Zambian farmer Neva Hamalengo (right) knows what it means to lose crops to the ravages of weather and have no insurance coverage. Credit: Friday Phiri/IPS

By Friday Phiri
MOYO, Pemba District, Zambia, Jul 6 2015 (IPS)

In the advent of unpredictable weather, smallholder rain-dependent agriculture is increasingly becoming a risky business and the situation could worsen if, as seems likely, the world experiences levels of global warming that could lead to an increase in droughts, floods and diseases, both in frequency and intensity.

Neva Hamalengo, a 40-year-old farmer from Moyo in Pemba district, Southern Zambia, knows what it means to lose everything in a blink of an eye – not only did a storm wipe out an entire hectare of market-ready tomatoes worth about 15,000 kwacha (2,000 dollars), but he also suffered maize crop failure due to a month-long drought.

“I expect very poor yields this season,” he told IPS. “We suffered crop damage through a storm and when crops needed the rains to recover, we had a severe drought.”

To make matters worse, his smallholder business had no insurance cover and, admitting that he “knew nothing about insurance,” Hamalengo said that would love to see insurance education incorporated into agricultural extension services.“When small-scale farmers are financially literate, they are able to guide fellow farmers to uptake a particular financial product such as insurance or credit … and avoid making poor decisions” – Allan Mulando, WFP Zambia

Hamalengo’s situation represents the predicament faced by most smallholder farmers – who are generally excluded from financial services – and confirms arguments by some experts that the risk of running an uninsured business is far greater if climate is involved.

While financial inclusion is considered a key enabler for reducing poverty, the statistics in Zambia are far from encouraging. According to a 2009 FinScope survey, 63 percent of the Zambian adult population (6.4 million people) is excluded from formal financial services. Slightly over half of the adult population is engaged in farming.

Putting these statistics into context, the “unbanked” majority are poor people, with many of them smallholder farmers. Now, in an attempt to help them become more resilient to climate variability and shocks, the World Food Programme (WFP) has launched the R4 Rural Resilience Initiative, aimed at tackling risk in a holistic manner.

The initiative is “an integrated approach to managing risk, focusing on index‐based agricultural insurance (risk transfer), improved natural resource management (disaster risk reduction), credit (prudent risk taking), savings (risk reserves) and productive safety nets,” Allan Mulando, WFP Zambia’s Head of Vulnerability Assessment and Mapping Unit (VAM), told IPS.

The initiative is based on a strategic global partnership between WFP and Oxfam America which, Mulando said, is aimed at “improving the capacity of food-insecure households to manage the risks of severe weather shocks.”

Working with partners such as the national Disaster Management and Mitigation Unit (DMMU), government ministries, the Meteorological Department, national insurance companies, as well as credit and savings institutions, the project strives to integrate activities with already running government programmes on resilience, such as the Conservation Agriculture Scaling Up (CASU), programme.

CASU, which is being run by the U.N. Food and Agriculture Organisation (FAO) in partnership with the Ministry of Agriculture and Livestock and with financial support from the European Union (EU), aims to contribute to reduced hunger, and improved food security, nutrition and income, while promoting the sustainable use of natural resources.

“R4’s overall objective is to create an environment for private sector participation through market development to ensure sustainability … through insurance cover, credit provision, asset creation programmes and safety nets, as well as household saving … all of which have been identified as alternative ways of reducing vulnerability,” explained Mulando.

Stressing the importance of the project, Southern Province Principal Agriculture Officer Paul Nyambe told IPS that “the Ministry [of Agriculture and Livestock] has been encouraging climate-resilient technologies under CASU and crop diversification amid climate-induced hazards, of which financial inclusion is a key ingredient.”

Meanwhile, for the Ministry of Lands, Natural Resources and Environmental Protection, such initiatives are always welcome because they fall within the government’s major objective of building the capacity of local communities to adapt to climate change.

“Stakeholders with initiatives that help people to adapt are welcome,” Richard Lungu, Chief Environment Management Officer at the ministry, said. “Right now, government is in the process of mobilising resources to support communities affected by a severe drought which led to crop failure.”

According to Lungu, who is Zambia’s focal point for the United Nations Framework Convention on Climate Change (UNFCCC) , “climate change is now a cross-cutting developmental issue especially for Zambia whose economy is natural resource dependent”, with over 80 percent of the population dependent on agriculture for their livelihoods.

Whereas climate shocks can trap farmers in poverty, the risk of shocks also limits their willingness to invest in measures that might increase their productivity and improve their economic situation – and this is where financial education becomes critical.

“Taking into consideration that agricultural weather-based index insurance is relatively new among our small farmers, there is a need for strong financial education,” Mulando told IPS. “When small-scale farmers are financially literate, they are able to guide fellow farmers to uptake a particular financial product such as insurance or credit … and avoid making poor decisions.”

Financial expert George Siameja agreed but noted that the problem lies at two levels – lack of financial education and an inhibiting credit finance environment.

“However, financial literacy should be the starting point because banks consider it too risky to lend money to individuals with inadequate financial capacity,” Siameja told IPS. “While farming is a function of climate, financial education is key.”

Sussane Giese, a German development and change consultant, also pointed to the so-called “dependency syndrome” which inhibits farmers from being more active. “In my interactions with some field officers,” she said, “there is something called dependency syndrome affecting farmers where they see themselves as beneficiaries and not individuals running agriculture as an enterprise.”

Meanwhile, one farmer who is singing the praises of financial literacy is 34-year-old Rodney Mudenda of Nabuzoka village in Pemba district, who has seen a dramatic change of fortunes.

“Since I was trained in financial management last year, I have changed my approach to farming. I am ready to take calculated risks like I did this season to reduce on maize and plant more sunflowers, a drought-tolerant crop. And the gamble has paid off. I expect to earn 12,000 kwacha (1,500 dollars) from an investment of 5,000 kwacha (650 dollars)”, Mudenda told IPS.

Edited by Phil Harris

UNICEF estimates that 3.5 million children in Pakistan suffer from acute malnutrition. Credit: Ashfaq Yusufzai/IPS

By Thalif Deen
UNITED NATIONS, May 29 2015 (IPS)

The United Nations is not only overwhelmed by a spreading humanitarian crisis, largely in Africa and the Middle East, but also remains hamstrung by a severe shortfall in funds, mostly from Western donors.

In conflict-ridden South Sudan, a major crisis point, about 40 percent of the country’s 11.4 million population is facing “alarming levels of hunger,” according to the Rome-based World Food Programme (WFP)."The system is overwhelmed and assistance often arrives too little and is too late." -- Shannon Scribner of Oxfam America

But lack of funding and shrinking access are compromising the agency’s ability to meet humanitarian needs.

Currently, the funding shortfall for WFP amounts to 230 million dollars for food and nutrition assistance.

Overall, the number of people requiring critical relief has more than doubled since 2004, to over 100 million today, according to the United Nations.

And current funding requirements for 2015 stand at a staggering 19.1 billion dollars, up from 3.4 billion dollars in 2004.

The United Nations considers four emergencies as “severe and large scale”: Central African Republic, Iraq, Syria and South Sudan.

And these crises alone have left 20 million people vulnerable to malnutrition, illness, violence, and death, and in need of aid and protection.

“Yet there is not enough funding to meet the needs,” Shannon Scribner, Humanitarian Policy Manager at Oxfam America, told IPS.

She said the current humanitarian system is led by the United Nations, funded largely by a handful of rich countries, and managed mostly by those actors, large international non-governmental organisations (including Oxfam), and the Red Cross/Red Crescent movement.

This system has saved countless lives over the past 50 years and it has done so with very little funding, she said, and less than what the world’s major donors spend on subsidies to their farmers.

“However, the system is overwhelmed and assistance often arrives too little and is too late,” she pointed out.

So strengthening the capacity of local actors to prevent, prepare and respond to emergencies in the first place makes sense, as well as increasing assistance to disaster risk reduction (DRR) that can have a high rate of return in saving lives and preventing damage to communities and infrastructure, as seen in South Asia, Central America, and East Africa.

However, between 1991 and 2010, only 0.4 percent of total official development assistance (ODA) went to DRR, Scribner said.

Last week, Secretary-General Ban Ki-moon appointed a high-level U.N. panel to address the widening gap between resources and financing for the world’s pressing humanitarian efforts.

Oxfam has recommended the panel looks at having U.N. member states make mandatory payments to humanitarian appeals – similar to what is done for U.N. peacekeeping missions, in which funding is received by mandatory assessments charged to member states.

Currently, the United Nations and its key agencies are funded by assessed contributions from the 193 member states and based on the principle of “capacity to pay”, with the United States the largest single contributor at 22 percent of the U.N.’s regular budget. All of these are mandatory payments.

Additionally, U.N. agencies also receive “non core” resources which come from voluntary contributions from member states.

Over the last decade, Ban said, the demand for humanitarian aid had risen “dramatically” amid an uptick in water scarcity, food insecurity, demographic shifts, rapid urbanisation and climate change.

“All these and other dynamics are contributing to a situation in which current resources and funding flows are insufficient to meet the rising demand for aid,” he declared.

“Humanitarian actors expected to stay longer and longer in countries and regions impacted by long-running crises and conflicts.”

Over the past 10 years, the global demand for humanitarian aid has, in fact, risen precipitously, he pointed out.

Oxfam said 12.2 million people are in need of assistance in Syria, almost 4 million refugees and 7.6 million internally displaced people.

In Yemen, two out of three Yemenis needed humanitarian assistance before current crisis. And in both countries, the U.N. appeal is only 20 percent funded

Scribner told IPS one way to address the ongoing problem of assistance being too little and arriving too late is to invest more in humanitarian action led by governments in crisis-affected countries, assisted and held accountable by civil society, as it is often faster and more appropriate, and can even save more lives.

Yet, during 2007-2013, just 2.4 percent of annual humanitarian assistance went directly to local actors.

Meanwhile, the High-Level Panel on Humanitarian Financing will be co-chaired by the Vice President of the European Commission, Kristalina Georgieva of Bulgaria, and Sultan Nazrin Shah of Malaysia.

The Panel will also include Hadeel Ibrahim of the United Kingdom; Badr Jafar of the United Arab Emirates; Trevor Manuel of South Africa; Linah Mohohlo of Botswana; Walt Macnee of Canada; Margot Wallström of Sweden; and Dhananjayan Sriskandarajah of Sri Lanka.

The United Nations said the panel is expected to submit its recommendations to the Secretary-General in November 2015 which will help frame discussions at next year’s World Humanitarian Summit in Istanbul.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

Credit: Oxfam/Petterik Weggers

By Lisa Vives
NEW YORK, Feb 24 2015 (IPS)

After twin suicide bombings at a popular Mogadishu hotel last week that killed 25 and wounded 40, news reporters were seen swarming through the city, spotlighting the victims, the assassins, the motives and the official response.

This left actor Barkhad Abdi, who played opposite Tom Hanks in the movie Captain Phillip and was making his first visit to Somalia since age seven, unlikely to have the usual paparazzi following his every move.Ordinary Somalis have been facing life without a lifeline since the shutdown of money transfers that have been key in rebuilding Somali lives.

Yet Abdi, a Goodwill Ambassador for Adeso, a Kenya-based development charity, was there to bring attention to the plight of ordinary Somalis, facing life without a lifeline since the shutdown of money transfers that have been key in rebuilding Somali lives.

The money – over a quarter of a billion dollars from the U.S. alone – comes from families in the diaspora, the charity Oxfam America reports.

“The small amounts of money that members of the Somali diaspora send their loved ones comprise Somalia’s most important source of revenue,” wrote OxfamAmerica on its website. “Remittances to Somalia represent between 25 and 45 percent of its economy and are greater than humanitarian aid, development aid, and foreign direct investment combined.

“Remittances empower women and help give young men alternatives to fighting in armed groups. The money is the country’s lifeline.”

Because Somalia lacks a formal banking system, small companies were established, run by money transfer operators who could safely and legally deliver money to relatives and friends in Somalia. These companies used bank accounts to wire the money but most of those banks have shut down including the California-based Merchants Bank just last month.

According to the banks, around one percent of money transfer firms could not be properly investigated and pass due diligence checks by the federal currency control office. Yet this decision ignored the 99 percent of money transfer businesses which have been operating in this sector for decades.

Most money wired to Somalia originates in the U.S.

The move by Merchants Bank to pull the plug on the money transfer network could force law-abiding U.S.-based Somalis to choose between three options, according to Professor Laura Hammond of the UK School of Oriental and African Studies.

“They can stop sending money to their relatives living in the Horn of Africa. They can try to find alternative legal channels, but as a result are likely to be charged much higher transfer rates, reducing the amount of money their relatives receive. Or they can use unregulated and illegal ways to send money.”

Opinion writer George Monbiot put it more strongly. The U.S. Office of the Comptroller of the Currency, which triggered the bank closings, is, he charged: “The world’s most powerful terrorist recruiting sergeant… Its decision to cause a humanitarian catastrophe in one of the poorest, most troubled places on Earth could resonate around the world for decades.

“During the 2011 famine in Somalia, British Somalis saved hundreds of thousands of lives by remitting money … reaching family members before aid agencies could mobilise,” he wrote in The Guardian newspaper.

“Government aid agencies then used the same informal banking system – the hawala – to send money to 1.5 million people, saving hundreds of thousands more. Today, roughly 3 million of Somalia’s 7 million people are short of food. Shut off the funds and the results are likely to be terrible.

“Money transfers from abroad also pay for schooling, housing, business start-ups and all the means by which a country can lift itself out of dependency and chaos,” he continued. “Yes, banking has its uses, as well as its abuses. Compare this pointless destruction with the US government’s continued licensing of HSBC.”

Alternative, if more expensive, means of sending money legally, for instance through Western Union, are possible for some but not for people sending money to smaller towns and rural areas in Somalia and other parts of the Horn, where Western Union and smaller companies that still send remittances do not have a presence.

Instead, according to Oxfam, a large proportion of the 200 million dollars sent from the U.S. to Somalia each year will be forced underground. People will send money the way they did before Somali money transfer companies were formed: in cash, stashed in bags and pockets, or in other ways that will be impossible to track.

Meanwhile, as Abdi made a tour of his country of birth to see the impact of the diaspora dollars, he came in for a shock.

“Based on what you hear on the news, I expected to see a shattered country,” Abdi recalled from his visit. “But what I saw instead was a place full of resilience, entrepreneurship and hope.”

Accompanied by his sponsor, the Nairobi-based Adeso service agency, he said he met with young men who were learning how to become electricians to take part of the rebuilding of their country, and with women who were using newly acquired skills to come together and open successful businesses.

“When I was in Somalia I didn’t just see conflict, drought, and hunger,” Abdi said. “I saw people building a better future for themselves. And part of the reason why they’ve been able to do so is because of the remittances they receive from overseas. Let’s not threaten that lifeline and risk reversing all the gains that are being made.”

Hawala is one of Africa’s great success stories, wrote Monbiot. “But it can’t work unless banks in donor nations are permitted to transfer funds to Somalia.”

The report, “Hanging on by a Thread,” by Oxfam, Adeso and the Global Center on Cooperative Security, can be found on the Oxfam website.

Edited by Kitty Stapp

The Canadian government is failing either to investigate or to hold the country’s massive extractives sector accountable for rights abuses committed in Latin American countries, according to petitioners who testified here Tuesday before an international tribunal.

The Inter-American Commission on Human Rights (IACHR) also heard concerns that the Canadian government is not making the country’s legal system available to victims of these abuses.“Far too often, extractive companies have double-standards in how they behave at home versus abroad.” -- Alex Blair of Oxfam America

“Canada has been committed to a voluntary framework of corporate social responsibility, but this does not provide any remedy for people who have been harmed by Canadian mining operations,” Jen Moore, the coordinator of the Latin America programme at MiningWatch Canada, a watchdog group, told IPS.

“We’re looking for access to the courts but also for the Canadian state to take preventive measures to avoid these problems in the first place – for instance, an independent office that would have the power to investigate allegations of abuse in other countries.”

Moore and others who testified before the commission formally submitted a report detailing the concerns of almost 30 NGOs. Civil society groups have been pushing the Canadian government to ensure greater accountability for this activity for years, Moore says, and that work has been buttressed by similar recommendations from both a parliamentary commission, in 2005, and the United Nations.

“Nothing new has taken place over the past decade … The Canadian government has refused to implement the recommendations,” Moore says.

“The state’s response to date has been to firmly reinforce this voluntary framework that doesn’t work – and that’s what we heard from them again during this hearing. There was no substantial response to the fact that there are all sorts of cases falling through the cracks.”

Canada, which has one of the largest mining sectors in the world, is estimated to have some 1,500 projects in Latin America – more than 40 percent of the mining companies operating in the region. According to the new report, and these overseas operations receive “a high degree” of active support from the Canadian government.

“We’re aware of a great deal of conflict,” Shin Imai, a lawyer with the Justice and Corporate Accountability Project, a Canadian civil society initiative, said Tuesday. “Our preliminary count shows that at least 50 people have been killed and some 300 wounded in connection with mining conflicts involving Canadian companies in recent years, for which there has been little to no accountability.”

These allegations include deaths, injuries, rapes and other abuses attributed to security personnel working for Canadian mining companies. They also include policy-related problems related to long-term environmental damage, illegal community displacement and subverting democratic processes.

Home state accountability

The Washington-based IACHR, a part of the 35-member Organisation of American States (OAS), is one of the world’s oldest multilateral rights bodies, and has looked at concerns around Canadian mining in Latin America before.

Yet this week’s hearing marked the first time the commission has waded into the highly contentious issue of “home state” accountability – that is, whether companies can be prosecuted at home for their actions abroad.

“This hearing was cutting-edge. Although the IACHR has been one of the most important allies of human rights violations’ victims in Latin America, it’s a little bit prudent when it faces new topics or new legal challenges,” Katya Salazar, executive director of the Due Process of Law Foundation, a Washington-based legal advocacy group, told IPS.

“And talking about the responsibility for the home country of corporations working in Latin America is a very new challenge. So we’re very happy to see how the commission’s understanding and concern about these topics have evolved.”
Home state accountability has become progressively more vexed as industries and supply chains have quickly globalised. Today, companies based in rich countries, with relatively stronger legal systems, are increasingly operating in developing countries, often under weaker regulatory regimes.

The extractives sector has been a key example of this, and over the past two decades it has experienced one of the highest levels of conflict with local communities of any industry. For advocates, part of the problem is a current vagueness around the issue of the “extraterritorial” reach of domestic law.

“Far too often, extractive companies have double-standards in how they behave at home versus abroad,” Alex Blair, a press officer with the extractives programme at Oxfam America, a humanitarian and advocacy group, told IPS. “They think they can take advantage of weaknesses in local laws, oversight and institutions to operate however they want in developing countries.”

Blair notes a growing trend of local and indigenous communities going abroad to hold foreign companies accountable. Yet these efforts remain extraordinarily complex and costly, even as legal avenues in many Western countries continue to be constricted.

Transcending the legalistic

At this week’s hearing, the Canadian government maintained that it was on firm legal ground, stating that it has “one of the world’s strongest legal and regulatory frameworks towards its extractives industries”.

In 2009, Canada formulated a voluntary corporate responsibility strategy for the country’s international extractives sector. The country also has two non-judicial mechanisms that can hear grievances arising from overseas extractives projects, though neither of these can investigate allegations, issue rulings or impose punitive measures.

These actions notwithstanding, the Canadian response to the petitioners concerns was to argue that local grievances should be heard in local court and that, in most cases, Canada is not legally obligated to pursue accountability for companies’ activities overseas.

“With respect to these corporations’ activities outside Canada, the fact of their incorporation within Canada is clearly not a sufficient connection to Canada to engage Canada’s obligations under the American Declaration,” Dana Cryderman, Canada’s alternate permanent representative to the OAS, told the commission, referring to the American Declaration of the Rights and Duties of Man, the document that underpins the IACHR’s work.

Cryderman continued: “[H]ost countries in Latin America offer domestic legal and regulatory avenues through which the claims being referenced by the requesters can and should be addressed.”

Yet this rationale clearly frustrated some of the IACHR’s commissioners, including the body’s current president, Rose-Marie Antoine.

“Despite the assurances of Canada there’s good policy, we at the commission continue to see a number of very, very serious human rights violations occurring in the region as a result of certain countries, and Canada being one of the main ones … so we’re seeing the deficiencies of those policies,” Antoine said following the Canadian delegation’s presentation.

“On the one hand, Canada says, ‘Yes, we are responsible and wish to promote human rights.’ But on the other hand, it’s a hands-off approach … We have to move beyond the legalistic if we’re really concerned about human rights.”

Antoine noted the commission was currently working on a report on the impact of natural resources extraction on indigenous communities. She announced, for the first time, that the report would include a chapter on what she referred to as the “very ticklish issue of extraterritoriality”.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

President Barack Obama takes the stage to deliver remarks at the U.S.-Africa Business Forum held at the Mandarin Oriental Hotel during the U.S. Africa Leaders Summit in Washington, D.C., Aug. 5, 2014. Credit: Official White House Photo by Pete Souza

By Julia Hotz
WASHINGTON, Aug 7 2014 (IPS)

As the three-day U.S- Africa Leaders Summit here drew to a close Wednesday, experts across the private, public and non-profit sectors continued to debate the opportunities and obstacles posed by the U.S’ expanding business partnership with Africa.

Speaking Tuesday regarding the 17 billion dollars pledged toward African business development, U.S President Obama declared his determination to be a “good,” “equal” and “long term” partner for Africa’s success.“African leaders are asking for US investment, while Africans are asking for jobs…this disconnect hasn’t completely been dealt with.” -- Gregory Adams

“We cannot lose sight of the new Africa that’s emerging,” Obama said Tuesday, announcing new private partnerships, as well as a reaffirmed commitment to improving infrastructure, expanding trade, and providing educational opportunities for young entrepreneurs.

While such business advances most directly benefit actors in the U.S. private sector, non-profits expressed similarly qualified enthusiasm about the summit’s promise of increased economic engagement with Africa.

“What the summit has offered is an opportunity for the United States is to see Africa as a land of opportunity,” Gregory Adams, director of aid effectiveness at Oxfam America, a development organisation here, told IPS.

Adams also said the proceedings have helped move U.S.-African relations more “from patronage to partnership,” and have facilitated “good” and “direct” exchanges between civil society actors and leaders from both the United States and Africa.

But he warned that not all African voices were heard during the three-day proceedings, and that an “important distinction” between the diverse economic interests of Africans has yet to be established.

“African leaders are asking for U.S. investment, while Africans are asking for jobs…this disconnect hasn’t completely been dealt with,” Adams told IPS, noting how “tremendous” economic growth does not necessarily translate to job creation.

More intensive effort to listen

Adding that representatives from Africa’s local and small business have historically been absent from large-scale conversations about U.S-African engagement, Adams explained that “if we’re truly moving from patronage to partnership,… we’re going to need a more intensive effort to listen to variety of African voices…and do more to engage with civil society and local African businesses.”

In a plea to examine just how “demand-driven” the announced investments to Africa are, Adams also called for there to be “follow-through” on such pledges, saying that “all of these commitments are coming fast and furious, so it’s hard to keep track of them and determine what’s real and what’s not.”

Such commitments were premiered within the three-day U.S-Africa Leaders Summit, in which delegations from more than 50 African countries – including more than 40 heads of state – came to Washington to discuss security, trade, infrastructure, and governance with U.S. President Obama and other top U.S. government officials.

Announced last year during U.S President Obama’s visit to Africa, the joint African leaders summit is the first in U.S. history, and has marked a major effort to play catch-up with the EU and China, where governments have previously used summits with Africa as a platform to expand economic partnerships and strengthen diplomatic ties.

While civil society groups participated in the proceedings, the summit’s centrepiece came Tuesday with the U.S-Africa Business Forum, which featured pledges by U.S. government officials, World Bank leaders and CEOs of major U.S. companies – including General Electric, Coca Cola, Walmart, Marriot, and  Mastercard – to provide aid to a variety of sectors in Africa

Special emphasis was given to Obama’s Power Africa programme, which has mobilised 12 billion dollars from both the public and private sector to an initiative that will provide 600 million Africans with a reliable electricity supply.

Ben Leo, director of Rethinking U.S. Development Policy at the Centre for Global Development (CGD), a think tank here, claimed that the Power Africa initiative is a key pre-cursor for business development in the region, explaining how the promise to provide electricity across Africa may even save the otherwise-neglected small businesses.

“If some of these commitments under the Power Africa initiative are effective in addressing both access to power and reliability to power, there will be significant benefits for [Africa’s] small and medium enterprises,” Leo told IPS.

Yet the Atlantic Council, a think tank here, believes that despite the promising nature of Power Africa, the region still lacks adequate infrastructure, and suffers from profound geographic disadvantages.

“Most data-driven investors in the world”

In a report released Wednesday, the Atlantic Council cited these two factors, along with the need for more market data and stronger policy implementation, as obstacles plaguing business development in sub-Saharan Africa.

“Although these are obstacles that affect everyone, the U.S. is the most frustrated with the lack of data… [because] they are the most data-driven investors in the world,” Diana Layfield, CEO of Africa Operations at Standard Chartered Bank, said at the report’s premiere.

But through harnessing innovation, a virtue that CGD’s Leo dubs as one of “America’s core strengths,” the Atlantic Council is optimistic about the opportunity for increased investment in sub-Saharan Africa.

From using satellite imagery to identify local traffic patterns, to issuing SMS surveys to learn about consumer preferences, private companies have been using technology as means to obtain basic information about consumer behaviour, which, the report says, is otherwise unavailable from public sector sources.

Yet for Oxfam’s Adams, such tech innovations miss a crucial point.

“I think we’re really skipping a step as a country if we’re not looking ahead to 30 years from now and asking if all this investment is a flash in the pan, or if  it’s going to lead to the emergence of  local businesses that will lead to job creation,” Adams told IPS.

Stressing that the U.S. is “incredibly non-transparent” and rarely “tell[s] countries the details of their own aid,” Adams concluded that “there is a lot more that the U.S. government needs to do if it actually wants to support Africa.”

Edited by: Kitty Stapp

The writer can be contacted at hotzj@union.edu

Major donor countries will unveil next week a new initiative aimed at strengthening the ability of developing countries’ governments to negotiate complex contracts, particularly around the extractives sector.

The undertaking comes in response to increasing frustration expressed by officials in developing countries over their inability to match the negotiating power of multinational corporations, resulting in what they see as unequal deals. The project, known as Strengthening Assistance for Complex Contract Negotiations (CONNEX), was announced last week at the Brussels summit of the Group of Seven (G7) rich countries.

CONNEX will “provide developing country partners with extended and concrete expertise for negotiating complex commercial contracts, focusing initially on the extractives sector,” the summit communiqué, released Jun. 5, states. The initiative will coordinate a recent increase in donor action on the issue, including “as a first step a central resource hub that brings together information and guidance”.

“For many developing countries, major investments, such as in natural resources or infrastructure, are the most important means of generating funds to drive economic growth and sustainable development." -- Lisa Sachs, director of the Columbia Center on Sustainable Investment (CCSI)
A fact sheet released by the White House notes that the initiative is a response to “direct requests” last year from the African Union and developing countries, particularly with regard to difficulties in negotiating with “multinational companies in the extractives sector”. The White House says CONNEX’s eventual goal will be to develop “rapid response teams to provide contract negotiation assistance to developing countries as soon as it is needed”.

Most formal details around CONNEX are still to be worked out, however, a process that will begin Jun. 17 in New York. The project is being jointly carried out by the Columbia Center on Sustainable Investment (CCSI), at Columbia University, which has done previous work on negotiation assistance and which will host the initiative’s digital infrastructure.

“For many developing countries, major investments, such as in natural resources or infrastructure, are the most important means of generating funds to drive economic growth and sustainable development,” Lisa Sachs, CCSI’s director, told IPS.

“Yet despite the importance of these deals, many governments do not have in place strong regulatory frameworks or the resources necessary to negotiate good deals, meaning that they are losing the critical opportunity to maximise the benefits from these investments.”

Transparency quid pro quo

Investment deals around resource extraction can last for decades, and thus poorly negotiated agreements can have long-term ramifications for a country’s ability to fund its public sector. Any such gaps inevitably impact particularly on the poorest and most marginalised communities.

Bad deals “not only prevent a country from enjoying the full long term benefits of its resources,” according to a draft ‘negotiating roadmap’ prepared in February by CCSI, but they also “help to entrench poverty, corruption and even conflicts, particularly when governance systems are inadequate.”

Indeed, governance issues play a central role in concerns over the allocation of natural resources revenues. According to research released last year by the Revenue Watch Institute (now known as the Natural Resource Governance Institute), trillions of dollars a year are being produced through the extractive industries but just a tiny percentage of this money is impacting on the lives of poor communities in developing countries.

More than 80 percent of the countries the group looked at had failed to put in place satisfactory standards for openness in these sectors – and half hadn’t even taken basic steps in this regard. Revenue Watch analysts said the findings constitute a “striking governance deficit”.

Nonetheless, countries with both strong and weak governance records are now increasingly looking for assistance in negotiating extractives contacts with multinational companies, development experts say.

“The governments making these requests run the gamut from well-governed to less so, because the motivation is the same: to generate as much money out of these natural resource deals,” Ian Gary, a senior policy advisor on the extractives industry for Oxfam America, a humanitarian and advocacy group, told IPS.

“Governments recognise that when they go into these negotiations they’re up against large companies that bring in dozens of lawyers who have huge advantages in doing these deals. So either way this is an attempt to level the playing field in these negotiations – though some governments may want to extract more value to funnel into national development, while others may have more self-centred motivations.”

Both multilateral and bilateral donors, including the World Bank and German government, have stepped up technical assistance in this area in recent years, and CONNEX will now play a critical role in coordinating these efforts. But Gary emphasises that related concerns around transparency and governance issues now need to become integrated into assistance packages as a matter of course.

“There needs to be a quid pro quo between donors providing this technical assistance and governments receiving it, to make sure that subsequent contracts are made public and that citizens are able to monitor that information,” he says. “Unfortunately, I’m not sure how much of an appetite we’ll see from donors next week to deal with these sensitive issues.”

U.S. officials were unable to comment for this story by deadline.

Long-term investment

Beyond the ambit of the new G7 initiative on contract negotiation, an incipient moderating factor in this dynamic may be coming from another source entirely: multinational corporations themselves.

The Columbia Center on Sustainable Investment has emphasised that the bad economics of a poorly negotiated deal can cut both ways. These can lead to, for instance, increased public protest, reduced security for corporate concessions, or revised legal conditions such as to the tax code.

On the other hand, if developing country governments can provide stronger negotiating teams, this thinking goes, the results could be stronger contracts and greater legitimacy for extractives deals.

“Some companies are now coming to the realisation that it’s not in their long-term best interest to extract extremely bad deals from governments,” Oxfam’s Gary says.

“Eventually the terms of those deals will come out and that can lead to instability. An oil company may operate in a particular country for 30 years, after all, so it’s ultimately in their interest to make sure there are no surprises down the road.”

While CONNEX is slated to focus initially on the extractives industry, multiple additional areas involving major government contracting could benefit from related support – around land, large-scale infrastructure or the sale of state assets such as telecommunications.

Representatives from the G7 countries will meet to discuss CONNEX over two days next week, with initial reports on the initiative due at next year’s G7 summit.

(END)

USAID relief commodities at the Port-au-Prince airport are readied for distribution, Jan. 17, 2010. Credit: Candice Villarreal/U.S. Navy

By Carey L. Biron
WASHINGTON, Apr 28 2014 (IPS)

Lawmakers here may roll back recent landmark reforms to how the United States provides international food aid, despite warnings that doing so would reduce assistance for some two million people worldwide.

At issue is a longstanding requirement that a portion of that food aid be transported globally on U.S. ships with U.S. crews, a policy aimed at bolstering jobs but which has long been criticised as inefficient in terms of both money and speed of response. For decades 75 percent of aid needed to be moved on U.S.-flagged ships, but in 2012 the U.S. Congress dropped this number to 50 percent, part of a major reform package that humanitarian groups and others lauded.“They’re trying to argue that you can get the best of both worlds, when the truth is this change will literally cost two million people food on the table at night." -- Eric Munoz

Yet a one-line provision in an otherwise unrelated bill passed by the House of Representatives earlier this month would set this figure again at 75 percent. The Senate is expected to start work in coming weeks on a similar bill, and opposition to the provision is now starting to coalesce among lawmakers, humanitarian groups and the administration of President Barack Obama.

“This absolutely goes against everything Congress and the administration have been trying to do, in terms of being more efficient with government funding,” Ryan Quinn, a senior policy analyst with Bread for the World, an anti-hunger group here, told IPS.

“We’re always talking about the budget crisis and using our money more wisely, but here’s a provision that would specifically raise the cost of food aid by 75 million dollars annually. That money would be taken directly out of U.S. food aid programmes – and millions of vulnerable people would be forced to pay the bill.”

The provision comes in otherwise routine legislation to fund the U.S. Coast Guard. Yet Quinn says the food aid directive, known as Section 318, was slipped into the broader bill with little discussion and no consultations with experts working on international assistance.

Now that the proposal has come to light, however, it has started to receive strong pushback from multiple corners.

“When 842 million people around the world go hungry every day, making every food aid dollar count is both a responsible use of taxpayer money and a moral imperative,” Allan Jury, senior policy advisor at World Food Program USA, a group that supports the U.N. agency and opposes Section 318, told IPS in a statement.

“U.S. food aid saves millions of lives each year. Therefore, we urge Congress to reject any actions that increase transportation costs for food aid and prevent hungry people around the world from receiving U.S. food assistance.”

The Obama administration, which had supported stronger reforms to U.S. food aid than ultimately became law in 2012, has likewise been adamant in its opposition to the new proposal. The Department of Homeland Security has written a letter to the Senate “strongly” opposing Section 318, warning that it would have “grave effects on United States humanitarian assistance programs”.

Rajiv Shah, the head of USAID, the federal agency in charge of most of the country’s foreign assistance, has likewise urged lawmakers to dump Section 318. In the past, the agency has pointed to research finding that previous U.S. food aid policies increased the time required to respond to a humanitarian crisis by up to 14 weeks, compared to simply purchasing supplies locally.

Ending reimbursements

The current debate is particularly important given that the United States is one of the world’s most important contributors of food aid, doling out some two billion dollars in assistance during the past fiscal year. Yet it’s also the only major donor country to continue to mandate transport requirements for that aid.

Lobbyists in favour of Section 318 have not been particularly public about their support, though it is clear the shipping industry and certain labour groups have pushed for the change. In addition, Duncan Hunter, the Republican lawmaker who pushed the provision, has suggested that his primary concern has to do with “military readiness” – ensuring that a sound fleet of private seagoing vessels is available in time of need.

Yet advocates who have urged food aid reform for years say the House’s approval of the bill doesn’t mean lawmakers necessarily support Section 318. Some say the quietness with which action was taken on the provision could have confused some in the House over the impact of the shipping change – a situation they’re hoping to prevent as the issue moves to the Senate.

“I think [lawmakers] are confusing a desire to support U.S.-flagged vessels with a programme that is fundamentally about assistance and reaching people in need,” Eric Munoz, a senior policy advisor with Oxfam America, a humanitarian group, told IPS.

“They’re trying to argue that you can get the best of both worlds, when the truth is this change will literally cost two million people food on the table at night – and at what benefit is not clear. We are now highlighting for members of Congress that this is not just an administrative change but one that will hamper our ability to reach people in places where this assistance is desperately needed.”

Further, the impact of the new change would likely be even more significant than in the past. Previously the federal government specifically tried to offset transport costs by reimbursing USAID and other federal agencies for the higher price of using U.S.-flagged ships.

Yet budget-related wrangling over the past year has ended these reimbursements entirely, amounting to some 731 million dollars over the next decade. This means that higher financial outlays incurred due to U.S. labour costs and regulations will be borne solely by the food programmes – and their intended recipients.

In its recent letter, the Department of Homeland Security warned that the combined effects of the new provision and the reimbursements ending “reduces that number of people – again mostly those in crises – who can be fed annually by 4 million.”

There is no public schedule yet for when the Senate may start work on its own Coast Guard reauthorisation bill, or whether a provision similar to Section 318 would be included. It’s likely, however, that the Senate will take up the issue in June.