Faces of mothers whose children were killed in criminal violence peer out from walls in Caracas. Venezuela has one of the highest murder rates in the world. Credit: Fidel Márquez /IPS

By Kanya D'Almeida
UNITED NATIONS, Mar 27 2014 (IPS)

This much is known: at least 33 people are dead and 461 have been wounded. The rest – questions of who, why and what next for Venezuela – has largely been a matter of speculation.

Earlier this month, a group of United Nations independent experts asked the government of Nicolas Maduro to clarify allegations of arbitrary arrests, intimidation of journalists and the abuse of dissidents in what experts say is the country’s worst political turmoil in over 10 years.“These are not random acts, this is a deliberate campaign to cut social links between the government and its mass base by blocking the delivery of social services." -- James Petras

Beginning in early February as sporadic student demonstrations, protests are now a daily occurrence, drawing anywhere from 500 to 5,000 people who say they have taken to the streets against perennial food shortages, soaring inflation and a steep rise in crime, including 21,000 homicides in 2012 alone according to the Venezuela Violence Observatory, representing one of the highest murder rates in the world.

Although initially peaceful, the protests recently turned deadly, with civilians hurling Molotov cocktails from behind their barricades and the National Guard dispatching units decked out in full riot gear to meet them.

For several weeks the media has portrayed the situation as a democratic struggle for human rights, including the rights to freedom of speech and political assembly.

In a Mar. 18 statement to the U.N. Human Rights Council in Geneva, Human Rights Watch (HRW) urged Maduro’s government to “uphold its international legal obligations to respect human rights, and, specifically, to end abuses against demonstrators.”

Daniel Wilkinson, managing director of the Americas division at HRW, told IPS the situation is “grave”, particularly the “abuses being committed by security forces, including excessive use of force against demonstrators.”

But other rights groups in and around Caracas, as well as some commentators in the U.S. and beyond, say the violence in Venezuela is neither democratic nor spontaneous, but a carefully orchestrated effort by the middle- and upper-classes to destabilise the revolutionary process set in motion by former President Hugo Chavez, which has long been a thorn in the side of the wealthy.

Silence in the barrios

A Mar. 25 statement signed by over 30 independent Venezuelan human rights activists says protests have largely been confined to affluent sectors in eight of the country’s 335 municipalities.

These neighbourhoods, home to mostly upper- and middle-class Venezuelans who constitute an electoral minority, are now the sites of makeshift barricades where “cables, barbed wire, felled trees, rocks, and spilt grease oil…mix with disused furniture, tires and rubbish that are lit on fire,” according to a recent study.

“The covers of public drains have been lifted, leaving holes in which at least two motorcyclists have died,” added the study.

Contrary to news reports that most of the 33 deaths have occurred at the hands of security forces, the study found that 17 of the victims died at the street barricades, including a pregnant woman who was shot Monday when the bus she was riding in was halted by protesters and its passengers forced to disembark.

“The people you are seeing on the streets constitute the hard-line of the right-wing opposition who decided that they did not want to wait till the next election to get rid of the government,” Mark Weisbrot, co-director of the Washington DC-based Centre for Economic and Policy Research, told IPS over the phone from Lima.

Regardless of their political affiliation, the protesters’ demands seem perfectly reasonable on paper: a reduction of the inflation rate that has nearly doubled to 57.3 percent since Maduro took the helm last April, and access to basic supplies and groceries.

Economic growth slowed from 5.6 percent in 2012 to to one percent in 2013, according to the International Monetary Fund, partly accounting for the bare shelves around the country.

But Weisbrot says the protesters are more sheltered from such scarcities than their counterparts in the sprawling barrios of Caracas, home to 50 percent of the city’s 3.8 million inhabitants.

“Demonstrators hailing from neighbourhoods like Los Palos Grandes have servants to wait in line for them at the supermarket, they have access to goods that most Venezuelans do not,” he said, recounting scenes from his recent trip to Venezuela’s capital.

Those sectors that bear the brunt of rising prices and severe shortages are giving the demonstrations a wide berth. A resident of the Petare slum, which hugs the eastern rim of Caracas, recently told reporters about the unrest, “It’s rich people trying to get back lost economic perks. The slums won’t join them.”

Indeed, economic analysts have suggested that the protesters are more aggrieved by the 4.1 percent jump in monthly recreational costs, and the 3.9 percent spike in hotel and restaurant prices, than by inflated healthcare expenses or the cost of flour.

Targeting the poor

Some sources say the above analysis is borne out by protesters’ systematic targeting of public welfare institutions, utilised by the country’s most destitute and marginalised groups, in a deliberate attempt to weaken the nerve center of the Socialist state.

“There have been attacks on government supermarkets that sell food at subsidised prices, on clinics where Cuban doctors provide free medical care, and on educational facilities,” James Petras, professor emeritus of sociology at the Binghamton University in New York, told IPS.

A few nights ago demonstrators torched an experimental university in the western city of San Cristobal, cradle of the protest movement, where several hundred low-income Venezuelan students were receiving subsidised education.

Over the last 12 weeks, Petras says, protesters have also targeted “many centres of social gathering and recreational activities, electrical grids – especially those that supply areas where support for Chavez is strong – municipal buildings, local banks that supply microcredit loans to small-scale enterprises, and the list goes on.”

Fire bombings, arson and other acts of sabotage have cost the country about 10 billion dollars in damages, the government said last Friday in a statement that lambasted such tactics as “vandalism” and “terrorism”.

“These are not random acts, this is a deliberate campaign to cut social links between the government and its mass base by blocking the delivery of social services,” Petras said.

“The right wing is very conscious of the link between welfare programmes and the government. This is why there has been no targeting of big businesses, multinational banks or other institutions of the upper classes.”

The government, meanwhile, is sandwiched between international pressure to release the roughly 1,800 jailed protesters and rein in its security forces, and a growing movement in and outside of Venezuela calling for swift action against what they say is a wave of fascism, in which a privileged minority is threatening to destabilise a government that has won 18 of the last 19 elections.

*Correction: March 28, 2014 — An earlier version of this story incorrectly stated that protesters in Venezuela fired bullets from behind their barricades. Documented evidence only shows civilians throwing Molotov cocktails at security forces.

Rosemie Durandisse stands with one of her children in front of her temporary home. Credit: Fritznelson Fortuné/IPS

By Bryant Harris
WASHINGTON, Jan 10 2014 (IPS)

As the fourth anniversary of the devastating earthquake in Haiti approaches on Jan. 12, development analysts are decrying an ongoing lack of transparency in U.S. foreign aid to the country, even as those assistance streams are drying up.

From what is known of U.S. post-earthquake funding to Haiti, it appears that a notably small proportion of money from USAID, the county’s main foreign aid arm, is going directly to local Haitian businesses, institutions and organisations.“Sixty percent [of USAID funds] goes to firms operating inside the beltway, disappearing in a black box.” -- Jake Johnson

“Sixty percent [of USAID funds] goes to firms operating inside the beltway, disappearing in a black box,” Jake Johnson of the Centre for Economic and Policy Research (CEPR), a Washington think tank, told IPS. “That makes it very hard to determine how and when the funds reach the ground.”

Even though the United States offered three billion dollars in aid for Haiti after the earthquake, less than one percent of the 1.3 billion dollars in obligated USAID funds – money designated specifically for Haitian recovery efforts – has gone directly to local Haitian groups.

“When so little of the funding reaches Haitians themselves, it takes them out of the decision-making process and ensures that aid programmes are not actually responsive to the needs of people on the ground,” Johnson says.

He believes that aid money can often be better utilised in post-emergency situations if donor governments ensure a high level of transparency around those assistance flows, and if they direct as much of these funds as possible towards developing new industries.

A USAID official accounts for these apparent discrepancies by noting that “part of the challenge of making more awards directly to Haitian entities – public and private – has been that few of them have the internal financial controls in place to ensure compliance with U.S. government terms and conditions.”

The official told IPS the agency is trying to address this impediment by working directly with Haitian organisations to build their “financial control capabilities”, as well as to educate them about USAID procurement procedures and provide them with financial services.

“Many USAID-funded partners already work with numerous Haitian NGOs – more than 400 – through contractor and grantee sub-awards as well as arrangements with local vendors.”

Half of the data is missing

So if less than one percent of USAID funding has gone to Haitian groups, where has the rest of this money been directed? The lack of funding transparency makes it impossible to know for sure.

“Reports on contractors are not actually done according to the Office of Inspector General for USAID,” says Johnson.

USAID’s primary contractors are required to report on their subcontractors’ activities, and this data in turn is supposed to be made public. “But this information is nowhere to be found,” Vijaya Ramachandran, a senior fellow with the Centre for Global Development (CGD), a Washington think tank, wrote this week.

The USAID official told IPS that “all reported subcontract and sub-award information is published publicly” through a government website. But Ramachandran asserts that “almost half of the transactions data” are missing important data that identify individual vendors.

Lawmakers have noticed similar problems. Legislation passed the U.S. House of Representatives in mid-December that would require a government audit of U.S. assistance in Haiti. (That bill is currently awaiting a vote in the Senate.)

USAID gave seven of the 10 largest contracts for operations in Haiti to Chemonics International, a for-profit provider that Johnson says is the largest USAID contractor in the world. Chemonics’s two largest projects in Haiti include the WINNER Project and the Office of Transitions Initiative, which Johnson describes as “the more political arm of USAID”.

The project was designed to provide aid to countries afflicted by natural disasters or political turmoil, and following the earthquake it immediately provided disaster relief for displaced Haitians.

Nonetheless, the public is unable to ascertain how Chemonics spent the vast majority of its multi-million-dollar contracts in Haiti due to USAID’s lack of oversight reports.

“The [USAID] inspector-general found that Chemonics regularly runs short of its goals and over its budget,” CEPR’s Johnson says. “This is typical, but it’s become particularly evident in Haiti because of the earthquake.”

Trade burden

In addition to development and reconstruction aid, Washington is also seeking to assist Haitian recovery efforts by strengthening the country’s garments industry. Doing so, however, has presented a different set of challenges.

Following the earthquake, USAID partnered with the Clinton Foundation, the Inter-American Bank and Sae-A Trading, a Korean textile manufacturer, to construct the Caracol Industrial Park. Although the agency predicted that the complex would create up to 65,000 jobs, media reports suggest that as of last September the park had created fewer than 1,500 jobs.

Furthermore, although the project’s financers gave hundreds of small-scale farmers 3,200 dollars each to vacate their land for the complex, 95 percent of that land today reportedly remains inactive. Meanwhile, Haitian garment factories, including Caracol Park, are said to be openly flaunting minimum wage laws by paying their employees a mere 4.56 dollars a day, rather than the 6.85 dollars per day stipulated by the government.

Other U.S. attempts to bolster the textiles sector have started out more strongly, but been beset by pre-existing measures.

In the aftermath of the 2010 earthquake, the U.S. Congress passed the Haiti Economic Lift Programme (HELP) Act in the hopes of stimulating the country’s economy by boosting apparels exports, long a cornerstone of Haitian industry. Haiti’s clothing exports to the U.S. have indeed risen by 25 percent since 2009, creating 30,000 jobs, a number that is expected to double by 2016.

Because Haitian apparel imports into the United States are restricted based on a rule of origin, however, certain types of clothing imports over a certain quota must be produced using U.S. materials. These measures are designed to benefit the U.S. textile industry.

Although the HELP Act partially ameliorated these complex trade restrictions, the quotas and tariffs that the United States places on the Haitian apparel industry continue to inhibit trade-based economic growth.

The CGD’s Kimberly Elliot told IPS that U.S. red tape on Haitian imports today consists of a “complex maze of caps and rules of origins. That’s unlike the European Union, Canada and Japan, all of which have simplified restrictions on rules of origins for states that the U.N. designates as least-developed countries.”

She calls the rule of origin a “burden” for Haiti and argues that if U.S. trade restrictions were less complex, post-earthquake Haitian trade would have a greater potential for growth.

A local woman returns to her home with a new shelter kit. While the destruction is widespread, local rebuilding efforts are already underway. Credit: Simon Davis/DFID/cc by 2.0

By Ramy Srour
WASHINGTON, Nov 21 2013 (IPS)

Nearly two weeks after Typhoon Haiyan devastated parts of the central Philippines, experts and activists here are warning that post-disaster reconstruction needs to be more transparent than past such efforts, while also focusing on a long-term assistance strategy that goes beyond immediate emergency relief.

In recent days, academics and civil society experts have also urged the international community to learn from some of the mistakes made during the disaster responses following the 2010 earthquake in Haiti."When the funding dries up, the rebuilding effort still needs to be taken care of." -- Prof. Jesse Anttila-Hughes

“I think there is a big myth that emergency response is split in different stages, with emergency relief coming first, followed by reconstruction and then rebuilding,” Jake Johnston, a research associate at the Centre for Economic and Policy Research (CEPR), a think tank here, told IPS. “But what you actually need is a more comprehensive view, from the very beginning.”

Johnston has closely followed reconstruction efforts in Haiti following the earthquake that left an estimated 316,000 people dead and 300,000 injured, and displaced almost 1.5 million people. He says there are several lessons learned from the Haitian disaster that can be applied to the current crisis in the Philippines.

Keeping locals in the loop

“One thing that, unfortunately, didn’t go very well in Haiti was that the local government and civil society were largely bypassed by foreign organisations,” he says. “For instance, you saw USAID” – the U.S. government’s primary foreign aid agency – “spending almost 1.3 billion dollars in awards to contractors and NGOs that were mostly based in the U.S., with less than one percent of that money actually going to Haitian organisations.”

In the Philippines, he notes, international organisations should keep the Manila government in the lead, making sure that it is a prominent part of the coordination of the entire reconstruction mechanism.

Transparency and accountability can also be vastly improved over past efforts. Experts say doing so would ensure that the organisations working on the ground meet local needs and are effective in doing so.

“Nongovernmental organizations and private contractors have been the intermediate recipients of most of these funds,” Vijaya Ramachandran and Owen Barder, two senior fellows at the Center for Global Development (CGD), a think tank here, wrote last week. “But despite the fact that these organizations are beneficiaries of public funds, there are few publicly available evaluations of services delivered, lives saved, or mistakes made.”

The analysts note that this lack of transparency and accountability has led to growing disillusionment among the local population in Haiti. Perhaps more important, lack of transparency can also end up affecting the relief’s efficiency itself.

“In Haiti, we saw that the groups on the ground weren’t actually communicating with each other, leading to a situation in which different groups simply duplicated the same things,” CEPR’s Johnston says. “That’s a clear indicator telling us that there wasn’t enough transparency and accountability around the aid that was being provided.”

Greater communication between groups would enable them to be more effective with their work, while also increasing their accountability to donors, he says.

Still, some NGOs currently working in the Philippines are stressing that transparency and communication are already at the core of what they do.

“We try to be very transparent about our finances, and we make sure that everyone sees where all of our money is going,” Rachel Sawyer, a member of the communications staff at All Hands Volunteers, a non-profit that works in disaster-stricken areas both in the U.S. and internationally, told IPS.

“We are also constantly communicating with other organisations. When we see one, we either partner with them or we try to meet the unmet needs somewhere else.”

She warns that “‘disaster relief’ is obviously a very broad term.”

Long-term funding

One other major issue experts point to is the problem of ensuring that the outpouring of funds raised in the immediate aftermath of a disaster is maintained over time, which is what long-term reconstruction requires.

“While media, funders and emergency responders spend a short amount of time dealing with immediate needs,” Lori Bertman, the president and CEO of the Louisiana-based Pennington Family Foundation, a grant-making institution, wrote on Monday, “this does not create the infrastructure to mitigate future risk, and leaves long-term needs such as resettlement, mental and public health, as well as fiscal viability, unfunded and unattended.”

Bertman’s article was later endorsed by the Centre for Strategic and International Studies, a think tank here.

Some have suggested that this short-term response may be partially due to the cyclical nature of media coverage, which tends to shift the public’s attention quickly.

“Obviously the news cycle is a cycle, and trying to get people to give more attention is not really going to work,” Jesse Anttila-Hughes, a development economics professor at the University of San Francisco, told IPS.

He notes, however, that the current strategy can be improved.

“Funding in these situations is very much focused on shelter and food. But then when the funding dries up, the rebuilding effort still needs to be taken care of,” he said. “What really needs to be done in these situations is to ensure that funding calls are specifically tied to clear, long-term reconstruction.”

According to the latest information released by the National Disaster Risk Reduction Management Council, the Philippine government’s agency monitoring the current crisis, Typhoon Haiyan has so far killed over 4,000 people, leaving almost 4.5 million people without a home.

Earlier this week, the Washington-based World Bank announced that it would release 500 million dollars in funding to support the Philippines’ effort in recovery and rebuilding. The funds, which are a loan, came in response to a request by the government in Manila, and Bank officials are already looking to see how this money can be stretched for the long term – and how it can be used to sidestep some of the problems that have beset previous reconstructions.

“Given the scale of this disaster, the country will need a long-term reconstruction plan,” Axel van Trotsenburg, the World Bank’s vice president for East Asia said on Monday. “We can bring lessons learned from our work in reconstruction after disasters hit Aceh, Haiti and other areas that might be helpful in the Philippines.”

After Hurricane Sandy struck Jamaica a year ago, critics say the country's recovery was hampered by the IMF budget. Credit: European Commission/cc by 2.0

By Samuel Oakford
UNITED NATIONS, Nov 18 2013 (IPS)

On May 23, shortly after wrapping up negotiations on the International Monetary Fund’s (IMF) 958- million-dollar loan – its second in three years – to keep Jamaica out of default, the fund’s mission chief in the country, Jan Kees Martijn, set out to visit Croydon, a former plantation settlement in the mountainous northwest of the island.

Also in Croydon that day was Verene Shepherd, professor of social history at the University of the West Indies and chair of the national reparations commission."There’s been a lot of talk about the new IMF... but what they are still pushing is from 15 years ago.” -- Jake Johnston

Shepherd was recording her weekly radio show, “Talking History” – she was marking the anniversary of the hanging of Samuel Sharpe, leader of the slave rebellion of 1831-32 – when she ran into Martijn being led through town by the local chamber of commerce.

The phlegmatic Dutch technocrat listened as Shepherd discussed the brutal history and economic legacy of slavery, one difficult to compute in dollars and cents (though Shepherd has, at 7.5 trillion dollars), but something that many in the region feel should at least footnote every budget shortfall and each emergency loan taken.

“I tried to tell him that you are looking at the end result of colonisation,” Shepherd told IPS. “It’s easy to say ‘you’re independent now, stop complaining’ but it’s very hard to distance what is happening now from the past.”

Though Shepherd was aware that in October Jamaica would be one of 14 Caribbean countries to sue Britain, France and the Netherlands for slavery reparations, she wished Martijn well, and the IMF team continued on to their heritage tour.

A towering crisis

Since 1990, there have been 37 debt restructurings in the Caribbean, a problem critics say international bodies like the IMF are woefully unprepared to tackle.

Barbados, Belize, Jamaica, Antigua and Barbuda, Grenada, St. Kitts and Nevis, and St. Lucia all have public debt higher than 80 percent of GDP; in Jamaica the figure is 143.3 percent.

Already this year, bondholders in Belize took 10-20 percent cuts, and in St. Kitts and Nevis, investors have seen 50-percent “haircuts” on their principal.

In a February report, the IMF found that the “main challenges for Caribbean small states looking ahead include low growth, high debt and reducing vulnerabilities from natural disaster.”

Yet even after issuing a mea culpa of sorts for pushing austerity in Europe following the 2008 financial crisis, the IMF turned around and insisted those very policies – ones that led to contractions and unemployment – were the only way out of the Caribbean’s fiscal mess.

“There’s been a split in their policies for rich countries and for developing countries,” said Jake Johnston, research associate at the Centre for Economic Policy Research (CEPR). “There’s been a lot of talk about the new IMF and in some cases they have been more lenient, but when you are talking about developing countries what they are still pushing is from 15 years ago.”

Despite successive loans from the IMF, Jamaica still spends around half its budget on interest payments, crippling the country’s ability to provide social services and prepare for natural disasters.

After Hurricane Sandy struck Jamaica one year ago, “they couldn’t repair or prepare for the next one because they were constrained by the IMF budget,” Johnston told IPS.

The IMF said it was unable to comment for this story because a team was currently in the country.

However, holding back spending can lead to a dangerous feedback loop: experts predict that for every dollar a country forgoes today on climate change mitigation, it will spend six or seven on disaster response in a few years’ time.

Media portrayals of the crisis tend to rely on sources in the IMF and investment community and adopt the same terse, tough-love language they favour that serves to distance themselves from people on the ground. Depictions often treat extreme weather and zero-growth economies as if in a vacuum, without interrogating their climactic or historical causes.

A history too quickly forgotten

Caribbean economies were ushered into independence underdeveloped and limited by colonial regimes that favoured primary exports over industrialization.

Countries came to rely heavily on preferential trade agreements that the EU offered former colonies.

The 1973 oil price shock forced many to take out dollar-denominated loans to pay for energy.

When interest rates in the U.S. shot up, payments on those loans ballooned and countries in the region had no choice but to accept the structural adjustment that accompanied IMF and World Bank bailouts, a position they’ve been in ever since.

To make matters worse, the U.S. successfully sued to end the EU concessions, effectively shuttering banana growers unable to compete with huge U.S.-owned plantations in Central America.

Before, “all the produce was sold and that was money in the pockets of people throughout the island, even in the smallest villages,” Father Sean Doggett, a catholic priest in Grenada, told IPS. “That came to a very sudden stop around 1998.”

Countries turned to tourism, but the recovery from the global financial crisis has been slow and uneven – in Grenada, unemployment doubled between 2008 and 2012.

Doggett and other members of the Grenadian Conference of Churches (COC) sat down with the IMF and the Grenadian government in October, proposing the creation of a “conference of creditors” to negotiate the terms of a two-thirds debt reduction and called on the IMF to attach greater importance to poverty reduction and unemployment.

In 2013, Grenada’s debt payments will amount to over 250 percent of what it spends on education and health.

“There is no way that Grenada can pay off its debt as it stands,” Doggett told IPS.  “We need to get out of this cycle of indebtedness and get on a development path that is more sustainable.”

“Having debt hanging around the neck of people forever and ever is contrary to the biblical concept of Jubilee, of debt forgiveness… this is as much an issue of justice and the building of a better society,” he said.

Though Grenada may one day serve as a model for more inclusive debt forgiveness in poorer countries, Johnston insists an international mechanism to settle sovereign debt disputes is needed.

“Companies go bankrupt, cities go bankrupt but when countries cannot pay their debt they end up being punished for it. It’s clear there is a need internationally and especially for the Caribbean that they have a mechanism to work these things out.”

At the Commonwealth Heads of Government Meeting in Colombo last weekend, countries discussed exploring a debt swap plan that would pay off the principal of heavily indebted countries with money already pledged by wealthier countries to combat climate change.

“In return for having their debt paid, countries would agree to set aside the principal amount into a trust fund to finance climate change mitigation” over 10 to 15 years, Travis Mitchell, economic advisor at the Secretariat, told IPS.

But for Shepherd, all of this misses the point.

“When we are talking to the international community, it’s always what you can do for us,” said Shepherd. “You need to own up to the exploitation and underdevelopment.”

For countries that are responsible for a miniscule portion of greenhouse gas emissions yet suffer the most from climate change, taking the money wouldn’t address the economic and moral offences that saddled them with debt in the first place.

Any payment, Shepherd says, should come as redress, not as a form of charity that lets the developed world clear its conscience.

“When you frame it in the post-2015 agenda and look at the (U.N.) Millennium Development Goals, you realise those aren’t realised without a change of attitude, otherwise you’ll be here talking about the same thing 50 years hence.”

Five years after the 2008 world financial crisis and two years after the Occupy movement it triggered, U.S. critics of the financial sector are coalescing around the idea of a Robin Hood Tax on financial transactions.

Bankers look down onto Robin Hood tax protestors gathered in New York City on Sept 17, 2013. Credit: Samuel Oakford/IPS

“The questions that Occupy raised are the right ones and it’s up to everyone else to come up with some answers,” said Robert Pollin, an economist at UMASS Amherst who works on financial transaction taxes (FTTs).

The idea, first floated by Nobel Prize-winning economist James Tobin in the early 1970s as a way to discourage overzealous currency trading, would, in its current iterations, levy a small duty on stocks, bonds and derivatives.

Though the debate over FTTs has long focused on curbing risky and unnecessary trading and “righting the market”, the Robin Hood movement attempts to shift it to one over human rights, fulfilling basic needs and not least a bit of payback for taxpayer bailouts of the financial sector.

For activists in the United States, the tax is part of what they hope will be a societal reorientation away from the privileging of an industry that has doubled its share of U.S. GDP since 1980 and drains other fields of the best and brightest.

FTTs exist in over 30 countries, many of them, like South Korea and Brazil, with some of fastest growth rates in the world.

“People don’t realise how tiny a tax we are talking about,” said Nicole Woo, director of domestic policy at the Centre for Economic and Policy Research (CEPR).

“There’s plenty of evidence out there that if revenues were to go to infrastructure spending, education and other public goods, it could increase GDP in the end and help increase employment,” Woo told IPS.

The Robin Hood Tax coalition, an umbrella group of sympathetic organisations, has put its weight behind a bill, “The Inclusive Prosperity Act,” introduced in the House of Representatives by Rep. Keith Ellison. The bill’s text is a strong critique of the financial sector and calls for the tax to pay for housing, healthcare and protecting the public sector and the environment.

The legislation would tax stock trades at 0.5 percent, bonds at .1 percent and derivatives at .005 percent.

The mix aims to “tax different markets equally”, Pollin told IPS, making it difficult for traders to flee one asset class for another. A tax in the U.S. would enjoy auto-enforcement on the part of market players because of the judicial security it provides.

“If you want to use the American legal system, you will have to trade here,” says Pollin.

Larry Summers’ decision to remove himself from consideration as chairman of the Federal Reserve in the face of a promised uproar among liberal members of Congress has Robin Hood supporters optimistic.

Summers is seen by many on the left as a leading architect of the financial crisis after he pushed for financial deregulation and opposed transparency in the derivatives market while serving as treasury secretary during the Bill Clinton administration.

A European proposal, agreed to by 11 countries, however, suffered a legal setback this month when E.U. lawyers delivered a non-binding opinion that found a continent-wide FTT used jurisdictional powers within states illegally. The decision is one of many roadblocks that supporters can expect to encounter.

For nurses at a Sept. 17 Robin Hood event in New York City, the events in Europe were noise.

“We looked around the globe and found nurses have the same issues everywhere. Austerity measures are killing us,” said Jean Ross, co-president of National Nurses United (NNU), a union of over 180,000 registered nurses and co-founder of the Robin Hood Tax coalition.

The union sees a Robin Hood Tax paying for many of the medical services which have been cut since the economic crisis.

An enemy weakened

For years, High Frequency Trading (HFT) was the oft-cited boogeyman when it came to pushing for a Robin Hood Tax. Critics claim the billions of daily trades distorted markets and added to volatility.

Fears were realised on May 6, 2010 when the Dow Jones Industrial Average fell more than nine percent only to regain those losses in a matter of minutes. Resounding blame was laid on trading algorithms that exacerbated an initial drop in the futures market. By 2012, HFT were estimated to be executing 84 percent of all trades on U.S. exchanges.

But as more HFT players enter the fray, returns in the zero sum game of shaving fractions of pennies off trades have decreased.

Large firms like KCG – itself formed when GETCO merged with near bankrupt Knight Capital after a haywire algorithm cost the latter over 400 million dollars in one day – have seen their profits cut by over three quarters from the height of the HFT boom, a period that coincided with the first volatile spurts of the crisis in 2008. Many have gone out of business.

KCG declined to comment for this story, as did industry leader Citadel Group.

That high-frequency trading may eat itself up underscores its social uselessness, says Woo. HFT proponents cite the volume and liquidity it creates – if bid and ask prices are nearly even, retail investors and pensions should pay lower prices. This is misleading, Woo told IPS.

“The liquidity provided by these traders is a sort of phantom liquidity because as soon as things start going south the computer algorithms pull all their money out, the liquidity just dries up completely,” she said.

HFT profits, even at their height, were small compared to those of the entire financial sector. Pollin’s models, using parametres similar to those set forth in Ellison’s bill, predict a drop in trade volume of at least 50 percent, putting U.S. market volume and capitalisation proportionally on par with Great Britain, where a tax of .5 percent already exists on stocks.

“Financial trading is an undertaxed sector of our economy,” says Woo.

Many even on Wall Street, especially those whose profits are reliant on long-term trends, agree.

A lack of tax on commodity trading can in fact be a burden on the average consumer. Legislation will help consumers by discouraging speculation in commodity markets, says Kenneth Zinn, political director at NNU. “There’s a surcharge on gasoline that’s simply Wall Street speculation.”

After watching a bruising battle over healthcare that ended in the Affordable Care Act, the nurses union is gearing for a fight with the financial industry, another special interest group which will fight tooth and nail to protect its privileged place in the economic pecking order.

A school in Papua New Guinea. “Services” refers to an extremely broad array of sectors, including education, water and energy provision, health, banking, construction, retail and much more. Credit: Catherine Wilson/IPS

By Carey L. Biron
WASHINGTON, Sep 17 2013 (IPS)

Nearly 350 international civil society organisations are urging countries taking part in new negotiations towards an agreement on “trade in services” to abandon the effort, warning that the accord would negatively impact on universal access to and national regulation of public services.

Trade representatives of nearly 50 countries, led by the United States and the members of the European Union, have since last year been engaged in initial discussions on a framework for what is being called the Trade in Services Agreement (TISA). This week, officials meeting in Geneva are marking the beginning of the substantive next phase of talks, with governments now offering their views on individual aspects of any eventual agreement.“This is not something that will level the playing field for developing economies." -- Deborah James of CEPR

On Monday, 341 national and international organisations, representing hundreds of millions of members, warned that the TISA framework threatens to undermine essential services around the globe. They also worry that the negotiations are pushing anti-regulatory stances that in part led to the recent international financial crisis.

“The TISA negotiations largely follow the corporate agenda of using ‘trade’ agreements to bind countries to an agenda of extreme liberalisation and deregulation in order to ensure greater corporate profits at the expense of workers, farmers, consumers and the environment,” an open letter from the groups, addressed to trade ministers both involved in the TISA negotiations and those not participating, states.

“The world is still recovering from the greatest global economic downturn in nearly a century, facilitated by the extreme deregulation of the financial services industry. It is clear that strong public oversight over services is necessary to ensure that the public interest is prioritised over private profit.”

The groups say the TISA would “move our countries in precisely the wrong direction”. Those supporting the new open letter’s call for a halt to negotiations represent a broad array of pro-poor and development concerns, including labour, water, health and education advocacy groups.

“We have seen no support for this agreement coming the labour, environment, safe communities or consumer side of things,” Deborah James, director of international programmes at the Center for Economic and Policy Research (CEPR), a think tank here, told IPS.

“When you have nobody from that side offering any support whatsoever, you know you have a problem. Instead, this is about taking up the market-access agenda of the richest corporations.”

90 percent of sectors

Of particular concern to critics is the breadth of the talks’ framework. In this case, “services” refers to an extremely broad array of sectors, including education, water and energy provision, health, banking, construction, retail and much more.

Further, unlike previous global trade-in-services agreements, which allowed countries to decide which services they wanted to include and liberalise, initial indications suggest that the TISA would cover nearly all sectors.

Sources within some of the negotiating countries say this could mean 90 percent of all services, according to Public Services International (PSI), a trade-union federation in over 140 countries. That means nearly all aspects of a society’s economy could suddenly be required to be deregulated and opened to foreign competition.

“We believe this deal is about transferring public services into the hands of private and foreign corporations motivated only by profit,” PSI General Secretary Rosa Pavanelli said Monday.

“This will undermine people’s rights and affordable access to vital public services such as healthcare, water and sanitation, energy, education, social services and pensions, and exploit common goods and natural resources.”

Further, it appears likely that clauses will be included that would prohibit any further national-level regulation in those sectors. Critics say that such a “standstill” mechanism would be anti-democratic.

“Strong regulation of and oversight over both public and private services is critical for democracy,” Monday’s open letter states.

“Democracy is eroded when decision-making about important sectors … [is transferred] to unaccountable ‘trade’ negotiators who have shown a clear proclivity for curtailing regulation and prioritising corporate profits.”

Under a grouping formally known as the Really Good Friends of Services, countries currently taking part in the TISA talks are Australia, Canada, Chile, Colombia, Costa Rica, Hong Kong, Iceland, Israel, Japan, Mexico, New Zealand, Norway, Panama, Pakistan, Peru, South Korea, Switzerland, Taiwan, Turkey, the United States, as well as the members of the European Union. Lichtenstein and Paraguay also look set to join the talks.

Competitive advantage

The TISA discussions could have particularly negative ramifications for developing economies, potentially exacerbating existing disparities rather than ameliorating them.

“Services is almost always something that advanced economies have a competitive advantage in, wherein most advanced economies are looking to gain access to each others’ and developing markets,” CEPR’s James, an organiser of Monday’s open letter, says.

“This is not something that will level the playing field for developing economies or give them more access to world trade for development purposes – there is no ‘trade for development’ model at work here. This is purely about enriching corporations that advocate for greater access.”

She points out that the make-up of those countries currently negotiating towards a TISA highlight this discrepancy. The vast majority of these countries are members of the Organisation for Economic Cooperation and Development (OECD), the Paris-based grouping of rich countries.

On the other hand, just eight governments currently in the TISA talks represent developing economies, and James says even these tend to skew along established ideological lines.

“Look at the countries from Latin America, for instance – Colombia, Chile, Panama, Peru, these are all countries that already have free trade agreements with the United States,” she says.

“On the other hand, where are the Brazils or Argentinas – the countries that are looking at more regional integration strategies, doing more to rebalance their economies away from export-led growth, looking at more domestic and social spending as a way to grow their economies? None of those are participating.”

While timeframes are always complicated when applied to large-scale trade talks, the organisers of the current TISA discussions are hoping to show substantial progress by the end of this year, when a WTO summit takes place in Indonesia. Thereafter, they suggest that a final agreement could come together as soon as next year.