Tag Archives: growth

Latest Developments, September 23

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In today’s latest news and analysis…

Normalizing drones
Reuters reports on the deterioration in US-Pakistan relations, with the most recent incident – chairman of the US Joint Chiefs of Staff Admiral Mike Mullen’s allegation that Pakistan’s intelligence agency is a “veritable arm” of the violent Haqqani network which operates inside Afghanistan – suggesting targeted assassinations have become less controversial than harsh words expressed publicly.
“Mahmud Durrani, a retired major general and former Pakistani ambassador to Washington, said both sides should ease tensions to avoid American military action beyond drone strikes or economic sanctions.”

Arming against democracy
Human Rights Watch has called on the US to hold off on selling $53 million in armoured vehicles and missiles to Bahrain in light of alleged abuses committed against “peaceful critics” of the regime.
“It will be hard for people to take US statements about democracy and human rights in the Middle East seriously when, rather than hold its ally Bahrain to account, it appears to reward repression with new weapons,” according to the group’s deputy Washington director, Maria McFarland.

Who you gonna believe?
In the aftermath of Oxfam allegations that a British company’s carbon offset project in Uganda had led to the forcible eviction of more than 20,000 people, the Wall Street Journal reports the New Forests Company said all relocations were “voluntary, legal and fully respected and in accord with all stringent protocols” and the World Bank said the project “had met its standards so far.”
“Matt Grainger, an Oxfam spokesman and co-author of the Uganda report, faults New Forests and its investors for not digging deeper into the project. In interviews with hundreds of former residents, he said, ‘we can’t find any evictee that doesn’t describe violence….We can’t find anybody who was compensated.’”

Diplomatic oil leak
The Courthouse News Service reports on Wikileaks cables describing efforts by Chevron to convince the Ecuadorean government to make a massive lawsuit over pollution in the Amazon rainforest go away despite the oil company’s public criticism of the country’s “politicized” courts.
“Chevron had begun to quietly explore with senior GOE officials whether it could implement a series of social projects in the concession area in exchange for GOE support for ending the case, but now that the expert has released a huge estimate for alleged damage, it might be hard for the GOE to go that route, even if it has the ability to bring the case to a close,” according to a note written by former US ambassador Linda Jewell April 7, 2008.

Putting the green in greenwash
A new Bottom Up Thinking post suggests that even if companies that donate funds to tropical conservation “are consciously attempting to atone for their ‘bad’ acts elsewhere that have harmed the cause of conservation,” pragmatic engagement may be the best approach.
“Wrapped up in all this is one of the big questions of CSR: compensatory philanthropy versus integration into core business practices. I think just about everyone agrees that it is better not to sin in the first place, than to make some later atonement, and thus conservation BINGOs need to be wary of cosying up to big polluting businesses who are fundamentally uninterested in changing their ways… But on the other side of the coin, we must be realistic: the modern world consumes an awful lot of resources (hydrocarbons, minerals, timber, food) whose production or extraction is inevitably messy. So, yes, we should constantly push polluters to improve their acts, but we should accept that some environmental damage is unavoidable, and welcome their attempts to atone for this elsewhere.”

With or without you
Embassy Magazine reports that British Prime Minister David Cameron, on a visit to Canada, suggested that an outcome of increased global trade liberalization was more important than a process of inclusive negotiation.
“And if we can’t get a deal involving everyone, then we need to look at other ways in which to drive forward with the trade liberalization the world needs, ensuring the continued work of the WTO preventing any collapse back to protectionism,” he told Parliament. “But going forwards, perhaps with a coalition of the willing where countries like Britain and Canada who want to, can forge ahead with more ambitious deals and others can join later if they choose.”

An end in itself
The Trade Justice Movement’s Ruth Bergan criticizes the G20’s development working group for prioritizing the interests of big business and seeing development as a means to increasing trade.
“While governments are allowed to continue doing business in the G20, we should expect little more than lip service to development and a shopping list of measures to benefit the vested interests of the private sector. The WTO may be in freefall, but we must be vigilant that the G20, which does not even pretend to be democratic or accountable, does not become a substitute.”

The trouble with accountability
The Institute of Development Studies’ Noshua Watson argues that because pressure from domestic voters can reduce the quality of foreign aid provided by governments in wealthy countries, official development assistance needs to be supplemented by other sources of non-state giving.
“The provision of global public goods is dependent on the willingness of the most fortunate to give to the less fortunate. Whether this aid actually contributes to development and wellbeing depends on how aligned donors’ intentions are with recipients’ needs. It also depends on recipients’ capacities to use that aid. Because they are not responsible to the voting public, philanthropies can more closely meet recipients’ needs and help them build capacity.”

Latest Developments, August 22

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In the latest news and analysis…

The unexpected appearance of a smiling, victory sign-flashing Saif al-Islam Gadhafi after he had supposedly been arrested by rebel forces suggests there may yet be a few twists in the Libyan conflict that has already lasted six months despite roughly 20,000 NATO aerial missions. Nevertheless, with the apparent crumbling of the Gadhafi regime over the last few days, all those nagging questions about Libya’s rebels and what they would do with power may be about to be answered. Beyond concerns about the ability of such disparate groups to work together without the focus provided by a common enemy, the New America Foundation’s Barak Barfi wonders if they have the competencies required for the work that lies ahead: “Short on skilled experts, a post-Qaddafi Libya risks becoming dependent on foreign assistance, much like the Palestinians, who live largely from international aid rather than from their own economic activity.” But as far as Europe is concerned, the business news coming out of Libya is good for now.

As for assessing the NATO mission, the Financial Times reports: “Few, if any, civilian casualties were incurred on the ground; no alliance aircraft or personnel were lost; and the mission saw no flagrant breaches of the remit it received from the UN, which defined the goal of the operation as the protection of civilians on the ground.” But media watchdog Fairness and Accuracy in Reporting has some questions (as does Amnesty International) about reports of civilian deaths, and US congressman Dennis Kucinich argues “the war against Libya has seen countless violations of United Nations security council resolutions (UNSCRs) by Nato and UN member states.”

The Wall Street Journal reports the US Justice Department is getting creative in trying to go after foreign officials who demand bribes, even though the Foreign Corrupt Practices Act is intended for the pursuit of those involved in the supply side of corruption. But lawyers for the ex-governor of the Tourism Authority of Thailand and her daughter are challenging the money laundering charges against their clients: “No court has allowed the making of a payment that is an essential element of the predicate unlawful activity—such as a bribe in bribery case—constitute ‘promotion’ of that same activity.”

Ghana’s Adom News reports tension is growing between Canadian miner Xtra Gold and inhabitants of a community who say their drinking water has been polluted and their lands expropriated, and are threatening to “deal ruthlessly” with the company. Local MP Kwasi Amoako Atta said the company needed to learn how to conduct business in the area: “Even if you have the required documents to back your operations you need to seek clearance from the town leaders, the mere fact that you have the license does not give you the permission to jump into people’s land and start mining.”

The Center for Economic and Policy Research’s Mark Weisbrot has a grim update on the state of reconstruction and resettlement in Haiti’s capital Port-au-Prince: “Nineteen months after the earthquake, almost 600,000 Haitian people are still living in camps, mostly under tents and tarps. Despite the billions of dollars of aid pledged by governments and donors since the earthquake, there are probably less than 50,000 that have been resettled. And for the 600,000 homeless, the strategy seems to be moving in the direction of evictions – without regard as to where they might end up.”

The Center for Global Development’s Michael Clemens presents an economic argument for opening the world’s borders to free movement of people. According to his calculations, taking such a step could increase global GDP by 20-60 percent or tens of trillions of dollars. University of Toronto political scientist Joseph Carens has long called for open borders but he does so on moral grounds: “Citizenship in Western liberal democracies is the modern equivalent of feudal privilege—an inherited status that greatly enhances one’s life chances. Like feudal birthright privileges, restrictive citizenship is hard to justify when one thinks about it closely.”

UN Under Secretary General Philippe Douste-Blazy argues revenues from the tax on financial transactions (re)proposed by the leaders of France and Germany last week should not just go to helping Europe’s struggling economies: “If the crisis is destroying jobs at home, it is destroying lives in the South.” He believes such a “micro-tax” could raise $100-$200 billion a year and would help “globalize solidarity.”

While the Overseas Development Institute’s Jonathan Glennie notes the World Bank “has had a bad couple of decades,” he also believes the it remains important in its ability to raise the profile of certain issues and mobilize governments to take action. But he says it “needs to become a bank for the world, ditching its history of favouring the interests of a few powerful shareholders.” To illustrate his point he takes the example of the debt cancellation campaign which started in the 1980s but did not convince the bank to cancel debts until 2005, “and then only with neoliberal strings attached.” The decades of delay, according to Glennie, were “because the bank is set up to look after the interests of the creditor countries, rather than the debtors, however hard decent officials seek to change that.” Until that changes, he believes the World Bank will be unable “to fulfil its idealistic mandate.”

The Guardian’s George Monbiot writes on the delusions and ravages of perpetual growth: “To sustain the illusion, we have inflicted more damage since 1950 to the planet’s living systems than we achieved in the preceding 100,000 years. The damage will last for centuries; the benefits might not see out the year.” He points to Tim Jackson’s 2009 Prosperity Without Growth as “the beginning of a plan.”

 

Latest Developments, July 20

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As expected, the UN has officially declared a famine in southern Somalia. French agriculture minister Bruno Le Maire writes in Le Monde that hunger in this day and age is a “scandal,” and a Globe and Mail editorial decries the slow international response to the food crisis in the Horn of Africa: “When an alarm of impending famine is sounded, the whole world should be galvanized into action.” But even though USAID’s Famine Early Warning Systems Network predicted the food crisis nearly a year ago and Islamist insurgents controlling much of Somalia recently lifted their ban on foreign aid, there are still legal obstacles to large-scale US assistance.

Earlier this year, the World Food Programme also launched an emergency operation in North Korea and an EU mission recently reported “widespread consumption of grass.” As of last week, the UN had received less than a quarter of the funds it was seeking for North Korean food assistance. The Brookings Institution’s Roberta Cohen says politics have prevented South Korea and the US from helping so far. “But taking no decision is really a decision, which gives the impression that there may be no urgent or extensive food crisis in North Korea requiring immediate action.”

But Columbia University economist Jeffrey Sachs says responding to food shortages, such as the one currently unfolding in the Horn of Africa, is not the way to go. The focus should instead be on lifting people out of poverty permanently, dealing with climate change and reining in population growth.

A Guardian editorial says the British public’s lack of enthusiasm for the government’s pledge to increase aid to 0.7 percent of GDP is understandable, given the frustratingly predictable cycle of development policies. “Fashions in giving have come and gone, interspersed with bursts of retrospective analysis purporting to show both why previous programmes have failed and how to reshape them so that they really will work and really will add to the sum of peace and prosperity in the world.” Nevertheless, the authors encourage the Cameron government to stick to its aid promise before concluding: “If we get it right this time, the public might eventually come round.”

A major problem with foreign aid, according to Bottom Up Thinking, is an accountability deficit resulting from the fact that its “‘customers’ are not the same people as those who pay the bills and that leads to massively misaligned incentives.” But the main reason why people have such little faith in aid’s usefulness is, paradoxically, the high expectations set up by an industry obsessed with sending out positive messages: “The problem, as I see it, is that we are very rarely upfront about the risks of failure. Far too much of the conservation and development industry is extremely reluctant to admit to failure (or even just disappointing results); glossy brochures proclaim an unending procession of success stories.”

The Center for Global Development’s Wren Elhai warns that a six-word amendment to proposed US legislation would make all American assistance to Pakistan conditional on the South Asian country’s demonstration that it is committed to preventing the Taliban and other perceived undesirables from operating within its borders: “The notion that a relatively small amount of civilian aid will change the strategic calculus of the Pakistani military is simply ludicrous. Meanwhile, attempting to use civilian aid as security leverage would upset the fragile two-track strategy that has guided U.S. strategy in Pakistan for the past several years.”

In a blog post entitled “Yes, South Sudan Can,” World Bank economist Shantayanan Devarajan lays out the three keys for South Sudanese success: stimulating sustained economic growth, implementing “home-grown solutions,” and embracing information and communications technology. Drawing on Africa’s recent history for inspiration, Devarajan points to “a number of countries, such as Mozambique and Uganda, which emerged from civil conflict and sustained above-7-percent GDP growth for over a decade.” In the UN’s latest Human Development Index ranking, Mozambique sat 168th out of 172 countries and Uganda scored better than only two non-African countries: Afghanistan and Haiti.

After discussing a recent study that suggests resource extraction is more often a blessing than a curse, Michael Levi of the Council on Foreign Relations turns to the specific possibility of a Liberian oil industry, reminding us the authors’ “analysis is statistical: while it might say that on average there isn’t a resource curse, that should be little reassurance for any particular country that’s diving into extraction.” Nor does the analysis, which focuses on political freedom, take socio-economic or environmental indicators into account. Of the 12 sub-Saharan countries whose daily crude production currently exceeds 50,000 barrels per day, only Gabon, South Africa and Congo do not rank in the bottom quintile in either the UN’s Human Development Index or Yale University’s Environmental Performance Index.

Reuters correspondent Peter Apps asks if Britain is more corrupt than it thinks. According to one expert quoted in the article: “If you look at the way we talk about and measure corruption in the West, it’s either Africa or Asia which comes out worse. But we are using a distorted prism.” Apps’s question is inspired by the UK’s ongoing phone hacking scandal, but there are also new developments concerning British companies behaving badly overseas. A parliamentary committee slammed military contractor BAE Systems for misusing funds in Tanzania and not paying the penalty imposed after a plea bargain. And miner Monterrico Metals has settled out of court on charges of collusion in the detention and torture of protesters in Peru.

The European Network on Debt and Development’s Alex Marriage sees an “apparent conflict of interest” in the fact that the European Commission assigned PricewaterhouseCoopers, an international accounting firm which boasts 415 of the Fortune Global 500 among its clients, to prepare a report on how poor countries can minimize financial losses due to corporate transfer pricing.  The practice allows large multinational corporations to reduce their tax bill by creatively billing themselves for transactions between subsidiaries so as to maximize declared expenses and minimize declared profits. “Transfer pricing is the single biggest source of illicit financial flows in the world costing developing countries hundreds of billions of dollars every year,” according to Marriage. PwC claims its own 2011 report on global transfer pricing – a separate document from the EU-commissioned one – “offers practical advice on a subject where the right amount of effort can produce huge dividends in the form of a low and stable tax charge, coupled with the ability to defend a company against tax auditor attack.”

Oxfam’s Duncan Green asks why development experts pay so little attention to “how poor people ‘do’ development.” And the Center on International Cooperation’s Alex Evans points out that poor people will not get a fair share of the world’s limited resources unless “developed countries and the “global middle class” dramatically reduce their consumption levels.”

Latest Developments, July 6

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Joseph Stiglitz says rich countries have learned nothing from the global financial crisis or the failure of earlier austerity measures in Latin America, Asia and elsewhere. But the Nobel laureate’s emphasis on growth and “still further growth” suggests sustainability does not factor into his vision.

Patrick Michaels goes a step further, arguing there are no limits to potential growth, at least when it comes to food production, and it is policies aimed at halting global warming that are killing people: “This “limits to growth” argument is as tired as a farmer at the end of harvest.”

Harvard economist Dani Rodrik lays out his position on the place of democracy in economic policy making: “Ultimately, the question concerns whom we empower to make the rules that markets require. The unavoidable reality of our global economy is that the principal locus of legitimate democratic accountability still resides within the nation state. So I readily plead guilty to my economist critic’s charge. I do want to make the world safe for democratic politicians. And, frankly, I wonder about those who do not.”

One of the architects of the Kimberley Process praises Canada’s stand on blood diamonds, while an editorial (also in Embassy Magazine) refers to asbestos as Canada’s blood diamond after Canada opposed the substance’s inclusion in the Rotterdam Convention’s list of hazardous substances. “So in the same day,” the editorial reads, “Canada stood up for a process designed to save lives and provide accountability in an industry that is wrought with death and hypocrisy, and then took a position of hypocrisy that will contribute to more deaths in developing countries.”

Meanwhile, gold is reportedly fanning the flames of Colombia’s violence. Canada, which is home to a number of the world’s largest gold mining companies, has signed a bilateral free trade agreement which is set to kick in next month. A similar US-Colombia agreement appears stalled for now.

And one final Canadian mining note: The Canadian International Development Agency is teaming up with Teck Resources and the Micronutrient Initiative for zinc treatment in Senegal. Perhaps surprisingly, a spokesperson for watchdog group Mining Watch Canada believes the project goes beyond the kind of “advertising” he says is typical of corporate social responsibility endeavours: “This looks to me like a perfectly positive thing with concrete benefits to children, and it has accountability already built in.”

UNAIDS is praising India’s decision to resist pressure, most notably from the European Union, to adopt more stringent intellectual property protections that would make it more difficult to produce generic HIV/AIDS treatments. “Millions of people will die if India cannot produce generic antiretroviral drugs, and Africa will be the most affected,” UNAIDS executive director Michel Sidibé said. “For me, it is an issue of life or death.”

Marta Ruiz draws attention to a couple of initiatives, one in Africa and one in the Netherlands, intended to rein in abusive transfer pricing by transnational corporations. But the tax news out of the Netherlands is not necessarily all good for poor countries.

A Chinese prosecutor is calling for international cooperation in tackling the “global cancer” of trans-border corruption, the world’s largest mining company has banned “facilitation payments” in order to comply with the UK’s new anti-corruption law, and the World Bank is looking into possible asset recovery in foreign bribery cases.

In case anyone needed a reminder of the problems inherent in trying to establish a one-size-fits-all global justice system, an angry crowd in Egypt wants tough penalties for police officers who used violence against protesters earlier this year, while a woman who lost her home in Cote d’Ivoire’s recent violence has other priorities.

Nigeria’s president worries about his country’s “huge food import bills,” and the Economist asks if housing is the most dangerous asset of all.