base protects the site.

The Holy Land changed hands time and again since Herod’s time, but at 758 metres high, the lay of the land looks unchanged – at first glance.

Dotting the surroundings, Israeli settlements and Palestinian villages vie for rights to the land.

Appointed by the Romans, Herod ruled the vassal kingdom of Judaea, part of the Palaestina province of the Roman Empire, for 33 years between 37 and 4 BCE.

“He was a cultural bridge, working on both sides, caught between the exigencies of the Roman Empire and that of Judaism,” says David Mevorah, the exhibition’s curator. “By his people he was regarded as a convert Jew; by Rome as a client king. But Judaea prospered in his time.”

Exquisite tableware from glass and fine and glossy red roman pottery; a statue of Cleopatra, the last pharaoh of Ancient Egypt; a decorated basin, a gift from his patron Emperor Augustus, whose bust is on display; his royal highness’s bath – all were found in situ.

Adorned with stucco and rare frescoes of sacred landscapes and navy battles painted with pigments on plaster, also imported from Herodion is the royal chamber.

The jewel of Herod’s crown, so to speak, is the reconstruction of his mausoleum which sheltered what archaeologists believe is the sarcophagus in which his body was placed. The man surely possessed a taste for the arts – even on his deathbed.  “He was very aware of historic memory,” comments the curator.

Here nowadays, historic memory refers mostly to competitive national quests.

Excavations at Herodion began in 1972 under Israeli archaeologist Ehud Netzer. “No one asked us or consulted us, then or now,” protests Jamal Amro, a Palestinian scholar from Bir Zeit University familiar with the site.

“The Israelis plundered Herodion,” he adds. “Israel uses archaeology to shape history and validate the country’s occupation of the West Bank and East Jerusalem.”

After prolonged exploration, Netzer uncovered Herod’s tomb in 2007. Two years later, he died in tragic circumstances at the site.

It took three more years to move some 30 tonnes of carved masonry from Herodion to the museum. “We actually moved thousands of fragments to our laboratories, working intensively from here on restoration and reconstruction,” says Mevorah.

“We’ve performed quite an important role for world cultural heritage,” says Israel Museum director James Snyder. But the self-complimentary effusion has been short-lived.

Palestinians complain that Israeli archaeological activities in Palestinian territories are illegal. “According to international law, this is a crime,” declares Amro. “Israel must recognise the rights of the Palestinian nation to their historical sites.”

The Israeli government lists Herodion as a national heritage site. Granted full membership of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), the Palestinian Authority now wants to nominate Herodion for recognition as a world heritage site.

“The Oslo Accord makes Israel responsible for custodianship over archaeology in the West Bank until a final settlement is reached,” retorts Snyder.

A ruthless ruler who had the last lineage of the Hasmonean dynasty that ruled before him executed, including high priests, opponents, his beloved second wife and three of his children, Herod was feared by his subjects. In Christianity, he’s ‘Horrid Herod’, thought of as a serial baby killer.

At the museum, he is mostly remembered as a master builder for his colossal projects, including expansion of the Second Temple in Jerusalem revered in Judaism. Centuries later, the Haram al-Sharif or Noble Sanctuary would be edified on its ruins.

For Amro, “Herod and Herodion are important not only to Jews but to Christians and Muslims. We should be in charge.”

“We borrowed the artefacts as authorised loans; we’ll retrocede them once the exhibition wraps by year’s end,” assures Snyder.

The question is where the relics will be returned to, and to whom. “To the authority in charge of archaeology in the West Bank,” clarifies Mevorah. That is, to the ‘Civil Administration’, a well-known euphemism for Israeli military authorities in the West Bank.

“They’ll never give back the artefacts to us, forget it,” protests Amro, not sure himself whether “it” refers to the site and its treasures or to the West Bank.

“When Israel signed the Camp David peace accord with Egypt in 1979 and withdrew from Sinai,” recalls Snyder, “there was a very intelligent division of material: what related to Egyptian heritage was returned to Egypt; what related to Jewish heritage stayed with Israel.”

Would such a model be applicable to Israel and Palestine were peace to be signed between them? “I’m just a museum director, but it was well done,” says Snyder.

José Graziano da Silva, director-general of the Food and Agriculture Organisation of the United Nations (FAO). Credit: FAO News

In the last ten years we have seen major changes in the behaviour of food prices. Up until around 2002 real food prices were falling but they have now been above trend for longer than at any other time in the previous forty years.

Food prices have also been volatile and the combination of high and volatile food prices will continue to challenge the ability of consumers, producers and governments to cope with the consequences.

All this makes it timely to reflect on recent price events and the reactions of the international community, especially since price volatility is likely to continue for the foreseeable future.

Set against this backdrop, the Ministerial Meeting on Food Price Volatility held on World Food Day on Oct. 16 was particularly relevant.

Twenty-five ministers and 13 deputy ministers met to discuss the issues and exchange views on how to strengthen measures to contain food price volatility and to reduce its impact on the most vulnerable populations.

The meeting recognised that a lot was learned from the 2007-8 and 2010-11 price hikes about appropriate responses at international, regional and national levels. They also agreed that much more could be done based on the Action Plan on Food Price Volatility and Agriculture that was adopted by the G20 leaders in November 2011.

This action plan launched major international initiatives, in particular the Agricultural Market Information System (AMIS), hosted at the headquarters of the Food and Agriculture Organisation (FAO). AMIS monitors developments based on the latest available information, analysing the global supply/demand situation and providing objective assessments.

Born just one year ago, AMIS is already a fully functioning mechanism and played a key role this summer in calming markets and preventing the deterioration of a vulnerable food market situation into the potential crisis that countless commentators were so quick to predict.

AMIS is providing an objective assessment of the market situation and risks, while calling on G20 member states to refrain from adopting policy measures that might further destablise markets.

This experience shows that coordinated international action and enhanced transparency and information on agricultural markets can make a difference in limiting food price spikes and excessive volatility.

Even when they are affected by adverse weather conditions that reduce production and export capacity, it is important that governments of exporting countries act transparently and dialogue with commercial actors to assure local availability of cereals without creating uncertainty in international markets.

This coordination is crucial because it can stop a drought or a flood from becoming a crisis.

Other actions to limit price spikes and excessive volatility ­ adjustments to trade rules, the creation of emergency food reserves, reform of biofuel policies and control of speculation ­ are all still works in progress. ‘Excessive’ is the keyword, because some degree of volatility is a characteristic of agricultural markets.

Action also needs to be taken to build resilience to that volatility in the medium-term.

This requires substantially increased investment in agricultural production with a particular emphasis on support to smallholder farmers.

Financing will need to come primarily from the private sector including smallholders themselves and major companies. This is a controversial area and concerns, especially over large-scale land investments, are well founded.

It is vital that any investment is made responsibly and for the benefit of all stakeholders. This is where the Principles for Responsible Investment in Agriculture, which will be discussed by the Committee on World Food Security (CFS), and the Voluntary Guidelines on Land Tenure previously endorsed by the CFS, have an important role to play.

FAO is prepared to assist governments in implementation of these safety measures. AMIS, Voluntary Guidelines and the Principles for Responsible Investments are all elements of the new global governance on food security that we are building, and that has the CFS as its cornerstone. We are making up for lost time, as food security governance was neglected until a few years ago. Fortunately we are learning that, in a globalised world, it is impossible to ensure food security in a single country or region. (END/COPYRIGHT IPS)

*Jose Graziano da Silva is the director-general of the United Nations Food and Agriculture Organization (FAO).

IMF chief Christine Lagarde has urged members to act on a suite of reform measures that would significantly increase the voices of developing countries, with mixed results. Credit: MEDEF/cc by 2.0

“There was some movement, but in my opinion this so-called reduction in the number of European chairs has petered out into a reshuffling that is largely cosmetic in nature,” Paulo Nogueira Batista, the IMF executive director for Brazil and several other Latin American and Caribbean countries, told IPS. “The Europeans have cleverly upgraded the representation of the emerging markets of the E.U., such as Turkey and Poland.”

The IMF’s executive board, based at the institution’s Washington headquarters, consists of 24 members, most of which represent shifting constituencies of the Fund’s 188 members. In 2010, a package of reforms was agreed to, aimed at rectifying longstanding concerns over the IMF’s governance imbalance.

While these reforms were meant to be finalised during the annual meetings of the IMF and World Bank, held Oct. 9-13 in Tokyo, and implemented this coming January, both deadlines now look set to be missed as the United States focuses on its presidential election and IMF members are deadlocked on key issues.

Part of this reforms package includes changes in who sits on the executive board, with the Europeans agreeing to give up two seats in order to increase the representation of developing countries. That process has now led to an unusually large amount of movement on which countries will align with which constituencies – the most significant changes in this regard since the early 1990s.

The second part of the reforms process has to do with voting rights, based on “quotas” arrived at through a contentious and complex formula that has favoured developed economies. Calls have mounted for the system to change, particularly to take into account a changed global economic situation in which so-called middle income countries (particularly the BRICS, referring to Brazil, Russia, India, China and South Africa) are increasingly crucial players.

Batista says that reforms of the quotas formula constituted the single most controversial topic discussed in Tokyo. Countries including the United States, Brazil and most of the BRICS want the formula to be based on gross domestic product, while the Europeans stress the issue of economic “openness”, which would specifically favour EU economies.

“The Europeans use a highly unusual definition for ‘openness’ – a definition so strange that I have proposed we rename this ‘Europeanness’,” Batista said, speaking not in his official capacity. “The main role seems to be to artificially inflate the quotas of European countries.”

In recent days, Batista, already one of the more outspoken of the IMF executive directors, has been openly critical of the European bloc at the Fund.

“What we’ve seen in Tokyo is that, unfortunately, some Europeans are backtracking on their pledges to quota review,” he told IPS shortly after arriving back to Washington from Tokyo. “This is a major concern, as the credibility of the Fund, of the G20 and of the individual countries is predicated on the faithful implementation of what they sign up to in the communiqués – and we’re not going to take this lightly.”

Post-crisis model

Over the past year, Brazil has played an increasingly central role in enunciating the demands of developing countries, a push that has been particularly embodied by the IMF reforms process.

“Brazil has been wonderful in that they have outright threatened not to turn over certain financial commitments to the IMF until the quota reforms move forward – not only regarding the 2010 agreements, but surrounding the 2013 deadline as well,” Jo Marie Griesgraber, the executive director of the New Rules for Global Finance Coalition, a Washington-based international network, told IPS.

“The Brazilians have been very forthright in this process – putting out notes on ridiculous anomalies, presenting these to the board and then, very unusually, making them public afterwards.”

Now the world’s sixth largest economy – larger than that of the U.K. – Brazil has in recent years been making a concerted effort to step up its bilateral relations throughout much of the Global South, particularly in Africa. Under former president Luiz Inacio Lula da Silva, the country opened more than a dozen new embassies across Africa, with the 37th reportedly opening soon, in Malawi.

Brazilian officials have increasingly focused on foreign aid funding, which a 2010 tabulation suggested was already reaching four billion dollars a year across all parts of the government, and growing rapidly. That’s a significant turnaround for a country that for decades was a net aid recipient.

More importantly, Brazilian aid has become characterised by a uniquely forceful emphasis on South-South technical assistance, particularly focused on agriculture and social issues. This is an approach that could increase substantially given new projects now in the works.

Today, Brazil is at the centre of a global push to define a new development paradigm, which has only received greater momentum – and focus – in the aftermath of the global economic crisis.

“What’s at stake here is not just about IMF voting share. Since the crisis, the previously preferred models, the so-called Washington Consensus, have been called into question,” Gregory Chin, a senior fellow with the Centre for International Governance Innovation, in Waterloo, Canada, told IPS.

“The BRICS countries are advocating a different understanding of best practices on national development, and the Brazilians have been the leading diplomatic force in pushing these changes.”

Such models, including what is known as countercyclical financing, directly contradict the approaches long pushed by institutions such as the IMF and the U.S. Treasury. Yet with several of the emerging economies having weathered the financial crisis better than anticipated, Chin says that such models are now gaining greater attention in the Washington headquarters of the IMF, the World Bank and beyond.

Beyond the BRICS

Even as Brazil and others work to strengthen the reforms process within the IMF, Chin points to the broader parallel effort to set up a BRICS-funded development bank.

“That is, they have one foot outside of the system versus one foot inside,” Chin says. “They’ve made sure to create for themselves this alternative track, because they’ve seen how slow things are happening in the IMF.”

Analysts are now looking to the next BRICS summit, to be held in Durban, South Africa, in March, with the South African hosts reportedly pushing hard for agreement on a major announcement on a BRICS development bank. Many are also weighing whether such an institution would be able to move beyond a BRICS-only institution to work throughout the developing world – potentially falling in line with Brazil’s focus on South-South cooperation.

“Brazil is trying to increase its role in the IMF and other international organisations and G20, and I think this is happening – all of the BRICS countries are raising their involvement in these institutions in the hope that these institutions will change fundamentally,” IMF executive director Batista says.

“Hopefully, the IMF will eventually no longer be a ‘North Atlantic monetary fund’, dominated by the North Atlantic. Although we are running up against a lot of institutional inertia, the IMF and other international fora must become truly international if they want to be relevant in today’s world economy.”

Large rich nations are falling short in their commitments to global aid and its effectiveness. Credit: Miriam Gathigah/IPS

The United States is lagging far behind other developed countries in its policies aimed at improving global prosperity, according to new research.

The tenth annual Commitment to Development Index (CDI) was released this week by the Washington-based think tank Centre for Global Development (CGD). The report ranked the efforts of 27 developed countries to support developing countries.

As in previous years, Denmark, Sweden, Norway and the Netherlands vied for the top spots. This year the United Kingdom, in ninth place, was the sole country from the wealthy Group of Seven (G7) bloc to make the top 10, while the United States ranked nineteenth.

Unlike most rankings of its kind, the CDI does not focus primarily on the quantity of foreign aid each country gives per year. Rather, it takes into account seven different components of development and averages a country’s score in each area. It also focuses on the scope of the integration of a country’s policies.

“All nations are linked in many ways, not just through aid – many policies in wealthy nations affect people all around the world,” David Roodman, a senior fellow at CGD and the chief architect of the CDI, explained in an interview last week.

Comprising each of the index’s seven components, such as quantity and quality of foreign aid, or migration and environmental policies, are multiple factors that contribute to a country’s overall score. In the category of foreign aid, for example, the index looks at what percentage of a country’s gross domestic product is given away, and whether the money is “tied” to certain conditions, goes to corrupt governments, or is given in the form of loans.

After scaling the scores to an average of 5.0, researchers found Denmark to have the highest score in 2012 (7.0), while South Korea had the lowest (2.7).

The United States scores above average on only two of the seven components, and with a score of 4.8 it ranks behind all major industrialised nations except Italy and Japan. Meanwhile, Nordic countries repeatedly stand at the top of the list, for several reasons.

“Superficially it’s about foreign aid; each of these countries gives a large amount of foreign aid for the size of their economy, about 1 percent of GDP,” Roodman said of the Nordic countries. “They are also pretty good with environmental policy, doing more than most countries to reduce the use of fossil fuels.”

Citizens of these countries, Roodman explained, tend to trust more in their government and in how taxes are spent, a sentiment that could potentially allow government officials to feel more comfortable making significant commitments to developing countries.

Owen Barder, a senior fellow at CGD and director for Europe, offered a broader explanation for Nordic countries’ top rankings. In an interview last week, Barder said, “These smaller nations are forced to have an international outlook because of their size. I think this results in a sense of national pride in the role these countries play in international peace and environment negotiations.”

Barder regarded the CDI as an opportunity to evaluate how Europe as a whole scored in individual components and to begin a continent-wide conversation on how improvements can be made.

Not all countries look favourably on the CDI’s metrics. Japan, which is consistently ranked at or near the index’s bottom, responded to the 2006 CDI by criticising its method.

“By using its own method to measure aid effectiveness of each donor and publishing its results…the [CDI] has various problems and has not evaluated fairly developed countries’ policies for international development,” Japan’s ministry of foreign affairs wrote.

Japan received a low score in trade partly because of its high import barriers, especially on rice. Yet the Japanese government has argued that only the negative impact of its trade tariffs were considered, not the positive agricultural subsidies it also provides.

“The CDI does not reflect the fact that major developed countries…take development challenges by making maximum use of their comparative advantages and by complementing one another through aid coordination,” the ministry stated. (Roodman’s response can be found here).

Indeed, the CDI does have some structural flaws. The countries currently listed on the index are all democracies, for instance. These countries “preach concern for human life and dignity within their own borders”, the index’s overseers have written, noting that the CDI “looks at whether rich countries’ actions match their words”.

Yet in the past decade a host of “middle income” countries – China, India, Brazil – have emerged as global economic leaders.

“I don’t think changes in the world mean that Japan or the U.S. are any less obliged to contribute to the prosperity of developing countries,” Roodman said. He added that he is considering broadening the index to a group of countries similar to the Group of 20 (G20) to include rich developing countries that still have a large amount of poverty within their borders.

Incorporating such countries would require the index to be built on a paradigm different from its current “rich world, poor world” model.

The CDI has seen slight improvements in industrialised countries over the past ten years. Nevertheless, as Roodman pointed out, “The richest largest nations are still falling short of their potential.”

Critics have been particularly scathing of the summit’s lack of discussion on development issues.

According to Oxfam International, an aid agency, the G20 countries “sidelined development” in Los Cabos.

“This is a hugely disappointing outcome for developing countries,” Oxfam spokesperson Carlos Zarco said on Tuesday. “Leaders failed to keep the world’s poorest in their sights, despite the fact that more than half these people live in G20 countries.”

Even while many had begun to forecast that world leaders attending the summit, held June 18-19, would be hobbled in making long-term commitments by roiling economic downturns at home, many had continued to hope that progress would be made on individual programmes.

Yet during the event, the financial problems in Europe seemed to eclipse much of the rest of the agenda.

U.S. President Barack Obama admitted as much in post-summit comments. “The (threat) that’s received the most focus…is the situation in Europe,” he said, despite the fact that “most leaders of the eurozone…are not part of the G20″.

Nonetheless, the entirety of Obama’s comments was devoted to European issues, a trend reflected in the Los Cabos declaration as well as the text of the signature Los Cabos Growth and Jobs Action Plan.

No new action

Some new initiatives did receive cautious praise from development experts. These included a new 100-million-dollar pot to fund agricultural innovations, as well as a renewed focus on nutrition and food security.

Even in Washington, however, critics noted that much of the momentum on these issues had already begun well prior to the Los Cabos summit, meaning that little new progress or detail emerged in Mexico.

“With food prices swinging wildly and the planet burning, this was the moment for bold proposals from the G20,” Neil Watkins, with ActionAid USA, a watchdog group, said. “Instead, on food security and climate change, the G20 turned in last year’s homework, content to reaffirm old plans and commission more studies.”

World Vision’s Adam Taylor voiced similar complaints. “The summit focused more on recycling previous commitments and sharing best practices and not enough on making measurable political commitments in the fight against poverty and hunger,” he said.

John Ruthrauff, director of international advocacy with InterAction, a Washington-based network of nearly 200 international NGOs, offered support for several of the initiatives, but expressed exasperation that “these words … are not accompanied by concrete steps, action plans, or benchmarks for completion”.

More IMF funding

Perhaps the biggest news to come out of the summit was the International Monetary Fund’s (IMF) successful raising of an additional 456 billion dollars, a push that had encountered friction leading up to the talks.

While IMF head Christine Lagarde praised this doubling of the Fund’s lending capacity as a demonstration of “the broad commitment of the membership to ensure the IMF has access to adequate resources to carry out its mandate in the interests of global financial stability”, the new money is, in fact, aimed largely at shoring up faltering European economies.

A critical percentage of those commitments came from the “middle income” countries that define the G20.

Although last week these governments, led by Brazil, China, India and Russia, had threatened to withhold some or all of this additional funding pending assurance of the passage of a suite of reforms within the IMF’s voting structure, the money was ultimately given with little forward movement on the reforms, which would increase the voting power of developing countries.

The G20 “lost sight of developing countries reeling from aid cuts, climate change and volatile food prices”, Oxfam said in a statement. “Poor countries depleted their reserves defending themselves against the economic crisis caused by the rich world, and are also having to cope with massive aid cuts.”

“When confronted with a severe crisis on your own doorstep, it can be easy to sideline development issues,” said Samuel A. Worthington, the president of InterAction. “But these problems are real and they are not going away unless we take measurable steps to address them.”

“G-Zero”

Many commentators have interpreted the lack of results at the Mexico summit as indicative of a broader lack of global leadership at the moment, amidst economic crisis and with several heads of state facing election this year.

“Political courage seems to be in short supply in Los Cabos,” said Michael Elliott, the head of ONE, an international campaign against extreme poverty. “Too much of the work that was started (in previous summits) has not been advanced by leaders in Los Cabos.”

Oxfam’s Zarco agreed, saying, “This collective failure of political will is shocking, and must be dealt with in the last months of Mexico’s G20 presidency.”

While Mexico’s G20 secretariat will be expected to answer for any lack of focus during the proceedings, much handwringing is being reserved for European and U.S. leaders, particularly Obama.

“He may well be appropriately focused on economic issues at home, but there is no denying that at the G-20, in the UN, at the world’s international financial institutions, and confronting key challenges, no one is touting the transformational presence of Obama the multilateralist as they did a couple of years ago,” wrote David Rothkopf, the influential editor at large for Foreign Policy magazine, this week.

Citing the G20′s recent agenda as “almost laughably remote from the big issues of the day”, Rothkopf suggested that the world is currently seeing more of a “G-Zero moment”, using a term recently coined by an American political scientist named Ian Bremmer.

Another commentator, the noted Indian economist Jayati Ghosh, suggested that the events at Los Cabos underscored the G20′s overall lack of relevance.

The Mexico summit was “arguably the most important meeting of this group since it was formed”, Ghosh wrote in a recent blog post. “The reason for this significance is that for some time now, the G20 appears to have lost its way…(having) increasingly shied away from addressing the more important questions.”

Urban and hotel development have devoured the oasis of San José del Estero in Los Cabos. Credit: Courtesy of Niparajá

The G20 Leaders’ Summit, which took place Jun. 18-19 in Los Cabos with sustainable development and combating climate change at the top of the agenda, was held in the International Convention Centre, considered the ultimate in sustainable architecture.

Within its 66,000 square metres are 2,700 square metres of green walls, a water treatment system with the capacity to process 2.6 liters per second, more than 1,000 solar panels to supply electricity, and rainwater collection facilities. It is an artificial oasis in the midst of a region that exemplifies a host of bad practices.

The municipality of Los Cabos, in the state of Baja California Sur, is made up of the towns of San José del Cabo (the municipal seat) and Cabo San Lucas. Both are economically dependent on tourism, mainly foreign. They are connected by a 33 km strip of luxury hotels, which take a heavy environmental toll.

“The main problem is the scarcity of water. Because this is an arid region, it is the most limited resource. The aquifers are already overexploited, and new hotel development projects could seriously affect the water supply,” activist Ernesto Vázquez of the non-governmental Niparajá Natural History Society told Tierramérica*.

The organisation, founded in 1990, works for the conservation of natural resources in the state of Baja California Sur.

Located in what is essentially a desert region, Los Cabos receives about 270 mm of rain annually. Within its territory lie a number of protected areas, including the Sierra La Laguna Biosphere Reserve, the Cabo Pulmo National Marine Park, the Estero de San José del Cabo State Ecological Reserve and the Cabo San Lucas Submarine Flora and Fauna Refuge. All of them are home to protected, threatened and endangered species.

“For a long time now Los Cabos has been facing problems caused by tourism development and population growth without proper urban planning. Urban sprawl has eaten into areas that had significant environmental importance,” said Isaí Domínguez of the National Commission for Knowledge and Use of Biodiversity (CONABIO).

“It was an area of considerable ecological wealth. What is left is very little,” he told Tierramérica.

Los Cabos first took off as a luxury tourism destination in the 1950s, and underwent a boom in the 1990s. It has more than 10,000 hotel rooms and received more than 800,000 visitors in 2011, according to the state Ministry of Tourism.

The mining of gypsum, copper and phosphorite, which dates back to the 19th century in the region, has also left its scars.

CONABIO lists erosion, coastal pollution from solid waste and wastewater, tourism mega projects, the conflict between sports and commercial fishing, and environmental damage from ships among the main problems facing the area.

The Mexican branch of Greenpeace reports that average daily water consumption is 250 liters per inhabitant, but in the big hotels, it ranges between 1,000 and 2,000 liters.

On Jun. 15 Mexican President Felipe Calderón announced the cancellation of the Cabo Cortés tourism development project, although he did not rule out the possibility of a new project that better adhered to scientific and environmental criteria.

The Cabo Cortés project involved the development of an area of 3,800 hectares, with plans for around 27,000 hotel rooms, two golf courses and other recreational facilities, which would have posed a danger to the coral reef off Cabo Pulmo, a national protected area.

Cabo Cortés would have also caused harmful impacts on sand dunes that stretch over several kilometres.

Meanwhile, since 2009, the U.S. mining company Vista Gold has been waiting for permission to develop an open pit gold mine formerly known as Paredones Amarillos and now known as Concordia. Local residents are opposed, and approval of the environmental impact assessment for the project is still pending.

This mining operation would affect the Sierra La Laguna Biosphere Reserve, which was created in 1994 and encompasses both pine and oak forest and jungle areas.

“This is an important fishing area and the chemicals used to separate the metals would create wastes that would hurt the industry,” said Domínguez.

Every year, 26 million cubic metres of water are extracted from the San José del Cabo aquifer, but its recharge rate is only 24 million cubic metres annually, according to the National Water Commission.

*The writer is an IPS correspondent. This story was originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme, United Nations Environment Programme and the World Bank.

“The G20 has liberally imposed itself over other institutions to mandate those other institutions to take on its agenda,” Gawain Kripke, a researcher with Oxfam America, said in Washington on Monday.

“That’s potentially a problem, when you have this fundamentally unauthorised organisation setting the agenda and work plans for other institutions that do at least have bylaws and so forth.”

Kripke pointed, in particular, to the example of the current debate over a set of reforms being pushed through the International Monetary Fund (IMF). These reforms, which in part would see developing countries significantly increase their voting powers within the Fund, have been spearheaded by the G20 as a signature issue.

While these reforms are widely seen as positive, the fact that the G20 is a non-institutionalised grouping – it lacks a secretariat, for instance, and operates largely on the whim of rotating host countries – is worrying for many, particularly as the group’s scope has widened significantly in recent years.

The G20, which calls itself an “informal forum”, was created in 1998 by the finance ministers of 20 of the world’s most developed countries. In particular, the group included the fast-rising “middle-income” countries such as India, Indonesia, Brazil, Turkey, Russia and China.

For the first decade of its existence, though, the G20 was of little relevance. “No one cared about the G20 – no one wanted to work with them,” Bernardo Lischinsky, a senior advisor at the IMF, told a panel discussion here on Monday, at an event organised by New Rules for Global Finance, a Washington non-governmental organisation (NGO), and the Heinrich Boell Foundation.

In the midst of the 2008 economic crisis, former U.S. President George W. Bush made a surprise call on the G20 to come together for an urgent meeting in Washington. The group was tasked with devising a coordinated response to the unfolding events.

While that leadership proved critical then, Lischinsky said, the G20 has since expanded into numerous other areas. “I think they need to slow down, to go back to what they were doing before the crisis,” he said. “They need to focus on strengthening other institutions.”

Shadowy overreach?

Today, the G20 has expanded its number of working groups to ten. Beyond the group’s core focus of finance, these groups take on a broad swath of issues, including development, food security, trade and the “social dimension of globalisation”.

Yet the agendas, negotiations and even composition of these groups have remained shrouded in mystery.

“There is a whole second G20 agenda on development that gets absolutely no headlines,” said Nancy Alexander, director of the Economic Governance Programme at the Heinrich Boell Foundation in Washington.

“The G20 has created an action plan for development in all 173 countries that are not part of the G20, with no mention of issues such as climate change or equity. This plan does not request or suggest, but mandates actions for 25 national and regional organisations.”

The website of the Economic Governance Programme is considered a treasure trove of documents – otherwise impossible to find – relating to the G20′s inner workings. She added that in simply trying to obtain information on the membership of the development working group, she was turned down by four governments citing “confidentiality”.

“This is wrong – this stifles democracy,” she argued. “The G20′s role should be to give suggestions to qualified bodies. We need to have a discussion on whether the G20 is actually accountable to more representative bodies – the U.N., say, or the international financial institutions.”

Few people realise that the G20 is “actually far less accountable than the IMF”, she pointed out.

The lack of accountability can be particularly problematic given the degree of influence that large-scale corporate interests have recently built up over the G20.

The new working group on transparency, for instance, is comprised entirely of people from the banking industry, according to Jo Marie Griesgraber, the executive director of New Rules for Global Finance. Similarly, until recently, U.S. participation at the G20 was solely through the commerce department.

Los Cabos summit

Monday’s events in Los Cabos were arguably dominated by the so-called B20 – the “business 20″ – while Tuesday morning started with a breakfast for heads of state and select business leaders.

Even within the group’s core focus on global finance, critics point out an overly heavy reliance on dogmatic positions. “In times of crisis you need a forum to address macroeconomic coordination,” said Thea Lee, a labour organiser in Washington.

“Unfortunately, the G20 has often come up with the wrong solutions, with an undue focus on neoliberal fiscal solutions – for instance, promoting more austerity when the problem today is a lack of demand.”

In the run-up to the Los Cabos summit, many have pointed out that the space for civil society engagement has very limited, a situation exacerbated by the high level of secrecy.

“The G20 is at heart a negotiating forum, and we have very little sense of how those negotiations proceed,” warned Oxfam’s Kripke.

“We have no understanding of countries’ intentions, positions – the process isn’t subject to public discussion and as such civil society can’t offer any help. Ultimately, that’s less likely to produce a good outcome.”

“I call on the remaining member countries to complete the necessary legislative steps and other legal measures quickly to implement these important reforms within the agreed timeframe,” Lagarde said following a review of progress towards implementation of the reforms, agreed upon in 2010 and set to be implemented by this fall.

According to the board’s progress report, 107 countries have given their consent so far, while 80 have yet to do so. “Time is running out,” it warns.

The topic is expected to constitute a key issue at the upcoming Group of 20 (G20) summit, taking place next week in Mexico. It was the G20 that first spearheaded the reforms process, and it is taking responsibility on seeing that the reforms are enacted on time.

“The resistance of the IMF’s major shareholders to even minor reforms of the institution’s governance has become a major item on the G20′s agenda,” Nancy Alexander, director of the Economic Governance programme at the Heinrich Boell Foundation here in Washington, told IPS.

“The problem is leading to more diverse monetary arrangements in geographical subregions and among the BRICS,” referring to the “middle income” countries of Brazil, Russia, India, China and South Africa.

Those countries could stand the most to gain from the reforms process, which will go some distance towards rebalancing voting rights within the IMF. Under the current package, for instance, China’s voting strength would become the third largest.

The reforms would also see a change in the make-up of the Fund’s board. Two of the European seats on the 24-member body would go to developing countries, with some advocating an additional seat be assigned to African countries specifically.

In addition, the Fund’s funding resources would double to about 730 billion dollars, in addition to the 430 billion dollars promised a few months ago aimed at faltering European economies. Such pots of money have become particularly important as the euro zone has continued to falter.

But with developing countries being called on to help bail out Europe, the BRICS have chosen to use the situation to their advantage and press the case for reform.

“The BRICS are saying, ‘We can go elsewhere – we don’t need the IMF. If you want the IMF to work, we’re willing to play with you, but we want our share and are tired of the promises,” Jo Marie Griesgraber, executive director of the New Rules for Global Finance Coalition, an international network based here, told IPS.

On Wednesday, Brazilian officials reportedly suggested that they are thinking of contributing less to the new IMF fund than the country had previously indicated. “We are frustrated because we see that countries that know they will lose influence are resisting” the reforms, Reuters quoted an anonymous Brazilian government official as saying this week.

Several other middle-income countries, including China, India and Russia, as well as G20 host Mexico, are said to support Brazil’s position. The BRICS will be meeting on the issue on Jun. 18.

“Emerging countries are right to hold out for a greater say in the running of the institution before they commit more money to it,” Oxfam International spokesperson Steve Price-Thomas told IPS.

“The old world needs to move over and let these growing economies take their rightful place at the table.”

The BRICS are particularly frustrated by the EU countries, Griesgraber says, which she suggests “by any stretch of the imagination are overrepresented” at the IMF.

“I am very encouraged that the BRICS are working together and considering the consequences for low-income countries,” she says.

“I am also encouraged by the newfound solidarity among the BRICS and the poorer countries that any benefits to the dynamic emerging markets should not come at the cost of the low-income countries.”

Strong solidarity for the BRICS position is also reportedly coming from President Barack Obama’s administration. Although many media outlets have suggested that the United States is stymieing the reform efforts – as the Congress is required to vote on the issue, an unlikely scenario before the November elections – Griesgraber says that Washington is firmly on board.

“The U.S. is allied with the BRICS but doesn’t want a public fight with the Europeans,” she says. “The U.S. administration is not presenting this to Congress yet because they don’t want it turned down, but they’ve said they will act as soon as they can.”

Beyond governance

Even if passed, the reforms have been criticised as being too tentative. According to one widely cited set of criticisms by a Brazilian IMF executive, following the reforms the BRICS would have about a 14 percent voting share, less than half the EU’s, despite the two groupings having almost identical collective gross domestic products.

Still, most see the reforms as a small, important step forward. Others, however, point out that the moves do not deal with longstanding structural critiques of IMF policy.

“It isn’t just the voting structure that’s the problem – it’s an institutional problem,” Mark Weisbrot, co-director of the Center for Economic and Policy Research, here in Washington, told IPS.

“Developing countries need to fight for their interests, and in the IMF they can’t do that. These countries are being badly hit because of the mess in Europe, and the IMF is one of the three players making this mess.”

Agrees Heinrich Boell’s Nancy Alexander: “Whatever the outcome of these power struggles and realignments, the key is whether the approach to monetary policy changes. What must change is the privatisation of gains and socialisation of losses.”

While IMF governance reforms are important, Alexander suggests such talk is pointless without also discussing the future priorities of the institution.

“We don’t want to just play musical chairs on board the sinking Titanic,” she says.

“It’s an agenda for investors,” Diana Aguiar, representative of the Brazilian Network for the Integration of Peoples (REBRIP), told IPS. “The idea is that natural resources won’t be preserved if no monetary value is put on them. This is a very mistaken premise. They see it as a business.”

The activist is attending the alternative People’s Summit, which runs Tuesday Jun. 12 to Friday Jun. 15 in Mexico City before continuing in the northwestern city of La Paz until Tuesday Jun. 19.

The civil society forum has drawn hundreds of delegates of NGOs from Mexico and other G20 nations, whose presidents are meeting Jun. 18-19 in Los Cabos, a Pacific resort town at the southern tip of Mexico’s Baja California Peninsula, south of La Paz.

Fomenting free movement of green or sustainable products is one of the recommendations that Business 20 (B20) – which represents companies in the G20 bloc – set forth to the governments. The issue is to be discussed at the summit.

In a 102-page report on recommendations of the B20 task force, to which IPS had access, the business executives laid out suggestions on food security, green growth, employment, trade, investment, technology and innovation, and financing for growth and development.

The B20 argues that free movement of green-friendly goods and services will accelerate the adoption of green technology and foment competitiveness, innovation and job creation.

The document also recommends raising the price of carbon dioxide (CO2) in order to change investment patterns and decisions and help reduce greenhouse gases.

To that end, G20 leaders should guarantee that national goals and policies are ambitious enough to create international demand consistent with the units of CO2 and thus bolster green technologies, climate-smart agriculture, and energy efficiency, the report says.

Transnational corporations like Monsanto, Coca-Cola and Wal-Mart from the U.S.; the Anglo-Dutch Unilever; and Nestle from Switzerland are among the companies represented in the B20.

In addition to the G8 industrialised nations – Canada, France, Germany, Italy, Japan, Russia, the UK and the U.S. – the G20 is made up of Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea and Turkey, as well as the European Union.

In Los Cabos, the presidents will discuss issues like policies against financial crises, food security, the green economy, the fight against climate change, transparency and corruption.

The non-member countries that have also been invited include Colombia, Chile, Peru and Spain.

The NGOs participating in the People’s Summit question the legitimacy of the G20, whose rotating presidency is currently held by Mexico, saying it represents the “one percent” of the world’s seven billion people.

They reject the summit’s agenda, which they say is more responsive to corporate and financial interests than to the needs and concerns of the world population.

“The G20 and B20 are very close, but that doesn’t happen with NGOs. That is worrisome,” Nancy Alexander, of the Heinrich Böll Foundation, told IPS.

Alexander, the director of the Economic Governance Programme in the Berlin-based Foundation’s North America office, also said the G20 has not focused on the priorities of infrastructure, green growth and food security.

Alexander and Aldo Caliari, director of the Rethinking Bretton Woods Project at the Center of Concern, a U.S. not-for-profit agency, stated in an article this month, “Selected Highlights of B20 Draft Recommendations to the G20”, that “If accepted by the G20, many of these recommendations would have far-reaching implications.”

Referring to the recommendation to place trade and investment on the G20’s permanent agenda, and to hold “periodic meetings of trade ministers” who would be in “ongoing dialogue” with the B20, they said this would exclude the 173 countries that are not members of the G20. “Therefore, if leaders accept this recommendation, it would institutionalise exclusionary trade negotiation practices,” they wrote.

The People’s Summit has scheduled seminars and workshops on questions like gender, energy, and alternatives to the G20, as well as street protests.

The NGOs are opposed to the austerity policies being implemented in the industrialised North, which have imposed drastic spending cuts in education, health and other essential social areas, and have driven up unemployment and stood in the way of developing a green economy.

“The G20 is in crisis,” Susana Sanz of Spain’s May 15 Movement (15M), which sprang up as nationwide protests against the government’s response to the economic crisis on that date last year, told IPS. “It doesn’t represent us. Public policies are adopted with a view to protecting private interests. We need participative democracy.”

The government of conservative Mexican President Felipe Calderón has outlined a five-point agenda for Los Cabos. The priorities include economic stability and structural reforms for growth and employment; consolidation of the international financial architecture; financial inclusion for economic growth; reduction of volatility in the commodities market; and promotion of sustainable development.

But what is expected to continue to monopolise the debate is the financial crisis that broke out in the U.S. in 2007, intensified in the EU last year, and has now thrown the future of the euro into doubt.

“They are seeking to use new spaces of accumulation of the financial system, to create commodities for speculation,” Aguiar said.

The G20 summit will announce the creation of a bloc that will include the multilateral financial institutions, private and development banks, companies, and private investors, to advance the B20 agenda over the next 36 months.

The B20 proposes an expansion of the public-private partnership model, especially in infrastructure construction, which is currently being tried in a number of the G20 countries.

“G20 promotes policies in low-income countries, but they are not represented nor have they been consulted properly,” Alexander said.

In their article, Alexander and Caliari argue that “formal engagement by the B20 in the assessment of trade and investment policies, as proposed, would also give the transnational business sector an unprecedented degree of access to decision-making, while excluding countervailing views from non-governmental actors”.

(END/IPS/WD LA G20 IF FM/TRASP-SW/EG/EGF/12)