Latest Developments, August 15

In the latest news and  analysis…

With Switzerland’s currency looking like a safe bet to investors and getting stronger by the day, there is growing concern the franc could become a threat to the Alpine nation’s economy: “It’s the curse of the diligent student,” Bank Sarasin’s Ursina Kubli told the Globe and Mail. “It’s being punished for doing its homework very nicely in recent years.” But Global Financial Integrity sees Switzerland in a less flattering light, as an important part of a worldwide network of tax-friendly regimes where individuals stash “US$12 trillion of assets in jurisdictions other than their own countries of residence that are not declared in their own countries of residence; the lost tax revenue annually from such undeclared assets is estimated at US$255 billion,” in addition to avoidance by corporations and other organizations. The Washington-based financial transparency advocates argue the recent tax deal Switzerland has made with Germany and another anticipated one with the UK involves “handing over money and some account information without making substantive changes to a system that puts tax collection and law enforcement officials at a disadvantage.” The solution, as GFI sees it, is a global agreement “to end tax haven secrecy.”

A deal has been struck to end a dispute in Gaza between Hamas and the US Agency for International Development that looked like a role reversal from aid-threatening rows elsewhere that saw Somalia’s Al Shabab – and Sudan’s government before them – accusing Western aid agencies of political interference. This time around, it was USAID who decided to stop humanitarian assistance because of perceived meddling by the host government.

The World Health Organization is looking into the emergence of a mysterious non-fatal illness that seems to be striking Angolan schoolchildren: “Although the cause of these outbreaks still remains unknown, this may be related to exposure to irritant chemicals.” Angola’s economy has grown rapidly since a decades-long civil war ended in 2002, due mainly to oil and supporting industries that account for roughly 85% of GDP. But it remains mired near the bottom of the UN’s Human Development Index rankings, behind Haiti and Uganda.

The UN is calling for investigation of possible war crimes in Sudan’s Southern Kordofan state, which sits on the border of newly independent South Sudan. But a Guardian editorial entitled “United Nations: Weak leaders wanted” strongly criticizes current secretary Ban Ki-moon for, among other things, his seemingly selective attention to evidence of serious human rights violations: “The myopia of powerful governments is clearly shown in their preference for weak candidates for UN secretary-general. Occasionally they misjudge their man, with interesting results. With Dag Hammarskjöld, it was peacekeeping. Kofi Annan’s staff devised the millennium development goals. This time – with the quiet reappointment of secretary-general Ban Ki-moon this summer – they got what they wanted. Mr Ban presides over the slow decay of the UN secretariat, an institution that should be working, as Hammarskjöld said, on the edge of progress.”

New York University economist Nouriel Roubini writes that global capitalism as currently practiced is doomed: “To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.” Among his prescriptions are “stricter supervision and regulation of a financial system run amok.”

James Lindsay of the Council on Foreign Relations is “depressed” to see Western pre-eminence slipping to the point where countries that are home to over 80 percent of the world’s population could soon account for half its wealth. But while the Globe and Mail’s John Ibbitson concedes “it’s natural for people to worry about their daughter or son finding a good job in a depressed Western economy, and for them not to care that billions of people have been lifted out of the very worst poverty as a result,” he is a firm believer in linear human progress and sees the rise of the world’s most populous countries as another big step in the right direction. “The more wealthy countries there are, the more wealth they will make together, which in turn will lift more people out of poverty and make them more free, reducing the chances of great wars, the kind that kill tens of millions, possibly including your daughter or son, or you.” And the Economist happily announces the BRIC countries are embarking on a path that could fundamentally alter the world of aid: “The establishment donors’ aid monopoly is finished.”

Following up on his recent rejection of the view “that history is something to be left to historians,” the Overseas Development Institute’s Jonathan Glennie looks at the recent history of measuring poverty. Concerning the World Bank’s practice of dividing countries into low-, medium- and high-income countries (LICs, MICs and HICs) and the apparent trend towards upward mobility, he cautions against a too-linear view, pointing out that “of the 26 countries that went from LIC to MIC status in the last decade, 18 had been MICs in the past but had relapsed to LIC status, mostly in the early 1990s.” On the other hand, membership in the UN’s Least Developed Country club has been depressingly stable.

Focusing mainly on Oprah Winfrey’s philanthropic activities, Cambridge University’s Priyamvada Gopal writes about “how billionaire benevolence is closely tied to the big neoliberal political manoeuvres of our time.” While Gopal stresses she does not question the sincerity underlying what she terms “humanitarian privatisation,” she worries about the combination of ignorance and “missionary zeal” the mega philanthropists display: “The billionaire “humanitarianism” of Winfrey, Gates and Murdoch is deeply compromised not only by its failure to acknowledge the causal relationship between extreme wealth and great poverty but by participating in an ideological assault on the welfare state. It posits itself as the only way to change the world – from above and with a wealthy few firmly in control.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s