Latest Developments, August 18


In the latest news and analysis…

As the violent crackdown on Syrian protestors continues, Western leaders have called for the country’s president, Bashar al-Assad, to step down and are threatening more sanctions. “We call on him to face the reality of the complete rejection of his regime by the Syrian people and to step aside in the best interests of Syria and the unity of its people,” said a joint statement by the leaders of France, Germany and the UK. “For the sake of the Syrian people, the time has come for President Assad to step aside,” US President Barack Obama said. And while there were no threats of international military action, a new UN report says the Syrian regime may have committed crimes against humanity and calls for an investigation by the International Criminal Court.

Peru’s new left-leaning government has suspended its US-funded coca eradication program while it rethinks its drug fighting strategy. Though saying the move is meant only to be a “pause,” the country’s anti-drug czar also suggested 12 years of eradication efforts had done little to reduce cocaine production in the Andean nation that could soon become the world’s top exporter of the drug. And in Mexico, there are growing questions about the human and economic toll of the country’s war on drugs. But in a move designed to crack down on planes smuggling drugs through Central America, the Honduran government is proposing a no-fly zone over an area representing more than a quarter of the country’s total territory.

Apparently not swayed by a recent Economist article suggesting “shale gas should make the world a cleaner, safer place,” South Africa’s government has extended by six months its moratorium on drilling for the controversial energy source. The country’s mining minister imposed the ban earlier this year and commissioned a study on the impacts of fracking but still has some lingering questions. Anglo American and Shell are among the companies eager to extract South Africa’s shale gas but they have encountered opposition from farmers concerned about water contamination risks.

The UK government is vowing to resist any “Robin Hood” tax on financial transactions, following noises from France and Germany that they intend to introduce such a measure to generate revenue and discourage market speculation. “Any financial transaction tax would have to apply globally — otherwise the transactions covered would simply relocate to countries not applying the tax,” according to a British Treasury official.

“No clear evidence exists that microfinance programmes have positive impacts,” according to a new study by the UK’s Department for International Development, citing a lack of “rigorous quantitative evidence” on the subject. The study’s lead researcher has urged “a more holistic approach to financial services for the poor, which would put more focus on savings, remittances and financial literacy rather than on the obsessive interest in microcredit of the last few years.” Another, as-yet unpublished DFID study on microfinance in Africa is said to reach similar conclusions but, according to the Guardian, the department has already locked in funding to expand African microfinance programs.

Christian Aid has blasted the anticipated UK tax deal with Switzerland, saying it will undermine efforts to tackle international tax dodging, which the NGO estimates costs poor countries $160 annually, “far more” than the amount of aid they receive. “Poor countries lack the political and economic clout to do such deals with Switzerland – but they too lose billions as a result of money being illegally hidden in tax havens,” according to a Christian Aid press release. “And just like the UK, they need that money to fund vital public services such as schools, hospitals and justice systems.”  The statement calls on G20 countries to put a stop to “the tax haven secrecy exemplified by Switzerland” by forging “a new system of automatic information exchange between Governments – including those of poor countries – to help them to detect when citizens hide wealth offshore.”

Like Christian Aid, the French government does not like Switzerland’s so-called Rubik plan – which Germany has accepted and the UK looks set to do the same – that allows Swiss banks to retain their secrecy while falling into line with European tax rules. “We understand the choices made by Germany and Great Britain who, not so long ago, held similar positions to our own,” a French finance ministry source told Le Monde. “It’s only human to want the money right away.” But the source said transparency remains the French priority. Meanwhile, a number of African governments are reportedly looking to set up their own tax havens in order to “modernise the African financial sector.”

Columbia University economist Jeffrey Sachs paints a picture of the world economy in which the super-rich have used the “global tax competition” argument to secure tax cuts from their home governments and tax havens have multiplied despite feeble protests from politicians: “In the end the poor are doubly hit, first by global market forces, then by the ability of the rich to park money at low taxes in hideaways around the world.” One of the essential steps he believes governments must take in order to end the current economic crisis is the balancing of budgets “in no small part through tax increases on high personal incomes and international corporate profits that are shielded by loopholes and overseas tax havens.”

Hexayurt Project director Vinay Gupta writes “we must acknowledge that the field of human rights has become a gridlock of rights, entitlements, preferences and theology. Rights directly conflict with each-other, as in the right to property directly conflicting with the right to assured access to water. Without a global jurisdiction, no government can enforce any kind of coherent rights doctrine, particularly in the face of borderless problems like terrorism or environmental crisis.”

University of South Carolina geographer Edward Carr argues development (as well as humanitarian) workers need to think more about their own work’s environmental impact: “While an intervention appropriate to a community’s current needs may result in improvements to human well-being in the short term, the changes brought on by that intervention may be maladaptive in ten or twenty years and end up costing the community much more than it gained initially.”

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