“Just as the world is moving towards multi-polarity, so is Asia … The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation”. Photo credit: Public domain via Wikimedia Commons

By Shyam Saran
NEW DELHI, Jun 1 2015 (IPS)

It has been apparent for some time that we are in the midst of a historic shift of the centre of gravity of the global economy from the trans-Atlantic to what is now becoming known as the Indo-Pacific.  

This is an emerging centre of economic dynamism and comprises what was earlier confined to the Asia-Pacific but now includes the South Asian region as well.

This is a region which now accounts for nearly 40 percent of world gross domestic product (GDP), which is likely to rise to 50 percent or more by 2050.  Its share of world trade is now 30 percent and growing.

Shyam Saran

This year, the region has become the largest source of foreign direct investment (FDI), surpassing the European Union (EU) and the United States. China has been the main driver of this historic shift, but other Asian economies have also made significant contributions.

As the Chinese economy begins to slow, India shows promise of regaining an accelerated growth trajectory under a new and decisive political leadership. This will help extend the scale and direction of this shift. Its geopolitical consequences will be profound.

It must be recognised that the economic transformation of Asia, in particular the spectacular growth of China, has been enabled by an unusually extended and liberal global economic environment, underpinned by the faith in globalisation and open markets.

It has also been enabled by a U.S.-led security architecture in the region which kept in check, though did not resolve, the long-standing political fault lines and regional conflicts over competing territorial claims and unresolved disputes.

This relatively benign and supportive economic and security environment is in danger of unravelling precisely at a time when the situation in the region is becoming more complex and challenging.  Paradoxically, this is partly a consequence of the very success of the region in achieving relative economic prosperity.“The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards. This may well undermine the very basis of Asia’s economic dynamism”

We are witnessing new trends in the region which, unless managed with prudence and foresight, may well sour the prospects of an Asian Century.

The relatively open and liberal trade and investment regime, in particular access to the large consuming markets of the United States, European Union and Japan, is now under serious threat.

Protectionist trends are already visible in these advanced economies as they struggle with prolonged economic stagnation which is the fall-out of the global financial and economic crisis of 2007-2008.

Instead of the consolidation and expansion of the open and inclusive economic architecture that had hitherto been the hallmark of the regional and global economy, we are witnessing its steady fragmentation.

In the Indo-Pacific region, there are competing regional trade arrangements and investment regimes, with no clarity on the contours of a new and emerging economic architecture.

The United States is spearheading its Trans-Pacific Partnership (TPP) which will include some Asian economies, but not India and China.

China has countered by proposing a free trade area encompassing the current Asia-Pacific Economic Cooperation (APEC) membership.  This will include China and the United States but not India and some of the Association of Southeast Asian Nations (ASEAN) economies.

The Regional Cooperation Economic Partnership (RCEP) would include all ASEAN countries plus China, Japan, Republic of Korea, India, Australia and New Zealand, but not the United States.

And finally, there is the East Asia Summit process (EAS) which includes all the above-mentioned countries but also the United States and Russia.

The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards.  This may well undermine the very basis of Asia’s economic dynamism.

In the security field, too, we are witnessing a growing salience of inter-state tensions and competitive military build-up.

The U.S.-led security architecture remains in place formally but its erstwhile predominance is diminished.

The gap between the military capabilities of China and the United State is closing steadily. As China’s security footprint expands beyond its shores, it will inevitably intersect with the existing deployment of the forces of the United States and its allies and partners.

Faced with an increasingly uncertain security environment and threatened by a more insistent assertion of territorial claims by China, the countries of the region, including Japan, Republic of Korea, members of ASEAN, Australia and India are building up their own defences, in particular maritime capabilities, and this itself is escalating tensions.

There is as yet no emerging regional security architecture which could help manage inter-state tensions in the region. This includes the growing possibilities of confrontation between the United States and China.

In the absence of such a regional security architecture, based on a broad political consensus and a mutually acceptable Code of Conduct, the region may well witness a heightening of tension and even conflict.  These developments would inevitably and adversely impact on the dense network of trade and investment relations that bind the countries of the region together and erode the very basis of their prosperity.

In this context, mention may be made of the Chinese One Belt One Road (OBOR) initiative which seeks to deploy China’s surplus capital to build a vast network of transport and infrastructural links not only across the Indo-Pacific but also straddling the Eurasian landmass.

The newly established Asian Infrastructure Investment Bank (AIIB) initiated and led by China would become a key financing instrument for the OBOR.  China has also recently come out with a new Defence White Paper, which puts forward a new strategy of Open Seas, shifting the emphasis from coastal and near sea defence to an expanding naval presence which matches China’s growing global profile and world-wide location of Chinese-controlled economic assets.

While China’s investment in regional infrastructure in Asia may be welcome, it will inevitably be accompanied by a security dimension which may heighten anxieties among countries in the Asian region and beyond.

It is apparent from the above analysis that it is no longer possible for any major power in the Indo-Pacific to unilaterally seek a position of overweening economic dominance or military pre-eminence of the kind that the United States enjoyed over much of the post-Second World War period.

Just as the world is moving towards multi-polarity, so is Asia.  It is now home to a cluster of major powers with significant economic and security capabilities and interests. The only practical means of avoiding a unilateral and potentially destructive pursuit of economic and security interests would be to put in place an inclusive economic architecture underpinned  by a similarly inclusive security architecture which provides mutual reassurance and shared opportunities for promoting prosperity.

The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

By Roberto Savio
ROME, May 19 2015 (IPS)

The victory of the Conservative Party and the debacle of the Labour Party in the recent British general elections is yet another sign of the crisis facing left-wing forces today, leaving aside the question of how, under the British electoral system, the Labour Party actually increased the number of votes it won but saw a reduction in the number of seats it now holds in Parliament (24 seats less than the previous 256).

Roberto Savio

If the proportional rather than uninominal system had been used, the Conservative Party with its 11 million votes would have won 256 and not 331 seats in Parliament (far short of the absolute majority of 326 needed to govern), while at the other extreme the United Kingdom Independence Party with nearly four million votes would have landed 83 and not just the one seat it ended up with – results that would be hard to imagine anywhere else and a good example of insularity.

To an extent, the recent British general elections mirrored the U.S. presidential elections in 2000 when Democratic candidate Al Gore won around half a million more popular votes than Republican candidate George W. Bush but failed to win the majority of electoral college votes on which the U.S. system is based. The outcome was eight years of George W.  Bush administration, the war in Iraq, the crisis of multilateralism, and all the paraphernalia of “America’s exceptional destiny”.

Let us venture now into an analysis that will have the politologues among us cringing.“The left has tried to mimic the winners, instead of trying to be an alternative to the process of neoliberal globalisation and, since the beginning of the world financial crisis in 2008 … it has had no real answer to the crisis”

It is now generally recognised that the end of the Soviet Union has given free way to a kind of capitalism without control, marked by an unprecedented supremacy of finance which, in terms of volume of investments, overwhelmingly exceeds the real or productive economy.

In its wake, neoliberal thinking has found the left totally unprepared, because part of its function had been to provide a democratic alternative to Communism, which was suddenly no longer a threat.

The left therefore has tried to mimic the winners, instead of trying to be an alternative to the process of neoliberal globalisation and, since the beginning of the world financial crisis in 2008 (with its bail-out cost so far of over four trillion dollars), it has had no real answer to the crisis.

Ever since the industrial revolution, the identity of the left had been to press for social justice, equality of opportunities and redistribution, while the right placed the emphasis on individual efforts, less role for the state and success as motivation.

Continuing with this brutal simplification, we have to add that the left, from Marx to Keynes, always studied how to create economic growth and redistribution – Marx by abolishing private property, social democrats through just taxation.

But it never studied the creation of a progressive agenda in the event case of an economic crisis such as the one we are now facing, with structural unemployment, young people obliged  to accept any kind of contract, new technologies which are making the concept of classes disappear, and rendering trade unions – erstwhile powerful actors for social justice – irrelevant.

It is unprecedented that the top 25 hedge fund managers received a reward in 2014 of 11.62 billion dollars, yet neither U.S. President Barack Obama nor Ed Miliband, then still leader of the Labour Party at the recent British general elections (until he resigned after election defeat), saw it fit to denounce this obscene level of greed.

Meanwhile, Europe as a political project is clearly in disarray, and now faces a “Grexit” on its southern flank and a “Brexit” on its northern flank.

In the case of a “Grexit” (the possible abandonment of the European Union by Greece), Greece faces the prospects of having to make substantial concessions to Europe, thus reneging on the promises of Alexis Tsipras who was voted in as prime minister in rebellion against years of dismantlement of public and social structures imposed in the name of austerity.

What is at stake here is the very neoliberal model itself and not only is ordoliberal Germany supported by allies like Austria, Finland and the Netherlands erecting a wall against any form of leniency, but countries which accepted painful cuts and where conservatives are now in power, like Spain, Portugal and Ireland, see leniency as giving in to the left.

A “Brexit” (the possible abandonment of the European Union by Britain) is a different affair. It is a game being played by British Prime Minister David Cameron to negotiate a more favourable agreement for Britain with the European Union.

A referendum will be held before the end of 2017 and the four million people who voted for the UKIP in the recent elections, plus the country’s “Euro-sceptics”, threaten to push Britain out of the European Union, especially if Cameron does not manage to obtain some substantial concessions from Brussels.

Meanwhile, if Europe is in disarray, the United States has a serious problem of governance. Analyst Moisés Naím, who served as editor-in-chief of Foreign Policy magazine from 1996 to 2010, has pinpointed a few examples of how this has translated into self-inflicted damage.

One concerns China which, after waiting five years trying to get the Republican-dominated Congress to authorise and increase in its stake in the International Monetary Fund (IMF) from a ridiculous 3.8 percent to 6 percent (compared with the 16.5 percent of the United States), got fed up and established an alternative fund, the Asian Infrastructure Investment Bank (AIIB).

Washington tried unsuccessfully to kill the initiative by putting pressure on its allies but first the United Kingdom, then Italy, Germany and France announced their participation in the new bank, which now has 50 member countries and the United States is not one of them.

Another example was the attempt by the Republican-dominated Congress to kill the Export-Import Bank of the United States (Ex-Im Bank) which has provided support for U.S exporters to the tune of 570 billion dollars since it was set up by President Franklin D. Roosevelt in 1934.  In just the last two years, China has provided 670 billion dollars in support for its exporters. Moral of the story: U.S. companies will be at a clear disadvantage.

As Larry Summers, a great proponent of U.S. hegemony, put it, “the US will not be in a position to shape the global economic system”.

The latest snub to the U.S. role of world leader came from four Arab heads of state who snubbed a U.S.-Gulf States summit at Camp David on May 14. The summit had been called by Obama to reassure the Gulf states that the ongoing negotiations with Iran over a nuclear agreement would not diminish their relevance, but the rulers of Saudi Arabia, United Arab Emirates, Oman and Bahrain deserted the summit.

However, there is no more striking example of mistake-making than the joint effort by the United States and Europe to push Russian President Vladimir against the wall over his engagement in Ukraine by imposing heavy sanctions.

There was no apparent reflection on the wisdom of encircling a paranoid and autocratic leader, albeit one with strong popular support, by progressively also bringing in all Eastern and Central European countries. The result of this encirclement of Russia is that China has now come to the rescue of Russia, by injecting money into the country’s asphyxiated economy.

China will invest around six billion dollars in the construction of a high speed railway between Moscow and Kazan, is financing a 2,700 kilometre pipeline for the supply of 30 billion cubic metres of Russian gas over a period of 30 years, plus several other projects, including the establishment of a two billion dollar common fund for investments and a loan of 860 million dollars to the Russian Sberbank bank.

So, the net result is that Russia has been pushed out of Europe and into the arms of China, and the two are now starting joint naval and military manoeuvres.  Is this in the interest of Europe?

At the end of the day, the decline of Europe and the United States perhaps comes down to a decline of political vision, with democracy being substituted by partocracy, and the statesman of yesteryear being substituted by very much more modest and self-referential political leaders.

This is all taking place amid a growing disaffection with politics, which is now aimed basically at administrative choices, making corruption easy. At least this is what around one-third of electors now appear to believe when they are asked if they think that they can make a difference at elections … and this is why a rapidly growing number of people are deserting the ballot box. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Almost exactly two years ago, on the morning of Apr. 24, over 3,600 workers – 80 percent of them young women between the ages of 18 and 20 – refused to enter the Rana Plaza garment factory building in Dhaka, Bangladesh, because there were large ominous cracks in the walls. They were beaten with sticks and forced to enter.

Forty-five minutes later, the building collapsed, leaving 1,137 dead and over 2,500 injured – most of them women.

The Rana Plaza collapse is just one of a long series of workplace incidents around the world in which women have paid a high toll.

It is also one of the stories featured in the UN Women report Progress of the World’s Women 2015-2016: Transforming Economies, Realizing Rights, launched on Apr. 27.

All too often women fail to enjoy their rights because they are forced to fit into a ‘man’s world’, a world in which these rights are not at the heart of economies.
Coming 20 years after the Fourth World Conference on Women in Beijing, China, which drew up an agenda to advance gender equality, Progress of the World’s Women 2015-2016 notes that while progress has since been made, “in an era of unprecedented global wealth, millions of women are trapped in low paid, poor quality jobs, denied even basic levels of health care, and water and sanitation.”

At the same time, notes the report, financial globalisation, trade liberalisation, the ongoing privatisation of public services and the ever-expanding role of corporate interests in the development process have shifted power relations in ways that undermine the enjoyment of human rights and the building of sustainable livelihoods.

Against this backdrop, all too often women fail to enjoy their rights because they are forced to fit into a ‘man’s world’, a world in which these rights are not at the heart of economies.

What this means in real terms is that, for example, at global level women are paid on average 24 percent less than men, and for women with children the gaps are even wider. Women are clustered into a limited set of under-valued occupations – such as domestic work – and almost half of them are not entitled to the minimum wage.

Even when women succeed in the workplace, they encounter obstacles not generally faced by their male counterparts. For example, in the European Union, 75 percent of women in management and higher professional positions and 61 percent of women in service sector occupations have experienced some form of sexual harassment in the workplace in their lifetimes.

The report makes the link between economic policy-making and human rights, calling for a far-reaching new policy agenda that can transform economies and make women’s rights a reality by moving forward towards “an economy that truly works for women, for the benefit of all.”

The ultimate aim is to create a virtuous cycle through the generation of decent work and gender-responsive social protection and social services, alongside enabling macroeconomic policies that prioritise investment in human beings and the fulfilment of social objectives.

Today, “our public resources are not flowing in the directions where they are most needed: for example, to provide safe water and sanitation, quality health care, and decent child and elderly care services,” says UN Women Executive Director Phumzile Mlambo-Ngcuka. “Where there are no public services, the deficit is borne by women and girls.”

According to Mlambo-Ngcuka, “this is a care penalty that unfairly punishes women for stepping in when the State does not provide resources and it affects billions of women the world over. We need policies that make it possible for both women and men to care for their loved ones without having to forego their own economic security and independence,” she added.

The report agrees that paid work can be a foundation for substantive equality for women, but only when it is compatible with women’s and men’s shared responsibility for unpaid care work; when it gives women enough time for leisure and learning; when it provides earnings that are sufficient to maintain an adequate standard of living; and when women are treated with respect and dignity at work.

Yet, this type of employment remains scarce, and economic policies in all regions are struggling to generate enough decent jobs for those who need them. On top of that, the range of opportunities available to women is limited by pervasive gender stereotypes and discriminatory practices within both households and labour markets. As a result, the vast majority of women still work in insecure, informal employment.

The reality is that women also still carry the burden of unpaid work in the home, which has been aggravated in recent years by austerity policies and cut-backs. To build more equitable and sustainable economies which work for both women and men, warns the report, “more of the same will not do.”

At a time when the global community is defining the Sustainable Development Goals (SDGs) for the post-2015 era, the message from UN Women is that economic and social policies can contribute to the creation of stronger economies, and to more sustainable and more gender-equal societies, provided that they are designed and implemented with women’s rights at their centre.

Edited by Phil Harris    

The Dube AgriZone facility currently incorporates 16 hectares of greenhouses, making it the largest climate-controlled growing area under glass in Africa. Credit: FAO

By Kwame Buist
DURBAN, South Africa, Mar 22 2015 (IPS)

Agriculture is the major employer and a backbone of the economies of Southern Africa.

However, the rural areas that support an agriculture-based livelihood system for the majority of the nearly 270 million people living in the region are typically fragile and there is wide variability in the development challenges facing the countries of the region.

The agricultural sector is dominated by crop production, although the share of livestock production and other agriculture practices have been increasing.Chronic and acute food insecurity remain major risks and Southern Africa still faces enormous challenges in trying to transform and commercialise its largely small holder-based agricultural systems through accelerated integration into competitive markets in a rapidly globalising world

Chronic and acute food insecurity remain major risks and Southern Africa still faces enormous challenges in trying to transform and commercialise its largely smallholder-based agricultural systems through accelerated integration into competitive markets in a rapidly globalising world.

These and other challenges facing the sector were the focus of a three-day meeting (Mar. 10-12) in Durban of management and experts from the Food and Agriculture Organization (FAO), which ended with a call to prioritise broad-based partnerships and build synergies to provide countries with effective and efficient support in the agriculture sector.

In an annual event designed to provide a platform for discussion and exchange of information on best practices and the general performance of FAO programmes in the region, David Phiri, FAO Sub-Regional Coordinator for Southern Africa, reiterated the importance of different sectors working together.

“Achieving food and nutrition security in Southern Africa is a challenge far too great for any government or FAO to overcome alone,” he said. “As well as the governments of developing and developed countries, the civil society, private sector and international development agencies must be involved. Above all, the people themselves need to be empowered to manage their own development.”

Building on what works

As one example of the best practices under the scrutiny of the meeting, participants took part in a field visit to the Dube AgriZone facility – a high-tech agricultural development initiative pioneered by the KwaZulu-Natal Provincial Government.

The facility aims to stimulate the growth of KwaZulu-Natal’s perishables sector and aims to achieve improved agricultural yields, consistent quality, year-round production and improved management of disease and pests.

The facility – strategically located 30 km north of the important coastal city of Durban – currently incorporates 16 hectares of greenhouses, making it the largest climate-controlled growing area under glass in Africa.

Its primary focus is on the production of short shelf-life vegetables and cut flowers which require immediate post-harvest airlifting and supply to both domestic and export markets.

In addition to its greenhouses, the facility offers dedicated post-harvest packing houses, a central packing and distribution centre, a nursery and the Dube AgriLab, a sophisticated plant tissue culture laboratory.

Dube AgriZone is an eco-friendly facility, adopting a range of ‘green’ initiatives to offset its environmental impact, including rainwater harvesting, use of solar energy, on-site waste management, and the growth of indigenous plants for rehabilitation efforts.

Dube AgriZone provides growers with the potential to achieve improved agricultural yields, consistency of produce quality, close management of disease and pest infestation and year-round crop production with a view to improved sustainability and enhanced agricultural competitiveness.

“I could never have been able put up such a facility and produce at the current scale were it not for this innovative AgriZone,” said Derrick Baird, owner of Qutom Farms, which currently produces 150,000 cucumbers in the glass greenhouse leased from Dube AgriZone.

“This high-tech facility with all the necessary facilities – including transportation and freight – has allowed us to concentrate on producing cucumbers at much lower costs than in other locations where we had previously tried.”

The partnership between the provincial government and the private sector behind the facility was hailed as an example of a success story that could offer valuable lessons to others across Southern Africa.

“There is plenty we can learn from this facility and perhaps one of the more important ones is on forming partnerships and alliances,” said Tobias Takavarasha, FAO Representative in South Africa.

“We need to build on what is working by adopting and adapting technologies to the local situation, and then scaling them upwards and outwards to achieve even better results,” he added.

Edited by Phil Harris    

By Roberto Savio
ROME, Mar 21 2015 (IPS)

The “surprise” re-election of incumbent Israeli Prime Minister Benjamin Netanyahu in the Mar. 17 elections has been met with a flood of media comment on the implications for the region and the rest of the world.

However, one of the reasons for Netanyahu’s victory has dramatically slipped the attention of most – the support he received from young Israelis.

According to the Israeli daily Haaretz, 200,000 last-minute voters decided to switch their vote to Netanyahu’s Likud party due to the “fear factor” and most of these were voters under the age of 35.

Roberto Savio

Perhaps the “fear factor” was actually an expression of the “Masada factor”. Masada is a strong element in Israeli history and collective imagination. The inhabitants of the mountain fortress of Masada, besieged by Roman legions at the time of Emperor Tito’s conquest of the Israeli state, preferred collective suicide to surrender.

Israelis today feel besieged by hostile neighbouring countries (first of all Iran), the continuous onslaught by the Caliphate and the Islamic State, overwhelming negative international opinion and growing abandonment by the United States.

Netanyahu played a number of cards to bring about his last-minute election success, including his speech to the Republican-dominated U.S. Congress on Mar. 3, which was seen by many Israelis as an act of defiance and dignity, not a weakening of fundamental relations with the United States.

His support for Israeli settlers in the West Bank and Gaza, his denial of the creation of a Palestinian state and his show of contempt for an international community unable to understand Israel’s fears led Netanyahu’s Likud party to victory.

In Israel, being left-wing mean accepting a Palestinian state, being right-wing means denying it. In the end, the Mar. 17 vote was the result of fear.“Taking refuge in parties that preach a return to a country’s ‘glorious’ past, blocking immigrants who are stealing jobs and Muslims who are challenging the traditional homogeneity of society, country … is an easy way out”

Israeli’s young people are not alone in moving to the right as a reaction to fear. It is interesting to note that all right-wing parties which have become relevant in Europe are based on fear.

Growing social inequality, the unprecedented phenomenon of youth unemployment, cuts in public services such as education and health, corruption which has become a cancer with daily scandals, and the general feeling of a lack of clear response from the political institutions to the problems opened up by a globalisation based on markets and not on citizens are all phenomena which are affecting young people.

“When you were like us at university, you knew you would find a job – we know we will not find one,” was how one student put it at a conference of the Society for International Development that I attended.

“The United Nations has lost the ability to be a place of governance, the financial system is without checks and corporations have a power which goes over national governments,” the student continued. “So, you see, the world of today is very different one from the one in which you grew up.”

As Josep Ramoneda wrote in El Pais of Mar. 18: “We expected that governments would submit markets to democracy and it turns out that what they do is adapt democracy to markets, that is, empty it little by little.

This is why many of those of who vote for right-wing parties in Europe are young people – be it for the National Front in France, the U.K. Independence Party (UKIP) in Britain, the Lega Nord (North League) in Italy, the AfD (Alternative for Germany) in Germany and Golden Dawn in Greece, among others.

Taking refuge in parties that preach a return to a country’s “glorious” past, blocking immigrants who are stealing jobs and Muslims who are challenging the traditional homogeneity of society, country, and bringing back to the nation space and functions which have been delegated to an obtuse and arrogant bureaucracy in Brussels which has not been elected and is not therefore accountable to citizens, is an easy way out.

This is a major – but ignored – epochal change. It was long held that an historic function of youth was to act as a factor for change … now it is fast becoming a factor for the status quo. The traditional political system no longer has youth movements and its poor performance in front of the global challenges that countries face today makes young people distrustful and distant.

It is an easy illusion to flock to parties which want to fight against changes which look ominous, even negative. It also partially explains why some young Europeans are running to the Islamic State which promise a change to restore the dignity of Muslims dignity and whose agenda is to destroy dictators and sheiks who are in cohort with the international system and are all corrupt and intent on enriching themselves, instead of taking care of their youth.

What can young people think of President Erdogan of Turkey building a presidential palace with 1,000 rooms or the European Central Bank inaugurating headquarters which cost 1,200 million euro, just to give two examples? And what of the fact that the 10 richest men in the world increased their wealth in 2013 alone by an amount equivalent to the combined budgets of Brazil and Canada?

This generational change should be a transversal concern for all parties but what is happening instead is that the welfare state is continuing to suffer cuts. According to the International Labour Organization (ILO), young people in the 18-23 age group will retire with an average pension of 650 euro. What kind of society will that be?

Without the safety net now being provided by parents and grandparents, how can young people in such a society avoid feeling left out?

We always thought young people would fight for social change, but what if they are now doing so from the right?

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

By Yilmaz Akyüz
GENEVA, Feb 16 2015 (IPS)

After a series of crises with severe economic and social consequences in the 1990s and early 2000s, emerging and developing economies have become even more closely integrated into what is widely recognised as an inherently unstable international financial system. 

Both policies in these countries and a highly accommodating global financial environment have played a role. Not only have their traditional cross-border linkages been deepened and external balance sheets expanded rapidly, but also foreign presence in their domestic credit, bond, equity and property markets has reached unprecedented levels.

Yilmaz Akyuz

New channels have thus emerged for the transmission of financial shocks from global boom-bust cycles.

Almost all developing countries are now vulnerable, irrespective of their balance-of-payments, external debt, net foreign assets and international reserve positions, although these play an important role in the way such shocks could affect them.

Stability of domestic banking and asset markets is susceptible even in countries with strong external positions.

Those heavily dependent on foreign capital are prone to liquidity and solvency crises as well as domestic financial turmoil.

The new practices adopted in recent years – including more flexible exchange rate regimes, accumulation of large stocks of international reserves or borrowing in local currency – would not provide much of a buffer against severe external shocks such as those that may result from the normalisation of monetary policy in the United States. “The surge in capital inflows that started in the early years of the new millennium, and continued with full force after a temporary blip due to the collapse in 2008 of the Lehman Brothers financial services firm, holds the key to the growing internationalisation of finance in developing countries”

And the multilateral system is still lacking adequate mechanisms for an orderly and equitable resolution of external financial instability and crises in developing economies.

This process of closer integration was greatly helped by highly favourable global financial conditions before 2008, thanks to the very same credit and spending bubbles that culminated in a severe crisis in the United States and Europe. The crisis did not slow this process despite initial fears that it could lead to a retreat from globalisation.  Integration has even accelerated since then because of ultra-easy monetary policies pursued in advanced economies, notably in the United States, in response to the crisis.

The surge in capital inflows that started in the early years of the new millennium, and continued with full force after a temporary blip due to the collapse in 2008 of the Lehman Brothers financial services firm, holds the key to the growing internationalisation of finance in developing countries.

It has resulted in a rapid expansion of gross external assets and liabilities of developing economies. More importantly, the structure of their external balance sheets has undergone important changes, particularly on the liabilities side, bringing new vulnerabilities.

The share of direct and portfolio equity in external liabilities has been increasing. An important part of the increase in equity liabilities is due to capital gains by foreign holders. In many developing countries presence in equity markets is greater than that in the United States and Japan.

While still remaining below the levels seen a decade ago as a percentage of gross domestic product (GDP), external debt build-up has accelerated since the crisis in 2008. This is mainly due to borrowing by the private sector, which now accounts for a higher proportion of external debt than the public sector in both international bank loans and security issues. A very large proportion of private external debt is in foreign currency. There is also a renewed tendency for dollarisation in domestic loan markets.

As a result of a shift of governments from international to domestic bond markets and opening them to foreigners, the participation of non-residents in these markets has been growing. The proportion of local-currency sovereign debt held abroad is greater in many developing countries than in reserve-issuers such as the United States, the United Kingdom and Japan. It is held by fickle investors rather than by foreign central banks as international reserves.

International banks have been shifting from cross-border lending to local lending by establishing commercial presence in developing countries. Their market share in these countries has reached 50 percent compared with 20 percent in developed countries.

These banks tend to act as conduits of expansionary and contractionary impulses from global financial cycles and increase the exposure of developing economies to financial shocks from advanced economies.

One of the key lessons of history of economic development is that successful policies are associated not with autarky or full integration into the global economy, but strategic integration seeking to use the opportunities that a broader economic space may offer while minimising the potential risks it may entail. This is more so in finance than in trade, investment and technology.

For one thing, the international financial system is inherently unstable in large part because multilateral arrangements fail to impose adequate discipline over financial markets and policies in systemically important countries which exert a disproportionately large impact on global conditions.

For another, the multilateral system also lacks effective mechanisms for orderly resolution of financial crises with international dimensions.

Thus, closer integration of several into the international financial system in the past ten years, after a series of crises with severe economic and social consequences, is a cause for concern.

In all likelihood, these countries will be facing strong destabilising pressures in the years ahead as monetary policy in the United States returns to normalcy after six years of flooding the world with dollars at exceptionally low interest rates.

In weathering a possible renewed instability, they cannot count on the more flexible currency regimes they came to adopt after the last bouts of crises or the reserves they have built from capital inflows or the reduced currency exposure of the sovereign.

It is important that they, as well as the international community, avoid going back to business-as-usual in responding to a new round of financial shocks, bailing out investors and creditors and maintaining an open capital account at the expense of incomes and jobs.

They need to include many unconventional policy instruments in their arsenals to help lower the price that may have to be paid for the financial excesses of the past several years

They should also take the occasion to rebalance the pendulum and to bring about genuine changes in the international financial architecture. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

* This column is based on Internationalization of Finance and Changing Vulnerabilities in Emerging and Developing Economies, South Centre Research Paper 60, January 2015, which is available here.

Excerpt:

By Andrew MacMillan
ROME, Jan 13 2015 (IPS)

About a week ago my wife was taken to hospital and diagnosed with pneumonia. She was promptly treated with antibiotics and, wonderfully, is now on the mend.

What has struck me about this experience is not so much the high professionalism of the health workers or their up-to-date hospital equipment but the fact that she has become immersed in what can best be described as “a culture of caring”.

Andrew MacMillan

She and the other patients in her ward are looked after round the clock by an extraordinary team of state-employed nurses in a quiet, efficient and courteous way that inspires confidence.

I suppose that there is nothing particularly unusual about this. Caring for others is a very natural human trait. Everywhere, mothers care for their children; sons and daughters care for their aging parents; and neighbours rush to help each other when they hit problems.

Perhaps, however, “modern” societies – if one dares to generalise about them – are driven more by the quest for individual material wealth than by any widely expressed wish to do things for the general good of humanity.

Unless you live in Bhutan, your country’s performance is measured not in terms of the happiness of its people but by the growth of its Gross Domestic Product; bankers and businessmen reward themselves with salary bonuses rather than with extra time with their families; and those who enjoy the highest pinnacles of wealth vie with each other over the size of their fleet of private jets or the tonnage of their personal yachts.

The idiosyncrasies of the super-rich and celebrities would not matter much if they had not become the new role models for people who aspire to “do well” in life and if their wealth did not entitle them to a voice in the corridors of world power. It seems odd that Presidents and Prime Ministers flock each year in January to [the World Economic Forum in] Davos to rub shoulders with the rich and famous, but perhaps this is simply a tacit admission of the influence that the latter have.“I believe that most people, at heart, want to see globalisation bring greater fairness and justice
even if this comes at the partial expense of our own material well-being”

Much of the recent material gains all around the planet is the result of the processes of globalisation that have successfully combined inventiveness, capital, low-cost but increasingly skilled labour and cheap transportation in new ways that have flooded the world’s markets with an amazing array of tantalising goods.

This apparent success of globalisation, however, may distract political attention from the idea that it could perhaps work better in everyone’s interest.

It seems absurd that 6 billion mobile phones have been produced and sold but 800 million people still go hungry every day; that, as people travel further, faster and more frequently, diseases such as Ebola spread more rapidly and more widely but the institutions responsible for protecting us from increased threats remain desperately under-funded; and that governments hesitate to upset their voters by acting to trim greenhouse gas emissions while, as predicted, the increasing frequency of extreme weather events is repeatedly wreaking havoc upon the unfortunate.

We tend to take these problems for granted rather than face up to the need to identify how to best manage globalisation in the interests of humanity.

I believe that most people, at heart, want to see globalisation bring greater fairness and justice even if this comes at the partial expense of our own material well-being.

I do not think that there are many people who, if asked, would want to see others starve for lack of food, who welcome greater weather instability or who think that it is right that their children should suffer from the environmental damage that results from our unsustainable lifestyles.

In a sense, President Lula of Brazil put this idea to the test during his successful 2002 campaign. Breaking out of the normal political mould, he did not promise his voters higher incomes but simply pledged that all Brazilians would enjoy three meals a day by the end of his term in office.

He unveiled his Zero Hunger Programme on his first day as President, with the State assuming the responsibility for assuring that all the poorest families in the country could fulfil their right to food. There was huge outpouring of popular support for his efforts to create the more just and equitable society that has now emerged.

What many of us would like to see is the emergence of a new international consciousness of social justice similar to that proposed by Lula and embraced by Brazilians twelve years ago.

It must be founded on a growing public recognition of the unique role that multilateral institutions have to play in ensuring that globalisation is harnessed to benefit all people, especially the poorest of the poor. It must also assure greater inter-generational fairness in the use of our planet’s scarce resources.

Nowhere is the need for greater fairness more apparent than in the realm of food management – where we face a crazy situation in which, though ample food is produced, the health of more than half the world’s population is now damaged by bad nutrition.

It is fitting that the Secretary-General of the United Nations, Ban Ki-moon, should have launched his personal “Zero Hunger Challenge” in Brazil in 2012 when he called for the elimination of hunger “within my lifetime”.

The fact that the current Director-General of the Food and Agriculture Organization (FAO) – the United Nations agency that that oversees global food management – is José Graziano da Silva, who was the Brazilian architect of Lula’s Zero Hunger Programme, inspires confidence that it will do all in its power to bring about a world without hunger.

We can already see a renewed FAO in action – committed to ending hunger and malnutrition, more focused in its goals, working as one and embracing partnerships for a better present and future. Four more years will allow Graziano da Silva to consolidate the transformations he has begun and realise their full effect to the benefit of the world´s poor and hungry.

Hopefully 2015 will be a year in which the world’s leaders will become the champions of the justice and fairness – the caring society that my wife has experienced – to which so many of us aspire.

At the very least, they should pick up the thought that, as in Brazil, it should be a perfectly normal function of any self-respecting government to ensure that all its people can eat healthily.

(Edited by Phil Harris)

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

The inclusive and sustainable industrial development (ISID) initiative of the U.N. Industrial Development Organisation to promote industrial development for poverty reduction, inclusive globalisation and environmental sustainability is gaining momentum in the countries of the African, Caribbean and Pacific (ACP) group. 

A concrete sign of this trend came on the occasion of last week’s ACP Council of Ministers meeting in the Belgian capital where UNIDO Director-General Li Yong met with ACP representatives to explore how to further promote inclusive and sustainable industrialisation in their countries and possible ways of scaling up investment in developing countries.

UNIDO Director-General Li Yong at the !00th ACP Council of Ministers meeting in Brussels, where he explored how to further promote inclusive and sustainable industrialisation in ACP countries. Credit: Courtesy of ACP

During the opening session of the ministers’ meeting, outgoing ACP Secretary-General Alhaji Muhammad Mumuni had already highlighted the key role of the ISID programme in promoting investment and stimulating competitive industries in African, Caribbean and Pacific countries.

In December last year in Lima, Peru, the 172 countries belonging to UNIDO – including ACP countries – unanimously approved the Lima Declaration calling for “inclusive and sustainable industrial development”.

The Lima Declaration clearly acknowledged that industrialisation is an important landmark on the global agenda and, for the first time, the spectacular industrial successes of several countries in the last 40 years, particularly in Asia, was globally recognised.

According to UNIDO statistics, industrialised countries add 70% of value to their products and recent research by the organisation shows how industrial development is intrinsically correlated with improvements in sectors such as poverty reduction, health, education and food security.“We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people” – UNIDO Director-General Li Yong

One major issue that the concept of ISID addresses is the environmental sustainability of industrial development. “We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people,” said Li.

Economic growth objectives should be pursued while protecting the environment and health, and by making business more environmentally sustainable, they become more profitable and societies more resilient.

ISID in the Post-2015 Agenda

“For ISID to be achieved,” said Li, “appropriate policies are essential as well as partnerships among all stakeholders involved.” This highlights the importance of including ISID in major development frameworks, particularly in the post-2015 development agenda that will guide international development in the coming decades.

With strong and solid support from the ACP countries, ISID has already been recognised as one of the 17 Sustainable Development Goals (SDGs) proposed by the U.N. Open Working Group on SDGs – to take the place of the Millennium Development Goals (MDGs) whose deadline is December 2015 – and confirmed last week by U.N. Secretary-General Ban Ki-moon in ‘The Road to Dignity By 2030’, his synthesis report on the post-2015 agenda.

In fact, goal 9 is specifically devoted to “building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation.”

In this context, Mumuni told the Brussels meeting of ACP ministers that “in building the competitiveness of our industries and facilitating the access of ACP brands to regional and international markets, UNIDO is regarded by ACP Secretariat as a strategic ally.”

ACP-UNIDO – A Strategic Partnership

A Memorandum of Understanding approved in March 2011 and a Relationship Agreement signed in November 2011 represent the solid strategic framework underlying the strategic partnership between ACP and UNIDO, and highlight how the two partners can work together to support the implementation of ISID in ACP countries.

Key is the establishment and reinforcement of the capacity of the public and private sectors in ACP countries and regions for the development of inclusive, competitive, transparent and environmentally-friendly industries in line with national and regional development strategies.

On the basis of these agreements, ACP and UNIDO have intensified their policy dialogue and concrete cooperation. One example reported during the ministers’ meeting was the development of a pilot programme entitled “Investment Monitoring Platform” (IMP), funded under the intra-ACP envelope of the 9th European Development Fund (EDF) with the support of other donors.

This programme is aimed at managing the impact of foreign direct investments (FDI) on development, combining investment promotion with private sector development, designing and reforming policies that attract quality investment, and enhancing coordination between the public and private sector, among others.

This programme has already reinforced the capacity of investment promotion agencies and statistical offices in more than 20 African countries, which have been trained on methodologies to assess the private sector at country level.

Implementing ISID in ACP Countries

In Africa, the strategy for the Accelerated Industrial Development of Africa (AIDA) prepared with UNIDO expertise, is a key priority of Agenda 2063  – a “global strategy to optimise use of Africa’s resources for the benefit of all Africans” – and of the Joint Africa-European Union Strategy.

In the Caribbean, high priority is being given to private sector development, climate change, renewable energy and energy efficiency, and value addition in agri-business value chains, trade and tourism.

The CARIFORUM-EU Business Forum in London in 2013 clearly articulated the need for more innovation, reliable markets and private sector information, access to markets through quality and the improvement of agro-processing and creative industries.

In the Pacific, the 2nd Pacific-EU Business Forum held in Vanuatu in June this year called for stronger engagement in supporting the private sector and ensuring that innovation would produce tangible socio-economic benefits.

Finally, in all three ACP regions, interventions related to quality and value chain development are being backed in view of supporting the private sector and commodity strategies.

(Edited by Phil Harris)

By Roberto Savio
ROME, Nov 21 2014 (IPS)

Less than a week after everybody celebrated the historical agreement on Nov. 17 between the United States and China on reduction of CO₂ emissions, a very cold shower has come from India.

Indian Power Minister Piyush Goyal has declared: “India’s development imperatives cannot be sacrificed at the altar of potential climate change many years in the future. The West will have to recognise we have the needs of the poor”.

This is also a blow to the Asia policy of U.S. President Barack Obama, who came back home from signing the CO₂ emissions agreement in Beijing, touting his success on establishing U.S. policy in the region.

Roberto Savio

But, more importantly, will give plenty of ammunition to the Republican Congress, which has been fighting climate control on the grounds that the United States cannot engage on climate control unless other major polluters make similar commitments. This was always directed to China, which had refuse to make any such commitment until President Xi, to the surprise of everybody, did so by signing an agreement with Obama.

India is a major polluter, not at the level of China, which has now reached 9,900 metric tons of CO₂, against the 6,826 of the United States. But India is coming up fast. “The incestuous relations between energy corporations and governments are out of the public's eye. It is yet further proof that, even when nothing less than survival is at stake for islands and coastlines, agriculture and the poor, governments are unable – or unwilling – to see beyond their immediate existence”

Goyal has promised that India’s use of domestic coal will rise from 565 million tons last year to more than a billion tons by 2019, and he is selling licences for coal mining at a great speed. The country has increased its coal-fired plants by 73 percent in just the last five years. In addition, Indian coal is of poor quality, polluting twice as much as coal in the West.

Nevertheless, newly-elected Indian Prime Minister Narendra Modi has announced that he will embark on a major programme of renewable sources of energy, and there is an apparent paradox in the fact that many of the climate scientists who form the Intergovernmental Panel on Climate Control (IPCC) are from India. Its Director-General is an Indian, Dr. Rajendra K. Pachauri, who is also chief executive of the Energy Resources Institute in New Delhi.

The IPCC’s last report was much more dramatic than previous ones, stating conclusively that climate change is due to the action of man, and providing an extensive review of the damage that the agricultural sector is bound to face, especially in poor countries like India. At least 37 million people would be displaced by rising seas.

Indian towns are by far the most polluted in the world, surpassing several times each year the worst polluted day in China.

But what is more worrying is that governments are reacting too slowly. It would take a very major effort, which is not now on the cards, to keep temperature from rising by more than 2 degrees Centigrade, and therefore to start to reduce emissions by 2020. Emissions in 2014 are expected to be the highest ever, at 40 billion tonnes, compared with 32 billion in 2010.

The consensus is that to limit warming of the planet to no more 2 degrees Centigrade above pre-industrial levels, governments would have to restrict emissions from additional fossil fuel burning to about 1 trillion tons of carbon dioxide.

But, according to the IPCC report, energy companies have booked coal and petroleum reserves equal to several times that amount, and they are spending some 600 billion dollars a year to find more. In other words, governments are directly subsidising the consumption of fossil fuel.

By contrast, less than 400 billion dollars a year are spent to reduce emissions, a figure that is smaller than the revenue of one just one U.S. oil company, ExxonMobil.

The last meeting of the G20 in Brisbane earlier this month gave unexpected attention to climate, but the G20 alone is spending 88 billion dollars a year in subsidies for fossil fuel exploration, which is double that which the top 20 private companies are spending to look for new oil, gas and coal.

The G20 spends 101 billion dollars to support clean energy in a clear attempt to make everybody happy but, according to the International Energy Agency, if G20 governments directed half of their subsidies, or 49 billion dollars a year, to investment for redistributing energy from new sources, we could achieve universal energy access as soon as 2030.

Another good example of the total lack of coherence from Western governments is that they have pledged an amount of 10 billion dollars for a Green Climate Fund, whose task is to support developing countries in mitigating and adapting to climate change. That amount is two-thirds of what those countries have been asking for and, since its creation in 1999, the fund has still to become operational.

And it was only after the last G20 meeting that the United States pledged three billion dollars and Japan 1.5 billion, bringing the total so far to 7 billion dollars – one-third is still missing.

And now we have the upcoming Climate Conference in Lima, in December, where opinion is that governments will once again fail to reach a comprehensive agreement on climate change – and the amount of time left for the planet will reduce even further.

Besides the fight to be expected from the Republican Congress in the United States, there will be also be opposition from countries that depend on fossil fuels, such as Russia, Australia, India, Venezuela, Iran, Saudi Arabia and the Gulf countries.

So, governments show a total lack of consensus and responsibility. If a referendum could be held asking citizens if they would prefer to pay 800 billion dollars less in taxes to avoid subsidising pollution, there are few doubts what the result would be. And there would be same result if they were asked if they would prefer to invest those 800 billion dollars in clean energy or continue to pollute.

But the incestuous relations between energy corporations and governments are out of the public’s eye. It is yet further proof that, even when nothing less than survival is at stake for islands and coastlines, agriculture and the poor, governments are unable – or unwilling – to see beyond their immediate existence. We are direly in need of global governance for this kind of globalisation. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

Excerpt:

With annual economic growth rates of over 10 percent and attractive investment conditions due to low infrastructural and labour costs, Ethiopia is eagerly trying to rise from the status of low-income to middle-income country in the next 10 years.

Ethiopia, with some 94 million inhabitants, is the second most populous country in Africa after Nigeria, but it remains a predominantly rural country. Only 17.5 percent of the population lives in urban areas, mainly Addis Ababa.

It is also one of the continent’s fastest growing economies. Between 2015 and 2018 growth is expected to average 7.3 percent, according to a recent study by the United Nations Industrial Development Organisation (UNIDO).

While economic growth since 2006/2007 doubled per capita income to 550 dollars in 2012/13, and the percentage of people living below the national poverty line dropped from 38.9 in 2004 to 29.6 in 2011, government sources admit that eradication of poverty remains a compelling issue.“There is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector” – UNIDO Director General Li Yong

The official target of rising to a middle-income country is considered to be realistic, but an East Asian diplomat accredited to the African Union in Addis Ababa says there is reason to be sceptical, partly because although the amount of foreign direct investment (FDI) rose from 0.5 percent in 2008 to 2 percent in 2013, investors continue to face trade constraints.

According to UNIDO, these are mainly related to border-logistics. Djibouti, the main import-export seaport used by Ethiopia, is situated 781 km from Addis Ababa, which makes the cost of land transportation a critical factor.

It is against this backdrop that UNIDO has chosen Ethiopia, along with Senegal, as a pilot country for its ambitious inclusive and sustainable industrial development (ISID) programme, which aims to achieve industrialisation in developing countries in order to eradicate poverty and create prosperity.

According to UNIDO Director General Li Yong, “there is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialised sector”.

What distinguishes the ISID programme is that “current modes of industrialisation are neither fully inclusive nor properly sustainable”, he added. UNIDO is therefore not merely promoting industrialisation but trying to approach the needs and challenges of the globalised world that demand future-oriented concepts.

Promoting the sustainability that should be inherent to industrialisation, UNIDO says that the ISID programme takes into account environmental factors together with its partner countries and organisations.

It also fosters an industrialisation that is inclusive in sharing the benefits of the generated prosperity for all parties involved, thereby promoting social equality within populations as well as an equal distribution between men and women to ensure that nobody is excluded from the benefits of growth.

To show how these objectives can be met and to promote ISID, UNIDO organised the Second Forum on ISID from Nov. 4 to 5 in Vienna. In an opening statement, U.N. Secretary-General Ban Ki-moon said: “We have a vision of a just world where resources are optimised for the good of people. Inclusive and sustainable industrial development can drive success.”

The Secretary-General, who is a strong advocate of the sustainable development agenda, also said that in order to achieve this objective, “industrial development must abandon old models that pollute. Instead, we need sustainable approaches that help communities preserve their resources.”

Prime Minister Hailemariam Desalegn of Ethiopia and Prime Minister Mahammed Dionne of Senegal – representing the two pilot countries chosen for ISID – commended UNIDO for implementing a partnership programme, and Ethiopia’s State Minister of Industry, Mebrahtu Meles, emphasised that building industrial zones will accelerate industrialisation, as has been done by Asian countries such as China.

Forum participants expressed optimism about Ethiopia achieving economic growth through inclusive and industrial sustainable development provided that leadership and vision focused on the country’s comparative advantages while improving infrastructure.

They said that regional integration could be key for the development of the country, and called for further exploration of UNIDO’s role as a catalyst of transformational change.

In particular additional efforts were required to enhance the productivity in existing light industries such as agro-food processing, textiles and garments, leather and leather products. There was also a need to diversify by launching new industries such as heavy metal and chemicals and building up high-tech industries like packing, biotechnology, electronics, information and communications.

The ambassadors of China, Japan and Italy to Ethiopia – Xie Xiaoyan, Kazuhiro Suzuki and Giuseppe Mistretta respectively – as well as business stakeholders and development banks assured their continued support in helping Ethiopia take the path towards inclusive and sustainable industrial development, mainly through UNIDO.

(Edited by Phil Harris)

President Rafael Correa Delgado of Ecuador does not mince words when it comes to development. ”Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour,” he told a crowded auditorium at the 15th Raul Prebitsch Lecture.

The Raul Prebitsch Lectures, which are named after the first Secretary-General of the U.N. Conference on Trade and Development (UNCTAD) when it was set up in 1964, allow prominent personalities to speak to a wide audience on burning trade and development topics.

This year, President Correa took the floor on Oct. 24 with a lecture on ‘Ecuador: Development as a Political Process’, which covered efforts by his country to build a model of equitable and sustainable development, “Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour” – President Rafael Correa Delgado of Ecuador

Development, he told his audience, “is a political process and not a technical equation that can be solved with capital” and he offered a developmental paradigm that seeks to build on “people-oriented” socio-economic and cultural policies to improve the welfare of millions of poor people instead of catering to the “elites of the empire of capital”.

Proposing a “new regional financial architecture”, he said that “the time has come to pool our resources for establishing a bank and a reserve fund for South American countries to pursue people-oriented developmental policies in our region” and reverse the “elite-based”, “capital-dominated”, “neoliberal” economic order that has wrought havoc over the past three decades.

“We need to reverse the dollarisation of our economies and stop the transfer of our wealth to finance Treasury bills in the United States,” Correa said. “South American economies have transferred over 800 billion dollars to the United States for sustaining U.S. Treasury bills and this is unacceptable.”

According to Correa, people-centric policies in the fields of education, health and employment in Ecuador have improved the country’s Human Development Index (HDI) since 2007. The HDI is published annually by the U.N. Development Programme (UNDP) is a composite statistic of life expectancy, education and income indices used to rank countries into tiers of human development.

Ecuador’s HDI value for 2012 is 0.724 – in the high human development tier – positioning the country at 89 out of 187 countries and territories, according to UNDP’s Human Development Report (HDR) for 2013.

Explaining his country’s achievement, Correa said that public investments involving the creation of roads, bridges, power grids, telecommunications, water works, educational institutions, hospitals and judiciary have all helped the private sector to reap benefits from overall development.

“At a time when Hooverian depression policies based on austerity measures are continuing to impoverish people while the banks which created the world’s worst economic crisis in 2008 are reaping benefits because of the rule of capital,  Ecuador has successfully overcome many hurdles because of its people-oriented policies,”  he said.

Correa argued that by investing public funds in education, which is the “cornerstone of democracy”, particularly in higher education or the “Socrates of education”, including special education projects for indigenous and Afro-Ecuadorian people, it has been shown that society can put an end to capital-dominated policies.

“We need to change international power relations to overcome neocolonial dependency,” Correa told the diplomats present at the lecture.  “Globalisation is the quest for global consumers and it does not serve global citizens.”

The Ecuadorian president argued that developing countries have secured a raw deal from the current international trading system which has helped the industrialised nations to pursue imbalanced policies while selectively maintaining barriers.

He urged developing countries to implement autonomous industrialisation strategies, just as the United States had done over two centuries ago.

Developing countries, he said, must pursue ”protectionist policies as the United States had implemented under the leadership of Alexander Hamilton [U.S Secretary of the Treasury under first president George Washington] when it closed its economy to imports from the United Kingdom.”

Citing the research findings of Cambridge-based economist Ha-Joon Chang in his book ‘Bad Samaritans:  The Myth of Free Trade and the Secret History of Capitalism’, Correa said that protectionist policies are essential for the development of developing countries.

He stressed that developing countries, which are at a comparable of stage of economic development as the United States was in Hamilton’s time, must devise policies that would push their economies into the global economic order.

The strategy of “import-substitution-industrialisation [ISI]” and nascent industry development is needed for developing countries, he said. “However, the developing countries must ensure proper implementation of ISI strategies because governments had committed mistakes in the past while implementing these policies.”

“Free trade and unfettered trade,” continued Correa, is a “fallacy” based on the Washington Consensus and neoliberal economic policies. In fact, while the United States and other countries preach free trade, they have continued to impose barriers on exports from developing countries.

Turning to the global intellectual property rights regime, which he said is not helpful for the development of all countries, Correa said that these rights must serve the greater public good, suggesting that the current rules do not allow equitable development in the sharing of genetic resources, for example.

In this context, he said that governments must not allow faceless international arbitrators to issue rulings that would severely undermine their “sovereignty” in disputes launched by transnational corporations.

President Correa also called for the free movement of labour on a par with capital. “While capital can move without any controls and cause huge volatility and damage to the international economy, movement of labour is criminalised. This is unacceptable and it is absurd that the movement of labour is met with punitive measures while governments have to welcome capital without any barriers.”

He was also severe in his criticism of the financialisation of the global economy which cannot be subjected to the Tobin tax. “Nobel Laureate James Tobin had proposed a tax on financial transactions in 1981 to curb the volatile movement of currencies but it was never implemented because of the power of the financial industry,” he argued.

Concluding with a hint that his government’s social and economic policies are paving the way for the creation of a healthy society, Correa quipped: “The Pope is an Argentinian, God may be a Brazilian, but ‘Paradise’ is in Ecuador.”

(Edited by Phil Harris)

Degrowth demonstrators marching through the streets of Leipzig, September 2014. The placard reads: Exchange Share Give. Credit: Klimagerechtigkeit Leipzig (http://klimagerechtigkeit.blogsport.de/)

By Justin Hyatt
LEIPZIG, Sep 22 2014 (IPS)

From the mid-20th century onwards, economic growth has come to count as a self-evident goal in economic policies and GDP to be seen as the most important index for measuring economic activities.

This was the premise underlying the recent Fourth International Conference on Degrowth for Ecological Sustainability and Social Equityheld in Leipzig to take stock of the “degrowth” movement’s progress in efforts to debunk the mantra of growth and call for a fundamental rethink of conventional economic concepts and practices.

Many followers of the movement, who argue that “anyone who thinks that growth can go on endlessly is either a crazy person or an economist”, base their philosophy on the findings of a 1972 book – The _Limits_to_Growth – which reports the results of a computer simulation of exponential economic and population growth with finite resource supplies.“In China, which is touted as a success story of economic growth, 75 percent of the results of this growth serves only 10 percent of the population, while the enormous Chinese urban centres have become so polluted that even the government would like to build eco-cities” – Alberto Acosta, economist and former President of the Constitutional Assembly of Ecuador

After Paris (2008), Barcelona (2010) and Venice (2012), this was the fourth such conference but, with some 3,000 participants, the largest so far. Hundreds of workshops, roundtable discussions and films or presentations were organised for the scientists, researchers, activists and members of non-governmental organisations (NGOs) who gathered to discuss economic degrowth, sustainability and environmental initiatives, among others.

Internationally acclaimed Ecuadorian economist Alberto Acosta, who was President of the Constitutional Assembly of Ecuador in 2007-2008 told participants that in China, which is touted as a success story of economic growth, 75 percent of the results of this growth serves only 10 percent of the population, while the enormous Chinese urban centres have become so polluted that even the government would like to build eco-cities.

Acosta, who developed the Yasuní-ITT initiative, a scheme to forego oil exploitation in Ecuador’s Yasuní National Park, is also an advocate of buen vivir, arguing that extractivism is one of the most damaging practices linked to latter day capitalism, as more and more non-renewable natural resources are taken from the earth and lost forever, while producing gigantic quantities of harmful emissions.

To counter extractivism, Acosta calls for the adoption of buen vivir, which is based on the Andean Quechua peoples’ sumak kawsay (full life) – a way of doing things that is community-centric, ecologically-balanced and culturally-sensitive – and loosely translates as “good living”.

For Giorgos Kallis, an environmental researcher and professor at the University of Barcelona, degrowth needs to provide a space for critical action and for reshaping development from below, in an attempt to divert more time away from a capitalist and towards a care economy.

When asked if the concept of degrowth was not too radical or uncomfortable a message, Kallis said: “Yes, perhaps degrowth doesn’t sit well, but that is precisely the point, to not sit well – it is time to make this message relevant.”

Canadian author and social activist Naomi Klein, known for her criticism of corporate globalisation and author of No Logo – which for many has become a manifesto of the anti-corporate globalisation movement – joined the conference by Skype to tell participants that radical change in the political and physical landscape is our only real possibility to escape greater disaster and that reformist approaches are not enough.

One of the main driving forces behind the degrowth movement is Francois Schneider, one of the first degrowth activists who promoted the concept through a year-long donkey tour in 2006 in France and founded the Research and Degrowth academic association.

“Systemic change involves whole segments of society,” Schneider told IPS. “It doesn’t involve just one little part and we don’t expect a new decision from the European Parliament that will change everything. Dialogue is the key. And putting forward many different proposals.”

Taking the example of transport and mobility, he explained that it is useless to tackle the transformation of transport alone because “transportation is linked to energy and advertising is linked to the car industry.”

Vijay Pratap, Indian activist from the Gandhi-inspired Socialist youth movement era and member of South Asian Dialogues on Ecological Democracy (SADED) pleaded for the inclusion of marginalised majorities in the degrowth movement. Pratap told IPS that “unless we initiate the processes so that they can become leaders of their own liberation, no real post-growth society can come into being.”

While he was satisfied with what he said as a very egalitarian and democratic approach to the organisation of the conference, Pratap said that inclusion should be guaranteed for those who do not speak English, those who do not know how to navigate social networking sites and those who do not have access to international philanthropic donor agencies.“

According to Pratap, who participated as an organiser in the World Social Forum (WSF) gathering in Mumbai in 2004, this was one major lesson of the WSF process.

On the final day, Lucia Ortiz, a programme director for Friends of the Earth International and active in Brazilian social movements, did not mince her words in the closing plenary when she proclaimed that “degrowth is the bullet to dismantle the ideology of growth.”

The movement to dismantle this ideology will now continue in preparation for the next degrowth conference in two years’ time.

And Kallis is convinced that it will be even more successful than this year’s event. Commenting on the increase in participation from a few hundred in Paris in 2008 to the 3,000 in Leipzig, he quipped: “At this pace, in twenty years, we’ll have the whole world at our conference.”

(Edited by Phil Harris)

The government of Mali and Touareg rebels representing Azawad, a territory in northern Mali which declared unilateral independence in 2012 after a Touareg rebellion drove out the Malian army, resumed peace talks in Algiers last week, intended to end decades of conflict.

The talks, being held behind closed doors, are expected to end on July 24.

Negotiations between Bamako and representatives of six northern Mali armed groups, among which the National Movement for the Liberation of Azawad (MNLA) is the strongest, kicked off in Algiers on July 16. Diplomats from Mauritania, Niger, Chad, Burkina Faso, the Economic Community of West African States (ECOWAS) and other international bodies are also attending the discussions.

Moussa Ag Assarid, MNLA spokesperson. Credit: Karlos Zurutuza/IPS

IPS spoke with writer and a journalist Moussa Ag Assarid, MNLA spokesperson in Europe.

You declared your independent state in April 2012 but no one has recognised it yet. Why is that?

We are not for a Touareg state but for a secular and democratic multi-ethnic model of country. We, Touaregs, may be a majority among Azawad population but there are also Arabs, Shongays and Peulas and we´re working in close coordination with them.

Since Mali´s independence in 1960, the people from Azawad have repeatedly stated that we don´t want to be part of that country. We do have the support of many people all around the globe but the states and the international organisations such as the United Nations prefer to tackle the issue without breaking the established order.

And this is why both the United Nations and Mali refer to “jihadism”, and not to the legitimate struggle for freedom of the Azawad people.

However, we are witnessing a reorganisation of the world order amid significant movements in northern Africa, the Middle East, and even Europe, as in the case of the Ukraine. It´s very much a clear proof of the failure of globalisation and the world´s management.“We [the people of Azawad] do have the support of many people all around the globe but the states and the international organisations such as the United Nations prefer to tackle the issue without breaking the established order” – Moussa Ag Assarid

The French intervention in the 2012 war was seemingly a key factor on your side. How do you asses the former colonial power´s role in the region?

The French have always been there, even after Mali´s independence, because they have huge strategic interests in the area as well as natural resources such as the uranium they rely on. In fact, you could say that our independence has been confiscated by both the international community and France.

The former Malian soldiers have been replaced by the U.N. ones but the Malian army keeps committing all sort of abuses against civilians, from arbitrary arrests to deportations or enforced disappearances, all of which take place without the French and the U.N. soldiers lifting a finger.

Meanwhile, Bamako calls on the French state to support them under the pretext they are fighting against Jihadism.

Another worrying issue is the media blackout imposed on us. Reporters are prevented from coming to Azawad so the information is filtered through Bamako-based reporters who talk about “Mali´s north”, who refuse to speak about our struggle and who become spokesmen and defenders of the Malian state.

So what is the real presence, if any, of the Malian state in Azawad?

Mali´s army and its administration fled in 2012 and the state is only present in the areas protected by the French army, in Gao and Tombouktou. Paris has around 1,000 soldiers deployed in the area, the United Nations has 8,000 blue helmets in the whole country, and there are between 12,000 and 15,000 fighters in the ranks of the MNLA.

We coordinate ourselves with the Arab Movement of Azawad and the High Council for the Unity of Azawad. Alongside these two groups we hold control of 90 percent of Azawad, but we are living under extremely difficult conditions.

We obviously don´t get any support from either Mali or Algeria and we have to cope with a terrible drought. We rely on the meat and the milk of our goats, like we´ve done from time immemorial and we fight with the weapons we confiscated from the Malian Army, the Jihadists, or those we once got from Libya.

You mention Libya. Many claim that the MNLA fighters fought on the side of Gaddafi during the Libyan war in 2011. Is that right?

Many media networks insist on distorting the facts. Gaddafi did grant Libyan citizenship to the Touaregs but he later used them to fight in Palestine, Lebanon or Chad. In 1990, they went back to Azawad to fight against the Malian army and, even if we had the chance, we did not make the mistake of fighting against the Libyan people in 2011.

Gaddafi gave Touaregs weapons to fight in Benghazi but the Touareg decided to go to Kidal and set up the MNLA. It´s completely false that the MNLA is formed by Touaregs who came from Libya. Many of our fighters have never been there, neither have I.

Do Islamic extremists still pose a major concern in Azawad?

In January 2013, AQMI (Al Qaeda in the Islamic Maghreb), MUJAO (Movement for Unity and Jihad in West Africa), a splinter group of AQMI and Ansar Dine attacked the Malian army on the border between Mali and Azawad.

Mali´s president asked for help from Paris to oust them but it´s us, the MNLA, who have been fighting the Jihadists since June 2012. The United States, the United Kingdom and France claim to fight against Al Qaeda but it´s us who do it on the ground. Ansar Dine has given no sign of life for over a year but AQMI and MUJAO are still active.

One of the most outrageous issues is that Bamako had had strong links with AQMI in the past, or even backed Ansar Dine, whose leader is a Touareg but the people under his command are just a criminal gang. Today, the Jihadists backed by Bamako have become stronger than the Malian army itself.

Are you optimistic about the ongoing talks with Bamako?

So far we have signed all sorts of agreements but none of them has ever been respected. Accordingly, we have already discarded the stage in which we would accept autonomy, or even a federal state. At this point, we have come to the conclusion that the only way to solve this conflict is to achieve our independence and live in freedom and peace in our land.

Mali has never fulfilled its word so that´s why we call on the international community, France and the United Nations.

By Andrew MacMillan
ROME, Jun 25 2014 (IPS)

The choice of foods displayed on supermarket shelves can be quite bewildering. This abundance encourages us to take it for granted that we will always be able to buy the food we want at affordable prices.

Any customers who give thought to how and where all the different foods are produced and end up in their shopping trolleys will start to uncover a rather disturbing situation.

They will find that in most countries, people working at all levels in the food system – in supermarkets, in meat processing and packing plants, as fruit harvesters or farm labourers, or as waitresses in fast-food restaurants – are among the worst paid of all workers.

Andrew MacMillan

They will discover that many of the skilled families that run the small-scale farms that produce most of the world’s food live precariously  They are exposed to multiple risks caused by fluctuating markets, pests and diseases and extreme weather problems, whether frosts, hailstorms, floods, typhoons or droughts.

They will also learn that in most developing countries hunger is heavily concentrated in rural areas, where some 70 percent of the world’s 842 million chronically hungry people live, largely dependent on farming, fishing and forestry. Much urban poverty results from people fleeing rural deprivation. And many of the conflicts that threaten global stability have their origins in areas of extreme poverty.

It seems dreadfully wrong that the very people who produce so much of our food should be those who suffer most from deep poverty and food shortages.

One reason for this apparently unjust situation is what economists call asymmetrical relationships in the food chain. For instance, supermarkets engage in cut-throat competition for customers by lowering their prices, reducing what they pay to their suppliers who, in turn, cut back on their workers’ pay.

Most governments like to keep food prices “affordable”, claiming that it makes food accessible to poor families, thereby preventing hunger and malnutrition. The main policy instruments used by rich and emerging nations include tax-funded subsidies that compensate their farmers for low-priced food sales. They also set low taxes on most foods.“It seems dreadfully wrong that the very people who produce so much of our food should be those who suffer most from deep poverty and food shortages”

The idea that low food prices will reduce the scale of the hunger problem is flawed since the main reason for people being hungry is that they cannot afford the food they need, even when prices are low.

Rather than, as now, shielding all consumers from paying a full and fair price for food, it seems to make more sense to let prices rise and increase the food buying power of the poor. As Fair Trade customers have discovered, higher retail prices can be passed back to all those involved in the food production chain, especially farm labourers. They probably offer the best market-driven option for cutting rural poverty and hunger.

But to eliminate hunger quickly, income transfers, targeted on poor families and with their value indexed to food prices, are also needed, at least until countries begin to manage their economies more equitably.

Policies that support low food prices, apart from exacerbating rural hunger, also add momentum to the other big food-related problems now facing the world, including:

• The serious mismatch between healthy diets and what people choose to eat as their incomes rise. This is most visible in the rapid rise in over-consumption of food, leading to more than 1.5 billion people being overweight or obese, creating a massive future health burden and huge losses in human productivity. It also shows up in the fast growth in demand for foods with high environmental footprints;

• The horrendous wastage of food at retail and household level, amounting to about 30% of output in industrialised countries (or more than the total annual net food production of Africa!);

• The rapid expansion of non-sustainable intensive farming systems. These are placing huge stresses on the increasingly scarce natural resources needed by future generations to meet their food needs – soils, fresh water, forests, marine fish stocks and biodiversity. They are also stoking the processes of climate change by generating large green-house gas emissions.

Many people think that the big food challenge for the future will be to produce enough to feed the hungry. Closing the hunger gap for over 800 million fellow humans, however, can be done today if we are willing to take direct measures to improve food access.

When I calculated what this would take, I was surprised to find that enabling all the world’s hungry to rise above the hunger threshold would raise demand by under 2 percent of present global food production.

Others see population growth as the main concern. Birth rates are dropping fast, but obviously further reductions will make the task of feeding the world easier. Interestingly, much of the growth in the number of mouths to feed – from 7 billion now to 9 billion in 2050 – will come from people living longer, the positive result of better hygiene, health and education.

The reality is that we who already have more than enough to eat and those who expect to emulate our unhealthy diets as their incomes rise are the main culprits, accounting for about half of the 60 percent increase in food demand forecast by the Food and Agriculture Organization (FAO) for 2050!

What seems to be needed now is to mainstream the concepts of fairness, healthy eating and sustainability throughout the food management system. We could usefully adopt the aspiration of the Slow Food movement that “all people can access and enjoy food that is good for them, good for those who grow it and good for the planet.”

Already many developing countries, inspired by the success of Brazil’s Zero Hunger programme, are starting to move in these directions. They are linking expanded social protection for poor families and the buying of food for school lunches to the promotion of small-scale sustainable farm development.

But industrialised countries must also deliver on their responsibilities for cutting their negative impacts on food management which hurt not only their people but also the rest of the world. A first move could be to redirect existing farm subsidies towards promoting healthy eating, cutting food wastage, and accelerating the necessary shift to farming systems that are truly sustainable from technical, environmental and social perspectives.

Rises in retail food prices would be part of the adjustment process, with consumers meeting a progressively rising share of “full and fair” production costs. Though they may complain, this should be readily affordable for the hundreds of millions of people who typically spend less than 20 percent of their disposable income on food. It will also be accessible for poorer families when they are served, as we propose, by expanded social protection.

If you think about it, it is a small price to pay for a healthier and safer world for us and our children! (END/COLUMNIST SERVICE)

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