Female workers sort out plastic bottles for recycling in a factory in Dhaka, Bangladesh. Credit: Abir Abdullah/Climate Visuals Countdown

By Masum Billah
DHAKA, Nov 27 2024 (IPS)

After Bangladesh’s interim government banned polyethene bags, a new sense of hope has emerged for the Sonali bag—a jute-based, eco-friendly alternative developed in 2017 by Bangladeshi scientist Dr. Mubarak Ahmed Khan. Sonali bag, or the golden bag, is named after the golden fiber of jute from which it is made.

Despite its promises, the project has struggled to make significant progress due to a lack of funding. However, following the announcement of the polythene bag ban, Mubarak is now facing pressure to supply his Sonali bag to a market eager for sustainable alternatives.

“Since the government banned polythene bags, we have faced immense pressure of orders that we cannot meet—people are coming in with requests at an overwhelming rate,” Mubarak Ahmed Khan told the IPS.

The latest ban, which came into effect on October 1 for superstores and traditional markets on November 1, isn’t the first time Bangladesh has imposed a ban on polythene bags.

In 2002, the country became the first in the world to outlaw them, as plastic waste was severely clogging city drainage systems and exacerbating its waterlogging crisis, with Dhaka alone consuming an estimated 410 million polybags each month. But the ban gradually lost effectiveness over the years, largely due to a lack of affordable and practical alternatives and inadequate enforcement from regulatory authorities.

Dr. Mubarak Ahmed Khan in his office holding a Sonali Bag. Credit: Masum Billah/IPS

Polyethene bags, although cheaper, are harmful to the environment as they are non-biodegradable and their decomposition takes at least 400 years. Sonali Bag as an alternative, on the other hand, is regarded as a game-changer because it is biodegradable, capable of decomposing in three months.

The ban comes as the UN Plastics Treaty Negotiations are underway in Busan, South Korea. The UN Environment Programme estimates that around the world, one million plastic bottles are purchased every minute.

“In total, half of all plastic produced is designed for single-use purposes—used just once and then thrown away.”

Without an agreement, the OECD estimates that annual plastic production, use, and waste are predicted to increase by 70 percent in 2040 compared to 2020. This on a planet already choking on plastic waste.

The talks have in the past stalled over a disagreement over how to manage waste, with some countries favouring introducing a cap on plastic production and others supporting circularity with use, reuse, and recycling as the main objectives.

The plastics treaty talks will run from 25 November 2024 to 1 December 2024.

However, despite its environmental benefits and higher demands, in Bangladesh the Sonali Bag project still remains within the pilot phase.

A late start for funding crisis

After Mubarak’s invention made headlines, the country’s state-owned Bangladesh Jute Mills Corporation launched a pilot project, setting up a jute-polymer unit at the Latif Bawani Jute Mill to produce Sonali Bag.

Mubarak said they have been asking for government funds, as the project has been operating under the Ministry of Textiles and Jute. However, the basic funding that kept the pilot project running expired last December, and the previous government—which was toppled in August in a mass uprising—had discontinued the project.

“There had been assurances that we might receive Tk100 crore (about USD 8 million) in funding from the government by July. But then came political unrest and a change in government,” Mubarak said.

After the new government took charge, they renewed the pledges to fund the Sonali Bag project.

“The interim government told us that we will get the money in January. If that happens, we will be able to produce five tons of bags per day,” Mubarak said. “Five tons may not be a lot, but it will give us the chance to demonstrate our work to private investors, boosting their confidence to engage with us.”

According to Mubarak, one kilogram of Sonali bags amounts to around 100 pieces of small bags. Based on this estimate, five tons could produce around 15 million bags per month.

Bangladesh’s current adviser to the Ministry of Textiles and Jute, Md. Sakhawat Hossain, told IPS that they are seriously considering funding the Sonali Bag project this January, although he acknowledged that his ministry is currently facing a funding crisis.

“The work will begin in full scale after the fund is provided,” Sakhawat Hossain said. When asked if Mubarak would receive the funds by January, he replied, “We hope so.”

A ban without adequate alternatives at hand

Mubarak Ahmed Khan regards the government’s decision to ban polythene bags as a “praiseworthy” initiative. However, he emphasized that sustainable and affordable alternatives to the polythene bags should come soon.

Mubarak is not alone in his concerns. Sharif Jamil, founder of Waterkeepers Bangladesh, an organization dedicated to protecting water bodies, shares skepticism about the effectiveness of the ban this time, citing the lack of sustainable alternatives in the market.

“The announcement of this ban is an important and timely step. However, it must also be noted that our previous ban was not enforced. Without addressing the underlying issues that led to nonenforcement of the previous ban, the new polythene ban will not resolve the existing problems. It is crucial to tackle the challenges that allowed polythene to remain in the market,” Sharif Jamil told IPS.

“If you don’t provide people with an alternative and simply remove polythene from the markets, the ban won’t be effective,” he added.

Sharif noted that the existing alternatives in the market are not affordable, with some selling alternative jute bags at Tk25 in supermarkets, while polythene bags are often offered at a price that is essentially free.

“Alternatives need to be more affordable and accessible to the public,” he said.

Mubarak stated that his Sonali bag currently costs Tk10 per piece, but he anticipates lowering the price with increased production and demand.

The pursuit of competition in sustainable alternatives

Sharif Jamil, however, wants competition in the sustainable alternatives market.

“It is not only about incentivizing Dr. Mubarak’s project,” Sharif said.

This technology has to be incentivized and recognized, but the government also has to ensure two other things, he said.

“If the government can make it accessible to people at a lower price, it will reach them. Secondly, if the alternative remains solely with Mubarak, it will create a monopoly again,” he said.

It must undergo competition, he recommended. Bangladesh has a competition commission to ensure that other existing sustainable green solutions on the market are also incentivized and recognized.

“Besides facilitating and upgrading Mubarak’s project, the government should ensure fair competition so that people can access it at a lower price,” he added.

For the sake of environment

Adviser Shakhawat Hossain said that they are optimistic about the success of Sonali Bag.

“Already the ambassadors of various countries are meeting me about this. Some buying houses too have been created for this. It seems it will be a sustainable development,” he said.

Mubarak said that if they get the funding soon, Sonali Bag will have a market not only in Bangladesh but all over the world.

He said the private investors should come forward not just because the government has banned polythene bags, but out of a moral obligation to address the negative impact these bags have on the environment.

“With this, I believe we can create a polythene-free environment,” Mubarak said, acknowledging, “It is not easy to introduce this to the market solely because it is a new product. We are up against an USD 3.5 trillion single-use plastic market.”

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

The global economy is facing strong headwinds that have set back world trade and output growth. Despite the measures implemented in many countries to contain the slowdown, production and employment trends continue to be negative. In the light of these developments, the World Trade Organisation (WTO) recently revised its forecast for world trade growth in 2012 to 2.5 percent, down from the previous 3.7 percent forecast. We foresee a volume of trade growth of 4.5 percent in 2013, below the long-term annual average of five to six percent that we have enjoyed for the last 20 years.

Pascal Lamy. Credit: Couresy of WTO.

In times of hardship, governments are subject to protectionist pressures. But in the present economic situation, trade opening is not part of the problem. In fact, trade could be part of the solution for recovering economic growth, promoting competitiveness, and creating jobs. Although protectionist pressures still exist, the collective vigilance exercised by WTO members is an important asset to contain them.

Unfortunately, the WTO is not yet delivering in one crucial aspect and that is in its ability to update its rulebook in order to make it more responsive to current realities and to facilitate the way in which trade can promote development.

In November 2001 in Doha, Qatar, we launched multilateral trade negotiations under a broad agenda to modernise the WTO rules. More than 11 years later, this process remains deadlocked. The goal of achieving a Doha package encompassing all of its 20 topics among the WTOs 157 members remains elusive and will not be available in the short term.

Regrettable as it is, the present deadlock in the Doha Round does not mean that we cannot advance in smaller steps in some areas of trade negotiations.

For instance, WTO members are negotiating the expansion of the Information Technology Agreement, originally drafted in 1996 among 20 members and now encompassing 97 percent of trade in IT products. It has been a win-win deal and I am confident that we may see progress on this topic in the coming months.

Another obvious area that we could advance in is trade facilitation, the task of finding a more efficient and effective way to process trade, or in other words to reduce the thickness of borders. This area of policy has a profound impact on competitiveness. The longer a producer has to wait for a needed imported component, the less competitive it becomes.

At its core, trade facilitation is about making trade easier and less costly. In a world increasingly focused on value chains and trade in intermediate products, effective trade facilitation is not just a choice – it is an essential element for any country.

The evidence is clear. The Organisation for Economic Cooperation and Development (OECD) estimates that for its members, customs procedures, paperwork and border delays constitute roughly 10 percent of the value of any trade transaction. Globally, these costs are close to two trillion dollars. A WTO deal on trade facilitation to curtail fees and paperwork, create greater transparency and reduce obstacles to goods in transit would cut those transaction costs in half.

Trade today is unlike what it was a few decades ago. World growth has become more dependent on trade: as a share of gross global product, trade has risen from 38 percent in 1980 to around 55 percent now.

The evolution of technology and transportation has greatly reduced the costs and uncertainty of distance. The rapid growth of global value chains, the preponderance of new regulatory-based, non-tariff measures and the shift in trade patterns as South-South trade grows rapidly are all elements that have accelerated since the turn of this century and which, if current trends are maintained, will continue to expand in the years ahead.

China has become the worlds second-largest economic power and the biggest exporter of goods. Many other trading powers have emerged Brazil, India, Mexico and Malaysia are all now at the table of the top 25 leading exporters, and all posted export growth of 15 percent or better in 2011. Developing countries share of trade is 47 percent today compared with a global share of around one-third in 2008.

The nature of trade has also changed. High-tech products used to be made in the U.S., Japan or Germany. Today, they are made in the world, with components and parts fabricated in many countries. The country where the final assembly takes place may contribute only a small fraction of the final value of the product. Currently, roughly 60 percent of the volume of world merchandise trade is trade in components. In Asia, the figure is closer to two-thirds. The import content of the average export is 40 percent, up from 20 percent two decades ago, and will keep growing in the future as multi-location supply chains keep extending.

These value chains have not only changed the way companies trade, they are also changing the nature of the trade debate. When products were made in a single country, the argument that exports were good and imports bad was more easily defended. This mercantilist approach was, for centuries, a driving force behind trade policy.

Value chains have turned all of this on its head. Companies that wish to be competitive in the global marketplace need access to the best possible inputs goods and services at the lowest possible prices.

To hinder companies seeking such imports is to render them less competitive globally. It is self-defeating. This factor, together with strict monitoring by the WTO, may explain why countries have by and large avoided taking massive trade-restrictive measures during the crisis.

(END/COPYRIGHT IPS)

Questions are asked whether the Organisation for Economic Co-operation and Development (OECD) agreement to force the world’s biggest companies to pay a fair share of tax will benefit the global South. Credit: Hugo Ramos/Unsplash

By Ed Holt
BRATISLAVA, Oct 20 2021 (IPS)

An agreement between 136 countries aimed at forcing the world’s biggest companies to pay a fair share of tax has been condemned by critics who say it will benefit richer states at the expense of the global South.

A deal agreed on October 8, and which covers around 90% of the global economy, includes plans for a global minimum corporate tax rate of 15%.

The Organisation for Economic Co-operation and Development (OECD), which led negotiations on the agreement, has said it will help end decades of countries undercutting each other on tax.

But independent organisations campaigning for fairer global taxes and financial transparency argue it will rob developing countries of revenues needed to recover from the COVID-19 pandemic, ultimately pushing millions more people into poverty.

Matti Kohonen of the Financial Transparency Coalition (FTC) civil society group told IPS: “In principle, a global minimum corporate tax is a good idea, but only if the rate is right and implemented properly. Under this deal, the main beneficiaries are the OECD – which led the negotiations – and its largest members.”

Calls for a global minimum corporate tax rate have grown in recent decades amid increasing scrutiny on the tax practices of multinationals.

The OECD deal, which has an aspirational implementation date of 2023, is designed to set a floor on corporate taxation and stop companies shifting profits to countries with the lowest tax rates they can find.

The OECD says the minimum global rate would see countries collect around USD150 billion in new revenues annually, and that taxing rights on more than USD125 billion of profit will be moved to countries where big multinationals earn their income.

But independent groups say the agreement falls far short of what is needed for a fair global corporate taxation system and has ignored the needs and wishes of developing nations, which rely more heavily on corporate tax than richer states.

According to OECD research Corporate Tax Statistics: Third Edition (oecd.org), in 2018, African countries raised 19% of overall revenue from corporate taxation as opposed to 10% among OECD states.

Critics point out that the 15% floor agreed to is well below the average corporate tax rate in industrialised countries of around 23%, potentially creating a ‘race to the bottom’ as countries cut their existing corporate rates.

It is thought a number of developing states had wanted a higher minimum global rate.

Civil society groups critical of the agreement also have concerns over many exemptions in the deal – there is a ten-year grace period for companies on some aspects of the agreement, and some industries such as extractives and financial services, are exempt.

Meanwhile, they highlight, only 100 of the world’s largest companies would be affected by part of the agreement aimed at getting highly profitable multinationals to pay more taxes in countries where they earn profits. Moreover, the minimum global tax will only apply to companies with a turnover of more than 750 million USD, which would exclude 85-90% of the world’s multinationals.

The fact that countries will have to waive digital services taxation rights, which are important sources of revenue for some developing states, is also problematic. And there are concerns that in many cases extra tax paid by corporations ‘topping up’ their tax bill to 15% will go to countries where they are headquartered. In many cases, this will be in already rich nations such as the US, UK, and Europe.

Chenai Mukumba of the Tax Justice Network Africa advocacy group told IPS: “We have an opportunity to reform the global tax system to make it right for global south countries, but we are settling for so much less. This is a lost opportunity to balance the scales, to put fairness at the centre of the system.”

The deal could have a negative effect on African countries, in particular, she pointed out.

Nigeria and Kenya have not signed up for the fair tax deal. Credit: Muhammadtaha Ibrahim Ma’aji/Unsplash

Kenya and Nigeria are among four countries that have not signed up for the deal.

“A lot of African countries currently have corporate tax rates of 25-30%. If the minimum rate is 15%, there is a great incentive for companies to shift profits elsewhere,” Mukumba said.

“Kenya hasn’t signed up to the deal because it is trying to raise revenue from its digital services taxation rights. It may end up buckling to the pressure [to join the deal],” she added.

OECD impact assessment studies for the deal published in 2020 https://www.oecd.org/tax/beps/economic-impact-assessment-webinar-presentation-october-2020.pdf showed that developing nations would gain as much as 4% extra corporate tax revenue.

The organisation told IPS this month (OCT) that it is now expecting those extra revenues to be even higher because of changes to the agreement since last year.

However, studies Pillar 1 impact assessment – 04.10.21 FINAL (oxfamireland.org) by the global aid group Oxfam estimate that 52 developing countries would receive around only 0.025 percent of their collective GDP in additional annual tax revenue under the redistribution of taxing rights.

The group also says a 25% global minimum corporate tax rate would raise nearly USD 17 billion more for the world’s 38 poorest countries – which are home to almost 39% of the global population – as compared to a 15 percent rate.

Speaking just after the agreement between the 136 countries was reached, Oxfam said in a press release that the deal was “a mockery of fairness that robs pandemic-ravaged developing countries of badly needed revenue for hospitals and teachers and better jobs”.

It added: “The world is experiencing the largest increase in poverty in decades and a massive explosion in inequality, but this deal will do little or nothing to halt either.”

Despite the criticism, OECD officials are adamant that the agreement will benefit developing nations.

They point out that it does not affect any state’s national corporate tax rates, and that the 10-year grace period only applies to a very small amount of income – 5% of the carrying value of a firm’s tangible assets and payrolls in a jurisdiction.

Grace Perez Navarro, Deputy Director of the OECD’s Centre for Tax Policy and Administration, told IPS: “The global minimum tax is aimed at stopping tax competition that is causing a race to the bottom in corporate tax rates.

“It does not require countries that have higher rates than 15% to lower their corporate tax rate, it just ensures that those countries will be able to collect at least 15%, no matter what type of creative tax planning a multinational comes up with.

“It will also reduce the incentive of multinationals to artificially shift their profits to low tax jurisdictions because they will still have to pay a minimum of 15%.”

She added: “It will also relieve the pressure on developing countries to offer excessive, often wasteful tax incentives while providing a carve-out for low-taxed activities that have real substance. This means that developing countries can still offer effective incentives that attract genuine, substantive foreign direct investment.”

But Mukumba said the problem is not that the deal will not bring any extra revenue to developing nations, but that richer nations will get much more out of it.

“Developing nations want a global corporate tax minimum, they have pushed for it in the past. They will get revenue under this deal, yes, but nowhere near as much as richer nations will get out of it,” she said.

This is problematic at a time when many developing nations are struggling with the effects of the COVID-19 pandemic and need revenue.

“This [deal] will mainly support recovery efforts in the G7 countries instead of developing countries which have been most impacted by the COVID-19 pandemic and are more in debt, preventing them from generating enough revenues to recover from the crisis and ultimately throwing millions more people into extreme poverty,” said Kohonen.

Follow @IPSNewsUNBureau
  

Participants at a UN event on Interfaith harmony and the Sustainable Development Goals. Credit: UN Photo/Manuel Elias.

By Lyndal Rowlands
UNITED NATIONS, Apr 21 2016 (IPS)

The traditional definition of aid is being eroded at the same time that governments have committed to achieving the UN’s ambitious Sustainable Development Goals (SDGs), Jeffrey Sachs special adviser to the UN Secretary-General on development told IPS Thursday.

“A lot of governments have a kind of magical thinking which is, we’re all for the Sustainable Development Goals but don’t come to us if you want to achieve them, go borrow from the private markets,” said Sachs.

Aldo Caliari who represents civil society in UN Financing for Development (FfD) negotiations told journalists here Monday that there has been a “significant shift in the language” in these negotiations towards “a larger presence of the private sector”.

“We are concerned about states withdrawing their responsibility and saying the private sector should do it,” said Caliari who is also director of the Rethinking Bretton Woods Project at the Washington DC-based Center of Concern.

“Loans usually go for commercial projects rather than public service delivery so this is an entirely different way of utilising the financing,” he said.

While private sector financing will provide part of the funds needed to achieve the sustainable development goals, there are definitely some areas where public funds remain essential.

“If you want to achieve universal health coverage in poor countries, which is SDG 3, that is a public sector function and the poor countries do not have enough domestic revenues to achieve that on their own,” said Sachs.

“For the poorest countries the Official Development Assistance should be overwhelmingly in the form of grants because putting absolutely impoverished countries into debt makes no sense,” he said.

Sachs said that there are examples right now where donor governments are reducing funding to development programs in favour of domestic refugee costs, peacekeeping budgets and climate financing.

“I know cases where contributions to The Global Fund (to Fight AIDS, Tuberculosis and Malaria) and GAVI (The Vaccine Alliance) were cancelled in favour of climate financing because the government wanted to check the box on climate financing,” said Sachs.

He said that even Scandinavian countries, which he described as “some of the world’s best donors”, were reallocating their development funds to refugee programs.

Jeroen Kwakkenbos, Policy and Advocacy Manager at the European Network on Debt and Development (EURODAD) expressed concerns that some of the biggest increases in the recently published 2015 Organization for Economic Cooperation and Development (OECD) Official Development Assistance (ODA) figures were for areas not traditionally defined as aid.

“One of the largest increases aside from refugee costs was for non-grant financing which is basically loans which increased by 26 percent,” said Kwakkenbos.

Kwakkenbos said that there is a trend towards loans replacing grants in country’s overseas development assistance budgets.

These changes are reflected in donor government aid policies. For example, the Australian government states on its website, that aid represents “an increasingly small proportion of development finance” and that Australia’s aid program will achieve it’s purpose by “supporting private sector development and strengthening human development.”

Kwakkenbos said that the inclusion of refugees in ODA accounting started in the 1990s, “but at the time it was a very small proportion of ODA so everyone just kind of ignored it.”

Overall, the OECD figures showed a small increase in ODA in 2015, without including the refugee costs, although some OECD countries did individually reduce the development assistance in favour of refugee programs.

The OECD told IPS by email that there has “not been any change of rules to allow more refugee costs to be counted as ODA” and that the OECD Development Assistance Committee told donor countries in February they were concerned that refugee costs should not “eat into ODA”.

Despite the small overall increase, most donor countries remain a long way from meeting their commitments to increase aid to 0.7 of one percent of their Gross National Income (GNI).

Kwakkenbos said that the target to reach 0.7 has now been revised to 2030, the same year governments have agreed to achieve the Sustainable Development Goals.

“You have to remember that the original 0.7 target was 1980 and no later than 1985,” he said.

The Organisation for Economic Cooperation and Development (OECD), once a domain of the rich countries, is keen to extend its global membership and has set out a clear path for Costa Rica’s membership, within months of launching accession discussions with Colombia and Latvia.

As part of this strategy, the 34-nation OECD has in fact been strengthening cooperation with Brazil, India, Indonesia, the People’s Republic of China and South Africa through ‘Enhanced Engagement’ programmes.

According to OECD official sources, over time the organisation’s focus “has broadened to include extensive contacts with non-members and it now maintains cooperative relations with a large number of them.”

Li Keqiang, Premier of the State Council of the People’s Republic of China, paid a historic visit to the OECD on Jul 1, 2015, to sign cooperation agreements in a move that will bolster ongoing collaboration.

The visit to the OECD, the first by a Chinese state leader, coincided with the 20th anniversary of OECD-China relations, as well as China’s upcoming Presidency of the G20 in 2016.

Premier Li Keqiang delivered a keynote address in the context of the OECD Leaders Programme. He was accompanied by a number of ministers and high-ranking officials from the Chinese government.

OECD’s Global Relations Secretariat (GRS) develops and oversees the strategic orientations of OECD’s global relations with non-members. More than 15 Global Fora have been established to address trans-boundary issues where the relevance of OECD work is dependent on policy dialogue with non-members.

Regional initiatives cover Europe, the Caucasus and Central Asia; Asia; Latin America; and the Middle East and North Africa (MENA). The Sahel and West Africa Club creates, promotes and facilitates links between OECD members and West Africa.

Helping improve public governance and management in European Union candidate countries, potential candidates and European Neighbourhood Policy partners is the mission of a joint OECD-EU initiative, the Support for Improvement in Governance and Management (SIGMA) programme.

The OECD’s current members are Austria, Australia, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

On Jul. 8, 2015, OECD members adopted the Roadmap for the Accession of Costa Rica to the OECD Convention setting out the terms, conditions and process for its accession.

OECD Secretary-General Angel Gurría said: “Launching the accession process of Costa Rica underlines the organisation’s commitment to broaden its global outreach. Our joint objective is to work together to bring Costa Rica’s policies and practices closer to OECD best policies and practices.”

Gurría, who hails from Mexico, added: “This process, through which standards and best practices are adopted, is as important as membership itself and will help improve the lives of all Costa Ricans. It will be mutually enriching, as it will also allow the OECD to learn from Costa Rica’s experience in various policy areas.”

The first step in the process will see Costa Rica submit an initial memorandum setting out its position on approximately 260 OECD legal instruments. This will in turn lead to a series of technical reviews by OECD experts, who will collect further information from Costa Rica through questionnaires and fact-finding missions.

As part of the accession process, the OECD will evaluate Costa Rica’s implementation of the organisation’s policies, practices and legal instruments. Its committees may make recommendations for adjustments to legislation, policy or practice to bring Costa Rica closer to OECD instruments or best practices, serving as a catalyst for reform.

There is no deadline for completion of the accession processes, said an OECD official. Final accession will depend on the candidate country’s capacity to adapt and adjust to meet the organisation’s standards. Once all the committees have given their opinion, a final decision will be taken by all OECD member countries in the Governing Council.

Created in 1961 as the successor to the Organisation for European Economic Cooperation, which administered the Marshall Plan at the end of the Second World War, OECD serves as an economic, environmental and social policy forum for its 34 member countries, as well as partners worldwide, on the world’s most important global challenges.

Edited by Phil Harris   

While lauding South Africa for impressive social progress over the past two decades, a new study has asked the country to build on the successes achieved and reduce inequality further.

The latest OECD Economic Survey of South Africa by the 34-nation Organisation for Economic Cooperation and Development (OECD) says: “South Africa has made impressive social progress over the past two decades, lifting millions of people out of poverty and broadening access to essential services like water, electricity and sanitation. Now is the time to build on these successes to reduce inequality further, create badly needed jobs and ensure stronger, sustainable and more inclusive growth for all.”

The survey, released in Pretoria, the capital of South Africa, by OECD Secretary-General Angel Gurría and South African Finance Minister Nhlanhla Nene, notes that prudent macroeconomic policies have secured the confidence of financial markets.

However, economic growth has been too slow and further measures are needed to overcome infrastructure bottlenecks, strengthen the business environment, improve labour markets and ensure future spending needs can be financed.

“The National Development Plan sets the direction for reforms needed for a strong and inclusive country. Our survey provides targeted recommendations to reach these objectives,” said Gurría.

“Millions of young South Africans are eager to work, and their potential must not be wasted. Their future is precious enough to justify tough reforms and hard spending choices,” he added.

According to the survey, improving infrastructure will be essential for boosting future growth and living standards while, given the large needs, prioritisation and cost effectiveness will be crucial.

The OECD noted out that the most immediate priority is to secure additional electricity generation capacity by opening the market to independent producers. Opening electricity and transport will require strong and independent regulators to protect households and firms.

The organisation pointed out that improving the regulatory environment would promote entrepreneurship and growth opportunities for small and medium enterprises (SMEs), which offer the greatest potential for creating jobs and future growth. Reducing barriers to entry, cutting red tape and promoting competition, will be essential.

According to the survey, labour market reforms can raise employment and incomes. Establishing a public employment service as a one-stop shop for job seekers would make it easier for people to find jobs, and for employers to find the right workers.

Costly industrial actions have held back the economy without delivering major gains to workers. The OECD suggests an increased role for mediation and arbitration in order to reduce conflict and provide better outcomes for workers and employers.

The survey pleads for “a high degree of public sector efficiency, prioritisation of spending and a strong revenue base” with a view to meeting public spending needs for infrastructure and the social safety net.

It argues that the South African tax system “is well designed and well administered, but there is scope to broaden key tax bases by reducing deductions, credits and exemptions.  Such tax reform would solidify public finances and make the tax system fairer.”

Edited by Phil Harris   

By Roberto Azevêdo
GENEVA, Jun 29 2015 (IPS)

The latest report by the World Trade Organisation (WTO) on G20 trade measures shows a slight deceleration in the application of new trade-restrictive measures by G20 economies, with the average number of such measures applied per month lower than at any time since 2013.

According to the thirteenth such WTO report, issued on Jun. 15, G20 economies had applied 119 new trade-restrictive measures since mid-October 2014, an average of 17 new measures per month over the period.

Roberto Azevêdo

A slight decrease in the number of trade remedy investigations by G20 economies has also contributed to this overall figure.

But it is not yet clear that this deceleration will continue and the WTO calls on G20 leaders to show continued vigilance and reinforced determination towards eliminating existing trade restrictions.

The longer term trend remains one of concern, with the overall stock of trade-restrictive measures introduced by G20 economies since 2008 continuing to rise.

Of the 1,360 restrictions recorded by this exercise since 2008, less than one-quarter have been eliminated, leaving the total number of restrictive measures still in place at 1,031. Therefore, despite the G20 pledge to roll back any new protectionist measures, the stock of these measures has risen by over seven percent since the last report.

The broader international economic context also supports the need for continuing vigilance and action. According to the WTO’s most recent forecast (14 April 2015), growth in the volume of world merchandise trade should increase from 2.8 percent in 2014 to 3.3% percent 2015 and further to four percent in 2016, but remaining below historical averages.“The longer term trend [vis-à-vis protectionism] remains one of concern, with the overall stock of trade-restrictive measures introduced by G20 economies since 2008 continuing to rise”

The overall response to the 2008 financial crisis has been more muted than expected when compared with previous crises. The multilateral trading system has proved an effective backstop against protectionism.

During this period, G20 economies also continued to adopt measures aimed at facilitating trade, both temporary and permanent in nature.

These developments confirm that G20 economies overall have shown a degree of restraint in introducing new trade restrictions. However, it is not yet clear that the deceleration in the number of measures introduced will continue in future reporting periods. It is also relevant that the slow pace of removal of previous restrictions means that the overall stock of restrictive measures is continuing to increase.

The broader international economic context also supports the need for continuing vigilance and action.

Trends in world trade and output have remained mixed since the last monitoring report, as merchandise trade volumes and GDP growth picked up in the second half of 2014 but appear to have slowed in the first quarter of 2015.

Economic activity remained uneven across countries as the United States and China slowed in the first quarter, while growth in the Euro area and Japan picked up.

Plunging oil prices and strong exchange rate fluctuations, including an appreciation of the U.S. dollar and a depreciation of the Euro contributed uncertainty to the economic outlook.

Lower prices for oil and other primary commodities were expected to provide a boost to importing economies, but reduced export revenues weighed heavily on commodity exporters.

In light of these developments, our most recent forecast (14 April 2015) predicted a continued moderate expansion of trade in 2015 and 2016, although the pace of recovery was expected to remain below historical averages.

In the area of government procurement, work from the Organisation for Economic Cooperation and Development (OECD), identifying 65 measures implemented since the financial crisis, suggests that discriminatory government procurement policies have become increasingly popular and potentially affect 423 billion dollars of government procurement in the implementing economies.

This report shows that G20 economies implemented 48 new general economic support measures during the period under review, with the majority targeting the manufacturing and agricultural sectors through various incentive schemes, often, but not exclusively, in the context of exports.

The overall assessment of this thirteenth report on G20 trade measures is that the continuing
increase in the stock of new trade-restrictive measures recorded since 2008 remains of concern in the context of an uncertain global economic outlook.

Individually and collectively, the G20 must show leadership and deliver on the pledge to refrain from implementing new measures taken for protectionist purposes and to remove existing ones. (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 Sipho Mthathi
JOHANNESBURG, Jun 12 2015 (IPS)

Africa is known as the ‘paradox of plenty’. How can a continent so rich in natural resources be so poor?

Economic growth is predicted to increase by 4.5 percent across the continent this year, despite falling oil prices and the Ebola crisis. South Africa’s economy, the second biggest in Africa is expected to continue to grow by 3.5 percent this year; Nigeria will grow by an enviable 5.5 percent.

Sipho Mthathi, Executive Director of Oxfam South Africa

However, millions across Africa are struggling.  Economic inequality is on the rise, and public coffers are insufficient due to an increasing demand for public services like health, education and housing.

Recently, Thomas Pogge and other distinguished academics have written about the cost of progress. Surprisingly, history provides us with examples of countries where, if there is a balance between economic growth and public spending, it is possible to address inequality.

There is no time to waste in looking for ways to address this widening gap across Africa.

It is urgent that, collectively, African nations look at the billions of dollars flowing out of the continent every year, most of which can be attributed to corporate tax dodging.

In January, the report of the High Level Panel on Illicit Financial Flows (IFFs) from Africa, chaired by former South African President Thabo Mbeki, contended that IFFs from Africa increased from about 20 billion dollars in 2001 to 60 billion in 2010 in the merchandise sector alone.

According to Global Financial Integrity’s 2014 report on IFFs from developing countries, South Africa alone may have lost more than 122 billion dollars between 2003 and 2012 in IFFs.

This is a lost opportunity for money that could have been reinvested in advancing Africa’s development and increased access to public goods for her Africa’s people.“It is urgent that, collectively, African nations look at the billions of dollars flowing out of the continent every year, most of which can be attributed to corporate tax dodging”

But this is only the half of the story. Multinational companies are gaining at the expense of African people through other ‘legal’ forms of corporate tax dodging, and through negotiated tax breaks. This is happening because of a lack of fair global tax rules, and behind-closed-door deals between corporations and governments, rushing to seal deals under pressure.

Africa’s astounding growth is affecting human development. And these losses in tax revenue come at a time when the role of official development assistance to Africa is declining.

Fair and progressive tax systems should be providing financing for well-functioning government programmes to enable governments to uphold citizens’ rights to basic services (such as healthcare and education), and cement trust between citizens and governments.

Establishing an effective tax system is critical if Africa is going to mobilise the resources it needs to tackle poverty and inequality.  Africa is home to six out of ten of the world’s most unequal countries – South Africa, Lesotho, Namibia, Botswana, Zambia, and Central Africa Republic.  Some estimates on Africa’s financing needs include 40-$60 billion dollars per year to finance the post-2015 development agenda.

This is not just Africa’s problem. Around the world, many lower-income countries have been subject to harmful tax practices, including transfer pricing, whereby a transfer price may be manipulated to shift profits from one jurisdiction to another, usually from a higher-tax to a lower-tax jurisdiction.

After revelations of how multinational enterprises (MNEs) such as Starbucks, Google and Apple deliberately structured themselves to minimise their tax bills, the Organisation for Economic Cooperation and Development (OECD) launched an effort to reform this base erosion and profit shifting (BEPS) practice. This reform is expected to wind up by the end of 2015.

However, since the launch of the BEPS Action Plan, developed countries have not had a real voice or influence in the process.  Just four African countries, including South Africa as a G20 member country, have been invited to participate as observers.  These countries are bringing attention to the many mining corporations which are offered lucrative tax incentives which must be addressed in the BEPS plan.

The African Tax Administration Forum (ATAF) is a regional tax body that has been invited by the OECD/G20 to participate in the BEPS reform process.  This should provide further scope to influence the BEPS process with an African perspective.

At the same time, the South Africa Revenue Services (SARS) is going after billions lost through wasteful incentives and trade mispricing. SARS has recovered 5.8 billion rand (460 million dollars) over the three-year period 2011-2014, 55 percent (3.4 billion rand or 274 million dollars) of which is attributed to the mining industry.

South Africa’s membership in the G20 (and its role as co-Chair of the G20 Development Working Group) provides an enormous opportunity to insist on broad inclusion of all nations in the BEPS reform process.

At a recent conference convened by ATAF, South African Finance Minister Nhlanhla Nene called for “Africa to protect its own tax base, and advance domestic resource mobilisation through a common voice, a common concern and a common action plan.”

It is time that all African finance ministers wake up to the possibility that tax revenues for financing essential services for their citizens, or investment in small-holder agriculture or infrastructure, could come from the recovery of billions of dollars lost from corporate tax dodging and unfair tax competition.

Tax breaks provided to six large foreign mining companies in Sierra Leone, for example, are equivalent to 59 percent of the total budget of the country – or eight times the country’s health budget.

It is time for a global inter-governmental body on international tax cooperation to allow for a more inclusive and coordinated approach to ongoing tax reform, beyond BEPS.

All countries should be able to participate in tax negotiations on an equal footing, which guarantees one country, one vote, and where representatives will have the political mandate to speak on behalf of their governments.  Simply relying on the BEPS process to re-write tax rules will not be enough to end international tax dodging.

Through the BEPS reform process and this new tax body, there would be real potential for an African taxation renaissance.

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:

Is the G7 commitment to an energy transition that aims to gradually phase out fossil fuel emissions this century to avoid the worst of climate change just hot air? Credit: CC BY-SA 2.5

By Lucy Cadena
LONDON, Jun 11 2015 (IPS)

One of the promises made by the leaders of the world’s seven richest nations when they met at Schloss Elmau in Germany earlier this week was an energy transition over the next decades, aiming to gradually phase out fossil fuel emissions this century to avoid the worst of climate change.

Let us be clear: a target of zero fossil fuels by 2100 puts us on track for warming on an unmanageable scale. The only commitment made by the G7 this week was a commitment to climate chaos.

Putting our faith in as-yet-underdeveloped technology fixes such as ‘carbon capture and storage’ and ‘geo-engineering’ to save us in the next 85 years, while the solutions to the climate crisis – renewable technology and community energy systems – exist here and now, is senseless.“The only way to avoid the worst of climate change is to act now, with urgency and ambition. Not by 2100, nor 2050. We need real commitment to real solutions – and the best place the G7 can start is by taking its money – public money – out of dirty energy”

The only way to avoid the worst of climate change is to act now, with urgency and ambition. Not by 2100, nor 2050. We need real commitment to real solutions – and the best place the G7 can start is by taking its money – public money – out of dirty energy.

While the G7 gathered on Jun. 7 and 8, this was the message from people from around the world, who are calling for a ban on all new dirty energy projects and an end to the financing of dirty energy.

The G7’s role in upholding the current dirty energy system is not limited to the subsidies they pour into fossil fuels daily.

G7 countries also directly finance – and profit from – dirty energy projects, particularly in the global South, and in regions where poverty and limited energy access devastate families.

These include projects affecting communities deeply reliant on clean air, water, and land that is polluted and stolen from them, projects among populations most vulnerable to the effects of climate change, and projects where people face harassment and human rights violations for speaking out.

France

Last week, France, host of the 30 November-11 December 2015 Paris climate summit – the U.N. gathering to set the agenda for global climate commitments in the next decades – announced that two of the summit’s key sponsors will be EDF and ENGIE (formerly GDF-Suez).

The French state holds 84 percent and 33.3 percent of shares in these companies respectively. Both are involved in the construction of several very controversial, polluting projects across the world.

EDF is currently planning the destructive Mphanda Nkuwa mega-dam on the Zambezi River in Mozambique, in the face of fierce opposition from local communities and environmental organisations.

A letter from civil society reminds French President François Hollande that these and other projects place EDF and ENGIE among the top 50 companies that contribute the most to global climate change.

With 46 coal-fired power plants between them, EDF and ENGIE are responsible for emitting 151 million tonnes of CO₂ a year – which amounts to about half the total of France’s overall emissions.

Italy

The Italian state owns a considerable number of shares – almost one-third – in oil and gas company ENI. According to a recent report by Amnesty International, last year alone ENI reported 349 oil spills in the Niger Delta from its own operations.

The figure is remarkable – almost unbelievable. Each spill triggers a human and ecological crisis. The scale of the devastation and ENI’s failure to safeguard communities and ecosystems begs the question: is this sheer incompetence, recklessness, or simply utter indifference to the welfare of local communities?

Japan

Japan, the next offender on the G7 list, is the number one public financier of coal plants globally among the Organisation for Economic Cooperation and Development (OECD) countries.

Japan has 24 coal-powered projects either under construction or planned, many of them in Indonesia, Vietnam and India, where the more vulnerable local populations live under the cloud of plants’ toxic emissions.

Emissions of deadly sulphur dioxide and nitrogen oxides from coal plants are currently highest in Indonesia, where the planned Batang coal power plant is set to become the largest ever Japanese-financed plant in Southeast Asia.

United States

A report by Oil Change International indicates that the United States government alone provides 5.1 billion dollars in national subsidies to fossil fuel exploration each year – that’s 5.1 billion dollars into seeking out new sources of civilisation-destroying energy sources.

Canada

Likewise, Canada’s expanding oil sector (caused by the growth in dirty tar sands production, known as ‘the biggest industrial project on Earth’) continues to reap the benefits of massive national subsidies.

United Kingdom

The U.K. government spent 300 times more supporting dirty energy overseas than it contributed towards renewable energy projects during its last term.

The 2012-2013 annual report of UK Export Finance, the country’s export credit agency, announced spending on projects such as a 147 million pounds (228 million dollars) guarantee to support oil and gas exploration by Petrobras in Brazil and 15 million pounds (23 million dollars) in guarantees to a loan for a gas power project in the Philippines.

Domestically, the government is prioritising drilling for new oil and gas, which will require huge subsidies. Hailing carbon-emitting gas as a ‘bridge fuel’ towards a cleaner energy system, the government is delaying investment in renewables to push fracking onto a population that vehemently opposes the dash for gas.

Germany

Meanwhile, Germany – the host of the G7 meeting – has been much lauded for its ‘Energiewende’ (‘Energy Revolution’), with a rapidly increasing use of renewable energy compensating for its nuclear phase-out in recent years.

However, German euros still make their way into the dirty energy machine – through sizeable tax exemptions afforded to fossil fuel producers’ exploration activities – allowing such companies to go further and dig deeper to uncover more carbon that needs to stay in the ground.

G7 Must Catch Up

The G7 countries have done the most to cause climate change. According to the Climate Equity Reference Calculator, they are responsible for 70 percent of historical carbon emissions, while hosting only 10 percent of the global population.

A commitment to a phase-out of fossil fuels in eight decades’ time is not a commitment. It is an easy promise for a politician, who probably will not even be in power in the next decade, to make. It is an easy promise for a rich nation, whose citizens are not the most vulnerable, to make.

G7 societies have grown rich by exploiting the human and natural world. They owe an enormous ‘climate debt’ to developing nations – yet they can barely scrape together the money they promised to the developing world via the Green Climate Fund.

Whether it’s an oil spill in Nigeria, a mega-dam in Mozambique or a coal plant in Java, the sources of our publicly-owned dirty energy are always sites of ecological and social devastation.

Access to energy is a right, but it should not come at the cost of other people’s rights – to clean air and drinking water, to land and food sovereignty, and to sustainable societies.

The international movement for climate justice is building, and will keep up pressure on governments to take money out of dirty energy and reinvest it in democratic renewable solutions that benefit everyone.

The global shift towards a just energy transformation has long been under way. Now, it’s snowballing. People from around the world are showing the way and implementing community-owned renewable energy solutions.

There is a hunger for change, despite continued inaction from governments. G7 leaders, take note: you are trailing far behind and have a lot of catching up to do!

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:

With little fanfare, the German IFO Institute for Economic Research recently published a report on population projections for Germany which states simply that the country’s population is shrinking fast.

The country has lost 1.5 million inhabitants since the last census in 2011 and it is estimated that it will have fallen from the 82.5 million in 2003 to 66 million in 2060, when Great Britain (if it still exists as such), will be the most populated country in Europe.

Roberto Savio

Meanwhile, a European Commission Population Policy Acceptance study found that 23 percent of German males thought that “zero” was the ideal family size, and this despite the 243 billion euros that the government spends each year in family subsidies.

The IFO report also states that, without immigrant families, the number of newly-born children would only reach 400,000 in a country of 82 million, and that even if German couples were to start having children again, it would take two decades to have citizens contributing to the social system.

It concludes that a decline in income and productivity because of the aging population is a serious concern for everybody for the near future.

This is happening in the European country which has most immigrants – close to 10 million.  Last year, Germany accepted almost 700,000 immigrants, placing itself after United States in terms of numbers. Nevertheless, even with that “open” policy, its population is destined to a massive decline.

“Instead of opposing populist parties with a campaign of facts, European governments try to neutralise them by incorporating their requests”
At European level, we see the same chilling trend. According to population projections from Eurostat, the official statistical agency of the European Union, the projected values for Europe’s population “are unprecedented in any human population.”

It says that “whereas in 1960 there were on average about three youngsters (aged 0-14 years) for every elderly person (aged 65 or over), by 2060 there may be more than two elderly people for each youngster: in other words, more grandparents for fewer grandchildren than in the past.”

Let us add to all this a Migration Policy Debate paper issued in 2014 by the Organisation for Economic Cooperation and Development (OECD) which states that ”contrary to widespread public belief, low-educated immigrants have a better fiscal position – the difference between their contributions and the benefits they receive – than their native born peers.”

“Where immigrants have a less favourable fiscal position, this is not driven by a greater dependence on social benefits, but rather by the fact they often have lower wages and thus tend to contribute less … Efforts to better integrate immigrants should be seen as an investment rather than a cost.”

Finally, the U.K. government has declared that, although migrants make up only eight percent of the population, they contribute 10 percent to the country’s gross domestic product (GDP), and that the economic growth rate of the United Kingdom would be some 0.5 percent lower for the next two years if net immigration were to cease.

Now, what is impressive is that those data remain for the specialists even though they have vital political implications. No newspaper has been publishing them and no parliamentarian – let alone government – has used them.

This simply because we now have anti-immigration (and usually right-wing and anti-euro) political parties which have sprung up in every European country, especially since the financial crisis of 2008, and this argument is now taboo.

The fact that the U.N. Population Fund (UNFPA) considers that Europe will no longer be competitive in just a few decades, because its aging population will not be competitive and a major burden on the social system, unless it opens the door to at least 10 million people, is totally ignored.

Instead of opposing populist parties with a campaign of facts, European governments try to neutralise them by incorporating their requests. After the anti-immigrant and anti-euro U.K. Independence Party (UKIP) took four million votes in May’s general elections, Prime Minister David Cameron has embarked on a campaign among European colleagues to demand that he be allowed to expel European immigrants if they do not find a job within six months and, among others, cancel their rights to social benefits.

This is a brilliant example of the difference between a statesman and a politician. A statesman does what is good for his country, even if that costs him dear.

When German Chancellor Helmut Khol was in favour of European integration and the euro, he had to face very hostile public opinion. For the Germans, the Deutsche mark was a symbol of stability and trust, and the idea of a new currency shared with other less responsible people revived memories of the hyperinflation of the Weimar Republic. At the same time, Europeans were suspicious of German intentions.

Kohl decided to accept a non-German, Wim Duisenberg of the Netherlands, as the first governor of the European Central Bank to make the Euro possible.

Today, the existence of Pegida, a German far right anti-Islam political organisation which boasts a few thousand members at most, is enough to paralyse Chancellor Angela Merkel, a politician. She has voiced her opposition to the quota proposed by the European Union for sharing the load of immigrants entering Europe via the Mediterranean.

Her position has immediately been shared by France, with the United Kingdom and Denmark asking to be left out, and several Eastern and Central Europe countries agitating against immigrants … even though they are the countries which provide the bulk of internal immigrants in Europe!

So, we have the data, the projections, and the hard fact that Europe is heading for decline unless it changes policy and acts to increase its population. And, speaking of projections, in the meantime the population of Africa is expected to double.

When will the European political class wake up and realise that time is passing? (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. 

G7-based companies and investors cheated Africa out of an estimated six billion dollars in a year through just one form of tax dodging, according to a new Oxfam report ‘Money talks: Africa at the G7’, released Jun. 2.

This is equivalent to three times the amount needed to plug the healthcare funding gap in the Ebola-affected countries of Sierra Leone, Liberia, Guinea and at-risk Guinea Bissau.

According to an Oxfam briefing paper release in April this year, an estimated 1.7 billion dollars is required to close the healthcare funding gap to improve dangerously inadequate health systems in these countries. This figure is based on raising spending to the recommendation of the World Health Organisation (WHO) that 86 dollars per capita is required to achieve the minimum package of essential services.“Multinational companies, many with headquarters in the United Kingdom and other G7 countries, are cheating African countries out of billions of dollars in vital tax revenues that could help vulnerable people get decent healthcare and send their children to school” – Nick Brye, Oxfam’s Head of U.K. Campaigns

The new Oxfam report comes as G7 leaders prepare to meet their African counterparts at the annual summit in Bavaria, Germany from Jun. 8 to 9. African leaders from Ethiopia (Prime Minister Hailemariam Desalegn), Liberia (President Ellen Johnson Sirleaf), Nigeria (President Muhammadu Buhari) and Senegal (President Macky Sall) are scheduled to join an outreach session on Jun. 8.

Oxfam is calling for the leaders of the G7 countries – Canada, France, Germany, Italy, Japan, United Kingdom and United States – to include action for ambitious tax reform in discussions about how the group can support economic growth and sustainable development on the continent.

In the United Kingdom, Oxfam is part of a coalition that has been calling on the recently elected new British government to show leadership by introducing a Tax Dodging Bill, which would make it harder for U.K. companies to avoid paying tax in the countries in which they operate – practices which currently cost some of the world’s poorest countries billions each year.

The coalition, which includes ActionAid and Christian Aid in addition to Oxfam, is currently running a Tax Dodging Bill campaign.

According to Oxfam, a well-crafted Tax Dodging Bill would also make it harder for big companies to avoid paying tax in the United Kingdom, and could bring in at least 3.6 billion pounds (5.4 billion dollars) a year to the U.K. Treasury, the equivalent of 600 pounds (910 dollars) for every household living below the poverty line.

“Multinational companies, many with headquarters in the United Kingdom and other G7 countries, are cheating African countries out of billions of dollars in vital tax revenues that could help vulnerable people get decent healthcare and send their children to school,” said Nick Brye, Oxfam’s Head of U.K. Campaigns.

“To fund the fight against poverty and to tackle worsening extreme inequality, we need action to ensure big companies pay their fair share, here and in the world’s poorest nations.”

Oxfam also notes that existing international efforts to tackle corporate tax dodging, such as the BEPS (Base Erosion and Profit Shifting) process, led by the Organisation for Economic Cooperation (OECD) for the G20 group of the world’s major economies, will leave gaping tax loopholes.

It warns that these loopholes can continue to be exploited by multinational companies across the developing world and that many African nations have been shut out of discussions on BEPS reform and will not benefit from them as a result.

Oxfam is also calling for British Chancellor of the Exchequer George Osbourne to attend July’s Financing for Development Conference in Ethiopia which will play host to heads of states and finance ministers from around the world.

The talks, which will focus on how the international community will fund development over the next two decades, are an opportunity for governments to work together to start shaping a more democratic and fairer global tax system.

In 2010, the last year for which data are available, Oxfam says that companies and investors based in G7 countries avoided paying tax on 20 billion dollars of income through a practice called trade mispricing – where a company artificially sets the prices for goods or services sold among its subsidiaries to avoid taxation.

With corporate tax rates in Africa averaging 28 percent, this equates to nearly six billion dollars in lost revenues. In addition, developing countries as a whole lose around 100 billion dollars a year through tax avoidance schemes involving tax havens, according to the U.N. Conference on Trade and Development (UNCTAD).

“Reforming global corporate tax rules so that African governments can claim the money owed to them is vital to tackle extreme poverty and inequality and boost economic growth, said Brye. “That’s why Oxfam has been calling for a U.K. Tax Dodging Bill that would ensure U.K. companies do their bit to help poor families at home and in developing countries.”

Edited by Phil Harris   

Demonstrators protesting at the Business & Climate Summit in Paris, May 20. Credit: A.D. McKenzie/IPS

By A. D. McKenzie
PARIS, May 21 2015 (IPS)

When it comes to climate change, business as usual is simply “not an option”.

That was the view of Eldar Saetre, CEO of Norwegian multinational Statoil, as international industry leaders met in Paris for a two-day Business & Climate Summit, six months ahead of the next United Nations Climate Change Conference (COP 21 ) that will also be held in the French capital.

Subtitled “Working together to build a better economy”, the May 20-21 summit brought together some 2,000 representatives of some of the world’s largest retail and energy concerns, including  companies that NGOs have criticized as being among the worst environmental offenders.

At the end, business leaders proclaimed that they wanted “a global climate deal that achieves net zero emissions” and that they wanted to see this happen at COP 21.

Throughout the conference, participants stressed that businesses will have to change, not only to protect the environment, but for their own survival. “Taking climate action simply makes good business sense. However, business solutions on climate are not being scaled up fast enough,” declared the summit organizers.

They pledged to lead the “global transition to a low-carbon, climate resilient economy.”

Saetre, for example, said his company wanted to achieve “low-carbon oil and gas production” and that it had embarked on renewables in the form of offshore wind energy. But he said that fossil fuels would still be needed in the future, alongside the various forms of renewable energy.

Acknowledging the widespread scepticism about multinational companies’ commitment, business leaders said that they could not “go it alone”, and called for support from governments as well as consumers.

Mike Barry, Director of Sustainable Business at British retailer Marks & Spencer, told IPS in an interview that global commitment was important in the drive to transform industry to have more environmentally friendly practices.

“Collective action can bring about real change,” he said. “We’re here today because we believe that climate change is happening and it’s going to have a significant impact on our business in the future and our success.

“Our customers would expect us to take the lead on this, and we want governments to take this seriously as well in the run-up to COP 21 [the 21st session of the Conference of the Parties to the United Nations Framework Convention on Climate Change to be held in Paris from Nov. 30 to Dec. 11].”

He said that Marks & Spencer and other companies in a network called the Consumer Goods Forum wanted to “stand shoulder to shoulder with government to say ‘this matters and we’re here to help’.”

But government consensus on how to address climate change has proved difficult, and even French President Francois Hollande, who opened the summit, conceded that it would require a miracle for a real agreement to be reached at COP 21.

“We must have a consensus. It’s already not easy in our own countries, so with 196 countries, a miracle is needed,” he said at the Business & Climate Summit, expressing the conviction, however, that agreement will be reached through negotiation and “responsibility”.

Hollande and other officials said the involvement of businesses was essential, and France, with its huge oil and electricity companies, evidently has a big role to play.

However, demonstrators outside the summit, held at the headquarters of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), slammed big business.

“These multinationals (and the banks that finance their activities) are in fact directly at the origin of climate change,” read a statement from organisations including Les Amis de la Terre (Friends of the Earth, France) and the civil disobedience group J.E.D.I. for Climate.

Saying that it was ironic to have fossil-fuel companies represented at the summit, the groups asked: “Can one imagine for a second that the tobacco industry would be associated with policies to combat smoking aimed at ending the production of cigarettes? No, that would be the best way to ensure that the world continued to chain-smoke.”

The protesters added that if Hollande and his ministers wanted to show a real commitment to the environment, they should make it clear that “the climate is not a business”.

“The fight against climate change is not the business of fossil-fuel multinationals: they belong to our past,” the groups said in a joint release, handed out on the street.

At the summit, Christiana Figueres, Executive Secretary of the U.N. Framework Convention on Climate Change (UNFCCC), said that businesses should not be “demonised” and she called for collaboration rather than confrontation.

“We all start with a carbon footprint,” she said. “It is not a question of demonising anyone but realizing that we’re all here … This is not about confrontation. This is about collaboration. If you’re thinking about confrontation, forget it. Because we’re not going to get there.”

The summit – co-hosted by Entreprises Pour l’Environnement, an association of some 40 French and large international companies, and UN Global Compact France, a policy initiative for businesses – also addressed the vulnerability of island states in the face of climate change.

Tony de Brum, the Marshall Islands’ Minister of Foreign Affairs, said that island states in the Pacific and elsewhere had an interest in keeping pressure on carbon emitters because their populations’ survival was at stake.

Angel Gurría, Secretary General of the Paris-based Organisation for Economic Cooperation and Development (OECD), also highlighted the threat to vulnerable countries, saying that for them, climate change is not about protecting the environment for future generations, but “it’s about how long the water will take to overcome the land.”

Gurría said that greater reductions in carbon emissions were required than has so far been proposed by states, and he stressed that countries over time needed to “develop a pathway to net zero emissions globally” by the second half of the century.

“Governments at COP 21 need to send a clear directional signal that will drive action for decades to come,” he said. “We are on a collision course with nature, and unless we seize this opportunity, we face an increasing risk of severe, pervasive and irreversible climate impact.”

Edited by Phil Harris    

Development aid flows were stable in 2014, after hitting an all-time high in 2013, but aid to the poorest countries continued to fall, according to new figures released on Apr. 8 by the OECD Development Assistance Committee (DAC).

Net official development assistance (ODA) from DAC members totalled 135.2 billion dollars, level with a record 135.1 billion dollars in 2013, though marking a 0.5 percent decline in real terms. Net ODA as a share of gross national income (GNI) was 0.29 percent, also on a par with 2013.

However, bilateral aid – which equates to roughly two-thirds of total ODA – to the least developed countries fell by 16 percent in real terms to 25 billion dollars, according to provisional DAC data.“European governments first promised to deliver 0.7 percent of their national income to support poor countries when Richard Nixon was President of America and the Beatles were topping the charts” – Hilary Jeune, Oxfam EU Policy Advisor

The Development Assistance Committee (DAC) is made up mainly of European countries plus the European Union as a member in its own right, United States, Canada, Australia, New Zealand, Japan and South Korea.

Five of the DAC’s 28 member countries – Denmark, Luxembourg, Norway, Sweden and the United Kingdom – continued to exceed the United Nations target of keeping ODA at 0.7 percent of GNI, while 13 countries reported a rise in net ODA, with the biggest increases in Finland, Germany, Sweden and Switzerland.

On the other hand, 15 DAC members reported lower ODA, with the biggest declines in Australia, Canada, France, Japan, Poland, Portugal and Spain.

“ODA remains crucial for the poorest countries and we must reverse the trend of declining aid to the least developed countries. OECD ministers recently committed to provide more development assistance to the countries most in need. Now we must make sure we deliver on that commitment,” said DAC Chair Erik Solheim.

Reacting to the latest DAC figures for Europe, Oxfam said that “the leadership of a handful of countries is masking the failure of the majority of European governments to deliver on their overseas aid promises”, with aid stagnating, leaving millions of poor people at risk

“In times of ballooning challenges for the world’s poorest, it is striking that European overseas aid has stagnated”, said Hilary Jeune, Oxfam’s EU Policy Advisor.

“This picture would be worse if it were not for the leadership of a handful of countries such as the United Kingdom, Sweden, Luxembourg and Denmark, masking the poor performance of the majority. Wealthy countries, such as France and Austria, have failed to uphold their commitments to the world’s most vulnerable people.”

France has cut its aid budget for the fourth year in a row and Spain’s overseas aid spending is at its lowest level since 1989, said Oxfam. Germany and Finland have made some progress but they are still off track on reaching their commitments, while the Netherlands is no longer contributing 0.7 percent of its GNI.

“European governments first promised to deliver 0.7 percent of their national income to support poor countries when Richard Nixon was President of America and the Beatles were topping the charts,” added Jeune.

“In the 45 years since, only a handful of European Union countries have delivered on this promise. Yet with some one billion people still living in poverty and climate change posing huge new development challenges, the need for overseas aid is greater than ever before.”

Oxfam called on the global community to agree ambitious new development goals and a new deal for tackling climate change this year, including at the third International Conference on Financing for Development in Addis Abeba, Ethiopia, in July.

“In Addis, EU Finance Ministers should demonstrate genuine leadership by being the first ones to re-commit to providing 0.7 percent of national income as overseas aid and outline how they will deliver on this promise, including setting a clear timetable.”

Oxfam said that they must also “put new money on the table from their budgets and from new sources like financial transaction taxes and the EU’s Emissions Trading Scheme to help poor countries cope with the devastating impacts of climate change.”

Edited by Phil Harris    

In response to rising demand for electricity, pressure to keep prices affordable and a need to maintain energy security, the Turkish government plans to increase electricity generation from coal.

According to a report on ‘Subsidies to Coal and Renewable Energy in Turkey’ released on Mar. 24,

Turkey already spent more than 730 million dollars in subsidies to the coal industry in 2013.

This figure, says the report, does not even count subsidies under the Turkish government’s ‘New Investment Incentive Scheme’, which provides tax breaks and low-cost loans to coal projects, so the true figure is likely to be even higher.

The report, by the International Institute for Sustainable Development (IISD), says that the Turkish government is planning to triple generation from coal by 2030 despite the fact that renewable energy is already cheaper than coal when external costs, such as health and environmental damage caused by burning coal, are taken into account.

According to the report, the country has developed a strategy “focusing on developing domestic coal resources, such that growth in coal-fired power generation is expected to be highest of all Organisation for Economic Cooperation and Development (OECD) countries.”

Nevertheless, this strategy “also acknowledges the importance of environmental protection and emissions reduction, and foresees a much larger role for renewable energy in the energy future.”

The report comes at a time when public and private institutions are under mounting pressure to stop investing in coal mining companies.

“Subsidies for coal lock in coal power for another generation when renewable sources of energy are less costly for society in economic, social and environmental terms,” said Sevil Acar, Assistant Professor at Istanbul Kemerburgaz University and one of the report’s authors.

The report says that when the costs of coal are compared with the costs of wind and solar energy, taking into account environmental and health costs, electricity from wind power is half the cost of electricity from coal, and solar power is also marginally cheaper than coal.

“This study provides further evidence to support the case for eliminating fossil-fuel subsidies once and for all,” said Peter Wooders, director of IISD’s Energy Programme. “As a G20 country that has already committed to phasing out inefficient fossil-fuel subsidies, this is a call to action for Turkey.”

According to the report, just over half of Turkey’s subsidies are used to provide coal to low-income households and while these serve the important goal of improving energy access, they come at a high health cost and are no replacement for social security programmes.

The report recommends a gradual phase-out of these subsidies in favour of more efficient measures to support access to energy and support social welfare.

Meanwhile, notes the report, coal also remains a significant employer in many areas, and any moves away from coal use would need detailed planning to ensure that affected communities can benefit from compensation measures and additional job creation from new technologies.

Edited by Phil Harris    

In the face of the growing number of crises taking place at the same time worldwide, humanitarian aid organisations – many of which have already reached their financial and logistic limits – are in desperate need of global coordination.

“We feel like we’ve hit the wall,” is how U.N. Assistant Secretary-General for Humanitarian Affairs and Deputy Emergency Relief Coordinator Kyung-Wha Kang has described the dramatic situation.

This situation was the subject of the 3rd Vienna Humanitarian Congress held last week in the Austrian capital under the slogan ‘Humanitarian Aid Under Fire’.Humanitarian organisations are rethinking their strategies, especially in Syria and Iraq, and trying to include all stakeholders in a dialogue to obtain access to the people in need – Kyung-Wha Kang, U.N. Assistant Secretary-General for Humanitarian Affairs

Opening the congress, Annelies Vilim, Director of Global Responsibility, the Austrian platform for development and humanitarian aid, told participants: “Humanitarian aid is not an act of charity. It is a human right.“

In a world in which trouble spots and wars are on the rise, the question of how aid operations are carried out most successfully to meet the necessities of recipients is becoming increasingly relevant and, noted Vilim, at this moment millions of people are in desperate need of humanitarian aid.

Among others, the goal of the congress was to make humanitarian work more visible in these difficult times and to commit decision makers at all levels to value the importance of humanitarian assistance and cooperation.

Unfortunately, sufficient funding and clear structures are lacking and already inadequate contributions are under constant threats of budget cuts.

Host country Austria itself, for example, is no exception – an OECD study has shown that state spending in 2013 was only 1.3 euro per capita, 20 times less than the amount a country of similar wealth such as Sweden was paying.

“The world is facing drastic transformations and politics are not keeping up,” complained Yves Daccord, Director General of the International Committee of the Red Cross.

To address those challenges, U.N. Secretary-General Ban Ki-moon has launched an initiative, managed by the U.N. Office for the Coordination of Humanitarian Affairs (OCHA), to hold the first World Humanitarian Summit in May 2016 in Istanbul, Turkey.

It will bring together governments, humanitarian organisations, people affected by humanitarian crises and new partners, including from the private sector, to draw up solutions and set an agenda for the future of humanitarian action.

Logo of the 3rd Vienna Humanitarian Congress. In the face of the growing number of crises taking place at the same time worldwide, humanitarian aid organisations are in desperate need of global coordination.

One issue that is certain to be on the agenda is the safety of aid workers. With 1.5 billion people living in conflict-affected areas, “we will unfortunately have to face more stories in the media about aid workers killed in the line of duty, of atrocities committed against innocent civilians,” said Kang.

In 2013 alone, 474 humanitarian workers were attacked, injured or abducted and 155 lost their lives.

Due to the difficult circumstances, Kang explained that humanitarian organisations are rethinking their strategies, especially in Syria and Iraq, and trying to include all stakeholders in a dialogue to obtain access to the people in need.

Controversially, this also means that for the sake of civilians, parties that are considered “terroristic” should also be involved in the process. Humanitarian actors legitimate this by upholding the principles of humanity, neutrality, impartiality and non-discrimination in regard to beneficiaries, and independence.

It is estimated that today over 30 armed conflicts are taking place worldwide, 16 of which are considered as wars with more than 1,000 victims each year. According to the United Nations, Syria, Iraq, South Sudan and the Central African Republic are ranked at the highest level of emergency.

The Central African Republic occupied some of the limelight at the Vienna congress in a panel discussion on humanitarian space and life and work in war. Two of the country’s religious leaders – Archbishop Dieudonne Nzapalainga and Imam Layama Oumar Kobine – spoke out about their fight for peace and disarmament.

Both argued that the civil war in their country was not a religious war. “Neither the Bible nor the Koran say that people should kill,” said Nzapalainga, explaining that five days after the beginning of the crisis in December 2012, religious leaders had come together to work collectively on an interreligious platform.

The problem, said the religious leaders, is that 75 percent of the country’s population is illiterate and therefore open to exploitation and recruitment by militant groups. This affects young people in particular and, because the state and government have ceased to exist, it is humanitarian workers who often fulfil the duties of the authorities.

Karoline Kleijer, Emergency Coordinator of Médecins Sans Frontières (MSF), described her experience of how life has become incredibly difficult for humanitarian workers in the country.

She described how shortly after arriving in the country in April 2014, armed forces entered a meeting of MSF staff and local community leaders that she was attending, opened fire and killed 20 people, including three MSF workers.

The incident had a huge impact on the organisation, she said, but despite all the difficulties “it did not stop us from working in the country. Since then, we have performed more than 10,000 operations and treated more than 300,000 people for malaria. We have delivered more than 15,000 babies and we have been continuing activities up to today.”

Although the principle that civilians have to be protected in armed conflicts and war and have a right to humanitarian assistance is embedded in the Geneva Convention, humanitarian workers have to take great risks to obtain access to the population in distress and, contrary to their neutrality, are becoming targets themselves.

“We hope that humanitarian workers will continue to take those risks, because we continue to take those risks in order to help the population in need,” said Nzapalainga.

Edited by Phil Harris    

Inequality out in the open. Credit: A.D. McKenzie/IPS

By A. D. McKenzie
PARIS, Dec 12 2014 (IPS)

For years, many policy makers, including economists, have clung to the belief that if states do nothing to boost income equality, market forces will cause wealth to trickle down to the poorest citizens and contribute to overall growth.

That theory is now being increasingly debunked as experts affirm that the broadening gap in income is creating far-ranging problems for many societies.

In a new report  published on Dec. 9, researchers at the Paris-based Organisation for Economic Cooperation and Development (OECD) argue that “reducing income inequality would boost economic growth”.

Their research shows that countries where income inequality is decreasing actually “grow faster than those with rising inequality,” and the analysts would like to see governments take stronger action to reduce inequity.“Today, the richest 10 percent of the population in the OECD area earn 9.5 times the income of the poorest 10 percent; in the 1980s, this ratio stood at 7:1 and has been rising continuously ever since” – OECD

“The single biggest impact on growth is the widening gap between the lower middle class and poor households compared with the rest of society,” says the report titled ‘Trends in income inequality and its impact on economic growth’, and “education is the key: a lack of investment in education by the poor is the main factor behind inequality hurting growth.”

According to Michael Förster, a senior analyst in the OECD’s Social Policy division, one reason “the poor and lower middle classes are being left behind in unequal societies” is that they do not have the resources to spend on their own or their children’s education, compared with wealthier citizens,.

He said that governments needed to revise strategies that are based on outdated economic theories.

“The common assumption used to be that the more you did to enhance equality, the more you would hinder growth,” he argued. “So the idea was that if you take too much from the top earners, through taxes, you will have less growth. We haven’t found evidence for that. What we have found is that increasing inequality is bad for growth.”

For example, rising inequality is estimated “to have knocked more than 10 percentage points off growth in Mexico and New Zealand over the past two decades up to the Great Recession,” says the OECD.

Meanwhile, in the United Kingdom, Italy and the United States, the “cumulative growth rate would have been six to nine percentage points higher had income disparities not widened.”

OECD Secretary-General Angel Gurría said that this “compelling evidence” proves that addressing high and growing inequality is “critical to promote strong and sustained growth” and needs to be at the centre of global policy discussions.

“Countries that promote equal opportunity for all from an early age are those that will grow and prosper,” he added.

However, some scholars maintain that the consequences of inequality are hard to prove. American economist Jared Bernstein and others have pointed out that it is difficult to establish a firm connection between the inequities in education and economic growth.

These analysts acknowledge that wealthier parents do spend more overall on educational tools and “goods”, and that children from rich families often study at elite institutions in contrast to children from poor backgrounds who may attend lower-quality schools, but they have disagreed on the social or economic effects.

With the “new evidence”, OECD researchers say that the main means through which inequality affects growth is by “undermining education opportunities for children from poor socio-economic backgrounds, lowering social mobility and hampering skills development.”

“People whose parents have low levels of education see their educational outcomes deteriorate as income inequality rises. By contrast, there is little or no effect on people with middle or high levels of parental educational background,” the OECD said in a statement.

According to researchers, anti-poverty programmes will not be enough to create greater equality of opportunities in the long term.  Essential measures will include “cash transfers and increasing access to public services, such as high-quality education, training and healthcare”, the OECD says.

Förster stressed that the inequality study focused on income and not wealth. But recent discussions have centred on both, particularly in France since the election of Socialist President François Hollande in May 2012.

Soon after his election, Hollande announced plans for a 75 percent tax on all income over one million euro, and a watered-down version of the plan was approved by French courts a year ago, even as many wealthy families fled to Belgium and elsewhere.

Economists of different political colours have argued about whether the increased taxation is good for the economy, and the debate has grown more heated with last year’s publication of Capital in the Twenty-First Century by renowned French economist Thomas Piketty.

A lecturer in Paris and internationally, Piketty advocates a global tax on wealth. He has carried out studies showing that income inequality has grown in many countries, alongside 30 years of declining tax levels.

The gap is particularly marked in the United States, but even in “egalitarian” France, the top one percent earned an average of 30,000 euro monthly in 2010, compared with 1,500 euro per adult of the poorest 50 percent.

According to the OECD, a similar situation exists in many of its 34 member countries, which include European nations and others such as Mexico, Chile and the United States.

“Today, the richest 10 percent of the population in the OECD area earn 9.5 times the income of the poorest 10 percent; in the 1980s, this ratio stood at 7:1 and has been rising continuously ever since.”

Bucking the trend, income inequality has been falling in Chile and Mexico, but the incomes of the richest are still more than 25 times those of the poorest in these two countries.

The OECD’s Latin American Economic Outlook 2015, produced with regional partners and also launched on Dec. 9, focuses on the role of education and skills, and experts said more needed to be done to “raise educational standards and address persistent and substantial socioeconomic inequalities.”

Förster told IPS that the organisation hoped governments would consider the findings as a basis to change policy, “otherwise we won’t get out of the current situation.”

(Edited by Phil Harris)

African countries fought hard for the Kyoto Protocol not to die on African soil at the 2011 Climate Change Conference in South Africa, but they say it is now languishing in limbo because developed countries are taking what they called “baby steps” towards ratification of the Doha Amendment that gave it a new lease of life.

The African Group and other least developed country negotiators at the ongoing (Dec. 1-12) U.N. Climate Change Conference in Lima, Peru, say they are concerned about the slow progress towards giving a legal force to the international emission reduction treaty.

Nagmeldin El Hassa, Chair of the Africa Group in Lima – “In our view, the developed countries are reneging, abandoning and weakening the Kyoto Protocol”. Credit: Wambi Michael/IPS

“We would like to point out that slow ratification of Commitment Period Two of Kyoto by developed countries does not build confidence. In our view, the developed countries are reneging, abandoning and weakening the Kyoto Protocol,” Nagmeldin El Hassan, Chair of the African Group said at the opening of the conference.

He said failure by developed countries to ratify the Doha Amendment was forcing the least developed countries to assume legal commitments while relaxing the legal commitments of the historical greenhouse emitters. “If this is the game that some think we are ready to entertain, we must make it clear that we will not be party to this game,” El Hassan added.

In December 2012, the Doha Amendment to the Protocol was agreed, extending it into a new commitment period running from 1 January 2013 to 31 December 2020. The European Union (EU), its 28 Member States and other developed countries have ratified the protocol.

The U.N. Framework Convention on Climate Change, to which the Kyoto Protocol is linked, requires ratification by 144 countries before it can enter into force.“The responses of rich developed countries show no sense of urgency – they have presented less climate finance than last year, have not raised their pollution targets and have not even legally ratified the Kyoto Protocol as they promised two years ago” – Mithika Mwenda, Secretary-General of the Pan African Climate Justice Alliance (PACJA)

By the end of November 2014, only 20 countries had ratified the Doha Amendment establishing the second commitment period of the Kyoto Protocol. Guyana was the latest to ratify as it prepared to join the negotiations in Lima.

El Hassan told IPS that the ratification process needs to be accelerated and clear accounting rules adopted in Lima so that the amendment enters into force by the next Climate Change Conference in Paris in 2015.

African environment groups and NGOs are also calling on governments to hasten progress on ratification of the much fought for second commitment period for the Kyoto Protocol.

Mithika Mwenda, Secretary-General of the Pan African Climate Justice Alliance (PACJA) to which more than 30 Africa-based NGOs belong, told IPS that it was demoralised by the “baby step” speed of the developed countries towards ratification.

“Africans have sent their governments to Lima with urgent and creative demands to face the climate crisis,” said Mwenda. “Yet the responses of rich developed countries show no sense of urgency – they have presented less climate finance than last year, have not raised their pollution targets and have not even legally ratified the Kyoto Protocol as they promised two years ago.”

According to Mwenda, the developed countries are determined to delay their participation in the Kyoto Protocol’s second commitment period.  “They are letting their national interests trump over the global common good and are opting out of multilateral rules.”

Earlier in the week, UNFCCC Executive Secretary Christiana Figueres said that both developed and developing country Parties to the Kyoto Protocol needed to save the protocol from languishing in limbo by ratifying it.

“I have said this before and let me say it again. For this international legal framework to enter into force, governments need to complete their ratification process as soon as possible. We need a positive political signal of the ambition of nations to step up crucial climate action,” said Figueres.

The African Group is pushing for ratification of the Doha Amendment because it extends a legal commitment to Annex 1 countries – members of the Organisation for Economic Cooperation and Development (OECD) plus a group of countries whose economies are in transition – to contribute towards a global effort to mitigate greenhouse gas emissions.

Ram Prasad Lamsal from Nepal, who chairs the LDC Group, told IPS that “ratification is essential for the Kyoto Protocol to continue to serving as a cornerstone of the multilaterally agreed rules-based system under the [Climate Change] Convention and a full reflection of its principles of equity and common but differentiated responsibilities.”

However, while the African countries are pushing their developed country counterparts to ratify the Doha Amendment, just four of them had ratified it by the end of November – South Africa, Sudan, Morocco and Kenya.

A delegate from European Union speaking on condition of anonymity wondered why the African countries – as well as the LDC Group, the G77 and China – were not ratifying the second commitment period as they mount pressure on developed countries.

Paul Isabirye, Uganda’s UNFCCC Focal Point, told IPS that African countries would easily ratify once the developed countries had taken the lead.

“But even if all the African countries ratified, it still cannot enter into force before our colleagues do it. They have the bulk of the emissions to cut. The issue is not that Africa has lagged behind, the big emitters don’t seem to be coming forward,” said Isabirye.

(Edited by Phil Harris)

By Manuel F. Montes
GENEVA, Nov 12 2014 (IPS)

As the international community wades into the political discussions regarding the alternatives to the Millennium Development Goals (MDGs) after 2015 and the design of the Sustainable Development Goals (SDGs) as mandated by the Rio+20 conference, it is timely to consider the question of whether development is a matter mostly of individual effort on the part of nation-states or whether there are elements in the international economic system that could serve as significant obstacles to national development efforts.

If there are obstacles in the international economic system, it is important that the post-2015 development agenda and the SDGs address the question of the elimination or the reduction of these obstacles.

Manuel F. Montes

The limited number of successfully developing countries since the 1950s has provoked a debate over whether the success of these countries required their success in eluding international obstacles to development.

The question is to evaluate features of the international system on the basis of how these features are conducive to enabling long-term investment toward economic diversification.

Terminologies of previous development orthodoxies litter the development literature – import substitution, industrialisation, basic needs, structural adjustment, Washington Consensus and Millennium Development Goals (MDGs).

Each of these orthodoxies tended to be a reaction to perceived weaknesses or missing elements from the immediately previous one. The most recent orthodoxy, as exemplified by the MDGs, is that development is about poverty eradication.

But poverty eradication is an overly narrow, possibly misleading, perspective on development.“Poverty eradication is a desired outcome of development but its achievement is permanent only with the movement of a significant proportion of the population from traditional, subsistence jobs to productive, modern employment”

Poverty eradication is a desired outcome of development but its achievement is permanent only with the movement of a significant proportion of the population from traditional, subsistence jobs to productive, modern employment.

The association of development with poverty reduction created for the donor community the pride of place in economic policy in developing countries.

But this place can be at the cost of reducing the responsibility of donor countries in helping to maintain an enabling international environment for development in trade, finance, human resource development and technology.

In the MDGs, these issues are crammed into “MDG-8”, the so-called global partnership for development, with a very selective and poorly defined set of targets.

Development requires not just higher levels of income, nutrition, education, and health outcomes but in the first place involves higher levels of productivity and capabilities.

Higher levels of productivity and capabilities are possible only with structural transformation of the economy.

In turn, in most societies, according to a report by the Secretary-General of the U.N. Conference on Trade and Development (UNCTAD), such a structural transformation has been “associated with a shift of the population from rural to urban areas and a constant reallocation of labour within the urban economy to higher-productivity activities.”

Structural transformation is only possible with substantial and sustained investment over decades in new activities and products, not just in anti-poverty programmes.

Where the international economic system is hostile to investment in new, productivity enhancing economic activities is where its elements create obstacles to development.

One example of an externally based obstacle is aid volatility which has been shown to have highly negative impacts on macroeconomic performance and domestic investment.

Capital and technological investments are required to overcome the enormous productivity gap between developing and developed countries which characterises the world economy.

In 2008, a ratio of the average Gross National Income (GNI) per worker in the countries of the Organisation for Economic Cooperation and Development (OECD) versus those in the least developed countries (LDCs) was 22:1 in favour of the OECD countries.

This imbalance has worsened by a factor of five in comparison to the earliest days of capitalist development. In the nineteenth century, taking the Netherlands and the United Kingdom as the richest countries and Finland and Japan as the poorest, the productivity gap was only between 2 to 1 and 4 to 1.

The international economic system is lacking crucial mechanisms for delivering long-term, stable resources required by developing countries to upgrade their capabilities.

Dependence on commodity exports sustains the productivity gap between developed and developing countries.

Abundant global liquidity and growing trade imbalances fuelled a commodity boom in the 2000s which benefited many developing countries, including many LDCs.

All previous global liquidity booms had ended with serious economic crises in developing countries. The more recent commodity price boom did not introduce an enduring improvement in macroeconomic balances, especially for low-income countries (LICs).

While in the 2000s LDCs experienced the strongest growth rates since 1970s, according to UNCTAD, more than one-quarter of LDCs actually saw GDP per capita decline or grow slowly in the 2002-2007 global boom.

Even the middle income region of Latin America presents evidence of insignificant structural improvement in fiscal and current account balances.

Previous commodity boom periods had similarly not been an occasion for structural change in LDCs. UNCTAD suggests that between the 1970s and 1997, manufacturing as a proportion of GDP increased by less than two percentage points in LDCs as a group, a period which saw various episodes of commodity and global liquidity booms.

When considering LDCs from Africa alone and including Haiti, manufacturing fell from 11 to 8 percent during the same period.

Developing countries had extensively liberalised their trade regimes in the 1980s. In the aftermath, UNCTAD finds that some LDCs have more open trade regimes than other developing countries, and others are more open than even developed countries.

These policies had been intended to facilitate economic diversification. Instead of the expected outcome, greater trade liberalisation has been accompanied by greater concentration in the structure of exports.

The international economic system labours under the constraint that the highest decision-making bodies in key institutions, such as the International Monetary Fund (IMF), do not provide sufficient voting weight and policy influence to countries most affected by their operations.

One effort under way but under enormous political obstruction is to update voting weights in line with the changed economic structure. Even the G20, where important developing countries sit, has been unable to advance progress. (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. 

*  Click here for the Research Paper on which this column is based.

Excerpt:

Smog over Cairo. Former New York mayor Michael Bloomberg and OECD Secretary-General Angel Gurria reaffirmed their commitment Sep. 17 “to support international cities’ efforts to lead in the global fight against climate change”. Credit: Wikipedia

By A. D. McKenzie
PARIS, Sep 17 2014 (IPS)

If former New York mayor Michael Bloomberg had used the Vélib’ – Paris’ public bicycle sharing system – to arrive at the headquarters of the Organisation for Economic Cooperation and Development here Wednesday, he might have sent a stronger message about the need for cities to be “empowered to take the lead in combating climate change”.

Yet, despite arriving by car, Bloomberg, the United Nations Special Envoy for Cities and Climate Change, spoke persuasively about how efficient environmental policies at local level can lead to a reduction in greenhouse gas emissions.

A key step is to make populations more aware of the issues by sending the right message, so that voters can make informed decisions, Bloomberg said during an open “discussion” with OECD Secretary-General Angel Gurría.

For example, if people saw an image of a baby on television with “two or three cigarettes dangling out of his or her mouth” and understood that as a symbol of the polluted air that they were breathing in their city, or the air that their children would breathe, the message would hit home, said Bloomberg, the founder and principal owner of the international media company that bears his name.If people saw an image of a baby on television with ‘two or three cigarettes dangling out of his or her mouth’ and understood that as a symbol of the polluted air that they were breathing in their city, or the air that their children would breathe, the message would hit home – Michael Bloomberg, former mayor of New York

“People will understand the issue, they will understand how it affects them … and what they can do about it,” he said, adding that such understanding will affect their political choices.

At the meeting, Bloomberg and Gurría “reaffirmed their commitment to support international cities’ efforts to lead in the global fight against climate change” and urged governments to adopt policies to achieve this.

Their pledge ties in with the former mayor’s current role: UN Secretary-General Ban Ki-moon appointed Bloomberg as a special envoy in January to assist him in “consultations with mayors and related key stakeholders in order to raise political will and mobilise action among cities as part of his long-term strategy to advance efforts on climate change”.

This assistance includes “bringing concrete solutions” to the 2014 Climate Summit that the UN Secretary-General will host in New York on Sep. 23.

However, many non-governmental organisations regard this Summit as a gathering where world leaders will once again be “fiddling with flimsy pledges instead of committing to binding carbon reductions”, according to environmental group Friends of the Earth.

“A parade of leaders trying to make themselves look good does not bring us any closer to the real action we need to address the climate crisis. This one-day Summit will not deliver any substantial action in the fight against climate change,” said Dipti Bhatnagar, climate justice and energy coordinator for Friends of the Earth International (FoEI).

“World leaders are falling far short of delivering what we need to truly tackle climate change in a just way. Their flimsy non-binding pledges in New York will do little to improve their track record. What we urgently need are equitable and binding carbon reductions, not flimsy voluntary ones,” she said in a statement.

Friends of the Earth will join with thousands of protesters on Sep. 21 to march in New York, Paris, London and several other cities around the world to “demand climate justice, standing with climate and dirty energy-affected communities worldwide”, the group said.

Some of the cities where the demonstrations will occur have already taken steps to reduce emissions and improve the quality of life for residents, as Bloomberg pointed out in Paris. But political awareness needs to be heightened so that special interest groups are not the ones imposing directions, the former mayor said.

Over three consecutive terms as mayor of New York, where he reportedly spent 268 million dollars of his own money on election campaigns, Bloomberg set up schemes to make New York “greener”, including recycling food waste and aiming at converting organic waste to biogas.

For Bloomberg and Gurría, cities are a” crucial part of efforts to slow climate change” because urban areas produce more than two-thirds of the world’s carbon emissions. The share of the global population living in cities is also set to increase to 70 percent, or 6.4 billion people, by 2050 from the current roughly 50 percent, says the OECD.

“Cities have the potential to make a great difference in the global effort to confront climate change: they account for more than 70 percent of global greenhouse gas emissions and two-thirds of the world’s energy use today,” according to Bloomberg and Gurría.

“Mayors have, within their authorities, many ways to reduce emissions, change the way energy is consumed, and prepare for the impacts of climate change,” they added.

Both men called on world leaders gathering at the UN Climate Summit to “look for ways to help their cities accelerate their progress and empower them to do even more.”

“We are all aware of the immense scale of the global challenge presented by climate change,” Gurría said. “It is no longer simply an environmental issue. It is an economic and a social issue. It is vital to our quality of life and to the life of our fragile earth. Action is becoming ever-more urgent.”

The OECD and Bloomberg Philanthropies also issued a “Policy Perspectives” document Wednesday that recommends measures for enabling cities to fight global warming. The recommendations include actively involving the private sector because “green” policies cannot be separated from economic growth, according to Gurría.

He said that various sectors needed to work together to “enable real progress in reaching international climate goals and a meaningful, global agreement next year in Paris,” where the 2015 UN Climate Change Conference will take place.

Friends of the Earth and many other NGOs remain unconvinced, however, of the commitment by wealthy nations such as those that are members of the OECD. The group said that the positions of developed countries’ leaders “are increasingly driven by the narrow economic and financial interests of wealthy elites, the fossil fuel industry and multinational corporations.”

(Edited by Phil Harris)

The official outlook for agriculture up to 2023 carries optimistic forecasts for agricultural productivity and commodity prices but it is unlikely that the benefits will be shared by the world’s poorest.

The mix of good and bad news comes in the 2014-2023 Agricultural Outlook, issued jointly by the U.N. Food and Agriculture Organization (FAO) and the Organisation for Economic Cooperation and Development (OECD) this month.

The OECD/FAO Agricultural Outlook examines trends regarding prices, dietary habits and other influencing factors such as production and demand, in addition to assessing the major policy challenges facing the sector."We still face a challenge with access to food. Higher food prices imposed undeniable hardship on the world’s poorest people, who spend a large share of their incomes on food. They also did more harm than good to poor farmers, who are more often than not net buyers of food staples" – OECD Secretary-General Angel Gurría

This year’s Agricultural Outlook, which is the 20th of its kind, “looks at the prospects for developing countries under the assumption that average weather patterns and current policies persist”, according to Holger Matthey, an economist at the Trade and Markets Division of FAO and team leader for the Agricultural Outlook.

“It gives an overview of the global market within the next 10 years, assuming that there are no disturbances”, Matthey told IPS

Crop prices are expected to stabilise significantly below recent peaks, although they will likely remain above pre-2008 levels, while meat and dairy prices will have reached record highs in 2013/14.

“We are very positive regarding the agricultural outlook for developing countries because they have the resources to expand production and are also expected to maintain strong growth rates in terms of consumption”, said Matthey.

Under the assumptions of this outlook, he added, it was found that “more than 80% of additional production will originate from developing countries and 50% of both the additional production and consumption over the next decade will take place in Asia.”

But there are still many obstacles in the way of ensuring that everyone can reap the benefits of increased agricultural productivity.

“We still face a challenge with access to food. Higher food prices imposed undeniable hardship on the world’s poorest people, who spend a large share of their incomes on food. They also did more harm than good to poor farmers, who are more often than not net buyers of food staples,” OECD Secretary-General Angel Gurría said at the launch of the report.

Among others, he said, there is a need “to extend social protection to cushion the effects of price shocks and help farmers manage risks and continue to invest in agricultural productivity so that farmers can respond effectively to price signals”, but tackling these challenges “in ways that are both inclusive and sustainable is a formidable challenge.”

This year’s Agricultural Outlook focuses on the case of India, the world’s second most populous country and home to the largest number of food-insecure people, for which the report portrays a “relatively optimistic” scenario, saying that the country is “projected to sustain production and consumption growth of food.”

In 2013, India adopted a National Food Security Act (NFSA), designed to ensure greater access to adequate and affordable food. The NFSA entitles more than 800 million people to 60 kg of food grain per person each year at prices that are 90 percent more economical than current retail prices.

According to FAO Director-General José Graziano da Silva, the NFSA – the world’s largest right-to-food programme – is something that will have an impact for food security around the globe.

However, the Agricultural Outlook also warns that implementation of the programme will be challenging.

“While there is enough food being produced, the access to food, the distribution of food and the healthy utilisation of food [in terms of adequate diet and access to clean water, sanitation and healthcare] are challenges that remain,” said Peter Kenmore, FAO representative in India.

For example, according to the U.N. Children’s Fund (UNICEF), 48 percent of children in India are stunted as a result of chronic malnutrition, a condition that has long-term physical and mental development consequences, such as weakening the immune system and decreasing productivity in adulthood.

The challenge is also to be more efficient in terms of infrastructure, including storage and transportation as well as means of delivery.

“The circuit of producing, procuring, storing and distributing food to those who lack access, all completed locally, as is accomplished in many places covered by the Zero Hunger Programme in Brazil, is worth pursuing,” Kenmore told IPS.

The Zero Hunger Programme was launched in 2003 by the Brazilian government with the aim of eliminating hunger and poverty.

However, Kenmore warned that “the fact that the price of subsidised food grains is 90 percent cheaper also represents a strong incentive for opportunists to obtain this subsidised food and resell it on the open market.”

“At the moment there are millions that are benefiting from the Public Distribution System that is being expanded under the NFSA but many that are not. Exclusion, discrimination and sub-optimal implementation are key concerns”, he told IPS.

There is a need to improve accountability and grievance mechanisms to allow people to make a complaint in case they cannot access subsidised food to which they would otherwise be entitled and, said Kenmore, these mechanisms “must not merely be notional but also effective.”

Inequality, poor infrastructure and declining trade are some of the problems that Latin America needs to overcome if the region truly wishes to achieve a “golden age”, according to Peru’s President Ollanta Humala.

“We haven’t found the gold yet,” said Humala, a keynote speaker at the 6th International Economic Forum on Latin America and the Caribbean held this week in Paris. “We need to build a more modern and efficient state that offers services to everyone … We cannot overlook poor or vulnerable populations.”“Erasing inequality is absolutely fundamental because equality itself is a very important human right … At the same time, it’s a key to economic and social development. No country can reach high levels of development with huge levels of inequality” – Danilo Astori, Vice President of Uruguay

The conference, titled ‘Beyond the Golden Decade? Logistics and infrastructure, pillars of regional integration and global trade opportunities’, brought together policy-makers, economists, private-sector representatives and other experts from across Latin America, exploring measures to achieve inclusive growth and structural transformation in the region. Specific Caribbean issues seemed absent from the agenda, however.

The main mantra, repeated by many participants, was that inequality is a huge barrier to Latin America fulfilling its development potential.

“Erasing inequality is absolutely fundamental because equality itself is a very important human right,” the Vice President of Uruguay, Danilo Astori, told IPS. “At the same time, it’s a key to economic and social development. No country can reach high levels of development with huge levels of inequality.”

Income gaps between groups, whether based on ethnicity or gender, are not just “moral issues, they’re also macro issues”, said Julie Katzman, Executive Vice President of the Inter-American Development Bank, a co-organiser of the conference along with the Organisation for Economic Cooperation and Development (OECD) and France’s Ministry for the Economy and Finance.

Katzman said that 70 percent of those excluded from the financial system are women and that there was an 86 billion dollar financing gap for women-owners of small and medium-sized enterprises.

She told IPS that if this gap were closed by 2020, gross domestic product in Latin America would be 12 percent higher by 2030.

“The private sector has a big role to play,” she added. “When you combine financial inclusion and better infrastructure, then you can begin to address the issues being discussed.”

Danilo Astori, Vice President of Uruguay. Credit: Alecia McKenzie/IPS

She and other participants emphasised the need for better infrastructure as an “instrument of development”, the main subject of the conference. Roberto Zurli Machado, Director of Infrastructure and Basic Petrochemicals for Banco Nacional de Desenvolvimento Economico e Social (BNDES), said that the region had to modernise to bring its infrastructure to the desired level.

According to the OECD, logistic costs in the region account for between 18 and 35 percent of the value of products, compared with around 8 percent in OECD countries. Meanwhile, the quality of the road system in Latin America is below the level for middle-income countries, the organisation says.

Studies also indicate that improvements in logistics could increase labour productivity in the region by about 35 percent.

“All this affects the competitiveness of exports and the potential for integration,” said Angel Gurría, Secretary-General of the Paris-based OECD.

Peru’s President Ollanta Humala (left) meets France’s Economics Minister Arnaud Montebourg (centre) with OECD Secretary-General Angel Gurria (right). Credit: Alecia McKenzie/IPS

He said that developing an integrated logistics policy and improving the efficiency of customs procedures, through technology, could bring significant benefits in a short time span.

Such measures would also have an impact on inequality, Gurría said. “We need to raise awareness and to strengthen cooperation,” he told IPS, reiterating that “Latin America is not the poorest region but the most unequal.”

The conference, which brings together some 400 experts annually, is one way to address the region’s challenges, Gurría added. This year’s discussions are seen as particularly important because after a decade of relatively strong growth, “Latin America’s economic prospects are becoming more convoluted,” as the OECD puts it.

The region has been affected by the weakness of the euro zone and has experienced “declining trade, moderation of commodity prices and increasing reservation surrounding external monetary and financing conditions,” the organisation says.

It stresses that the rise in the prices of commodity exports “has led Latin American economies to substitute locally manufactured goods with imports, and contributed to a certain decrease in the region’s productive capacities.”

Achieving “improved logistics performance” would help bolster structural change in the region and “represent an opportunity for the insertion of the continent into the global trade,” according to the OECD.

Humala, the president of Peru, said that the region has great potential but faces many challenges, including the impact of climate change [the United Nations climate change conference – COP 20 – is scheduled to be held in Peru in December].

He said that Latin America would truly achieve a “golden age” when it solves its productivity problems and becomes more egalitarian. “The golden era is coming … hard times force us to look at opportunities,” he added.

Students and teachers from a physical education school in Michoacán take part in protests in Mexico City. Credit: Daniela Pastrana/IPS

By Daniela Pastrana
MEXICO CITY, Sep 12 2013 (IPS)

On his first day of fourth grade, Efraín found there were no desks or benches in the classroom in his Mexico City school. His parents had to help the teacher haul in furniture from other rooms so the children wouldn’t have to start the new school year sitting on the floor.

That day, Aug. 19, Efraín’s mother found out about the suspension of the swimming programme that served 15,000 public school students in the capital and had functioned successfully for 10 years.

She also learned of the start of teacher protests, which culminated in a national teachers’ strike on Wednesday Sept. 11.

“Being in the swim programme was a privilege for your children,” a public ministry official told the parents who demanded an explanation.

The parents didn’t know it, but the disappearance – by presidential decree – of the general directorate of physical education was merely the start of a series of changes in public education, planned by the conservative government of Enrique Peña Nieto.

The reforms have triggered an insurrection by teachers in roughly two-thirds of Mexico’s 31 states.

The problem is not a shortage of funds for education. The educational system, which serves some 26 million primary school students and 4.3 million secondary students, receives 17.5 percent of the federal budget.

But 93 percent of that goes to salaries of teachers and other staff according to “Education at a Glance 2013” by the Organisation for Economic Cooperation and Development (OECD), the so-called “rich countries’ club”.

The report says that is the highest proportion among OECD countries, which include Mexico.

Efraín’s school is in the Benito Juárez borough in the capital – the municipality with the highest level of human development in the country, according to the United Nations Human Development (UNDP) index.

That means he is better off in terms of school conditions than children in the rest of the country.

To get to the bilingual school he heads, Raymundo Carrera has a four-hour walk every Sunday and crosses the Presa Miguel Alemán lake by motorised canoe in the region of Tuxtepec in the impoverished southern state of Oaxaca, which has a high concentration of indigenous people.

The 50-year-old, who has been a teacher for 26 years, lives in a hut with a tin roof and a dirt floor.

“That’s what the community gives you, and you get used to it. We also join in the local harvests and fiestas,” Carrera told IPS as he took part in the protest camp that teachers have set in the Zócalo, Mexico City’s main square.

Oaxaca is Mexico’s second-poorest state, according to the UNDP Human Development Report 2010.

Teachers from Oaxaca make up the biggest delegation among the 15,000 teachers protesting in Mexico City since Aug. 19 against a series of laws restricting their labour rights. Their roadblocks have exacerbated the chaos of downtown traffic for nearly a month. The teachers have also occupied public buildings, blocked the Mexico City international airport for several hours, and seized toll booths on highways.

On Wednesday, protesters clashed with anti-riot police as they tried to approach the presidential residence.

The laws were approved by Congress last week and signed into law by the president on Tuesday.

But news on the issue was overshadowed by the scandal of the arrest of Elba Esther Gordillo, the lifelong leader of the teachers’ union and one of the country’s most powerful political leaders.

Gordillo is in prison, charged with embezzlement and organised crime.

The protesting teachers form part of a dissident faction of the Sindicato Nacional de Trabajadores de la Educación – the national teachers union – which has 1.2 million members among primary and middle school teachers.

But after the laws were passed, the protesters were joined by other unions, and the movement grew in strength until declaring Wednesday’s national strike.

The laws, which are focused on primary and secondary education, introduce mandatory periodic teacher evaluations. In addition, teachers will be recruited through open tests, starting in 2014. There are also changes to the systems of promotions, wages, benefits, and working conditions in different states.

But critics say the evaluation system is vague. They also complain that their concerns were not taken into account by the legislators, and that the reforms do not take into consideration the specific challenges of teaching children from disadvantaged backgrounds, as well as indigenous children, many of whom do not speak Spanish.

Mexico’s native population is variously estimated to make up between 12 and 30 percent of the country’s 112 million people (the smaller, official, estimate is based on the number of people who actually speak an indigenous language).

Furthermore, the protesters argue that the reform paves the way for the privatisation of the education system in Mexico.

The trade unionists are calling for an autonomous national institute to carry out evaluations. An institute was created in 2002, but it is not independent.

“This is a labour reform, not an educational one, and it did not arise from a negotiated consensus,” Raymundo Vera, a teacher from the Oaxaca committee, told IPS.

Promoters of the reform, spearheaded by business leaders, have complained about the high proportion of education expenditure that goes towards salaries.

However, the OECD study also reveals that Mexico has the highest student/teacher ratios – more than 25 pupils per teacher in early childhood education, compared to the OECD average of 14.3. And the ratio is even higher at the primary school level (28 students per teacher) and highest (nearly 30 students per teacher) at the secondary level.

“I do want to be evaluated, but who will guarantee that they’re going to do it properly, and not like they have up to now, with standardised tests that do not take into consideration the conditions at each school?” asked Carrera.

Teacher evaluations, which were introduced in 1989, were held up by the presidency of Felipe Calderón (2006-2012) as an indication that quality was improving.

But few advances have actually been made on that front.

The “2012 Panorama educativo de México” (Mexican Educational Outlook), by the National Institute for Evaluation of Education (INEE), found that half of the students in the first three years of secondary school were unable to solve mathematical problems involving two or more operations.

The same study, which measures advances made between 2006 and 2010, shows that primary students in urban public schools improved in Spanish, while the proportion of indigenous students who under-performed in Spanish had risen to nearly 50 percent.

A primary school teacher earns between 2,000 and 8,000 pesos (160 to 620 dollars) a month. “Much less than these personages,” Vera said, referring to lawmakers who earn at least 20 times more.

“The people complaining about our protest marches do not and will never understand our living conditions,” he said.

In Mexico, only 56 percent of young people between the ages of 15 and 19 are enrolled in school – the lowest rate in the OECD.

INEE statistics from the “Panorama educativo de México”, presented in April, show that 4.8 million children and adolescents in Mexico do not go to school.

Technology education programmes are increasingly becoming a viable alternative to the standard four-year undergraduate university programme, according to the OECD, a major international grouping of rich countries.

On Wednesday, the OECD released findings from a new study, recommending implementing industry standards for certificates, which imply the recipient was specifically trained in that field. The study also encourages more CTE programmes, two-year institutions that train for a specific industry, to become accredited so employers can be more assured of their employees’ skills.

“In the 21^st century, a college degree is not an end in itself,” Simon Field, project leader for the OECD Directorate for Education and Skills, says. “It is the skill development that is the key to greater individual and national prosperity.”

Between 2000 and 2003, the number of people seeking such professional certificates almost tripled, with the steepest increase coming from the information technology sector. The OECD study predicts that, by 2018, about two-thirds of all job vacancies will require more than a high school diploma, but only a third of vacancies will require a four-year degree or higher.

“The challenge has been that there is a segment of higher education regulations and institutions that look at work-based learning as of lesser importance, while the goal is to see this as an integrated system,” Sandi Vito, a state labour official, said at an event here Wednesday.  “Work-based learning isn’t ‘lesser than’, and it should be combined with academic learning as well.”

According to a 2012 study by the National Center for Education Statistics, part of the U.S. Department of Education, about 65 million people in the United States workforce have an industry certificate or a license to practice. Currently, one in 10 workers reports such a certificate as their highest level of education, according to the OECD study.

“Employers don’t think they have a very receptive audience in the higher education world, and that’s a problem,” Andrew Kelly, the director of the Higher Education Reform programme at the American Enterprise Institute, a consevative think tank, said at Wednesday’s event.  “At a CTE, its pretty clear why you are there: you’re there to get a job.”

In 2010, 1.5 million postsecondary CTE credentials outlining specific skills acquired through CTE programmes were awarded. Half of such credentials given out today are from public two-year schools – as opposed to more traditional four-year colleges or universities – and the rest are from private technical businesses and trade institutions.

“The overarching recommendation from the report is the need for the U.S. to strategically pursue more quality, coherence and transparency in the U.S. postsecondary system,” the study states.

The OECD’s research and recommendations put significant emphasis on a traditional position that has largely fallen by the wayside in the United States: apprenticeships. The study highlights these interim positions as a way to learn necessary skills for a chosen field that might not be taught in a classroom setting.

“Apprenticeships combines work and education simultaneously,” David McCord, the director of the Joint Apprenticeship and Training Committee, said on Wednesday, calling the idea of apprenticeships “phenomenal”.

Unlike an internship, an apprenticeship involves some classroom work, usually lasts between four to six weeks, and is paid. In the United States, apprenticeships are most common in the construction and agriculture industry.     

Need for standardisation

Despite the rising evidence of the current and potential benefits of CTE programmes in the United States, the OECD and many education experts agree that much still needs to be improved in this area.

According to Malgorzata Kuczera, the lead author of the new report, it remains difficult for companies to tell a high-quality CTE programme from others.

“If we could strengthen quality overall and ensure even the weakest programmes are of strong quality, this would provide a really robust opportunity for students to invest in their own future,” Kuczera said Wednesday. “It would also offer a robust assurance to employers that students have the necessary skills.”

There are currently about 5,000 certification programmes in the U.S., according to Roy Swift, with the American National Standards Institute, a non-profit group that oversees adherence to certain standards. Of these programmes, only about 10 percent have been accredited to meet national standards, he says.

“We have a problem here [the number of un-accredited CTE programmes] and we need to have people meet national standards,” Swift told IPS. “By doing this, [accrediting the programmes] it will increase the quality of the workforce and employers will be more satisfied with who they are receiving.”

Community colleges and four-year universities, which often do have several CTE programmes, are reportedly reluctant to apply for accreditation.

“Reliance on these standards [for accreditation] is critical to increasing quality and transparency of certificates and certification in the United States, leading to a more qualified American workforce,” Swift says.

Still, advocates are currently optimistic about the future of CTE programmes and the improvements they can bring to the workforce and the economy.

“Accreditation is critical, but the bottom line is getting graduates employed and that they are doing a good job for their employers,” Jay Box, chancellor of the Kentucky community and technical college system, said at Wednesday’s discussion. “What drives us most is our graduate success.”

With the level of Western aid to the world’s poorest countries declining amid the global financial crisis, economists are calling for “innovative” means of development that range from proper taxation of multinationals to laws that ensure gender equality.

“The game changers are inclusive growth, regional integration and gender equity – making sure women have property and inheritance rights,” said Prof. Mthuli Ncube, chief economist and vice-president of the African Development Bank in an interview with IPS.

Ncube was in Paris this week to attend the Global Forum on Development hosted by the Organisation for Economic Cooperation and Development (OECD). Much of the focus was on Africa, with former Nigerian president Olusegun Obasanjo being a keynote speaker.

“There must be fairer and more transparent relationships between investors and the African people. The whole issue of negotiating fairer royalty fees is crucial because we’ve seen commodity prices going up, but revenues for African governments are not increasing,” Ncube told IPS.

“Africa has huge natural resources, and the investors in these natural resources are mainly from outside. We have to examine how these investments can benefit the African people through job creation, protecting the environment, developing African entrepreneurs and using the revenues from resources to diversify African economies,” he said.

He added that discussions on maximising revenues from natural resources to finance development had to take into account the fact that “benefits are going to the elite in African countries” and also to the foreign investor companies. “The growth is not being shared, it is being creamed off,” Ncube said.

The Global Forum followed the release of the annual OECD report which showed that development aid fell by four percent in real terms in 2012, after a two percent decrease the previous year.“There must be fairer and more transparent relationships between investors and the African people."

The OECD said that the “continuing financial crisis and eurozone turmoil has led several governments to tighten their budgets, which has had a direct impact on aid to poor countries.”

It said that there has also been “a noticeable shift in aid away from the poorest countries and towards middle-income countries,” but that a moderate recovery in aid levels is expected in 2013, based on donors’ projected spending plans.

“As we approach the 2015 deadline for achieving the Millennium Development Goals, I hope that the trend in aid away from the poorest countries will be reversed. This is essential if aid is to play its part in helping achieve the Goals,” said Angel Gurría, the OECD secretary-general.

But aid from rich countries is not necessarily the answer, say many economists. Franklyn Lisk, professor of development policy and practice at the University of Warwick in the United Kingdom told IPS that the whole issue of assistance had to be examined in the context of “development and justice”.

“In Africa, we have this paradoxical situation where the richest continent in terms of natural resources is the poorest in terms of human development and physical development. This is due partly to the fact that African governments have not been able to realise anywhere near the true returns they should get from their natural resources,” Lisk told IPS.

“I would like to see what I call tax justice because many foreign companies in extractive industries in Africa and other developing countries get away with paying little or no taxes, through manipulation and connivance with corrupt regimes,” he added.

Lisk and other economists estimate that if African countries were able to realise the “true value of taxation,” the revenue would account for six times the volume of total aid.

“There would not be any need for aid if African countries get their true share in terms of revenues and royalties,” Lisk told IPS. “We have to go beyond economic growth and beyond issues of sustainability to look at those dimensions of development such as social issues, tax justice, gender equality – issues that are not sufficiently taken into account.”

For the OECD, however, assistance does play a role in development, and the organisation’s top officials expressed concern at the falling aid levels, calling the trend “worrying”.

Opening the Forum on Thursday, Gurría said that while poverty has declined globally, partly because of economic growth and innovative policies in countries such as Brazil and Bangladesh, it was still crucial for the international community to “work together to put forth a new and more ambitious vision for a Post-2015 development world.”

In 2012, members of the OECD’s Development Assistance Committee (DAC) provided 125.7 billion dollars in net official development assistance, representing 0.29 percent of their combined gross national income.

To achieve the Millennium Development Goals (MDGs), the United Nations has set a figure of 0.7 percent of gross national income as an aim.

Gurría said he was heartened by the fact that nine countries still managed to increase their aid, in spite of the crisis. Meanwhile the new DAC chairman Erik Solheim said that his committee would continue to encourage its members to live up to their commitments.

“I welcome the efforts of those nine DAC members that increased their aid in 2012, and urge others to increase their aid as soon as their budget circumstances allow,” Solheim stated.  “Maintaining aid is not impossible even in today’s fiscal climate. The UK’s 2013-14 budget increases its aid to 0.7 percent of national income, which gives hope that we can reverse the falling trend.”

The nine DAC countries that increased aid – Australia, Iceland, Austria, Korea, Luxembourg, Canada, Norway, Switzerland and Luxembourg – were praised by NGOs such as the anti-poverty campaigner ONE.  Other donors who boosted their assistance included Poland, Turkey and the United Arab Emirates.

ONE said that aid was necessary because many African countries won’t achieve the eight Millennium Development Goals by 2015 without assistance, especially those related to providing primary education and safe drinking water.

“Donors are now focusing on emerging countries, at the expense of sub-Saharan Africa and at the expense of the least advanced countries,” ONE France’s director Guillaume Grosso told IPS. “They need to realise that when you invest aid smartly, you get results.”  (END)

By Pascal Lamy
GENEVA, Mar 4 2013 (IPS)

The global economy is facing strong headwinds that have set back world trade and output growth. Despite the measures implemented in many countries to contain the slowdown, production and employment trends continue to be negative. In the light of these developments, the World Trade Organisation (WTO) recently revised its forecast for world trade growth in 2012 to 2.5 percent, down from the previous 3.7 percent forecast. We foresee a volume of trade growth of 4.5 percent in 2013, below the long-term annual average of five to six percent that we have enjoyed for the last 20 years.

Pascal Lamy. Credit: Couresy of WTO.

In times of hardship, governments are subject to protectionist pressures. But in the present economic situation, trade opening is not part of the problem. In fact, trade could be part of the solution for recovering economic growth, promoting competitiveness, and creating jobs. Although protectionist pressures still exist, the collective vigilance exercised by WTO members is an important asset to contain them.

Unfortunately, the WTO is not yet delivering in one crucial aspect and that is in its ability to update its rulebook in order to make it more responsive to current realities and to facilitate the way in which trade can promote development.

In November 2001 in Doha, Qatar, we launched multilateral trade negotiations under a broad agenda to modernise the WTO rules. More than 11 years later, this process remains deadlocked. The goal of achieving a Doha package encompassing all of its 20 topics among the WTOs 157 members remains elusive and will not be available in the short term.

Regrettable as it is, the present deadlock in the Doha Round does not mean that we cannot advance in smaller steps in some areas of trade negotiations.

For instance, WTO members are negotiating the expansion of the Information Technology Agreement, originally drafted in 1996 among 20 members and now encompassing 97 percent of trade in IT products. It has been a win-win deal and I am confident that we may see progress on this topic in the coming months.

Another obvious area that we could advance in is trade facilitation, the task of finding a more efficient and effective way to process trade, or in other words to reduce the thickness of borders. This area of policy has a profound impact on competitiveness. The longer a producer has to wait for a needed imported component, the less competitive it becomes.

At its core, trade facilitation is about making trade easier and less costly. In a world increasingly focused on value chains and trade in intermediate products, effective trade facilitation is not just a choice – it is an essential element for any country.

The evidence is clear. The Organisation for Economic Cooperation and Development (OECD) estimates that for its members, customs procedures, paperwork and border delays constitute roughly 10 percent of the value of any trade transaction. Globally, these costs are close to two trillion dollars. A WTO deal on trade facilitation to curtail fees and paperwork, create greater transparency and reduce obstacles to goods in transit would cut those transaction costs in half.

Trade today is unlike what it was a few decades ago. World growth has become more dependent on trade: as a share of gross global product, trade has risen from 38 percent in 1980 to around 55 percent now.

The evolution of technology and transportation has greatly reduced the costs and uncertainty of distance. The rapid growth of global value chains, the preponderance of new regulatory-based, non-tariff measures and the shift in trade patterns as South-South trade grows rapidly are all elements that have accelerated since the turn of this century and which, if current trends are maintained, will continue to expand in the years ahead.

China has become the worlds second-largest economic power and the biggest exporter of goods. Many other trading powers have emerged Brazil, India, Mexico and Malaysia are all now at the table of the top 25 leading exporters, and all posted export growth of 15 percent or better in 2011. Developing countries share of trade is 47 percent today compared with a global share of around one-third in 2008.

The nature of trade has also changed. High-tech products used to be made in the U.S., Japan or Germany. Today, they are made in the world, with components and parts fabricated in many countries. The country where the final assembly takes place may contribute only a small fraction of the final value of the product. Currently, roughly 60 percent of the volume of world merchandise trade is trade in components. In Asia, the figure is closer to two-thirds. The import content of the average export is 40 percent, up from 20 percent two decades ago, and will keep growing in the future as multi-location supply chains keep extending.

These value chains have not only changed the way companies trade, they are also changing the nature of the trade debate. When products were made in a single country, the argument that exports were good and imports bad was more easily defended. This mercantilist approach was, for centuries, a driving force behind trade policy.

Value chains have turned all of this on its head. Companies that wish to be competitive in the global marketplace need access to the best possible inputs goods and services at the lowest possible prices.

To hinder companies seeking such imports is to render them less competitive globally. It is self-defeating. This factor, together with strict monitoring by the WTO, may explain why countries have by and large avoided taking massive trade-restrictive measures during the crisis.

(END/COPYRIGHT IPS)

Excerpt:

In the 1980’s, Caribbean countries wanted to shore up their prospects of social and economic development in the coming decades, so they looked to the financial services sector to spur employment and development. They managed to develop a robust industry, particularly in the Bahamas and the Cayman Islands.

Today, however, the region has been struggling to keep up with evolving international regulations. These challenges come at a high cost, even as proponents of the regulations argue that they are critical in dealing with the global financial and economic crisis.

For at least two years, the international community has pressured the Caribbean, where several countries are well known as tax havens, to shut down its financial centres and implement a number of measures in order to qualify for bilateral aid. Since then, little has changed, delegates at the second meeting of the Caribbean Forum (CARIFORUM) Conference on the International Financial Services Sector in the Caribbean Region, held Oct. 30-31 in Antigua, learned.

Baldwin Spencer, the Antiguan prime minister, said the international community continues to issue “repeated demands that the region should be treated on a level playing field with financial centres in the industrialised economies using the principles of natural justice”.

He said that while the Caribbean has been committed to developing financial services in a “responsible manner and investing in their good supervision and regulation”, developed countries are the ones that have dropped the “regulatory ball”, to devastating effect on the rest of the world.

The Paris-based Organisation for Economic Cooperation and Development (OECD) has pushed for restricting, and in some cases, outlawing financial services in the Caribbean, threatening on occasions to blacklist countries that have failed to comply with some of its policies.

Regulations with a purpose

Those who support such regulations say that they are necessary given the current financial climate. The newly appointed head of the delegation of the European Union to Barbados and the Eastern Caribbean, Mikael Barfod, has defended the OECD position, insisting that it is aimed at tackling tax fraud and harmful tax practises.

“In today’s environment with the international financial crisis, the international taxation cooperation between governments and between tax administrations has gained in importance,” he said, noting that since 2009, there has been “major progress” in these areas.

He acknowledged that while Caribbean countries have made an effort to sign a “sufficient amount” of Tax Information Exchange Agreements in order to be fully accepted by the OECD, “there is more to be done in many states and the governance standards defined internationally by G20 and OECD are changing”.

Avinash Persaud, an international expert on the financial services sector and chairman of the London Business School, told IPS that the financial sector “is really quite significant” in Caribbean economies, accounting for as much as 50 percent of gross domestic product (GDP) for islands like Barbados and Antigua and Barbuda.

“They represent a major part of tax revenues. Over the past 10 years they have come under tremendous pressure by the larger economies” such as those of London, Zurich, and New York, which are under fiscal pressure themselves with little or no tax revenues and which now want to compete with Caribbean financial centres.

“They are trying to establish a set of global rules which they decide themselves and then impose on us,” said Persaud. “Then they judge whether we are fitting with those rules or not. Judge and jury. It is really ad hoc and it is really designed to close down the international financial centres coming from the Caribbean. It is certainly not a level playing field.”

New standards to follow

Ivan Ogando Lora, the director general of CARIFORUM, which is comprised of the 15-member Caribbean Community (CARICOM) bloc and the Dominican Republic, said recent recommendations by the Financial Action Task Force (FATF) regarding international standards for combating money laundering and financing of terrorism, will also now pose new problems for the region.

“Compliance to international standards now seems to be the order of the day and Caribbean jurisdictions have been making strides in this regard,” he said, noting however, despite the efforts, that Caribbean countries “continue to attract negative attention”.

CARICOM countries have already developed a final draft of a Financial Services Agreement that if approved by mid-2013 would create a single financial space with common legislation, regulations, administrative procedures and practices and will also provide for cross border supervision and harmonisation of standards.

The United States, which has complained in the past of its wealthy citizens using the Caribbean to escape paying taxes, has itself introduced a range of changes to its financial regulatory environment that regional stakeholders fear could also undermine the financial services sector within CARIFORUM.

The Foreign Account Tax Compliance Act (FATCA), for example, would require U.S. tax authorities to levy a 30 percent withholding tax on both foreign and non-financial foreign institutions where new reporting requirements have not been met.

The requirements would affect traditional financial institutions such as retail and commercial banks as well as investment banks, securities and brokerage firms, private banks and wealth management firms that do business in the United States. Any institution doing business with U.S. individuals and entities would have to immediately adopt procedures, processes and systems necessary for FATCA compliance.

Persaud said that this latest strategy underscores the struggle facing the Caribbean in recent years.

“They have essentially moved land and water to try and comply with the new rules and when they do so, the rules then change again and the costs are extremely burdensome. The cost for the Caribbean financial centre complying with international rules is ten times as the per cent of GDP as the cost of the larger rich countries complying with the rules they have set.

“The problem is we can’t abandon the sector because it is an important sector,” he said, urging the Caribbean “to fight a better fight”.

France's energy mix includes solar panels at a fuel station. Credit: A. D. McKenzie/IPS

By A. D. McKenzie
PARIS, May 14 2012 (IPS)

As France’s president-elect Francois Hollande prepares to form a new government, many environmentalists are calling for the appointment of an ecology minister with real power who can deliver on promises to reduce the use of nuclear power as well as cut carbon emissions.

“We want a strong minister – one that will have energy as part of his portfolio,” said Marc Mossalgue, a spokesman for Climate Action Network France (RAC-F), which groups non-governmental organisations concerned with climate change and environmental protection.

Mossalgue told IPS in an interview that NGOs want to see a “clear mandate” so that the ecology minister won’t be overshadowed by his counterparts in the industry and economy sectors.

“The challenges demand … that the future minister also be able to address housing, transportation and energy issues to be effective.” Mossalgue said ahead of Hollande’s inauguration on Tuesday.

The former ecology minister, Nathalie Kosciusko-Morizet, had limited authority in the administration of president Nicolas Sarkozy, who Hollande defeated in runoff elections on May 6. Decisions on energy then were largely in the realm of the Industry Ministry, which often had the final say, according to political observers.

“Kosciusko-Morizet was never able to live up to her own convictions. She chose the wrong side, and too bad for her,” said Joël Vormus, energy and environment project manager for the Comité de Liaison Energies Renouvelables (CLER), a non-governmental network of more than 200 professionals throughout France.

“The first promise we want to see Hollande keep is the holding of a public debate on the future of energy policies in France,” he told IPS. “It was never subjected to public debate and all NGOs are waiting for this to happen.”

Hollande, a socialist, says he will close France’s oldest nuclear plant, the two-reactor, 35-year-old plant at Fessenheim in north-eastern France; but that wouldn’t be until the end of his first term in 2017.

He also proposes to cut the amount of electricity generated from nuclear power in France to 50 percent from the current 75 percent, by 2030. This would mean closing half of the country’s 58 reactors.

Alongside these goals, Hollande has also said he wants to cut carbon emissions by 30 percent by 2020, which would be 10 percent higher than the European agreed objective.

“This is an ambitious goal, but it’s not unrealistic,” Vormus told IPS.

Other energy experts do not expect much to change in the short-term, however, because of the huge costs involved in moving to renewables and the spectre of higher electricity bills for consumers amid the present economic crisis.

“Over the next five years we wouldn’t expect to see very much change,” says Dr. Roy Cameron, head of the nuclear development division in the Nuclear Energy Agency of the Organisation for Economic Cooperation and Development (OECD).

“Nuclear will continue to be a very significant contributor in the energy mix,” he told IPS. “In terms of basic issues of the interaction of nuclear and renewables, countries like France have to work out how capable they are of dealing with the increased costs that will come from any move to renewables and whether they are ready to impose hikes in electricity prices as is happening in Germany, for instance.”

The French Electricity Union (UFE) released a report last November saying that cutting nuclear energy use to 50 percent would necessitate an extra 60 billion euros in investments to meet projected electricity demand, and would increase carbon emissions by around 30 percent and cause electricity prices to rise by some 50 percent.

NGOs measure the monetary costs against the “grave and irreversible consequences for man and the environment” that could come from one accident at a nuclear plant, to use the words of Kosciusko-Morizet following the Fukushima disaster in Japan last year.

“That’s obviously an argument that can be made, but the accident in the world that’s killed the most people has been a dam collapse and not a nuclear plant,” said Cameron, referring to a 1975 dam burst in China in which an estimated 30,000 people perished and thousands more died in resulting epidemics.

“On any comparative basis … the health impacts are always much lower in nuclear than in other technologies,” he added. “That’s without dismissing the real costs related to relocation, loss of income or other issues in a nuclear accident.”

Cameron said that OECD studies have shown that governments and consumers are most concerned about “security of supply” when it comes to providing energy.

“Citizens are not happy if they turn on the light and it doesn’t come on or if they put on the shower and it’s cold water,” he told IPS. “Security of supply is often the issue we’ve found in our studies that motivates governments more. Climate change policy is secondary to security of supply.”

He said that the new French government will have to decide how much it can “take on board a climate change goal without affecting security of supply while ensuring affordability.”

Even if Fessenheim does close, Hollande has already agreed to the completion of a controversial third- generation reactor being built at the Flamanville Nuclear Power Plant in northwestern France, and he hasn’t indicated where he stands on the construction of another reactor at Penly.

The Flamanville 3 EPR (European Pressurised Reactor) will have greater power-generating capacity than Fessenheim, which means the country’s nuclear status quo will be kept for some time, analysts say.

“The number of reactors will stay the same for now,” says Pierre Terzian, editor and publisher of Petrostrategies, an international energy newsletter. “But Hollande will definitely invest more in renewables, probably encourage energy efficiency and probably not authorise the building of new nuclear plants.” (END)