Inter Press Service » TerraViva United Nations http://www.ipsnews.net News and Views from the Global South Wed, 22 Feb 2017 02:14:25 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.15 South Sudan Declares Famine, Other Countries May Follow Warns UNICEFhttp://www.ipsnews.net/2017/02/south-sudan-declares-famine-other-countries-may-follow-warns-unicef/?utm_source=rss&utm_medium=rss&utm_campaign=south-sudan-declares-famine-other-countries-may-follow-warns-unicef http://www.ipsnews.net/2017/02/south-sudan-declares-famine-other-countries-may-follow-warns-unicef/#comments Tue, 21 Feb 2017 18:04:43 +0000 Lyndal Rowlands http://www.ipsnews.net/?p=149050 http://www.ipsnews.net/2017/02/south-sudan-declares-famine-other-countries-may-follow-warns-unicef/feed/ 0 Tax Evasion Lessons From Panamahttp://www.ipsnews.net/2017/02/tax-evasion-lessons-from-panama/?utm_source=rss&utm_medium=rss&utm_campaign=tax-evasion-lessons-from-panama http://www.ipsnews.net/2017/02/tax-evasion-lessons-from-panama/#comments Tue, 21 Feb 2017 14:44:28 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=149048 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. ]]>

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.

By Jomo Kwame Sundaram
KUALA LAMPUR, Feb 21 2017 (IPS)

Unlike Wikileaks and other exposes, the Panama revelations were carefully managed, if not edited, quite selective, and hence targeted, at least initially. Most observers attribute this to the political agendas of its main sponsors. Nevertheless, the revelations have highlighted some problems associated with illicit financial flows, as well as tax evasion and avoidance, including the role of enabling governments, legislation, legal and accounting firms as well as shell companies.

US President Obama criticized ‘poorly designed’ laws for allowing illicit money transfers worldwide. He noted that “Tax avoidance is a big, global problem…a lot of it is legal, but that’s exactly the problem”.

US President Obama criticized ‘poorly designed’ laws for allowing illicit money transfers worldwide. He noted that “Tax avoidance is a big, global problem…a lot of it is legal, but that’s exactly the problem”.

The political tremors generated by the edited release of 1.1 million documents were swift. No one expected Iceland’s prime minister to resign in less than 48 hours, or that the then British prime minister would soon publicly admit that he had benefited from the hidden wealth earned from an opaque offshore company of his late father.

Panama Papers
The Panama Papers help us understand how shell companies and trusts operate. The documents, from the law firm Mossack Fonseca, involved 210,000 legal entities. The Panama-based law firm has worked with some of the world’s biggest banks — including HSBC, Société Générale, Credit Suisse, UBS and Commerzbank — to set up thousands of offshore companies to circumvent tax and law enforcement authorities worldwide.

The accounts enabled by just one law firm in Panama is the tip of a massive iceberg still hidden from public view as many other such firms in different locations provide similar services. High net-worth individuals and corporations have a far greater ability to evade taxes by paying tax advisers, lawyers and accountants, and by opening undeclared companies and financial accounts in low-tax jurisdictions. The expose shows that the firm aided public officials, their cronies and large corporations to avoid taxes.

Not surprisingly, Mossack Fonseca claims it has never been accused or charged in connection with criminal wrongdoing. This only underscores the fact that Panama’s financial regulators, police, judiciary and political system are very much part of the system. Similarly, many clients believe that they have not violated national and international regulations.

‘Offshore’ tax havens

Total global wealth was estimated, by a 2012 Tax Justice Network (TJN) USA report, entitled The Price of Offshore Revisited, at US$231 trillion in mid-2011; this was roughly 3.5 times the global GDP of US$65 trillion in 2011. It conservatively estimated that, of this, US$21 to US$32 trillion of hidden and stolen wealth has been stashed secretly, ‘virtually tax-free’, in and ‘through’ more than 80 secret jurisdictions.

According to Oxfam, at least US$18.5 trillion is hidden in undeclared and untaxed tax havens worldwide, with two thirds in the European Union, and a third in UK-linked sites. After the Panama Papers leak, Oxfam revealed that the top 50 US companies have stashed US$1.38 trillion offshore to minimize US tax exposure. The 50 companies are estimated to have earned some US$4 trillion in profits across the world between 2008 and 2014, but have only paid 26.5 per cent of it in US tax.

In a 5 April 2016 speech, following the US Treasury’s crackdown on corporate tax ‘inversions’, US President Obama criticized ‘poorly designed’ laws for allowing illicit money transfers worldwide. He noted that “Tax avoidance is a big, global problem…a lot of it is legal, but that’s exactly the problem”.

It was also estimated that this costs poor countries over US$100 billion in lost tax revenues every year. Oxfam also found that tax dodging by transnational corporations alone costs the developing world between US$100 to US$160 billion yearly. If ‘profit shifting’ is taken into account, about US$250 to US$300 billion is lost. After all, many countries and institutions actively enable—and profit handsomely from—the theft of massive funds from developing countries.

More so now than ever before, the term ‘offshore’ for tax havens refers less to physical locations than to virtual ones, often involving “networks of legal and quasi-legal entities and arrangements”. Private banking ‘money managers’ provide all needed services — including financial, economic, legal, accounting and insurance services — to facilitate such practices, making fortunes for themselves by doing so. Thousands of shell banks and insurers, 3.5 million paper companies, more than half the world’s registered commercial ships over 100 tons, and tens of thousands of ‘shell’ subsidiaries of giant global banks, accounting firms and various other companies operate from such locations.

Reforming tax havens?
In recent years, amid increased public scrutiny, the global tax haven landscape has changed. The Organization of Economic Cooperation and Development (OECD), the Paris-based club of rich nations, has been developing a global transparency initiative to crack down on tax haven secrecy. But Panama is refusing to participate seriously, with the OECD tax chief calling it a jurisdiction “that welcomes crooks and money launderers”.

To qualify for the OECD’s ‘white list’ of approved jurisdictions, almost 100 countries and other jurisdictions have agreed, since 2014, to impose new modest disclosure requirements for international customers. Hence, the Swiss government has now relaxed confidentiality-cum-secrecy provisions, allowing information sharing about illegal or unauthorized deposits with other countries, subject to certain conditions. Consequently, the world of illegal and unaccounted cash has moved in response.

Facilitating tax evasion
Only a handful of nations have declined to sign on. The most prominent is the US. Another is Panama. As Panama has dodged, delayed and diluted compliance with OECD regulations, many accounts moved to Panama from other signatory tax havens. As Bloomberg noted earlier in 2016, “Panama and the U.S. have at least one thing in common: Neither has agreed to new international standards to make it harder for tax evaders and money launderers to hide their money.”

Rothschild, the centuries-old European financial institution, is now moving the fortunes of wealthy foreign clients out of offshore havens subject to the new international disclosure requirements, to Rothschild-run trusts in Nevada, which are exempt.

It has acknowledged that the US itself is the world’s single greatest tax haven, while the UK plays a disproportionately greater role as a tax haven, considering the smaller size of its population and economy. A TJN study found that the US continues to facilitate financial secrecy and tax evasion. “Due to lax requirements…, it is far easier to set up an anonymous shell company in the US than it is in well-known tax havens”, according to the Financial Transparency Coalition.

The US does not accept a lot of international standards, and can get away with it because of its economic and political clout, but is probably the only country that can continue to do that. It has taken steps to keep track of American assets abroad, but not of foreign assets in the US.

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Humanitarian Crisis, Result of Decades of Globalization with No Concern for Social Justicehttp://www.ipsnews.net/2017/02/humanitarian-crisis-result-of-decades-of-globalization-with-no-concern-for-social-justice/?utm_source=rss&utm_medium=rss&utm_campaign=humanitarian-crisis-result-of-decades-of-globalization-with-no-concern-for-social-justice http://www.ipsnews.net/2017/02/humanitarian-crisis-result-of-decades-of-globalization-with-no-concern-for-social-justice/#comments Tue, 21 Feb 2017 09:26:59 +0000 Hanif Hassan Al Qassim http://www.ipsnews.net/?p=149041 Dr. Hanif Hassan Al Qassim, Chairman of the Geneva Centre for Human Rights Advancement and Global Dialogue, a think-thank dedicated to the promotion of human rights through cross-cultural, political, religious and civilizational dialogue, and through training of the upcoming generations of stakeholders in the Arab region.

Dr. Al Qassim' op-ed is issued on the occasion for World Day of Social Justice 2017. ]]>

Dr. Hanif Hassan Al Qassim, Chairman of the Geneva Centre for Human Rights Advancement and Global Dialogue, a think-thank dedicated to the promotion of human rights through cross-cultural, political, religious and civilizational dialogue, and through training of the upcoming generations of stakeholders in the Arab region.

Dr. Al Qassim' op-ed is issued on the occasion for World Day of Social Justice 2017.

By Dr. Hanif Hassan Al Qassim
GENEVA, Feb 21 2017 (IPS)

The distressing images of desperate people making the treacherous journey across the Mediterranean Sea and the Balkans to escape armed conflict, social tensions, discrimination and poverty harm the preconditions to achieve social harmony.

Dr. Hanif Hassan Al Qassim

Dr. Hanif Hassan Al Qassim

This humanitarian crisis is the result of decades of freewheeling globalization with no concern for social justice in all countries. One of its consequences is social upheavals and mass exodus.

What remains today of the peace and its dividends that were supposed to accrue to the poorer countries as a consequence of the ending of the East-West conflict?

The proliferation of armed conflicts, particularly in the Middle East, further undermine the well-being of societies.

According to the United Nations High Commissioner for Refugees (UNHCR), more than 4 million people have left Syria owing to the continued violence in the country. The majority of them live now in shelters and camps as internally displaced persons scattered throughout the region in countries such as Turkey, Lebanon and Jordan.

The world has not witnessed mass exodus of this proportion since the end of World War II.

As the Chairman of the Geneva Centre for Human Rights Advancement and Global Dialogue (Geneva Center), I participated as a panel member in a side-event that was held 06 December 2016 by the Geneva Centre in relation to the 30th anniversary of the adoption of the 1986 Declaration on the Right to Development.

During our panel deliberation, I observed that structural violence and the ongoing-armed conflicts and displacement were in contradiction with the vision expressed by the Declaration on the Right to Development.

The negative impact of violence tramples both human rights to life and to development.

Widening income equality also gives rise to social tensions that destabilize societies. Lack of employment opportunities stifle economic growth and result in poverty, which give rise to unemployment and social tensions.

Addressing social tensions requires adopting measures to eradicate poverty, ensure the promotion of employment and decent work, and eliminate the root-causes of inequality. By inequality, one should refer to both inequality in access to public goods, to income and gender inequality.

The realization of the Sustainable Development Goals (SDGs) is a good starting-point. SDG 10 stipulates the need to reduce inequality between and within countries. SDG 8 similarly reminds the world of the importance of promoting sustained, inclusive and sustainable economic growth to eradicate inequality. Lastly, SDG 5 specifies the need to achieve gender equality and empower all women and girls through the elimination of violence and discrimination.

The 2030 Agenda is a bold roadmap for states to foster social cohesion and social harmony.

Another cause of social tension is the application of universal coercive measures. Such measures are discriminatory and hinder the capacity of governments to execute their functions in the interest of their citizens, and very often target the vulnerable segments of populations rather than the elites.

The denial of access to technology, food and patented medicines negatively affects the enjoyment of basic human rights.

Indeed, social development is central to the needs and aspirations of people throughout the world. The aim is to live in a peaceful, just and equitable society that ensures the fair distribution of income, access to resources and equality of opportunities for all.

We need to seize the opportunity to address the causes of social instability and economic backsliding. People must be empowered so as to enable them to realize their potential and take ownership of their destinies.

Identifying, addressing and eradicating the root-causes of social injustice will enable us to promote a more equitable development that puts the human being at the centre, and creates synergies between societal development and human security.

Addressing social injustice is in our common interest to promote a more sustainable international order.

I would like to end this statement by sharing a quote from Martin Luther King Jr:

Injustice anywhere is a threat to justice everywhere.”

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Red Tape Snarls Nepal’s Ambitious Poverty-Alleviation Planshttp://www.ipsnews.net/2017/02/red-tape-snarls-nepals-ambitious-poverty-alleviation-plans/?utm_source=rss&utm_medium=rss&utm_campaign=red-tape-snarls-nepals-ambitious-poverty-alleviation-plans http://www.ipsnews.net/2017/02/red-tape-snarls-nepals-ambitious-poverty-alleviation-plans/#comments Tue, 21 Feb 2017 02:00:02 +0000 Renu Kshetry http://www.ipsnews.net/?p=149004 Juna Bhujel (looking at the camera) at the Mankha VDC office to complain about non-payment of disaster relief funds to reconstruct housing. She lost her home in Nepal’s April 2015 earthquake. Credit: Renu Kshetry/IPS

Juna Bhujel (looking at the camera) at the Mankha VDC office to complain about non-payment of disaster relief funds to reconstruct housing. She lost her home in Nepal’s April 2015 earthquake. Credit: Renu Kshetry/IPS

By Renu Kshetry
KATHMANDU, Feb 21 2017 (IPS)

Juna Bhujel of Sindupalchowk District, 85 kilometres northeast of Nepal’s capital Kathmandu, lost her daughter-in-law in the Apr. 25, 2015 earthquake. Fortunately, she managed to rescue her two-year-old grandson, who was trapped between her mother’s body and the rubble.

Soon after the devastating earthquake, her son, the family’s sole bread-winner, left for Malaysia to seek work, taking out a loan with high interest rates to fund his trip. He has neither returned, nor sent any money back home.“Since 65 percent of the total income of Nepali people goes to food consumption, these programs should be linked with food security." --Janak Raj Joshi, former vice chairman of the Poverty Alleviation Fund

Bhujel, a member of the Mankha Village Development Committee (VDC), now lives in a makeshift dwelling with a family of five. Their only source of income is when her husband gets menial work in home construction. To make matters worse, she has not received any money from the government to build a house.

“I was already poor, with a small plot of land that produced enough food for only three months, and now I don’t even have a house,” said Bhujel, 55. “If my government does not support me, then who will?”

Bhujel is just one of tens of thousands of earthquake victims who lost their family members and homes, but are still waiting to be formally identified as “poor” by the government.

Nepal has set a target of reducing poverty to five percent by 2030, per the U.N.’s Sustainable Development Goals. In this central Himalayan country, 25.2 percent of the population now lives below the national poverty line.

The government is planning to distribute Poor Identity Cards to 395,000 families in 25 districts starting in April, providing social security entitlements and benefits with the aim of achieving the targets.

Hriday Ram Thani, Minister for Cooperatives and Poverty Alleviation, told IPS that with this new identity card, the government will be able to implement more concentrated programs. The ministry is planning to expand the distribution of identity cards to 50 more districts. Nepal has 75 districts.

But the government’s ambitious plans to alleviate poverty face the challenge of weak programming, planning and coordination between various line ministries to successfully implement the proposed programs.

Nepal already has 44 programs to alleviate poverty run by various ministries. For example, the Poverty Alleviation Constituency Development Program run by the Ministry of Federal Affairs and Local Development has a budget of Rs one billion (9.29 million dollars), and the 9,290,000.00 USD 9,290,000.00 USDPoverty Alleviation Fund under the Prime Minister’s office has a Rs 3.82 billion (2.6 million) budget for this year.

The Youth Employment Fund under the Finance Ministry has Rs 90 million (836,100 dollars), and the Poor with Bishweswor program under the Ministry of Local Development has Rs 160 million (1.486 million) for this year with the mandate to run programs in 483 VDCs in 75 districts.

While the Youth Council Program aims to provide one industry per 10 youth under the Ministry of Youth and Sports, the Rural Independent Fund run by Nepal Rastra Bank under the Ministry of Agriculture and Livestock also has a similar aim to reduce poverty.

Minister Thani said that in order to achieve the target and make it more results-oriented, he has already asked Prime Minister Pushpa Kamal Dahal to integrate all these poverty-related projects so that the outcome can be measured — or else to close down the ministry.

“Apart from results documented in reports from any of these ministries, the impact cannot be observed in any of their target areas,” he said.

He added that there is a need to establish a high-level poverty alleviation board under the chairmanship of the prime minister and the Poverty Alleviation Ministry should be the focal ministry that links all the projects under various ministries. “There is a need for an internal expert team within the ministry with 3-5 subject group experts,” he said.

While the Poverty Ministry is complaining about a lack of programs and projects, high-level officials at National Planning Commission said that since poverty is a cross-cutting issue, all the ministries are running their own programs and discussions are being held with the Poverty Ministry on how to integrate these programs.

Apart from these initiatives, about two to three percent of the government budget is spent on nine categories of Social Security Entitlements each year for 8 percent of the total population.

Janak Raj Joshi, former vice chairman of the Poverty Alleviation Fund, said that it is sad that the government’s programs have been expanding but failed to go deeper and lack sustainability. He also blamed various international organisations for launching time-bound poverty alleviation projects.

“Since 65 percent of the total income of Nepali people goes to food consumption, these programs should be linked with food security,” he said. “The government lacks a vision of proper distribution of resources and the programs have failed to address the core issues. Each program should directly link to the people living under the poverty line.”

Around two-thirds of Nepalis rely on agriculture for their livelihood, according to the U.N. Food and Agriculture Organisation (FAO). The National Planning Commission (NPC) aims to introduce various programs to help improve the overall development of agriculture from this year.

Mahesh Kharel, Under-Secretary of the NPC’s Poverty Alleviation Division, said that they have planned an Agriculture Development Strategy from this year. He said that under the prime minister’s chairmanship, the project will focus on agriculture, infrastructure, local development and agricultural roads, livestock and irrigation to promote marketing of agricultural goods.

The government has allotted Rs 58 billion (541 million dollars) for the project. Similarly, the government has also allotted Rs six billion (56 million) to focus on an Agriculture Modernization Project. The program has already started in Kailali, Jhapa and Bara districts, where super zones of wheat, rice and fish have been announced.

Kharel agreed that poverty alleviation needs an integrated approach with some focused programs that directly affect the poor and bring positive changes to their lives. “By making improvements in the agriculture sector, we can help improve the living standards of people living under the poverty line,” he said.

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Palestinian Rejection Underscores Limits of UN Chief’s Powershttp://www.ipsnews.net/2017/02/palestinian-rejection-underscores-limits-of-un-chiefs-powers/?utm_source=rss&utm_medium=rss&utm_campaign=palestinian-rejection-underscores-limits-of-un-chiefs-powers http://www.ipsnews.net/2017/02/palestinian-rejection-underscores-limits-of-un-chiefs-powers/#comments Mon, 20 Feb 2017 16:38:40 +0000 Thalif Deen http://www.ipsnews.net/?p=149033 By Thalif Deen
UNITED NATIONS, Feb 20 2017 (IPS)

Pointing out an example of the hierarchy of political power at the United Nations, a former Nigerian ambassador once told a group of reporters of an encounter at an international gathering in Africa when he ran into one of his friends who had returned from a visit to New York.

guterres_300“I met your boss,” he told a perplexed Nigerian envoy. “What boss?”, he asked his friend. “I don’t have a boss in New York.”

When his friend explained that he really meant the UN Secretary-General (SG) whom he had met during his visit to the UN, the envoy shot back: “He is not my boss. I am his boss.”

And the Nigerian envoy was dead on target.

But most outsiders, however, do not realise the limitations and restrictions under which a Secretary-General operates.

A creature of the world body’s 193 member states, the Secretary-General is really the Chief Administrative Officer (CAO) of the United Nations and has to do the bidding of member states— particularly on politically sensitive issues and on senior appointments.

And he rarely, if ever, defies the five veto-wielding permanent members (P-5), namely the US, Britain, France, Russia and China, whose nationals traditionally hold some of the most senior positions in the UN Secretariat— jobs doled out mostly under political pressure.

The current Secretary-General Antonio Guterres, who took office in January, was a two-time Prime Minister of Portugal (1995-2002) and the first and only UN chief who was a former head of government.

And Prime Ministers, protocol-wise, are known to exercise vast political powers in their home countries – and rarely known to take orders from others.

Still, one of Guterres’ early appointments – of the former Palestinian Authority Prime Minister Salam Fayyad as the Secretary General’s Special Representative in Libya – was unceremoniously shot down by US Ambassador Nikki Haley, purely because he was a Palestinian.

A visibly disappointed Guterres told reporters last week: “I think it was a serious mistake. I think that Mr. Fayyad was the right person in the right place at the right time, and I think that those who will lose will be the Libyan people and the Libyan peace process.”

“And I believe that it is essential for everybody to understand that people serving the UN are serving in their personal capacities. They don’t represent a country or a government – they are citizens of the world representing the UN Charter and abiding by the UN Charter,” he said pointedly directing his answer at Haley.

Asked to comment on the issue of limits of power exercised by a Secretary-General, Ambassador Anwarul Chowdhury of Bangladesh, a former UN High Representative and Under-Secretary-General, told IPS that “essentially there are four main constraints to the effectiveness of the Secretary-General”.

Firstly, veto and veto-wielding members of the Security Council, which influences matters in all areas of UN system’s work; secondly, promises and commitments made by the Secretary-General as a candidate to secure his election; thirdly, aspiration to get re-elected for a second term from day one of the first term; and, fourthly, the labyrinthine UN bureaucracy, said Chowdhury, who was one of the senior UN officials in former Secretary-General Kofi Annan’s cabinet and management team.

The late Boutros Boutros-Ghali of Egypt, who had a running battle with senior US officials, and particularly with US Ambassador Madeleine Albright, was the only Secretary-General who was denied a second five-year term.

At a Security Council meeting, 14 of the 15 members voted to give him a second term. But the US cast the single veto punishing him for his defiance, and making a mockery of the concept of majority rule– and an overwhelming majority in this case– which it preaches to the rest of the world.

The right course of action for the US would have been to abstain on that vote and respect the views of the remaining 14 members. But it never did.

Martin Edwards, Associate Professor in the School of Diplomacy and International Relations at Seton Hall University, told IPS: “I think this is a learning process for Guterres in how to work with the new administration.”

The storm over Fayyad will blow over, and it’s clear that the party that loses most here isn’t Guterres, but the White House, which now looks petulant, said Edwards whose expertise includes International Organizations and International Political Economy.

He pointed out that the more intriguing development lies in the appointments announced last Tuesday.

Both Jeffrey Feltman of the US (renewed mandate as Under-Secretary-General for Political Affairs) and Jean-Pierre Lacroix of France (Under-Secretary-General for Peacekeeping Operations) are one-year appointments, setting up potential jockeying with the US and France over these offices next year.

“So these are early days as Guterres seeks to build his team,” he noted.

Asked if the nomination of Fayyad was based on consultations with all of the members of the Security Council, UN Deputy Spokesman Farhan Haq told reporters last week: “We do consult broadly in the course of make appointments, and based on the understanding he had at the time, he believed he could go forward.”

Asked if Guterres spoke personally with Ambassador Haley regarding this nomination, he said: “I can’t characterize the full range of discussions he had. Like I said, he did… he and the Secretariat did consult prior to this, and we believed we had the understandings in hand. We… but we did not.”

Clarifying further, Haq said the Security Council is consulted on all appointments having to do with senior officials who report directly to the Security Council or carry out its mandates.

“So, that is part of the standard procedure in which all of the 15 members of the Security Council have a say. Regarding where we go forward from here, the Secretary General will continue his consultations. We’ll let you know of an appointment once something is decided.”

Asked if Guterres’ power or reputation — is diminished by the Fayyad incident, and whether it was embarrassing for him personally and a blow to his credibility, Haq said: “I don’t think it should be a blow to his credibility. I think it’s really suggested there is a problem where people’s perceptions should not blind them to the actual qualifications of a person for the job.”

In a wide-ranging IPS oped piece before the election of Guterres last year Chowdhury said: “Like any leader of an organization, the UN leader’s success or absence of it depends on his team. That is another area I belief needs a total overhaul in UN. It is long overdue.”

As in the case of any new corporate Chief Executive Officer, each time the UN’s Chief Administrative Officer – that is how the S-G is described in the UN Charter – gets elected or re-elected, interested quarters wonder whether he will introduce any new guidelines on senior appointments, and will he be subject to pressure from the big powers — as it happened with his predecessors?

In that context, he said, it is strongly felt that the UN’s so-called political appointments of Assistant-Secretaries-General (ASG) and Under-Secretaries-General (USG), should be more transparent and open.

The pressures from Member States and personal favoritism have made the UN Charter objective of “securing the highest standards of efficiency, competence and integrity” (article 101.3) almost impossible to achieve, he added.

It is also to be kept in mind that for his own appointment, the incoming Secretary-General makes all kinds of deals – political, organizational, personnel and others. And those are to be honored during first years in office, said Chowdhury, a former chairman of the UN’s Administrative and Budgetary Committee that approved Kofi Annan’s first reform budget.

“That then spills over for the second occasion when he starts believing that a second term is his right, as we have seen in recent years.”

The tradition of all senior management staff submitting their resignations is only notional and window-dressing. The new Secretary-General knows full well that there is a good number of such staff who will continue to remain under the new leadership as they are backed strongly by influential governments. In the process, merit and effectiveness suffer, said Chowdury, initiator of Security Council resolution 1325 underscoring women’s equality of participation.

It is a pity that the UN system is full of appointments made under intense political pressure by Member States individually or as a group. Another aspect of this is the practice of identifying some USG posts for P-5 and big contributors to the UN budget.

“What makes this worse is that individuals to these posts are nominated by their governments, thereby violating article 100 of the UN Charter which says that “In the performance of their duties the Secretary-General and the staff shall not seek or receive instructions from any government or from any other authority external to the Organization.”

“The reality in the Secretariat does not reflect the Charter objectives – I believe it never did.”

One way to avoid that would be to stop nomination and lobbying – formally or informally – for staff appointments giving the S-G some flexibility to select senior personnel based on “competence and integrity”.

Of course, one can point out inadequacies and possible pitfalls of this idea. But, there the leadership of the S-G will determine how he can make effective use of such flexibility being made available to him.

A very negative influence on the recruitment process at the UN, not to speak of senior appointments, has been the pressure of donors – both traditional and new ones – to secure appointments of staff and consultants, mostly through extra-budgetary resources and other funding supports.

This has serious implications for the goals and objectives as well as political mission and direction of the UN in its activities, he noted.

“No Secretary-General would be willing or be supported by the rest of the UN system to undertake any drastic reform of the recruitment process for both the senior management or at other levels. Also, at the end, he has to face the Member States in the General Assembly to get their nod for his reforms,” he declared.

The writer can be contacted at thalifdeen@aol.com

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Of Arabs and Muslims and the Big Banhttp://www.ipsnews.net/2017/02/of-arabs-and-muslims-and-the-big-ban/?utm_source=rss&utm_medium=rss&utm_campaign=of-arabs-and-muslims-and-the-big-ban http://www.ipsnews.net/2017/02/of-arabs-and-muslims-and-the-big-ban/#comments Mon, 20 Feb 2017 10:35:02 +0000 Baher Kamal http://www.ipsnews.net/?p=149025 This article slightly updates a previous one that IPS had published regarding the recurrent confusion about who are Arabs and who, Muslims.]]> Arab countries in the Middle East and North of Africa. Dark Green: Arab majority population. Light Green: Arab minority countries | Credit: Public Domain.

Arab countries in the Middle East and North of Africa. Dark Green: Arab majority population. Light Green: Arab minority countries | Credit: Public Domain.

By Baher Kamal
ROME, Feb 20 2017 (IPS)

Now that President Donald Trump’s decision to ban citizens of seven Muslim majority countries from entering the United States continues to drift into legal labyrinths about its legality–or not, it may be useful to clarify some myths that often lead to an even greater confusion regarding the over-written, under-reported issue of who are Arabs and who Muslims.

To start with, it is a common belief – too often heralded by the mainstream media – that the Middle East is formed entirely of Arab countries, and that it is about the so-wrongly called Muslim, Arab World.

This is simply not accurate.

Firstly, because such an Arab World (or Arab Nation) does not actually exist as such. There is not much in common between a Mauritanian and an Omani; a Moroccan and a Yemeni; an Egyptian and a Bahraini, just to mention some examples. They all have different ethnic roots, history, original languages, traditions and religious beliefs.

Example: The Amazighs – also known as the Berbers – are an ethnic group indigenous to the North of Africa, living in lands stretching from the Atlantic cost to the Western Desert in Egypt. Historically, they spoke Berber languages.

There are around 25-30 million Berber speakers in North Africa. The total number of ethnic Berbers (including non-Berber speakers) is estimated to be far greater. They have been “Arabised” and “Islamised” since the Muslim conquest of North of Africa in the 7th century.

Secondly, because not all Muslims are Arabs, nor all Arabs are Muslims. Not to mention the very fact that not all Arabs are even Arabs. It would be more accurate to talk about “Arabised,” “Islamised” peoples or nations rather than an Arab World or Arab Nation.

Here are seven key facts about Muslims that large media, in particular the Western information tools, often neglect or ignore:

1. Not all Muslims Are Arabs

In fact, according to the most acknowledged statistics, the number of Muslims around the world amounts to an estimated 1.56 billion people, compared to estimated 2.2 billion Christians and 1.4 million Jewish.

Of this total, Arab countries are home to around 380 million people, that is only about 24 per cent of all Muslims.

2. Not all Arabs Are Muslims

While Islam is the religion of the majority of Arab population, not all Arabs are Muslims.

In fact, it is estimated that Christians represent between 15 per cent and 20 per cent of the Arab combined population. Therefore, Arab Muslims amount to just around one-fifth of all the world’s Muslims.

Arab Christians are concentrated mainly in the Palestinian Territories, Lebanon and Egypt, where they represent up to 13 per cent of the total population amounting to 95 million inhabitants according to last year’s census.

It is also estimated that there are more Muslims in the United Kingdom than in Lebanon, and more Muslims in China than in Syria.

3. Major Muslim Countries Are in Asia

According to the U.S-based Pew Research Center, this would be the percentage of major religious groups in 2012: Christianity 31.5 per cent; Islam 23.2 per cent; Hinduism 15.0 per cent, and Buddhism 7.1 per cent of the world’s total population.

Meanwhile, the Pew Research Center estimated that in 2010 there were 49 Muslim-majority countries.

South and Southeast Asia would account for around 62 per cent of the world’s Muslims.

According to these estimates, the largest Muslim population in a single country lives in Indonesia, which is home to 12.7 per cent of all world’s Muslims.

Pakistan (with 11.0 per cent of all Muslims) is the second largest Muslim-majority nation, followed by India (10.9 per cent), and Bangladesh (9.2 per cent).

The Pew Research Center estimates that about 20 per cent of Muslims live in Arab countries, and that two non-Arab countries – Turkey and Iran – are the largest Muslim-majority nations in the Middle East.

In short, a large number of Muslim majority countries are not Arabs. This is the case of Afghanistan, Bangladesh, Iran, Indonesia, Pakistan and Turkey.

3. Largest Muslim Groups

It is estimated that 75 to 90 per cent of Islam followers are Sunni, while Shii represent 10 to 20 per cent of the global Muslim population.

The sometimes armed, violent conflicts between these two groups are often due to political impositions. But this is not restricted to Arab or Muslim countries, as evidenced by the decades of armed conflict between Catholic and Protestant communities in Northern Ireland.

4. Muslims Do Not Have Their Own God

In Arabic (the language in which the sacred book, the Koran, was written and diffused) the word “table” is said “tawla;” a “tree” is called “shajarah;” and a “book” is “ketab.” In Arabic “God” is “Allah”.

In addition, Islam does not at all deny the existence of Christianity or Christ. And it does fully recognise and pay due respect to the Talmud and the Bible.

Probably the main difference is that Islam considers Christ as God’s closest and most beloved “prophet,” not his son.

5. Islamic “Traditions”

Islam landed in the 7th century in the Gulf or Arab Peninsula deserts. There, both men and women used to cover their faces and heads to protect themselves from the strong heat and sand storms. It is not, therefore, about a purely Islam religious imposition.

Meanwhile, in the Arab deserts, populations used to have nomadic life, with men travelling in caravans, while women and the elderly would handle the daily life of their families. Islamic societies were therefore actually matriarchal.

Genital mutilations are common to Islam, Judaism (male) and many other religious beliefs, in particular in Africa.

Likewise other major monotheistic religions, a number of Muslim clerics have been using faith to increase their influence and power. This is fundamentally why so many “new traditions” have been gradually imposed on Muslims. This is the case, for example, of denying the right of women to education.

As with other major monotheistic religions, some Muslim clerics used their ever-growing powers to promote inhuman, brutal actions. This is the case of “Jihad” fundamentalists.

This has not been an exclusive case of Muslims along the history of humankind. Just remember the Spanish-Portuguese invasion of Latin America, where indigenous populations were exterminated and Christianity imposed by the sword, for the sake of the glory of Kings, Emperors… and Popes.

6. The Unfinished Wars between the West and Islam (and Vice-Versa)

There is a growing belief among Arab and Muslim academicians that the on-going violent conflicts between Muslims and the West (and vice-versa) are due to the “unfinished” war between the Christian West and the Islamic Ottoman Empire, in spite of the fact that the latter was dismantled in the early 1920s.

This would explain the successive wars in the Balkans and the Middle East, for instance.

7. The “Religion” of Oil

It has become too common, and thus too given for certain, that oil producers are predominantly Arabs and Muslims. This is not accurate.

To start with, the Organization of the Petroleum Exporting Countries (OPEC) was founded in (the under British mandate) Baghdad, Iraq, in 1960 by five countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. These were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).

And here you are: OPEC full membership includes: Ecuador, Venezuela, Nigeria, Gabon and Angola. None of these is either Arab or Muslim. They are all Christian states. As for Iran and Indonesia, these are Muslim countries, but not Arab.

Then you have other major oil and gas producers and exporters outside the OPEC ranks: the United States [which produces more oil (13,973,000 barrels per day) than Saudi Arabia (11,624,000)]; Russia (10,853,000); China (4,572,000); Canada (4,383,000, more than United Arab Emirates or Iran or Iraq); Norway (1,904,000, more than Algeria) and Mexico, among others.

Again, none of these oil producers is Arab or Muslim.

In short, not all Muslims are Arabs (these are less than 20 per cent of the total); not all Arabs are Muslims, and… not all Arabs are even Arabs!

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Making the Deep Blue Sea Green Againhttp://www.ipsnews.net/2017/02/making-the-deep-blue-sea-green-again/?utm_source=rss&utm_medium=rss&utm_campaign=making-the-deep-blue-sea-green-again http://www.ipsnews.net/2017/02/making-the-deep-blue-sea-green-again/#comments Mon, 20 Feb 2017 04:17:29 +0000 Lyndal Rowlands http://www.ipsnews.net/?p=149021 A young boy stands near mangroves planted near his home in the village of Entale in Sri Lanka’s northwest Puttalam District. Credit: Amantha Perera/IPS

A young boy stands near mangroves planted near his home in the village of Entale in Sri Lanka’s northwest Puttalam District. Credit: Amantha Perera/IPS

By Lyndal Rowlands
UNITED NATIONS, Feb 20 2017 (IPS)

Kids growing up in the Seychelles think of the ocean as their backyard, says Ronald Jean Jumeau, Seychelles’ ambassador for climate change and SIDS.

“Our ocean is the first and eternal playground of our children, they don’t go to parks they go to the ocean, they go to the beach, they go to the coral reefs, and all that is just collapsing around them,” Jumeau told IPS.

The tiny country off the East Coast of Africa is one of 39 UN member states known as small island states, or as Jumeau likes to call them: “large ocean states.”

Ambassadors and delegations from these 39 countries often speak at UN headquarters in New York steadfastly sounding the alarm about the changes to the world’s environment they are witnessing first hand. Jumeau sees these island states as sentinels or guardians of the oceans. He prefers these names to being called the canary in the gold mine because, he says: “the canaries usually end up dead.”

Yet while much is known about the threats rising oceans pose to the world’s small island states, much less is known about how these large ocean states help defend everyone against the worst impacts of climate change by storing “blue carbon.”

“We are not emitting that much carbon dioxide but we are taking everyone else’s carbon dioxide into our oceans,” says Jumeau.

"There’s 3 billion people around the world that are primarily dependent on marine resources for their survival and so they depend on what the ocean can produce,” -- Isabella Lövin, Sweden’s deputy prime minister.

Despite decades of research, the blue carbon value of oceans and coastal regions is only beginning to be fully appreciated for its importance in the fight against climate change.

“There’s proof that mangroves, seas salt marshes and sea grasses absorb more carbon (per acre) than forests, so if you’re saying then to people don’t cut trees than we should also be saying don’t cut the underwater forests,” says Jumeau.

This is just one of the reasons why the Seychelles has banned the clearing of mangroves. The temptation to fill in mangrove forests is high, especially for a nation with so little land, but Jumeau says there are many benefits to sustaining them.

Mangroves guard against erosion and protect coral reefs. They are also provide nurseries for fish.

But its not just coastal forests that take carbon out of the atmosphere. Oceans also absorb carbon, although according to NASA their role is more like inhaling and exhaling.

The Seychelles, whose total ocean territory is 3000 times larger than its islands, is also thinking about how it can protect the oceans so they can continue to perform this vital function.

The nation plans to designate specific navigation zones within its territories to allow other parts of the ocean a chance to recover from the strains associated with shipping.

The navigation zones will “relieve the pressure on the ocean by strengthening the resilience of the oceans to absorb more carbon dioxide and ocean acidification,” says Jumeau. He acknowledges the plan will only work if all countries do the same but says you have to start somewhere.

Fortunately other countries are also beginning to recognise the importance of protecting the world’s oceans.

Isabella Lövin, Sweden’s deputy prime minister and climate minister told IPS that the world is going “in the totally wrong direction,” when it comes to achieving the goal of sustainable oceans and life below water.

“If you look at the trends right now, you see more and more overfishing, we are seeing more and more pollution, plastic litter coming into our oceans, and we’re also seeing all the stress that the ocean is under due to climate change, acidification of the water, but also the warming and sea level rises and all of this is putting a tremendous, tremendous pressure on our oceans,” said Lövin.

Together with Fiji, Sweden is convening a major UN Ocean Conference in June this year.

The conference aims to bring together not only governments but also the private sector and non-governmental organisations to create a more coordinated approach to sustaining oceans. It will look at the key role that oceans play in climate change but also other issues such as the alarming prospect that there will be more plastic in our seas than fish by the year 2050.

“There’s 3 billion people around the world that are primarily dependent on marine resources for their survival and so they depend on what the ocean can produce, so it’s about food security, it’s also about livelihoods for hundreds of millions of people that depend on small scale fisheries mostly in developing countries,” said Lövin.

Lövin also noted that rich countries need to work together with developing countries to address these issues, because the demand for fish in rich countries has put a strain on the global fish stocks that developing countries rely on.

“Rich countries … have been over-fishing with industrial methods for decades and now when they European oceans are being emptied more or less we have depleted our resources and then we import and we fish (over long distances in) developing countries’ waters.”

“We need to make sure that fish as a resource is conserved and protected for future generations.”

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Alternative Mining Indaba Makes Its Voice Heardhttp://www.ipsnews.net/2017/02/alternative-mining-indaba-makes-its-voice-heard/?utm_source=rss&utm_medium=rss&utm_campaign=alternative-mining-indaba-makes-its-voice-heard http://www.ipsnews.net/2017/02/alternative-mining-indaba-makes-its-voice-heard/#comments Sat, 18 Feb 2017 04:00:11 +0000 Mark Olalde http://www.ipsnews.net/?p=149007 A delegate from the Alternative Mining Indaba dances during a protest march on Feb. 8, 2017. About 450 representatives of civil society mining-affected communities attended the conference in Cape Town. Credit: Mark Olalde/IPS

A delegate from the Alternative Mining Indaba dances during a protest march on Feb. 8, 2017. About 450 representatives of civil society mining-affected communities attended the conference in Cape Town. Credit: Mark Olalde/IPS

By Mark Olalde
CAPE TOWN, South Africa, Feb 18 2017 (IPS)

“Comrades, we have arrived. This cherry is eight years awaited. We have made it to this place,” Bishop Jo Seoka told the crowd, pausing to allow for the whistles and cheers.

Seoka, the chairman of a South African NGO called the Bench Marks Foundation, presided over the crowd of protesters that was busy verbally releasing years of frustration at the continent’s mining industry. The protest on Feb. 8 was part of the Alternative Mining Indaba (AMI) held in Cape Town.“We want transparency, we want accountability and, most importantly, we want participation of the people affected by mining." --Mandla Hadebe

The annual gathering brings together residents of mining-affected communities and civil society representatives to discuss common problems caused by the mining industry in Africa. On its third and final day, the AMI took to the streets to deliver its declaration of demands to industry and government representatives.

While police temporarily blocked the march from reaching the convention center hosting the Mining Indaba, the industry’s counterpart to the AMI, protesters were angry after years of having their side of the story largely ignored.

They marched up to the line of police and private security guarding the doors to the conference hall and demanded to speak with members of the Mining Indaba.

“As citizens and representations (sic) citizen-organisations we wish to express our willingness to work with African governments and other stakeholders in the quest to harness the continent’s vast extractive resources to underpin Africa’s socio-economic transformation and the [Africa Mining Vision] lays a foundation for this,” the declaration stated.

“I very much appreciate the willingness to engage in dialogue, and I think this is the first step towards establishing a common vision,” Tom Butler, CEO of the International Council on Mining & Metals, told the crowd before signing receipt of the declaration and handing it over for the managing director of the Mining Indaba to also sign.

Alternative Mining Indaba participants dance and sing struggle songs during their march on Feb. 8, 2017. Individual countries have begun holding their own alternative indabas, with South Africa’s first country-specific conference held this year in Johannesburg. Credit: Mark Olalde/IPS

Alternative Mining Indaba participants dance and sing struggle songs during their march on Feb. 8, 2017. Individual countries have begun holding their own alternative indabas, with South Africa’s first country-specific conference held this year in Johannesburg. Credit: Mark Olalde/IPS

While Butler came to the AMI to give a presentation on the mining industry’s behalf, few other members of government or the industry made an attempt to engage with the AMI. The Mining Indaba’s Twitter account even blocked some AMI delegates who took to social media to air their grievances.

The official Mining Indaba is a place for mining ministers, CEOs of mining houses and other industry representatives to network and strike deals. During the event, South Africa and Japan, for example, signed a bilateral agreement to boost collaboration along the mining value chain.

“This Indaba has affirmed South Africa’s status as a preferred investment destination,” Mosebenzi Zwane, the country’s minerals minister, said in a statement following the event. “As government, we are heartened by this and recommit to ensuring the necessary regulatory and policy certainty to attract even more investment into our country.”

In his opening address at the Mining Indaba, Zwane also announced that the draft of the new Mining Charter, a document guiding the country’s mining industry, would be published in March.

The AMI, however, was born as a community-level response to the fact that such decisions are usually made without consulting those most impacted by mining.

“They are going to find this huddled mass of people,” Mandla Hadebe, one of the event organizers, said of the protest’s goals in the first year. Only 40 delegates were present.

An Alternative Mining Indaba delegate from Swaziland sings protest songs. There was a feeling of triumph among the delegates after achieving even a degree of acknowledgement from industry representatives. Credit: Mark Olalde/IPS

An Alternative Mining Indaba delegate from Swaziland sings protest songs. There was a feeling of triumph among the delegates after achieving even a degree of acknowledgement from industry representatives. Credit: Mark Olalde/IPS

In its eighth year, the AMI has grown to about 450 participants representing 43 countries. Delegates came from across Africa – from Egypt to the Democratic Republic of the Congo and Malawi – as well as the rest of the world – from Cambodia to Bolivia and Australia – to share their stories.

“It just shows that our struggles are common and that we’ve decided to unite for a common purpose,” Hadebe said of the growth. “We want transparency, we want accountability and, most importantly, we want participation of the people affected by mining.”

A number of panels dedicated to community voices gave activists a platform to share their stories and methods of resistance. Translators in the various conference rooms translated among English, French and Portuguese, a necessity as well as a tacit nod to the ever-present effects of the same colonialism that brought mining.

“What we heard first were promises,” a woman from Peru recounted. “Thirty years passed, and now I call the second part of this process ‘the lies.’”

“We are trying to build a critical mass that is angry enough to oppose irresponsible mining,” a delegate from Kenya explained.

Some panels addressed specific issues facing Africa’s extractive industry. One discussion explained the need to move away from indirect taxes toward direct ones focused on mining houses. The presenter, a member of Tax Justice Network-Africa, said that an increase in government audits had led to a surge in tax revenue since 2009, a rare success story.

Another panel dealt with the realities of impending job loss due to widespread mechanization, while others took on the need for governments to strike better deals with international corporations.

Side events provided forums for more nuanced learning on topics such as the corruption involved with mining on communal land. At the showing of a documentary following South African land rights activist Mbhekiseni Mavuso, delegates from other countries such as Sierra Leone compared and contrasted their own forced relocations.

Mavuso said, “We are regarded as people who do not count. We have now become what we call ‘victims of development,’ and so that is also making us to become victims of democracy. We are fighting, so let us all stand up and fight.”

Occasionally, delegates took to the microphone to lament continued talk with minimal action. Much of the AMI focused on the Africa Mining Vision, a document produced by the African Union. While its goal is to make mining beneficial for all Africans, the document is a high-level policy discussion lacking a direct connection to affected communities.

The three-day conference has outgrown its ability to delve deeply into every issue impacting the represented countries, so delegates have taken the idea to their home nations. In the past year, Madagascar, Angola, Swaziland and others held their first country-specific alternative indabas.

Only a week before the AMI, South Africa hosted its first such conference in Johannesburg.

Despite many delegates expressing feelings of helplessness or anger, the march to the Mining Indaba provided a temporary sense of victory.

After finally obtaining some level of acknowledgment from industry representatives, the AMI participants danced and took selfies outside the Mining Indaba, far from the townships and rural villages adjacent to mines.

As the delegates boarded busses to depart the event, the vehicles shook from stomping and singing, and some protesters leaned out the windows to shout their last parting sentiments on behalf of mining-affected communities around the country and the continent.

*Mark Olalde’s mining reporting is financially supported by the Pulitzer Center on Crisis Reporting, the Fund for Environmental Journalism and the Fund for Investigative Journalism.

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Expansion of Renewable Energies in Mexico Has Victims, Toohttp://www.ipsnews.net/2017/02/expansion-of-renewable-energies-in-mexico-has-victims/?utm_source=rss&utm_medium=rss&utm_campaign=expansion-of-renewable-energies-in-mexico-has-victims http://www.ipsnews.net/2017/02/expansion-of-renewable-energies-in-mexico-has-victims/#comments Fri, 17 Feb 2017 22:34:19 +0000 Emilio Godoy http://www.ipsnews.net/?p=149013 In Mexico, wind farms spark controversy due to complaints of unfair treatment, land dispossession, lack of free, prior and informed consent and exclusion from the electricity generated. In the photo, wind turbines frame the horizon of the northern city of Zacatecas. Credit: Emilio Godoy/IPS

In Mexico, wind farms spark controversy due to complaints of unfair treatment, land dispossession, lack of free, prior and informed consent and exclusion from the electricity generated. In the photo, wind turbines frame the horizon of the northern city of Zacatecas. Credit: Emilio Godoy/IPS

By Emilio Godoy
KIMBILÁ, Mexico, Feb 17 2017 (IPS)

The growing number of wind and solar power projects in the southern Mexican state of Yucatán are part of a positive change in Mexico’s energy mix. But affected communities do not see it in the same way, due to the fact that they are not informed or consulted, and because of how the phenomenon changes their lives.

“We have no information. We have some doubts, some people say it’s good and some say it’s bad. We have heard what is said in other states,” small farmer Luis Miguel, a Mayan Indian, told IPS.

He lives in Kimbilá, a town in the municipality of Izmal, which is the site of an up-to-now failed private wind power venture that has been blocked by opposition from the area’s 3,600 inhabitants and in particular from the ejido or communal land where the wind farm was to be installed.“There is a lack of information going to the communities, who don’t know the scope of the contracts; (the companies and authorities) don’t explain to them the problems that are going to arise. Conflicts are generated, and manipulation is used to get the permits. Social engineering is used to divide the communities.” -- Romel González

“We fear that they will damage our crops,” said Miguel, whose father is one of the 573 members of the Kimbilá ejido, located in the Yucatán Peninsula, 1,350 km southeast of Mexico City.

The questioned project, run by the Spanish company Elecnor, includes the installation of 50 wind turbines with a capacity of 159 MW per year.

The company installed an anemometric tower in 2014, but the local population, who grow maize and garden vegetables, raise small livestock and produce honey for a living, did not find out about the project until January 2016.

Since then, the ejido has held two assemblies and cancelled another, without reaching an agreement to approve a 25-year lease on the lands needed for the wind farm.

Meanwhile, in February 2016, the members of the ejido filed a complaint against the Procuraduría Agraria – the federal agency in charge of protecting rural land – accusing it of defending the interests of the company by promoting community assemblies that were against the law.

The wind farm is to have an operating life of 30 years, including the preparatory phase, construction and operation, and it needs 77 hectares of the 5,000 in the ejido.

The company offered between five and 970 dollars per hectare, depending on the utility of the land for a wind farm, a proposition that caused unrest among the ejido members. It would also give them 1.3 per cent of the turnover for the power generated. But the electricity would not be used to meet local demand.

“We haven’t been given any information. This is not in the best interests of those who work the land. They are going to destroy the vegetation and 30 years is a long time,” beekeeper Victoriano Canmex told IPS.
This indigenous member of the ejido expressed his concern over the potential harm to the bees, “because new roadswould be opened with heavy machinery. They said that they would relocate the apiaries but they know nothing about beekeeping. It’s not fair, we are going to be left with nothing,” he said.

Canmex, who has eight apiaries,checks the beehives twice a week, together with four of his six children. He collects about 25 30-kg barrels of honey, which ends up on European tables. Yucatan honey is highly appreciated in the world, for its quality and organic nature.

Luis Miguel, a Mayan farmer from Kimbilá, in the southeastern state of Yucatán, Mexico, fears that the installation of a wind farm in his community will damage local crops of corn and vegetables.  Credit: Emilio Godoy/IPS

Luis Miguel, a Mayan farmer from Kimbilá, in the southeastern state of Yucatán, Mexico, fears that the installation of a wind farm in his community will damage local crops of corn and vegetables. Credit: Emilio Godoy/IPS

Yucatán, part of the ancient Mayan empire, where a large part of the population is still indigenous, has become a new energy frontier in Mexico, due to its great potential in wind and solar power.

This state adopted the goal of using 9.3 per cent non-conventional renewable energies by 2018. In Yucatán, the incorporation per year of new generation capacity should total 1,408 MW by 2030.

Leaving out the big hydropower plants, other renewable sources account for just eight per cent of the electricity produced in Mexico. According to official figures, in December 2016, hydropower had an installed capacity of 12,092 MW, geothermal 873 MW, wind power 699 MW, and photovoltaic solar power, six MW.

According to the Mexican Wind Energy Association, which represents the industry, in Mexico there are at least 31 wind farms located in nine states, with a total installed capacity of 3,527 MW of clean energy for the northeast, west, south and southeast regions of this country of 122 million people.

Besides the lack of information, and of free, prior and informed consent, as the law and international conventions require, indigenous people complain about impacts on migratory birds, rise in temperatures in areas with solar panels and water pollution caused by leaks from wind towers.

For Romel González, a member of the non-governmental Regional Indigenous and Popular Council of Xpujil, a town in the neighboring state of Campeche, the process of energy development has legal loopholes that have to do with superficial contracts and environmental impact studies.

“There is a lack of information for the communities, who don’t know the scope of the contracts; (the companies and authorities) don’t explain to them the problems that are going to arise. Conflicts are generated, and manipulation is used to get the permits. Social engineering is used to divide the communities,” González told IPS.

He said that in the region, there are “previously untapped” natural resources that are attracting attention from those interested in stripping the communities of these resources.

The state is experiencing a clean energy boom, with plans for five solar plants, with a total capacity of 536 MW, and five wind farms, with a combined capacity of 256 MW. The concessions for the projects, which are to operate until 2030, have already been awarded to local and foreign companies.

In the first national power generation auction organised by the government in March 2016, four wind power and five solar power projects won, while in the second one, the following September, two new wind projects were chosen.

The change in the electricity mix is based on Mexico’s energy reform, in force since August 2014, which opened the industry to national and international private capital.

Local authorities project that by 2018, wind power generation will amount to 6,099 MW, including 478 from Yucatán, with the total increasing two years later to 12,823 MW, including 2,227 MW from this state.

Yucatán will draw a projected 52 million dollars in investment to this end in 2017 and 1.58 billion in 2018.

The Electricity Industry Law, in effect since 2014, stipulates that each project requires a social impact assessment. But opponents of the wind power projects have no knowledge of any assessment carried out in the state, while there is only evidence of two public consultations with affected communities, in the case of two wind farms.

“The electricity will not be for us and we don’t know what will happen later (once the wind farm is installed). That is why we have our doubts,” said Miguel.

People in Yucatán do not want to replicate the “Oaxaca model”. That is the southern state which has the largest number of wind farms, which have drawn many accusations of unfair treatment, land dispossession and lack of free, prior and informed consent.

“The authorities want to do this by all means, they are just trying to get these projects approved,” said Canmex.

González criticised the government for failing to require assessments. “We have asked for them and the government has responded that there aren’t any. The community response to the projects will depend on their level of awareness and social organisation. Some communities will react too late, when the project is already underway,” he said.

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The Planned US Border Tax Would Most Likely Violate WTO Rules – Part 2http://www.ipsnews.net/2017/02/the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2/?utm_source=rss&utm_medium=rss&utm_campaign=the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2 http://www.ipsnews.net/2017/02/the-planned-us-border-tax-would-most-likely-violate-wto-rules-part-2/#comments Fri, 17 Feb 2017 15:52:20 +0000 Martin Khor http://www.ipsnews.net/?p=148999 The tax on US imports, without the same being applied to US-made products, discriminates against foreign products, and US exports being exempted from taxes is tantamount to being an export subsidy. How will this be taken at the WTO, the guardian of the multilateral trading system? Credit: Amantha Perera/IPS

The tax on US imports, without the same being applied to US-made products, discriminates against foreign products, and US exports being exempted from taxes is tantamount to being an export subsidy. How will this be taken at the WTO, the guardian of the multilateral trading system? Credit: Amantha Perera/IPS

By Martin Khor
PENANG, Feb 17 2017 (IPS)

As American lawmakers and the Trump administration prepare the ground for introducing a border adjustment tax, many controversial issues have emerged, including whether they go against the rules of the World Trade Organisation (WTO).

The border tax is part of the overhaul of the US corporate tax system proposed by Republican Congress leaders and appears to have the support of President Donald Trump.

If adopted, the tax measure is sure to attract the opposition of the United States’ trading partners, as their exports to the US will have the equivalent of a 20% tax imposed on them, whereas the exports from the US will be exempted from a 20% corporate tax.

The tax on US imports, without the same being applied to US-made products, discriminates against foreign products, and US exports being exempted from taxes is tantamount to being an export subsidy.

How will this be taken at the WTO, the guardian of the multilateral trading system?

US Congressman Kevin Brady, chairman of the House Ways and Means Committee, and the plan’s main advocate, is convinced the plan is WTO-consistent, but has yet to explain why.

On the other hand, many trade and legal experts think the plan violates the principles and rules of the WTO, although they caution that a final opinion is possible only when the language of the law is known.

Their general view is as follows: Firstly, the inability to deduct import expenses from a company’s tax (while allowing deductions for locally sourced products and services and wages) discriminates against imports vis-à-vis domestic products, and violates the national treatment principle of the WTO and the rules of the General Agreement on Tariffs and Trade (GATT) which specify that imports must be treated no less favourably than similar locally produced goods.

Secondly, the exemption of export revenues from the taxable income would be most likely assessed as a prohibited export subsidy under the WTO’s subsidies agreement.

The renowned international trade expert, Bhagirath Lal Das, says that there are two separate issues to be considered:  the differential treatment of domestic and imported materials, and the differential tax treatment of income based on whether the product is domestically consumed or exported.

Martin Khor

Martin Khor

Says Das:   “It appears that the proposal is to deduct the cost of domestic input (product) from a company’s income while computing the tax, whereas there is no such deduction if a like imported input is used in the production.

“If this be the case, such a provision will clearly violate the principle of national treatment contained in Article III of the GATT 1994.”     Under that article, imported products must be accorded treatment no less favourable than that given to similar domestic products in respect of laws and regulations.

Added Das:  “If the use of the domestic product results in tax reduction whereas the use of the like imported product does not get similar treatment, clearly the imported product will get “less favourable” treatment. And that will violate the principle of national treatment, and it can be successfully challenged in the WTO on this ground.”

On the second issue, the proposal is to differentiate between the earning from domestic sale and that from export in the matter of taxation in respect of a product.

Commented Das:  “Here it would appear that the exemption of the tax is conditional on export. This practice will clearly qualify for being categorised as export subsidy which is prohibited under Article 3 of the WTO’s Subsidy Agreement.”

Das cites a case of an American company, the Domestic International Sales Corporation (DISC).  A portion of its profit which was engaged in export was tax free.  The EEC, the predecessor of EC, raised a dispute in the GATT in 1973. The matter was delayed for a long time until in 1999 a panel at the WTO ruled that the US practice was in fact an export subsidy and was prohibited.

“This case may not be exactly the same as the currently anticipated proposal, but it does point to the fallibility of providing government benefit contingent on export,” says Das.

Das was formerly Chairman of the General Council of GATT,  Indian Ambassador to GATT, and subsequently Director of Trade in the UN Conference on Trade and Development, and has written many books on the WTO and its agreements.

According to another eminent expert on the WTO, Chakravarthi Raghavan, whether the US law is considered “legal” depends on the language of the law and its actual effects.

“There is little doubt that the “pith and substance” of the Republican border tax proposal or ideas will be in violation of Articles II and III of GATT and Article 3.1 of the Subsidies Agreement.”

Raghavan, Chief Editor Emeritus of the South-North Development Monitor, followed and analysed the negotiations of the Uruguay Round and of the WTO on a daily basis ever since.

There are many shortcomings with the WTO dispute system. Few countries have the courage or financial resources to take up cases against the US.
Countries can challenge the US at the WTO and if they succeed the US has to change its law or face retaliatory action.  The winning party can block US exports to it equivalent in value to the loss of its exports to the US.

However, there are many shortcomings with the WTO dispute system.  Few countries have the courage or financial resources to take up cases against the US.

If some countries do take up cases, it takes as long as three to four years for a case in the WTO to wind its way through panel hearings and to a final verdict at the Appellate Body, and for the winning Party to get the go-ahead to take retaliatory action.  During that period, the US can continue with its laws and practices.

If the US loses, it need not pay any compensation to the successful Party for having suffered losses.   Moreover, in the past, when it loses cases at the WTO, the US has typically not complied with the orders made on it.  Even if it does comply, it needs to do so only in respect of the Parties that brought the action against it; it need not do so for other Parties.

If it does not comply, the complainant countries are allowed to take retaliatory action by blocking US goods and services from entering their markets up to an amount equivalent to the losses they have suffered.  This retaliatory action can only be taken by those countries that successfully took up the cases.

Thus, the US may decide to implement the border adjustment taxes and wait two to four years before a final judgment is made at the WTO, and for retaliatory action to be allowed by the WTO.   It can meanwhile reap the benefits of its border tax measures.

Another possibility is that Trump may make good his threat to leave the WTO, if important cases go against it.  That would cause a major crisis for the WTO and for international trade.

With regard to the WTO process, Raghavan said:   “Apart from the difficulties of taking up cases in the WTO, including costs, the lengthy process and no retrospective damages when any WTO member, raises a dispute, the onus of proving the violation is on them.

“To the best of my knowledge, in none of the rulings against US, requiring changes in law or regulations, has the US implemented them, and even major trading partners have been chary of taking retaliation action.

“Countries that are affected, could act to unilaterally deny the US some rights; but they cannot justify that this is retaliation, until there is a ruling in their favour.”

American advocates of the border adjustment tax plan have claimed that it is similar to a value added tax (VAT) which is considered by the WTO to be a legitimate measure;  and thus that the border adjustment tax would also be compatible with the WTO.

Almost all major developed countries have instituted the VAT system, with the notable exception of the US.  The Republican Congress leaders and Trump have argued  that this places the US at a disadvantage in its trade relations because the VAT system imposes a tax on imports, whilst allowing companies to obtain a refund for taxes paid on their exports.

They claim the border tax would correct this disadvantage that the WTO should similarly recognise the border tax as legitimate.

However, several well-known economists and lawyers are of the opinion that there are important differences between the VAT and the border tax.

There are two parts of their arguments.  Firstly, the VAT imposes taxes on both imports and locally produced goods and services and therefore does not discriminate against imports;  whereas the border tax system imposes a tax on imports whilst excluding domestic inputs and wages from tax, which therefore discriminates against imports.  Secondly, the VAT system does not subsidise exports, whereas the border tax system does.

In a 1990 paper, Martin Feldstein and Paul Krugman found that the VAT does not improved the trade competitiveness of countries using it.  They said:  “The point that VATs do not inherently affect international trade flows has been well recognised in the international tax literature…A VAT Is not a protectionist measure.”

Krugman, in a recent blog, reiterated that “a VAT does not give a nation any kind of competitive advantage, period.”  But a destination-based cash flow tax like the border adjustment tax has a subsidy element that “would lead to expanded domestic production.”

In another paper, Reeven Avi-Yonah and Kimberly Clausing  from Michigan Law School and Reed College respectively analyse the difference between the VAT and the proposed border adjustment tax and why the former is WTO-consistent whereas the latter would violate WTO rules.

They said:   “U.S. trading partners are likely to be hurt in several ways. The effects of the wage deduction render the corporate cashflow tax different from a VAT, and these differences have the net effect of increasing the incentive to operate in the United States

“In addition, such a tax system would exacerbate the profit shifting problems of our trading partners, since the United States will appear like a tax haven from their perspective.”

Economists also agree that the border tax will raise the value of the US dollar but there is a debate as to how long this will take and by how much it will rise. If the dollar appreciation is significant, this may have an adverse effect on countries that hold debt in US dollars, as they would have to pay out more in their domestic currency to service their loans. This would include many developing countries with substantial dollar-denominated debts of the public or private sectors, and some of them may tip into new debt and financial crises.    According to former US Treasury Secretary Lawrence Summers:  “Proponents of the plan anticipate a rise in the dollar by an amount equal to the 15 to 20 per cent tax rate.  This would do huge damage to dollar debtors all over the world and provoke financial crises in some emerging markets.”           

This article is the second in a two-part series on the border adjustment tax, which would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax. You can find Part 1 here

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Still in Limbo, Somaliland Banking on Berberahttp://www.ipsnews.net/2017/02/still-in-limbo-somaliland-banking-on-berbera/?utm_source=rss&utm_medium=rss&utm_campaign=still-in-limbo-somaliland-banking-on-berbera http://www.ipsnews.net/2017/02/still-in-limbo-somaliland-banking-on-berbera/#comments Fri, 17 Feb 2017 13:10:31 +0000 James Jeffrey http://www.ipsnews.net/?p=148992 In the capital people encounter a mishmash of chaotic local market commerce existing alongside diaspora-funded construction including glass-fronted office buildings, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with characteristic Somali energy and dynamism. Credit: James Jeffrey/IPS

In the capital people encounter a mishmash of chaotic local market commerce existing alongside diaspora-funded construction including glass-fronted office buildings, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with characteristic Somali energy and dynamism. Credit: James Jeffrey/IPS

By James Jeffrey
HARGEISA, Somaliland, Feb 17 2017 (IPS)

Crossing African borders by land can be an intimidating process (it’s proving an increasingly intimidating process nowadays in Europe and the US also, even in airports). But crossing from Ethiopia to Somaliland at the ramshackle border town of Togo-Wuchale is a surreally pleasant experience.

Immigration officials on the Somaliland side leave aside the tough cross-examination routine, greeting you with big smiles and friendly chit chat as they whack an entry stamp on the Somaliland visa in your passport.“If you look at the happiness of Somalilanders and the challenges they are facing, it does not match.” --Khadar Husein, Operational director of the Hargeisa office of Transparency Solutions.

They’re always happy to see a foreigner’s visit providing recognition of their country that technically still doesn’t exist in the eyes of the rest of the political world, despite having proclaimed its independence from Somalia in 1991, following a civil war that killed about 50,000 in the region.

A British protectorate from 1886 until 1960 and unifying with what was then Italian Somaliland to create modern Somalia, Somaliland had got used to going on its own since that 1991 declaration, and today exhibits many of the trappings of a functioning state: its own currency, a functioning bureaucracy, trained police and military, law and order on the streets. Furthermore, since 2003 Somaliland has held a series of democratic elections resulting in orderly transfers of power.

Somaliland’s resolve is most clearly demonstrated in the capital, Hargeisa, formerly war-torn rubble in 1991 at the end of the civil war, its population living in refugee camps in neighbouring Ethiopia. An event that lives on in infamy saw the jets of military dictator Mohammed Siad Barre’s regime take off from the airport and circle back to bomb the city.

But visitors to today’s sun-blasted city of 800,000 people encounter a mishmash of impassioned traditional local markets cheek by jowl with diaspora-funded modern glass-fronted office blocks and malls, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with typical Somali energy and dynamism.

“We are doing all the right things that the West preaches about but we continue to get nothing for it,” says Osman Abdillahi Sahardeed, minister for the Ministry of Information, Culture and National Guidance. “This is a resilient country that depends on each other—we’re not after a hand out but a hand up.”

Non-statehood deprives Somaliland of direct large-scale international support from the likes of the World Bank and International Monetary Fund. For these members of the Somaliland Seaman’s Union at Berbera Port’s docks, it means they are not paid the same wages—they earn about $220 a month—as paid to foreign workers due to not belonging to an internationally recognised organisation. Credit: James Jeffrey/IPS

Non-statehood deprives Somaliland of direct large-scale international support from the likes of the World Bank and International Monetary Fund. For these members of the Somaliland Seaman’s Union at Berbera Port’s docks, it means they are not paid the same wages—they earn about $220 a month—as paid to foreign workers due to not belonging to an internationally recognised organisation. Credit: James Jeffrey/IPS

Increasing levels of exasperation within Somaliland’s government and among the populace are hardly surprising. Somaliland’s apparent success story against the odds remains highly vulnerable. Its economy is perilously fragile. Non-statehood deprives it of direct large-scale international support and access to the likes of the World Bank and International Monetary Fund (I.M.F.).

As a result, the government has a tiny budget of about 250 million dollars, with about 60 percent spent on police and security forces to maintain what the country views as one of its greatest assets and reasons for recognition: continuing peace and stability. Also, it relies heavily on the support of local clan elders—it is hard for any government to prove its legitimacy when essential services need the help of international humanitarian organizations, local NGOs and the private sector.

Indeed, Somaliland survives to a large extent on money sent by its diaspora—estimated to range from $400 million to at least double that annually—and by selling prodigious quantities of livestock to Arab countries.

All the while, poverty remains widespread and swathes of men on streets sipping sweet Somali tea and chewing the stimulating plant khat throughout the day testify to chronic unemployment rates.

“About 70 percent of the population are younger than 30, and they have no future without recognition,” says Jama Musse, a former mathematics professor who left Italy to return to Somaliland to run the Red Sea Cultural Foundation center, which offers cultural and artistic opportunities for Hargeisa’s youth. “The world can’t close its eyes—it should deal with Somaliland.”

Peace and security hold in Somaliland, so effectively that moneychangers can safely stash bundles of cash on the street. Credit: James Jeffrey/IPS

Peace and security hold in Somaliland, so effectively that moneychangers can safely stash bundles of cash on the street. Credit: James Jeffrey/IPS

For now, Somaliland’s peace holds admirably well.

“If you look at the happiness of Somalilanders and the challenges they are facing it does not match,” says Khadar Husein, operational director of the Hargeisa office of Transparency Solutions, a UK-based consultancy focused on civil society capacity building in Somaliland and Somalia. “They are happy because of their values and religion.”

But others speak of the risks of encroaching Wahhabism, a far more fundamental version of Islam compared to Somaliland’s conservative though relatively moderate religiousness, and a particular concern in a volatile part of the world.

“Young men are a ready-made pool of rudderless youth from which militant extremists with an agenda can recruit,” says Rakiya Omaar, a lawyer and Chair of Horizon Institute, a Somaliland consultancy firm helping communities transition from underdevelopment to stability.

Almost everyone acknowledges the country’s present means of sustainment—heavily reliant on the private sector and diaspora—must diversity. Somaliland needs greater income to develop and survive.

Abdi Muhammad, a veteran of the Somali civil war, makes his feelings clear. Credit: James Jeffrey/IPS

Abdi Muhammad, a veteran of the Somali civil war, makes his feelings clear. Credit: James Jeffrey/IPS

For many, the key to Somaliland’s much needed economic renaissance lies in tapping into the far stronger economy next door: Ethiopia, Africa’s second most populous country and its fastest growing economy, according to the I.M.F.

Crucial to achieving this is Berbera, a name conjuring images of tropical quays and fiery sunsets. Once an ancient nexus of maritime trade, Berbera has long been eclipsed by Djibouti’s ports to the north. But Berbera Port is now on the brink of a major expansion that could transform and return it to a regional transportation hub, and also help fund Somaliland’s nation-building dreams.

In May 2016, Dubai-based DP World was awarded the concession to manage and expand Berbera for 30 years, a project valued at about 442 million dollars, including expanding the port and refurbishing the 268-kilometer route from the port to the border with Ethiopia.

Landlocked Ethiopia has long been looking to diversify its access to the sea, an issue of immense strategic anxiety. Currently 90 percent of its trade goes through Djibouti, a tiny country with an expanding network of ports that scoops at least 1 billion dollars in port fees from Ethiopia every year.

Somaliland would like about 30 percent of that trade through Berbera, and Ethiopia is more than happy with that, allocating such a proportion in its latest Growth and Transformation Plan that sets economic policy until 2020.

Ethiopia and Somaliland had already signed a Memorandum Of Understanding (MOU) covering trade, security, health and education in 2014, before in March 2016 signing a trade agreement on using Berbera Port. And Ethiopia could just be the start.

“It would be a gateway to Africa, not just Ethiopia,” says Sharmarke Jama, a trade and economic adviser for the Somaliland government during negotiations on the port concession. “The multiplying benefits for Somaliland’s economy could be endless.”

Somaliland officials hope increased trade at the port will enable greater self-sufficiency to develop the country, while also chipping away at the international community’s resistance over recognition.

“As our economic interests align with the region and we become more economically integrated, that can only help with recognition,” Sharmarke says.

Perhaps. The political odds are stacked against Somaliland due to concerns that recognizing Somaliland would undermine decades of international efforts to patch up Somalia, and open a Pandora ’s Box of separatist claims in the region and further afield around Africa.

But greater self-sufficiency would undoubtedly result from a resurgent Berbera, and without this crucial infrastructure revival Somaliland’s economic potential will remain untapped, trapping its people in endless cycles of dependence, leaving those idle youth on street corners.

On April 13, 2016, up to 500 migrants died after a boat capsized crossing the Mediterranean. Most media reported that a large portion of those who died were from Somalia. But in Hargeisa following the tragedy, locals noted how many of those who died were more specifically Somalilanders.

“Why are they leaving? Unemployment,” says Abdillahi Duhe, former Foreign Minister of Somaliland and now a consultant in the Ethiopian capital, Addis Ababa. “Now is a very important time: we’ve passed the stage of recovery, we have peace—but many hindrances remain.”

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Beware of the New US Protectionist Plan, the Border Adjustment Tax – Part 1http://www.ipsnews.net/2017/02/beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax/?utm_source=rss&utm_medium=rss&utm_campaign=beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax http://www.ipsnews.net/2017/02/beware-of-the-new-us-protectionist-plan-the-border-adjustment-tax/#comments Fri, 17 Feb 2017 12:37:51 +0000 Martin Khor http://www.ipsnews.net/?p=148990 If the tax plan is implemented it will have serious adverse effects on many contries, like China or Mexico, which sell hundreds of billions of dollars of manufactured products to the US. Credit: Bigstock

If the tax plan is implemented it will have serious adverse effects on many contries, like China or Mexico, which sell hundreds of billions of dollars of manufactured products to the US. Credit: Bigstock

By Martin Khor
PENANG, Feb 17 2017 (IPS)

A new and deadly form of protectionism is being considered by Congress leaders and the President of the United States that could have devastating effect on the exports and investments of American trading partners, especially the developing countries.

The plan, known as a border adjustment tax, would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax.

The aim is to improve the competitiveness of US products, drastically reduce the country’s imports while promoting its exports, and thus reduce the huge US trade deficit.

On the other hand, if adopted, it would significantly reduce the competitiveness or viability of goods and services of countries presently exporting to the US.  The prices of these exports will have to rise due to the tax effect, depressing their demand and in some cases make them unsalable.

And companies from the US or other countries that have invested in developing countries because of cheaper costs and then export their products to the US will be adversely affected because of the new US import tax.

Some firms will relocate to the US.   Potential investors will be discouraged from opening new factories in the developing countries.  In fact this is one of the main aims of the plan – to get companies return to the US.

The plan is a key part of the America First strategy of US President Donald Trump, with his subsidiary policies of “Buy American” and “Hire Americans.”

The border adjustment tax is part of a tax reform blueprint “A Better Way” whose chief advocates are Republican leaders Paul Ryan, speaker of the House of Representatives and Kevin Brady, Chairman of the House Ways and Means Committee.

President Trump originally called the plan “too complicated” but is now considering it seriously.  In a recent address to congressional Republicans, Trump said:  “We’re working on a tax reform bill that will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the (border) wall.”

Martin Khor

Martin Khor

The proposal has however generated a tremendous controversy in the US, with opposition coming from some Congress members (including Republicans), many economists and American companies whose business is import-intensive.

It however has the strong support of Republican Congress leaders and some version of it could be tabled as a bill.

Trump had earlier threatened to impose high tariffs on imports from countries having a trade surplus with the US, especially China and Mexico.

This might be a more simple measure, but is so blatantly protectionist that it would be sure to trigger swift retaliation, and would also almost certainly be found to violate the rules of the World Trade Organisation (WTO).

The tax adjustment plan may have a similar effect in discouraging imports and moreover would promote exports, but it is more complex and thus difficult to understand.

The advocates hope that because of the complexity and confusion, the measure may not attract such a strong response from US trading partners.  Moreover they claim it is permitted by the WTO are presumably willing to put it to the test.

In the tax reform plan, the corporate tax rate would be reduced from the present 35% to 20%.   The border adjustment aspect of the plan has two main components. Firstly, the expenses of a company on imported goods and services can no longer be deducted from a company’s taxable income.  Wages and domestically produced inputs purchased by the company can be deducted.

The effect is that a 20% tax would be applied to the companies’ imports.

This would especially hit companies that rely on imports such as automobiles, electronic products, clothing, toys and the retail and oil refining sectors.

The Wall Street Journal gives the example of a firm with a revenue of $10,000 and with $5,000 imports, $2 000 wage costs and $3,000 profit.  Under the present system, where the $5,000 imports plus the $2,000 wages can be deducted, and with a 35% tax rate, the company’s taxable total would be $3,000, tax would be $1,050 and after-tax profit would be $1,950.

Under the new plan, the $5,000 imports cannot be deducted and would form part of the new taxable total of $8,000.  With a 20% tax rate, the tax would be $1,600 and the after-tax profit $1,400.

Given this scenario, if the company wants to retain his profit margin, it would have to raise its price and revenue significantly, but this in turn would reduce the volume of demand for the imported goods.

For firms that are more import-dependent, or with lower profit margin, the situation may be even more dire, as some may not be financially viable anymore.

Take the example of a company with $10,000 revenue, $7,000 imports, $2,000 wages and $1,000 profit.   With the new plan, the taxable total is $8,000 and the tax is $1,600, so after tax it has a loss of $600 instead of a profit of $1,000.

The company, to stay alive, would have to raise its prices very significantly, but that might make its imported product much less competitive.  In the worst case, it would close, and the imports would cease.

The economist Larry Summers, a former Treasury Secretary, gives a similar example of a retailer who imports goods for 60 cents, incurs 30 cents in labour and interest costs and then earns a 5 cent margin.  With 20% tax, and no ability to deduct import or interest costs, the taxes will substantially exceed 100% of profits even if there is some offset from a stronger dollar.

On the other hand, the new plan allows a firm to deduct revenue from its exports from its taxable income.  This would allow the firm to increase its after-tax profit.

The Wall Street Journal article gives the example of a firm which presently has export sales of $10,000, cost of inputs $5,000, wages $2,000 and profit $3,000.  With the 35% corporate tax rate, the tax is $1,050 and after-tax profit is $1,950.

Perhaps the most vulnerable country is Mexico, where many factories were established to take advantage of tariff-free entry to the US market under the North American Free Trade Agreement. President Trump has warned American as well as German and Japanese auto companies that if they make new investments in Mexico, their products would face high taxes or tariffs on entry, and called on them to invest in the US instead.
Under the new plan, the export sales of $10,000 is exempt from tax, so the company has zero tax.  Its profit after tax is thus $3,000.   The company can cut its export prices, demand for its product increases and the company can expand its sales and export revenues.

At the macro level, with imports reduced and exports increased, the US can cut its trade deficit, which is a major aim of the plan.

On the other hand, the US is a major export market for many developing countries, so the tax plan if implemented will have serious adverse effects on them.

The countries range from China and Mexico, which sell hundreds of billions of dollars of manufactured products to the US; to Brazil and Argentina which are major agricultural exporters; to Malaysia, Indonesia and Vietnam which sell commodities like palm oil and timber and also manufactured goods such as electronic products and components and textiles, Arab countries that export oil, and African countries that export oil, minerals and other commodities, and countries like India which provide services such as call services and accountancy services to US companies.

American industrial companies are also investors in many developing countries. The tax plan if implemented would reduce the incentives for some of these companies to be located abroad as the low-cost advantage of the foreign countries would be offset by the inability of the parent company to claim tax deductions for the goods imported from their subsidiary companies abroad.

Perhaps the most vulnerable country is Mexico, where many factories were established to take advantage of tariff-free entry to the US market under the North American Free Trade Agreement.  President Trump has warned American as well as German and Japanese auto companies that if they make new investments in Mexico, their products would face high taxes or tariffs on entry, and called on them to invest in the US instead.

After the implications of the border adjustment plan are understood, it is bound to generate concern and outrage from the United States’ trading partners, in both South and North, if implemented.  They can be expected to consider immediate retaliatory measures.

A former undersecretary for international business negotiations of Mexico (2000-2006), Luis de la Calle, said  in a media interview:  “If the US wants to move to this new border tax approach, Mexico and Canada would have to do the same….We have to prepare for that scenario.”

In any case, it can be expected that countries will take up complaints against the US at the WTO.   The proponents claim the tax plan will be designed in a way that is compatible with the WTO rules.

But many international trade law experts believe the tax plan’s measures will violate several of the WTO’s principles and agreements, and that the US will lose if other countries take up cases against it in the WTO dispute settlement system.

This prospect may however not decisively deter Trump from championing the Republicans’ tax blueprint and signing it into law, should Congress decide to adopt it.

The President and some of his trade advisors have criticised the WTO’s rules and have mentioned the option of leaving the organisation if it prevents or impedes the new America First strategy from being implemented.  If the US leaves the WTO, it would of course cause a major crisis for international trade and trade relations.

There are many critics of the plan.  Lawrence Summers, a former US Treasury Secretary, warns that the tax change will worsen inequality, place punitive burdens on import-intensive sectors and companies, and harm the global economy.

The tax plan is expected to cause a 15-20% rise in the US dollar.  “This would do huge damage to dollar debtors all over the world and provoke financial crises in some emerging markets,” according to Summers.

While export-oriented US companies are supporters, other US companies including giants Walmart and Apple are strongly against the border tax plan, and an influential Republican, Steven Forbes, owner of Forbes magazine, has called the plan “insane.”

It is not yet clear what Trump’s final position will be. If he finds it too difficult to use the proposed border tax, because of the effect on some American companies and sectors, he might opt for the simpler use of tariffs.

In any case, whether tariffs or border taxes, policy makers and companies and employees especially in developing countries should pay attention to the trade policies being cooked up in Washington, and to voice their opinions.

Otherwise they may wake up to a world where their products are blocked from the US, the world’s largest market, and where the companies that were once so happy to make money in their countries suddenly pack up and return home.

This article is the first in a two-part series on the border adjustment tax, which would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax. You can find Part 2 here

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Improved Cookstoves Boost Health and Forest Cover in the Himalayashttp://www.ipsnews.net/2017/02/improved-cookstoves-boost-health-and-forest-cover-in-the-himalayas/?utm_source=rss&utm_medium=rss&utm_campaign=improved-cookstoves-boost-health-and-forest-cover-in-the-himalayas http://www.ipsnews.net/2017/02/improved-cookstoves-boost-health-and-forest-cover-in-the-himalayas/#comments Fri, 17 Feb 2017 11:13:23 +0000 Athar Parvaiz http://www.ipsnews.net/?p=148986 Women and children are the primary victims of indoor air pollution in poor, rural areas of India. Credit: Athar Parvaiz/IPS

Women and children are the primary victims of indoor air pollution in poor, rural areas of India. Credit: Athar Parvaiz/IPS

By Athar Parvaiz
DARJEELING, India, Feb 17 2017 (IPS)

Mountain communities in the Himalayan region are almost entirely dependent on forests for firewood even though this practice has been identified as one of the most significant causes of forest decline and a major source of indoor air pollution.

Improper burning of fuels such as firewood in confined spaces releases a range of dangerous  air pollutants, whereas collection of firewood and cooking on traditional stoves consumes a lot of time, especially for women.

The WHO estimates that around 4.3 million people die globally each year from diseases attributable to indoor air pollution. Women and children are said to be at far greater risk of suffering the impacts of indoor pollution since they spend longer hours at home.

Data from the Government of India’s 2011 Census shows that 142 million rural households in the country depend entirely on fuels such as firewood and cow dung for cooking.

Despite heavy subsidies by successive federal governments in New Delhi since 1985 to make cleaner fuels like LPG available to the poor, millions of households still struggle to make the necessary payments for cleaner energy, which compels them to opt for traditional and more harmful substances.

This has prompted environmental organisations like Bangalore-based Ashoka Trust for Research in Ecology and Environment (ATREE) to help mountain communities minimise the health and environmental risks involved in using firewood for cooking in confined places.

IPS spoke with the Regional Director of ATREE for northeast India, Sarala Khaling, who oversees the Improved Cooking Stoves (ICS) project being run by the organisation in Darjeeling, Himalayas. Excerpts from the interview follow.

The Improved Cooking Stove (ICS) keeps this kitchen in India’s Himalaya region smoke-free. Credit: Athar Parvaiz/IPS

The Improved Cooking Stove (ICS) keeps this kitchen in India’s Himalaya region smoke-free. Credit: Athar Parvaiz/IPS

IPS: What prompted you to start the ICS programme in the Darjeeling Himalayan region?    

Sarala Khaling: In many remote forest regions of Darjeeling we conducted a survey and found out that people rely on firewood because it is the only cheap source in comparison to LPG, kerosene and electricity. Our survey result found that around Singhalila National Park and Senchal Wildlife Sanctuary, the mean fuel wood consumption was found to be 23.56 kgs per household per day.

Therefore, we thought of providing technological support to these people for minimizing forest degradation and indoor pollution which is hazardous to human health and contributes to global warming as well. That is how we started replacing the traditional cooking stoves with the improved cooking stoves, which consume far less fuel wood besides reducing the pollution.

IPS: How many ICS have you installed so far?  

SK: Till now ATREE has installed 668 units of ICS in different villages of Darjeeling. After the installation of ICS, we conducted another survey and the results showed reduction of fuel wood consumption by 40 to 50 per cent and also saved 10 to 15 minutes of time while cooking apart from keeping the kitchens free of smoke and air pollution.

We have trained more than 200 community members and have selected “ICS Promoters” from these so that we can set up a micro-enterprise on this. There are eight models of ICS for different target groups such as those cooking for family, cooking for livestock and commercial models that cater to hostels, hotels and schools.

IPS: When did the project begin? 

SK: We have been working on efficient energy since 2012. This technology was adopted from the adjacent area of Nepal, from the Ilam district. All the models we have adopted are from the Nepalese organization Namsaling Community Development Centre, Ilam. This is because of the cultural as well as climatic similarities of the region. Kitchen and adoption of the type of “chulah” or stove has a lot to do with culture. And unless the models are made appropriate to the local culture, communities will not accept such technologies.

IPS: Who are the beneficiaries?

SK: Beneficiaries are local communities from 30 villages we work in as these people are entirely dependent on the fuel wood and live in the forest fringes.

IPS: What are the health benefits of using ICS? For example, what can be the health benefits for women and children? 

SK: Women spend the most time in the kitchen, which means young children who are dependent on the mothers also spend a large part of their time in the kitchen. The smokeless environment in the kitchen definitely must be having a positive effect on health, especially respiratory conditions. Also the kitchen is cleaner and so are the utensils. And then using less fuel wood means women spend lesser time collecting them thus saving themselves the drudgery.

IPS: What is the feedback from the beneficiaries? 

SK: The feedback has been positive from people who have adopted this technology. They say that ICS takes less fuel wood and it gives them a lot of comfort to cook in a smoke free environment. Women told us that their kitchens are looking cleaner as so also the utensils.

IPS: How much it costs to have a clean stove? And can a household get it on its own? 

SK:  It costs around INR 2500 (37 dollars) to make a stove. ATREE supports only the labour charges for making a unit. Of course we support all the training, mobilising, monitoring and outreach and extension. Yes, there are many houses outside of our project sites who have also adopted this technology. The material used for making the clean stove is made locally like bricks, cow dung, salt, molasses and some pieces of iron.

IPS: Since you say that you are training local people to make these stoves, do you have any target how many households you want to cover in a certain time-period? 

SK:  We are looking to provide 1200 units to as many households. But, depending on the uptake, we will scale up. Our main objective is to make this sustainable and not something that is handed out as free. Our model is to select community members and train them.

We want these trained community members become resource persons and organise themselves into a micro-enterprise of ICS promoters. We want these people to sell their skills to more and more villages because we believe people will pay to make and adopt this technology. We are noticing that this has already started happening.

IPS: Have you provided this technology to any hostels, hotels etc?

SK: Yes, government schools who have the midday meal systems have also adopted this. There are about half a dozen schools which are using ICS and we are mobilizing more to adopt this technology.

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Washington Rules Change, Againhttp://www.ipsnews.net/2017/02/washington-rules-change-again/?utm_source=rss&utm_medium=rss&utm_campaign=washington-rules-change-again http://www.ipsnews.net/2017/02/washington-rules-change-again/#comments Thu, 16 Feb 2017 13:33:45 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=148980 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. ]]> South-south cooperation represents a progressive alternative to the Washington Consensus. Credit: IPS

South-south cooperation represents a progressive alternative to the Washington Consensus. Credit: IPS

By Jomo Kwame Sundaram
KUALA LAMPUR, Feb 16 2017 (IPS)

Over the last four decades, the Washington Consensus, promoting economic liberalization, globalization and privatization, reversed four decades of an earlier period of active state intervention to accelerate and stabilize more inclusive economic growth, associated with Franklin Delano Roosevelt and John Maynard Keynes.

The Golden Age
The US Wall Street Crash of 1929 led to the Great Depression, which in turn engendered two important policy responses in 1933 with lasting consequences for generations to come: US President Roosevelt’s New Deal and the 1933 Glass-Steagal Act.

While massive spending following American entry into the Second World War was clearly decisive in ending the Depression and for the wartime boom, the New Deal clearly showed the way forward and suggested what could be achieved if more public money had been deployed consistently to revive economic growth.

Michal Kalecki and Keynes provided robust analytical justification for counter-cyclical fiscal and other policies to maintain aggregate demand, very much contravening earlier received wisdom. Post-war decolonization gave birth to the academic field of development economics from the 1950s, initially pioneered by Central Europeans striving not to be left behind by the earlier ascendance of Western Europe and then the United States of America after its Civil War.

For about a quarter of a century after the end of the Second World War, the post-war ‘Golden Age’ saw rapid post-war reconstruction in Western Europe. This was crucially supported by the generous Marshall Plan, arguably the first, largest and most successful development cooperation program, triggered by the beginning of the Cold War. Similar economic development policies and assistance were introduced in Japan, Taiwan and South Korea, following the Korean War and the establishment of the People’s Republic of China.

US Secretary of State General George Marshall understood that inclusive economic development would help ensure a cordon sanitaire against the Soviet-led camp. Thus, thanks to the Cold War, Western Europe and Northeast Asia recovered quickly, industrialized rapidly and achieved sustained, rapid growth with interventionist policies which would be widely condemned by today’s conventional wisdom. While national economic capacities and capabilities had to be nurtured to ensure sustainable development, Marshall also recognized that aid should be truly developmental, not piecemeal or palliative.

Washington Consensus

The ‘Washington Consensus’ – uniting the American government and the Bretton Woods institutions located in the US capital city – emerged from the early 1980s to prescribe neo-liberal economic policies for developing countries for the ‘counter-revolutions’ against development economics, Keynesian economics and progressive state interventions.

Macroeconomic policies became narrowly focused on balancing annual budgets and attaining predictably low inflation – instead of the earlier post-colonial emphasis on achieving and sustaining rapid growth and full employment without runaway inflation. A ‘neo-liberal’ wave of deregulation, privatization and economic globalization followed, supposedly to boost economic growth. Economic growth was expected to trickle down to reduce poverty, with broader sustainable development and inequality concerns consigned to the garbage bin.

But the Washington Consensus policies not only failed to sustain economic growth, largely due to the greater instability and volatility associated with financial liberalization, especially across borders. But premature trade liberalization also undermined existing production and export capacities and capabilities without enabling the development of new ones. For the poorest countries, the loss of tariff revenue also undermined government revenues, expenditure and hence, the capacity to provide badly needed infrastructure, social protection and support for developmental initiatives.

Globalization’s Contradictory Discontents
Instead, those developing countries which achieved rapid growth and structural transformation were typically those which defied conventional wisdom by adopting pragmatic ‘heterodox’ developmental economic policies appropriate to their respective circumstances. Meanwhile, financial and other economic crises of various types became more frequent and disruptive, undermining sustained growth.

In the meantime, the more liberal developed economies experienced spurts of rapid growth as well as greater volatility and instability while most developed economies became more vulnerable to institutional stasis as they abandoned Keynesian policies for neo-liberal policies demanded by markets and their champions.

With European social democrats turning their backs on Keynes in favour of neoliberal economics, and often barely distinguishable from the centre-right in this regard, dissent against economic liberalization and its discontents moved to the ‘extremes’. With the left often on the backfoot in most developed economies for more than a quarter century, it has been the right which has successfully mobilized against cultural ‘others’ often divided among themselves.

While the rhetoric of the national chauvinist ‘new right’ rejects globalization and multiculturalism, it also rejects international solidarity, cooperation and multilateralism. Its rejection of the neoliberal Washington Consensus does not imply opposition to contemporary imperialism, but rather threatens a return to old — and new — forms of domination, economic and otherwise.

More than ever, it will be crucial for developing countries to work together, not only to ensure that South-South and ‘triangular’ (with the North) cooperation represents a progressive alternative to the Washington Consensus and its national chauvinist successors. Such solidarity will determine how well the South — and the world as a whole — will fare during the coming eclipse.

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Energy Access Builds Inclusive Economies and Resilient Communitieshttp://www.ipsnews.net/2017/02/energy-access-builds-inclusive-economies-and-resilient-communities/?utm_source=rss&utm_medium=rss&utm_campaign=energy-access-builds-inclusive-economies-and-resilient-communities http://www.ipsnews.net/2017/02/energy-access-builds-inclusive-economies-and-resilient-communities/#comments Thu, 16 Feb 2017 11:34:56 +0000 Manipadma Jena http://www.ipsnews.net/?p=148974 More girls in rural Bihar, India are going to school after mini-grid-powered household lights give mothers and children two extra hours of evening work and study time. Credit: Manipadma Jena/IPS

More girls in rural Bihar, India are going to school after mini-grid-powered household lights give mothers and children two extra hours of evening work and study time. Credit: Manipadma Jena/IPS

By Manipadma Jena
NEW DELHI, Feb 16 2017 (IPS)

Jaipal Hembrum runs three one-man home enterprises – a bicycle repair shop, a tiny food stall and a tailoring unit in Kautuka, a remote village in eastern India. Sewing recycled clothes into mattresses late into the evening, the 38-year-old father of three girls says two light bulbs fed by a solar power system have changed his life.

Given the trajectory of development India is currently pursuing, energy access for its rural population could bring dramatic economic improvement. Yet 237 million people — a fifth of its 1.3 billion people, many of them in remote villages with few livelihood options — do not have any access to it.The challenge India faces is how to meet its energy requirements while also meeting its emission reduction commitment to the global climate deal.

The Delhi-based research organisation Centre for Science and Environment (CSE) stipulates that if even half of households deemed electrified through the national power grid are not receiving the guaranteed six hours uninterrupted supply, the number of people who are electricity-poor in India totals 650 million.

In this scenario, renewable energy-based mini-grids, particularly in remote villages, are considered the best option to manage local household and commercial energy demand efficiently by generating power at the source of consumption.

This is being proven true by the Rockefeller Foundation’s Smart Power for Rural Development (SPRD) initiative in two of India’s poorest states, Bihar and Uttar Pradesh, where 16 and 36 percent of households respectively are electrified. In India, 55 percent rural households have energy access, often of unreliable quality.

Started in 2014, the SPRD project has helped set up close to 100 mini-grid plants, covering the states of Uttar Pradesh, Bihar and lately, in Jharkhand too. According to Rockefeller Foundation sources, these plants are serving a customer base of around 38,000 people. Over 6,500 households are benefitting, along with 3,800 shops and businesses, and over 120 institutions, telecom towers and micro-enterprises.

Over 2014 – 2017, the Rockefeller Foundation aims to make a difference to 1,000 energy-poor villages in India, benefitting around a million rural people. For this effort, the Foundation has committed 75 million dollars, partnering and funding Smart Power India (SPI) a new entity designed to work closely with a wide range of stakeholders who help scale-up the market for off-grid energy.

Jaipal Hembrum stitches old clothes mattresses in the evening by the light of a solar-powered bulb. The 50 dollars a day he earns is kept aside for schooling and marriages of his three daughters. Credit: Manipadma Jena/IPS

Jaipal Hembrum stitches old clothes mattresses in the evening by the light of a solar-powered bulb. The 50 dollars a day he earns is kept aside for schooling and marriages of his three daughters. Credit: Manipadma Jena/IPS

What can mini-grids can do? Plenty

A recent evaluation of the mini-grids’ impact on communities they serve in Bihar and Uttar Pradesh already show a broad range of economic, social and environmental benefits.

Entrepreneurship and new businesses have grown, with 70 percent existing micro-businesses reporting increased number of costumers after connecting to the mini-grids and 80 percent planned to expand.

Nine in 10 household users said their children’s daily study time has increased by two hours since they got the lights. Women said they had increased mobility after dark and theft cases had fallen. Use of kerosene and diesel has fallen dramatically — to virtually zero, according to Khanna.

Micro-businesses like cyber cafes, fuel stations, mobile and fan repair shops, banks, schools and hospitals are the fastest growing commercial customer section of mini-grids constructed under Smart Power India.

In Shivpura village of Uttar Pradesh, where TARA Urja, a small energy service company (ESCO), started providing reliable electricity from a 30-KW solar plant, Sandeep Jaiswal set up a water purification processor in 2015. In just over a month he was rushing 1,200 litres of water on his new mini-truck to 40 customers. TARA, also a social business incubator, has financially supported Jaiswal with 530 dollars, in return for a one-year contract to source electricity from TARA.

Smart Power India supports the development of rural micro-enterprises through loans, community engagement and partnerships with larger companies with rural value chains, for instance, city malls that source vegetables from rural farms.

India confronts a demographic youth ‘bulge’ with 64 percent in the working age group in 2020, requiring 10 million new jobs every year in the coming decade. Using green mini-grids to create rural livelihoods can also reduce urban migration.

Innovating a business model that propels construction of mini-grids

Mini-grids are a decentralized system providing a renewable energy-based electricity generator with a capacity of 10 kilowatts or more, with a target consumer group it supplies through a stand-alone distribution network.

The sustainability of private companies in the rural power supply sector depends on generating sufficient revenue long-term. To make it profitable for smaller-scale ESCOs to bring electricity to rural parts of the developing world, the Smart Power model ensures fast-growing sectors with significant energy needs such as telecom towers in rural areas, to provide steady revenue. In return, the ESCOs provide contractual guarantee of reliable power supply to the towers.

“There is an opportunity to catalyze the telecommunication and off-grid energy sectors. Currently cell phone towers in rural areas are often powered by expensive diesel generators and companies are looking for cheaper alternatives, thereby creating the possibility for a strong anchor,” says Ashvin Dayal, Managing Director, Asia, of the Rockefeller Foundation.

Telecom towers — by becoming the ‘anchor’ customers – help make ESCOs bankable. They then can expand supply into rural household lighting and local enterprises.

Government figures say 2 billion litres of diesel is annually consumed by the 350,000  existing telecom towers in India, including those in remote rural regions. The challenge India faces is how to meet its energy requirements without compromising environmental sustainability, while meeting its emission reduction commitment to the global climate deal.

Solar power cost per unit has fallen in India to 0.045 cents, which makes it increasingly feasible to shift to renewable powered mini-grids, saving substantial subsidies spent on fossil fuels. The government in 2016 decided to construct 10,000 mini-grids in the next five years of 500 megawatt (MW) capacity, but this is clearly not enough, say experts.

India has a potential for 748,990 MW of solar power. Fourteen states, including Bihar and Uttar Pradesh, receive irradiance above the annual global average of 5 kilowatt-hours per square meter per day.

Around the world, approximately 1.3 billion people lack access to reliable and affordable means of electricity without which, growing their incomes, improving food security and health, educating children, accessing key information services becomes a major challenge. Energy access is critical to achieving several UN Sustainable Development Goals by 2030.

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Corruption Brings Down an Empire: Odebrecht in Brazilhttp://www.ipsnews.net/2017/02/corruption-brings-down-an-empire-odebrecht-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=corruption-brings-down-an-empire-odebrecht-in-brazil http://www.ipsnews.net/2017/02/corruption-brings-down-an-empire-odebrecht-in-brazil/#comments Thu, 16 Feb 2017 00:29:24 +0000 Mario Osava http://www.ipsnews.net/?p=148966 The American Airlines Arena, a stadium and entertainment complex in Miami, Florida, is one of the many projects carried out by Odebrecht in the United States, where prosecutors have begun to produce figures reflecting the scope of the company’s corruption. Credit: Odebrecht

The American Airlines Arena, a stadium and entertainment complex in Miami, Florida, is one of the many projects carried out by Odebrecht in the United States, where prosecutors have begun to produce figures reflecting the scope of the company’s corruption. Credit: Odebrecht

By Mario Osava
RIO DE JANEIRO, Feb 16 2017 (IPS)

People in Brazil have been overwhelmed by the flood of news stories about the huge web of corruption woven by the country’s biggest construction company, Odebrecht, which is active in dozens of fields and countries.

The business empire built by three generations of the Odebrecht family is falling apart after three years of investigation by the Lava Jato (car wash) operation launched by the Federal Public Prosecutor’s office in Brazil, which is investigating the corruption that diverted millions of dollars in bribes in exchange for major public works contracts from the state-run oil giant Petrobras.The business group had created a specialised bribe department. According to U.S. justice authorities, every dollar “invested” in bribes produced 12 dollars in contracts.

Marcelo Odebrecht, who headed the company from 2008 to 2015, was arrested in June 2015 and was initially sentenced to 19 years in prison.

In October he and the company reached plea bargain deals to cooperate with the investigation. A total of 77 former and present Odebrecht executives provided over 900 sworn statements to Lava Jato prosecutors, causing a political earthquake in Brazil and throughout Latin America.

In December, the U.S. Justice Department revealed that Odebrecht allegedly spent 1.04 billion dollars in bribes to politicians and government officials in ten Latin American and two African countries, including Brazil, which accounted for 57.7 per cent of the total.

The United States is carrying out its own investigation, which could end in criminal convictions, since several Odebrecht subsidiaries, such as the petrochemical company Braskem, operate there, and their shares are traded on the New York Stock Exchange.

That is also happening in the case of Petrobras, implicated in the corruption scandal and under investigation at the initiative of shareholders in the U.S.

The U.S. and Switzerland, where banks were allegedly used to funnel bribes or launder money, signed cooperation agreements with legal authorities in Brazil, as part of the ongoing offensive against corruption in Latin America’s giant.

The impacts are overwhelming. In Brazil, the revelations about Odebrecht are expected to provoke a tsunami in the political system. Two hundred parliamentarians and government officials may have received bribes, including senior members of the current administration and legislature.

The business group had created a specialised bribe department. According to U.S. justice authorities, every dollar “invested” in bribes produced 12 dollars in contracts.

That estimate is based on more than 100 projects carried out or in progress in Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru and Venezuela, plus Angola and Mozambique in Africa.

Part of the Caracas valley seen from the San Agustín Metrocable, one of the many works assigned to Odebrecht in Venezuela during the government of Hugo Chávez (1999-2013), when the Brazilian company became the biggest construction firm in the country. Credit: Raúl Límaco/IPS

Part of the Caracas valley seen from the San Agustín Metrocable, one of the many works assigned to Odebrecht in Venezuela during the government of Hugo Chávez (1999-2013), when the Brazilian company became the biggest construction firm in the country. Credit: Raúl Límaco/IPS

The arrest warrant issued by a court in Peru against former Peruvian president Alejandro Toledo (2001-2006), who has been living in the United States, and allegations implicating current Colombian President Juan Manuel Santos and Panamanian President Juan Carlos Varela, are just the tip of the iceberg.

What was revealed by Odebrecht executives and former executives, as well as former directors of different departments, such as external affairs, infrastructure, industrial engineering or logistics, has not yet been made public.

New figures involving alleged bribes are expected to come out over the next few months, added to those already disclosed in the United States, including 599 million dollars distributed in Brazil, 98 million in Venezuela, 92 million in the Dominican Republic, 59 million in Panama and 50 million in Angola.

In Peru the total revealed so far is “only” 29 million dollars since 2005. The sum is small, considering that for the Southern Peru pipeline – still under construction – alone, the projected investments amount to seven billion dollars. The Peruvian government has decided to terminate the contract with Odebrecht for the project.

Besides Odebrecht, the Inter-Oceanic Highway, which runs across southern Peru from the Brazilian border to Pacific Ocean ports, is being built by three other Brazilian construction firms – Camargo Correa, Andrade Gutierrez and Queiroz Galvão – which are also under investigation for suspicion of corruption.

During the presidency of Alan Garcia (2006-2011), Peru and Brazil signed an agreement for the construction of five large hydropower plants in Peru, which was cancelled by his successor, Ollanta Humala (2011-2016), who, however, is suspected of receiving three million dollars from Brazil for his election campaign.

Odebrecht, which has a concession to manage Chaglla, the third biggest hydroelectric plant in Peru, with a capacity of 462 MW, was to be the main construction company in charge of building the new plants.

The growing wave of local and industry scandals sheds light on the reach of Odrebrecht’s tentacles. Braskem is accused of distributing 250 million dollars in bribes to sustain its leadership position in the Americas in the production of thermoplastic resins, with 36 plants spread across Brazil, Mexico, the United States, as well as Germany.

The empire, born in 1944 as a simple construction company, started diversifying in the last half century into activities as diverse as the sugarcane business, the development of military technologies or oil services, logistics or shipbuilding companies.

In the early 1970s the group built the Petrobras headquarters in Rio de Janeiro, sealing a connection that led to the current disaster which destroyed the reputation of the company that was so proud of its “Entrepreneurial Technology”, a set of ethical and operational business principles to which its fast expansion was attributed.

But Odebrecht’s success could actually be attributed to a strategic vision and a modus operandi that proved successful until the Lava Jato operation. Part of its methods included being “friends with the king”.

Angola is the best example. The current chairman of the company’s board of directors, Emilio Odebrecht, son of founder Norberto Odebrecht, meets every year with Angolan President José Eduardo dos Santos in Luanda, to discuss projects for the country.

Officially, what they do is assess the projects carried out by the company and define new goals.

The explanation given for the special treatment received by Odebrecht is that it has such a strong presence in vital infrastructure works in the country in areas such as reconstruction, energy, water, highways and urbanisation.

Odebrecht has great prestige in Angola, since it built the Capanda hydroelectric plant on the Kwanza River between 1984 and 2007, facing delays and risks due to the 1975-2002 civil war. Now it is building the biggest plant in Angola, Lauca, also on the Kwanza River, with a capacity to produce 2,067 MW.

The conglomerate is ubiquitous in the country, managing the Belas Mall – an upscale shopping centre in the south of Luanda, Angola’s capital – implementing the water plan to supply the capital, developing the first part of the industrial district in the outskirts of Luanda, building housing developments and playing a key role in saving the national sugarcane industry.

In Cuba it also led the strategic project of expanding the Mariel Port and managing a sugar plant, to help boost the recovery of this ailing sector of the Caribbean nation’s economy.

In other countries, such as Panama, Peru and Venezuela, the number of works and projects in the hands of the Brazilian conglomerate is impressive, in fields as diverse as urban transport, roads and bridges, ports, power plants, fossil fuels, and even agriculture.

But that cycle of expansion came to an end. Heavily indebted, with a plummeting turnover and no access to loans, not even from Brazilian development banks, and carrying the stigma of corruption, the conglomerate is trying to cooperate with justice authorities in the involved countries, seeking agreements to allow it to keep operating and eventually recover.

Now it remains to be discovered whether Odebrecht is “too big to go bankrupt,” as was said of some banks at the start of the global crisis that broke out in 2008.

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Authorities Urged to Disclose Anti-Money Laundering Effortshttp://www.ipsnews.net/2017/02/authorities-urged-to-disclose-anti-money-laundering-efforts/?utm_source=rss&utm_medium=rss&utm_campaign=authorities-urged-to-disclose-anti-money-laundering-efforts http://www.ipsnews.net/2017/02/authorities-urged-to-disclose-anti-money-laundering-efforts/#comments Wed, 15 Feb 2017 17:34:01 +0000 IPS World Desk http://www.ipsnews.net/?p=148957 Asia Pacific: Fighting corruption is side-lined. The majority of Asia Pacific countries sit in the bottom half of the Corruption Perceptions Index 2016. 19 out of 30 countries in the region scored 40 or less out of 100. Photo: Transparency International.

Asia Pacific: Fighting corruption is side-lined. The majority of Asia Pacific countries sit in the bottom half of the Corruption Perceptions Index 2016. 19 out of 30 countries in the region scored 40 or less out of 100. Photo: Transparency International.

By IPS World Desk
ROME / BERLIN, Feb 15 2017 (IPS)

Bank regulators need to publish much more information about whether banks are doing what’s required by law to stop money laundering, says a major international anti-corruption watchdog.

This would ensure that citizens and businesses can be confident corrupt individuals and organisations, criminals, or terrorists are not using the global banking system, Transparency International (TI) on Feb 15 2017 explained.

A new report from Transparency International shows that in countries hosting the world’s biggest banks, little data on anti-money laundering prevention and enforcement is published, or is if it is published, it is out-of-date.

“Mistrust of banks will continue unless people know they are working on their behalf and not for the corrupt. Corruption and money laundering undermine the basic rule of law, weaken democratic institutions and damage economies and societies,” said José Ugaz, Chair of Transparency International.

“It drives inequality and blocks efforts to stop poverty. We need to see that the people meant to stop corruption in the banking industry are doing their job,” he added.

Transparency International’s study, Top Secret: Countries keep financial crime fighting data to themselves, shows that data about authorities’ anti-money laundering efforts are only partially available across 12 countries, including Germany, Luxembourg, Switzerland, the UK and the US.

This includes data as basic as the number of times banks were sanctioned for money laundering failures in a given country — a number that is only public in four out of the 12 countries assessed: Australia, Cyprus, Italy and the US.

“There is no good reason to keep this data secret. Are they protecting us from the next financial crisis? We, the citizens, have the right to know if the financial sector is being permissive or complicit with illicit activity,” Ugaz noted.

According to Transparency International, in 2013 alone, developing countries lost an estimated 1.1 trillion dollars to illicit financial flows – the illegal movement of money from one country to another. Effective anti-money laundering measures, in both developed and developing countries, are essential to end these illicit flows.

“The public also needs evidence that action is being taken, not only to build trust in the institutions that hold our money, but also as a deterrent against crime by making sure bank examiners are effective.”

Policing the financial sector requires strong, consistent and effective anti-money laundering supervision by authorities, TI underlines, adding: “just like health and safety inspectors in restaurants, national financial supervisors have the power to visit and inspect banks (on-site monitoring), identify and record failings in their systems, and impose sanctions where necessary.”

“Citizens have a right to know the extent to which supervisors are applying this power in practice to uphold the law in the financial sector.”

By increasing media and citizen oversight, making more data about these activities public would help to make anti-money laundering systems more effective.

Transparency International recommends that countries publish anti-money laundering oversight and enforcement statistics on a yearly basis, in a single report or data file. The requirement to publish yearly anti-money laundering data should become a standard recommendation of international bodies, including the Financial Action Task Force (FATF) and the G20.

Transparency on this important aspect of financial market enforcement is only a first, but vital, step on the long road to cleansing the global financial system of dirty money, TI concludes.

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Worst Drought in Decades Drives Food Price Spike in East Africahttp://www.ipsnews.net/2017/02/worst-drought-in-decades-drives-food-price-spike-in-east-africa/?utm_source=rss&utm_medium=rss&utm_campaign=worst-drought-in-decades-drives-food-price-spike-in-east-africa http://www.ipsnews.net/2017/02/worst-drought-in-decades-drives-food-price-spike-in-east-africa/#comments Wed, 15 Feb 2017 15:55:45 +0000 IPS World Desk http://www.ipsnews.net/?p=148953 Farmers in the Horn of Africa need urgent support to recover from consecutive lost harvests and to keep their livestock healthy and productive. Photo: FAO/Simon Maina

Farmers in the Horn of Africa need urgent support to recover from consecutive lost harvests and to keep their livestock healthy and productive. Photo: FAO/Simon Maina

By IPS World Desk
ROME, Feb 15 2017 (IPS)

The most severe drought in decades, which has struck parts of Ethiopia and is exacerbated by a particularly strong El Niño effect, has led to successive failed harvests and widespread livestock deaths in some areas, and humanitarian needs have tripled since the beginning of 2015, the United Nations warns.

East Africa’s ongoing drought has sharply curbed harvests and driven up the prices of cereals and other staple foods to unusually high levels, posing a heavy burden to households and special risks for pastoralists in the region, the United Nations food and agricultural agency on Feb. 14 warned.

“Sharply increasing prices are severely constraining food access for large numbers of households with alarming consequences in terms of food insecurity,” said Mario Zappacosta, a senior economist for the UN Food and Agriculture Organization (FAO).

Local prices of maize, sorghum and other cereals are near or at record levels in swathes of Ethiopia, Kenya, Somalia, South Sudan, Uganda and Tanzania, according to the latest Food Price Monitoring and Analysis Bulletin (FPMA).

Poor livestock body conditions due to pasture and water shortages and forcible culls mean animals command lower prices, leaving pastoralists with even less income to purchase basic foodstuffs, FAO adds, while providing some examples:

Somalia’s maize and sorghum harvests are estimated to be 75 per cent down from their usual level. In Tanzania, maize prices in Arusha, Tanzania, have almost doubled since early 2016.

Drought is pushing up food prices in Uganda. Photo: FAO

Drought is pushing up food prices in Uganda. Photo: FAO


In South Sudan, food prices are now two to four times above their levels of a year earlier, while in Kenya, maize prices are up by around 30 per cent.

Beans now cost 40 per cent more in Kenya than a year earlier, while in Uganda, the prices of beans and cassava flour are both about 25 per cent higher than a year ago in the capital city, Kampala.

Pastoral Areas Face Harsher Conditions

Drought-affected pastoral areas in the region face even harsher conditions, the UN specialised agency reports. In Somalia, goat prices have fallen up to 60 per cent compared to a year ago, while in pastoralist areas of Kenya the prices of goats declined by up to 30 per cent over the last 12 months.

Shortages of pasture and water caused livestock deaths and reduced body mass, prompting herders to sell animals while they can, as is also occurring in drought-wracked southern Ethiopia, FAO reports. This also pushes up the price of milk, which is, for instance, up 40 per cent on the year in Somalia’s Gedo region.

According to the Rome-based agency, Ethiopia is responding to a drought emergency, triggered by one of the strongest El Niño events on record.

Humanitarian needs have tripled since the beginning of 2015 as the drought continues to have devastating effects on the lives and livelihoods of farmers and pastoralists — causing successive crop failures and widespread livestock deaths, it reports.

Food insecurity and malnutrition rates are alarming with some 10.2 million people in need of food assistance.

FAO also reports that one-quarter of all districts in Ethiopia are officially classified as facing a food security and nutrition crisis — 435 000 children are suffering severe acute malnutrition and 1.7 million children, pregnant and lactating women are experiencing moderate acute malnutrition.

Livelihood Crisis

More than 80 per cent of people in Ethiopia rely on agriculture and livestock as their primary source of food and income, however, the frequency of droughts over the years has left many communities particularly vulnerable.

Significant production losses, by up to 50-90 percent in some areas, have severely diminished households’ food security and purchasing power, forcing many to sell their remaining agricultural assets and abandon their livelihoods.

Pastoralists in Ethiopia carry butchered meat home. Photo: FAO

Pastoralists in Ethiopia carry butchered meat home. Photo: FAO


Estimates in early 2016 by Ethiopia’s Bureau of Agriculture indicate that some 7.5 million farmers and herders need immediate agricultural support to produce staple crops like maize, sorghum, teff, wheat, and root crops, and livestock feed to keep their animals healthy and resume production.

Hundreds of thousands of livestock have already died and the animals that remain are becoming weaker and thinner due to poor grazing resources, feed shortages and limited water availability, leading to sharp declines in milk and meat production.

The FAO Ethiopia El Niño Response Plan aims to assist 1.8 million vulnerable pastoralists, agro pastoralists and smallholder farmers in 2016.

To achieve this, the UN food and agriculture will prioritize agricultural production support in order to reduce the food gap, livestock interventions to protect the livelihood assets of pastoralists and agro pastoralists, and activities to enhance the resilience of affected communities through coordinated response.

As part of the emergency response, FAO has been providing planting materials to help seed- and food-insecure households in the worst affected regions plant in the belg and meher seasons.

In an effort to preserve livestock, it has been distributing multi-nutrient blocks in pastoral and agro-pastoral areas to strengthen livestock and bolster the resilience of the cooperatives that produce them.

Survival animal feed is also being provided to help farmers produce fodder and improve access to water for livestock. Herds across the country have also benefited from vaccination and treatment campaigns to address their increasing vulnerability as a result of drought.

In Ethiopia’s Somali Region, FAO is enhancing the financial stability of drought-affected households through the purchase of weak sheep and goats for immediate, local slaughter – and providing the meat – rich in protein – to nutritionally vulnerable drought-affected families.

The intervention will help reduce stress on available feed, enable households to focus their resources on their remaining productive animals, and invest in productive assets.

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Sri Lanka Shines Light on Public Sector Governancehttp://www.ipsnews.net/2017/02/sri-lanka-shines-light-on-public-sector-governance/?utm_source=rss&utm_medium=rss&utm_campaign=sri-lanka-shines-light-on-public-sector-governance http://www.ipsnews.net/2017/02/sri-lanka-shines-light-on-public-sector-governance/#comments Wed, 15 Feb 2017 15:23:31 +0000 Amantha Perera http://www.ipsnews.net/?p=148952 Sri Lanka’s new Right to Information (RTI) Act could open new doors for the country’s media if journalists use it effectively. Credit: Amantha Perera/IPS

Sri Lanka’s new Right to Information (RTI) Act could open new doors for the country’s media if journalists use it effectively. Credit: Amantha Perera/IPS

By Amantha Perera
COLOMBO, Feb 15 2017 (IPS)

Sri Lanka’s long-awaited and much-debated Right to Information (RTI) Act became law this month without much fanfare.

There was no big PR campaign on the part of the government to unveil it on Feb. 3, a day before the island’s 69th Independence celebrations. There was not even a public event, a rarity in this South Asian island, where politicians are prone not to let such opportunities pass by.

Maybe the lack of fanfare was due to a rare understanding of what RTI could do to Sri Lanka’s governing culture – like media minister Gayantha Karunathilake predicted several months ago, the act now places all elected and public officials ‘inside a glass box’ of public scrutiny.

And the requests have flooded in. Taking the lead has been actor turned politician and current deputy minister of social welfare, Rajan Ramanayake. He filed a slew of requests even before the ink dried on the new act.

“This is an act will reveal everything about politicians, without any discrimination on party affiliations,” Ramanayake said.

His RTI requests include details on the number of bar permits, sand mining permits, duty free shop permits, fuel station permits and land permits that have been offered to elected officials from parliamentarians to those at local government bodies. He said he was likely to receive the details by the third week of February.

He has also filed a request for details of all licenses given out by the government to operate TV stations and their conditions.

Most of the first batch of RTI requests have been linked to corruption within public sector, according to RTIWire, a national website that tracks the progress of the act.

“When we asked the public what information they would seek through RTI, almost a third of them referenced some form of corruption by public servants; for example, asset declarations, irregularities in tenders, salaries and perks for ministers,” RTIWire said in profiling the first ten days of the new act.

Citizens in the former conflict zone in the North and East have used the act to seek information on land acquisitions by government departments and on missing loved ones.

Media Minister Karunathilake is candid about the act’s possible ramifications on the government ,which has stepped into the second of a five-year term.

“This will open up the government structure completely for scrutiny. Usually governments will take this kind of decision at the toe end of their terms, but we have not. The act can minimize corruption.”

There has been criticism leveled at the government that the act was aimed at soothing international concerns on rights issues, especially those stemming from the administrations of former president Mahinda Rajapaksa between 2005 to 2015.

The minister denied that there was any connection between the act and the government’s efforts to regain preferential tariff deals for garment exports to the European Union.

“There is no connection at all,” he said. In the next two months the EU is expected to announce whether Sri Lanka will be allowed back in to GSP+ tariff fold that it lost in 2010 due to rights-related concerns.

Opposition parties, however, say that the government is not showing the same enthusiasm it displayed in getting the act finally functioning in making sure the act is implemented efficiently.

“If they are serious, they should begin awareness campaigns without delay,” Opposition MP from the People’s Liberation Front Nalinda Jayatissa said.

To be fair, the government has a Herculean task on its hands in getting RTI information officers into all government agencies, which according to some estimates at the Media Ministry could be in the range of 40,000.

The Ministry has been training officers in the last few months, and while several thousand have taken up posts, many more remain to be filled. The government has not done itself any favours by only allocating a mere Rs 25 m (175,000 dollars) in the current budget for RTI implementation.

Close to two weeks after the act became law, the government was yet to announce the relevant officers in departments, adding confusion and creating unnecessary delays for those submitting requests. B.K.S. Ravindra, the additional secretary at the Media Ministry, said that list would soon be made available online, but did not give a date.

During the first week of the act, there was also confusion about whether police came under the act and who was the relevant officer for each station. Ravindra said that police stations indeed came within the act and that the Assistant Superintendent of Police from each district would serve as the RTI officer.

But according to RTIWire, “the Police are still in the process of appointing Information Officers. This should be complete within the next few weeks. The police force is currently participating in trainings held by the Ministry of Mass Media on Right to Information.”

There is also a dearth of awareness in rural areas on the act and how to file requests, especially in rural areas. In Arananayake, a rural village about 130km from the capital Colombo, which suffered a devastating landslide last year, villagers still living in temporary shelters had absolutely no idea that they could gain information from using the act.

The bigger test for the government will be to make sure that the RTI act does not end up a damp squib.

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Togolese to Lead the Fight against Rural Povertyhttp://www.ipsnews.net/2017/02/togo-to-lead-the-fight-against-rural-poverty/?utm_source=rss&utm_medium=rss&utm_campaign=togo-to-lead-the-fight-against-rural-poverty http://www.ipsnews.net/2017/02/togo-to-lead-the-fight-against-rural-poverty/#comments Wed, 15 Feb 2017 14:04:03 +0000 IPS World Desk http://www.ipsnews.net/?p=148947 Gilbert Fossoun Houngbo, new president of IFAD.

Gilbert Fossoun Houngbo, new president of IFAD.

By IPS World Desk
ROME, Feb 15 2017 (IPS)

Gilbert Fossoun Houngbo, former Prime Minister of Togo, has been appointed as the sixth President of the International Fund for Agricultural Development (IFAD), a specialised UN agency and international financial institution that invests in eradicating rural poverty in developing countries around the world.

“I have come from the rural world. I have first-hand knowledge of the harshness of this kind of life,” said Houngbo, who was appointed by IFAD’s member states at the organisation’s annual Governing Council meeting in Rome.

Houngbo takes up the helm at a time when changing government priorities and the more immediate needs of humanitarian crises – like natural disasters, conflict and refugees – threaten to divert funding away from long-term development.

With growing global demand for food, increased migration to cities and the impact of climate change, investments in agriculture and rural development will be essential to achieve the Sustainable Development Goals of ending poverty and hunger.

“We have to keep our ambition and at the same time be realistic and pragmatic,” he said. “We have to demonstrate that every dollar invested will have the highest value for money.”

Houngbo has more than 30 years of experience in political affairs, international development, diplomacy and financial management.

Since 2013 he has served as Deputy Director General of the International Labour Organisation. Prior to that, he was Assistant Secretary General, Africa Regional Director and Chief of Staff at the United Nations Development Programme.

As someone who was born and raised in rural Togo, Houngbo believes that the inequality in today’s world should never be accepted, and that IFAD has a crucial role to play in bringing opportunities to the poor and excluded.

“The privilege of attaining high-quality education helped me develop a strong sense of responsibility towards improving the condition of those who have not had similar opportunities,” he wrote in answer to questions during the nomination process.

“I believe that through a dynamic leadership of IFAD, I can contribute to visible change in the hardship-laden lives of the world’s rural poor.”
Togo covers 57,000 square kilometres, making it one of the smallest countries in Africa. With a population of around 8 million inhabitants, Subsistence agriculture is the main economic activity in Togo; the majority of the population depends on it. Food and cash crop production employs the majority of the labour force and contributes about 42 per cent to the gross domestic product (GDP).

Coffee and cocoa are traditionally the major cash crops for export, but cotton cultivation increased rapidly in the 1990s, with 173,000 metric tons produced in 1999.

After a disastrous harvest in 2001 (113,000 metric tons), production rebounded to 168,000 metric tons in 2002.
Despite insufficient rainfall in some areas, the Togolese Government has achieved its goal of self-sufficiency in food crops — maize, cassava, yams, sorghum, pearl millet, and groundnut.

Small and medium-sized farms produce most of the food crop; the average farm size is one to three hectares.
In the industrial sector, phosphates are Togo’s most important commodity, and the country has an estimated 60 million metric tons of phosphate reserves.

During the 1990s, Togo suffered through a socio-political crisis, an economic regression and a decrease in public and international aid. As a result, an estimated 62 per cent of the population currently lives below the poverty line.

The country’s challenge now is to create the conditions for economic growth – and the Government of Togo believes that the best way to achieve lasting growth is through increased production and productivity in the agriculture sector.

Houngbo was among eight candidates, including three women, vying for the organisation’s top leadership position. He succeeds Kanayo F. Nwanze, who was President for two terms beginning in April 2009. Houngbo will take office on 1 April 2017.

IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience, though grants and long-term, law-interest credits.

Since 1978, this UN body — also known as the “bank of the poor” — has provided 18.5 billion dollars in grants and low-interest loans to projects that have reached about 464 million people.

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