Latest Developments, October 3

In the latest news and analysis…

What’s old is new again
Reuters reports that Somalia’s new government plans to “honour contracts signed prior to 1991 with oil majors including Royal Dutch Shell, BP and Chevron” during Mohamed Siad Barre’s two decades of military rule:

“The country hopes exploration by major oil companies will enable it to participate in the excitement over a string of discoveries in East Africa that have aroused expectations the region will become an important energy supplier.
Should companies choose to return, they will negotiate with the government over converting the old royalty-based contracts into production sharing agreements.
Any companies that signed oil exploration deals after 1991 could negotiate but would not be given priority, [Abdullahi Haider, a senior adviser to Somalia’s Ministry of Energy] said.”

Fair share
The Australian Broadcasting Corporation reports on Timor Leste’s struggle to control its own natural resources:

“Having fought a bitter battle with Australia over seabed borders and mineral rights it’s now taking on some of the world’s biggest private energy companies, demanding they pay their fair share of tax on the resources they’re extracting.

As Four Corners discovered, the immediate battle is to audit the energy companies that the government claims are not paying their share of taxes. The centre of this struggle can be found in an office building where a small group of public servants have been meticulously going through contracts and tax returns. This is a contest the country’s leaders say they cannot afford to lose, because if they do they will consign an entire country to poverty.”

Eco-protectionism
The South African Government News Agency reports that the country’s trade minister believes that international health and safety requirements are a threat to African products:

“Speaking at the 3rd African Accreditation Cooperation (AFRAC) General Assembly and Meetings held at the Emperor’s Palace on Monday, [Trade and Industry Minister Rob] Davies said ‘eco protectionism’ was emerging under the guise of addressing climate change concerns, particularly from advanced countries.
‘For instance, some countries are considering the imposition of border adjustment taxes on imports produced with greater carbon emissions than similar products produced domestically, and subject to carbon emission limits,’ said Davies.

The dumping of cheap, sub-standard manufactured goods on African markets has sometimes led to the collapse of local industries as well as served as a major barrier to industrial development.”

Food speculation
Metro reports that financial speculation on food, blamed by many for pushing up the world’s soaring food prices, is getting worse:

“Regulations that were previously in place to protect those who grew or sell food were removed in the 1990s. With the amount of money to be made gambling on the markets, the banks, hedge fund managers and pension funds moved in. Financial speculation on food almost doubled between 2006 and 2011. In 2006, the value of financial assets in food markets was £40billion; by 2011, it was £78billion. Financial speculators now dominate commodity markets, holding more than 60 per cent of some markets in 2011, compared with 12 per cent in 1996.”

Bad words
ABC reports that a group of linguists are arguing the US media’s use of the term “illegal immigrant” is neither inaccurate nor neutral:

“ ‘If we talk about a child who skips school, we don’t say he’s an illegal student,’ [UCLA’s Otto] Santa Ana said in reference to truancy laws. ‘We call a person who crosses the street illegally a jaywalker, not an illegal walker.’ Linguists George Lakoff and Sam Ferguson suggest in their 2006 paper ‘The Framing of Immigration’ that if the media is insistent on using ‘illegal immigrant,’ they also might consider the term ‘illegal employers,’ for those who give them work, in the name of linguistic fairness.”

Fighting patents
Intellectual Property Watch reports that Médecins Sans Frontières (Doctors Without Borders) has launched the “Patent Opposition Database” to increase access to affordable generic medicines:

“A patent opposition is a legal challenge aimed at blocking the granting of an unwarranted patent, MSF said.
The database was launched on the tenth anniversary of a landmark decision by the central intellectual property court in Thailand to overturn a patent on a key HIV drug based on opposition filed by patients. India and Brazil also have used this process.”

Demographic dividend
The Royal African Society’s Richard Dowden suggests that the extractive industry, currently “the single biggest contributor to Africa’s growth,” is unlikely to provide solutions to one of the continent’s biggest challenges:

[McKinsey and Co’s Africa at Work, Job Creation and Inclusive Growth] report says that 90 million Africans had joined the world’s consuming classes by 2011 and that the continent is about to reap a ‘demographic dividend’ by 2020 as there will be another 122 million people in the job market. Then comes the killer fact that makes the so-called dividend look more like a disaster: only 28 percent of the current labour force has stable wage-paying jobs. So technically Africa – were it one country – has a 72 percent unemployment rate. And where will new jobs come from? Resource extraction – namely mining, oil and gas – are notoriously low employers these days.

Macro malpractice
Morgan Stanley Asia’s Stephen Roach argues that so-called quantitative easing “puts central banks in the destabilizing position of abdicating control over financial markets”:

“For a world beset by seemingly endemic financial instability, this could prove to be the most destructive development of all.
The developing world is up in arms over the major central banks’ reckless tactics. Emerging economies’ leaders fear spillover effects in commodity markets and distortions of exchange rates and capital flows that may compromise their own focus on financial stability. While it is difficult to track the cross-border flows fueled by quantitative easing in the so-called advanced world, these fears are far from groundless. Liquidity injections into a zero-interest-rate developed world send return-starved investors scrambling for growth opportunities elsewhere.”

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