By Crystal Orderson
LHASA, Aug 22 2019 (IPS)

According to the Tibet’s Social Science Academy’s Institute of Rural Economic Studies, the number of Tibetans still living in poverty has been brought down from 850,000 a few years ago to 150,000.

Tibetan officials say the government is committed to reducing that number to zero by the end of this year.

By Kinda Mohamadieh
GENEVA, Apr 6 2015 (IPS)

The world’s attention turned to the practices of vulture funds after the U.S. Supreme Court affirmed a lower court opinion in the NML Capital vs Argentina case, which forbids the country from making payments on its restructured debt.

Argentina had defaulted in 2001 and went through two rounds of negotiations to restructure its debt, both in 2005 and 2010. In June 2014, the court ordered Argentina to pay the ‘vulture funds’ that held out and did not accept the terms of the debt swaps.

Kinda Mohamadieh

The vulture funds had held out with the aim of achieving what amounts to a 1,600 percent return on their original investment. The funds concerned had purchased the Argentinian bonds in 2008 at 48 million dollars and the court ruling ordered Argentina to pay them 832 million dollars.

Nobel laureate Joseph Stiglitz noted that this was “the first time in history that a country was willing and able to pay its creditors, but was blocked by a judge from doing so”.

While this case brought the term ‘vulture funds’ into the public sphere, the predatory practices of these entities did not start with Argentina.

According to a former U.N. independent expert on the effects of foreign debt and other related financial obligations of states on the full enjoyment of all human rights, the term ‘vulture funds’ describes “private commercial entities that acquire, either by purchase, assignments or some other form of transaction, defaulted or distressed debts, and sometimes actual court judgments, with the aim of achieving higher returns.”

Basically, vulture funds are hedge funds whose modus operandi focuses on three main steps including: (1) purchasing distressed debt on the secondary market at deep discounts far less than its face value; (2) refusing to participate in restructuring agreements with the indebted state; and (3) pursuing full value of the debt often at face value plus interest, arrears and penalties, including through litigation, seizure of assets or penalties.“The African Development Bank has reported that at least twenty heavily indebted poor countries have been threatened with or have been subjected to legal actions by commercial creditors and vulture funds since 1999”

Many developing countries have been exposed to the predatory practices of vulture funds, especially African and Latin American countries.

The African Development Bank has reported that at least twenty heavily indebted poor countries have been threatened with or have been subjected to legal actions by commercial creditors and vulture funds since 1999. These countries include Sierra Leone, Cote d’Ivoire, Burkina Faso, as well as Angola, Cameroon, Congo, Democratic Republic of the Congo, Ethiopia, Liberia, Madagascar, Mozambique, Niger, Sao Tome and Principe, Tanzania, and Uganda.

Peru was targeted by NML Capital in the year 2000. According to media reports, the fund spent almost four years in the courts to win a ruling that forced Peru to settle for almost 56 million dollars on distressed debt, which the fund had initially bought for 11.8 million dollars.

The African Development Bank has documented that up until the year 2007, 25 judgments in favour of vulture funds had yielded nearly one billion dollars. Out of this amount, 72 percent of the judgments have been against African countries. The reported number of outstanding cases against debtor countries has doubled since 2004.

According to the World Bank and the International Monetary Fund (IMF), 54 court cases were instituted against 12 heavily indebted poor countries between 1998 and 2008. The IMF estimates that in some cases claims by vulture funds constitute as much as 12 to 13 percent of a country’s gross domestic product.  The World Bank estimates that nearly one-third of countries that are eligible for debt relief and other poverty alleviation programmes are the targets of nearly 26 vulture funds.

Concerned about the extent of the threat posed by such predatory practices and their systemic implications, several international authorities and multilateral institutions have voiced their concern about the matter.

The African Development Bank has warned that by precluding debt relief and costing millions in legal expenses, these vulture funds undermine the development of the most vulnerable African countries.

In June 2014, the heads of state and government of the Group of 77 and China, in their declaration issued on the occasion of the ‘For a New World Order for Living Well’ summit held in Santa Cruz de la Sierra, Bolivia, reiterated the importance of “not allowing vulture funds to paralyse the debt restructuring efforts of developing countries” and stressed that “these funds should not supersede the state’s right to protect its people under international law.”

The IMF had cautioned that upholding the decision against Argentina would harm future sovereign debt restructuring attempts. In 2013, the IMF stated that “if upheld, [the Court of Appeals decision] would likely give hold-out creditors greater leverage and make the debt restructuring process more complicated”.

In 2007, G8 finance ministers had expressed concern about actions of some litigating creditors against heavily indebted poor countries, and agreed to work together to identify measures to tackle this problem based on the work of the Paris Club.

In September 2014, a resolution on the activities of vulture funds and the effects of foreign debt and other related international financial obligations of states on the full enjoyment of all human rights, particularly economic, social and cultural rights, was presented by Argentina and adopted at the 27^th session of the U.N. Human Rights Council which took place in Geneva.

It is also worth noting that the 26^th session of the Human Rights Council in June 2014 had adopted a resolution titled ‘Elaboration of an international legally binding instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights’.

This resolution sets in place a process of negotiations towards an international legally binding instrument on transnational corporations and their liability in the area of human rights. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris   

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

* This column is based on a longer version published in published in the South Centre’s South Bulletin 83 of 12 February 2015.

Excerpt:

Putting the spotlight on culture. Credit: A.D. McKenzie/IPS

By A. D. McKenzie
FLORENCE, Oct 4 2014 (IPS)

International experts working in the creative sector are calling for governments to recognise the integral role that culture plays in development and to ensure that culture is a part of the post-2015 United Nations development goals, to be discussed next year.

At UNESCO’s Third World Forum on Culture and Cultural Industries, which took place Oct. 2-4 in Florence, Italy, representatives from a range of countries discussed the contributions that culture can make to a “sustainable future” through stimulating employment, economic growth and innovation.

The United Nations cultural agency pointed out that the global trade in cultural goods and services has doubled over the past decade and is now valued at more than 620 billion dollars, although there is some disagreement on this figure.

But, apart from the financial aspects, culture also contributes to social inclusion and justice, according to UNESCO Director-General Irina Bokova, who inaugurated the forum at Florence’s Palazzo Vecchio.“Countries must invest in culture with the same determination they bring to investing in energy resources, in new technologies … In a difficult economic environment, we must look for activities that reinforce social cohesion, and culture offers solutions in this regard” – UNESCO Director-General Irina Bokova

“I believe countries must invest in culture with the same determination they bring to investing in energy resources, in new technologies,” she said. “In a difficult economic environment, we must look for activities that reinforce social cohesion, and culture offers solutions in this regard.”

Bokova told IPS that the forum wanted to show that culture contributes to the “attainment” of the various development goals, which include ending extreme poverty, achieving universal primary education and gender equality, and ensuring environmental sustainability.

Many governments, however, are not investing enough in the cultural or creative sectors even when these industries have proven their worth. Some states prefer to build sports stadiums that are rarely used rather than to support the arts, said Lloyd Stanbury, a Jamaican lawyer in the music business who participated in the forum.

“In the case of Jamaica, we’ve shown that we can compete and win globally at the highest levels in culture,” he told IPS. “Reggae and Rastafari have put Jamaica on the world map and the debate is happening right now about what the government can do to invest more in culture.”

Stanbury said that arts education should have the same status as traditional curricula. “Students are sometimes told, ‘oh, you can’t do maths? Go and draw something’ but their drawings aren’t considered valuable,” he said.

In some developing countries, the arts are seen as a peripheral sector, not a “real” industry and that must change, he argued.

In addition, Stanbury said in his presentation to the forum, in many developing countries, “segments of the music and entertainment community do not enjoy harmonious relationships with government and government institutions, particularly where there is evidence of government corruption that artists speak out against in the creation and presentations of their work.”

For many governments, meanwhile, investing in culture naturally comes a long way behind providing proper health, sanitation and electricity services and developing transportation infrastructure. Yet, culture can help in poverty alleviation, job creation and peace building, experts said.

Peter N. Ives, Mayor pro tem of the U.S. city of Santa Fe, New Mexico, detailed how the city had invested in the arts, through allocating one percent of hotel-bed taxes (or lodger taxes) for cultural activities, among other measures.

“Santa Fe now has more cultural assets per capita than any other city in the United States,” he said, adding that “inclusion” of all groups was a key element of the policy, in which “everyone brings their creative gifts to the table”.

The city has an Arts Commission, appointed by the mayor, that “recommends programmes and policies to develop and promote artistic excellence in the community” and it has followed a multi-cultural route.

The result is that Santa Fe has increasingly drawn writers and visual artists, as well as tourists, because of its growing number of museums, performances and outdoor sculptures – also one of the reasons behind its designation as a UNESCO Creative City.

Such “success stories” may seem far-fetched for many poor or middle-income countries, faced with a variety of crises including conflict. But experts at the conference described grassroots schemes where intra-community violence, for instance, decreased when community members were actively encouraged to produce art about their lives.

Other representatives examined how creating film and literary festivals had contributed to a sense of national pride and cohesion. In the Caribbean and in parts of Africa and Asia, for example, the growth of festivals and cultural prizes has given a general boost to the arts in some countries, reflecting what wealthy countries have known for some time.

The forum, jointly organized by UNESCO, the Italian government, the Tuscany region and the Municipality of Florence, also examined how culture can be preserved in war-affected regions, with a focus on recent UNESCO cultural heritage preservation projects (funded by Italy) in Afghanistan, Mali and other states.

Denmark and Belgium, meanwhile, provided a look at how overseas development aid to cultural activities can promote employment, training and youth involvement in society, especially within a human rights context.

“We’re living in a very hostile environment for development cooperation and also for culture and development, but I’m launching an appeal for more cooperation in this area,” said Frédéric Jacquemin, director of Africalia, a Belgian organisation that sees culture as “a motor for sustainable human development”.

Participants in the forum produced a ‘Florence Declaration’ calling for the “full integration of culture into sustainable development policies and strategies at the international, regional and local levels.”

The Declaration said that this should be based on standards that “recognise fundamental principles of human rights, freedom of expression, cultural diversity, gender equality, environmental sustainability, and openness and balance to other cultures and expressions of the world.”

(Edited by Phil Harris)

New analysis suggests that developing countries are losing a trillion dollars or more each year to tax evasion and corruption facilitated by lax laws in Western countries, raising pressure on global leaders to agree to broad new reforms at an international summit later this year.

These massive losses could be leading to as many as 3.6 million deaths a year, according to the ONE Campaign, an advocacy group that focuses on poverty alleviation in Africa. Recovering just part of this money in Sub-Saharan Africa, the organisation says, could allow for the education of 10 million more children“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer” – ONE Campaign
 a year, or provide some 165 million additional vaccines.

“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer,” a report on the findings, released Wednesday, states.

“When governments are deprived of their own resources to invest in health care, food security or essential infrastructure, it costs lives, and the biggest toll is on children.”

The new analysis focuses on a spectrum of money laundering, bribery and tax evasion by criminals as well as government officials. The lost money is not development aid but rather undeclared or siphoned-off business earnings – immense tax avoidance resulting in a decreased base from which governments can fund essential services.

International trade offers a key point of manipulation, the report says, with the extractive industries particularly vulnerable. In Africa alone, exports of natural resources grew by a factor of five in the decade leading up to 2012, offering clear prospects for growth alongside lucrative opportunities for corruption on a mass scale.

“Between 2002 and 2011 we saw an exponential increase in illicit financial flows across the globe,” Joseph Kraus, a transparency expert at the ONE Campaign, told IPS.

“Yet while we’re all familiar with corruption in developing countries, it takes two to tango – that money often ends up in the financial centres of the Global North. Those banks, lawyers and accountants are all essentially facilitators of that corruption, so in order to get at the root of this issue we need to go after the problems there.”

Real opportunity

Advocates including the ONE Campaign are currently stepping up pressure on industrialised countries to institute a series of across-the-board transparency measures. Some are aimed at corruption in developing countries, such as strengthening disclosure laws impacting on the extractives industry and bolstering “open data” standards to allow citizens increased oversight over their governments’ dealings.

Several other reforms would need to be carried out by developed countries, particularly those housing major financial centres such as the United States and United Kingdom. These would include new standards requiring governments to automatically exchange tax information, to mandate the publication of full information on corporate ownership, and to force multinational corporations to report on their earnings on a country-by-country basis.

In certain circles, such demands have been percolating for years. But current circumstances could offer unusual opportunity for such changes.

“In the last two years we’ve seen an acceleration of this agenda,” Kraus says. “Eighteen months ago, no one was talking about phantom firms or anonymous shell companies. But these issues have gained a lot of momentum in a short period of time, and there is real opportunity coming up.”

This new energy has been motivated particularly by concerns in advanced economies over shrinking government budgets in the aftermath of the global economic downturn. Yet developing countries arguably stand to benefit the most from substantive reforms, provided they’re structured accordingly.

Advocates of such changes are now looking ahead to a summit, on Nov 15 and 16 in Australia, of the members of the Group of 20 (G20) world’s largest advanced and emerging economies as well as two major meetings of finance ministers in the run-up to that event.

The G20 represent about two-thirds of the world’s population, 85 percent of global gross domestic product and over 75 percent of global trade.

The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

The G20 has taken on a primary role in issues of global financial stability and, more recently, in pushing the automatic exchange of tax information between governments. A new global standard on such exchange could be approved by the G20 ministers in November, among other actions.

“For too long, G20 countries have turned a blind eye to massive financial outflows from developing countries which are channelled through offshore bank accounts and secret companies,” according to John Githongo, an anti-corruption campaigner in Kenya.

“Introducing smart policies could help end this trillion dollar scandal and reap massive benefits for our people at virtually no cost. The G20 should make those changes now.”

Coordinated response

In fact, many G20 countries have instituted some of these reforms on their own. The U.K. government, for instance, has taken unilateral action on publicising information on corporate ownership, while the United States was the first to pass strong transparency requirements for multinational extractives companies.

While such piecemeal national legislation can spur other countries to action, many feel only a comprehensive approach would have a chance at having a substantial impact. Further, many governments have pledged to act on these issues, but have yet to actually follow through.

“Illicit financial flows are a perfect example of a transnational problem, in that you have two legal regimes in which loopholes are being exploited,” Josh Simmons, a policy counsel at Global Financial Integrity, a Washington watchdog group that supplied data for the new ONE Campaign report, told IPS.

“So when an international cooperative body is able to identify these loopholes, they can get member countries to move in sync to address the situation. But if only one country tries to do so, businesses would probably just move elsewhere.”

Others are looking even more broadly than the G20. A paper released last month by researchers with the Center for Global Development, a think tank here, calls for the inclusion of anti-tax-evasion aims in the new global development goals currently being negotiated under the United Nations.

Indeed, even while there could be real movement at the G20 on several of these issues this year, the work on the other end of this equation – in developing countries – remains onerous.

“We need to get developing countries’ tax systems up to speed, strengthen their financial intelligence units and get their anti-laundering laws up to code. And that is proceeding, but much more under the radar given its complexity,” Simmons says.

“Still, that’s where people are actually bearing the brunt of this problem. Tax avoidance in the United States contributes to the national debt, but in developing countries it’s literally causing people to go hungry.”

Edited by Ronald Joshua

By Naimul Haq
DHAKA, Jan 2 2013 (IPS)

Nearly 50 percent of Bangladesh’s primary school students drop out before they complete fifth grade, as crushing poverty drives them into the informal employment sector.

Only a small fraction of the country’s workforce (0.4 percent) has received vocational, technical, or skills-development training, which results in lifelong dependence on extremely low wages.

A Bangladesh Bureau of Statistics (BBS) report revealed that 5.8 million children aged 10 to 14 years are employed in the informal sector, comprising 11.3 percent of the total labour force. These children are unable to attend school or pursue technical training.

In an effort to rectify the problem, which is severely hindering the country’s efforts to achieve the Millennium Development Goals (MDGs), the European Union has poured 2.5 million euros into local programmes designed to harness the skills and potential of impoverished youth.

The Technical and Vocational Education and Training (TVET) programme quickly became one of the key tools for guaranteeing long-term and higher-paid employment for young people in the country.

With support from Save the Children, the Underprivileged Children’s Educational Programmes (UCEP) has used the TVET curriculum since the early 1970s to provide basic training to working street children over 15 years of age.

At least 45,000 students aged between 15 and 18 are now waiting to graduate from the programme and secure decent jobs in the industrial sector, guaranteed a starting salary of 5,000 taka (or 62 dollars) per month.

Over 140,000 graduates of the programme have already found permanent jobs.