Frank McCourt, founder of Project Liberty, speaking with Foreign Policy CEO Andrew Sollinger at the Geoeconomics Forum. Credit: IPS

By Umar Manzoor Shah
SRINAGAR, India, Apr 17 2026 (IPS)

As war in the Middle East ripples through global markets, policymakers, economists, and industry leaders gathered in Washington this week to agree that economics is no longer separate from geopolitics. It is now its core instrument.

At the Geoeconomics Forum hosted by Foreign Policy alongside the Spring Meetings of the International Monetary Fund and World Bank, speakers repeatedly pointed to a world shaped by shocks, where supply chains, energy flows, and technology have become tools of power.

“Geoeconomics is no longer a backdrop to global politics. It is the key and critical element,” said Foreign Policy CEO Andrew Sollinger in his opening remarks.

The urgency of that shift is tied closely to the ongoing conflict in the Gulf, which has disrupted energy markets and exposed vulnerabilities in global trade systems. The war has made the world understand how quickly regional crises can cascade into worldwide economic instability, affecting everything from fuel prices to industrial production.

Participants at the forum described a transformed global order where governments increasingly deploy economic tools once considered neutral or technical.

Trade policy, capital flows, and supply chains now serve strategic goals. Critical minerals, essential for semiconductors and artificial intelligence systems, have become geopolitical leverage points. Energy routes such as the Strait of Hormuz have turned into potential choke points with global consequences instead of just transit corridors.

“Geopolitics and economics have always been linked. We are going back to a school of thought that sees them as inextricable,” Jacob Helberg, U.S. Under Secretary for Economic Affairs, said in his address.

Helberg pointed to growing competition over rare earth minerals, where China dominates processing and has begun using export controls as a strategic tool. At the same time, logistics corridors and manufacturing hubs have emerged as additional pressure points in the global system.

“The stack is totally interlinked,” he said, referring to the chain from raw materials to finished technology. “There are choke points at every layer.”

The forum repeatedly returned to a central theme: fragmentation.

Countries are adapting to a “shock-prone” world marked by conflict, pandemics, and financial instability. This has led to a shift away from global integration toward more regional and strategic economic blocs.

Middle powers, in particular, face difficult choices. As competition intensifies between the United States and China, many nations are weighing how to align their economic and technological futures.

Dr Pedro Abramovay, Vice President, Programs, Open Society Foundations, argued that the moment offers both risk and opportunity for these countries.

“We need to make sure that middle powers act as middle powers and not just middlemen,” he said, stressing that democracy can shape their role in a changing order.

Abramovay said the current moment has exposed long-standing imbalances in the global system.

“It unveils the reality that existed before,” he said, referring to earlier global arrangements that often did not serve the interests of the Global South.

He noted that domestic political pressure is now reshaping how countries engage globally. Leaders can no longer align externally without responding to internal constituencies.

“That internal pressure can empower those middle powers to assert their sovereignty and negotiate effectively,” Abramovay said.

The forum highlighted growing calls for a reworked international order grounded in sovereignty and public interest rather than narrow economic gain.

“We need to have clear clarity of agenda. We need to have commitment of those leaders expressing that they are there, not representing big corporations or, again, interests and organisations that speak for themselves, but exactly speaking in the name and representing the majority of the world,” Abramovay added.

Frank McCourt, founder of Project Liberty, warned against framing the future as a binary choice between U.S. private-sector dominance and Chinese state-led models.

“This is a false dichotomy,” he said, arguing for a third path that aligns technology with democratic values.

He highlighted growing unease among countries that feel caught between competing systems, noting that many are exploring alternative frameworks for digital governance and economic cooperation.

Human Impact Behind the Strategy
While much of the discussion focused on high-level strategy, speakers acknowledged the human consequences of geoeconomic shifts.

Energy shocks translate into higher costs for households. Supply chain disruptions affect jobs and access to goods. Decisions made in boardrooms and ministries ripple outward to communities worldwide.

“The best-laid plans can be interrupted by unforeseen circumstances. You have to pivot, adapt, and build better,” Sollinger said.

That message echoed throughout the event.

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Multilateral development banks are caught in a tricky dynamic: responding to pressures from key shareholders — notably the U.S. — to loosen restrictions on financing for fossil fuels while working to limit greenhouse gas emissions that negatively affect development. Credit: IPS

By Philippe Benoit
WASHINGTON DC, Oct 14 2025 (IPS)

The World Bank and other multilateral development banks recently have begun reconsidering their self-imposed restrictions on financing fossil fuel projects. This change is being prompted in part by the new U.S. administration and is also supported by developing country experts. Yet, the reality remains that greenhouse gas emissions (GHG) from fossil fuels, and specifically the climate change they induce, can severely undermine multilateral development bank projects and overall developing country growth prospects.

Most of these emissions, however, come from richer big economies, not poorer developing ones. Given the negative effects of these emissions, multilateral development banks need to push richer economies away from fossil fuel-produced GHG emissions, even as they consider softening restrictions on lending for fossil fuel projects in poorer countries.

Last decade, multilateral development banks began restricting funding for fossil fuel projects due to concerns about the negative impact of emissions-induced climate change on development, but also under pressure from the U.S., European and other key stakeholders.

The emissions reduction needed to avoid dangerous levels of climate change must come, unsurprisingly, from the world’s biggest economies. This includes China, with 33 percent of carbon dioxide emissions in 2022, followed by the U.S. with 13 percent, the European Union taken as a block, Russia and then Japan. Together, these countries generate 60 percent of the global total

For example, the World Bank announced in 2017 it would largely stop funding gas drilling and extracting projects. Other multilateral development banks followed suit.

Many have noted the economic benefits being denied to poor countries by these restrictions, such as export revenues and power plants fueled by domestic gas reserves. In contrast, Sub-Saharan Africa and South America have contributed little to historical global emissions — 2 percent and 3 percent, respectively, a trend projected to continue.

As the International Energy Agency consistently highlights in its climate scenarios, the emissions reduction needed to avoid dangerous levels of climate change must come, unsurprisingly, from the world’s biggest economies. This includes China, with 33 percent of carbon dioxide emissions in 2022, followed by the U.S. with 13 percent, the European Union taken as a block, Russia and then Japan. Together, these countries generate 60 percent of the global total. India is also a large emitter, but its level is driven more by a massive population than wealth.

These emissions, and specifically the climate change they drive, present two significant risks for multilateral development banks. First, they undermine the development benefits sought by multilateral development bank projects. Second, they create financial risks for these banks by potentially weakening the capacity of developing country borrowers to repay their loans.

The massive 2022 flooding in Pakistan illustrates the potentially devastating economic impact of climate change, as the country suffered over $30 billion in losses — nearly 10 percent of its GDP. This degree of devastation is not feasible to plan for or adapt to. It needs to be avoided.

Unfortunately, various factors stunt a proper appreciation of climate change’s potential destructive impact. First, there is the ‘past is not prologue’ phenomenon, namely the inevitable uncertainties regarding the future. Looking back or even to the present does not provide a full sense of the future potential destructive impact of climate change.

Second, climate change’s impact grows over time, producing more destruction in a more distant future. Its small impact on today’s stock market where short-term horizons drive valuation contrasts significantly with its potentially large-scale economic damage 15 to 20 years from now as climate change predictably worsens over time. That longer period is particularly relevant to multilateral development banks, whose projects often take years to mature, and whose corresponding loans extend beyond 15 years.

Third, the uncertainty inherent in predicting the future is being exploited by climate minimizers to play down the long-term perils of emissions relative to the shorter-term benefits of fossil fuel projects.

As a result, multilateral development banks are caught in a tricky dynamic: responding to pressures from key shareholders — notably the U.S. — to loosen restrictions on financing for fossil fuels while working to limit greenhouse gas emissions that negatively affect development.

Earlier this year, the World Bank’s president proposed an “all of the above” shift in approach, with more natural gas development projects, as well as nuclear power and other alternatives. Although this proposal was welcomed by some, the World Bank’s board in June deferred a decision on natural gas, even as it approved nuclear power.

This debate will continue, including at the World Bank Annual Meetings this October. But the writing is on the wall as the U.S. pushes multilateral development banks to fund more fossil fuel projects.

This discussion, however, hides a thornier and more important development issue: the pressing and inescapable need in supporting the long-term development of poorer countries to address the fossil fuel emissions of the world’s biggest and richest emitting countries. The prospective destructive impact of climate change on the economies of developing countries is too large to ignore.

In order to reduce this risk to multilateral development banks and their poorer developing country borrowers, these banks should launch an initiative to encourage the largest greenhouse gas emitting countries to reduce their emissions [the “Undertaking to Reduce Global Emissions to support Development” (URGED)].

Although these richer countries aren’t susceptible to being influenced through multilateral development bank lending policies (China’s loan levels have dropped significantly, while the US, most EU countries and Japan aren’t even borrowers), they are all leading shareholders of these banks, active on the executive boards and at shareholder meetings and other convenings. This involvement provides an avenue for multilateral development banks to engage with these countries on this emissions topic that affects development.

For example, the “URGED” initiative — built around analytic work, convenings and outreach regarding the negative development impact of wealthy country emissions — could even be launched at the World Bank’s October annual meetings.

Is that likely in today’s political environment? No, but that doesn’t mean it doesn’t make sense.


Philippe Benoit is managing director at Global Infrastructure Advisory Services 2050. He previously worked as division chief at the World Bank and the International Energy Agency, as a director at SG Investment Bank and as senior adjunct research scholar at Columbia University-SIPA’s Center on Global Energy Policy.

[Previously published in The Hill]

The World Bank-funded Msimbazi Basin Development Project aims to turn Dar es Salaam’s flood-prone areas into a climate-resilient green park. Credit: Kizito Makoye/IPS

By Kizito Makoye
DAR ES SALAAM, Tanzania, Jul 24 2025 (IPS)

When the rains pounded through the night, 44-year-old Teresia Katimba clutched her rosary and prayed silently, her fingers trembling with each whispered Hail Mary. A devout Catholic and mother of four, she stayed awake, huddling her children, hoping the floodwaters wouldn’t engulf them.

In Jangwani, a flood-prone neighborhood in Dar es Salaam, where the Msimbazi River slithers through crowded shacks and a tangle of mangroves, heavy rains routinely trigger flooding and displacement.

“There were nights we didn’t sleep,” says Katimba. “You just sat awake, waiting for the water to come.”

Katimba had learned to read the signs. And on that night, they spelled danger. Her house, nestled precariously beside the riverbank, became a target for misery. Murky floodwater—infested with sewage, discarded plastic bottles and garbage—perpetually surged through the door, soaking mattresses and spoiling maize flour, charcoal and dried sardines.

“My children were terrified; we somehow managed to survive anyway,” she says.

Katimba, an entrepreneur, saw the danger. But like many residents in the impoverished neighborhood, she stayed put—until the floods almost swept away everything.

Today, her life is different. She received compensation in 2024 and relocated to Madale, a dry, forested neighborhood 39 kilometers away, where she built a modest house. “We’re very happy to be here,” she says. “There’s no floodwater to worry about.”

The plight of Katimba’s family highlights wider challenges for many city dwellers.

Teresia Katimba has moved from the dangerous floodplains to safer ground. Credit: Kizito Makoye/IPS

Miraculous Escape

Matilda Msemwa, a resident of Kigogo, recalls how the floods engulfed her living room and destroyed her valued furniture.

Shortly after midnight she sensed a foul smell and an abrupt change in air pressure. Minutes later, the floodwater had risen to waist level.

“I had to scream for help. My daughter nearly drowned as the floods violently filled the house,” she says

Rapid Urbanization

Home to 5.8 million people, Dar es Salaam, one of Africa’s fastest-growing cities, is highly vulnerable to flooding. Around 70 percent of its inhabitants live in informal settlements that are prone to flooding. In 2018, one flooding event at the Msimbazi basin inflicted property damage worth USD 100 million, or 2 percent of the city’s GDP, according to World Bank data.

But for the first time, Dar es Salaam is tackling the flood menace head-on.

Backed by climate financing, the USD 200 million World Bank-funded Msimbazi Basin Development Project aims to turn Dar es Salaam’s flood-prone areas into a climate-resilient green park.

Running through 2028, the project targets the city’s lower Msimbazi River basin, home to 330,000 people living in squalid settlements.

Plans include modern flood control infrastructure—river dredging, terracing, and a complete overhaul of the Jangwani bridge and bus depot.

“This project was conceived after the floods in February 2018, which were very devastating,” says John Morton, a project manager at the World Bank. “The then vice president, who is now the president, convened all the agencies to say, ‘Please come up with a solution for Msimbazi’.”

It was precisely this reality that gave birth to the Msimbazi Opportunity Plan—a comprehensive roadmap to restore the degraded basin and manage future floods. That blueprint is now being realized through a concessional loan from the International Development Association (IDA), part of the World Bank Group.

“IDA credits are concessional,” Morton explains. “They are basically low- or no-interest, with a long grace period and a long repayment period.”

A graphic representation of the Msimbazi Basin Development Project.

More Than Money

But it’s not just the World Bank putting its money where the floodwaters are. The Netherlands and the Spanish Agency for International Development Cooperation (AECID) are also on board.

“The Netherlands’ contribution is a grant,” says Morton. “They’re financing 30 million euros, matching our co-financing for a particular subcomponent of the project… It’s a big earthworks contract. They’ll finance 50 percent up to their 30 million euro cap, and then we finance the rest.”

The Spanish funds, he adds, are structured similarly to IDA’s and will be blended into the project once finalized.

Evacuating to Safety

One of the most controversial parts of the initiative is the resettlement of low-income residents currently living in the floodplain. For Morton, the logic is simple—rescue starts with relocation.

“It was very evident that people did not want to live there,” he says. “Their property was being damaged. Their kids were out of school… the flooding was too devastating.”

According to the World Bank, USD 30 million has been disbursed for resettlement of around 3,500 households trapped in high-risk areas.

Reclaiming the Green

At the center of the project’s vision is not just dry homes but a green, living park. The Msimbazi floodplain, currently a chaotic sprawl of settlements and garbage, will be restored to a natural detention area—a place where floodwaters can spread without destroying lives and property.

“Eventually, what we’ll have is basically a flood detention area that’ll be a park and have natural ecosystems, as well as some more park facility-like things that can naturally flood as it should,” Morton says.

Mangrove forests—critical to both river and marine ecosystems—will be protected and expanded.

“The mangroves provide an important function, both on the coastal side and for the river itself,” says Morton. “Right now, they’re under stress from sedimentation and garbage. The idea is to expand them and maintain their function in purifying the water.”

Waste Not, Want Not

Another key concern for Dar’s residents is waste—both solid and liquid—that chokes the river and pollutes the Indian Ocean. Unplanned dumping of rubbish, household sewage, and industrial effluents has turned the river into a toxic soup in places.

The project, says Morton, addresses this head-on.

“There’s a component on watershed management… including reforestation in the middle and upper basin, protection of riverbanks, and investments in solid waste management,” he says.

Many of these interventions target informal settlements that currently dump waste directly into the river.

“There are investments to help organize them and organize services to make sure that collection improves,” he adds.

On the sewage front, the project will initiate a comprehensive monitoring programme to better understand wastewater flows and engage responsible agencies like DAWASA to develop sewerage plans.

Cautious Optimism

‘It’s a turning point—but only if we get it right,’ says Sylvia Macchi, an urban expert on Msimbazi Valley Project

For Macchi, a respected urban development specialist and long-time observer of Dar es Salaam’s planning chaos, the Msimbazi Valley Development Project is “perhaps the most ambitious climate-resilience intervention this city has ever attempted.”

But she’s not clapping just yet.

“We’ve seen grand plans come and go in Dar,” she says. “What matters now is execution—not promises.”

The professor, who has spent decades researching informal settlements and urban flooding in Tanzania, believes the project has the potential to redraw the city’s future—if handled properly.

“Clearing the valley, relocating at-risk communities, and restoring green spaces along the Msimbazi River—that’s urban transformation at scale,” she tells IPS.

Will it Last?

All eyes are now on the future. The project is scheduled to run until 2028—but what happens then?

“There’s an idea to create an institution to manage the park, real estate, and broader watershed,” Morton says. “That’s being studied now—on the legal aspects and how it would be financed.”

Revenue could come from land sales, developer fees, and even regulated sand mining.

“There’ll be proper sand mining, which will help manage the watershed and generate funds,” he explains.

This institution will oversee not just park maintenance but also ensure that gains in environmental protection and climate resilience are not lost after the project closes.

An Oasis in the Making

In a city gasping for green space, the transformation of the Msimbazi floodplain into an urban oasis is as symbolic as it is strategic. Dar es Salaam doesn’t just need protection from floods—it needs hope. And for Morton, the basin’s rebirth is about more than drainage ditches and concrete.

“This is going to be an asset for the city,” he says. “Not only to reduce flooding but to be a park—a green space that doesn’t exist in Dar es Salaam now. Everybody will have access to it, including low-, medium-, and high-income people. That’s the broader benefit.”

If successful, the Msimbazi Basin Development Project won’t just protect Dar’s poorest—it will provide a blueprint for climate-resilient urban planning across Africa.

“This is about turning adversity into opportunity,” Morton says with measured optimism.

From the banks of the Msimbazi River to the halls of the World Bank, the vision is clear. Dar es Salaam will no longer surrender to the floodwaters. With strong oversight, community input, and green innovation, the city’s greatest vulnerability may just become its most precious asset.

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Remittances now account for an important portion of GDP in Latin America and the Caribbean and support millions of families, so the drop in this source of income is shaking the economies of many countries and deepening poverty in the region. CREDIT: World Bank

By Humberto Márquez
CARACAS, May 18 2020 (IPS)

Remittances that support millions of households in Latin America and the Caribbean have plunged as family members lose jobs and income in their host countries, with entire families sliding back into poverty, as a result of the COVID-19 health crisis and global economic recession.

The region will receive a projected 77.5 billion dollars in remittances this year, 19.3 percent less than the 96 billion dollars it received in 2019, according to provisional forecasts by the World Bank.

The damage “can be understood from the angle of consumption. Six million households, of the 30 million that receive remittances, will not have them this year, and another eight million will lose at least one month of that income,” expert Manuel Orozco told IPS from Washington, D.C.

Remittances in the region average 212 dollars per month, according to studies by the Inter-American Development Bank (IDB).

Remittances “represent 50 percent of the total income of the households that receive money from family members abroad, and increase their savings capacity to more than double that of the average population,” said Orozco, who heads the migration, remittances and development programme at the Inter-American Dialogue organisation.

“The projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country,” the World Bank stated in a report.

The cause of this was the shutdown of entire segments of economic activity in an attempt to curb the spread of the COVID-19 virus, which deprived migrants of their sources of employment and income, thus undermining their ability to send money back home to their families.

This is a global phenomenon, with remittances falling by at least 19.7 percent to 445 billion dollars in low- and middle-income countries as a whole: dropping by 23 percent in sub-Saharan Africa, 22 percent in South Asia, 19.6 percent in the Middle East and North Africa, and 13 percent in East Asia and the Pacific.

Remittances “are a vital source of income for developing countries,” World Bank Group President David Malpass said Apr. 22, noting their role in alleviating poverty, improving nutrition, increasing spending on education and reducing child labour in disadvantaged households.

Alicia Bárcena, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), listed the drop in remittances among the factors that will depress the region’s economy to an unprecedented level, -5.3 percent, with the risk of poverty climbing from 186 million to 214 million inhabitants: 33 percent of the total population.

An empty money transfer office in Las Vegas, Nevada, which is usually packed with migrants sending remittances home from the U.S. to their families in Central America. The city, dedicated to leisure and tourism, has been paralysed by the COVID-19 pandemic, leaving thousands of migrant workers without employment or income. CREDIT: Western Union

Anxiety from the north

The countries that will be hardest hit are those of Central America and Haiti, according to Bárcena. Remittances make up between 30 and 39 percent of Haiti’s gross domestic product (GDP), and last year accounted for 21.8 percent of Honduras’ GDP, 21.2 percent of El Salvador’s and 13.8 percent of Guatemala’s.

“We’re talking about fragile states, with collapsed health systems, weak or corrupt governments, and budgets that were already insufficient to meet people’s needs and are worse off now,” Victoria Gass of the U.S. division of Oxfam’s anti-poverty coalition told IPS from New York.

Orozco stressed that it will affect the consumption capacity of 20 percent of Central Americans, who will be forced to use their savings, on average a quarter of all remittances, for immediate expenses such as buying food and medicine.

In El Salvador, for example, Gabriela Pleitez, 35, who lives in the capital, no longer receives the 200 dollars a month sent to her by her mother, a dental assistant, and her brother, a taxi driver, who live in Los Angeles, California and found themselves suddenly unemployed.

Gabriela completed the 400 dollars she needed to get by with unsteady work as a real estate agent or by selling clothes and beauty products. Now she takes in some money as an assistant at a stand that sells traditional foods.

“I don’t buy bread anymore, and I’m eating less. If you manage to get 10 dollars you have to think carefully what to spend it on. If I don’t pay the water bill, they will cut it off. My landlord won’t charge me rent for three months, in accordance with a government decree, but then he will want me to leave,” she told IPS.

Another Salvadoran, Rosa Ramírez, a 56-year-old mother and grandmother still in charge of an adult daughter and four children, said the pandemic dealt her small flower arrangement business a death blow. “The situation was difficult before, and now, with homes and businesses closed, I’m out of work,” the resident of Zacatecoluca, in the central department of La Paz, told IPS.

Young Latin Americans migrate in search of opportunities and older family members are dependent on their support through remittances to cover essential expenses such as food and medicine. CREDIT: IFAD

Her lifeline is her son Luis, 27, who found a job in 2018 as a carpenter in Stafford, Virginia, in the U.S. southeast, after fleeing from gangs who demanded he make payments to keep them from attacking his then three-year-old daughter.

Luis used to send her between 350 and 400 dollars a month “to pay bills, the rent, and medicine, because I’ve had high blood pressure for years and I can’t go without my medicine,” Rosa said. But now her son has only sent her half that because “he is working fewer hours, one day he gets a job and the next he doesn’t.”

Rosa’s daughter received a temporary 300 dollar aid package provided by the government for the most vulnerable, and was able to cover basic expenses. But Rosa is now anxious about how she will make ends meet. Her daughter, Gabriela, would like to emigrate to the United States, but she has been told that the legal process could take eight years.

Another hard-hit country is Mexico, where 42 percent of the population of 130 million lives in poverty. In 2019, 36 billion dollars in remittances came in, mostly from the 37 million people of Mexican origin living in the United States.

Seven million households received remittances in 2019, but this year 1.7 million of those households will not receive them, Orozco calculated, due to the wave of unemployment that is hitting the U.S.

Intra-regional migration in the South

South America has a more even spread of migration that provides it with remittances, between North America, Spain and other European countries, and the sub-region itself, greatly increased by the millions of Venezuelans who fled to neighbouring countries in the last six years due to the economic, political and humanitarian calamity in their country.

This is the case, for example, of 26-year-old Laura (who preferred not to give her last name), who works in a veterinary clinic in Lima, “which has practically been left without clients due to the lockdown ordered by the Peruvian government. My husband, who used to do various jobs, is not bringing in an income either,” she told IPS from the Peruvian capital.

Poverty in Latin America and the Caribbean will rise with the fall in economic activity, the largest seen in the region in almost a century, and this time there will be little relief from remittances because the COVID-19 pandemic has also sunk the economies of host countries. CREDIT: UNDP

Laura regularly sent 100 dollars a month to her mother, a widow raising two teenage children on the meager salary (equivalent to five dollars a month) of a school teacher in Barquisimeto, a city in central-western Venezuela.

With each remittance, her mother “could buy some medicine, some meat, milk and eggs to complete the CLAP (the acronym for the bag of basic foodstuffs that the government delivers monthly at subsidised prices to poor families), but now I can’t send her almost anything, we’re just trying to scrape by in Lima,” said Laura.

Of the Venezuelans working in Peru, 46 percent were street vendors, 15 percent were employed in shops and six percent worked in restaurants – activities that have all faced restrictions in the COVID-19 pandemic, according to research by Cécile Blouin of the Pontifical Catholic University in Lima.

In the last five years, 1.6 million Venezuelans have migrated to Colombia, 880,000 to Peru, 385,000 to Ecuador, 370,000 to Chile, 250,000 to Brazil and 145,000 to Argentina, according to a platform of United Nations agencies and NGOs monitoring the phenomenon.

The Venezuelan diaspora was added to more traditional migration flows, such as that of Paraguayans in Argentina: 550,000 migrants who sent home some 70 million dollars in 2019, a figure that was already declining due to exchange controls in Buenos Aires.

One third of the 1.3 billion dollars that Bolivia received in remittances in 2019 came from Bolivian migrants in Argentina, Brazil and Chile, but the figure has dropped since March with the measures put in place in the attempt to contain the spread of COVID-19.

In Peru, which has three million citizens living abroad, a quarter of the 3.3 billion dollars the country received in remittances in 2019 came from the 350,000 Peruvians living in Argentina and the 250,000 in Chile.

Until this global upheaval, remittances were counter-cyclical: workers sent more money to their families when their home countries were experiencing crisis and hardship, which this time they have not been able to do because the pandemic and recession have affected all countries.

But there is some hope for the future. According to the International Monetary Fund, after falling -3.0 percent in 2020, the world economy will grow 5.8 percent in 2021 (Latin America 3.4 percent) and remittances will also increase at a similar rate. In low- and middle-income countries they will total 470 billion dollars.

But for millions of Latin American families, like those of Gabriela and Rosa in El Salvador or Laura in Venezuela, that’s too long a wait.

With reporting from Edgardo Ayala in San Salvador.

Cyclone Idai made landfall on Mar. 14 and 15, in Mozambique’s Sofala, Manica and Zambézia provinces. It was followed by Cyclone Kenneth on Apr. 25 which affected the northern province of Cabo Delgado. Recent data from the World Food Programme (WFP) indicates that more than 2.1 million of the country’s 31 million people were affected. This, coupled with the country’s economic downturn, could affect the elections planned for later this year. Credit: Andre Catuera/IPS

By Amos Zacarias
MAPUTO, May 20 2019 (IPS)

Mozambique, which was affected by an unprecedented two tropical cyclones over a matter of weeks, is still reeling from the impact a month after the latest disaster. But resultant devastation caused by the cyclones could impact the country’s elections as concerns are raised over whether the southern African nation can properly hold the ballot scheduled for later this year.

Currently, Mozambique does not have sufficient funds to go to the polls on Oct. 15, with the national electoral body only having 44 percent of the required 235 million dollars needed to hold the election.

Cyclone Idai made landfall on Mar. 14 and 15, in Mozambique’s Sofala, Manica and Zambézia provinces. It was followed by Cyclone Kenneth on Apr. 25 which affected the northern province of Cabo Delgado.

The cyclones have also made it difficult for the National Commission of Elections (CNE) to complete the process of voter registration. Apr. 15 to May 30 was set aside for this but in the regions affected by Cyclone Idai the census have not yet begun and in Cabo Delgado voter registration was interrupted.

The damage caused by the two cyclones is enormous. Recent data from the World Food Programme (WFP) indicates that more than 2.1 million of the country’s 31 million people were affected. Of these, at least 60,000 people in the country’s central and northern regions are still living in makeshift housing centres created by the government and aid partners. While 1,67 million people are still receiving food assistance, health care and water from the government and NGOs, according to WFP.

Official data points to the death of more than 1,000 people and schools, hospitals, roads, bridges and many public buildings were destroyed.

Many have lost everything, including their proof of identity, as researcher and social activist Jessemusse Cacinda explains to IPS: “Many people have lost their documents, and the possibility of being registered to vote is greatly reduced.”

Originally the CNE had aimed to register some 14 million voters this year, up 3 million from the country’s previous national elections. This year will be first time that Mozambicans will vote for provincial governors.

But CNE president Abdul Carimo has acknowledged that the electoral body is far from registering 14 million voters.

Though Mozambique’s Minister of Economy and Finance Adriano Maleiane said in an interview with STV (Mozambican private television channel) that the government and the CNE would find ways to make the elections possible.

“If the solution is reorientation of the expenses within the limit that has been fixed, we probably don’t have to go to make an international [appeal],” said Maleiane.

Economist Manuel Victorino recognises that the difficulties in spending money on the elections and on relief efforts. He tells IPS that the country’s public accounts should also not be ignored.

At the beginning of May, the World Bank announced 545 million dollars in support for those affected by Cyclone Idai in Mozambique, Malawi and Zimbabwe. Of this, 350 million dollars is allocated to Mozambique.

According to World Bank President David Malpass the money will be used to re-establish water supply, for disease prevention and reconstruction, among other things. It is also intended to ensure food security, provide social protection and provide early warning systems in the communities affected by the cyclones.

Rebuilding will not be easy.

Cyclones Idai and Kenneth made landfall amid an economic downturn that has affected the country since 2015 when the government’s programme partners decided to withdraw their support for the state budget, due to the discovery of hidden debts.

The World Bank stated before the cyclones that, “Mozambique continues to be in default of its Eurobond and the two previously undisclosed loans.”

Mozambique has a “real gross domestic product (GDP) growth estimated at 3.3 percent in 2018, down from 3.7 percent in 2017 and 3.8 percent in 2016. This is well below the 7 percent GDP growth achieved on average between 2011 and 2015,” according to the World Bank.

In addition, the Mozambique Tributary Authority says that between 2016 and 2017, more than 2,900 companies closed their doors due to the economic crisis and unemployment has risen. According to the United Nations Educational, Scientific and Cultural Organization, the rate of unemployment in Mozambique is around 21 percent. But since the cyclones a number of private business have also closed.

Despite the sharp rise in debt, the Mozambican economy was expected to rise around 4 percent this year, against 3,3 percent of 2018, according to the International Monetary Fund. The country expects to generate 95 billion dollars of natural gas revenue over the next quarter of a century.

Until then, however, ordinary people are struggling.

“The situation of the country is bad. The cost of living is too high, and the purchasing power of the citizens is dropping a lot. And it has become worse due the cyclones Idai and Kenneth,” António Sabonete, a trader who sells clothes in Tete, central Mozambique, tells IPS.

Sabonete has three children and says he decided to become trader because he lost his job in 2016.

Cacinda says that the economic situation could impact the ruling party’s reputation in the next general elections

The Mozambique Liberation Front, known by it’s Portuguese acronym, FRELIMO, has dominated the polls since the first multi-party elections in 1994.

“From this high cost of living and the purchasing capacity of people has lowered. It can weaken and penalise FRELIMO [in the elections],” says Cacinda, underlining that, “the opposition parties will use all these elements linked to the crisis to build their own speech to try to convince the voters. And it’s obviously going to reduce the number of votes for FRELIMO.”

Cacinda adds that the economic crisis should create opportunities for Mozambican opposition parties to have a stronger showing in the upcoming polls, “Because for this year’s elections we feel that there is some balance.”

But FRELIMO recently publicly condemned corruption and accusations of such from within the party, appealing to justice authorities to continue investigating these cases.

But in addition to clamping down on corruption, Cabinda says that it is time for Mozambican politicians to prioritise the impact of climate change on the country.

“Mozambique and many of the Africans countries are not prepared to deal with climate change.”

“Our politicians must have a clear view of the kind of country they intend to govern and they want to leave for the future generations. Because locals development plans should be made that include issues of climate change as a priority approach,” Cabinda tells IPS.

In the meantime, others worry how they will start again from scratch.

Beira, the capital city Sofala province, was razed by Cyclone Idai. But people have started to return to the devastated city and are picking up the pieces of their lives.

Gervasio John is one of them.

In a telephonic interview with IPS, John says that he and his family returned to his home in Manga Mascarenha, a neighbourhood in Beira.

John is rebuilding his house. He is one of many who are doing so at their own cost as the government does not have the resources to directly support the reconstruction of homes.

“It’s not easy, but I need to do something to restart life after Idai, despite the fact that there is no money,” John says.

**Writing with Nalisha Adams in Johannesburg

By Scott Morris and Gailyn Portelance
WASHINGTON DC, Jan 10 2019 (IPS)

China continues to borrow an average of $2 billion a year from the World Bank, making it one of the Bank’s top borrowers—despite being the world’s second-largest economy and itself a major global lender, according to our study released today.

By doing a project-level analysis of recent World Bank loans to China, we found that the World Bank’s International Bank for Reconstruction and Development (IBRD)—which offers loans to middle-income and credit-worthy lower-income countries—has loaned more than $7.8 billion to China since the country surpassed the bank’s “graduation” income threshold for lending in 2016. The World Bank’s current threshold to trigger IBRD country graduation discussions is $6,895 in gross national income (GNI) per capita.

Lending to countries above this threshold has been controversial, with the United States particularly critical of ongoing lending to China. Critics have pushed for strict graduation standards that would make wealthier borrowers ineligible for bank loans (i.e., “graduation”). Under the 2018 agreement, World Bank shareholders agreed to limit loans to countries above the threshold to only projects that focus on:

• global public goods (projects that benefit the world at large); and,
• capacity-building (projects that help the countries “graduate” away from World Bank lending).

As shown in the figure above, less than half of China’s lending has gone to either of the approved categories, by strict definitions of these categories, since China crossed the income threshold in 2016. Capacity-building projects contribute to only 5 percent of its portfolio, and global public goods make up 38 percent of China’s borrowing portfolio.

However, a broader conception of capacity-building, which focuses on the allocation of resources to the poorest provinces within China improves that picture. Fifty-eight percent of lending to China has been directed to provinces with per capita incomes below the graduation income threshold.

And with a third of the portfolio supporting the reduction of carbon emissions in the country, the bank is meeting a clear global public good mandate. As the world’s largest polluter, China will need to make sizeable investments in climate-friendly finance if we are to make meaningful progress on this critical agenda.

The world has a lot to gain from a sustainable and productive China-World Bank relationship. To lower political heat from the United States and other critics, the Bank should request more from China in terms of interest charges on loans and ensure that all project lending adheres to the 2018 standards.

You can read the full study here.

Excerpt:

St. Vincent and the Grenadines has installed 750 kilowatt hours of photovoltaic panels, which it says reduced its carbon emissions by 800 tonnes annually. Credit: Kenton X. Chance/IPS

By Friday Phiri
PEMBA, Zambia, May 23 2018 (IPS)

Climate finance has never been more urgently needed, with massive investments in climate action required to meet the goals of the Paris Agreement and avoid the devastating effects of a warmer planet.

However, it is an open secret that public financing mechanisms alone are not enough to meet the demand for climate finance, especially for developing countries whose cost to implement their conditional Nationally Determined Contributions (NDCs) and transition to low-carbon economies is pegged at 4.3 trillion dollars.Scaling up and accelerating innovative approaches to climate finance from multiple sources, including the private sector, has emerged as a key strategy to meet the goals of the Paris Agreement.

This is a huge price-tag when compared to the Green Climate Fund (GCF’s) current coffers, which are still being counted in billion terms. The GCF is one of the designated UNFCCC financial instruments created at COP 17 in Durban, South Africa.

Therefore, scaling up and accelerating innovative approaches to climate finance from multiple sources, including the private sector, has emerged as a key strategy to meet the goals of the Paris Agreement through long-term and predictable climate-smart investments.

It is for this reason that the World Bank and partners has been organising platforms in which ways of leveraging public resources with private sector financing are discussed.

One such platform is the Innovate4Climate, launched in 2017 in Barcelona. It serves as an integral part of the global dialogue on climate finance, sustainable development, carbon pricing and markets.

This year’s event, set for Frankfurt from 22-24 May, with four thematic areas, convenes global leaders from industry, government and multilateral agencies for a one-day Summit, workshops and a Marketplace, to work and dialogue on development of innovative financing instruments and approaches to support low-carbon, climate-resilient development pathways.

The Business Case for Climate Investment

Under this pillar, the focus is on the important role of the private sector to fight climate change. It explores climate-related business opportunities such as how to create markets for climate investments, and which approaches are effective in de-risking investment opportunities.

At the meeting, this stream is set to showcase sustainability and climate-resilient initiatives of business associations and industries, present models of collaboration and partnerships between public and private sector, as well as analyse trends and new initiatives in mobilizing development/climate finance, to match developing country investment needs with private sector capital.

A classic example under this theme is the GCF blended model—the use of four financial instruments: concessional loans, equity, grants, and guarantees that can be used through different modalities and at various stages of the financing cycle. Debt and equity instruments help close a specific financing gap for specific projects and programmes, thus bringing more projects and programmes to fruition, while guarantees help to crowd in new private sector financing from multilateral development banks, national development banks, and others.

“We are starting to see it already with the GCF,” says Fenella Aouane, Global Green Growth Institute (GGGI’s) Principal Climate Finance Specialist. “They put out the 500-million-dollar private sector facility…they have gone into the market for the entirety of the private sector globally, they put out a call for proposals to spend up to 500 million. Now relate that to the fact that in a single board meeting in February, they approved projects worth 1 billion.”

NDC Implementation—policies and finance

Another central theme of the Innovate4Climate conference this year is focusing on improving access to finance and support for capacity building to successfully implement countries’ NDCs. This stream targets initiatives aiming at getting “further-faster-together” for NDCs implementation.

The key questions revolve around how to improve access to available funding and mobilize new sources, to strengthen climate finance readiness and accelerate disbursement of climate finance, how to increase and sustain ambitions, and ensure accountability and how to reduce transaction costs through standardisation and simplifying processes.

Innovation for Climate Resilience

Technology is a crucial component of the Paris Agreement’s means of implementation pillar. There is no question that innovative technologies and financial instruments are changing the narrative of climate change resilience. Thus, this stream presents achievements and models in climate smart agriculture, climate action in cities, and disaster risk management among others.

And in relation to the theme of technology, Tony Simon, Director General of the World Agroforestry Centre (ICRAF), recently emphasised the importance of adopting locally-relevant options that enhance agricultural productivity, for example, in relation to climate change adaptation and mitigation through exploring innovative finance instruments.

“Explore innovative finance instruments,” said Simon at the UNFCCC organized first regional Talanoa which was part of the Africa Climate Week, held in Nairobi in April 2018. “Private equity offers a huge amount of money. Use the money from CTCN and other sources to pull in other funds and use that as an opportunity to blend financing for climate change initiatives.”

Climate Market and Metrics

Under this theme, the focus is on the contribution of market-based approaches to efficient and cost-effective climate change mitigation. Delegates will discuss current and future trends around practical outcomes of international negotiations on Article 6 (voluntary cooperation on mitigation and adaptation actions). The theme also seeks to understand what can be expected from aviation and shipping.

“One area where forestry hopes the private sector may be interested is—the airline industry is currently trying to decide how it will offset its emissions as an industry and one way that might do this is through the purchase of carbon offsetting assets so that could be forestry in the form of some level of carbon credit,” GGGI’s Fenella told IPS. “If they do this, then there will be a possible clear return for investors.”

While the Innovate4Climate conference gets underway in Frankfurt next week, it seems the private sector approach by GGGI is already paying dividends. According to its 2017 Annual report, GGGI helped mobilize over half a billion dollars for green investments that aim to support developing countries and emerging economies transition toward environmentally sustainable and socially inclusive economic growth.

It contributed to the mobilization of 524.6 million dollars in green investments in Ethiopia, India, Indonesia, Rwanda and other countries in which the Seoul-based international organization operates.

“This is a record achievement for GGGI, representing more than 11 times the organization’s actual budget in 2017,” said Dr. Frank Rijsberman, GGGI Director-General. “Working closely with partner countries over the years to develop and implement policies that enable the environment to for green growth investment, GGGI is now demonstrating its growing capacity to access and mobilize finance for projects that deliver strong impact.”

With GGGI technical support to design and de-risk bankable projects, of the total amount mobilized, 412 million came from the private sector.

And just to highlight some countries in Africa, in Ethiopia, GGGI produced a pipeline of projects for the Mekelle City Water Project that helped attract 337 million dollars from the international private sector, while in Rwanda, GGGI catalyzed a 60-million investment from the private sector for a Cactus Green Park Development Project in Kigali, to support Rwanda’s secondary cities program.

Role of Multilateral Banks

The discussion on green economic growth and the increasing need for private sector climate financing cannot be complete without mentioning the role of multilateral banks. According to the World Bank, concessional climate finance is one critical strategy under this pillar, to support developing countries to build resilience to worsening climate impacts and to catalyzing private sector climate investment. Through this approach, collectively, the Multilateral Development Banks (MDBs) increased their climate financing in developing countries and emerging economies to 27.4 billion dollars in 2016 – including more than 11 billion from the WBG.

From an African perspective, the African Development Bank (AfDB) has been instrumental to the green growth discourse and the need for African countries not to follow the fossil fuel development pathway.

And in its efforts to foster a green growth economic pathway, in 2014, the AfDB released the first-ever Green Growth Framework—to function as a foundational reference document for its work on green growth. The bank was therefore instrumental in the formulation of Africa Renewable Energy Initiative (AREI).

The initiative, which came out of COP21 and subsequently approved by the African Union, aims at delivering 300GW of renewable energy by 2030.

The AfDB also played a key role in de-risking one of Africa’s gigantic multi-billion-dollar solar power investment in Ouarzazate, Morocco, an example of a green growth economic model, which requires multi-million-dollar investments that cannot be done by public financing alone.

Mustapha Bakkaoury, president of the Moroccan Agency for Solar Energy (MASEN), told delegates at COP 22 that his country’s renewable energy revolution would not have been possible if multilateral partners such as the AfDB had not come on board to act as a guarantor for financing of the project.

About the Global Green Growth Institute (GGGI)

Based in Seoul, GGGI is an intergovernmental organization that supports developing country governments transition to a model of economic growth that is environmentally sustainable and socially inclusive.

GGGI delivers programs in 27 partner countries with technical support, capacity building, policy planning & implementation, and by helping to build a pipeline of bankable green investment projects.

More on GGGI’s events, projects and publications can be found on www.gggi.org.

Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change, at the One Planet Summit in Paris. Credit: AM

By Paris Correspondent
PARIS, Dec 14 2017 (IPS)

As funding to combat climate change has lagged behind lofty words, the One Planet Summit in France this week invited governments and business leaders to put money on the table.

The result was a significant number of international pledges – both for investment in green energy and divestment from fossil fuels – as various sectors responded to the call from French President Emmanuel Macron for urgent action.Some of the drive at the summit came from small island states, which have been battered by recent hurricanes and other disasters.

“We’re not going fast enough,” Macron said at the Dec. 12 summit, which he co-convened with the United Nations and the World Bank. “Some countries present will see their territories disappear. We all have to move forward… The time is now.”

French multinational insurance company AXA announced that it plans to have 12 billion euros in green investments by 2020 and that it would divest 2.4 billion euros from certain coal-company activities.

Meanwhile the World Bank Group (WBG) highlighted its funding of projects in India for street lighting; in West Africa to tackle “coastal erosion, flooding and climate change adaptation”; in Indonesia regarding geothermal-power development; and with the Global Covenant of Mayors in a new “Cities Resilience Programme” (CRP).

“Over the next three years, the CRP will leverage $4.5 billion in World Bank loans to catalyze billions in public and private capital for technical assistance, project co-financing and credit enhancement,” said World Bank Group President Jim Yong Kim.

He said that the programme would essentially “act as an investment banker for cities to structure programs to address their vulnerabilities to climate change”.

Kim also announced that the World Bank would not be financing upstream oil and gas after 2019, but that in “exceptional circumstances”, consideration would be given to such financing in the “poorest countries” where there is a clear benefit in terms of “energy access for the poor”.

The bank said it was on track to meet its target of 28 percent of its lending going to climate action by 2020.

With these and other announcements, the One Planet Summit, held two years after the signing of the landmark Paris Agreement, aimed to add momentum to the push for adequate financing of climate adaptation and mitigation, said some observers, while others termed it a public-relations exercise.

The summit brought together heads of state, local government representatives, non-governmental organizations – and schoolchildren. Journalists were out in force, alongside United Nations delegations, at the Seine Musicale venue, an imposing new arts centre on an island in the river Seine, just outside Paris.

Government leaders arrived by boat with UN Secretary-General António Guterres, Macron and Kim, the co-convenors, for a packed afternoon of panel discussions and speeches, following morning events.

“Technological progress has already revealed the falsehood that responding to climate change is bad for the economy,” said Guterres. “Finance could be, should be and will be a decisive factor.”

Some of the drive at the summit came from small island states, which have been battered by recent hurricanes and other disasters.

Caribbean representatives announced the launch of a 8-billion-dollar investment plan to create the world’s first “climate-smart zone”. The bodies involved include the Inter-American Development Bank, the World Bank, the Caribbean Development Bank and private groups, forming a “Caribbean Climate-Smart Coalition”.

The goal is to find a way “to break through the systemic obstacles that stop finance flowing to climate-smart investments”, the Caribbean Development Bank said.

Juvenel Moȉse, Haiti’s president and a participant at the summit, spoke of the vulnerability of the region, emphasizing that all the islands are suffering from the impacts of climate change. He said that Haiti was in a “very fragile zone”.

American actor Sean Penn, also present, said he had got involved in helping Haiti to rebuild after the 2010 earthquake that devastated the country, and he said more financing was needed.

“I call on all those gathered to stand with Haiti,” he urged.

Meanwhile, Canada and the World Bank Group said they would support small island developing states to expand their renewable-energy infrastructure to achieve greater access to energy and to decrease pollution.

In side events around the summit, groups such as the International Development Finance Club (which groups 23 international, national and regional development banks from across the world), highlighted their “green financial flows”.

The group said that in 2016, IDFC members made new commitments representing 173 billion dollars in finance, an increase of 30 billion from 2015.

The eve of the summit, Dec. 11, was titled Climate Finance Day, and it was also the 20th anniversary of the Kyoto Protocol. Patricia Espinosa, the Executive Secretary of UN Climate Change (UNFCCC), told journalists that the long years of negotiations had provided a framework in which all sectors of society could take action, as governments “cannot do it alone”.

She said there was a growing sense of urgency, especially after recent extreme weather events that had seen some communities “losing everything they have built throughout their lives”. More support was needed for adaptation, she and other officials noted.

At the summit, the Agence Française de Développement – an IDFC member — signed accords with Mauritius, Niger, Tunisia and the Comoros – as part of the agency’s Adapt’Action Facility.

With financing of 30 million euros over four years, Adapt’Action seeks to “accompany 15 developing countries that are particularly vulnerable to climate change impacts, in the implementation of the Paris Agreement regarding adaptation,” the agency stated.

An official from Niger spoke compellingly of problems that included desertification. The country has been cited as an example of France not doing enough for its former colonies, and political analysts question whether that will change under Macron.

The European Union meanwhile said that its External Investment Plan (EIP) is set to mobilise some 44 billion euros to “partner countries in Africa and the EU Neighbourhood” by 2020.

Among its goals, the EIP aims to “contribute to the UN’s sustainable development goals while tackling some of the root causes of migration,” according to the EU.

Regarding Asia and the Pacific, officials at the summit said action by countries in the region were “encouraging”. Heads of state included the prime ministers of Bangladesh and Fiji, who spoke of their climate initiatives. Fiji’s Prime Minister Frank Bainimarama said the country was among the first emerging states to offer a green bond.

The international nature of the summit made the U.S. absence even more noticeable. As U.S. President Donald Trump had announced earlier this year that the country would withdraw from the Paris Agreement, he was not invited, French officials said.

Other American climate figures were present, however, such as businessman and former New York Mayor Michael Bloomberg, former California governor and actor Arnold Schwarzenegger, Microsoft founder Bill Gates and former Secretary of State John Kerry.

Bloomberg said that around the world, businesses were taking “responsible” action because investors want to put their money in environmentally friendly companies.

Still, for some NGOs, not enough is being done, and the summit was more of what they had heard before.

“If governments and business are sincere in their commitment to the goals of the Paris Agreement, they would cease their financing of dirty and harmful energy projects around the world and would instead accept their responsibility for providing public finance to address climate change instead of letting business dictate the agenda,” said Meena Raman of Third World Network.

Garment workers in Bangladesh. Should Bangladeshis, Malaysians and others worry about their countries’ downward slide in the ‘Doing Business’ ranking? Credit: IPS

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Dec 22 2016 (IPS)

Without any hint of irony, the World Bank’s most recent Doing Business Report 2017 promises ‘Equal Opportunity for All’. Bangladesh ranked 176th among 190 economies, below civil war-ravaged Iraq and Syria! Bangladesh even slipped two places from 174 in the 2016 ranking and is three places below its 2015 ranking.

Malaysia, too, slipped five places. The Doing Business Report (DBR) 2017 ranked Malaysia at 23, down from 18 in the previous two reports for 2015 and 2016. Incredibly, this had nothing to do with news of the biggest scandal ever in the country’s history.

Malaysia seems to have slipped because, it had “made starting a business more difficult by requiring that companies with an annual revenue of more than MYR 500,000 register as a GST payer,” and made tax payments more complex “by replacing sales tax with GST”.

Previously, Malaysia was recognized in DBR 2016 for reducing the property tax rate from 12% to 10% of the annual rental value for commercial properties in 2014, even though this contributed negatively to overall government revenue or public finance.

Thus, ‘be damned if you do, and be damned if you don’t’. Countries are asked to raise domestic revenue, but stand to slip in their rankings if they act to raise tax revenues. Taxation may reduce the incentive to invest, but low tax revenue would also hurt the business environment if it reduces government revenue needed to finance public infrastructure, education, healthcare and business services.

Rankings

Should Bangladeshis, Malaysians and others worry about their countries’ downward slide in the ‘Doing Business’ ranking? Should those doing better be elated about their elevation in the rankings? The simple answer is ‘no’, but it really depends.

What do the rankings imply? How does the World Bank compare countries with very different economic structures at different stages of development and with varied capabilities address very diverse problems? By ranking countries, the DBR ignores their heterogeneity and essentially treats them as comparable on a single scale.

This serious methodological problem was pointed out by an independent panel in 2013, headed by South Africa’s Vice President and former finance minister Trevor Manuel. It concluded that “The Doing Business report has the potential to be misinterpreted…. It should not be viewed as providing a one-size-fits-all template for development…. The evidence in favour of specific country reforms is contingent on many auxiliary factors not captured by Doing Business report topics.”

By ranking countries, the DBR ignores their heterogeneity and essentially treats them as comparable on a single scale. This serious methodological problem was pointed out by an independent panel in 2013, headed by South Africa’s Vice President and former finance minister Trevor Manuel.
The panel also noted that “the act of ranking countries may appear devoid of value judgement, but it is, in reality, an arbitrary method of summarising vast amounts of complex information as a single number.” It recommended dropping the overall aggregate ranking from the report.

The independent panel had been set up by the Bank in response to heavy criticism of the DBR. Yet, the Bank has chosen to ignore most of the independent panel’s recommendations, especially to drop overall country rankings.

In response to criticisms of overall country ranking, the Bank added a ‘distance to frontier’ measure. Thus, instead of the ordinal measures used for ranking, the ostensible (cardinal) ‘distance’ from the best performance measure for each indicator became the new basis for ranking.

Yet, it does not address the main concern – heterogeneous countries cannot be ranked mechanically. Thus, not surprisingly, the best performers are rich, developed countries.

Ignoring criticisms

Besides the external panel, the World Bank also ignored much of its own internal review. For example, its legal unit has been uneasy about the DBR process and findings.

The unit’s September 2012 internal review of the 2013 DBR questioned the ranking’s ‘manipulation’ and noted the ‘embedded policy preferences’ underlying some indicators. It went so far as to accuse the DBR of bias as it ‘tends to ignore the positive effects of regulation’.

For example, the ‘starting a business’ indicator uses the limited liability corporate form as the only ‘proxy’ for business creation. The legal unit considered this approach ‘deceptive’ as there is no evidence that easing “company formation rules leads to increases in business creation”.

The Bank’s legal unit also argued that the DBR methodology is seriously flawed, highlighting ‘black box’ data gaps, ‘cherry picking’ background papers, and ‘double counting’. The legal team even asked, “are high income the Organisation for Economic Co-operation and Development (OECD) countries placed higher in the Doing Business rankings because they have implemented the (types of) reforms advocated by the report?” In its 26 September 2015 issue, The Economist, usually a cheerleader for pro-business reforms, argued that the DBR ranking did not provide a reliable guide to investors.

Countries have perversely amended regulations to try to improve their ranking in order to impress donors or prospective foreign investors, rather than to actually increase investments and growth. Countries are also likely to do more to favour foreign investments, rather than domestic investments, which are generally more likely to contribute to sustainable development.

Biases

The DBR survey is generally biased against regulations and taxes. Following earlier criticisms, ease of hiring and firing workers and flexibility of working hours are no longer used in the overall ranking, but nonetheless remain in the report, highlighting the authors’ appreciation of such regulations. Conversely, the DBR continues to look unfavourably on a country which seeks to enhance workplace regulations by improving wages, working conditions or occupational safety, or by allowing workers in export processing zones to unionize.

Surprisingly, the DBR does not cover security, corruption, market size, financial stability, infrastructure, skills and other important elements often deemed important for attracting business investments. Moreover, many DBR indicators are considered to be quite superficial. For example, the survey’s credit market indicator does not reflect how well credit is allocated. Similarly, the DBR survey focuses on how difficult it is to get electricity connected without taking into account the state of electricity generation or distribution, which often depends on a country’s level of development.

The DBR approach is very ‘legalistic’ as it mainly looks at formal regulations without considering how such regulations affect SMEs or other investors besides the stereotypical foreign investor. It also ignores, norms and other institutions including extra-legal processes. For example, Mary Hallward-Driemeier of the World Bank and Lant Pritchett of Harvard compared the DBR with the Bank’s firm surveys. They found large gaps between the DBR report and reality.

They also found ‘almost zero correlation’ between DB findings and other Bank surveys of business enterprises. For instance, the average amount of time that companies report spending on three tasks — obtaining construction permits, getting operating licenses and importing goods — is ‘much, much less’ than those cited in the DBR. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.29.3.121]

Pritchett, who once worked for the Bank, has argued that developing country policy makers focusing on improving their DBR rankings could divert scarce resources away from more important and urgent reforms, e.g., to help the government better administer, implement and enforce business regulations.

“The pretense that Doing Business measures the real rules, and that if we just modestly improve these Doing Business indicators, they would somehow become the reality of what the rules are and how business is really done — I think that’s a very dangerous fiction.” [http://blogs.wsj.com/economics/2015/08/04/is-the-world-banks-doing-business-report-at-odds-with-how-business-is-done-in-the-developing-world/].

In sum, the DBR assumes that there are universally ‘good’ and ‘bad’ policies regardless of context. This approach clearly misses the need for concrete analysis in specific contexts. Not surprisingly, the DBR continues to promote deregulation as the best strategy for promoting economic growth. To be fair, the Bank acknowledges that the DBR should not be seen as advocating a one-size-fits-all model, but the Bank’s own promotion and coverage of the report suggests otherwise.

Excerpt:

A worker arranges bricks for burning at a traditional brick factory in Munshiganj, Bangladesh. Such factories are responsible for a large amount of carbon emissions. Credit: Farid Ahmed/IPS

By Farid Ahmed
DHAKA, Dec 19 2016 (IPS)

Bangladesh is weighing a World Bank proposal to introduce a carbon tax, the first of its kind in the South Asian nation, amid fears of a backlash from consumers.

In its proposal, the World Bank suggested that the government introduce the carbon tax initially only on petroleum products. Bank officials advised the government to keep the market price of fuel unchanged by slashing its own profits."The cost of a carbon tax should not be passed on to the consumers." --Dr. Saleemul Huq

Fuel costs are generally much higher in Bangladesh compared to the international market, which has allowed the government to make a huge profit in past years.

“We need to weigh the proposal to assess its pros and cons,” Bangladesh’s state minister for Finance and Planning M.A. Mannan told IPS in Dhaka.

Previous efforts to tax polluting industries by Finance Minister Abul Maal Abdul Muhith have failed to gain traction, and several senior government officials who asked not to be named believe the government will not act quickly on any new tax.

Still, many climate change activists and scientists were largely happy with the proposal and said those responsible for carbon emissions must pay the price. They believe imposing such a tax would trigger new investments in clean technology, but stress that the market price of fuel should be kept stable for consumers.

“Bangladesh has no obligation to impose a carbon tax but nevertheless it should do so to both raise revenue for investments in cleaner energy and also to impose some cost on polluting energy,” said Dr Saleemul Huq, Director of the International Centre for Climate Change and Development.

“At present, the cost the consumers bear is much higher than necessary when the global price of imported petroleum is considered. Hence the cost of a carbon tax should not be passed on to the consumers,” Dr. Huq told IPS.

He said that the tax collected thus would accrue to the government, which could then allocate it to investments in cleaner energy.

The chief of a leading consumers’ rights group disagreed. “I don’t think it’s justified to impose a carbon tax right at this moment,” Ghulam Rahman, president of the Consumers Association of Bangladesh, told IPS.

Rahman, who earlier headed Bangladesh’s Anti-Corruption Commission, said it would not only affect consumers but also hamper the country’s production and development.

Bangladesh should not rush to impose a carbon tax when many of the world’s largest polluters have failed to do so, he said.

In a move to address the impacts of climate change, Bangladesh amended its constitution in 2011 to include provisions for the protection of the environment and safeguarding natural resources for current and future generations. Moreover, as part of its Nationally Determined Contribution during the COP21 meeting in Paris, Bangladesh committed to reducing climate-harming emissions by 5 percent.

Rashed Al Mahmud Titumir, a professor of economics at the University of Dhaka, said the government should take effective measures to curb carbon emissions, but instead of introducing a carbon tax immediately, it should encourage green and clean technologies by offering tax breaks and other benefits.

Apart from their adverse impacts on the environment, unchecked carbon dioxide emissions take a huge toll on public health, said Titumir, who also heads the policy research group Unnayan Onneshan.

With assistance from the World Bank, Bangladesh, one of the most vulnerable countries to climate change due to its low-lying geography, was the first to set up its own Climate Change Trust Fund to help mitigate and adapt to climate change, and this time Bangladesh could take the lead again.

Zahid Hussain, lead economist at the World Bank’s Dhaka office, said, “Petroleum products are the best option for Bangladesh to introduce a carbon tax since the government was making a huge profit by selling petroleum products.”

Initially, Bangladesh could focus on fuel only since it might be difficult to collect carbon taxes from other sources, he said.

Hussain argued that while oil prices do fluctuate, the government could assist the most vulnerable segments of the population.

Apart from tapping a significant source of revenue, Hussain said a carbon tax could even help Bangladesh and its exporters carve a niche the increasingly environmentally-conscious developed markets across the world.

A World Bank document did not rule out the challenges of introducing carbon tax and said policy-makers could justifiably be concerned about the impacts of carbon taxes on the poorer segments of the population and on some economic sectors.

“A carbon tax can have significant benefits for Bangladesh, but it’s not without challenges,” it said.

Albert Kanga's plantain farm on the outskirts of Abidjan, Cote d'Ivoire. Credit: Friday Phiri/IPS

By Friday Phiri
ABIDJAN, Cote d'Ivoire, Jul 18 2016 (IPS)

Albert Kanga Azaguie no longer considers himself a smallholder farmer. By learning and monitoring the supply and demand value chains of one of the country’s staple crops, plantain (similar to bananas), Kanga ventured into off-season production to sell his produce at relatively higher prices.

“I am now a big farmer. The logic is simple: I deal in off-season plantain. When there is almost nothing on the market, mine is ready and therefore sells at a higher price,” says Kanga, who owns a 15 Ha plantain farm 30 kilometres from Abidjan, the Ivorian capital.

Harvesting 12 tonnes on average per hectare, Kanga is one of a few farmers re-writing the African story on agriculture, defying the common tale of a poor, hungry and food-insecure region with more than 232 million undernourished people – approximately one in four.

Albert Kanga on his plantain farm. Credit: Friday Phiri/IPS

With an estimated food import bill valued at 35.4 billion dollars in 2015, experts consider this scenario ironic because of Africa’s potential, boasting 60 percent of the world’s unused arable land, and where 60 percent of the workforce is employed in agriculture, accounting for roughly a third of the continent’s GDP.

The question is why? Several reasons emerge which include structural challenges rooted in poor infrastructure, governance and weak market value chains and institutions, resulting in low productivity. Additionally, women, who form the backbone of agricultural labour, are systematically discriminated against in terms of land ownership and other incentives such as credit and inputs, limiting their opportunities to benefit from agricultural value chains.

“Women own only one percent of land in Africa, receive one percent of agricultural credit and yet, constitute the majority of the agricultural labour force,” says Buba Khan, Africa Advocacy Officer at ActionAid.

Khan believes Africa may not be able to achieve food security, let alone sovereignty, if women remain marginalised in terms of land rights, and the World Bank Agenda for Global Food System sourcebook supports the ‘closing the gender gap’ argument.

According to the sourcebook, ensuring that women have the same access to assets, inputs, and services in agriculture as men could increase women’s yields on farms by 20-30 percent and potentially reduce the number of hungry people by 12-17 percent.

But empowering women is just one of the key pieces to the puzzle. According to the African Development Bank’s Feeding Africa agenda, number two on its agenda is dealing with deep-seated structural challenges, requiring ambition and investments.

According to the Bank’s analysis, transforming agricultural value chains would require approximately 280-340 billion dollars over the next decade, and this would likely create new markets worth 55-65 billion dollars per year by 2025. And the AfDB envisages quadrupling its investments from a current annual average of US 612 million to about 2.4 billion dollars to achieve this ambition.

“Our goal is clear: achieve food self-sufficiency for Africa in 10 years, eliminate malnutrition and hunger and move Africa to the top of agricultural value chains, and accelerate access to water and sanitation,” said Akinwumi Adesina, the AfDB Group President at the 2016 Annual Meetings, highlighting that the major focus of the bank’s “Feed Africa” agenda, is transforming agriculture into a business for farmers.

But even with this ambitious goal, and the colossal financial resources on the table, the how question remains critical. Through its strategy, the Bank sets to use agriculture as a starting point for industrialisation through multi-sectoral interventions in infrastructure, intensive use of agro inputs, mechanisation, enhanced access to credit and improved land tenure systems.

Notwithstanding these well tabulated interventions, there are trade-offs required to create a balance in either system considering the climate change challenge already causing havoc in the agriculture sector. The two schools of thought for agriculture development—Intensification (more yields per unit through intensive agronomical practices) and Extensification (bringing more land under cultivation), require a right balance.

“Agriculture matters for Africa’s development, it is the single largest source of income, food and market security, and it is also the single largest source of jobs. Yet, agriculture faces some enormous challenges, the most urgent being climate change and the sector is called to act. But there are trade-offs to either approaches of up-scaling. For example, extensification entails cutting more forests and in some cases, displacing people—both of which have a negative impact on Agriculture’s role to climate change mitigation,” says Sarwatt Hussein, Head of Communications at World Bank’s Agriculture Global Practice.

And this is a point that Ivorian Minister of Agriculture and Rural Development, Mamadou Coulibaly Sangafowa, stresses regarding Agricultural investments in Africa. “The emphasis is that agricultural investments should be climate-sensitive to unlock the opportunities especially for young Africans, and stop them from crossing the Mediterranean seeking economic opportunities elsewhere,” he said.

Coulibaly, who is also president of the African conference of Agricultural Ministers, identifies the need to improve specialised agricultural communication, without which farmers would continue working in the dark. “Farmers need information about latest technologies but it is not getting to them when they need it the most,” he said, highlighting the existing information gap, which the World Bank and the African Media Initiative (AMI) have also noted regarding media coverage of Agriculture in Africa.

While agriculture accounts for well over 60 percent of national economic activity and revenue in Africa, the sector gets a disproportionately small amount of media coverage, contributing less than 10 percent to the national economic and political discourse. And this underreporting has resulted not only in limited public knowledge of what actually goes on in the sector, but also in general, misconceptions about its place in the national and regional economy, notes the AMI-World bank analysis.

Whichever route Africa uses to achieve the overall target of feeding itself and be a net food exporter by 2025, Ivorian farmer, Albert Kanga has already started the journey—thanks to the World Bank supported West Africa Agricultural Productivity Programme-WAAPP, which introduced him to off-season production techniques.

According to Abdoulaye Toure, lead agro-economist at the World Bank, the WAAPP initiative which started in 2007 has changed the face of agriculture in the region. “When we started in 2007, there was a huge food deficit gap in West Africa, with productivity at around 20 percent, but it is now at 30 percent, and two similar programmes in Eastern and Southern Africa, have been launched as a result,” said Toure.

Some of the key elements of the programme include research, training of young scientists to replace the older generation, and dissemination of improved technologies to farmers. With in-country cluster research stations set up based on a particular country’s potential, there is improved information sharing on best practices.

“With new varieties introduced and off-season irrigation techniques through WAAPP, I am now an example,” says Farmer Kanga, who does not only supply to big supermarkets, but also exports to international markets such as Italy.

He recalls how he started the farm named after his late brother, Dougba, and wishes “he was alive to see how successful it has become.”

The feed Africa agenda targets to feed 150 million, and lift 100 million people out of poverty by 2025. But is it an achievable dream? Farmer Kanga is already showing that it is doable.

The pastoralists of Ethiopia’s Somali region are forced to move constantly in search of pasture and watering holes for their animals. Credit: William Lloyd-George/IPS

By Thalif Deen
UNITED NATIONS, Apr 28 2016 (IPS)

Ten presidents and prime ministers from around the world will work together to resolve the growing global water crisis amid warnings that the world may face a 40 percent shortfall in water availability by 2030.

The figures continue to be staggering:  despite improvements, at least 663 million still do not have access to safe drinking water.

And projecting into the future, the United Nations says an estimated 1.8 billion people – out of a total world population of over 7 billion – will live in countries or regions with water scarcities.

The crisis has been aggravated by several factors, including climate change (triggering droughts) and military conflicts (where water is being used as a weapon of war in several war zones, including Iraq, Yemen and Syria).

The High Level Panel on Water, announced jointly by the the United Nations and World Bank last week. is expected to mobilise financial resources and scale up investments for increased water supplies. It will be co-chaired by President Ameenah Gurib of Mauritius and President Enrique Peña Nieto of Mexico. The other eight world leaders on the panel include: Malcolm Turnbull, Prime Minister of Australia; Sheikh Hasina, Prime Minister of Bangladesh; János Áder, President of Hungary; Abdullah Ensour, Prime Minister of Jordan; Mark Rutte, Prime Minister of the Netherlands; Jacob Zuma, President of South Africa; Macky Sall, President of Senegal; and Emomali Rahmon, President of Tajikistan.

At a UN panel discussion last week, UN Deputy Secretary-General Jan Eliasson of Sweden said water lies at the nexus between sustainable development and climate action.

Referring to the two extremes in weather patterns– droughts on the one hand and floods on the other – Eliasson said one of his colleagues who visited Pakistan after a huge flood, remarked: “Too much water and not a drop to drink.”

When world leaders held a summit meeting last September to adopt the UN’s post-2015 development agenda, they also approved 17 SDGs, including the elimination of extreme poverty and hunger and the provision of safe drinking water to every single individual in the world – by a targeted date of 2030.

But will this target be reached by the 15 year deadline?

Sanjay Wijesekera, Associate Director, Programmes, and Chief of Water, Sanitation and Hygiene at the UN children’s agency UNICEF, told IPS: “As we enter the SDG era, there is no doubt that the goal to get ‘safely managed’ water to every single person on earth within the next 15 years is going to be a challenge. What we have learned from the Millennium Development Goals (MDGs) is that water cannot be successfully tackled in isolation.”

He said water safety is compromised every day from poor sanitation, which is widespread in many countries around the world, particularly in South Asia and sub-Saharan Africa.

Currently, nearly two billion people worldwide are estimated to be drinking water which may be faecally contaminated.

As a result, UNICEF and others working on access to safe water, will have to redouble their efforts on improving people’s access to and use of toilets, and especially to end open defecation.

“As we address water, sanitation and hygiene, we must also take into account climate change. Droughts, floods, and extreme weather conditions all have an effect on the availability and the safety of water,” said Wijesekera.

He also pointed out that some 160 million children under-5 live in areas at high risk of drought, while around half a billion live in flood zones.

Asked how best the water crisis can be resolved, Darcey O’Callaghan, International Policy Director at Food and Water Watch, told IPS the global water crisis must be addressed in two primary ways.

“First, we must provide clean, safe, sufficient water to all people because water is a human right. Affordability is a key component of meeting this need. Second, we must protect water sustainability by not overdrawing watersheds beyond their natural recharge rate.”

“If we allow water sources to run dry, then we lose the ability to protect people’s human rights. So clearly, we must address these two components in tandem,” she said.

To keep water affordable, she pointed out, it must be managed by a public entity, not a private, for-profit one. Allowing corporations to control access to water (described as “water privatization”) has failed communities around the globe, resulting in poor service, higher rates and degraded water quality.

Corporations like Veolia and Suez — and their subsidiaries around the world—are seeking to profit off of managing local water systems, she said, pointing out that financial institutions like the World Bank and regional development banks often place conditions on loans to developing countries that require these systems to be privatized.

“But this is a recipe for disaster. Profits should not be the priority when it comes to providing water and sanitation services to people”, said O’Callaghan.

Asked if the public should pay for water, she said there is no longer any question that water and sanitation are both human rights. What the public pays for is water infrastructure upkeep and the cost of running water through the networks that deliver this resource to our homes, schools, businesses and government institutions.

“The UN has established guidelines for water affordability –three percent of household income—and these guidelines protect the human right to water. If the water service fee is beyond a household’s ability to pay, it is a human rights violation.”

One approach that has shown promise are public-public partnerships (PPPs). In contrast to privatization, which puts public needs into the hands of profit-seeking corporations, PPPs bring together public officials, workers and communities to provide better service for all users more efficiently.

PUPs allow two or more public water utilities or non-governmental organizations to join forces and leverage their shared capacities. PPPs allow multiple public utilities to pool resources, buying power and technical expertise, she said.

The benefits of scale and shared resources can deliver higher public efficiencies and lower costs. These public partnerships, whether domestic or international, improve and promote public delivery of water through sharing best practices, said O’Callaghan.

The writer can be contacted at thalifdeen@aol.com

By Roberto Savio
ROME, Jan 27 2016 (IPS)

The rich and the powerful, who meet every year at the World Economic Forum (WEF), were in a gloomy mood this time. Not only because the day they met close to eight trillion dollars has been wiped off global equity markets by a “correction”. But because no leader could be in a buoyant mood.

Roberto Savio

German Chancellor Angela Merkel is losing ground because of the way she handled the refugee crisis. French President Francois Hollande is facing decline in the polls that are favoring Marine Le Pen. Spanish president Mariano Rajoy practically lost the elections. Italian President Matteo Renzi is facing a very serious crisis in the Italian banking system, which could shatter the third economy of Europe. And the leaders from China, Brazil, India, Nigeria and other economies from the emerging countries (as they are called in economic jargon), are all going through a serious economic slowdown, which is affecting also the economies of the North. The absence of the presidents of Brazil and China was a telling sign.

However the last Davos (20-23 January) will remain in the history of the WEF, as the best example of the growing disconnection between the elites and the citizens. The theme of the Forum was “how to master the fourth revolution,” a thesis that Klaus Schwab the founder and CEO of Davos exposed in a book published few weeks before. The theory is that we are now facing a fusion of all technologies, that will completely change the system of production and work.

The First Industrial Revolution was to replace, at beginning of the 19th century, human power with machines. Then at the end of that century came the Second Industrial Revolution, which was to combine science with industry, with a total change of the system of production. Then came the era of computers, at the middle of last century, making the Third Industrial Revolution, the digital one. And now, according Schwab, we are entering the fourth revolution, where workers will be substituted by robots and mechanization.

The Swiss Bank UBS released in the conference a study in which it reports that the Fourth Revolution will “benefit those holding more.” In other words, the rich will become richer…it is important for the uninitiated to know that the money that goes to the superrich, is not printed for them. In other words, it is money that is sucked from the pockets of people.

Davos created two notable reactions: the first came with the creation of the World Social Forum (WSF), in 1991, where 40,000 social activists convened to denounce as illegitimate the gathering of the rich and powerful in Davos. They said it gave the elite a platform for decision making, without anything being mandated by citizens, and directed mainly to interests of the rich.

The WSF declared that “another world is possible,” in opposition to the Washington Consensus, formulated by the International Monetary Fund (IMF), the World Bank, and the Treasury of the United States. The consensus declared that since capitalism triumphed over Communism, the path to follow was to dismantle the state as much as possible, privatize, slash social costs which are by definition unproductive, and eliminate any barrier to the free markets. The problem was that, to avoid political contagion, the WSF established rules which reduced the Forums to internal debating and sharing among the participants, without the ability to act on the political institutions. In 2001, Davos did consider Porto Alegre a dangerous alternative; soon it went out of its radar.

At the last Davos, the WSF was not any point of reference. But it was the other actor, the international aid organization Oxfam, which has been presenting at every WEF a report on Global Wealth.

Those reports have been documenting how fast the concentration of wealth at an obscene level is creating a world of inequality not known since the First Industrial Revolution. In 2010, 388 individuals owned the same wealth as 3.6 billion people, half of humankind. In 2014, just 80 people owned as much as 3.8 billion people. And in 2015, the number came down to 62 individuals. And the concentration of wealth is accelerating. In its report of 2015, Oxfam predicted that the wealth of the top 1 per cent would overtake the rest of the population by 2016: in fact, that was reached within ten months. Twenty years ago, the superrich 1 per cent had the equivalent of 62 per cent of the world population.

It would have been logical to expect that those who run the world, looking at the unprecedented phenomena of a fast growing inequality, would have connected Oxfam report with that of UBS, and consider the new and immense challenge that the present economic and political system is facing. Also because the Fourth Revolution foresees the phasing out of workers from whatever function can be taken by machines. According to Schwab, the use of robots in production will go from the present 12 per cent to 55 per cent in 2050. This will cause obviously a dramatic unemployment, in a society where the social safety net is already in a steep decline.

Instead, the WEF largely ignored the issue of inequality, echoing the present level of lack of interest in the political institutions. We are well ahead in the American presidential campaign, and if it were not for one candidate, Bernie Sanders, the issue would have been ignored or sidestepped by the other 14 candidates. There is no reference to inequality in the European political debate either, apart from ritual declarations: refugees are now a much more pressing issue. It is a sign of the times that the financial institutions, like IMF and the World Bank, are way ahead of political institutions, releasing a number of studies on how inequality is a drag on economic development, and how its social impact has a very negative impact on the central issue of democracy and participation. The United Nations has done of inequality a central issue. Alicia Barcena, the Executive secretary of CEPAL, the Regional Center for Latin America, has also published in time for Davos a very worrying report on the stagnation in which the region is entering, and indicating the issue of inequality as an urgent problem.

But beside inequality, also the very central issue of climate change was largely ignored. All this despite the participants in the Paris Conference on Climate, recognized that the engagements taken by all countries will bring down the temperature of no more than 3.7 degrees, when a safe target would be 1.5 degrees. In spite of this very dangerous failure, the leaders in Paris gave lot of hopeful declarations, stating that the solution will come from the technological development, driven by the markets. It would have been logical to think, that in a large gathering of technological titans, with political leaders, the issue of climate change would have been a clear priority.

So, let us agree on the lesson from Davos. The rich and powerful had all the necessary data for focusing on existential issues for the planet and its inhabitants. Yet they failed to do so. This is a powerful example of the disconnection between the concern of citizens and their elite. The political and financial system is more and more self reverent: but is also fast losing legitimacy in the eyes of many people. Alternative candidates like Donald Trump or Matteo Salvini in Italy, or governments like those of Hungary and Poland, would have never been possible without a massive discontent. What is increasingly at stage is democracy itself? Are we entering in a Weimar stage of the world?

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Excerpt:

By Anuradha Mittal
OAKLAND, California, Jan 25 2016 (IPS)

With the African Union celebrating the African Year of Human Rights at its 26th summit, at its headquarters in Addis, Ethiopia, the venue raises serious concerns about commitment to human rights.

Anuradha Mittal

Ethiopia’s so called economic development policies have not only ignored but enabled and exacerbated civil and human rights abuses in the country. Case and point is the ongoing land grabbing affecting several regions of the country. Under the controversial “villagization” program, the Ethiopian government is forcibly relocating over 1.5 million people to make land available to investors for so called economic growth. Since last November, the country’s ruling party, EPRDF’s, “Master Plan” to expand the capital Addis has been the flashpoint for protests in Oromia which will impact some 2 million people. At least 140 protestors have been killed by security forces while many more have been injured and arrested, including political leaders like Bekele Gerba, Deputy Chairman of the Oromo Federalist Congress, Oromia’s largest legally registered political party. Arrested on December 23, 2015, his whereabouts remain unknown.

Political marginalization, arbitrary arrests, beatings, murders, intimidation, and rapes mark the experience of communities around Ethiopia defending their land rights. This violence in the name of delivering economic growth is built on the 2009 Anti-Terrorism Proclamation, which has allowed the Ethiopian government secure complete hegemonic authority by suppressing any form of dissent.

A new report, Ethiopia’s Anti-Terrorism Law: A Tool to Stifle Dissent, by the Oakland Institute and the Environmental Defender Law Center, authored by lawyers including representatives from leading international law firms, unravels the 2009 Proclamation. It confirms that the law is designed and used by the Ethiopian Government as a tool of repression to silence its critics. It criminalizes basic human rights, like the freedom of speech and assembly. Its definition of “terrorist act,” does not conform with international standards given the law defines terrorism in an extremely broad and vague way, providing the ruling party with an iron fist to punish words and acts that would be legal in a democracy.

The law’s staggering breadth and vagueness, makes it impossible for citizens to know or even predict what conduct may violate the law, subjecting them to grave criminal sanctions. This has resulted in a systematic withdrawal of free speech in the country as newspaper journalists and editors, indigenous leaders, land rights activists, bloggers, political opposition members, and students are charged as terrorists. In 2010, journalists and governmental critics were arrested and tortured in the lead-up to the national election. In 2014, six privately owned publications closed after government harassment; at least 22 journalists, bloggers, and publishers were criminally charged; and more than 30 journalists fled the country in fear of being arrested under repressive laws.

The law also gives the police and security services unprecedented new powers and shifts the burden of proof to the accused. Ethiopia has abducted individuals from foreign countries including the British national Andy Tsege and the Norwegian national, Okello Akway Ochalla, and brought them to Ethiopia to face charges of violating the anti-terrorism law. Such abductions violate the terms of extradition treaties between Ethiopia and other countries; violate the territorial sovereignty of the other countries; and violate the fundamental human rights of those charged under the law. Worse still, many of those charged report having been beaten or tortured, as in the case of Mr. Okello. The main evidence courts have against such individuals are their so-called confessions.

Some individuals charged under Ethiopia’s anti-terrorism law are being prosecuted for conduct that occurred before that law entered into force. These prosecutions violate the principles of legality and non-retroactivity, which Ethiopia is bound to uphold both under international law as well as the Charter 22 of its own constitution.

A few other key examples of those charged under the law, include the 9 bloggers; Pastor Omot Agwa, former translator for the World Bank Inspection Panel; and journalists Reeyot Alemu and Eskinder Nega; and hundreds more, all arrested under the Anti-Terrorism law.

It has been a fallacious tradition in development thought to equate economic underdevelopment with repressive forms of governance and economic modernity with democratic rule. Yet Ethiopia forces us to confront that its widely celebrated economic renaissance by its Western allies and donor countries is dependent on violent autocratic governance. The case of Ethiopia should compel the US and the UK to question their own complicity in supporting the Ethiopian regime, the west’s key ally in Africa.

Given the compelling analysis provided by the report, it is imperative that the international community demands that until such time as Ethiopian government revises its anti-terrorism law to bring it into conformity with international standards, it repeals the use of this repressive piece of legislation.

Case and point is the controversial resettlement program under which the Ethiopian government seeks to relocate 1.5 million people as part of an economic development plan. Research by groups including the Oakland Institute, International Rivers Network, Human Rights Watch, and Inclusive Development International, among others, as well as journalists.

Perhaps there is hesitation to confront this because it would implicate the global flows of development assistance that make possible rule by the EPRDF. Receiving a yearly average of 3.5 billion dollars in development aid, Ethiopia tops lists of development aid recipients of USAID, DfID, and the World Bank. Staggeringly, international assistance represents 50 to 60 per cent of the Ethiopian national budget. Evidently, foreign assistance is indispensible to the national governance. At the face of this dependency, the Ethiopian government exercises repressive hegemony over Ethiopian political and civil expression.

It is the responsibility of international donors to account for the political effects of development assistance with thorough and consistent investigations and substantive demand for political reform and democratic practices as a condition for sustained international aid. This will inevitably mean a new type of Ethiopian renaissance, one that seeks the simultaneous establishment of democratic governance and improving economic conditions.

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Excerpt:

By Frank Mulder
UTRECHT, Netherlands, Jan 4 2016 (IPS)

Venezuela doesn’t want investment treaties anymore if they give investors the right to drag the country before a commercial court. “The system has been set up to break down the nation-state.”

All is not going well for Venezuela. While the country is torn apart by poor governance, poverty and polarisation, it is attacked from the outside by oil firms claiming tens of billions of dollars.

The method these firms use is called ISDS, or Investor-State Dispute Settlement. This is a mechanism by which investors can sue a state by means of arbitration, which is a kind of privatized court. Many lawyers stress the advantage that plaintiffs don’t have to go before a local judge whom they feel they cannot trust. You can choose a judge for yourself, the opponent does the same, and the two of those choose a chairman. They are called arbitrators. The case is heard at a renowned institute, like the World Bank. How could it be more fair?

Biased

But Bernard Mommer, former vice-minister for oil in the time of Hugo Chavez, now the main witness in different claims against Venezuela, has to laugh a bit. “I won’t say that Caracas is a neutral venue. But don’t be so foolish to say that Washington is neutral. The whole arbitration system is biased in favour of investors.”

After Argentina, no country has been sued as much as Venezuela: until 2014 at least 37 cases have been filed against this Latin American state. However, the fine they can expect now exceeds all of the others. ConocoPhillips, a Texas-based oil company, claims 31 billion dollars and seems to be on the winning side. According to critics, that case represents everything that’s wrong with the ISDS system.

Oil dispute

The dispute about oil began in 2006. Under the activist leadership of Chavez, Venezuela decided to nationalise the oil sector. Also, higher taxes were announced. Mommer was responsible for the negotiations with international oil firms about compensation. Most of the 41 companies in the country agreed with the buyout. Two didn’t. Those were the Texas-based companies ConocoPhillips and Mobil (now ExxonMobil).

“When we started with the expropriation, they went for arbitration,” says Mommer. “I didn’t even know that this was possible. For arbitration two parties need to consent, don’t they? How could they sue a state?” But Mommer discovered that Venezuela signed Bilateral Investment Treaties (BITs) in 1991, among others with the Netherlands. Those treaties give all investors from the given country an offer to arbitration if they feel treated unfairly by the host state.

Dutch sandwich

ConocoPhillips and Mobil quickly moved their Venezuelan holdings to the Netherlands in 2006. That gave them the opportunity to claim, as Dutch investors, that the unexpected policy change violated their BIT rights. Together, they demanded 42 billion dollars.

“This is called the Dutch sandwich”, says George Kahale III, a top lawyer from New York, who defends Venezuela in different cases. “You put a Dutch holding in the middle of your company chain and you can call yourself Dutch.”

Companies are not allowed to do this if the dispute already started. ExxonMobil and Conoco said that their move was made independently of the dispute. However, a remarkable message has been found among the Wikileaks cables. In these a representative of Conoco told someone from the American embassy that they “already” moved to the Netherlands to “safeguard their arbitration rights.”

Unlawful

The cases are still dragging on. ExxonMobil has had no luck. The three arbitrators have judged that the expropriation was lawful. ExxonMobil gets compensation, but not much more than what they were offered earlier, around one billion dollars.

But the Conoco case evolved differently. Two of the three arbitrators found the expropriation unlawful. This means that Venezuela has to compensate the firm, not on the basis of the low oil price in 2006, but on the basis of the much higher price at the time of the claim. This will amount to tens of billions of dollars.

This is insane, says Kahale. “The fact is that four out of six arbitrators found that the expropriation was perfectly lawful. And yet Venezuela can expect a mega award.”

Unfair

Talking about fairness: among the Wikileaks cables another juicy anecdote has been found. In a cable from 2008, the Conoco representative tells the American ambassador that the negotiations are going well and that Venezuela is being reasonable. This is in contradiction to what Conoco was claiming in public. Yet the arbitrators – at least, two of the three – now say that they can’t change their conclusion anymore and now have to proceed to the next phase, about the damages.

“In other words”, says Mommer, “the investor can lie. We can’t sue them anyway. They alone can sue us. This shows why Western countries have invented this system. It has been set up to break down the nation-state.”

Disaster

ISDS is structurally flawed, says Kahale. “Who are the judges? They are investment lawyers. Their commercial background shines through in their decisions. Every judge of course always brings his own views to his job. But in arbitration these people are deciding no longer private commercial disputes, but megacases of international significance, with sometimes vital importance for individual states, involving billions of dollars, with very little training in international law.”

Too many, conflicts of interest arise. “You will never see a supreme court judge acting as a counsel in another case. But many arbitrators also act as a counsel. It’s very hard to preside over the legality of something one day, and advocate the same issue the other day. It is natural that I’m holding back in one or the other, depending on which case is more important to me. There are very few checks and balances. Too many mistakes are made.”

Venezuela is fed up with ISDS claims. Soon after the claims were filed, they pulled the plug, not only from the ICSID convention (which acknowledges the World Bank as arbitration court) but also from a number of BITs. The Dutch BIT was the first to be terminated a few years ago. Unfortunately for Venezuela, this treaty contains a clause giving investors the right to arbitration until 2023.

Don’t challenge us

Arbitration can be an elegant method for solving a dispute. But is has developed into an instrument for multinational companies to pressure states.

“These oil firms were offered a brilliant compensation,” says Juan Carlos Boue, a Venezuelan researcher at the Oxford Institute of Energy. “But when the oil price rose, they decided to leave the country with as much money as possible.” For ExxonMobil, a giant with a revenue of 400 billion dollars, twice as big as the GDP of Venezuela, there is more at stake. “They have unlimited resources. They want to let the world know what happens if you challenge them.”

And the arbitrators? “Some of them are on the boards of multinational companies. They just don’t want the countries to get away with it. They have an extreme dislike towards countries like Venezuela.”

ExxonMobil and ConocoPhillips refrained from any comment.

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Excerpt:

Coastal communities in the Solomon Islands in the southwest Pacific Islands are already threatened by climate change with rising seas and stronger storm surges. Credit: Catherine Wilson/IPS

By Catherine Wilson
CANBERRA, Australia, Jan 1 2016 (IPS)

Women leaders in the Pacific Islands have acclaimed the agreement on reducing global warming achieved at the United Nations (COP21) Climate Change conference in Paris as an unprecedented moment of world solidarity on an issue which has been marked to date by division between the developing and industrialized world. But for Pacific small island developing states, which name climate change as the single greatest threat to their survival, it will only be a success if inspirational words are followed by real action.

“It’s a huge step forward and I don’t think it would have been possible without the voices of indigenous Pacific Islanders banding together and demanding action and justice…. I am very optimistic about the future,” Kathy Jetnil-Kijiner, climate activist and poet from the Republic of the Marshall Islands, who attended the historic meeting, told IPS.

Intense negotiations and compromise between the interests of 195 countries, plus the European Union, which make up the Conference of the Parties (COP) to the climate change convention, marked its 21st meeting in Paris last month.

Dame Meg Taylor, Secretary General of the regional Pacific Islands Forum Secretariat (PIFS), said that “while not all the issues identified by Pacific Island countries were included in the final outcome and agreement, there were substantive advances with recognition of the importance of pursuing efforts to limit temperature increases to 1.5 degrees Celsius, the inclusion of loss and damage as a separate element in the agreement and simplified and scaled up access to climate change finance.”

Claire Anterea of the Kiribati Climate Action Network in the small Central Pacific atoll nation of around 110,000 people added that the outcome was “good, but not perfect,” highlighting that the new temperature goal and call to boost climate finance were particularly important.

The World Meteorological Organisation predicted this year will be the hottest on record with average global temperatures expected to reach 1 degree Celsius above the pre-industrial age. Meanwhile Pacific Island countries are bracing for further rising temperatures, sea levels, ocean acidification and coral bleaching this century. Maximum sea level rise in many island states could reach more than 0.6 metres, reports the Pacific Climate Change Science Program.

Due to rising seas in the Marshall Islands “a simple high tide results in waves flooding and crashing through sea walls built of cement and rocks and completely destroying homes. The salt from the flooding also destroys our crops and food,” Jetnil-Kijiner said..

In the best case scenario, Kiribati and Papua New Guinea could experience a temperature increase of 1.5 degrees Celsius, but under high emissions this might soar to 2.9 degrees Celsius by 2090.

Global warming could result in yields of sweet potato, a common staple crop, declining by more than 50 per cent in Papua New Guinea and the Solomon Islands by 2050, estimates the Asian Development Bank. The burden of crop losses will fall on the shoulders of Pacific Islands’ women who are primarily responsible in communities for growing fresh produce, producing food and fetching water.

Pacific Islanders led a campaign in Paris this year to recognize a new temperature rise threshold of 1.5 degrees Celsius. This is critical, they argued, to stem future climate shocks and mitigate forced displacement as islands become increasingly uninhabitable due to loss of food, water and land.

And in a sign of shifting views in the industrialized world, Pacific Islanders were joined in their campaigning on this issue by numerous developed and developing nations in a ‘Coalition of High Ambition’ which emerged during the second week of COP21. Solidarity was demonstrated by, amongst others, Mexico, Brazil, Norway, Germany, the European Union and United States.

The final Paris agreement which seeks to limit global warming to below 2 degrees Celsius and ‘pursue efforts’ to further reduce it by another 0.5 degree was a win for the coalition.

“1.5 degrees Celsius wasn’t even on the table before the conference began, so hearing it first announced that it even made it into the text made me cry with relief. That being said, the vague wording definitely has me worried and I know it’ll take a continued push from all of us to actually reach 1.5,” Jetnil-Kijiner said.

This will not decrease the immense challenges the region already faces in adapting to extreme weather, which cannot be met by small island economies without access to international climate finance. This year island leaders called for the international community to honour its pledge to raise 100 billion dollars per year by 2020 to fund adaptation in developing countries, an objective first conceived in Copenhagen in 2009. Assessments since then of how much has been raised vary, but the World Bank claimed in April there was a serious shortfall of 70 billion dollars.

Taylor believes “there is a positive outlook for climate financing post-2020 with Article 9 of the Paris Agreement identifying that, for Small Island Developing States, financing needs to be public and grant-based resources for adaptation.” There has been debate about whether finance mechanisms, such as the Green Climate Fund (GCF), should issue free grants or concessional loans.

Anterea emphasised that, to be effective, funding “needs to reach grassroots people through a simple processing method.”

Recognition of loss and damage caused by extreme weather and natural disasters in the final pact was also a milestone, the PIFS Secretary General added, even though it does not provide for vulnerable nations to claim liability or compensation from big polluters.

“The legal right of countries to test the liabilities of other Parties using other avenues has not been diminished by this decision,” she said.

But the greatest hope is being invested in the binding commitment by nations to set emission reduction targets and be subject to a process of long term monitoring and review, a move which would accelerate the global transition toward renewable energy and make the burning of fossil fuels, the greatest driver of greenhouse gas emissions, increasingly unviable.

“We need the five-year review as a crucial step to keeping countries’ governments accountable to our targets and goals,” Jetnil-Kijiner emphasised. If nations are not emboldened to better their goals every time, the planet may continue toward a devastating temperature increase of 2.7 degrees Celsius or more, experts conclude.

The most pressing question, after the euphoria of the global accord demonstrated in Paris has died down, is how will these lofty promises be implemented? Pacific Islanders are depending on it.

(End)

The heavily criticized legal mechanism, known as ISDS, is an important tool for European companies to pressurize developing countries. This year Uganda joins the rank of developing nations asking themselves: “Why have we ever signed this?”

Earlier this year, the French oil company Total filed a request for arbitration against the government of Uganda. In essence, arbitration is a way to resolve a dispute, not by going to a public court, but by asking the verdict of a private court. Both parties choose an arbitrator, usually an investment lawyer, and the two of them choose a third one. The arbitration is hosted, in this case, by the World Bank.

This is a new step in the frustrating process of Uganda trying to turn its oil into cash.

Peaceful names

Crude oil reserves in Uganda are estimated by government geologists at 6.5 billion barrels, half of which lies beneath the famous Murchison Falls, a famous national park, known for its wild animals. Wells have been given exotic names, like Crocodile, Buffalo, Giraffe and Warthog.

These peaceful names contrast with the bitter fights that are being fought over the oil. Commercial production has been repeatedly delayed by disputes with explorers over taxes and development plans. Now it’s the French oil company Total refusing to pay tax. It acquired a 33 per cent share in a 2.9 billion dollar project owned by Tullow Oil. According to Ugandan law, when a stock is bought, a stamp duty must be paid.

However, the oil firm refuses to do so, citing no legal obligation to honor the government claims. Total has not disclosed how much tax is at the heart of the dispute or why it objects to the tax levy but a source at the Uganda Revenue Authority told Reuters earlier that the Production Sharing Agreement (PSA) includes a tax waiver.

Secret

From their offices in an eight-story glass building located in the lush green high-end Nakasero area in the capital city Kampala, Total’s Corporate Affairs Manager Ms. Ahlem Friga-Noy stated that “given the applicable confidentiality obligations, we are not in a position to comment further on the proceedings.”

The Office of the Attorney General of the Government of Uganda replies in the same manner: “We are under obligation not to disclose the content of the matter to the public until it is appropriate.”

This points exactly to the problem of arbitration. In a court room all affected parties and stakeholders have the right to speak, or at least listen, but an arbitration procedure is very secretive. No one is obliged to disclose details. Has the state really behaved badly? Or is it the company who abuses arbitration as a pressure to get a tax reduction? The public remains completely in the mist, until the final verdict of the tribunal is published, which can be a multimillion dollar fine.

The Dutch sandwich

The problem Uganda now faces has been made possible by the Bilateral Investment Treaty signed in 2000 with the Netherlands. According to the treaty, all Dutch investors in Uganda have the right to pursue arbitration before the World Bank court if they feel treated unfairly. The French company Total Uganda registered itself as a Dutch company.

This is known as the Dutch Sandwich; you put a Dutch company in between and then you become a Dutch investor. Which turns the treaty into a tool to drag a state before a tribunal of three men in Washington, having a commercial background and the ability to award billion dollar fines, without a possibility to appeal. If Uganda is condemned to a compensation but refuses to pay, the company has the right to seize Ugandan assets in the world.

Against Ugandan law

This is against Ugandan law, says the renowned Human Rights lawyer Isaac Ssemakadde. “According to the constitution, taxation is wholly the creation of the law of the state.” Which means that disputes have to be settled on the basis of the law alone. “Even an agreement between parties cannot supercede the obligation fixed in the law. There is therefore no room for arbitration on taxation,” he said.

“In an earlier tax dispute, between Heritage Oil and Gas against Uganda Revenue Authority, the High Court has forbidden the state to refer proceedings to the arbitration processes in London or anywhere else outside the jurisdiction of the Ugandan courts of law,” noted Ssemakadde.

In short, “Total is being treated differently to other business persons which is in violation of article 21 of the constitution of Uganda which states that all persons are equal before and under the law.”

Nobody can check Total’s claims about a tax waiver, because the Product Sharing Agreements are confidential. This is so despite the fact that Uganda has an Access to Information law that was promulgated in 2005. This limits the discussion, and knowledge, about the proceedings in the country’s oil sector to senior politicians and bureaucrats. The ordinary Ugandan is kept in darkness about what happens there.

The secrecy is not only advantageous for oil companies, but also for certain politicians, who seem to be interested in “personalizing” the oil resources. The Ugandan president Yoweri Museveni recently told Ugandans that those people who are challenging him politically in the forthcoming general elections “are after my oil.”

Why BITs?

A new interactive map made by Dutch journalists, with all known ISDS cases in the world, shows that ISDS is mainly used against developing countries. Sometimes because they clearly behaved badly towards an investor, but in other cases it’s more likely that it is used as a bargaining tool and a threat by multinational companies for better deals. Litigation costs amount to 8 million dollars on average, calculated the Organisation for Economic Co-operation and Development.

For lawyers and arbitrators this is simply an effective tool to defend the rule of law. “I’m happy there is arbitration”, a Dutch investment lawyer says. “There are many thug states in the world. And why do they complain? They signed the treaty themselves.”

“In the end, it’s the ordinary Ugandan taxpayer to bear the brunt and consequences for the enormous amounts of money that is going to be spent on this arbitration process,” says Ssemakadde. “Whereas Total can afford to maintain a given team of lawyers in Washington for, say, a month, Uganda can hardly afford this.”

The people remain ignorant about the deals that are made, and who exercises pressure on whom. Unless the general public starts to view the oil, as well as the treaties their government signs, as belonging to them and not the selected few in government, companies like Total will continue dragging the state into expensive arbitration processes, paid by the Ugandan taxpayers, who are the actual owners of the national resources.

This article is part of a research by De Groene Amsterdammer, Oneworld and Inter Press Service, supported by the European Journalism Centre (made possible by the Gates Foundation). See www.aboutisds.org.

One of the most significant aspects of the international conference on climate change, concluded in Paris on December 12, is that food security and ending hunger feature in the global agenda of the climate change debate.

The text of the final agreement adopted by the 21st Conference of the Parties (COP21) of the United Nations Framework Convention on Climate Change recognizes “the fundamental priority of safeguarding food security and ending hunger and the special vulnerability of food systems production to the impacts of climate change.”

Indeed, of the 186 countries that presented voluntary plans to reduce emissions, around a hundred include measures related to land use and agriculture.

The approved programme of measures constitutes a sector-by-sector program to be implemented by 2020, which implies there will be ongoing focus on agricultural issues and not just about energy, mitigation or transportation, which drew so much of the attention in Paris.

In the next years the commitments must be implemented, which will require helping developing countries make necessary adaptations through technology transfer and capacity building.

The Green Climate Fund, comprising 100,000 million per year provided by the industrialized countries, will be a key contributor to this process. Contributions of additional resources to the Fund for the Least Developed Countries and the Adaptation Fund, among others, have also been announced.

The issue of future food production, long saddled with a low profile in the media, is increasingly a major concern and poses a challenge to governments.

A recent World Bank report estimated that 100 million people could fall into poverty in the next 15 years due to climate change. Agricultural productivity will suffer, in turn causing higher food prices.

According to Jose Graziano da Silva, Director-General of the Food and Agriculture Organization (FAO), “climate change affects especially countries that have not contributed to causing the problem” and “particularly harms developing countries and the poorer classes.”

The facts speak for themselves. The world’s 50 poorest countries combined, are responsible for only one per cent of global greenhouse emissions, yet these nations are the ones most affected by climate change.

Approximately 75 per cent of poor people suffering from food insecurity depend on agriculture and natural resources for their livelihoods. Under current projections, it will be necessary to increase food production by 60 per cent to feed the world’s population in 2050.

Yet crop yields will, if current trends continue, fall by 10 to 20 per cent in the same period, according to the Intergovernmental Panel on Climate Change (IPCC) and higher ocean temperatures will slash fishing yields by 40 per cent.

One of the least-mentioned problems associated with climate change are the effects of droughts and floods, which have become a near constant reality. On top of the destruction of resources and huge losses brought by these phenomena, they also cause increases in food prices which in turn affects mainly the poor and most vulnerable.

Rising food prices have a direct relation to “climate migrants”, as the drop in production and income is one of the factors that triggers displacement from rural areas to cities, as well as from the poorest countries to those where there are potentially more opportunities to work and have a dignified life.

For example, migration in Syria and Somalia are not driven by political conflicts or security issues alone, but also by drought and the consequent food shortages.

This is why FAO argues that we must simultaneously solve climate change and the great challenges of development and hunger. These two scenarios go hand-in-hand. The dilemma is to make sure that measures adopted to address the former do not generate a constraint on the latter. Production capacity, particularly of developing countries, must not be jeopardized.

This is why developing countries argue that, to reduce greenhouse gas emissions, they need technologies and support that they cannot fund with their own resources without hobbling their own development plans.

And since the most responsible for greenhouse gas emissions are the industrialized nations, the countries of the South insist, and have done so long before the COP21, that richer nations contribute to funding the changes needed to preserve the environment.

It was therefore natural that this dilemma was at the center of discussions in Paris and that efforts were made to find an agreement.

The creation of the Green Climate Fund was one of the keystones for an agreement that practically binds the whole world to the goal of keeping average temperatures at the end of the century from rising more than two degrees Celsius. The agreement will enter into force in 2020 and will be reviewed every five years. In that period, many problems will arise and need to be resolved.

Yet beyond the difficulties we will face on the way, it now seems legitimate to expect that the big problem will be addressed and the future of the planet will be preserved.

(End)

The Solar Kiosk with goods inside. A part from perishable foodstuffs/soft drinks they include solar energy accessories and phone chargers. Credit: Justus Wanzala/IPS

By Justus Wanzala
Olkiramatian, Kenya, Dec 7 2015 (IPS)

This market centre in the arid Lake Magadi region, Kajiado of Southern Kenya is with no grid electricity. The area is inhabited by the pastoralist Maasai community. With climate change affecting their pastoral way of life, the community is increasingly adopting a more sedentary life but without amenities.

The centre is hot and dusty. Much as the area enjoys bright sunshine during the day, the situation changes to pitch dark after sunset. But in the last two years, the market centre is witnessing a transformation. It is becoming a beehive of activity.

This is courtesy of Solar Kiosk Kenya Ltd. that installed a retail kiosk, called the SOLARKIOSK E-HUBB. The E-HUBB, designed by GRAFT (partners and co-founders of SOLARKIOSK AG, the Berlin-based mother company), is a modular solar-powered structure that can be easily implemented in remote communities.

The E-HUBB outlet enables and empowers local entrepreneurship and the sustainable development of Base-of-the-Pyramid (BOP) communities by selling essential food ingredients, vital energy services, solar and clean energy products and connectivity solutions. By the end of 2015, SOLARKIOSK will have implemented over 100 E-HUBBs on three continents.

A SOLARKIOSK E-HUBB is a solar-powered autonomous business hub. It uses solar power to generate electricity for rural off-grid communities for various uses. It is a decentralised, easy to maintain source of energy. Kiosk operators are able to use the power during the day and continue operating late into the night.

Solar Kiosk Kenya Ltd manages operations in Kenya and uses a business model that enables a local entrepreneur to sell solar products and provide solar powered services to their community. It is a commercial enterprise which stations solar-powered units in kiosks in Kenya’s remote and peri-urban areas, thus creating a triple impact: social, environmental and economical.

Its impact amplifies the link between energy and development. To the residents of Olkiramatian the dream of ever accessing a clean source of energy was just a farfetched one to the residents.

Like elsewhere in remote areas of Kenya, Olkiramatian residents rely on kerosene lanterns or diesel generators which are not only noisy but also polluting.

Jan Willem Van Es, Managing Director of Solar Kiosk Kenya said, “Solar power is a renewable energy form with a potential to accelerate growth of remote areas with connection to electric power grid.”

He noted, “The structure is a modular and expandable kit-of-parts that can be transported and deployed in remote off-grid areas. The E-HUBB at Olkiramatian was the fourth to be installed in the country.”

“The E-HUBB combines a state of the art design with a total of 2Kilowattsolar panel capacity on the roof as well as enough battery capacity to operate for at least 24 hours without sunshine,” he said.

The SOLARKIOSK impact on residents of Olkiramatian is noticeable. Seuri Lesino, the SOLARKIOSK operator at Olkiramatian says that he opens his E-HUBB for a few more hours at night generating extra revenue for the family.

“Initially, to run a business here after sunset you had to rely on kerosene lanterns which could hardly provide enough light, but nowadays if you come at night, you will be mistaken to think that you are in a town. We operate till midnight and residents have come to like it, the power is abundant,” said Seuri.

“The2kw E-HUBBin Olkiramatian installed in 2013 generates electricity capable of powering a television set, printing services, document lamination, and phone charging, barber and photocopy services,” he said.

In addition to energy services and food staples, the E-HUBB sells a wide range of solar products as well as energy efficient cook stoves, farm waste charcoal briquettes and other sustainable goods. Van Willem says that the kiosks are also equipped with internet services in addition to being a platform for businesses like beauty salons, hairdressers, movie and sports viewing halls.

“In the future, we can expand this E-HUBB into its own mini mall, if another entrepreneur comes around with the aim of offering butchery services for instance, additional panels can be provided and this applies to service providers like telecommunication companies keen to put up network masts,” Jan Willem explained.

Area Chief Josphat Maiponyi says that SOLARKIOSK has enabled availability of services and products that initially were not previously accessible. They include cold drinks and perishable products that are now present courtesy of refrigeration services. “Harnessing of this free and abundant sunshine has borne dividends,” he said. He adds that residents used to move long distances to charge their phones but it is no longer the case.

Maiponyi says that the elders use a temporary hall set up close to the kiosk to conduct their meetings even after sunset. Fredrick Sankori, a primary school pupil from the neighbourhood says he finds the hall handy to his school homework late in the evening, taking advantage of the light provided and not being effected by the bad smoke of the kerosene candles.

SOLARKIOSK spurs local development by enhancing communication and entrepreneurship, offering a safe place to the residents to meet their friends. The kiosks are assembled in Kenya with the parts being brought in from Germany. Soon the kiosks will also be manufactured locally in Kenya. Currently, there are 23 SOLARKIOSK E-HUBBsin Kenya offering not only services to thousands of Kenyan but also employment to many local people. SOLARKIOSK AG is operating also in Ethiopia, Tanzania, Rwanda, Botswana and Ghana.

The United Nations Environment Programme (UNEP) Lighting Assessment undertaken in 2010 indicated that the off-grid population in Kenya was 34 million out of the country’s population 40.5 million people. This may slightly increased but indicates the need for efficient off grid systems particularly in rural areas.

Globally 1.5 billion people live without electricity access. Some 800 million are in Africa. Unsustainable and dirty fuels provide much of their energy despite abundant sunshine.

Fortunately, off-grid communities like Olkiramatian can benefit from the immense solar resources of the African continent and access sustainable energy. The outcome is a significant change in livelihood.

According to the World Bank, Kenya has an estimated solar radiation potential of at 4-6 kWh/m2/day, which can effectively end energy poverty if optimally harnessed.

Jan Willem’s concern is however that poor transport network and general infrastructure in rural Kenya could undermine investment in providing more SOLARKIOSK E-HUBBs as off grid energy solutions.

“There hasn’t been much goodwill from authorities, we would welcome any support from the government,” he said.

He suggests that if the kiosks are embraced by local governments, they can open up rural market centres to spur entrepreneurship and economic development through the provision of affordable, reliable and clean energy.

Similar views are expressed by Peter George, Global Village Energy Partnership’s (GVEP) Head of Advisory Services who says that infrastructure is a challenge to renewable energy companies targeting remote communities. GVEP is involved in initiatives to reduce poverty and increase energy access in Kenya.

George says investment in renewable energy is vital because it conserves the environment and creates jobs. “Tangible and real development can only occur through sustained and enough energy generation in country.” he said. He adds that the more widespread the energy access, the easier it is for a country to tackle poverty.

“It is for this reason that we’re supporting companies like SOLARKIOSK who invest in the provision of energy to off grid communities,” he said.

(End)

The UN’s heavily-hyped Sustainable Development Goals (SDGs), which were approved by more than 160 world leaders at a summit meeting in September, are an integral part of the world body’s post-2015 development agenda, including the eradication of hunger and poverty by 2030.

But that ambitious goal, warns the UN’s sister institution, the World Bank, can be thwarted by the devastating impact of climate change on the world’s poorest people.

In a new study released Monday, the World Bank says climate change is already preventing people from escaping poverty.

“And without rapid, inclusive and climate-smart development, together with emissions-reductions efforts that protect the poor, there could be more than 100 million additional people in poverty by 2030.”

The report, released ahead of the international climate conference in Paris November 30-December 11, finds that poor people are already at high risk from climate-related shocks, including crop failures from reduced rainfall, spikes in food prices after extreme weather events, and increased incidence of diseases after heat waves and floods.

Titled ‘Shock Waves: Managing the Impacts of Climate Change on Poverty’, the study says such shocks could wipe out hard-won gains, leading to irreversible losses and, driving people back into poverty, particularly in Africa and South Asia.

According to the report, the poorest people are more exposed than the average population to climate-related shocks such as floods, droughts, and heat waves, and they lose much more of their wealth when they are hit.

In the 52 countries where data was available, 85 per cent of the population live in countries where poor people are more exposed to drought than the average.

Poor people are also more exposed to higher temperatures and live in countries where food production is expected to decrease because of climate change, the report notes.

“This report sends a clear message that ending poverty will not be possible unless we take strong action to reduce the threat of climate change on poor people and dramatically reduce harmful emissions,” said World Bank Group President Jim Yong Kim.

“Climate change hits the poorest the hardest, and our challenge now is to protect tens of millions of people from falling into extreme poverty because of a changing climate,” he added.

Asked for a response, Harjeet Singh, Climate Policy Manager at ActionAid, told IPS the World Bank’s analysis of poor people’s vulnerability to climate impacts is not new, but it rightly highlights that poverty cannot be addressed without tackling climate change.

He said poor people and poor countries are most vulnerable to climate change as they have limited assets, skills and knowledge to overcome the effects.

“However, the World Bank is coming late to the game with its talk of improving social protection to fight the effects of climate change”, Singh said.

In reality, he pointed out, the World Bank has had a long and dubious record of forcing developing countries to reduce their public expenditure to provide basic services, and protecting socially and economically weaker populations.

“It will need to address this before it can reliably practise what the report preaches,” he declared.

Louise Whiting, senior policy analyst, water security and climate change at the UK-based WaterAid, told IPS the world’s poorest are most at risk from climate change and are receiving the least amount of climate-change financing to help them adapt to climate-related weather shocks including flood, drought and heat waves.

“Our research tells us that in Bangladesh alone, an estimated 38 million lives are at risk between now and 2050 because of climate-change related disasters,” she pointed out.

“The climate path we are on now means an end to development – an end to all progress on extreme poverty.”

She said for families living in extreme poverty, with fragile access to safe water, good sanitation and hygiene, these lengthening dry seasons and intensifying monsoons wipe out years of work and further entrench the cycle of poverty.

“Safeguarding basic services including clean water, sanitation and hygiene helps communities recover faster and become more resilient to climactic extremes.”

Whiting said national governments in developing countries need more support in designing and implementing projects to help eradicate poverty while building communities’ resilience to climate change, as well as financing.

Leaders at this month’s crucial talks in Paris must not forget the world’s poorest, and include a strong focus on helping them to adapt to this challenging new reality, she added.

The writer can be contacted at thalifdeen@aol.com

Africa's children still stand as the number one victims of suffering and destitution across the continent. Credit: Jeffrey Moyo/IPS

By Jeffrey Moyo
HARARE, Aug 26 2015 (IPS)

“Poverty has become part of me,” says 13-year-old Aminata Kabangele from the Democratic Republic of Congo. “I have learned to live with the reality that nobody cares for me.”

Aminata, who fled her war-torn country after the rest of her family was killed by armed rebels and now lives as a as a refugee in Zimbabwe’s Tongogara refugee camp in Chipinge on the country’s eastern border, told IPS that she has had no option but to resign her fate to poverty.

Despite the United Nations’ Millennium Development Goal (MDG) of eradicating extreme poverty and hunger, African children still stand as the number one victims of suffering and destitution across the continent.“Poverty has become part of me. I have learned to live with the reality that nobody cares for me” – Aminata Kabangele, a 13-year-old refugee from the Democratic Republic of Congo

“In every country you may turn to here in Africa, children are at the receiving end of poverty, with high numbers of them becoming orphans,” Melody Nhemachena, an independent social worker in Zimbabwe, told IPS.

Based on a 2013 UNICEF report, the World Bank has estimated that up to 400 million children under the age of 17 worldwide live in extreme poverty, the majority of them in Africa and Asia.

According to human rights activists, the growing poverty facing many African families is also directly responsible for the fate of 200,000 African children that the United Nations estimates are sold into slavery every year.

“Many families in Africa are living in abject poverty, forcing them to trade their children for a meal to persons purporting to employ or take care of them (the children), but it is often not the case as the children end up in forced labour, earning almost nothing at the end of the day,” Amukusana Kalenga, a child rights activist based in Zambia, told IPS.

West Africa is one of the continent’s regions where modern-day slavery has not spared children.

According to Mike Sheil, who was sent by British charity and lobby group Anti-Slavery International to West Africa to photograph the lives of children trafficked as slaves and forced into marriage, for many families in Benin – one of the world’s poorest countries – “if someone offers to take their child away … it is almost a relief.”

Global March Against Child Labour, a worldwide network of trade unions, teachers’ and civil society organisations working to eliminate and prevent all forms of child labour, has reported that a 2010 study showed that “a staggering 1.8 million children aged 5 to 17 years worked in cocoa farms of Ivory Coast and Ghana at the cost of their physical, emotional, cognitive and moral well-being.”

“Trafficking in children is real. Gabon, for example, is considered an Eldorado and draws a lot of West African immigrants who traffic children,” Gabon’s Social Affairs Director-General Mélanie Mbadinga Matsanga told a conference on preventing child trafficking held in Congo’s southern city of Pointe Noire in 2012.

Gabon is primarily a destination and transit country for children and women who are subjected to forced labour and sex trafficking, according to the U.S. State Department’s 2011 human trafficking report.

In Africa’s most populous country, Nigeria, a study of child poverty showed that over 70 percent of children are not registered at birth while more than 30 percent experience severe educational deprivation. According to UNICEF Nigeria, about 4.7 million children of primary school age are still not in school.

“These boys and girls, some as young as 13-years-old, serve in the ranks of terror groups like Boko Haram, often participating  in suicide operations, and act as spies,” Hillary Akingbade, a Nigerian independent conflict management expert, told IPS.

“Girls here are often forced into sexual slavery while many other African children are abducted or recruited by force, with others joining out of desperation, believing that armed groups offer their best chance for survival,” she added.

Akingbade’s remarks echo the reality of poverty which also faces children in the Central African Republic, where an estimated 6,000 to 10,000 boys and girls became members of armed groups following an outbreak of a bloody civil war in the central African nation in December 2012, according to Save the Children.

Violence plagued the Central African Republic when the country’s Muslim Seleka rebels seized control of the country’s capital Bangui in March 2013, prompting a backlash by the largely Christian militia.

A 2013 report by Save the Children stated that in the Central African Republic, children as young as eight were being recruited by the country’s warring parties, with some of the children forcibly conscripted while others were impelled by poverty.

Last year, the United Nations reported that the recruitment of children in South Sudan’s on-going civil war was “rampant”, estimating that there were 11,000 children serving in both rebel and government armies, some of who had volunteered but others forced by their parents to join armed groups with the hopes of changing their economic fortunes for the better.

Meanwhile, back in the Tongogara refugee camp, Aminata has resigned herself. “I have descended into worse poverty since I came here in the company of other fleeing Congolese and, for many children like me here at the camp, poverty remains the order of the day.”

Edited by Phil Harris   

The rubble of twisted concrete and metal bakes in the hot Mediterranean sun of a regional heat wave. A year on from Israel’s 51-day military operation in 2014, not a single one of the 11,000 destroyed homes in Gaza has been rebuilt. Photo credit: UNRWA Archives/Shareef Sarhan

By Charlie Hoyle
BETHLEHEM, Palestine, Aug 15 2015 (IPS)

The rubble of twisted concrete and metal bakes in the hot Mediterranean sun of a regional heat wave.

Eight months ago, the infrastructural devastation in the Gaza Strip was the same, except floodwater and freezing winter temperatures swept over the heaped remnants of people’s homes and businesses.

A year on from Israel’s 51-day military operation – in which over 2,200 Palestinians were killed, including more than 500 children – not a single one of the 11,000 destroyed homes has been rebuilt.

The task of large-scale reconstruction work was entrusted to the Gaza Reconstruction Mechanism (GRM), a United Nations-brokered agreement between Israel and the Palestinian Authority which would oversee the distribution of building materials entering Gaza.“Most of the 100,000 Palestinians displaced by the [2014] war continue to live in makeshift shelters, often in the rubble of their former homes, and the landscape is littered with miles upon miles of apocalyptic decay where homes, shops, and restaurants once stood”

To date, only 5.5 percent of the building materials needed to repair and rebuild homes and other damaged infrastructure has entered the coastal enclave, according to Israeli rights group Gisha, founded in 2005 to protect the freedom of movement of Palestinians, especial Gaza residents.

Failed promises by donor countries which pledged 5.4 billion dollars last October, political tensions between the Palestinian Authority and Hamas, and Israel’s continued restrictions on materials entering the territory have all impeded reconstruction efforts.

However, many hold the GRM directly responsible for the glacial pace of reconstruction, arguing that the terms of the agreement have entrenched Gaza’s underdevelopment by granting Israel control over nearly every aspect of the rebuilding process.

“Israel actually has deep power over every single house built in Gaza,” says Ghada Snunu, a reporting officer at Ma’an Development Centre in Gaza.

“We cannot build a house if Israel says no. Israel decides whether homes are built or not.”

As part of the GRM, Israel has case-by-case approval over individual applications for building materials, veto power over construction companies put forward by the Palestinian Authority to provide those materials, and access to the Authority’s Ministry of Civil Affairs database, which registers the ID numbers and GPS coordinates of Palestinians whose homes were destroyed.

According to Gisha, private owners, building plans, locations and the quantities all require Israeli approval, with companies and merchants who store the construction materials – mostly aggregate, cement and steel bars – forced to place security guards and install cameras to supervise the goods 24 hours a day.

This lengthy and expensive bureaucratic process, designed specifically to meet Israel’s stated security concerns, has meant the process is at a virtual standstill.

“The GRM has failed because it gives Israel veto power over everything. There are no changes on the ground so far,” complains Snunu.

In January, the Brookings Doha Centre said in a policy briefing that the GRM has effectively seemed to offer “legitimacy to the Israeli blockade” and placed “exclusive reliance on Israel’s willingness to allow the flow of reconstruction materials” for success of the mechanism.

In recent months, Oxfam says that more building materials are entering Gaza, but the levels are still only 25 percent of those before Israel’s blockade was imposed some eight years ago.

“At this pace it could take 19 years to finish just the rebuilding of homes destroyed in 2014 and at least 76 years to build all the new homes that Gaza needs,” said Oxfam’s Arwa Mhunna.

Most of the 100,000 Palestinians displaced by the war continue to live in makeshift shelters, often in the rubble of their former homes, and the landscape is littered with miles upon miles of apocalyptic decay where homes, shops, and restaurants once stood.

The vast infrastructural damage last summer, caused by an unprecedented amount of explosive weaponry used by Israel’s military, compounds the effects of an eight-year blockade and two other Israeli military offensives since 2008, with damage from those conflicts barely addressed.

Gazan institutions and stakeholders have been largely excluded from the rebuilding process following the three wars, placing the civilian population at the mercy of political infighting, unfulfilled international promises and Israel’s blockade.

“Gaza had already been destroyed completely before the war. This agreement did not change anything, Palestinians were told their homes would be rebuilt, but these promises have been broken by the international community and the PA,” says Snunu.

In May, the World Bank reported that Gaza had the highest unemployment rate in the world at 43.9 percent, with 67 percent of under 24-year-olds unemployed. Real per capita income is now 31 percent lower than it was 20 years ago, at 970 dollars a year, the report added.

At least 80 percent of Gazans are dependent on humanitarian aid.

“The situation in Gaza is getting more serious and dire,” says Mhunna. “The humanitarian crisis is continuing and now affects all aspects of life. Displacement has lasted for over a year since the war and there is a devastating economic situation.”

Hamas officials, rights groups, and both local and international NGOs had repeatedly stressed last year during ceasefire negotiations that Gaza must not return to a status quo of blockade.

Since Israel disengaged from Gaza in 2005 – withdrawing some 9,000 settlers and military forces – it has repeatedly claimed that it is no longer occupying the territory and has held Hamas responsible for the civilian population.

Yet 10 years later, Israel controls the movement of Palestinians in and out of Gaza, the food they can have access to, whether they can receive medical treatment or not, and now under the terms of the GRM, whether their homes can be rebuilt.

“The GRM harms Palestinians more than it benefits them. What is clear in our demands is that the GRM heightens the blockade and Gaza will not be rebuilt unless the blockade is lifted,” says Snunu.

“Palestinians need solutions for the crisis, not mechanisms that manage the crisis.”

Edited by Phil Harris   

By Roberto Savio
SAN SALVADOR, Aug 1 2015 (IPS)

In recommendations to German Chancellor Angela Merkel at the end of July, the German Council of Economic Experts outlined how a weak member country could leave the Eurozone and called for strengthening the European monetary union.

German Finance Minister Wolfgang Schäuble wants Greece out because he does not believe that it will ever be able to refund the loans it has received so far, and because he thinks it is question of principle to be strict. In an interview with Der Spiegel a few days after the historical date of Jul. 13, at the end of negotiations on Greece, he said: “My grandmother used to say: benevolence comes before dissoluteness.”

Roberto Savio

Explaining the recommendations of the Council of Economic Experts, however, its chairman Christoph M. Schmidt expressed another opinion. “To ensure the cohesion of monetary union, we have to recognise that voters in creditor countries are not prepared to finance debtor countries permanently … A permanently uncooperative member state should not be able to threaten the existence of the euro.”

This is the best illustration of Germany’s Europe. Any country which does not fit into the German scenario will have to quit. Europe is no longer a question of solidarity, it is all about fiscal and monetary considerations.

Germany now says that federalism has exceptions – whenever a member of the Eurozone is perceived to be challenging the rules of the monetary union, it will be subject to complete annihilation of its state sovereignty and national democracy. This is the kind of federalism that Germany has now proclaimed.

This German position on its vision of Europe, where political and ideal considerations are no longer the basis of the European project, has triggered a strong response from a normally obedient France.“We should all realise that the idea of Europe as a political project, based on solidarity and mutual support, is on the wane. Monetary union is no longer just a step towards a democratic political union”

President François Hollande, who appears to have suddenly woken up, has come out with a call to reinforce European integration through the establishment of a “Eurozone government”, which run in the opposite direction from that of Berlin.

Germany will of course go ahead and pursue its own course, but the Paris-Berlin axis which was conceived as the fulcrum of European integration has now been seriously weakened after Germany’s imposed agreement on Greece on Jul. 13. So we have now a major realignment.

France has been the country which has always blocked any substantial progress on European integration, by continually voting against any radical step towards integration in order to preserve as much of its national sovereignty as possible.

Now it is Germany which is intent on changing the course of integration, from a political project to a fixed exchange monetary system based on creditor countries – a system in which some democracies are more equal than others.

Schäuble has been reported as expressing concern over the European Commission’s increased political role, interfering in political issues for which it has no mandate. And it is a stark fact that the Jul. 13 Brussels agreement has sought to remove politics and discretion from the functioning of the monetary union, an idea that has long been very dear to the French, and now are the French who want more European integration as protection from a German Europe.

We should all realise that the idea of Europe as a political project, based on solidarity and mutual support, is on the wane.

Monetary union is no longer just a step towards a democratic political union, as Helmut Kohl and François Mitterand sought at the reunification of Germany, and the creation of the Euro.

We are, in fact, going back to a more toxic version of the old exchange-rate mechanism of the 1990s that left countries trapped in a mechanism which worked primarily for Germany, and which led to the exit of the British pound and the temporary exit of the Italian lira.

But the euro, as Nobel laureate in economics Paul Krugman says, “has turned into a Roach Motel, a trap that’s hard to escape.” Once you’re in, you cannot get out, and you have to accept the diktat of the creditors.

Another Nobel laureate in economics, Joseph Stigliz, who was Chief Economist of the World Bank, says that the current European policy of austerity at any cost, is like going back to a “19^th century debtors’ prison. Just as imprisoned debtors could not make the income to repay, the deepening depression in Greece will make it less and less able to repay.”

Of course, what is never said openly (except by Stigliz) is that in the Greek bailout one central reason for the extremism of the new package of conditions was to teach a lessons to a radical left-wing party, Syriza, and to the Greek people who had had the audacity to reject the calls from European leaders to vote against that party.

It is not by chance that countries like Poland, which were asking to be admitted to the Eurozone, have withdrawn their applications.  The euro has become a rallying political issue, with parties from all over Europe asking to withdraw. It has become the first line of action for those who oppose European integration.

Until now, the answer of European governments has been that withdrawal is impossible under the European constitution. But now that the German Council of Economic Experts has come out with a concrete proposal on how to do that, that line of defence is crumbling.

According to many analysts, Angela Merkel is playing with fire. Germany cannot remain a credible leader of a coalition of Northern and Eastern European countries and ignore the realities and needs of Southern Europe. This is unsustainable, even in the medium term.

Meanwhile, the world goes on. Within seven years India will have overtaken China as the most populous country in the world, while within a few decades Nigeria will have a larger population than the United States.

And Europe? Europe will have become the continent with most old people and lower productivity, and will have to face its four horses of the apocalypse:

• a solution to relations with Russia;
• common agreement on how to deal with the dramatic flow of immigrants, when countries are not even able to relocate 40,000 people in a region of 450 million;
• a real policy on the explosive Middle East and terrorism; and soon
• the request of United Kingdom for a new agreement on the European Union, or else it will exit Europe.

We can safely bet that those negotiations, which will be based purely on economic issues, will be the kiss of death for the original European dream. (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 Daya Thussu
LONDON, Jul 22 2015 (IPS)

The formal opening of the BRICS Bank in Shanghai on Jul. 21 following the seventh summit of the world’s five leading emerging economies held recently in the Russian city of Ufa, demonstrates the speed with which an alternative global financial architecture is emerging.

The idea of a development-oriented international bank was first floated by India at the 2012 BRICS summit in New Delhi but it is China’s financial muscle which has turned this idea into a reality.

Daya Thussu

The New Development Bank (NDB), as it is formally called, is to use its 50 billion dollar initial capital to fund infrastructure and developmental projects within the five BRICS nations – Brazil, Russia, India, China and South Africa – though it is also likely to support developmental projects in other countries.

According to the 43-page Ufa Declaration, “the NDB shall serve as a powerful instrument for financing infrastructure investment and sustainable development projects in the BRICS and other developing countries and emerging market economies and for enhancing economic cooperation between our countries.”

The NDB is led by Kundapur Vaman Kamath, formerly of Infosys, India’s IT giant, and of ICICI Bank, India’s largest private sector bank. A respected banker, Kamath reportedly said during the launch that “our objective is not to challenge the existing system as it is but to improve and complement the system in our own way.”

The launch of the NDB marks the first tangible institution developed by the BRICS group – set up in 2006 as a major non-Western bloc – whose leaders have been meeting annually since 2009. BRICS countries together constitute 44 percent of the world population, contributing 40 percent to global GDP and 18 percent to world trade.“Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way” – Kundapur Vaman Kamath, head of the New Development Bank (NDB)

In keeping with the summit’s theme of ‘BRICS partnership: A powerful factor for global development’, the setting up of a developmental bank was an important outcome, hailed as a “milestone blueprint for cooperation” by a commentator in The China Daily.

The Chinese imprint on the NDB is unmistakable. The Ufa Declaration is clear about the close connection between the NDB and the newly-created Asian Infrastructure Investment Bank (AIIB), also largely funded by China. It welcomed the proposal for the New Development Bank to “cooperate closely with existing and new financing mechanisms including the Asian Infrastructure Investment Bank.” China is also keen to set up a regional centre of the NDB in South Africa.

If economic cooperation remained the central plank of the Ufa summit, there is also a clear geopolitical agenda.

The Global Times, China’s more nationalistic international voice, pointed out that the establishment of the NDB and the AIIB will “break the monopoly position of the International Money Fund (IMF) and the World Bank (WB) and motivate [them] to function more normatively, democratically, and efficiently, in order to promote reform of the international financial system as well as democratisation of international relations.”

The reality of global finance is such that any alternative financial institution has to function in a system that continues to be shaped by the West and its formidable domination of global financial markets, information networks and intellectual leadership.

However, China, with its nearly four trillion dollars in foreign currency reserves, is well-placed to attempt this, in conjunction with the other BRICS countries. China today is the largest exporting nation in the world, and is constantly looking for new avenues for expanding and consolidating its trade relations across the globe.

China is also central to the establishment of the Shanghai Cooperation Organisation (SCO), a Eurasian political, economic and security grouping whose annual meeting coincided with the seventh BRICS summit. Founded in 2001 and comprising China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, the SCO has agreed to admit India and Pakistan as full members.

Though the BRICS summit and the SCO meeting went largely unnoticed by the international media – preoccupied as they were with the Iranian nuclear negotiations and the ongoing Greek economic crisis – the economic and geopolitical implications of the two meetings are likely to continue for some time to come.

For host Russia, which also convened the first BRICS summit in 2009, the Ufa meeting was held against the background of Western sanctions, continuing conflict in Ukraine and expulsion from the G8. Partly as a reaction to this, camaraderie between Moscow and Beijing is noticeable – having signed a 30-year oil and gas deal worth 400 billion dollars in 2014.

Beijing and Moscow see economic convergence in trade and financial activities, for example, between China’s Silk Road Economic Belt initiative for Central Asia and Russia’s recent endeavours to strengthen the Eurasian Economic Union. The expansion of the SCO should be seen against this backdrop. Moscow has also proposed setting up SCO TV to broadcast economic and financial information and commentary on activities in some of the world’s fastest growing economies.

Whatever the outcome, it is clear that a new international developmental agenda is being created, backed by powerful nations, and to the virtual exclusion of the West.

China is the driving force behind this. Despite its one-party system which limits political pluralism and thwarts debate, China has been able to transform itself from a largely agricultural self-sufficient society to the world’s largest consumer market, without any major social or economic upheavals.

China’s success story has many admirers, especially in other developing countries, prompting talk of replacing the ‘Washington consensus’ with what has been described as the ‘Beijing consensus’. The BRICS bank, it would seem, is a small step in that direction.

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:

St Kitts and Nevis has launched a 1-megawatt solar farm at the country’s Robert L Bradshaw International Airport. A second solar project is also nearing completion. Credit: Desmond Brown/IPS

By Desmond Brown
FORT-DE-FRANCE, Martinique, Jul 21 2015 (IPS)

A leading geothermal expert warns that the small island states in the Caribbean face “a ticking time bomb” due to the effects of global warming and suggests a shift away from fossil fuels to renewable energy is the only way to defuse it.

President of the Ocean Geothermal Energy Foundation Jim Shnell says to solve the problems of global warming and climate change, the world needs a new energy source to replace coal, oil and other carbon-based fuels.  OGEF’s mission is to fund the R&D needed to tap into the earth’s vast geothermal energy resources."You need to have a balance of your resources but it is quite possible to have that balance and still make it 100 percent renewable and do without fossil fuels altogether." -- Jim Shnell

“With global warming comes the melting of the icecaps in Greenland and Antarctica and the projection is that at the rate we are going, they will both melt by the end of this century,” Shnell told IPS, adding “if that happens the water levels in the ocean will rise by approximately 200 feet and there are some islands that will disappear altogether.

“So you’ve got a ticking bomb there and we’ve got to defuse that bomb and if I were to rate the issues for the Caribbean countries, I would put a heavyweight on that one.”

It has taken just eight inches of water for Jamaica to be affected by rising sea levels, with one of a set of cays called Pedro Cays disappearing in recent years.

Scientists have warned that as the seas continue to swell, they will swallow entire island nations from the Maldives to the Marshall Islands, inundate vast areas of countries from Bangladesh to Egypt, and submerge parts of scores of coastal cities.

In the Caribbean, scientists have also pointed to the likelihood of Barbuda disappearing in 40 years.

Shnell said countries could “essentially eliminate” the threat by turning to renewable energy, thereby decreasing the amount of fossil fuels or carbon-based fuels they burn.

“The primary driver of climate change is greenhouse gasses and one of the principal ones in terms of volume is carbon dioxide,” he said.

“For a long time a lot of electricity, 40 per cent of the electricity produced in many countries, would come from coal because it was a very inexpensive, plentiful form of carbon to burn.

“But now countries have seen that they need to move away from that and in fact the G7 just earlier this month got together and in their meeting, the leaders declared that they were going to be 100 percent renewable, that is completely stop burning carbon, coals and other forms of fossil fuels by the end of this century. The only problem is that for global warming purposes that’s probably too late,” Shnell added.

Shnell was among some of the world’s leading renewable energy experts who met here late last month to consider options for renewable energy development in the Caribbean.

The Martinique Conference on Island Energy Transitions was organised by the International Renewable Energy Agency (IRENA) and the French Government, which will host the United Nations International Climate Change Conference, COP 21, at the Le Bourget site in Paris from Nov. 30 Dec. 11 2015.

Senior Energy Specialist at the World Bank Migara Jaywardena said the conference was useful and timely in bringing all the practitioners from different technical people, financial people and government together.

“There’s a lot of climate funds that are being deployed to support and promote clean energy…and we talked about the challenges that small islands, highly indebted countries have with mobilising some of this capital and making that connection to clean energy,” Jaywardena told IPS.

“They want to do it but there isn’t enough funds and remember there’s a lot of other competing development interests, not just energy but non-energy interests as well. Since this conference leads to the COP in Paris, I think being a part of that climate dialogue is important because it creates an opportunity to begin to access some of those funds.”

“As an example, for Dominica we have an allocation of 10 million dollars from the clean technology fund to support the geothermal and that’s a perfect example of where climate funds could be mobilised to support clean energy in the islands,” Jaywardena added.

Shnell said Caribbean economies are severely affected by the cost of fuel but that should be an incentive to redouble their efforts to get away from importing oil.

“The oil that you import and burn turns right around and contributes to global warming and the potential flooding of the islands, whereas you have some great potential resources there in terms of solar and wind and certainly geothermal,” he said.

“What we’re advocating is the mixture of those resources. We feel it would be a mistake to try to select one and make that your 100 percent source of power or energy but it’s the mix, because of different characteristics of each of them and different timing of availability and so forth, they work much better together.”

He noted that wind and solar are intermittent while utility companies have to provide power all the time.

“So you need something like geothermal or hydropower that works all the time and provides enough energy to keep the grid running even when there is no solar energy. So you need to have a balance of your resources but it is quite possible to have that balance and still make it 100 percent renewable and do without fossil fuels altogether,” Shnell said.

A legislator in St. Kitts and Nevis said the twin island federation has gone past fossil fuel generation and is now adopting solar energy with one plant on St. Kitts generating just below 1 megawatt of electricity and another being developed which would produce 5 megawatts.

“In terms of solar we’ll be near production of 1.5 megawatts of renewable energy. As a government we are going full speed ahead in relation to ensuring that there’s renewable energy, of course, where the objective is to reduce electricity costs in St. Kitts and Nevis,” Energy Minister Ian Liburd told IPS.

In late 2013 legislators in Nevis selected Nevis Renewable Energy International (NREI) to develop a geothermal energy project, which they said would eventually eliminate the need for existing diesel-fired electrical generation by replacing it with renewable energy.

Edited by Kitty Stapp

Fifty-five percent of the world’s poor still have limited protection from hunger and economic, social or political crises despite expansion of social safety programmes in developing countries in recent years.

According to a report released by the World Bank on Jul. 7, most of the poor without a social safety net system are in lower-income countries, especially in sub-Saharan Africa and South Asia, where the vast majority of the world’s poor reside.

In these countries, safety schemes like cash transfers and school feeding programmes only cover 25 percent of the extreme poor, compared to 64-percent coverage in upper-middle-income countries.

Existing social welfare mechanisms are insufficient to close the poverty gap, leaving approximately 773 million people struggling to survive, experts say.

The report, the second in a series, was released following the World Bank Group and International Labor Organisation’s (ILO) announcement of their goals to provide universal social protection within the next 15 years.

A joint statement released by the two organisations on Jun.30 cited universal coverage and access to social protection as twin goals by 2030.

“The World Bank Group and the ILO share a vision of social protection for all, a world where anyone who needs social protection can access it at any time,” according to the joint statement by Jim Yong Kim, president of the World Bank Group, and Guy Ryder, executive director of the ILO.

“The new development agenda that is being defined by the world community – the sustainable development goals (SDGs) – provides an unparalleled opportunity for our two institutions to join forces to make universal social protection a reality, for everyone, everywhere.”

The report comes just ahead of the United Nations’ third Financing for Development (FfD) conference scheduled to take place in the Ethiopian capital Addis Ababa next week, where world leaders will discuss plans for funding the post-2015 development agenda, due to be launched in September.

The issue of providing universal social protection is slated to be at the centre of the agenda.

The five largest social safety programmes in the world are in China, India, South Africa and Ethiopia, where regular assistance reaches a combined total of 526 million people.

According to the report, all countries have at least one type of social security scheme, while the average developing country has about 20 such programmes. Globally, approximately 1.9 billion people benefit from these mechanisms.

On average, low-middle-income countries devote 1.6 percent of their gross domestic product (GDP) to these mechanisms, while richer countries devote 1.9 percent of their earnings to social programmes.

The World Bank reports that poor policy choices lie at the heart of inefficiencies in adequately providing for the poor. Fuel and electricity subsidies, for instance, reduce the portion of government spending allocated to social spending. These regressive subsidies disproportionately benefit the rich.

For example, Yemen spends nine percent of its GDP on energy and electricity subsidies, compared to the three percent it spends on social security net programs. The country, engulfed in political turmoil for the past few years, is already one of the poorest countries in the Arab World with up to 54.5 percent of its population living in poverty.

As developed countries like the United States and the European Union grapple with the balance between providing social security and maintaining economic growth in the slumping economy, developing countries have expanded their safety nets in a bid to reduce poverty.

Cash transfer programmes, recommended by the report as the most effective method, has “positive spillover effects on the local economy.” For each dollar transferred, the total income of the beneficiary increases from 1.08 dollars to 2.52 dollars.

“There is a strong body of evidence that these programmes ensure poor families can invest in the health and education of their children, improve their productivity, and cope with shocks,” said Arup Banerji, the World Bank Group’s senior director for social protection and labour.

“Going forward, more can be done to close the coverage gap and reach the world’s poorest by improving the effectiveness of these programmes underpinned by enhanced targeting, improved policy coherence, better administrative integration, and application of technologies.”

Edited by Kanya D’Almeida