Latest Developments, October 25

In the latest news and analysis…

Water grab
Corporate Accountability International argues a newly launched water-governance partnership between the World Bank and major corporations, such as Nestlé and Coca-Cola, amounts to an attempt at water grabbing.
“The Water Resources Group aims to “develop new normative approaches to water management,” paving the way for an expanded private sector role into best and common practices, worldwide. In order to be eligible for support from this new fund, all projects must “provide for at least one partner from the private sector,” not simply as a charitable funder, but “as part of its operations.” The group’s strategy is to insert the private sector into water management one country at a time, through a combination of industry-funded research and direct partnerships with government agencies.”

Puzzling growth
The Center for Global Development’s Charles Kenny looks at the 19 countries – nine of which are located in Sub-Saharan Africa – whose economies more than doubled in size over the last decade and concludes business-friendly regulations may not be as important as many believe.
“Whatever the secret, it doesn’t appear that it was simply a case of creating nirvana for private sector growth. The average 2010 ranking among the world’s 19 fastest-growing countries on the World Bank’s Ease of Doing Business index, which measures the conduciveness of a country’s regulatory environment to starting a new firm, was 114 out of 183. Even among those nine countries that don’t owe their growth to extractive industries, five — including India and Ethiopia — had a ranking below 100. That result echoes the conclusions of economists Dani Rodrik, Ricardo Hausmann, and Lant Pritchett. They looked at 80 periods of “growth acceleration” where an economy increased its growth rate by 2 percent or more for at least seven years. Nearly all were unrelated to economic reforms including liberalization of trade and prices.”

Swiss secrecy
A Bloomberg editorial calls Switzerland’s history of banking secrecy “shameful” and dismisses recent tax agreements with the UK and Germany, which allow holders of Swiss bank accounts to remain anonymous.
“Unfortunately, Switzerland has cooperated only grudgingly in meeting international banking standards, agreeing to do so in 2009 under threat of sanctions and being named as a tax haven by the Organization for Economic Cooperation and Development. Even so, the country this month was ranked at the top of a financial secrecy index developed by the London-based Tax Justice Network.
Switzerland should do itself a favor and abandon the financial opacity that has made it the world’s No. 1 destination for offshore wealth. It has no place in a globalized world where money can be electronically whisked from one place to another, except as a cloak for financial wrongdoing.”

Where dirty money goes
The UN News Centre reports on a new study that suggests 70 percent of the proceeds of international organized crime – about $1.6 trillion – were laundered through the world’s financial system, whereas less than one percent was seized or frozen.
“The findings suggest that most cocaine-related profits are laundered in North America and in Europe. The main destination to process cocaine money from other subregions is probably the Caribbean.”

EU extractive industry rules
Tax Research UK’s Richard Murphy is “delighted” that the European Commission has proposed requirements that EU-based extractive and forestry industries disclose their payments to foreign governments on a country and project basis.
“Now we have to get it through the Parliament.
And then make it global.
And apply it to all sectors.”

Hold the applause
But Christian Aid argues the proposal would address corruption but not the tax avoidance that costs poor countries billions each year.
“This information will help people hold their governments to account about what they are doing with the money they are receiving from multinational companies – and that is important,” according to Christian Aid’s Joseph Stead.
“However, corporate accountability is equally important. Unless these proposals are expanded to cover firms in all industries and to require greater financial detail than the Commission is currently suggesting, then companies will be able to keep siphoning profits out of developing countries on a massive scale.”

Letter from Ban
The UN has released a letter sent by Secretary General Ban Ki-moon to G-20 leaders ahead of next month’s summit, in which he reminds them of their responsibilities to the planet and its most vulnerable people.
“New sustainable development goals should build on the [Millennium Development Goals] and bring the needs of the planet and those of the poor into a single and mutually reinforcing framework.”

Nobel laureate
Politico reports that the Obama administration is facing opposition from both Democrats and Republicans over the decision to send US troops to central Africa – ostensibly to provide “information, advice and assistance to partner nation forces” in the fight against the Lord’s Resistance Army – just as missions in Iraq and Libya are winding down.
“What is the strategic interest of the United States in doing this? I mean, there are lots of unpleasant people in the world. There are lots of insurgencies and terrorist movements in the world. The United States obviously cannot try to dethrone every one of them,” Rep. Gerry Connolly (D-Va.) said at a House Foreign Affairs Committee hearing on the deployment.

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