New studies argue that mobile technologies can be more effective than microcredit in promoting entrepreneurship and fighting poverty in developing countries, like Mauritania. Credit: Kristin Palitza/IPS

By Farangis Abdurazokzoda
WASHINGTON , May 31 2014 (IPS)

Mobile-finance and direct cash grants are revolutionary tools that can substitute for under-developed financial sectors and help reduce poverty and promote entrepreneurship in developing countries, according to researchers here.

Rodger Voorhies of the Bill & Melinda Gates Foundation and Christopher Blattman, a Columbia University political scientist, say these two potentially empowering mechanisms can help global efforts to provide needed assistance to vulnerable and poor populations.

In a teleconference hosted by the New York-based Council on Foreign Relations (CFR), one of the country’s most influential think tanks, the two men argued that mobile technologies can help poor people in developing countries manage their personal finances, including savings, insurance, credit, and cash transfers that many in the developed world take for granted.

Mobile technologies can help fill the gap by providing easy and free access to financial tools, according to an article published in CFR’s journal, ‘Foreign Affairs’, co-written by Voorhies and Jake Kendall, who also works at the Gates Foundation.

The article, ‘The Mobile Finance Revolution’, cites World Bank statistics showing that, on average, nearly nine out of every ten people living in a developing country have a cell-phone account, although some users may, of course, have multiple accounts.

Mobile technologies are more effective than much-lauded microcredit programmes in promoting entrepreneurship and fighting poverty, according to the article.

Among other advantages, they eliminate the bureaucracy and routine banking costs associated with in-person and cash transactions. In addition, mobile-finance clients generate data that can be further used by banks and investors as an alternative for the traditional credit scores, according to Voorhies and Kendall.

In a second article titled ‘Show Them the Money’, Blattman and Paul Niehaus, who teaches economics at the University of California San Diego, detail recent studies that show the effectiveness of cash grants and outline the comparative disadvantages of microloans and related programmes, such as donating money to buy cows, goats, seeds, beans, tools, and other agricultural inputs, as well as schoolbooks and clothing for poor families.

Not everybody wants a cow

Despite the fact that the microcredit movement brought significant positive results – recognised in 2006 when the Bangladesh-based Grameen Bank and its founder, Muhammad Yunus, were awarded with a Nobel Peace Prize – a series of more recent studies on the effects of microloans have put their success into question, according to Blattman and Niehaus.

In one study, the economist Abhijit Banerjee of the Massachusetts Institute of Technology (MIT) and a number of collaborators examined the case of the Indian non-profit Spandana that provided 250 dollar loans to women in Hyderabad at low-interest rates. Over three years, they found no measurable improvements in the education, health, poverty, or women’s empowerment among the recipients.

After collecting an additional 20 years of data on Spandana’s lending and their borrowers, Banerjee found “no evidence of large sustained consumption or income gains as a result of access to microcredit.”

As for the effectiveness of training programmes, economists David McKenzie and Christopher Woodruff reviewed the outcomes of the International Labour Organisation’s ‘Start and Improve your Business Programme’ that has provided training to over 4.5 million people in over 100 countries since 1977. They found that there was little lasting effect on the sales or profits of the business owners in the recipient countries.

“No wonder people in developing countries, when given the choice, don’t necessarily choose to invest in skills training,” write Blattman and Niehaus.

The two authors argue that providing cash grants to poor people directly is also preferable to supplying goods that will presumably be used by recipients to increase their income or skills.

They argue that poor people in developing countries often use the cash to buy the same things that aid organisations would provide, such as livestock, tools, or training, in any event, but giving people cash directly provides them with more flexibility.

“Not everyone, after all, wants a cow,” the authors write.

Blattman and Niehaus do not deny the benefits of aid, training programmes, and microloans but insist that significant improvements are possible depending on how the money is allocated.

In a study conducted in Uganda, 250 groups of 15-25 young adults were each given 400 dollars in cash to spend as they wished, so long as the purpose was to enhance their livelihood.

The study found that most of the money was spent on acquiring the physical tools and materials they needed to start working, and only ten percent was used for training. It turned out that over four years, the participants’ incomes rose by an average of 40 percent.

A similar study was conducted in Liberia, where unconditional 200 dollar grants were given to drug addicts and petty criminals. The recipients “did not waste the money,” but used it to fund legitimate enterprises.

“Fears that poor people waste cash are simply not borne out by the available data,” the authors write.

Cash or cell phones?

Blattman and Niehaus outline the benefits of cash transfers over traditional aid programmes. They emphasise the importance of money transfers in places where the population has been hit by unexpected crises – conflicts, natural disasters, or extended periods of political uncertainty.

“Think of Southeast Asia after [the] tsunami or the Middle East flooded with Syrian refugees, where the returns on capital after a recovery period are likely to be unusually high and the challenge of making smart investments without localised knowledge unusually large,” the authors write.

Further, cash transfers are essential to emerging markets that have relatively stable economies but where few firms offer jobs and where most workers, by necessity, are self-employed.

More specifically, the authors suggest that cash transfers better enable entrepreneurs to start businesses in countries where banks and other credit institutions are weak or under-developed.

Just as Blattman and Niehaus argue that cash transfers can be particularly helpful in emergency situations, Kendall and Voorhies insist that cell phones may actually prove more effective.

“A study in Niger by a researcher from Tufts University found that during a drought, allowing people to request emergency government support through their cell phones resulted in better diets for those people, compared with the diets of those who received cash handouts,” according to the authors.

In addition, studies have shown that cell phones encourage financial discipline and savings. In Malawi, for example, farmers were offered an option to have their harvest proceeds directly deposited into savings accounts. Those farmers who chose this option ended up investing 30 percent more in farm inputs and had a 22 percent increase in revenues compared to those who chose not to participate.

But while both articles articulate valid criticisms of how aid and microloan organisations operate, they fail to address important aspects. The most obvious are literacy rates, especially low financial literacy that is often prevalent in developing countries. The issues that need to be considered with mobile-finance are the access of affordable network providers as well as a very basic one – electricity.

Schools around the world, like this one in Melilla, Uruguay, are trying to introduce healthy eating habits to bring down rates of obesity and overweight. Credit: Victoria Rodríguez/IPS

By Farangis Abdurazokzoda
WASHINGTON , May 31 2014 (IPS)

Over two billion people – or 30 percent of the world’s population – are either obese or overweight, and no country has successfully reduced obesity rates to date, according to a new study published this week by the British medical journal, The Lancet.

The number of overweight and obese people increased from 857 million in 1980 to 2.1 billion in 2013, according to the research, which was conducted by the Institute for Health Metrics and Evaluation (IHME) at the University of Washington and funded by the Bill & Melinda Gates Foundation.

Titled “Global, regional, and national prevalence of overweight and obesity in children and adults during 1980-2013,” the study calls obesity a “major public health epidemic” in both the developed and the developing regions of the world.

An individual is considered to be overweight if he or she has a Body Mass Index (BMI), or weight-to-height ratio, greater than or equal to 25 and lower than 30, while obesity is defined as having BMI equal to or greater than 30.

“Obesity is an issue affecting people of all ages and incomes, everywhere,” said Dr. Christopher Murray, director of IHME and a co-founder of the Global Burden of Disease (GBD) study.

Not surprisingly, the largest proportion of the world’s obese people are found in the United States (13 percent).

In the Middle East and North Africa (MENA), Central America, and the island nations of the Pacific and the Caribbean, overweight and obesity rates have skyrocketed over the past 30 years – to 44 percent or higher.

Several oil-rich states in the MENA region – including Saudi Arabia, Kuwait, Qatar, and Libya – account for the world’s largest increase in obesity over the past generation.
But rates are also increasing the world’s two most populous nations – China and India. They currently account for 15 percent of the world’s overweight or obese population.

“These trends have nothing to do with genetics, but rather our lifestyle that has increasingly become indoors and immobile,” Ali Mokdad, who teaches at the University of Washington in Seattle, told IPS.

“We are paying the price for progress,” Mokdad, one of the study’s co-authors, added. “Machines have made our lives easier; thanks to machines, we can produce food faster and cheaper than ever, while microwaves make meals quick and easy. All these contribute to the problem.”

“It’s not a cosmetic issue, but a major risk factor for morbidity and mortality,” he said.
Particularly disturbing is the rise in obesity among children and adolescents. In the three decades covered by the study, the number of overweight or obese children and adolescents increased by 50 percent.

While in the developed world countries, 22 percent of girls and 24 percent of boys are overweight or obese, boys and girls in developing countries are catching up, as nearly 13 percent of them are overweight or obese.

“We know that there are severe downstream health effects from childhood obesity, including cardiovascular disease, diabetes, and many cancers. We need to be thinking now about how to turn this trend around,” said the study’s lead author Marie Ng.

The study stresses the need to mobilise not only the people, but also governments in the fight against obesity and its consequences.

“It’s not only the Ministry of Health that has to be concerned, but also the Ministry of Agriculture which needs to take into account how to build programmes and develop infrastructure in a way that would encourage people to be more healthy,” according to Mokdad.

He saluted U.S. First Lady Michelle Obama’s initiative “Let’s Move!” – a four-year-old effort “to end the epidemic of childhood obesity in a generation so that kids born today will grow up healthy.” In addition to encouraging exercise among youths, “Let’s Move!” urges schools to reduce the excessive consumption of sugar, salt, and fat and include more fruits and vegetables in meals served to students.

In a column published Thursday by the New York Times, the First Lady wrote that the U.S. spends 190 billion dollars a year treating obesity-related conditions in the general population. ”Just think about what those numbers will look like in a decade or two if we don’t start solving this problem now,” she wrote.

Her efforts have drawn criticism from right-wing Republican sectors and their allies in the press. The Wall Street Journal Thursday called Obama’s efforts “cuisine central planning” and cited recent statistics showing that consumption of federally funded school lunches has declined nearly four percent since the government’s new standards were first enforced, presumably because the recommended menus no longer included items popular with young consumers.

Qatar was found to suffer the highest rates of obesity and overweight at 73.9 percent, followed by Egypt (73.6 percent), Kuwait (73.4 percent), Libya (71.9 percent), Saudi Arabia (69.4 percent), Jordan (69.3 percent), Syria (69.1 percent), Mexico (68.9 percent), Iceland (68.5 percent), and the U.S. (67.4 percent).

Among South Americans, Chileans and Paraguayans led the region, with 66.1 percent and 63.9 percent, respectively.

In sub-Saharan Africa, where obesity and overweight were least prevalent among all regions, oil-rich Equatorial Guinea was the regional leader, with 58.7 percent of the population obese or overweight. It was followed by South Africa, at 52.9 percent, and another oil-rich country, Gabon, at 47.7 percent. In Ethiopia, by contrast, only 5.5 percent of the population was obese or overweight.

South and East Asia were also relatively slim, compared to wealthier regions. Malaysia was the heavyweight at 45.3 percent, followed by South Korea (33.2 percent), Pakistan (30.7 percent), and China (28.3 percent). By contrast, less than one out of five Indians were obese or overweight (19.5) percent.

The leanest, however, included Vietnam (12.4 percent), while North Korea and Timor Leste tied for the world’s lowest prevalence at 4.6 percent, according to the study. Rates in neighbouring Australia, on the other hand, neared those of the world’s heaviest, at 63.3 percent.

Most of the countries that are heaviest today, including Libya, Egypt, Iceland, as well as many wealthy countries, were also heaviest 30 years ago. But the obesity and overweight gap between them and most developing countries, particularly in sub-Saharan Africa and Asia, has since closed.

In 1980 China, for example, only about ten percent of the population was overweight or obese – or about one-third of the percentage in 2012.

More country data can be found here.

Jim Lobe contributed to this article.

Seventeen states currently grant gay couples the right to marry. Credit: Bigstock

By Farangis Abdurazokzoda
WASHINGTON, May 16 2014 (IPS)

Honouring the International Day Against Homophobia and Transphobia, U.S. Secretary of State John Kerry Friday emphasised progress in advancing the rights of lesbian, gay, bisexual, and transgender (LGBT) persons, but a new report on criminalisation of LBGT people suggests that there is still a long way to go.

“Today of all days, we are reminded that the cause of justice can and must triumph over hatred and prejudice,” said Kerry said in a statement.“The United States arrests and prosecutes more people on the basis of their HIV status than the rest of the world combined." -- Catherine Hanssens

Undeniably, a number of events over the past week indicate significant advances in LGBT rights.

Michael Sam, the first openly gay U.S. football player, kissed his boyfriend on national TV after being drafted by the National Football League; Arkansas, one U.S. Bible-Belt state lifted a ban on gay marriage; and Conchita Wurst, an Austrian cross-dresser, won Eurovision Song Contest, the televised singing competition watched by tens of millions of viewers across Europe.

Nonetheless, LGBT people and and People Living with HIV (PLWH) experience higher rates of homelessness and poverty, lower levels of education, and high rates of family and community rejection, according to the report.

“Seventy-three percent of LGBT people and PLWH have had run-ins with police in the past five years,” said Aisha Moodie-Mills, co-author of the report and a senior fellow at the Center for American Progress (CAP), a think tank considered close to the administration of President Barack Obama.

“Oftentimes these groups also experience police misconduct such as false arrests and verbal, physical, and sexual abuse while in police custody,” she told IPS.

Released late last week by CAP and several civil rights law groups, the report urges relevant U.S. agencies to adopt key reforms that can improve the plight of LGBT people and PLWH. Existing criminal-justice policies, according to the report, perpetuate poor life outcomes of LGBT people and PLWH.

“Police profile transgender women and use possession of condoms as evidence of prostitution-related offenses and grounds for arrest,” Moodie-Mills said. “And, in 36 states there are laws that criminalise HIV exposure. PLWH can be charged with felonies for having consensual sex, biting, and spitting despite the fact that spitting and biting have not been shown to pose significant risks for HIV transmission.”

Further, some states that do not have HIV-specific laws prosecute PLWH under more general criminal laws, including attempted murder, assault, and even bio-terrorism.

According to conservative estimates by the New York-based Center for HIV Law and Policy, nearly 200 PLWH have been prosecuted since 2008. In Texas, for example, a man with HIV is serving 35 years for spitting at a police officer. In New York, a man was sentenced to 10 years for aggravated assault for biting a police officer.

And in Michigan, prosecutors charged an HIV-positive man under the state’s anti-terrorism statute with possession of a “biological weapon,” and equated the HIV infection with possession of a “harmful device.”

“The United States arrests and prosecutes more people on the basis of their HIV status than the rest of the world combined,” noted Catherine Hanssens, the centre’s executive director and a co-author.

“The policies that drive these arrests spring from profoundly phobic misconceptions about the actual routes, risks, and consequences of HIV transmission and federal health officials’ refusal to promote frank, accurate information about sex, sexual orientation, and gender identity.”

The particular needs of LGBT people and PLWH are often overlooked when in jail. For example, discriminatory attitudes toward LGBT people prevent them from reporting sexual assaults. Despite the Prison Rape Elimination Act of 2003 (PREA) – the first federal law passed that deals with sexual assault of prisoners.

“Justice continues to be elusive and conditional for these populations due to a range of unequal laws and policies that dehumanise, victimise, and criminalise them because of their sexual orientation, gender identity, or HIV status,” says the report.

The report was generated in collaboration with over 50 activists, policy advocates, lawyers, and grassroots organisations working on LGBT criminalisation and racial justice issues and is the first comprehensive publication to offer policy recommendations to the all levels of government, from local police and state prisons to federal agencies and prosecutors.

They call for more aggressive efforts to curb discrimination in policing and law enforcement, to stop violence and discrimination inside prisons and detention centers, including the federally funded immigrant detention facilities.

The roadmap’s authors stress that existing legislation that oftentimes fail to protect LGBT people.

PREA can be amended to better address specific issues LGBT people face with in prisons, according to the report. This also includes allowing transgender people to specify the gender of the officer they would prefer to conduct searches on their persons and specifically to ban prohibit degrading and invasive genital searches.

Criminalisation and official harassment of LGBT people and PLWH are widespread across the world, particularly in sub-Saharan Africa, where the governments of Nigeria and Uganda have recently approved laws that impose draconian punishment on homosexual conduct.

On May 19, the Center for Strategic and International Studies (CSIS) Global Health Policy Center will issue a new report on the criminalisation of homosexuality at the Third Atlanta Summit on Health in Africa.

Manes Feston, flanked by her children, holds her four-month-old son Fedson. He was one of triplets but his siblings died because of a lack of welfare support. The family lives in a remote rural community in southern Malawi. Credit: Travis Lupick/IPS

By Farangis Abdurazokzoda
WASHINGTON, May 13 2014 (IPS)

Social safety net programmes have expanded, yet 870 million of the world’s poorest people remain uncovered, says a new World Bank report released Tuesday.

Although over one billion people in 146 countries now participate in at least one of roughly 475 social safety net programmes, most of the extreme poor – those who live under 1.25 dollars a day – are not, says the report, The State of the Social Safety Nets 2014.

Nonetheless, the World Bank’s director for social protection and labour, Arup Banerji, remains hopeful on the growing reach of social safety net programmes, as well as their effectiveness.

“There is a strong and growing body of evidence that social safety nets are one of the most cost-effective ways for the countries to end extreme poverty and promote shared prosperity,” he said.

Social safety net programmes comprise transfers in cash or in-kind, designed to provide regular and predictable support to poor and vulnerable people.

The report highlights the role of the social safety net in reducing poverty, improving maternal and child health and nutrition, boosting school attendance and learning outcomes, and promoting sustained economic growth.

It is the first in a series of studies that will monitor and report on the growth and coverage of social safety nets in the developing world.

The report considers five types of social safety net programmes: conditional cash transfers, unconditional cash transfers, conditional in-kind transfers, unconditional in-kind transfers, and public works.

It finds that one-third of beneficiaries live in upper-middle-income countries, whereas in low-income countries where 47 percent of the population is extremely poor, less than 10 percent have a social safety net support.

The two primary reasons for this, according to the report, are a lack of scaled-up social safety net programmes in both low and middle-income countries, and the fact that social safety nets may not be specifically targeted at the income-poor, but instead focus more on improving nutrition or providing old age security.

Exponential growth in social safety nets has been achieved particularly with cash-based programmes.

This has been particularly true in Sub-Saharan Africa, where the number of unconditional cash transfers – transfers of cash targeted at a particular category of people, for instance, pensions – has tripled from 2010 to 2013, and the number of countries that implemented these programmes increased from 21 to 37 in the same period.

The largest programmes in the world are in India, China, and Brazil; together they have a combined reach of over 486 million people. This data, according to Banerji, shows that it is possible to extend the coverage of safety nets and reach the remaining populations who live in extreme poverty without any social protection.

“More could be done to assist the world’s poorest people,” he adds.

Lower-income countries face the most challenges in providing populations with safety nets.

In some 57 countries, social safety net coverage corresponds with the scale of poverty often measured by national poverty line. For example, in Guatemala, where 49 out of 54 percent of the population that lives below national poverty line benefits from social safety net programmes, the main policy challenge is to ensure that programmes include a sufficient amount of people.

However, there are about 50 countries where programme coverage is below the scale of the poverty challenge. One is Madagascar, where out of the 75 percent living below national poverty line, only one percent are covered. Another is Burundi, where of the 67 percent of the poorest people, only five perfect have some kind of social safety.

As countries get richer, the aggregate spending on social safety nets rises – but not significantly, says the report.

Developing countries on average spend 1.6 percent of their GDP on social safety nets, while public policy measures such as fuel subsidies are much higher. For comparison, in the Middle East and North Africa, on average only one percent of GDP is spent on social safety, while four percent is spent on fuel subsidies.

“Even lower income countries such as Egypt, Yemen and Morocco spend about 6.7, 4.7 and 0.7 percent of GDP on fuel subsidies and only 0.2, 1.4 and 0.9 percent of GDP on safety nets programmes respectively,” Ruslan Yemtsov, a lead economist at the World Bank, told IPS.

Energy subsidies do benefit the entire population, says the report, because they reduce prices of energy for heating, transport, and lighting. However, their impact is mainly on those income groups who are more likely to be consuming electricity and fuels in larger quantities, thus disregarding the immediate concerns of the extremely poor.

Further, the poorest people in the low-income countries are worse off when considering other capital flows, such as remittances – the money migrant workers send home – and external financing.

The study finds that remittances are ineffective in reaching the poorest households.

“Data from ASPIRE (Atlas of Social Protection: Indicators of Resilience and Equity) shows that in higher income countries, the majority of households receiving remittances are in the poorest quintiles,” Maddalena Honorati, an economist at the World Bank, told IPS.

“The pattern is reversed in lower income countries, where the poor are not well covered by social safety nets and most of the remittances recipients are in the richest quintile. Globally, less than 15 percent of the remittances reach the extreme poor.”

As for external financing, low-income countries are increasingly putting social safety nets programmes “on-budget,” says the report. Donor financing, in some of the poorest countries, such as Liberia, Sierra Leone, and Burkina Faso are almost fully financing social safety nets.

On a more positive note, the report notes that many countries move from fragmented programmes to integrated social protection systems. More mechanisms that help policymakers monitor the effectiveness of the programmes have been developed.

One example of such a mechanism is the Cardastrosocial registry in Brazil, which is helping to collect data on 27 million people and then linking it to more than 10 social programmes.

Currently around 68 countries have a national social protection strategy in place that outlines systemic approaches. In 2009, there were only 19. Moreover, 10 countries have introduced institutional bodies to coordinate social protection programmes across sectors and ministries.

Misinvoiced trade in five African countries cost their governments billions of dollars in tax revenue and facilitated at least 60.8 billion dollars in illicit financial flows from 2002 to 2011, says a new report by Global Financial Integrity (GFI), a research advocacy organisation here.

Using data on bilateral trade flows from 2002-2011 from the U.N.’s Commodity Trade database, the study calculated that the potential average annual tax loss from trade misinvoicing amounted over the same decade to roughly 12.7 percent of Uganda’s total government revenue, followed by Ghana (11 percent), Mozambique (10.4 percent), Kenya (8.3 percent), and Tanzania (7.4 percent), according to the 52-page report, “Hiding in Plain Sight.”“A lack of domestic enforcement of regulations against deliberate trade misinvoicing, as well as unclear international regulations, exacerbates the illicit money flows.” -- Brian LeBlanc

The report, sponsored by the Danish foreign ministry, represents the first comprehensive study on the magnitude of the loss of tax revenue for these countries.

Trade misinvoicing is the intentional misstating of the value, quantity, or composition of goods on customs declaration forms and invoices, usually for tax evasion or money-laundering purposes.

“Fraudulent trade transactions rob the people of these countries of funds that could otherwise have been used for investments in infrastructure, schools, hospitals, and other much-needed public services,” said Mogens Jensen, Denmark’s minister for Trade and Development Cooperation.

Further, misinvoiced trade is a significant source of illicit capital flight.

Tanzania tops the list, with the greatest annual average gross illicit flows of 1.87 billion dollars. Kenya is second with 1.51 billion in average gross flows. They are followed by Ghana (1.44 billion); Uganda (884 million), and Mozambique (585 million).

These losses create “one of the most damaging conditions undermining economic growth and development, governance, and human rights in Africa and around the world,” according to the report which, noted that misinvoicing thrives in a global shadow system that features financial secrecy and tax havens for the rich.

Over the decade, gross illicit outflows in Kenya were twice what the country received in official development assistance (ODA); in Ghana these flows roughly equaled its ODA, followed by Tanzania (77.6 percent), Uganda (58.9 percent), and Mozambique (32.6 percent).

The numbers are huge, but experts caution that these might be too modest.

“The estimates provided by our methodology are likely to be extremely conservative as they do not include trade misinvoicing in services or intangibles, same-invoice trade misinvoicing, hawala transactions, and dealings conducted in bulk cash,” GFI President Raymond Baker noted.

Ghana, Kenya, Mozambique, Tanzania, and Uganda have all experienced significant economic growth in recent years. But the wealth remains concentrated in the hands of a very few and has not trickled down to the average citizen and the very poor, who often lack basic services.

The revenues that the governments lost due to misinvoiced trade and illicit money flows could  help fill these gaps.

“The problem lies in a lack of transparency and poor data reporting. And publishing data is important,” Brian LeBlanc, who co-authored the report, told IPS.

He also noted statistics presented at last week’s launch of the latest report by the African Progress Panel, a think tank chaired by former U.N. secretary-general Kofi Annan. It estimated that illegal fishing and logging – most of which benefits foreign interests – cost sub-Saharan Africa an average of over 20 billion dollars each year.

GFI experts highlighted the importance of governments both domestically and internationally in cracking down against trade misinvoicing. Thus, the two main objectives of the report are focused on helping governments improve transparency in domestic and international financial transactions and enhancing cooperation between developed and developing country governments to shut down the channels through which illicit money flows.

“A country with weak laws or lax enforcement of money laundering statutes could encourage trade misinvoicing by making it easier to transfer and use the money gained from the illegal transaction,” the report says.

According to LeBlanc, particular attention needs to be paid to providing customs officials with “real-time access to pricing data” in order to identify the mispriced and mistraded goods. More pressure should also be placed on auditing firms to inform governments of misinvoiced trade.

Customs authorities often lack the means, or, in some cases, the will to collect the data they need to understand the magnitude of illicit flows of capital due to trade misinvoicing or the tax revenue and investment capital that are lost as a result.

Governments need to track the direction of trade flows, detect if the invoices are altered in different jurisdictions, and understand how the values of items included in invoices compare to the world market for the products involved.

“Many countries don’t have access to world market prices for different commodities, this information asymmetry makes it difficult to make progress in curtailing misinvoicing trade and illicit financial flows,” Clark Gascoigne, communications director at GFI, told IPS.

Not only does the information asymmetry deprive governments of tax revenues, it also hinders their efforts at halting illicit flows.

“A lack of domestic enforcement of regulations against deliberate trade misinvoicing, as well as unclear international regulations, exacerbates the illicit money flows,” LeBlanc said.

The five countries are nonetheless making some progress. The establishment of electronic customs systems and, in some cases, the creation of financial intelligence units (FIUs) hold some promise.

The World Trade Organisation (WTO) could also be used as an important enforcement mechanism, according to LeBlanc, who also cited a model that has been used with considerable success in the Philippines.

“A final step to curtailing illicit trade transactions and financial flows is a whistle-blowing mechanism, where employees as well as competitors can blow the whistle anonymously if their employers or rivals are engaging in misinovocing trade,” LeBlanc told IPS.

He added that it is in the interests of both employees and competitors. And while it is obvious why competitors would benefit from blowing the whistle on their rivals, LeBlanc further elaborates on why it is in the interest of employees of the company.

“There is a misconception that misinvoicing trade results in a better company performance in terms of revenue. It in fact hurts the company,” LeBlanc says, and “the extra profits from over- or under-invoicing imports and exports end up being transferred to off-shore accounts of the company owners and are not distributed to the employees.”

The Azerbaijan government crackdown on civil society has worsened in recent months, human rights campaigners are warning, and activists are increasingly falling victim to official efforts to limit dissent.

Human Rights Watch, the global watchdog, is calling for an end to what it refers to as harassment and oppressive tactics against the prominent human rights activist Leyla Yunus and her husband, Arif Yunusov. The group says it is now up to the international community to step up pressure on the Azerbaijan government.“Mirgadirov and the Yunuses are the voices that the Azerbaijani government doesn’t want to be heard." -- Rachel Denber

“Azerbaijan’s international partners, in particular fellow members of the Council of Europe, should make clear that continued harassment of human rights defenders, and the Yunuses in particular, will affect their relationships with Azerbaijan’s government,” the U.S.-based watchdog group said.

The call was particularly aimed at President Francois Hollande of France, who is scheduled to visit Azerbaijan on May 11 and 12. Campaigners are urging President Hollande to insist on seeing the Yunuses and to signal that their freedom is of significant importance to French-Azerbaijani relations.

Concern is also being expressed for the plight of Rauf Mirgadirov, an Azerbaijani journalist accused of spying for Armenia. He’s been in prison since late last month, awaiting trial.

Rachel Denber, deputy Europe and Central Asia director at Human Rights Watch, called the charges against Mirgadirov “bogus”.

“Mirgadirov is a man who has been for many years a strong critique of the Azerbaijani government, and the Azerbaijani authorities, who are known for having a longstanding pattern of bogus allegations, were just looking for a pretext to put him behind bars,” Denber told IPS.

“Mirgadirov and the Yunuses are the voices that the Azerbaijani government doesn’t want to be heard. But the outrageous facts of their scandalous treatment have to be exposed to the public and addressed immediately.”

Azerbaijan will soon be taking over the rotating chairmanship of Europe’s foremost human rights body, the Council of Europe. Human Rights Watch is also calling on the body’s secretary-general, Thorbjorn Jagland, to express urgent concern about the treatment of the Yunuses and Mirgadirov, as well as other civic activists and journalists that have fallen victims of the regime in recent months.

“No government should be allowed to get away with targeting human rights defenders while it’s seeking to boost its international prestige,” Denber said in a brief.

PR show

The warnings come just days after an annual private-sector U.S.-Azerbaijan convention took place here in Washington. There, the U.S. ambassador to Azerbaijan, Richard Morningstar, called the detention of the Yunuses a “mistake”.

In follow-up comments to IPS, State Department officials expressed “deep concern” about the human rights situation in Azerbaijan, and said that they are “closely following the situation”. The U.S. Embassy in Baku, they said, has been in “direct touch” with the Yunuses.

“As with the Rauf Mirgadirov case, we are disturbed that the actions taken by the Azerbaijani government against Leyla Yunus and Arif Yunusov appear to be related to their participation in people-to-people efforts aimed at building confidence and facilitating a peaceful resolution to the Nagorno-Karabakh conflict.”

Nagorno-Karabakh is a de facto independent but unrecognised state, which is internationally seen as part of Azerbaijan. However, the area remains populated by significant numbers of ethnic Armenians.

The Yunuses’ detention occurred at about the same time as the U.S.-Azerbaijan Convention took place here in Washington. The event is seen by some as a public-relations show for energy-rich Azerbaijan, with significant participation by the country’s influential oil and gas industry.

Leyla Yunus’s brother-in-law, Ramis Yunus, a long-time Washington-area resident and a columnist for a number of Azerbaijani and Russian language media outlets, was not allowed to attend the convention after his family members were detained in Azerbaijan.

Although attempts by IPS to contact Ramis Yunis proved unsuccessful by deadline, he was quoted in local media stating that he had hoped to ask U.S. legislators whether their priority lay with human rights or oil.

“They call it the ‘U.S.-Azerbaijan Convention’, organised by ‘friends of Azerbaijan’,” Ramis Yunus was quoted as saying. “I am both a U.S. citizen and an Azerbaijani citizen. But why I am treated as an enemy here?”

This year’s U.S.-Azerbaijan Convention celebrated two decades of bilateral ties following Azeri independence from the Soviet Union.

Alex Vatanka of the Middle East Institute, who spoke at the convention, told IPS the event’s goals are “to further the conversation between American policy-makers and Azerbaijani counter-parts.”

Vatanka continued: “Such efforts are important in introducing Azerbaijan’s agenda to policy-makers here in Washington.”

Track-two crackdown

Leyla Yunus is the director of the Institute for Peace and Democracy, a group formed in 1995 that focused on combating politically motivated prosecutions, violence against women and unlawful house evictions. Since then, the group has also been involved in the projects targeted at rebuilding the relationship between Armenia and Azerbaijan around the unresolved conflict in Nagorno-Karabakh.

Leyla and Arif Yunusov were detained by Azerbaijan’s government earlier last week as they were boarding a plane to Doha, where they planned to attend an international conference. Leyla Yunus’s detention is visibly related to their work on building dialogue with Armenians and her relationship with Mirgadirov, the journalist.

Mirgadirov has been involved in track-two diplomacy between Armenia and Azerbaijan over Nagorno-Karabakh, having taken part in meetings in Armenia aimed at improving the relationship between the two countries. Leyla Yunus and the Institute for Peace and Democracy have also been involved in organising some of these projects.

Human Rights Watch cites media reports from in which the Azerbaijani officials state that the Yunuses are considered witnesses to a criminal investigation. The officials also assert that the Yunuses had previously disregarded an attempt to be served with an interrogation summons, and had not responded to phone calls asking them to appear for questioning.

Yunus’s lawyer confirmed to Human Rights Watch that a government official delivered such a summons on Apr. 24. Leyla Yunus refused, however, explaining that she had not received adequate notice.

“Azerbaijan has a long history of using bogus charges to imprison its critics, including on treason charges,” Human Rights Watch states.

Unless leaders act promptly, climate change and environmental degradation will only worsen and cause greater global problems, scientists warn. Credit: Crustmania/CC by 2.0

By Farangis Abdurazokzoda
WASHINGTON, May 2 2014 (IPS)

It is time to craft new politics and economic policies to address the sustainability crisis, according to the latest edition of a flagship report by the Worldwatch Institute, a think tank here.

The global community has delayed addressing the issues associated with rapid climate change and environmental degradation for too long, according to the 294-page report, “Governing for Sustainability”.“Markets can be excellent tools for certain purposes, but they do not have a social conscience, environmental ethic or long-term vision." -- Michael Renner

And it is this failure in governance that has resulted in the most alarming environmental challenges that we face today, the institute warns, from water shortages to climate change.

The report, which marks the Worldwatch Institute’s 40th anniversary, highlights the challenges imposed by the existing economic and political order. For instance, it criticises neoliberalism for undermining democratic processes by granting a strong political voice to corporations, whose profit-maximising nature traditionally takes little account of environmental health and sustainability.

“The unrestrained flow of money into the political process essentially undermines democracy,” Michael Renner, co-director of the report, told IPS.

“We need to rethink many of our basic economic assumptions and mechanisms, and aim not only for a better and wiser distribution of resources, but also a better sharing of available work. This can’t be accomplished via conventional forms of capitalism.”

In part, the report promotes so-called B corps – or benefit corporations – that “aim not only at doing well but also doing good”. B corps are new forms of for-profit entities designed to benefit their social and environmental stakeholders – those affected by the business’s operations – as well as their profit-seeking shareholders.

“This emerging movement is still a small phenomenon relative to the total global economy, but it continues to expand, led by mostly small and medium-sized companies in the United States,” Colleen Cordes, director of outreach and development for The Nature Institute, a research and advocacy organisation, told IPS.

Still, Worldwatch’s Renner expresses some scepticism that even B corps will be able to meet sustainability goals in the long term.

“Many of the companies subscribing to these principles are still quite small, and a big question is what will happen when these firms grow larger,” he says. “Can they remain anchored to the public interest within a broader system that remains ruled by the tenets of capitalism?”

The traditional ways in which democratic societies have made important decisions, he says, have been upended.

“Markets can be excellent tools for certain purposes, but they do not have a social conscience, environmental ethic or long-term vision,” Renner notes.

“It’s difficult to know what can successfully change this situation, but it would appear that a mass grassroots mobilisation is needed to provide some sort of counterweight to the money-driven politics that is now in command.”

Drastic measures?

Of course, the drive to maximise profit is not exclusive to corporations. Developing countries often voice discontent about the environmental regulations that industrialised countries impose on trade, for instance, as these regulations are make it more difficult for them to attain higher economic development and growth, at least in the short term.

Renner believes that it is possible to develop and yet avoid the environmental degradation that often follows economic growth – for instance, as widely seen throughout today’s China.

“We need to facilitate a process of ‘leap-frogging’ that allows developing countries to move to much-cleaner alternatives right away,” he says, giving the example of renewable energy.

“A poor country like Bangladesh succeeded in installing 2.8 million solar home systems in rural areas, generating some 100,000 jobs in the process. That’s much better than continuing to subsidise coal and kerosene, and that’s the kind of success story that’s worth learning from and emulating.”

Still, multiple counter-examples to the Bangladesh experience could be more affluent countries that have made little to no meaningful progress in combating the sustainability crisis. The report lists several countries that have seen rollbacks in this progress.

For instance, while Australia had previously pledged to reduce greenhouse gas emissions by five percent under 2000 levels, it has now reversed course and could cause national emissions to increase 12 percent by 2020. Japan, too, has abandoned its 2020 target for cutting national emission to 25 percent below 1990 levels.

And Canada is investing heavily in developing carbon-intensive tar sands deposits, an issue that has become a political hot potato here in the U.S.

Meanwhile, with little agreement on what global steps should be taken to address climate change, it is perhaps not surprising that the concentration of carbon dioxide in the Earth’s atmosphere is now at an all-time high. In fact, over the past decade, carbon dioxide emissions have steadily increased at around 2.7 percent annually – in the process, tripling the carbon emission rate from the previous decade.

Such statistics reinforce the sense that only a drastic change in the global economic and political governance will be able to change course.

“There is a chance we can prevent the worst disruption in climate change, as well as other sustainability challenges such as erosion or fresh water access. But these need to be addressed now,” Tom Prugh, another co-director of the report, told IPS. “The more we delay, the more irreversible our imprint on the environment will be.”

Purposeful ineffectiveness

Many other observers have connected these delays directly to a political and economic ineffectiveness brought about purposefully over the past several decades.

“Long before the climate crisis was the greatest market failure the world has ever seen, it was a massive political and governmental failure,” David Orr, a professor of environmental studies and an adviser to President Barack Obama, at Oberlin College, told IPS.

According to Orr, the U.S. and U.K. administrations of Ronald Reagan and Margaret Thatcher, buttressed by conservative economists such as Friedrich Hayek and Milton Friedman, strongly undermined the role of the government. The effect was particularly potent in those parts of the government dedicated to public welfare, health, education and environment.

“The public capacity to solve public problems has diminished sharply,” Orr says, “and the power of the private sector, banks, financial institutions and corporations has risen.”

Yet for The Nature Institute’s Cordes, a key answer to this situation will come down to the day-to-day role individuals and families.

“We need to focus our attention on urgent issue of how to govern our countries, but also our families and ourselves,” she says. “It’s time for us to think critically before we make decisions with regard to what we buy, where we work, and evaluate our footprints.”

Even as countries around the world have started to sign on to and ratify a landmark international treaty that would for the first time regulate the international trade in conventional weapons, experts here are warning that the treaty in itself will not be able to maintain peace and security in Africa.

The Arms Trade Treaty (ATT) was almost unanimously passed by the U.N. General Assembly in April 2013 following a decade of often contentious negotiations. It covers small arms to battle tanks, combat aircrafts to warships.“Without import control regimes along with export controls, it will be hard to reap the benefits of the treaty." -- Thomas Countryman

Thus far, 118 states have signed on to the treaty, though only 31 have ratified the agreement. Ultimately, 50 ratifications will be needed before the ATT can come into effect.

Of the 31 states that have ratified the treaty, just two have been African – Nigeria and Mali. Yet even if, or when, more African governments decide to ratify the ATT, experts here, including some who helped negotiate the treaty, say its effect in maintaining peace in Africa will be somewhat limited.

“The ATT is an important step toward prosperity, peace and security in Africa, but by itself is not enough,” Thomas Countryman, the chief U.S. negotiator on the ATT, said this week at the Center for Strategic and International Studies (CSIS), a think tank here.

In a follow-up interview, Countryman told IPS that African countries played a “very valuable role” in advocating for the treaty, but acknowledged the impediments that developing countries in Africa may face in institutionalising and implementing the ATT before and post-ratification. He also noted that the United States and the European Union are prepared to assist in the ratification and regulation process as required.

Most African countries did sign the ATT, except for Egypt and Sudan, which abstained from the General Assembly vote. In addition, Somaliland, Sierra Leone, Western Sahara, Equatorial Guinea, and Sao Tome and Principe took no public position.

For now, Countryman says, it is critical that countries implement effective and transparent export and import arms control mechanisms.

“Without import control regimes along with export controls, it will be hard to reap the benefits of the treaty,” he stated.

An important part of this, Countryman says, is implementing effective border control and customs services, both in law and practice. Other steps include the establishment and implementation of an effective legal framework for the prosecution of both internal and external illegal arms trades.

This includes, Countryman notes, the need for stronger mechanisms over government weapons.

“It is essential … [that] African states institute effective controls over state-owned stockpiles of current and legacy weapons,” he said.

Many armories in Africa were built during the colonial period or the early days of independence.

“Additional arsenals were purchased legally by the governments in the cause of national security for the military and the police,” he continued. “However, such arms are not always adequately secured.”

Securing such caches is not an obligation under the ATT, which deals solely with the international transfer of arms. However, Countryman notes that such a concern is directly related to the goals of the treaty, particularly ensuring civilian safety.

Transparency is key

“The treaty is complimentary to other actions that should be taken to stop violence perpetrated with illegally traded conventional arms,” Raymond Gilpin, the dean of the National Defense University (NDU), here in Washington, told the CSIS panel discussion on Wednesday.

Gilpin particularly emphasised the role of partnerships between the public and private sector in tackling the illicit arms trade. In this, he said, a similar model could be seen in global attempts to force greater transparency in the extractives sector in developing countries.

“As with minerals, if we leave the decision-making to the state alone, we might face reluctance in developing more transparency, a lack of resources or corruption in implementing the ATT requirements. Furthermore, one has to consider the influence of violent non-state actors in arms trade and diversion,” Gilpin said.

“Price stability as well as predictability of supply and demand relies heavily on transparency… Transparency is one of the main pillars of the ATT, and a lack of this element costs companies a lot of money.”

Gilpin made specific reference to an annual publication called the Transparency Barometer, put out by the Geneva-based Small Arms Survey. While the barometer serves as an important outlet for policy-relevant research on small arms and armed violence, Gilpin said, it focuses mostly on the exporting countries.

Control and transparency in the import-control regimes is also a very important aspect to tackle the illicit trade of arms, he cautioned.

African countries need to be more prepared for the ratification and implementation of obligations imposed by the ATT, Gilpin warned.

African states could be hindered in ratifying the treaty due to “a lack of capacity and expertise to draft the laws and prepare documentations for the parliamentary submissions, but also include state complicity,” he said.

Furthermore, certain countries view the import and management of arms as national security-related secrets. Thus, he suggests, confidentiality might be holding some countries back from ratifying the treaty.

Gilpin also emphasised the importance of strengthening public awareness about the need to prevent crimes associated with the gun violence, particularly during election campaigns on the continent.

“People get desensitised to the issue during the periods of relative peace and stability,” he said. “But to prevent conflicts from escalating and to maintain peace, civil societies need to more actively push elected officials to take more action to tackle the issue.”

U.S. foreign aid is becoming increasingly outdated, analysts here are suggesting.

Rather, reforms to U.S. assistance need to focus on issues of accountability and country ownership, according to a policy paper released this week by Modernizing Foreign Assistance Network (MFAN), a prominent coalition of international development advocates and foreign policy experts.“Aid should be structured in a way that citizens and NGOs can monitor how the government implements development projects." -- Casey Dunning

“Aid is a strong expression of U.S. moral, economic, and national security imperatives, and in many contexts the U.S. is still the most significant donor,” the paper states. But according to many metrics, U.S. aid is both non-transparent and inefficient.

“The United States needs to frame and deliver aid in a structured way that would support the effectiveness of aid in partnership countries and generate sustainable results,” Sylvain Browa, director of aid effectiveness at Save the Children, an independent charity, told IPS.

“In such dynamic environments, where all aid remains critical to savings lives, curing diseases and putting children in school, new players come to stage, and these include local leaders and citizens who know first-hand what their priorities are.”

In terms of aid quality, the United States ranked just 17th out of 22 major donors according to the Commitment to Development Index in 2013. Each year, the index ranks wealthy countries on how efficiently they help poor ones in areas of aid, trade, finance, migration, environment, security, and technology.

According to that ranking, just one U.S. agency was rated “very good” in terms of transparency. The agency responsible for the bulk of U.S. foreign assistance, USAID, was rated just “fair”, while the State Department and PEPFAR, the landmark anti-AIDS programme, were rated “poor” and “very poor” respectively.

MFAN suggests that a newly streamlined policy agenda, structured around two “mutually reinforcing pillars of reform” – accountability and country ownership – could significantly improve the effectiveness of U.S foreign aid.

“The donor-recipient paradigm of foreign aid is outdated,” the report states, and without priority on these two pillars, “we revert to old, tired, and stagnant paradigms of aid – paradigms that unnecessarily perpetuate aid dependency.”

The new program is designed to empower communities, which in turn should carry out country ownership, says George Ingram, MFAN’s co-chair and a senior fellow at the Brookings Institute, a think tank here.

“The two pillars are prerequisites to build the kind of capacity that will help enable leaders and citizens in the aid-recipient countries to take responsibility for their own development,” Ingram told IPS, “such as spending priorities, as well as making evidence-based conclusions about what works and what doesn’t.”

The report emphasises that such changes are also somewhat time-sensitive. Given looming domestic and international deadlines, MFAN’s analysts say the next two years constitute “an important window of opportunity for U.S. aid reform”.

“The midterm elections in 2014 are certain to shake up the membership of Congress,” they write. “In 2015, the Millennium Development Goals will expire and a new global development agenda will take its place. And 2016 will bring a new administration and further changes on Capitol Hill.”

Local destiny

The recommendations have received quick support from other development groups.

“The paper is of universal importance to all aid agencies, implementers and thinkers,” Casey Dunning, a senior policy analyst for the Centre for Global Development, a think tank here, told IPS.

But she warned that there were inherent difficulties in the recommendations, as well.

“There is a lot of rhetoric on what country ownership means or what accountability encompasses,” she says. “Ambiguities in definitions and measurements of accountability and country ownership make it difficult to make aid more effective. However, the MFAN report helps to find metrics for capacity-building and to see what it actually means.”

Save the Children’s Browa, too, notes that the concepts outlined in the report are not necessarily new.

“But when put together, these pillars are vital to building local capacity and creating local ownership of resources and tools for development,” he says, “so that country leaders and citizens can take leadership in their destiny.”

To achieve better transparency, the report’s authors are calling on the U.S. government to fully implement new global standards called the International Aid Transparency Initiative (IATI) by the end of 2015. In addition, the ratings of the Aid Transparency Index should be extended to all U.S. government agencies, which currently doesn’t happen.

Further, all U.S. agencies should begin contributing comprehensive financial information to a landmark new online government information clearinghouse, known as the Foreign Assistance Dashboard.

Finally, aid and development decisions need to be guided by rigorous evaluation, MFAN says. Together, transparency and evaluation will help these agencies to achieve stronger results for both U.S. taxpayers and communities receiving U.S. assistance.

In all of this, Ingram notes, learning is one of the most important aspects in the policy proposal. “Data and evaluations are useless unless we learn from them and use them to make better decisions and achieve better results,” he says.

Defining partners

The aid paradigm has already shifted, MFAN’s report suggests. “Today, countries that give support through bilateral assistance and countries that receive such support are partners,” it states.

Yet how exactly to define those partnerships remains a work in progress.

“Aid should be structured in a way that citizens and NGOs can monitor how the government implements development projects,” CGD’s Dunning says, “and how the resources are utilised.”

Would such an approach run the risk of strengthening corruption at lower levels? Dunning says this isn’t necessarily the right question.

“We can’t shy away from the corruption issue, since it’s such an integral issue for debate,” she says. “And transparency is the key. It is vital to every programme, every sector. Together with other tools, such as evaluation and learning, transparency contributes to sustainable country ownership, which militates against corruption.”

MFAN’s Ingram, meanwhile, sees the empowerment of local communities as an anti-corruption tool in itself.

“Engaging smart and trusting people who know the culture and know how to manoeuvre through the dynamics of that country is very important,” he says.

“Informed and empowered citizens who demand good governance and sound priorities act as a check against corruption.”

Child labourers rescued in Delhi waiting to be sent back to their villages. Credit: Bachpan Bachao Andolan/IPS

By Farangis Abdurazokzoda
WASHINGTON, Apr 16 2014 (IPS)

Modern-day slavery can be eradicated from multinational supply chains, but only if global businesses contribute to greater transparency and collaboration, according to new recommendations by Sedex Global and Verite.

“Human trafficking and slavery in the supply chain are global issues,” Mark Robertson, head of marketing and communications at Sedex Global, which provides a collaborative platform for responsible supply-chain data, told IPS.“Modern day slavery carries risks for companies. It can seriously affect a brand’s reputation.” -- Mark Robertson

“But these issue are not unsolvable and there are good examples of companies – and initiatives – tackling the issue.”

There are thought to be some 11.7 million victims of forced labour in Asia, followed by 3.7 million in Africa and 1.8 million in Latin America. Slave labour is part of the production of at least 122 consumer goods from 58 countries, according to the 2012 International Labour Organisation statistics listed in the briefing.

The U.S. federal government compiles its own such list of products produced by slave or child labour. According to the latest update, last year, some 134 goods from 73 countries use child or forced labour in the production processes.

Certain sectors are particularly vulnerable to human trafficking and forced labour. According to the new briefing and backed up by these other lists, particularly problematic sectors include agriculture, mining and forestry, as well as manufacturers of apparel, footwear and electronics.

“Asia is the source of many of the world’s manufactured goods, and also home to half the world’s human trafficking – the majority of which is forced labour,” Anti-Slavery International’s Lisa Rende Taylor notes in the report.

Almost 21 million people are victims of human trafficking worldwide, according to the briefing, 55 percent of whom are women and girls.

Migrant workers and indigenous populations are considered particularly vulnerable to forced labour. The briefing highlights issues that analysts say have not yet been sufficiently addressed, such as “broker-induced hiring traps”, exacerbated by steadily increasing volumes of migrant workers all around the world.

“For workers, labour brokerage increases migration and job acquisition costs and the risk of serious exploitation, including slavery,” the report states. Further, the presence of both well-organised and informal brokerage companies “in all cases” increases migrant vulnerability.

“The debt that is often necessary for migrant workers to undertake in order to pay recruitment fees, when combined with the deception that is visited upon them by some brokers about job types and salaries, can lead to a situation of debt-bondage,” the report states.

Globalised supply chains

Sedex and Verite highlight the importance of sourcing from responsible businesses and offer recommendations for both brands and suppliers on how to engage in ethical practices in supply chains.

“We are hoping to help companies understand the risks that they and their partners face with regard to the modern slavery,” Dan Viederman, the CEO of Verite, a watchdog group, told IPS. “It takes more commitment from companies to really understand what is happening amongst the hidden process among their business partners.”

Viederman says the new campaign by Verite and Sedex Global will work to motivate companies and their suppliers.

Globalisation and “complex and multi-tiered” supply chains have made it massively more difficult to detect forced labour and human trafficking, the new report states. Thus, “companies need tools, protocols and policies to effectively audit trafficking and to establish mechanisms to protect workers.”

The briefing recommends companies step up actions to “raise awareness internationally and externally of the risks of human trafficking” and to establish corporate policies to address related issues. Particularly important is to “map supply chains, which would help identify vulnerable workers and places of greatest risk.”

Sedex Global, with over 36,000 partners, allows member companies to upload all social audit types, which are primary tools for brands to assess their own facilities and those of their suppliers to detect workers abuse.

The Sedex platform highlights social audits, conducted between 2011 and 2013, that show that a “lack of adequate policies, management and reporting on forced labour” as well as a “lack of legally recognised employment agreements, wages and benefits” can indicate a risk of forced labour being present.

“Modern day slavery carries risks for companies,” Robertson says. “It can seriously affect a brand’s reputation.”

Nor is slavery an issue that affects only developing countries.

“Since 2007, more than 3,000 cases of labour trafficking inside the United States have been reported – nearly a third from 2013 alone,” Bradley Myles, the CEO of the Polaris Project, a U.S. anti-trafficking group, says in the new report.

“And there are so many more people who are trapped that we haven’t heard from yet. Business can and should take steps to eradicate this form of modern slavery from their operations and supply chains.”

California model

Consumers also have enormous power – if they use it. But “the issue has not pervaded the conscience of society quite yet,” Karen Stauss, director of programmes for Free the Slaves, an advocacy group, told IPS.

“The word hasn’t gotten out. Consumer power, the company’s buying as well legislative powers, should all be part of the resolution.”

Stauss says a good model comes from a state law here in the United States, called the California Transparency in Supply Chain Act, or SB-657. This would require publicly traded companies to disclose what efforts they are making to eradicate human trafficking and slavery from their supply chains.

Many companies, however, do not yet appear to have formal anti-slavery policies. According to the Corporate and Social Responsibility press release, out of 129 companies urged to conform with the California law by Know the Chain, an anti-slavery group, only 11 have done so.

The director of communications of Humanity United, Tim Isgitt said, “After months of outreach to these corporations, approximately 21 percent on the list are still not in compliance with the law.”

“It is necessary to push all businesses, not only progressive ones, to be more transparent to their customers and their investors in their supply chains,” Free the Slaves’ Stauss says.

“Although multinationals might not be directly involved in the exploitation of forced labour, they can help confront it by using their buying power to influence their direct and marginal partners who are involved in the production of the raw materials, where human trafficking and forced slavery are most prevalent.”

Residents of Nairobi's Mathare slum, one of the largest in Kenya. Credit: Miriam Gathigah/IPS

By Farangis Abdurazokzoda
WASHINGTON, Apr 10 2014 (IPS)

Global income inequality threatens economic and social viability, according to a World Bank report released Thursday, reiterating a new but increasingly forceful narrative from both the bank and International Monetary Fund (IMF).

Yet as the two Washington-based institutions gather here this week for semi-annual meetings, anti-poverty campaigners are calling on the bank and IMF to translate such rhetoric into practice.“Fewer than 100 people control as much of the world’s wealth as the poorest 3.5 billion combined.” -- World Bank President Jim Yong Kim

“World Bank President Jim Kim and IMF Managing Director Christine Lagarde have been vocal about the dangers of skyrocketing inequality, but there is still a long way to go,” Max Lawson, the head of policy and advocacy for Oxfam GB, a humanitarian and advocacy group, told IPS.

“There’s no trade-off between growth and inequality,” concurred his colleague, Nicolas Mombrial, of Oxfam America. “There will be no inclusive growth if economic inequality remains out of control.”

Oxfam and other groups are now calling on the World Bank and IMF to take concrete action to address issues associated with wealth inequality worldwide. IMF policies in particular have been criticised in the past for particularly negative impacts on poor and marginalised communities.

“We are pleased to see the IMF recognise that drastic fiscal consolidation policies have been a drag on growth, something that unions have been saying since the inappropriate shift to austerity made in 2010,” Sharan Burrow, general secretary of the International Trade Union Confederation (ITUC), said Thursday.

“The IMF’s undermining of labour standards and collective bargaining institutions in several European countries, for example, has already had important impacts on income distribution that are likely to intensify in the future. We urgently call for a review and major changes in the Fund’s labour market policies.”

Oxfam’s Lawson lists at least three areas that he would like to see receive serious consideration by the IMF and the World Bank.

“First of all, it is necessary to develop a more adequate measurement of income inequality,” he says. “This needs to look at not only the income of the bottom 40 percent of the world’s income earners are measured but also the income flows of the world’s top 10 percent.”

Lawson suggested that the IMF, given its constant and influential interaction with the world’s governments, would be particularly well placed to advance a stronger measurement of inequality.

“Secondly, it is necessary to reform taxation schemes,” Lawson continued. “It is not fair that a billionaire pays a lower percentage in tax than a bus driver. And thirdly, it is essential to provide access to universal health care and education.”

Oxfam is also calling on governments to address inequality by focusing more robustly on tax dodging and related financial secrecy. Along with others, the group is calling for a global goal to end extreme inequality as part of the discussion around the post-2015 international development goals.

“We cannot hope to win the fight against poverty without tackling inequality,” Oxfam says. “Widening inequality is creating a vicious circle where wealth and power are increasingly concentrated in the hands of a few, leaving the rest of us to fight over crumbs from the top table.”

Widening gap

Inequality has become a particularly prominent topic in international policy discussions over the past two years. In part this is because, in the aftermath of the global economic downturn of 2008, the rich have bounced back much more quickly than the poor – thus widening the inequality gap.

A recent list of global billionaires published by Forbes underscored the scope of the problem. According to that data, just 67 people have as much wealth as the poorest 3.5 billion people.

“Fewer than 100 people control as much of the world’s wealth as the poorest 3.5 billion combined,” World Bank Group President Jim Yong Kim said Thursday at the start of the World Bank-IMF Spring Meetings. At similar meetings last year, Kim announced a new bank goal of eliminating extreme poverty by 2030.

Yet on Thursday he warned that economic growth is not enough to reach that goal.

“Even if all countries grow at the same rates as over the past 20 years, and if the income distribution remains unchanged, world poverty will only fall by 10 percent by 2030, from 17.7 percent in 2010,” he said.

“We need a laser-like focus on making growth more inclusive and targeting more programmes to assist the poor directly if we’re going to end extreme poverty.”

Kim’s warning is underscored in a press release published on Thursday by the bank.

“Rising inequality of income can dampen the impact of growth on poverty,” the paper says.

“In countries where inequality was falling, the decline in poverty for a given growth rate was greater. Even if there is no change in inequality, the ‘poverty-reducing power’ of economic growth is less in coun­tries that are initially more unequal.”

The paper emphasises that the governments and donors can’t aim only to lift people out of extreme poverty, but also have to ensure that people aren’t “stuck just above the extreme poverty line due to a lack of opportunities that might impede progress toward better livelihoods.”

“Persistent inequality, where the rich are continuously advantaged and the rest struggle to catch up, makes people frustrated with the system,” Carol Graham, a scholar at the Brookings Institution, a Washington think tank, told IPS.

“Such inequality pre-programmes the public perception downward. And even in countries where there is a progress with regard to inequality, and social frustration impacts political instability.”

In a blog post, Carol Graham and another researcher tie recent protests in Chile, Brazil, Russia, Turkey, Venezuela, Ukraine and even the Arab Spring to widening income differential or inequality.

“The protesters are not a nothing-to-lose risk taker, but middle-aged, middle income, and more educated than average people who are unhappy about an unfair advantage of the rich and a lack of opportunities for the poor,” they write, calling the “prototypical” protestors “frustrated achievers”.

“Extreme inequality is particularly dangerous in countries in political and economic transition,” they note.

President Barack Obama signs executive actions to strengthen enforcement of equal pay laws for women, at an event marking Equal Pay Day, in the East Room of the White House, Apr. 8, 2014. Credit: Official White House Photo by Pete Souza

By Farangis Abdurazokzoda
WASHINGTON, Apr 9 2014 (IPS)

Since his re-election in 2012, President Barack Obama has stepped up his rhetoric around gender equality issues in the United States, but he has yet to get a partisan U.S. Congress to go along with a series of legislative proposals he put forward.

On Tuesday, Obama bypassed Republican opposition by signing two executive orders aimed at addressing wage disparities between men and women in the United States.

While the non-legislative executive orders he unveiled on Tuesday deal only with narrow issues, supporters say they offer an important initial attempt on Obama’s part to address stubborn disparities between how much money U.S. men versus women take home.

“Women make up nearly half of the nation’s workforce and are the primary breadwinners in 4 in 10 American households with children under age 18,” the president stated Tuesday in a speech at the White House. And yet “women still make only 77 cents to every man’s dollar. For African American women, Latinas, it’s even less.”

Obama said such statistics are an “embarrassment”. He is now calling on lawmakers and the public to recognise that it is the time for a valuation of individual’s contribution to the economy based solely on merit – and that this should not be constrained by gender.

Obama’s mandate will affect federal contractors, requiring that they publish wage data by both gender and race in order to ensure they’re complying with laws on wage equality that are already on the books. A second order prohibits those contractors from taking actions against employees who compare their salaries.

Tuesday is marked in the United States as Equal Pay Day.

“These orders … will help erase Equal Pay Day from the calendar,” the National Organisation for Women (NOW), and advocacy group, said Tuesday. “NOW applauds the executive orders President Obama is signing today, and what it represents — a step towards equality for women. It’s about recognising women’s work as equal to their male peers – and above all else, fairness.”

Some researchers suggest the wage-gap problem in the United States could be even greater than Obama indicates.

“Most studies I have seen that include many other characteristics of workers and the jobs using the same data tend to leave about 30 percent of the gender gap unexplained,” Jeffrey Hayes, study director at the Institute for Women’s Policy Research (IWPR), a think tank, told IPS.

Hayes warns that it is possible to “overcontrol” such models.

“For example, you can statistically control for the occupations and industries in which women and men work and this would explain some of the gap,” he says. “But if access to the good-paying jobs is one of the mechanisms that could be discriminatory, the researcher could be underestimating discrimination if only the unexplained part is considered as potential discrimination.”

Despite long understanding of the issue of gender-based wage gap in the United States, the situation appears to have stayed roughly the same for at least the past decade.

According to a comprehensive 2013 IWPR study, the earnings gap – measured as the ratio of women’s median annual earnings for full-time year-round workers – was 76.5 in 2012, thus corroborating Obama’s figure. Further, that study indicates this number remained unchained since 2004.

The gender wage gap is “not a myth”, Obama said Tuesday. The IWPR study concurs, stating this disparity is “a reality for women across racial and ethnic groups”.

Political tactic?

President Obama has previously signed a bill that should help bridge the wage disparity between male and female. In fact, the Lilly Ledbetter Fair Pay Restoration Act of 2009, named after a retired tire plant supervisor who discovered she was paid far less than her male counterparts, was the first bill signed by the president upon taking the office.

“From signing the Lilly Ledbetter Fair Pay Act to establishing the Equal Pay Task Force, I have strengthened pay discrimination protections and cracked down on violations of equal pay laws,” Obama said Tuesday.

“And I will continue to push the Congress to step up and pass the Paycheck Fairness Act, because this fight will not be over until our sisters, our mothers, and our daughters can earn a living equal to their efforts.”

Yet according to some estimates, the gender wage gap continues to extend right into the White House. A recent analysis by the American Enterprise Institute (AEI), a neoconservative think tank, found that female White House staff members on average earn 88 cents for every dollar that male staffers make.

Yet the National Organisation for Women is urging quick passage of the PFA.

“The Paycheck Fairness Act helps women fight the wage gap by requiring greater transparency from employers – who would have to show that wage differences are job-related and not gender-based – and protects employees from retaliation when they share information about compensation,” the group said Tuesday.

“NOW urges the Senate to pass this bill immediately. If equal pay for women were instituted immediately, across the board, it would result in an annual $447.6 billion gain nationally for women and their families. Over fifteen years, a typical woman loses $499,101 because she is paid less than a man. It’s unacceptable.”

The United States ranks among the highest in the world in gross domestic product (GDP) per capita, but only 16th among 132 countries in terms of social progress and environmental performance, according to a new index released Wednesday.

New Zealand, Switzerland, Iceland, the Netherlands and Norway topped the Social Progress Index (SPI), compiled by a U.S. nonprofit group called the Social Progress Imperative. Researchers say the results highlight an important discrepancy between economic growth and wellbeing."The tendency to ‘GDP envy’ is largely misplaced. GDP as an indicator has much less clout than the sustainability crowd tends to assume.” -- Marc Levy

“The United States is consistently under-performing across a wide range of indicators – often significantly below expectations – despite enjoying the second highest per capita GDP in the world,” Michael Green, executive director of the Social Progress Imperative, said Wednesday in unveiling the new index.

“The Social Progress Index highlights the scale of the challenges faced by the United States’ schools and health care systems.”

Proponents say the index offers a new way to gauge national wellbeing, including as an alternative or complement to the long-used gross domestic product (GDP), a purely economic metric.

“Until now, the assumption has been that there is a direct relationship between economic growth and wellbeing,” one of the index’s lead creators, Harvard Business School Professor Michael E. Porter, said Wednesday.

“However, the Social Progress Index finds that all economic growth is not equal. While higher GDP per capita is correlated with social progress, the connection is far from automatic.”

Friday marks the 80th anniversary of the formal idea of GDP, first presented to the U.S. Congress by economist Simon Kuznets as a measure of economic progress. Yet even then, Kuznets cautioned lawmakers not to use GDP as a measure of a nation’s wellbeing, which critics have echoed for years.

“GDP is an imperfect measure of a nation’s progress, as it over-measures expenditures on enterprises and defence, while overlooking important aspects of wellbeing such as home production,” Carol Graham, a researcher on poverty and inequality at the Brookings Institution, a Washington think tank, told IPS. “SPI, on the other hand, like any wellbeing index, contributes to what GDP measures and is better targeted at measuring quality of life.”

Others suggest that the metrics offered by the new index could be more in tune with recent social upheaval in the United States and elsewhere.

“SPI reflects the changes brought by the Occupy [Wall Street] movement that target the importance of the access to essential services, which are building blocks of a decent society,” Emira Woods, co-director of Foreign Policy in Focus at the Institute for Policy Studies, another Washington think tank, told IPS.

Still, others warn against attempting to supplant GDP completely.

“The Social Progress Index represents an ambitious, sophisticated effort to provide societies with a robust empirical basis for seeing how their national conditions stack up against their desires and against their peers,” said Marc Levy, of Columbia University’s Earth Institute.

“Yet the tendency to ‘GDP envy’ is largely misplaced. GDP as an indicator has much less clout than the sustainability crowd tends to assume.”

Mutually reinforcing

Using 12 variables assigned a score of zero to 100, the index is designed to measure a country’s social progress and environmental performance over the past decade.

Each of the variables is categorized under three dimensions, referred to as basic human needs, foundations of wellbeing and opportunity. Basic needs include nutrition and medical care, water and sanitation, shelter, and personal safety.

Wellbeing is assessed by access to both basic knowledge and to information and communications, health and wellness, ecosystem sustainability. Finally, opportunity is divided into personal rights, personal freedom and choice, tolerance and inclusion, and access to advanced education.

“Because the Social Progress Index measures comprehensive social outcomes directly, separately from economic indicators, it allows us – for the first time – to examine the relationship between economic and social progress,” Harvard’s Porter says.

The measures used by the SPI are designed to recognise the importance of inclusive growth and shared prosperity. The index’s creators say they hope policymakers can use this tool to develop and implement relevant policies in a more efficient, holistic and egalitarian manner.

Ultimately, the findings suggest that higher economic growth results in social and environmental challenges as well as benefits. “Economic progress is not equally distributed within countries and neither is social progress,” the report states, and economic performance alone is not enough to explain a nation’s overall wellbeing.

Despite being the world’s largest economies, for instance, the United States shows weakness in basic human needs. Compared to other wealthy countries, the country does particularly poorly in terms of personal safety (in which it ranked 31st) and what’s referred to as “foundations of wellbeing” (36th), especially in access to adult literacy, primary and secondary school enrolment, and gender parity.

Most notably, the health and wellness subcategory put the United States down to 70th in the world. Still, the country tops the list in access to advanced education, with the highest number of globally ranked universities and years of tertiary schooling.

This is not to say that the study doesn’t suggest a strong correlation between GDP per capita and social progress. For example, New Zealand – with a GDP per capita of 25,875 dollars – ranks higher than Chad, which holds the lowest rank in the index, with 1,870 dollars per capita income.

However, SPI scores that measure social progress do not necessarily go hand in hand with GDP per capita. While at lower income levels, higher GDP per capita shows stronger social performance, this trend does not apply to countries with higher income levels.

Thus, among high-income countries, Russia (80) performs much worse than Uruguay (26) on the SPI. In the middle-income group, Jamaica (43) ranks much higher than China (90).

In lower-income groups, Ghana (96) does better than Nigeria (123). Likewise, Malawi (109) performs better than Togo (122).

The SPI index of oil-rich countries, including Saudi Arabia (65), Kuwait (40), and Angola (127), was also lower than expected relative to their GDP per capita. Interestingly, countries like Malawi (109), New Zealand (1) and the Philippines (56) performed much better than expected, based on their GDP.

It is also possible that “economic progress and social progress reinforce each other,” the report concludes, noting that future such work needs to understand “the mutual interdependence between economic and social performance.”