Latest Developments, February 8

In the latest news and analysis…

Fortress Europe
Agence France-Presse reports the European Commission has rejected a Greek request for funds to help build a fence along the Turkish border in order to stem illegal immigration. “ ‘The commission has decided not to follow up the Greek request because it considers it pointless,’ Michele Cercone, a European Commission spokesman, told a news briefing. ‘Fences and walls are short term measures that do not solve migration management issues in a structural way.’ It is up to EU states to decide how to secure their borders, but they have to take into account ‘international obligations including the respect of migrants, human rights,’ Cercone said.”

Give me your tired, your poor…
Yahoo! News reports that increasingly harsh American immigration laws, such as Alabama’s controversial HB 56 which prohibits “business transactions” between undocumented migrants and the state, are impacting people’s ability to obtain food.
“Last month, Kansas kicked more than 1,000 mixed-status families off its food stamp program when it joined three other states in adopting a stricter food stamp eligibility policy. A low-income family of five made up of two undocumented parents and three citizen children now has to show that its income is close to the poverty level for a family of three–not a family of five–in order to access food stamps. This is intended to prevent illegal immigrants from benefiting from food stamps, but immigration advocates say it will leave citizen kids hungry.”

Mining audit
Reuters reports that Zambia plans to audit all the country’s mining projects in search of back taxes it estimates at between $500 million and $1 billion.
“According to UK charity Christian Aid, more than half of the copper Zambia exported in 2008 was destined for Switzerland, but according to Swiss import data almost none of this arrived and [mines minister Wylbur] Simuusa said this trend continued.
This raises a number of transparency issues and activists say copper exported to Switzerland on paper often fetches a lower price than it would if it was exported elsewhere.
‘Once it leaves, where does it go? We don’t have a clue,’ he said.”

World Bank and tax havens
The Task Force on Financial Integrity and Economic Development’s María José Romero writes about revelations that the majority of clients of the World Bank’s private sector arm, the International Finance Corporation (IFC), are using tax havens.
“According to a recent report by Danish NGOs DanWatch and IBIS, ‘57 per cent of the companies analysed in the IFC’s extrac­tives portfolio from 2010 have channelled their investment in developing countries through an intermediate hold­ing company in a tax haven.’ Additionally, ‘more than a third of the countries hosting [the] IFC’s extractive projects have no specific policies on thin capitalisation,’ which means that IFC’s extractive-industry clients can minimise tax payments in developing countries by injecting as much debt and as little equity as possible into their operating subsidiaries.

Civil society organisations have demanded changes in the IFC policy in order to ensure that investing in private sector companies has a positive impact on development.  According to Alvin Mosioma from Tax Justice Network, ‘the IFC should stop channelling public funds to companies using secrecy jurisdictions.’ To make effective and measurable progress towards financial transparency, the DanWatch report also recommends that ‘companies supported by IFC should present their annual accounts on a country-by-country and project-by-project basis, which would en­able host governments and civil society to iden­tify tax avoidance and evasion.’ ”

Resource scramble
A new Global Witness report suggests corruption and instability could worsen in Africa unless there is more transparency in the oil, gas and mining industries.
“Firstly, all companies involved in bidding rounds for oil licences, or that hold oil licences should fully disclose their ultimate beneficial owners. This level of transparency provides government and the public with the opportunity to begin to dispel suspicions that government officials may be benefitting illicitly from the allocation of oil licences. Additionally, the terms of all licences and contracts should be published to make it easier for the appropriate authorities and the public to determine that the terms of a contract are not unduly favourable to a company.”

Cynical aid
MiningWatch’s Catherine Coumans argues the Canadian International Development Agency’s decision to fund corporate social responsibility projects near mine sites is “intended to help Canadian mining companies compete for access to lucrative ore bodies in developing countries” where local opposition to mining is growing.
“Subsidizing the CSR projects of well-endowed multinationals is an irresponsible use of public funds by CIDA, particularly as these CSR projects mask rather than address the serious local- and national-level development deficits caused by mining.
If the Canadian government were interested in addressing the negative impacts of mining on development it would have implemented the recommendations of the parliamentary report of 2005 and the CSR Roundtables of 2007.”

Planning ahead
The Inter Press Service reports the Sierra Leone Conference on Development and Transformation has drafted a 50-year plan for the West African nation and intends to submit it to the country’s parliament.
“Many of the communiqué’s recommendations for improving the economy differ from the growing push towards increased foreign investment in mining, instead focusing on the long-term benefits of health, education and infrastructure. In fact, it suggests that no new mineral extraction agreements should be made by the government without first conducting a public comprehensive analysis of the quantity and amount of the resources to be exploited.
‘We’ve had a system that was not set up for a rapidly growing economy that would be prosperous, it was a system set up to ensure we have a quite country where resources could be extracted with us saying very little,’ said [the conference’s national coordinator Herbert] McLeod. ‘The exploitation of these resources could continue to have dangerous consequences if they are not managed well. You could have an already unequal society become more unequal as the benefits accrue to only a small section of the population.’ ”

Pot and kettle
The Overseas Development Institute’s Jonathan Glennie argues that for all the Western criticism of China’s activities in Africa, Chinese behaviour is “more or less” the same as that of other major donors.
“All in all, Chinese aid to Africa is going to come with all sorts of strings attached, despite the ‘no-conditionality’ rhetoric, and it is a huge power play, despite the proclamations of ‘south-south co-operation’. There will be problems, but no more or less than with the more traditional donors; just different, on account of different attitudes and modalities.”

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