Latest Developments, November 23

In the latest news and analysis…

Mining aid
The Globe and Mail reports that Canada’s new international co-operation minister’s promotion of business opportunities abroad, particularly for mining companies, signals “a profound shift” in the Canadian approach to foreign aid:

“[Julian Fantino] said part of [the Canadian International Development Agency’s] work is to help small and medium enterprises in developing countries find their footing. But he also emphasized CIDA’s role in preparing those countries for foreign investment, suggesting the agency’s work can help make countries and people ‘trade and investment ready’ and even dissuade governments from nationalizing extractive industries.
‘CIDA can help develop the capacity to negotiate with other countries, implement international commercial agreements with Canada and other trading partners and help firms benefit from these agreements. We will be doing more of this in the future,’ he said.”

Setting limits
In a draft report on sustainability and the post-2015 development agenda, New York University’s Alex Evans calls for the successors to the Millennium Development Goals to include “explicit recognition of planetary boundaries”:

“Poverty reduction is the first casualty of unsustainability, with poor people disproportionately reliant on natural assets and vulnerable to climate and scarcity risks. At the same time, current models of development are also the main driver of unsustainability – most obviously in ‘developed’ countries, but increasingly also in emerging economies which, though far behind high income countries in per capita impacts, are nonetheless helping push the world towards ecological tipping points.

Environmental summitry has become the world’s principal breeding ground for multilateral zombies (staggering on, moaning piteously, never quite dying) with few if any really significant wins in the 15 years since Kyoto. This should surprise no-one, mirroring as it does the fact that in capitals all over the world, environment ministers lack the clout to make change happen. Sustainability advocates need to stop talking about mainstreaming and get on with it. That means bringing environment to the heart of debates about how we develop – not in some vague, aspirational way, but by starting from quantified estimates of how much environmental space is available for us to share between us.”

Vulture loss
The Guardian reports that politicians in Jersey have voted to prevent so-called vulture funds from using the British island’s courts as a venue to sue poor countries:

Vulture funds, which buy up poor nations’ debts on the cheap before suing them for up to 100 times the original amount, had attempted to take cases to Jersey after British law banned the practice.
In the latest case, multimillionaire speculator Peter Grossman used Jersey’s courts to sue the Democratic Republic of the Congo (DRC) for $100m (£64m) over a decades-old debt that started out at $3.3m. Grossman, who runs the FG Hemisphere fund, was able to take the case to Jersey’s courts because the island is a crown dependency not covered by all UK laws.

The International Monetary Fund and the World Bank estimate that vulture funds are seeking total claims of $1.47bn from countries including Cameroon, Ethiopia, Sudan, Uganda, and the DRC.

Vulture win
The Financial Times reports that Argentina’s government has described as “a kind of legal colonialism” a US court ruling that the country should pay $1.3 billion to hedge funds:

“The victory for several hedge funds against Argentina has sparked fears that the country could be plunged into yet another debilitating sovereign default and threatens to make government restructurings more difficult in the future.
In what has been dubbed the ‘trial of the century’ for sovereign debt restructurings, a US District Court judge on Wednesday ordered Argentina to pay the hedge fund creditors – led by Elliott Associates and Aurelius Capital – in mid-December.

Buenos Aires could choose to default rather than repay the hedge funds it considers ‘vultures’, in a case that experts say has far-reaching ramifications for international finance.

The decision still has to be confirmed by the appeals court and could end up before the US Supreme Court. But if upheld, it would open a chink in the armour of sovereign immunity against creditors that countries have largely enjoyed for the past century.”

Unnecessary incentives
TrustMedia reports that the African Tax Administration Forum is calling for a review of tax incentives granted by African governments to multinational corporations:

“[ATAF’s Logan Wort] said most tax incentives agreements were entered into without wide consultations as to how they impact on African countries’ ability to mobilise domestic resources for development.
‘We believe African countries are losing millions of dollars through tax incentives, which are mostly negotiated by the political elite.’

Zambia, for instance, has given specific tax incentives to companies operating in copper mining, the country’s traditional export sector, with conditions varying from one company to another. ATAF thinks this kind of incentive is not necessary.
‘We believe investors will come with or without tax incentives, therefore they are not necessary,’ Thulani Shongwe, a tax expert at the ATAF secretariat, commented. He said the organisation was now on a ‘crusade’ to review the benefits.”

Corn fears
Via Campesina expresses concern that multinational giants Monsanto, Dow and DuPont look likely to get the green light to plant genetically modified maize on 2.4 million hectares of Mexican land, “a surface area equivalent to that of El Salvador”:

The situation is extremely alarming since Mexico is the world’s centre of maize diversity, with thousands of varieties in the fields of peasant and indigenous communities. Maize is currently one of the world’s three main food staples, so the contamination of Mexican maize by dangerous GMOs is a threat to the entire planet.”

Human development
The University of London’s Simon Reid-Henry writes that Nobel prize-winning economist Amartya Sen’s conception of development “requires thinking about poverty not simply as an aberration, as something that we might somehow solve.”

“It involves acknowledging, rather, that ‘our privileges are located on the same map as their suffering’, as Susan Sontag puts it. The problem of development lies as much in what we classify as wealth and how we go about promoting that as it does in poverty.

Accordingly, development becomes not so much about making up for what people lack (modernisation, say) so much as removing the ‘unfreedoms’ that stop them living in a way they might otherwise choose: market inequalities, perhaps, or state violence.”

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