After coming under fire from environmental and social justice organisations for violations of land protection laws, Herakles Farms, a New York-based agricultural company, has suspended a large, controversial palm oil project in Cameroon.

The announcement comes after the Cameroonian government ordered the company to halt its operations, saying the project had failed to obtain necessary permits. Critics of Herakles’s Cameroon plans are celebrating the decision as a victory for the power of local community activism, though the suspension is currently seen as merely temporary."If you think you’re going to go into an African country and do as you please to make some quick money, it now turns out you’re in over your head." -- Anuradha Mittal of the Oakland Institute

“People on the ground are celebrating, and the suspension is being viewed as recognition of the [Forest] Ministry standing up for what is right,” Anuradha Mittal, executive director of the Oakland Institute, a U.S. watchdog group that has followed Herakles Farms’ Cameroon project for years, told IPS.

“In fact, what it shows is that it’s communities on the ground that will make governments honourable – and that’s what democracy is supposed to look like. This is sending a strong message that African countries are open for business, but they’re not open for theft.”

In a 2009 agreement, the Cameroonian government authorised a Herakles Farms subsidiary to develop more than 73,000 hectares for new palm oil plantations. Much of this forestland has reportedly already been cleared, and the company says it is currently in the process of transporting saplings to the plantation areas from nurseries.

Yet local NGOs have increasingly accused Herakles Farms of ignoring community concerns and failing to comply with both court mandates and a government injunction. The company’s decision to suspend the operation now comes following a mid-April order from the Forest Ministry that the company halt a logging operation in the Cameroonian southwest.

A request for comment from Herakles on Friday was not responded to by deadline.

Ministry officials say Herakles has failed to attain two required permits, with Forestry Minister Ngole Philip Ngwesse noting Thursday that previous agreements between the company and government don’t “exempt” Herakles from following “legal procedure”.

Ngwesse said his office was forced to act following grievances lodged by local communities. Authorisation to resume operations is now based on a “declaration of public usefulness”, according to the ministry.

In announcing the suspension of work, Herakles stated that it “always has and will comply fully and transparently with government regulations in force” and that it “hopes to understand and resolve these actions” by the ministry. Noting that nearly 700 employees involved in the project could now be furloughed or laid off, Herakles said it “finds these events especially tragic”.

Need to “safeguard reputation”

Yet according to Mittal, newly released evidence of Herakles’s internal operations suggests that moving forward could be complicated for the company, which says it has invested some 350 million dollars in the Cameroon project.

“Given the other evidence that we have of the company’s mismanagement, it will be interesting to see how exactly they decide to handle this,” she says.

“After all, this could now undermine a misconceived business plan. If you think you’re going to go into an African country and do as you please to make some quick money, it now turns out you’re in over your head – and there’s no way to fix that quickly.”

Earlier this week, the Oakland Institute and Greenpeace International jointly released a report highlighting wide discrepancies between how Herakles was presenting its projects in Cameroon to investors and consumers and the environmental and social impacts on the ground.

At the heart of the issue is Herakles’s presentation of the Cameroon project in a way that emphasised its purported environmental sustainability and beneficial impact on local communities – the company even began its own development group, called All for Africa. Yet internal documents included in the report now show that executives at Herakles were aware of the legal holes in the investment.

One e-mail between company executives called the management situation in Cameroon “pathetic” with a “grossly overstaffed office”, and urged “formal approval from the government for land concession”. The e-mail also warned that the situation in Cameroon should be addressed “to safeguard Herakles investments and reputation”.

“What’s really unique about this [instance] is the web of lies and deceit,” Samel Ngiuffo, director of the Center for Environment and Development, a Cameroonian NGO, told reporters this week. “It’s not just to consumers … it’s to investors and the Cameroonian government.”

Chief among these allegations is that Herakles, despite denials to the contrary, began clearing forest and developing palm nurseries before obtaining certificates required by Cameroonian law. According to the report, some evidence suggests that the projects have been in violation of those laws since 2010.

Herakles has also touted the project’s employment potential. Its corporate website, for example, states that the company has developed a “staffing plan and will work closely with village leaders to identify and train candidates and employ as many of those seeking employment as possible.”

Yet a convention Herakles signed in 2009 allows the company to pay according to minimum wage scales “fixed on the basis of productivity and efficiency criteria”, rather than according to Cameroonian minimum wage laws.

“Small-scale farmers who are already producing cash crops like cocoa are making far more independently operating than they would be as labourers in a Herakles plantation,” Brendan Schwartz, a forest campaigner with Greenpeace International, told reporters this week.

Additionally, Herakles Capital, an affiliate company, is a member of the Roundtable on Sustainable Palm Oil, a group designed to set and monitor environmental standards for such investments. The group formally prohibits its members from using so-called high conservation value forests (HCVF), or forests designated as ecologically, economically or culturally vital, for palm plantations.

Despite this, the new report points out that the Germany Agency for International Cooperation (GIZ), among other monitoring groups, has indicated that “part of the [Herakles] concession area has to be considered as HCVF.”

Now, the Cameroonian government’s strong position on the Herakles project shouldn’t be read as an attempt to close the door on foreign investment, the Oakland Institute’s Mittal cautions.

“The ministry is not saying that Cameroon is a bad place to invest,” she says. “It’s just saying that investors need to follow the proper regulations.”

Labour groups here are stepping up pressure on U.S. firms to sign a binding building safety agreement for Bangladeshi factories after 10 major European garment companies signed onto the landmark agreement.

H&M, a major European apparel chain, signed the agreement Monday, and Benetton, which was under fire from activists after their clothing was found in the ruins of the Rana Plaza factory which collapsed in late April, signed on Tuesday.

The ruins of the eight-story Rana Plaza factory. Credit: Rijans/CC BY-SA 2.0

The nearly month-long search for victims in the wake of the Rana Plaza collapse ended Monday, after the death toll had reached 1,127.

“H&M’s decision to sign the accord is crucial,” Scott Nova, executive director of the Worker Rights Consortium (WRC), an independent labour rights watchdog group based in Washington, said in a press release.

“They are the single largest producer of apparel in Bangladesh, ahead even of Walmart. This accord now has tremendous momentum.”

Other European companies that signed the accord, known as the Bangladesh Building and Fire Safety Agreement, included Inditex, C&A, Primark and Tesco. By Tuesday evening, the only U.S. company to agree to the accord was PVH, the parent company of Tommy Hilfiger and Calvin Klein, which signed last year.

According to the International Labor Rights Forum (ILRF), an advocacy organisation, the new agreement covers all major areas needed to ensure its effectiveness: “independent safety inspections with public reports, mandatory factory building renovations, the obligation by brands and retailers to underwrite the cost of repairs, and a vital role for workers and their unions”.

The pact also calls for participating companies to pay up to 500,000 dollars a year toward building maintenance and safety in Bangladeshi factories, to bring them up to a specified standard. According to Liana Foxvog, ILRF communications director, the associated costs would translate into about ten cents per garment.

The agreement between several major European companies has also been significant in that it now focuses a spotlight on the relative inaction of their U.S. counterparts – and narrows and intensifies the pressure from labour groups on U.S. companies to sign the pact.

“The fact of European brands signing on is very important for the Bangladesh garment industry,” Foxvog told IPS. “It’s time for U.S. companies to sign on as well.”

Labour groups are particularly focused on Walmart and Gap, two of the largest and most influential companies that source from factories in Bangladesh. Foxvog said that “If Gap changes its mind, we expect that more U.S. companies will sign on.”

Gap, which was close to signing the agreement last year before starting its own non-binding, voluntary agreement with factories in Bangladesh in October 2012, said Monday that the company was concerned about possible “legal liability” issues that could arise.

The company said Tuesday that it was “six sentences away” from signing the accord and would accept if those proposed sentences, which lessen its liability concerns, were accepted.

But critics say such arguments have little substance behind them.

“They’re nonsense,” WRC’s Nova told IPS. “Ask Gap wherein the legal liability lies; ask them to point to the language in the agreement that creates legal liability for them – they can’t do it. What Gap wants is an agreement that can’t be enforced. The stuff about legal liabilities is a ruse.”

Foxvog expressed similar sentiments.

“Gap is saying it doesn’t want to be held accountable for the working conditions (in the factories) and other commitments of the safety agreement,” she said.

Company-led change

Still, labour rights groups are growing increasingly optimistic, as companies seem to be facing increasing pressure to conform to multi-stakeholder agreements, and the Bangladeshi government has shown signs of committing to stronger labour standards.

On Monday, Bangladesh’s cabinet lifted restrictions on forming unions, reversing a 2006 law that required employees to obtain permission from an employer before organising.

And the previous day, the government set up a new minimum wage board that will include factory owners and workers, and government officials, and will recommend pay raises. However, the decision to implement these new standards will still need to be approved by the cabinet.

But for broader change, advocates argue that the active participation of multinational companies is key to bringing about permanent change in the Bangladeshi garment industry. Proponents are now hoping that the announcement by the 10 European companies – with more, perhaps, to come – could now create a transatlantic ripple effect.

“This is a really tremendous advance to have … global brands and retailers make a binding commitment to worker safety,” Judy Gearhart, executive director of the ILRF, said in a statement. “Now we need major U.S. brands and retailers such as Walmart, Gap, and JC Penney to join in the same agreement.”

Walmart has said its own safety plan meets or exceeds the building and fire safety code’s standards, but added that it would continue to discuss the plan.

Howard Riefs, spokesman for Sears, also a large producer in Bangladesh, said late Tuesday that while the company is still in discussions over the plan, it is not yet ready to sign on. JCPenney and The Children’s Place are also reportedly still evaluating the plan.

Last week, the ILRF and United Students against Sweatshops, an advocacy group, launched a new website, designed to ramp up pressure on Gap to sign the Bangladesh Fire and Building Safety Agreement.

“I find it hard to believe that Gap is irresponsible enough to continue on this course of action (of avoidance) any longer,” Nova told IPS.

Syrian refugee children learn to survive at a camp in north Lebanon. Credit: Zak Brophy/IPS.

By Katelyn Fossett
WASHINGTON, May 14 2013 (IPS)

Humanitarian assistance groups in Washington are warning that the health care system has become a deliberate target in the increasingly brutal civil war in Syria, presenting major challenges to addressing the humanitarian and refugee crises spurred by the conflict.

In a meeting with U.S. President Barack Obama on Monday, UK Prime Minister David Cameron stressed the centrality of the unfolding health crisis, emphasising the need in Syria to “care for trauma injuries, help torture victims to recover, [and get] Syrian families clean drinking water”.

Health aid is meeting significant obstacles, though, as the public health system in Syria reportedly has been largely dismantled after being targeted by Bashar al-Assad’s regime, which has wiped out a third of the hospitals in the country.

“The systematisation of the attacks [in Syria]…certainly served its purpose,” Stephen Cornish, executive director at Médecins Sans Frontières (MSF) in Canada, said recently at a panel discussion in Washington. “It created a flight of many medical personnel and destroyed large numbers of hospitals and interrupted public healthcare in a significant way.”

According to the Violations Documentation Centre, a Syrian human rights organisation based in Damascus, 469 health workers are currently imprisoned in Syria. Tom Bollyky, a senior fellow at the Council on Foreign Relations, a Washington think tank, estimates that around 15,000 doctors have been driven out of the country.

Bollyky noted that these attacks are one conflict’s manifestation of a disturbing global trend in which medical facilities and personnel become more frequent combat targets in conflict zones. In a March report, the Independent International Commission of Inquiry on the Syrian Arab Republic accused the Assad regime and opposition groups of strategically targeting medical facilities and personnel."Attacking medical personnel is a way of depriving a population of the humanitarian support they need."
-- Tom Bollyky

“Attacking medical personnel is a way of terrorising a population and depriving them of the humanitarian support they need,” Bollyky told IPS.

He pointed to similar instances in the Middle East and Asia, particularly coordinated attacks by the Taliban on polio immunisation volunteers in Afghanistan and Pakistan. On Monday, the Taliban announced it was halting its years-long effort to sabotage the campaign to eradicate polio among children in these two countries.

Such attacks are specifically outlawed in the Geneva Conventions, which entitle hospitals and medical staff to protection from hostile fire.

“Medical personnel are absolutely protected under international law,” Bollyky noted. “There is no circumstance where it is okay to attack medical personnel or facilities, and it is certainly happening on both sides.”

Silent casualties

The targeting of the Syrian health care system has not only left those wounded by combat without urgently needed care but has also exacerbated a public health crisis brought on by the poor living conditions of refugee camps outside of Syria.

Refugees from the conflict currently number more than one million, and the United Nations is warning that figure could swell to 1.5 million by the end of this year. That number is dwarfed by the more than 4.2 million Syrians who are displaced within Syria.

In addition to the systematic targeting, Syrian medical facilities are reportedly being “cannibalised” to serve military ends.

Zahir Sahloul, a doctor with the Syrian American Medical Society, told an audience on Friday about the looting of the two main hospitals in Aleppo – an eye hospital and a children’s hospital – that now serve as bases of operations for military battalions.

“Besides the destruction of the public health system, there is no sewer system,” Sahloul said “[There is a] lack of hygiene because of lack of electricity and sometimes water…and lack of diesel fuel. And because of that, you have a resurgence of some of the epidemics that weren’t there before.”

Chronic illnesses that were relatively easily treatable before the outbreak of the conflict – diabetes, or high blood pressure, for example – are now deadlier than ever, leading to what MSF’s Cornish called “silent casualties”.

These patients can’t be referred outside of the country because they aren’t considered emergency cases. But they also can’t be treated inside Syria because the necessary facilities and healthcare providers simply don’t exist anymore.

“Folks who have cancer and had their chemotherapy interrupted, all they can have is palliative medicine,” Cornish said. “And slowly, day by day, they die.”

Health workers are increasingly ill-equipped to deal with these growing problems, expert say, as their capacities are being undercut by suspicions over loyalty.

“In Syria, if you are a physician who is…’treating people from the other side’, you put your life at risk,” Sahloul said.

As humanitarian groups try to find solutions to the challenges to health and humanitarian assistance, observers appear united in their calls to the international community to ramp up pressure on both sides to stop hospital and medical staff attacks and to have more respect for international humanitarian standards.

Geneva Call, a non-governmental organisation in Geneva that focuses on engaging non-state actors in international humanitarian law, released several short video spots promoting respect for international humanitarian standards. One of the videos’ titles was “Respect and Protect Medical Personnel and Objects”.

Tom Bollyky suggested that treating these violations with more seriousness in the International Criminal Court– and recognising the international community’s responsibilities in combating them – would be a step in the right direction.

“You have seen a surge in these attacks, but you have not seen a surge in the indictments being brought against the people behind them,” he said. “The international legal system is not known for being expeditious, but it would be a form of real condemnation.”

Cutting trees in Nicaragua. Deforestation is inherent to the predatory economy, whether for the exploitation of the timber itself, the soil beneath the trees, or resources in the subsoil. Credit: Germán Miranda/IPS

By Katelyn Fossett
WASHINGTON, May 7 2013 (IPS)

More than two dozen environmental organisations are urging California Governor Jerry Brown to disregard recommendations from a United Nations task force to include so-called forest “offsets” in the state’s new emissions-trading scheme.

The offsets would serve as a mechanism by which emissions-producing companies in California could continue to pollute if they compensate foreign governments for the protection of their own forests."The carbon market is just proving to be extremely complicated, and not benefiting people at all." -- Bill Barclay of Rainforest Action Network

But critics say the consequences of such a policy would have repercussions that extend far beyond the environment.

“Independent investigations into the promotion of international forest offsets have raised serious concerns related to human rights violations and there is major opposition from indigenous peoples and local communities in both Chiapas, Mexico and in Acre, Brazil,” the groups said in an open letter sent this weekend.

Environmental groups say the move would simply shift the pollution from one country to another, rather than addressing the root causes of deforestation and climate pollution. The scheme would also create another set of economic and social problems for the communities in the regions paid to preserve their forests.

“Offsets are problematic in a number of ways,” Jeff Conant, director of the International Forests Programme at the U.S. office of Friends of the Earth, an activist network, told IPS. “First, they don’t actually reduce emissions. They just misplace emissions.”

The recommendations to include the offsets in new climate change-related legislation in California (known as AB-32) came from the REDD Offset Working Group (ROW), formed to implement a collaborative effort designed by the United Nations called REDD (which stands for Reduced Emissions from Deforestation and Forest Degradation).

As described by the U.N., REDD is “a mechanism to create an incentive for developing countries to protect, better manage and wisely use their forest resources, contributing to the global fight against climate change.”

Although California’s AB-32 already has a domestic offset exchange programme, the move to expand it globally prompted a vehement response last week from groups in Mexico worried about the possibility of “land-grabbing”.

The REDD programme “allows Northern polluters to purchase forest carbon offset credits from the global South,” the 15 groups, from Chiapas, Mexico, wrote in late April.

“This Agreement is underpinned by the logic of capitalist accumulation: it enables the purchase of carbon credits that will legally allow the continuation of the predatory and consumerist model.”

The response recommends instead that the “consumerist countries of the North … implement urgent mechanisms to reduce greenhouse gas emissions without substitutions or offsets, and with a focus on the reduction goals of their own countries”.

‘Gaming, corruption, error’

“In Chiapas, you have customary titles and [land] rights that haven’t been fully resolved,” Bill Barclay, climate policy advisor at Rainforest Action Network, and advocacy group based here, told IPS.

“It’s a very complicated situation, and when you bring in someone who might come in and impose that and do it quickly and cheaply, it elevates social conflict.”

These critics are also wary of the potential pitfalls that could accompany payments to countries with little oversight and government accountability.

“Once you involve international entities – especially the most impoverished states in the hemisphere – you’re getting to a state … with a lot of gaming, corruption, fraud and error,” Jeff Conant says.

Activists say these problems shine a light on the broader complications that tend to lurk in a system as complicated as emissions trading or “carbon markets”.

“This is about the most complicated way you could come up with to try to bring money into the market to reduce emissions and generate innovations,” Conant says.

“There’s an ideology that says that allowing the markets to fix the climate problem is the most efficient way to go… Unfortunately, [the market] does not work in the favour of the most marginalised communities that are on the front lines.”

In fact, carbon offsets have critics even among pro-market economists. The new letter references the findings of a 2011 report that examined REDD from a “market perspective”, using the authors’ “experience in derivatives trading and systems architecture”.

Known as the Munden Report, it found that “using carbon markets to finance REDD… is likely to be a drain of resources, both in terms of money and time, away from the very serious problems REDD seeks to address.”

The letter from environmental groups also comes just as new reports have emerged on collapsing carbon prices in Europe, where the world’s first and most established carbon market is floundering.

Although the European system decided not to rely on forest offsets, many are still suggesting that the collapse of the E.U. carbon prices could have ripple effects for similar markets worldwide, particularly as advocates push for interlinking these systems down the road.

Both the price collapse in Europe and the social consequences of an international carbon offset exchange have bolstered support for the more direct carbon tax. Although this has been the preferred mechanism by environmental groups, it continues to be thought politically unviable in the U.S., at least for the time being.

“I think there is going to be a greater shift to carbon fees and away from carbon markets,” Barclay of the Rainforest Action Network told IPS.

“The carbon market is just proving to be extremely complicated, and not benefiting people at all. There’s just too much gaming and speculation, and it’s been too poorly regulated.”

Sixteen-year-old Parul, hailing from Dhaka's Batara slum, is paid about 15 dollars a month for her work in a garment factory. Also in the picture are her younger brothers and a cousin. Credit: Naimul Haq/IPS

By Katelyn Fossett
WASHINGTON, May 3 2013 (IPS)

Worker advocacy groups here are calling on some of the most high-profile U.S.-based clothing companies to make drastic reforms to their international labour practices in the wake of the factory collapse that killed more than 420 workers in Dhaka last week.

But critics say U.S. companies appear to be “meeting” these demands with increasingly creative ways to circumvent their core recommendations, by forming their own safety initiatives that rights groups say are essentially meaningless, or pulling out altogether to avoid the risk."What we see are token donations and empty promises that can’t be enforced." -- Scott Nova of the Workers Rights Consortium

“Any meaningful programme needs to be legally binding,” Liana Foxvog, communications director at the International Labor Rights Forum (ILRF), an advocacy group here, told IPS.

“It needs to pay prices sufficient for ensuring compliance and needs to include worker representation so that worker voices on what they truly need are at the table.”

The collapse of an eight-storey factory building known as Rana Plaza was initially reported to have killed more than a hundred workers. As the week progressed and a major fire broke out, that figure quadrupled, setting off a public relations storm as human rights companies scrambled to identify the companies that sourced from the factory.

U.S.-based companies The Children’s Place and Cato Fashion have both been tracked as sourcing from the factory, but companies such as JCPenney, which sells European brands manufactured at the factory, are also under pressure from activist groups.

“Deadly psychology”

As critics strengthened calls for substantive changes in business practices to prevent another Dhaka tragedy, multinational companies responded this week with a flurry of press releases and attempts at deflecting blame.

“We did not have any ongoing production at the time of the incident,” Cato said in a statement.

The Children’s Place issued a similar statement, saying “none of our apparel was in production” there at the time of the collapse.

Activist groups also point to companies’ reluctance to sign onto a binding agreement known as the Bangladesh Fire and Building Safety Agreement as a lack of commitment to worker safety.

“The clothing brands’ insatiable hunger for lower prices and faster delivery by factories cultivates this deadly psychology in Bangladesh,” the Workers Rights Consortium (WRC), an independent monitoring group, said in a statement.

According to the WRC, the agreement would obligate participating companies to “open the doors of their Bangladesh factories to independent inspection and … pay for a country-wide program of renovations and repairs to make these buildings safe.”

The agreement, negotiations over which began in December 2010, needs four companies to become binding; so far, it has only attracted two.

One of the most notable instances of a prominent company bowing out of the negotiations was GAP, Inc., which owns GAP, Old Navy, and Banana Republic, among others. The company chose instead to create their own programme in October 2012.

Yet critics say that GAP’s alternative plan is inadequate. The plan carries no provisions about paying more to factories so they can abide by safety standards, for instance, and does not involve workers or unions in oversight and implementation.

Most importantly, the plan is voluntary and has no teeth for enforcing the measures. IPS contacted GAP for comment but did not receive a response.

Walmart, one of the largest retailers in the United States, denied a connection to Rana Plaza to IPS, but had been listed on the factory website, raising questions from activists. It has taken a similar route to that of GAP.

In an e-mail from the company’s international corporate affairs office, IPS was referred to a description of the store’s 1.6-million-dollar donation after the Tazreen fire in 2012 to establish the Environment, Health and Safety Academy in Bangladesh. The Academy would give “comprehensive training” on workplace safety to apparel workers.

Walmart also pointed IPS to a press release about the company’s “strengthening” of fire safety regulations in January 2012 in its factories.

Those regulations include “conducting regular fire drills, ensuring adequate number of exit routes and mandating fire safety training to all levels of factory management”, which critics say underscore a weak and inadequate commitment.

All a game

Missing from both GAP’s and Walmart’s plans is any mention of higher pay to suppliers to pay for safer buildings, which some critics say would be the first line of response if the companies were genuinely committed to the safety of their workers.

This is all just part of a “game” these companies play, Scott Nova, executive director of the Workers Rights Consortium, told IPS.

“These companies recognise they have to claim they’re doing something in order to avoid damage to the image of the brand, but they don’t want to have to do anything,” he said.

“So what we see are token donations and empty promises that can’t be enforced. They weather the public relations crisis and expect [the media spotlight] to fade.”

Ahead of President Barack Obama’s trip to Mexico and Costa Rica, experts here are expecting that security will take a back seat to issues of economic cooperation between the U.S. and Mexico.

Mexican President Enrique Pena Nieto. Credit: cc by 2.0

But some Washington advocacy groups are sounding alarms about shifting away too soon from critical security and rights concerns.

“A lot of the focus is going to be on economics,” President Obama told reporters Tuesday. “We’ve spent so much time on security issues between the United States and Mexico that sometimes I think we forget this is a massive trading partner responsible for huge amounts of commerce and huge numbers of jobs on both sides of the border.

“We want to see how we can deepen that, how we can improve that and maintain that economic dialogue over a long period of time,” he continued.

This shift is notable, as issues of security, law enforcement and combating crime formed the backbone of U.S.-Mexican relations during the previous Mexican administration.

“Even before [former Mexican President Felipe] Calderon took office, it was part of the discussion with the U.S., and the U.S. and Mexican administrations went on to develop a close and complex relationship on security matters,” Eric Olson, associate director of the Latin America programme at the Woodrow Wilson Center, a Washington think tank, told IPS.

President Obama is slated to meet with Mexican President Enrique Pena Nieto later this week before meeting with Costa Rican President Laura Chinchilla.

“President Obama having a visit [early in his second term] symbolises the importance of Mexico to the U.S.,” Chris Wilson, an associate at the Mexico Institute, a think tank here, told IPS.

The United States is Mexico’s largest trading partner, and the two countries engaged in nearly 500 billion dollars worth of trade in 2012. Much of that trade is in what are known as intermediate inputs, referring to semi-finished U.S. goods that are finalised with Mexican resources, a process seen as increasing the competitiveness of both countries.

Remittances sent home from Mexican immigrants living in the United States are also a substantial factor in the countries’ economic ties, totalling more than 20 billion dollars last year.

The upcoming summit’s focus on economics squares with a narrative gaining traction in media coverage and academic circles in recent years that paints a picture of an economically booming Mexico.

“During the administration of Calderon, the perception of Mexico in the media was largely one of drugs and violence – the headlines about Mexico were about drugs and trafficking, organised crime, gruesome violence,” Wilson recalls.

“But the new [Mexican] administration has come in at a time when economic growth is pretty robust. They are trying their best to shift the narrative of Mexico by talking more about these economic issues: the reforms that are happening in Mexico that will promote growth, new investments coming into Mexico that will promote growth.”

Development’s Achilles heel

Still, for a country like Mexico that is still struggling with issues of citizen security and rampant crime, many suggest that economic growth would have to start from the bottom, with more robust social programmes and safety nets, before the international community becomes too optimistic about economic and trade booms.

Cynthia Arnson, director of the Latin America programme at the Wilson Center, calls Latin America “far behind” in developing policies that might leverage inclusive growth.

“There is not a sense of shared responsibility … when your social policy is remittance, when your lack of social policy is permitted,” she told reporters on Friday. The region, she said, needs “a widespread recognition of the role the private sector needs to play in paying taxes, improving government … [and] institutions.”

In a telephone interview with IPS, she noted that the U.S. relationship with Central America is likely to remain more focused on security concerns.

“There is a growing consensus in the development community that sustainable growth can’t and will not happen unless levels of violence are brought under control,” she told IPS.

The World Bank recently called citizen insecurity the “Achilles’ heel of development” in Latin America.

Members of the U.S. Congress and advocacy groups here are also wary of turning a blind eye to human rights concerns in Mexico.

“The dire human rights situation in Mexico is not going to solve itself,” Maureen Meyer, a senior associate for Mexico and Central America with the Washington Office on Latin America (WOLA), an advocacy group, said in a statement.

“As the bilateral agenda evolves, it is critical that the U.S. and Mexican governments continue to focus on how best to support and defend human rights in Mexico.”

In a press release issued last week, WOLA expressed agreement with a letter from 23 members of Congress to Secretary of State John Kerry that stressed that “[t]he human rights crisis will not improve until there are stronger legal protections, increased human rights training for Mexico’s security forces, and more government agents held responsible for the human rights violations they commit.”

Even as the focus of U.S.-Mexico relations turns to economics, there is no broad agreement on how exactly a shift toward trade relations will strengthen the “economic competitiveness” of both countries.

“Part of the challenge is that we have this term, but we have a laundry list of issues that could fit into that term,” the Mexico Institute’s Chris Wilson said.

“What we still don’t have is a coherent agenda or a way in which the leadership from the top level can engage the public or business community or civil society … and create something more [meaningful],” he told IPS.

Members of South Sudan's Murle ethnic group wait to receive food aid after attacks in 2012 by a rival tribe that the U.N. says affected at least 120,000 people. Credit: Jared Ferrie /IPS

By Katelyn Fossett
WASHINGTON, Apr 25 2013 (IPS)

Experts here are calling on the United States and the international community to increase pressure on the government of South Sudan to address weaknesses in its central governance.

A high-level panel of scholars and government officials warned Wednesday that corruption, economic mismanagement and a lack of national unity could pose obstacles to the establishment of stability in the newly formed country."It’s a state being built from scratch with virtually no history of centralised governance." -- CGD's Kate Knopf

“That is the fear, and that is why we call for reform,” said Lual Deng, managing director of the Ebony Center for Strategic Studies, a non-profit research institution in Juba, South Sudan. “The way we see it, South Sudan is between Somalia and the D.R. Congo. If we are not careful, it will fall into one of these.”

Deng was speaking in particular about the growing issue of highly concentrated power in the hands of a small number of people, as well as growing signs of pervasive corruption. He referred to the disappearance of eight billion dollars in oil revenues last year, believed to have been stolen by government officials.

The malpractices of the South Sudanese government were also at the forefront of human rights and civil society concerns in the wake of the last week’s release of the U.S. State Department’s annual worldwide report on human rights.

The South Sudan section reviews the country’s human rights practices during the past year, the first full year of South Sudanese independence following a brutal civil war with Sudan that came to be regarded as one of the worst humanitarian crises in recent years.

The report details a bleak picture of the country’s first year of sovereignty, stating that the three most serious rights issues included security force abuses and lack of access to justice and conflict-related abuses.

It also details “extrajudicial killings, torture, rape, intimidation … corruption within the justice sector … and displacement of civilians as a result of fighting between Sudanese and South Sudanese forces”.

In a statement issued Apr. 22, human rights groups including Act for Sudan, American Jewish World Service, the Enough Project and United to End Genocide called the report an “opportunity” for the South Sudanese government to address these issues, “both through investigation and by ensuring such abuses do not occur in the future, as well as carrying out the action plan it has signed with the UN, acceding to all relevant human rights treaties, and moving forward with the planned national reconciliation process.”

“We want to make it clear that while we support South Sudan – as do many NGOs and governments – we don’t want to be seen as turning a blind eye to human rights abuses just because the country is new and facing many challenges,” John C. Bradshaw, executive director of the Enough Project, a Washington advocacy group that works to counter genocide, told IPS.

Look to diaspora

The discussion Wednesday suggested a comprehensive strengthening of South Sudan’s governance institutions as the only way to address the potentially existential threats posed by corruption, government abuses and economic mismanagement.

“I think it’s really important to look at the history and context of where South Sudan is coming from,” Kate Knopf, a visiting policy fellow at the Center for Global Development, a Washington think tank, said at the discussion Wednesday. “It’s a state being built from scratch with virtually no history of centralised governance.

“There are many, many grave concerns about how South Sudan is being managed … But [these concerns] need to be situated in a context of where South Sudan is and what our expectations can properly be of a country in this very nascent state.”

Indeed, one of the central themes highlighted in the discussion was a lack of skill among many South Sudanese that would enable them to take on government positions.

One of the solutions proposed by the panel, particularly by Deng, was to encourage the return, temporary or permanent, of the South Sudanese diaspora community to take on vital government roles.

But for Erik Reeves, a professor at SmithCollege who specialises in Sudan and South Sudan, an incomplete reading of the State Department’s new report could undermine hope for a solution. He cautions against reading the human rights abuses of the South Sudanese government as separate from the aggravations and hostilities of its northern neighbour, Sudan.

Reeves says that the Sudanese capital of Khartoum houses and supports renegade militia forces known for continued attacks on South Sudan, most of which are ethnically motivated.

“The effect of that is enormously destructive [in escalating] racial tensions that are already high in South Sudan,” Reeves told IPS. “Khartoum is creating a highly inflammatory situation in which human rights abuses are more likely to occur.”

According to Reeves, the U.S. State Department has been negligent in exposing Sudan’s role in South Sudan’s human rights record out of a desire to preserve a relationship with Khartoum for counterintelligence reasons. He suggested that the embassy in Khartoum is rife with intelligence activity.

“The report on South Sudan is a further extension of a U.S. policy toward Sudan that has been unbalanced and continues to be unbalanced in its excessive valuation on issues of supposed counterterrorism,” he said.

Arresting sacred cows

Regardless of the external sources of conflict, though, some of the most pressing items on the agenda for South Sudan today appear to be tackling corruption and the narrow concentration of power. If unchecked, some say these matters could render any other solution – such as expanded access to education or improved relations with Sudan – worthless.

“We hope the president will take the issue of corruption very seriously, by arresting a few sacred cows … to send a serious message,” Deng said, referring to South Sudanese President Salva Kiir.

Until President Kiir does so, some think corruption represents the most urgent part of the broader “crisis of governance” threatening to throw the fragile new country into consuming instability.

“Reform comes out of crisis,” Knopf said Wednesday. “Giving South Sudan the best lessons learned [in other countries] doesn’t really matter … the solutions … have to come from within South Sudan.”

Women and children from the Mexican village where the Esparza family was murdered demand justice outside the schoolhouse. Credit: Mónica González /IPS

By Katelyn Fossett
WASHINGTON, Apr 19 2013 (IPS)

Development experts here are warning that widespread, unchecked violence against citizens in Latin America is posing a threat to the development of the entire region.

According to a high-level panel of development workers and government officials at the World Bank on Thursday, violence is increasing in the region, at odds with otherwise promising development gains, and that increase poses a real threat to Latin America’s fragile progress.

“Behind Latin America’s economic boom, there is a hidden wave of crime and violence that threatens a decade of progress hurting all citizens, particularly the poorest, who have no way of protecting themselves,” Hasan Tuluy, vice-president of the World Bank for Latin America and the Caribbean, said Thursday.

“I’m afraid that citizen insecurity is becoming the Achilles’ heel of development.”

The World Bank is currently holding its annual Spring Meetings here in Washington, together with the International Monetary Fund (IMF).

At Thursday’s panel discussion, participants referred to an incident in El Salvador a little over a year ago, when the country’s two most powerful gangs called a truce. That single incident led to a 52-percent drop in killings, though only minor decreases in extortion, theft and drugs.

For many, the truce highlighted an extreme example of rampant violence, in which a few criminal groups had essentially supplanted government and neutered the rule of law entirely. In El Salvador, citizens’ rights are in the hands of a corrupt few, and any temporary calm – such as the truce – is a fragile peace.

“When there is [widespread] corruption, when the justice system can’t function … it makes it harder to draw the line between licit and illicit activity,” Joseph Bateman, a programme office at the Washington Office on Latin America (WOLA), an advocacy group here, told IPS.

Experts say that unchecked crime poses a threat to public institutions and civil society, both of which are necessary to democratic growth and economic prosperity.

“Crime has tangible direct costs, such as the cost of funding private and public security infrastructure to prevent and combat crime,” Ana Corbacho, an economic advisor at the Inter-American Development Bank (IDB), told an audience Thursday.

“But the implications of crime on the region’s wellbeing are potentially much greater. Violence not only victimises individuals – it undermines trust in public institutions.”

The relationship between stronger law enforcement and development in Latin America has been the subject of recent development scholarship, which has picked up particularly following a call for proposals from the World Bank on methodologies to measure the cost of crime in the region.

One of the resulting studies found that in Mexico, municipalities with greater levels of violence associated with drug cartels had a 6.8 percent lower rate of electricity consumption – considered a proxy indicator for gross domestic product (GDP) – than did less violent municipalities.

In a study that took into account the opportunity costs for jail time and the cost of stolen goods, scholars found that crime cost Uruguay about 319 million dollars a year.

But the ripple effects of widespread crime stretch far beyond the immediate damage.

Another of the World Bank-commissioned studies found that incarcerated youths were 15 percent less likely to have access to formal education, undercutting an otherwise growing trend of expanding educational access in the region.

More attention is also being focused on the effects of gender violence on early infant health and nutrition. Women in abusive households, for instance, are more likely to give birth to underweight children, and children of domestic abuse victims are more likely to grow up with feeble health.

Labyrinth of insecurity

Thursday’s panel emphasised the need for a broader framework for approaching the issue of citizen insecurity, a term that itself implies a move from a focus on criminal justice and law enforcement to crime prevention.

“There was a time when the reaction to increased violence was increased law enforcement,” Pablo Bachelet, a senior communications officer for the Inter-American Development Bank, a Washington-based multilateral donor, told IPS.

“And now we’re finding out that we need a more holistic and integrated approach – community services, youth services, available community spaces, job opportunities.”

Bachelet cited the example of what is known as Pacifying Police Units, a law enforcement and social services programme that was pioneered in Brazil in 2008. The units cleared out gang leaders as well as gang weapon and drug stashes in Rio de Janeiro’s most crime-laden neighbourhoods.

That process was then followed up immediately with the coordination of public agencies, NGOs and the private sector to meet the social needs of the community in the vacuum that followed, in order to ensure that the drop in violence was sustainable.

“[Citizen security] tries to change the focus from combating crime to protecting citizens,” WOLA’s Bateman told IPS.

Mauricio Funes, the president of El Salvador and a keynote speaker at Thursday’s World Bank event, laid out the key components of these integrated approaches, looking to a reform initiative already underway in the small country that is yielding slow but steady results.

The reforms, aimed at both preventing crime and strengthening institutions, included increasing the number of police officers, introducing new prevention policies (from youth centres to employment programmes), strengthening institutions, and eliminating corruption throughout the criminal justice system.

“There is no single response to [this] challenge, but we can find a way out of this labyrinth of insecurity,” President Funes said Thursday. “Reducing crime and ensuring justice will be the main tasks of our time.”

Civil society groups here are praising parts of President Barack Obama’s newly unveiled budget proposal, saying it appears to build on momentum gathered in recent years toward a robust overhaul of the U.S. Agency for International Development (USAID), the country’s main foreign aid agency.

Haitians receive U.S.-funded food aid in 2010. Credit: USAID

They point particularly to long-demanded changes to the structuring of the U.S. food aid programme, one of the largest in the world. Under the president’s new proposal, released Wednesday, U.S. food assistance would no longer be sourced from U.S. farmers and then sent abroad but would be purchased in local markets.

Proponents suggest the changes will save significant money for Washington while simultaneously helping to bolster local markets and economies in crisis-hit regions. Advocates say the food aid changes are in line with a broader reforms process under way at USAID.

“Oxfam was very critical of what USAID was doing [in 2008] – we questioned its very existence,” Paul O’Brien, vice-president of policy and advocacy at Oxfam America, a humanitarian group, said at a policy discussion here Thursday. “But we think what we’re seeing [now] is a quiet renaissance.”

Over the past half-decade, a new government initiative, known as USAID Forward, has worked to strengthen links between the agency and local institutions and to forge stronger partnerships between the United States and host countries. Supporters point to the development of Country Development Cooperation Strategies, detailed plans in which the host country lays out goals and unique needs to chart a path forward.

“U.S. policy is changing,” a new Oxfam report, released Thursday, states, “allowing more U.S. government development officials to work more closely with leaders in developing countries, in government, civil society, and the private sector.”

In a survey of 257 non-U.S. government officials in recipient countries, the report found that 83 percent saw the United States today as a better donor than it was five years ago.

According to the report, “Respondents reported that their interactions with the US have improved, allowing them more opportunities to decide how aid is spent and to work together towards mutually-shared results.”

Taking on aid inefficiency

While USAID Forward began as a direct response to criticisms spurred by the dwindling reputation and alleged mishandling of USAID programmes during the first decade of the 2000s, President Obama’s new budget proposal – which has not yet been approved by Congress – seems to draw on these successes in moving towards a more full-scale modernisation of the country’s foreign assistance model.

The budget request spotlights sweeping changes to food assistance in particular, allocating 1.6 billion dollars for the Feed the Future initiative to combat chronic food insecurity and 2.65 billion dollars to the USAID Global Health Programmes.

It would also shift 1.8 billion dollars from the U.S. Department of Agriculture to the State Department, using funds currently allocated for a process known as “monetisation” to instead go toward disaster- and crisis-related food assistance accounts.

Monetisation is the term given to the process by which Washington has traditionally given U.S.-grown grains to local organisations, which can then sell them for cash. Critics say this process is notably inefficient, a finding corroborated by a 2011 report by the Government Accountability Office (GAO), the U.S. Congress’s main investigative arm.

“The president’s 2014 budget includes reforms to food aid that will enable us to feed an estimated four million more hungry children every year with the same resources,” Rajiv Shah, the head of USAID, said in a major address Wednesday.

That optimism has been mirrored by NGOs and aid modernisation advocates.

“We are encouraged by the administration’s proposal, and believe that if it is implemented correctly and authorised by Congress that it could meet the principles that NGOs have called for,” Mark Lotwis, senior director of public policy at InterAction, a coalition of U.S.-based NGOs, told IPS.

“[Those calls] include keeping the core focus of food assistance on those who have acute hunger needs, increasing the number of people who are helped, and providing the administration with flexibility to meet the needs of people in the field.”

Some key food assistance changes in Obama’s budget request include the use of cash vouchers that broaden the reach of food assistance in disaster areas and the end of inefficient “monetisation”. This process, known for returning little more than half of invested funding, has become synonymous in the NGO community with inefficiency.

“The truth is that for years our practice in food assistance has lagged behind our knowledge,” Shah said Wednesday. “In the last decade, more than 30 different studies … have revealed the inefficiencies of the current system.”

A looming battle in Congress?

Some of these inefficiencies, though, are rooted in agricultural changes internationally, and implicating this sector in the needed reforms constitutes some unique political challenges for these proposals going forward.

For example, shortages in food, instead of the surpluses that once drove farmers to seek out foreign markets, have driven up the costs of doing business with recipient countries by some 200 percent in recent years. That increase has been primarily responsible for monetisation’s increasing inefficiencies and advocates’ calls for reform.

Ending monetisation, which necessarily entails shifting funds away from the Department of Agriculture, has already been met with some resistance in Congress, and is only expected to attract more on its way to a vote.

“American agriculture is one of the few U.S. business sectors to produce a trade surplus,” said a letter signed by 21 senators, including the chairmen of the Agriculture and Agricultural Appropriations Committee. “During this time of economic distress, we should maintain support for the areas of our economy that are growing.”

This conflict, though, is only one incarnation of a problem likely to be seen across different sectors, as groups affiliated with development assistance struggle to adjust their practices and business models to a transformative shift.

Even among NGOs, which have been largely supportive of the USAID reforms, the proposals are prompting a discussion about changing core practices in order to adapt.

“With [USAID Forward] we got the kind of leadership we need, but I think it’s now on us,” O’Brien from Oxfam said Thursday.

“Some of us are going to evolve and some of us are going to resist. But frankly, I’d be worried if you think that the way you used to do business is a viable business model for the next 10 years.”

A child is vaccinated for polio outside Peshawar, Pakistan. Credit: Ashfaq Yusufzai/IPS

By Katelyn Fossett
WASHINGTON, Apr 9 2013 (IPS)

A U.S.-based civil society coalition is calling on Congress and President Barack Obama’s administration to keep spending on global health aid at current levels, warning that recent budget cuts risk a dangerous backslide in health and development gains achieved over the past three decades.

The new brief has been published by InterAction, a Washington-based umbrella of international NGOs, is supported by 37 organisations. It warns that any future cuts to these programmes would endanger important health milestones achieved in part due to U.S. assistance.We have a choice: we can invest now or pay forever.

These include the near-eradication of polio and the treatment of over five million people living with HIV/AIDS. In addition, the brief warns that austerity-related budget cuts that went into effect on Mar. 1 could lead to the re-emergence or worsening of critical global health threats, like those posed by the spread of malaria and tuberculosis.

“The U.S. is at a critical juncture in its global health efforts: budget pressures threaten the global health gains that have been made and jeopardize programming … Capitalizing on our successes and meeting emerging global health challenges will require increased and sustained commitments by all donors,” the brief says.

But the warning is competing with snowballing enthusiasm for budget-cutting that has seized Washington since the recent cuts, known here as the “sequester”, went into effect. Cutting roughly five percent of all federal budgets, analysts say the sequester would slice around 433 million dollars from U.S. global health aid for the remainder of this fiscal year alone.

The United States is the world’s largest individual donor to a spectrum of global health initiatives.

“We see the brief as a resource for members of Congress and their staff on U.S. investments in global health,” Danielle Heiberg, one of the authors of the brief, told IPS. “By highlighting how current and past U.S. investments have made significant progress in global health, we hope that Congress will understand the value and importance of maintaining appropriate funding for the global health accounts.”

“Sustained US investments in global health programs and health systems strengthening are crucial – health problems will only be more expensive and more difficult to resolve in the future, especially with the rise of non-communicable diseases (cancer, lung and heart-disease and diabetes) in all populations,” the brief says.

Sequester-related cuts have been forced to impact on nearly all federal programmes, with Congress purposefully designing them so that neither policymakers nor agency heads could target the reductions at waste or initiatives of low priority. Critics note that foreign aid generally only constitutes about one percent of the U.S.’s total budget – with just a tenth of that for global health.

Nonetheless, U.S. spending still has an outsized impact on global health projects. Indeed, the United States has taken on an even more expanded role since the 2008 financial crisis led other donor countries to cut their aid programmes.

Newly released data from the Organisation for Economic Co-operation and Development (OECD), a grouping of rich, industrialised countries, has revealed a 5.4-billion-dollar decline in general international aid flows worldwide in the past year.

Advocates have expressed particular concern about the future of U.S. health assistance because it does not have the deep political support that bolsters other kinds of foreign developmental assistance. Projects for which mutual economic opportunities for donor and recipient countries are far more visible – such as improving infrastructure or trade, for instance – tend to benefit from deeper political support than that for health aid.

“Domestic donor interests have much more influence in donor capitals where aid decisions are being made,” Gregory Adams, head of the aid effectiveness programme at Oxfam International, a humanitarian group, told IPS. “The more locally owned and demand-driven aid gets cut first.”

Adams listed the Global Fund to Fight Aids, Tuberculosis, and Malaria, an international financing organisation, as one of the groups that is affected by this decision-making bias.

Indeed, on Monday the Global Fund announced a massive new 15-billion-dollar fundraising goal. If it attains this goal, the group says it will be able to prevent a million new HIV infections and save the lives of almost six million people with tuberculosis.

“We have a choice: we can invest now or pay forever,” Mark Dybul, executive director of the Global Fund, said Monday. “Innovations in science and implementation have given us a historic opportunity to completely control these diseases. If we do not, the long-term costs will be staggering.”

Double problem

Oxfam’s Adams further warns that there is a “double problem” with foreign aid.

“It’s not just that the [aid] is not getting to the people who need it, but you take these countries that trusted the United States and give them reason not to trust the U.S,” he said.

“We keep asking partner countries to show more leadership – to do a better job of leading and meeting their own countries’ needs, but sometimes the global donor country makes it very difficult for those countries to plan their leadership by changing the goal posts.”

In addition, failure to follow through on health assistance could introduce the additional obstacles of reduced immunity and new drug-resistant strains of a disease, particularly with malaria and tuberculosis.

“History shows that if we scale back funding, malaria will re-emerge worse than ever, especially since populations with reduced immunity will face an increase in morbidity,” the InterAction brief states.

In March, the World Health Organisation issued a statement on the increasing spread of drug-resistant tuberculosis, a growing public health crisis due in part to its history of incomplete treatments in developing countries. A study in August 2012 found that almost half of TB patients were not responsive to either first- or second-line treatments, suggesting the disease could become “virtually untreatable”.

For now, health and aid groups are expressing fear, uncertainty and a fair amount of outrage as they wait to feel the concrete effects of the March cuts.

“The sequester is going to have a significant and detrimental effect,” Oxfam’s Adams said. “[But] it’s a blunt instrument – it’s hard to predict how the axe is going to fall.”

Following last week’s approval of U.S. Senate bills that critics say would weaken a major financial reform law known as Dodd-Frank, watchdog groups here are cautioning that banks deemed “too big to fail” still pose a risk to U.S. and international economic security.

“Too big to fail” was a term associated with the 2008 Troubled Assets Relief Programme (TARP), which gave 700 billion dollars in taxpayer money to rescue large U.S.-based banks whose collapse could have had a devastating impact on global economic security.You’re not going to win this tinkering with the rules...You have to break up the banks.

At a panel discussion here in Washington on Wednesday, political leaders and regulators urged the break-up of big banks as the only viable solution to what they say is still a systemically dangerous concentration of power.

“You’re not going to win this tinkering with the rules,” Neil Barofsky, former special inspector general of TARP and author of a new book on the issue, “Bailout”, said at the headquarters of Public Citizen, a consumer rights advocacy group. “You have to go to the source of these corrupting influences … You have to break up the banks.”

The push against financial regulation flexed its muscle in Congress last week, as Senate bills watering down Title VII of Dodd-Frank, which deals with the especially risky derivatives markets, were approved. The bills now proceed to a floor vote.

That move has renewed a call from regulation proponents to curb the political power of financial institutions, which some say is possible only by ending too-big-to-fail.

Supporters of this move point to the central problem in the too-big-to-fail philosophy: that protecting banks from the consequences of their own actions shields them from accountability and, ultimately, can encourage risky behaviour.

“I think as long as [the too-big-to-fail mentality] exists, the administration of justice is severely undermined in this country,” said Brooksley Born, a former chairperson of the Commodity Futures Trading Commission (CFTC), a government regulator.

Born is known for pushing for increased regulation of the derivatives market, an especially risky slice of trading activity, during the 1990s, calling this market the “hippopotamus under the rug”. Her concerns were rebuffed at the time by Federal Reserve Chairman Alan Greenspan and, under pressure from the financial lobby, Congress eventually passed legislation prohibiting derivatives regulation.

A decade later, Born’s concerns were vindicated by events that played out in the 2008 collapse, which largely began in the derivatives market.

Regarding the extent to which too-big-to-fail shields banks from prosecution, Born cited comments made by U.S. Attorney General Eric Holder last month, especially his admission that “it does become difficult for us to prosecute [the banks] when we are hit with indications that if you do prosecute … it will have a negative impact on the national economy.”

She also revealed a less public example of the government protection she says she witnessed firsthand as a member of the Financial Crisis Inquiry Commission, an official task force appointed to investigate the causes of the 2008 financial crisis.

“The Financial Crisis Inquiry Commission was given a mandate to focus on causes of the financial crisis, but our statute also said that if we came across evidence of violations of U.S. law, it was our obligation to report those violations to the Justice Department,” she said.

“We made a number of such referrals … and I have not seen anything happen on those.”

That failure, she suggests, was just one symptom of a broader illness.

“I became convinced there was a philosophy in this administration of letting the banks earn their way out of the insolvency they were in,” she said, “that the banks had to be protected from the rule of law in order to preserve the financial system.”

Cognitive capture

For some, though, the prospect of breaking up the banks is both too abstract and too politically unviable to be discussed as a serious policy proposal.

Dennis Kelleher, CEO of Better Markets, a financial reform advocacy group, says that any move to break up the banks would come in one of two guises: either as a prohibition on banks dealing with more than a certain amount of gross domestic product, or government regulators using all the authority already vested in Dodd-Frank.

“The Federal Reserve could say banks with more than 50 billion dollars pose a significant threat to the financial stability, and they have to put up 50 percent of capital [in case of extreme losses],” Kelleher told IPS. “If they did that – which they have the power to do – that wouldn’t be ‘breaking up the banks’, but that would eliminate the too-big-to-fail threat.”

Under this approach, the key problem is ensuring that regulators are aggressive enough, and especially strong enough to counter Wall Street tropes that invoke the common citizen as the main victim of regulation.

“[Regulators] actually believe the spin that comes from Wall Street and its lobbyists,” Kelleher says, calling it “cognitive capture, reinforced by a culture that equates money with brains”.

Regulation proponents, though, seemed confident that shifting public opinion was becoming a formidable opposition to these entrenched interests, even if the time is not yet ripe for putting a hard cap on the size of major banks.

“If there is another major megabank blow-up, it could easily change the political dynamics,” Kelleher told IPS. “While these too-big-to-fail banks have political support … [that support] is broad but it’s not deep – it’s very fragile.”

Workers mop up tar sands oil from Exxon Mobil Pegasus pipeline spill from creek in Mayflower, Arkansas. Credit: NWFblogs/cc by 2.0

By Katelyn Fossett
Apr 3 2013 (IPS)

Environmental groups are sounding alarms about conflicting reports on the size and seriousness of an oil spill that took place late last week in the southern U.S. state of Arkansas.

The spill has generated particular interest because it emanates from a pipeline carrying “tar sands” oil, a particularly heavy and environmentally destructive oil composed of bitumen and diluted with lighter elements.A lot of the people we talked to said, ‘We didn’t even know there was a pipeline under our homes.'

It also comes just as politicians and environmentalists here are engaged in a debate over whether to approve the construction of a major pipeline – known as Keystone XL – that would carry the same tar sands oil from Canada to the southern U.S.

“[Pipeline owner] ExxonMobil is sort of dancing around how they’re describing it,” Jane Kleeb, executive director of BOLD Nebraska, an advocacy group fighting the Keystone XL pipeline, told IPS.

“Every time they talk about the oil spill, they describe it in different terms – sometimes as crude oil, sometimes Canadian oil – but we’re fairly certain it is tar sands oil.”

On Tuesday, 22 homes in the town of Mayflower were evacuated and at least 12,000 barrels of what the Sierra Club, an environment group, calls the “dirtiest oil on Earth” had been released, reportedly darkening yards and driveways across the suburban town.
Critics of the Keystone project, including BOLD Nebraska, are particularly concerned about the spill’s release of benzene, a carcinogenic chemical found in tar sands oil, and bitumen, which climate scientists say releases 17 percent more greenhouse gases than standard oil.

Meanwhile, President Barack Obama is surveying the environmental and health evidence in order to determine whether the construction of Keystone XL would serve the “nation’s interest”. He is expected to give a final ruling on Canadian company Transcanada’s application to build the pipeline by late summer.

Despite environmental concerns, recently released polls from the Pew Research Center suggest broad support has been gathering for the project’s approval, likely bolstered by Congressional Republicans’ trumpeting the project’s potential for job creation.

The spill also comes a month after a draft environmental impact assessment from the U.S. State Department concluded that the Keystone XL project would “not likely result in significant adverse environmental effects”. That conclusion is likely to be subject to greater scrutiny as Mayflower residents continue to reel from the spill’s damage.

“To see the devastation in that town is pretty sobering,” Glenn Hooks, a spokesman for the Arkansas chapter of the Sierra Club, told reporters Tuesday. “I spoke with people whose lives have been upended – they want to know when they can go home, and they want to know if there will be a home to come back to.”

Anthony Swift, an attorney with the Natural Resources Defense Council, a watchdog group, said the spill brings the risks of the Keystone XL pipeline into “sharp relief for the American people”.

Swift noted that bitumen oil pipelines require higher operating temperatures that make ruptures more likely, citing a study that found that states that carried bitumen oil for the longest periods had experienced 3.6 times as many spills as the national average.

He called the Mayflower oil spill “a tragic warning”, but alluded to previous warnings that had gone unheeded.

“TransCanada’s Bison and Keystone I pipelines had special conditions that were supposed to make them safer. The Keystone I pipeline had to be shut down in its first year after having 14 spills,” he said.

Little clarity

In the days following the Mayflower spill, the opaqueness surrounding the leak and the pipeline in general has been of particular concern for environmental groups.

“A lot of the people we talked to said, ‘We didn’t even know there was a pipeline under our homes,’” said Hooks of the Arkansas Sierra Club. “And I’m sure the ones who did know were surprised to learn it was a tar sands oil pipeline.”

Kleeb, of BOLD Nebraska, pointed to ExxonMobil’s failure to disclose potential health hazards by specifying sooner exactly what kind of oil had been spilled.

“ExxonMobil is not giving folks a clear sense of what was spilled … It’s obvious why they’re not saying it’s tar sands,” she said, referring to the growing concerns over tar sands oil pipelines in the midst of the Keystone debate.

Exxon spokesperson Charles Engelmann said the leaking pipeline was built in the 1940s, but did not have any information on when it last underwent maintenance. In 2010, the U.S. Department of Transportation fined the company for going more than five years without maintenance on a section of the same pipeline beneath the Mississippi River.

With environmental groups already sceptical of an incomplete picture of the environmental and public health impact of Keystone XL, many are now suggesting that these growing signals of oil companies’ poor commitment to maintenance and regulation standards should carry serious implications for the president’s ultimate decision to approve the project.

“Looking at the differences between the reality and rhetoric, TransCanada’s claims that this pipeline will be different don’t add up,” warned Swift of the National Resources Defense Council.

President Barack Obama doubled down on a new push for infrastructure investment in a major speech Friday, highlighting roads, ports and bridges that many say have suffered from decades of insufficient upkeep.

“When the American Society of [Civil] Engineers put out their 2013 report card on our national infrastructure, they gave it the best overall grade in 12 years … the bad news is we went from a D to a D+,” President Obama said, speaking at a port in Miami.

“We still have all kinds of deferred maintenance. We still have too many ports that aren’t equipped for today’s world commerce. We’ve still got too many rail lines that are too slow and clogged up. We’ve still got too many roads that are in disrepair, too many bridges that aren’t safe.”

The American Society of Civil Engineers (ASCE) annual report the president referenced was released earlier this month and has spurred a debate over infrastructure and spending in Washington and beyond.

“We know that investing in infrastructure is essential to support healthy, vibrant communities. Infrastructure is also critical for long-term economic growth, increasing GDP, employment, household income, and exports. The reverse is also true – without prioritizing our nation’s infrastructure needs, deteriorating conditions can become a drag on the economy,” the report states.

On Friday, President Obama outlined a new plan that, he said, would seek to attract private investment for public infrastructure, while also creating new bonds and offering more loans for similar projects.

1.3 trillion dollars needed

A think-tank in Washington has one idea for leveraging private investment toward infrastructure: encourage the investment of labour union pension funds in infrastructure projects.

“Couple [our poor state of infrastructure] with pension funds, which are long-term, patient investors, with stable, risk-adjusted returns, and this fits well with our fiduciary duty,” Dan Pedrotty, managing director of benefits and pensions at the American Federation of Teachers, said Thursday at the release of a report on the topic at the Center for American Progress (CAP).

Pension funds present a viable alternative to traditional public financing because their large-scale assets and long-term nature give them the ability to put up a large amount of capital and see projects through to their payoff—obstacles typically thought to be too large for any investor except the federal government.

The report also suggests the time is ripe, both economically and politically, for this kind of change.

“We will need an extra 1.3 trillion dollars in infrastructure investments over the next 10 years,” Donna Cooper, co-author of the report and a senior fellow at the Center for American Progress, said Thursday. She was referring in part to the recent American Society of Civil Engineers report.

“There is [also] an unemployment rate of 14 percent in construction … and a reduction in construction investment.”

The report focused on the business interests of investors, but also the unique benefits the plan can generate for the labour unions themselves.

For example, a paper from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) that outlines its infrastructure investment standards says it encourages pension funds to “invest in infrastructure projects that utilize union construction labor and protect the jobs, collective bargaining rights and working conditions of current employees.”

And as with any policy discussion in Washington right now, the overall mood of fiscal constraint lends the plan particular appeal.

“Putting existing money to use is certainly much more politically popular than spending new money,” Baruch Feigenbaum at the Reason Foundation, a free-market-oriented think tank, told IPS.

Supplementing government money with private investment from pension funds could also free up scarce government grants, the new report states, to go to projects “where user fees or other dedicated revenues are not likely to be sufficient to repay investors”.

Charting a way forward

Going forward, the report highlights structural changes that should be made to facilitate greater union pension fund investment in infrastructure.

Those proposals included the establishment of a national infrastructure bank with experts “who have the background and expertise to build working relationships with pension funds” and bringing back taxable bonds like Build America Bonds, which provided more of a federal subsidy to state and local governments than traditional bonds.

Obama’s speech on Friday went on to propose such an infrastructure bank and introduced America Fast Forward Bonds modeled on the success of the earlier Build America Bonds.

Much of the discussion on Thursday also focused on models that the U.S. could use in designing such a shift.

In 2012, for instance, as part of a strategy to strengthen the UK’s Manchester Airports Group (MAG), a Melbourne-based pension fund manager, Industry Funds Management (IFM), bought a 35-percent stake in the group. The additional capital allowed MAG to buy another airport and plan a large-scale renewal project to balance out the airport market share that Heathrow Airport Holdings had come to gobble up over the years.

The deal resulted in a 10-percent increase in employment and a 26-percent increase in underlying operating profit.

But smaller-scale models also exist in some U.S. cities already, like Chicago, which established the Chicago Infrastructure Trust in 2013 that functions much like the infrastructure bank suggested by the report and proposed by President Obama Friday.

The trust’s six board members are tasked with reaching out to private investors and developing financing strategies for different public works projects.

“Hopefully those local projects can spur on the federal government,” Pedrotty said Thursday.

Those against same-sex marriage in the U.S. and those supporting it traded places as the majority opinion over the past decade. Credit: Jason Tester Guerilla Futures/cc by 2.0

By Katelyn Fossett
WASHINGTON, Mar 27 2013 (IPS)

On the second day of oral arguments in two different cases involving the constitutionality of same-sex marriage, a majority of the U.S. Supreme Court on Wednesday expressed serious doubts about the 1996 Defense of Marriage Act (DOMA), which codifies the non-recognition of same-sex marriage for federal and inter-state purposes.

For advocacy groups and gay marriage supporters, DOMA effectively sanctions discrimination by denying same-sex couples the same legal and economic benefits allowed to heterosexual couples.

“Marriage equality is a fundamental right, but it also has important implications for other rights – access to housing, custody of children, for example,” Cristina Finch, managing director of the Women’s Human Rights Programme at Amnesty International, told IPS.

Although a separate case heard Tuesday deals with the issue from the angle of a statewide ban – California’s Proposition 8 – both cases have been heralded as potentially landmark decisions.

“I remember supporting [presidential candidate] John Kerry when I was 12, and hearing about the idea of a constitutional amendment to ban marriage – and knowing that was wrong even at that time,” Melissa Wasser, an activist who came to Washington from Ohio to hear the arguments, told IPS outside of the Supreme Court.

“I’m 20 and I feel like we’re finally going through the [legal] steps.”

New figures from a Pew Research Center poll on public opinion toward gay marriage attest to a strikingly rapid shift in public opinion on the issue. Researchers found that those against same-sex marriage and those supporting it traded places as the majority opinion over the past decade.

In 2003, 58 percent of U.S. citizens were against gay marriage. This year, 49 percent supported it, while 44 percent opposed it.

The numbers are even starker if opinion is broken down by age group. According to the same study, 70 percent of those age 18 to 32 support same-sex marriage, compared to just 31 percent of those older than 68 years old.

Possible impact

While the case being heard regarding DOMA, which was passed in 1996, is expected to have a more decisive impact, the California case could be dismissed, as several justices have expressed hesitation to take it on in the first place.

“I just wonder if this case was properly granted,” Justice Anthony Kennedy, who had been expected to be the deciding vote, wondered aloud during Tuesday’s hearings.

Kennedy was likely referring to the charge that the lawyers supporting and challenging California’s law, a state-wide ban on same-sex marriage, are not directly enough injured by it, as they are not from California or affected personally by the ban themselves.

If the justices indeed decide that the case should not have been accepted by the court, a dismissal would uphold the lower court ruling, and California would go back to granting marriage licenses to same-sex couples.

The DOMA case, on the other hand, is more squarely in the realm of federal law. “It seems to me there’s injury here,” Justice Kennedy said Wednesday.

DOMA found its way to the Supreme Court when a woman named Edith Windsor was forced to pay 363,000 dollars in real-estate taxes after the death of her spouse because, under federal law, their marriage was ineligible for tax-relief benefits given to heterosexual couples.

“DOMA does not bar or invalidate any state-law marriage but leaves states free to decide whether they will recognize same-sex marriages,” said a brief filed by the Republican congressional group that is defending the law.

Although the court’s decisions are not slated to become public until June, the activists and supporters gathered outside the court exuded optimism.

“I am pretty confident DOMA will be struck down,” Tom Kelly, a high school student who came from Massachusetts out of an interest in constitutional law, told IPS.

Political u-turn

One element of the DOMA problem that poses potential problems in the Supreme Court’s jurisdiction, however, is the unusual refusal of the government to defend its own law.

In 2011, the Obama administration made a statement that it had found Section 3 of DOMA, which enshrines the non-recognition of same-sex marriage for tax, insurance, and social security benefits, unconstitutional. Despite an appeal from the justice department to overturn the lower court’s ruling, the administration refused to defend it in court, and a Republican Congressional group took up defending it instead.

“This is wholly unprecedented,” Chief Justice John G. Roberts said about the odd circumstances, which some say effectively amounted to a lack of challenge between the two sides.

If the administration’s agreement with the lower court indeed suggests a lack of controversy to a degree that could grant jurisdiction to the Supreme Court, the justices could dismiss the case altogether.

This possibility – that there may not, legally and politically, be enough controversy on the issue for a Supreme Court case – could indeed be most telling about the general direction of gay marriage.

“Not only do the majority of people in the United States support marriage equality, but laws on the state level are changing quickly,” Finch from Amnesty told IPS. “The time is now for this human right to be recognised.”

The United States’ main foreign assistance agency is getting widespread plaudits for new data on a series of internal reforms aimed at aid improvement, but some development experts are pointing to a persistent opaqueness from the agency.

In a first-of-its-kind report released this week, the U.S. Agency for International Development (USAID) has laid out the progress it has made under a key reform initiative undertaken over the past three years.

“This report does provide a nice, concise summary with policy descriptions and challenges, but it could go further in its attempt to be transparent,” Sarah Rose, a senior policy analyst on the Rethinking Foreign Assistance team at the Center for Global Development (CGD), told IPS.

The report focuses heavily on new evaluation policies aimed at increasing accountability and country ownership, incorporating new technologies (“from improved seeds to mobile phones”) and leveraging “high impact” partnerships, specifically with the private sector.

In the past, USAID has been widely criticised for a lack of transparency. While the agency is currently in the midst of a massive overhaul of related policies, just this past October an advocacy group called Publish What You Fund ranked USAID just 27th out of 43 foreign aid agencies, in terms of transparency.

To address such criticisms, in 2010 President Barack Obama unveiled a policy directive that spurred the new round of reforms. At the forefront of its objectives were the development of “robust … budget and evaluation capabilities”, progress toward which the new report outlines.

For instance, a new policy has been introduced that requires every major U.S. aid project to undergo a rigorous evaluation conducted by an independent third party. The report touts that this new policy has already been called “a model for other federal agencies” by the American Evaluation Association, a professional association for evaluators, and that it has led to budgetary changes in a third of the cases examined.

Some aid organisations have also expressed enthusiasm about increasingly collaborative partnerships between the United States and recipient countries, a break from the old structure in which the host countries were seen as less active participants in project design.

“The progress demonstrated in the report, especially on promoting sustainable development through high-impact partnerships, demonstrates a commitment to ensuring that people are the leaders of their own development,” Gregory Adams, Oxfam America’s director of aid effectiveness, said in a release.

They point particularly to the development of Country Development Cooperation Strategies (CDCS), five-year plans drafted collaboratively by the United States and recipient countries that identify the needs of partner countries and detail specific paths forward. CDCSs ostensibly give host countries more of a stake in USAID development projects.

The new report finds that the percentage of USAID funds allotted to local institutions grew from 9.7 in 2010 to 14.3 in 2013. That puts the agency at the halfway mark of a five-year goal of 30 percent by 2015.

Transparency concerns

Still, many see room for improvement in USAID’s partnership strategies.

“USAID has done a good job refurbishing its human capacity and bringing on additional people,” George Ingram, the co-chair of the Modernizing Foreign Aid Assistance Network (MFAN), an advocacy group, told IPS.

“But it needs to do a better job providing its employees with training and advanced managerial skills to help them keep abreast of new developments.”

Transparency and accountability concerns are also central. Although the report outlines a 50-percent increase in local partnerships by USAID, it lacks detail about what local institutions were partnering with USAID.

“There are a number of stakeholders who want to know exactly what those local partnerships are,” CGD’s Rose told IPS. “Doing so would allow stakeholders to do their own analyses.”

Similarly, although the paper reported that USAID had increased its public-private partnerships by 40 percent over the past three years and leveraged an additional 383 million dollars of non-U.S. government money toward development goals, the report made little mention of the companies or projects involved in those partnerships.

For some, the greatest threat to increased transparency could be a greater reliance on private-sector funds in development assistance. This has been at the core of a decade-long shift in USAID projects, and now looks set to continue to increase.

“In a world where foreign direct investment flows vastly outpace development assistance,” the report states, “we have to enable global investment and local private sector entrepreneurs to serve as engines of sustainable growth for even the most vulnerable communities.”

MFAN’s Ingram says that public-private sector initiatives can indeed be complementary in supporting economic growth in host countries.

“To some extent, government organisations are good at formulating plans about what needs to be done,” he says. “But the private sector knows how to get those things done – on the ground, in the marketplace, for their clients.”

But Ingram also notes looming barriers to public-private cooperation, highlighting the possible obstacles to transparency that a strengthened public-private partnership would imply. There is a degree of “public trust”, he says, to which government agencies are beholden by virtue of operating on taxpayer funds.

“In honouring and respecting that public trust, [government agencies] end up developing a lot of rules and regulations to make sure that the way they conduct business is open to public scrutiny,” he says. “In the end, there has to be some balance between the rules and responsibilities that come with public funds, and the private sector that isn’t used to that.”

Indeed, the private sector’s inclination toward efficiency and profit at the expense of oversight and accountability is precisely what concerns many development advocacy groups here in Washington.

In a conversation with IPS earlier this month, Janet Redman, director of the Sustainable Energy and Economy Network at the Institute for Policy Studies, a Washington think tank, expressed concern about public-private aid collaboration blurring the line between two very different measures of progress.

“The danger lies in pretending gross domestic product and foreign direct investment are the same thing as making economies more sustainable and enabling them to meet the needs of their citizens,” she said.

Patients, doctors and international aid groups are calling on donors and governments to support measures that would make treatment of drug-resistant tuberculosis more effective and accessible.

The demands are being made amidst the recent or imminent approval of two new drugs, bedaquiline and delamanid. Advocates say the drugs present an historic opportunity to tackle the notoriously difficult-to-treat disease.

“As we know with all infectious diseases, we need to seize this opportunity before an airborne infectious disease gets too out of control,” Dr. Jennifer Cohn, a policy advisor with Medecins Sans Frontieres (MSF), an aid group, told IPS.

On Monday, MSF released a manifesto, signed by TB patients and their doctors in 23 countries around the world, noting that “after close to five decades of insufficient research and development into TB … Research is urgently required to determine the best way to use these new drugs so that treatment can be made shorter and more effective.”

It also warns that “If measures to tackle MDR-TB are not immediately expanded, rates of the disease will continue to increase worldwide, and a historic opportunity to improve abysmal cure rates will have been squandered.”

The call to action comes on the heels of a World Health Organisation (WHO) statement on the wide spread of drug-resistant tuberculosis – and warnings over an anticipated funding gap of 1.6 billion dollars needed to both identify new cases and combat existing strains.

An additional 3.2 billion dollars, according to WHO estimates, could be provided by governments. If the combined 4.8 billion dollars is funded, treatment could be provided for 17 million TB and drug-resistant TB patients.

“We have gained a lot of ground in TB control through international collaboration, but it can easily be lost if we do not act now,” Dr. Margaret Chan, the WHO director-general, said in a statement.

Twenty pills a day

While the overall incidence of tuberculosis has fallen in recent years, drug-resistant strains have increased. In a 2009 resolution to the World Health Assembly, the WHO noted that the highest levels of multidrug resistance reported in the agency’s lobal report “pose a threat to global public health security”.

The spread of resistant strains is particularly alarming because their long and difficult treatment process makes them significantly more difficult to cure than traditional strains.

The MSF manifesto makes reference to regimens that require up to 20 pills a day along with daily injections that make it painful to sit or lie down. The treatment is also known for strong side effects, including severe nausea and even deafness.

MSF is calling for universal access to diagnosis and treatment for patients suffering from drug-resistant tuberculosis, as well as the development of “more tolerable” drug regimens, and additional financial support from international donors and governments for research.

Perhaps the most serious obstacle to filling the 1.6-billion-dollar funding gap is the massive federal budget cuts that went into effect here in Washington in early March. These are slated to cut deeply into development assistance, including international health.

For instance, the United States will reduce its contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria alone by 300 million dollars, according to figures revealed by Secretary of State John Kerry.

“The United States is the number one donor to the Global Fund, and the Global Fund is the number one donor for treating multi-drug-resistant TB,” Cohn says. “So budget cuts are definitely a concern.”

Still, she notes, one of the biggest challenges lies in fostering cooperation among manufacturers.

“We need to see manufacturers engaging in trials on the different [anti-TB] drugs together, to determine their efficacy and to develop a regimen that works as strongly and safely as possible,” she says. “Unfortunately, we have not seen a lot of progress on this.”

Drug reservations

One of the drugs being lauded in the manifesto is bedaquiline. But some watchdog groups here are sounding alarms about the drug’s safety.

“I don’t have any problem with looking for more drugs to treat disease that is a terrible problem in many countries, but it has to be done very carefully and cautiously,” Dr. Sidney Wolfe, the director of the Health Research Group at Public Citizen, a Washington-based advocacy group, told IPS.

In a letter to the U.S. Food and Drug Administration sent in December, Public Citizen strongly opposed any accelerated approval of bedaquiline, noting that the drug has been shown to be highly dangerous in clinical trials. The letter referenced findings that patients taking bedaquiline in addition to standard TB treatment were five times likelier to die than those who took a placebo.

Despite these concerns, bedaquiline was approved in December.

“There are two possibilities,” Wolfe says. “Either [MSF] didn’t read the report [about the five-fold increase in death rate], or they did and decided that since the FDA approved it, it must be ok. Either one of these explanations is unacceptable. How can you be enthusiastic about a drug that is killing so many people?”

Cohn at MSF stresses the need to be vigilant about any new medication, and notes that the drug will now go through an additional phase of testing.

“Any new drug that comes to market we want to watch closely,” she says. “We are looking forward to data that will tell us more about the Phase 3 side effects of bedaquiline.”

Women in the Middle East and North Africa have made significant strides in health and education but not in workforce participation. Credit: Rebecca Murray/IPS

By Katelyn Fossett
WASHINGTON, Mar 20 2013 (IPS)

As countries in the Middle East and North Africa adjust to profound political changes and economic difficulties, development experts on the region have increasingly turned their attention to the social and economic potential of incorporating more female workers into the labour market.

Not only would more employed women stimulate economic growth, but a more inclusive labour market has also been thought to encourage political participation among women. But the World Bank is warning that Middle Eastern and North African (MENA) countries are lagging on bringing more women into the workforce.

At the core of these findings is a puzzle in development indicators that is largely unique to the region: as women in the Middle East and North Africa have made unprecedented strides in health and education, female workforce participation has struggled to make commensurate gains.

“MENA countries have wisely invested in women’s education but they are not yet fully tapping into their potential to contribute to growth and prosperity,” Manuela Ferro, director for poverty reduction and economic management in MENA at the Washington-based World Bank, said in a statement.

A bank report released last week points to a wide and interrelated set of economic, legal and social factors that help to explain these findings. In most MENA countries, female-to-male enrolment ratios are close to or above one-to-one, and eight countries even have a “reverse gender gap” in post-secondary education, in which women enrol in greater numbers than men.

Likewise, maternal mortality fell by 59 percent between 1990 and 2008, the largest decline in the world.

Such impressive gains have not been matched in the labour markets in the region, however. Female participation hovers at just 25 percent, compared with 50 percent worldwide.Middle Eastern countries are not fully tapping into women's potential to contribute to economic growth and prosperity.

Of course, trends vary greatly by country, demographic and education level.

In Tunisia, for instance, the number of tertiary-educated women in the workforce has grown modestly. In Egypt, less-educated women have actually entered the workforce in greater numbers, even while labour participation by their more educated counterparts has declined.

The MENA puzzle

Although the report repeatedly mentions norms and customs that stress rigid ideas of women’s roles in society, the authors caution against attributing too much of the findings to Islam. They cite the diversity of women’s status across Muslim countries as evidence of a greater system of factors at work.

Current scholarship typically considers “variations in economic structures and policies among countries, or differences in pre-existing cultural values within a given country” more important, the report said.

This idea stands in contrast to another World Bank report from 2004, which looked at gender and development in the MENA region. At the time, researchers cited ideas of the woman as central to family honour in Islamic societies and the Muslim code of modesty, or mahram, as some of the strongest barriers to female participation in public life.

Yet it is impossible to escape the centrality of the law – and the uneven enforcement of anti-discrimination laws – as one of the most important and immediate avenues for bringing more women into the workforce.

“In principle, it can work both ways,” Tara Vishwanath, the lead author of the new report, told IPS. “But many would argue that without equality in the letter of the law, its interpretation and its implementation, it would be hard to ensure a level playing field for women.”

The structure of oil-dominated economies could also be to blame for squeezing job markets typically dominated by women.

Low-wage, export-oriented industries such as textiles are one typical way through which women have entered the workforce in developing countries. But during oil booms, academics have found that economies tend to shift away from female-heavy “traded” sectors and instead towards male-dominated non-traded sectors, such as construction and retail.

“The benefits of educating girls are many, and I believe families in the MENA region are aware of that,” Mayra Buvinic, a senior fellow with the U.N. Foundation, a Washington think tank, and former director of gender and development at the World Bank, told IPS.

She pointed to the relatively high income of MENA countries to explain the gender education-workforce mismatch.

“Because of their high income levels, they are able to afford educating all of their children, male and female,” she says. “They do not have to make hard choices.”

In this sense, the education-workforce mismatch is a sign of relative luxury, of an economy in which women have not yet had to enter the workforce in large numbers out of sheer necessity. The World Bank suggests that this could be one reason many other lower-income developing countries are outpacing the MENA region in this regard.

Policy solutions

Aside from the job markets of oil-dominated economies, policies of generous food, fuel and electricity subsidies also lower women’s incentives to work.

In Kuwait, for instance, subsidies account for as much as 20 percent of government spending. Such practices generally lower household costs and make the prospect of working outside the home less attractive for women, especially because doing so is often accompanied by, for example, additional costs for childcare.

Vishwanath and her co-authors propose reforms to such policies based on the fear that they dampen incentives to work. They also suggest tweaking other policies that may encourage more female labour force participation, lauding the effects of two tax credits (for earned income and child care) that have encouraged U.S. women to participate in the workplace.

They also say that political quotas can challenge deep-seated gender stereotypes.

“Although there is little consensus on the use of quotas, recent evidence finds that even temporary or short-term quotas can play an important role in changing attitudes and stereotypes,” Vishwanath says.

To this end, many are closely watching the effects of a December 2012 decision by the UAE government to implement gender quotas in corporate boardrooms.

Since the 2008 financial crisis, and most recently with the broad federal spending cuts beginning Mar. 1, experts have warned that an austerity-minded political system could bring about dramatic changes in the U.S. foreign aid model.

A significant part of this conversation has focused on shifting away from a government-led approach and instead strengthening the role of the private sector in development assistance. But critics are focusing attention on the potential pitfalls of such a redesign.

“The idea that there is a lack of public resources, so we need to be leveraging private money, ignores some of the options to increase public funds,” Janet Redman, director of the Sustainable Energy and Economy Network at the Institute for Policy Studies, told IPS.The danger lies in pretending that gross domestic product and foreign direct investment is the same as making economies more sustainable.

She says there are numerous other public sector options available for a country in the United States’ position. These include, for instance, taxes on financial transactions and carbon, both approaches that have largely been left out of the political discussion here in Washington amidst a shift in focus onto the private sector.

In a report released this week, a think tank task force of development experts and business leaders here urged the U.S. government to increase its reliance on the private sector in foreign aid flows aimed at development.

Citing changes in technology and an increased willingness among developing countries to engage with U.S. companies, researchers with the Center for Strategic and International Studies (CSIS) predict that the United States’ current model of development assistance could be obsolete within 25 years.

The CSIS report authors are calling for a shift from a government-based approach to a “blend of development, trade and investment”.

Such recommendations are based on global shifts in technology and business, especially the rapid outpacing of public sector development funds by the private sector. According to the report, the private sector currently spends over 87 percent of U.S. funds flowing to the developing world.

The share of public funding, meanwhile, has fallen from 71 percent in 1960 to just nine percent today.

Some also feel there is evidence that the private sector may be able to deepen the impact of foreign aid by equipping people in developing countries with new skill sets.

By equipping a person with a skill set instead of simply money, said Thomas J. Pritzker, executive chairman of Hyatt Hotels Corporation, “You’ll also give him hope – and hope is a crucial aspect of social stability.” He called peace and prosperity “two sides of the same coin”.

Narrative problem

Still, the prospect of the private sector serving as a primary engine of growth for development indicators is, for some, a controversial premise. Janet Redman, for instance, notes that the report’s findings are predicated on a potentially dangerous “narrative problem”.

She also cautions against adopting a system in which development institutions are designed to function more like companies, at the expense of meeting the needs of people who stand to benefit the most from foreign assistance.

Ensuring access to, for instance, health care, water and education should not be profit-driven enterprises, she stressed, because doing so would set up a “dynamic where companies looking for an investment may need to see a particular rate of return for them to invest.”

Redman continued: “The danger lies in pretending that gross domestic product and foreign direct investment is the same as making economies more sustainable and enabling them to meet the needs of their citizens.”

Private sector funds often don’t trickle down to the poorest members of a host country, a finding supported by a 2011 report published by the Independent Evaluation Group, the internal watchdog for the International Finance Corporation, the World Bank’s private-sector arm.

“The link from growth to poverty reduction is not automatic,” that report found, “particularly in situations where market failures and other inefficiencies limit participation of the poor.”

According to the auditor’s findings, less than a quarter of the IFC projects that generated satisfactory returns also generated identifiable benefits to the poor.

U.S. weariness

Of course, there are major challenges to any such dramatic overhaul of the United States’ development assistance model.

Many, for instance, refer to an increasing gap between how companies, federal agencies and NGOs function and communicate with each other. Business and NGO leaders at the event also attested to notable deficiencies in trust between the public and private sectors.

“There is not a system in place that would allow for cooperation on this scale between the different actors,” Sam Worthington, president of InterAction, a coalition of U.S.-based NGOs, told IPS. Developing such a system may be a task for the donor countries, he added.

Meanwhile, the challenge of U.S. public opinion looms large in any current discussion of foreign aid. As the Mar. 1 budget cuts are phased in, and as the United State withdraws from more than a decade of military involvement in the Middle East, many here are eying any kind of international engagement more warily than ever.

Experts on the issue are urging a shift in public opinion, warning against allowing war-weariness to translate into weariness with international engagement in general.

A poll released Tuesday shows a stark decline in favourability among Arab and Muslim citizens regarding the Iranian government and its policies.

Some who follow the issue are warning that tensions between Shia- and Sunni-led governments could ultimately be driving these shifts in attitude.

The poll, released by Zogby Research Services, is the latest in a series of surveys that charts public opinion in the Arab world on Iran. It polled 20,000 citizens in 17 Arab countries and three other non-Arab Muslim countries (Turkey, Azerbaijan and Pakistan), and was conducted over the course of several weeks beginning in September.What we’re seeing is entrenched in a really quite frightening spread of sectarianism.

An earlier poll, conducted in 2006, had indicated skyrocketing public opinion in the Arab world on Iran, with favourability ratings around 75 percent. Six years later, the new poll shows those same rates plummeting to around 25 percent, a decline that is being attributed to shifting perceptions towards both the United States and Iran, as well as growing Sunni-Shia tension.

In an IPS article published almost two years ago, in July 2011, journalist Barbara Slavin noted that favourability ratings toward Iran in the region were already in steep decline. In an extreme case, the Egyptian attitude fell from an 89 percent rating to just 36 percent.

In 2012, the most favourable views of the United States were expressed in Saudi Arabia (30 percent) and Lebanon (25 percent). The least favourable views were found in Jordan (10 percent) and Egypt (six percent).

Numbers indicating favourability toward the United States were generally lower and more volatile than those toward Iran, in the five to 40 percent range.

Meanwhile, Iran was viewed most favourably in Lebanon, with 61 percent, and Egypt further behind with 38 percent.

Iranian favourability ratings began much higher in 2006 and fell in all countries over the next six years. Public opinion fell the least in Lebanon, where favourability toward Iran was the highest out of all the countries (65 percent) in the last year.

In virtually every question, including two on Iranian roles in Bahrain and Syria in which other countries’ favourability ratings severely dropped, Lebanese participants answered with favourability rates above 70 percent.

Different explanations for the results were discussed at the Wilson Center here on Tuesday.

James Zogby, director of the Arab American Institute, said that in 2006 Iran had benefited from the perception that it was the centre of resistance against both the West, whose occupation of Iraq was then in its third year, and Israel, which had just fought a brief but very destructive war against Hezbollah in Lebanon.

Zogby suggested that Turkey was now supplanting Iran in this role, while the latter is perceived as stoking divisiveness in Iraq, Bahrain, Lebanon and Syria. The U.S. profile in the region, he noted, has also been reduced by its withdrawal from Iraq.

But analysts who responded to the poll cautioned against reading the results too optimistically and confusing anti-Iranian and anti-Shia sentiment.

“What we’re seeing is entrenched in a really quite frightening spread of sectarianism,” Marc Lynch, a Middle East expert and international affairs professor, said Tuesday. The results of the poll, he noted, need to be read as much as a “cautionary tale about the future of the Middle East as a feel-good tale of declining Iranian influence”.

Hisham Melham, head of the Washington bureau of Al Arabiya News Channel, also expressed concern over growing sectarianism in the region, going so far as to say that the Sunni-Shia divide is the worst it has ever been in the region.

Syria factor

The civil war in Syria also appears to be playing a significant role in this dynamic. Marc Lynch warned that some of the events that have proved crucial in undermining Iranian influence in the region, including the ongoing conflict in Syria, are creating new opportunities for expanding Iranian influence.

“Iranian influence in Syria is not going to go away,” he cautioned, “and one can easily imagine an insurgency fighting against what appears to be a Western-backed government in Damascus” when Syrian President Bashar al-Assad falls.

Middle East observers have been increasingly expressing concern over the region’s deepening sectarianism, especially as it exacerbates the conflict in Syria. After the removal of former president Saddam Hussein in Iraq, sectarian conflict and perception of a threat posed by Shi’ism has grown in the region.

Baghdad has been led by a predominantly Shia government since Hussein’s ouster and subsequent execution.

In the Syrian conflict, the government of President al-Assad has been backed primarily by Iran and the Lebanese Shia Hezbollah, while the rebels, who are predominantly Sunni, are supported primarily by the Sunni-led Gulf kingdoms and, to a lesser extent, Turkey. The Shia-led Iraqi government has also provided backing for al-Assad.

According to the new polling data, Palestinians hold particularly unfavourable views toward Iran, with favourability ratings in the 20 percent range. That compares, for instance, with relatively favourable polling outcomes towards the United States, with two-thirds of Palestinians responding that the U.S. contributed to stability in the Arab world.

Barbara Slavin, now a senior fellow at the Atlantic Council’s South Asia Center, expressed particular surprise at the Palestinian results, but likewise attributed the finding to the Syrian conflict.

“Iran and Hezbollah are rallying to the side of Assad in Syria, while Arab countries are funnelling money and weapons to the largely Sunni rebels in Syria,” she told IPS.

Pan-Islamic image

One of the most striking results of the new poll was a change in Arab public opinion over the past half-dozen years regarding Iran’s efforts to expand its nuclear power programme, producing enriched uranium that could be used for military purposes – a change Tehran denies.

In Saudi Arabia in 2006, for example, only about 15 percent of those polled believed Iran had nuclear weapons ambitions, compared with 78 percent in 2012. In Jordan, that number jumped from eight percent in 2006 to 72 percent in 2012.

The number increased in every country polled, albeit by smaller margins in the other six countries.

Although experts disagree on the underlying drivers of the shifting sentiments, it was clear that the polling results could potentially pose major problems for the Iranian government.

“Iranians have tried to project a pan-Islamic image of themselves since the 1979 revolution,” Slavin said, “which doesn’t work if they’re seen as a narrow sectarian power.”