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Latest Developments, October 24

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In the latest news and analysis…

Happiness is a doughnut
Oxfam’s Kate Raworth makes the case for adding social boundaries to the nine so-called “planetary boundaries” in order to come up with comfort zones or “doughnuts” within which people can live both sustainably and decently.
“[N]on-monetary metrics must clearly be given more weight in policy making. Economic progress cannot be assessed only – or even primarily – in monetary terms (such as incomes per capita and GDP growth rates). Where the edges are, and whether or not we are hitting them, matters for stability and justice. Policymakers must take more notice of, and be more accountable for, the impact of economic activity on planetary and social boundaries, defined in ‘natural’ and ‘social’ metrics, such as species extinction rates, and unemployment rates.”

Inequality matters
The Overseas Development Institute’s Claire Melamed says the Occupy movements have, if nothing else, dragged the issue of inequality into the spotlight and she presents five points to show why it matters.
“Policy change might be becoming more likely.  In sharp contrast to previous protests, the Occupy movement has got a very sympathetic hearing in the press, with even the Financial Times conceding that they have a point.  Could this be the moment that inequality becomes mainstream? ”

Corruption talks
A new World Bank and UN report calls on the world’s governments to do more about corruption and money laundering.
“The report, the Puppet Masters, examines how bribes, embezzled state assets and other criminal proceeds are being hidden via legal structures – shell companies, foundations, trusts and others. The study’s release coincided with a UN conference on corruption in Marrakesh, Morocco, bringing together anti-corruption advocates and representatives from 154 states.”

Mailbox companies
SOMO has released a new report on Dutch bilateral investment treaties alleging so-called “mailbox companies” are using these agreements to sue home countries for billions “for alleged damages to the profitability of their investments.”
“In addition, the majority of the companies availing themselves of the generous investment protections offered by Dutch BITs are so-called ‘mailbox companies,’ companies with no employees on their payroll and no real economic activity in the Netherlands.”

Walking the gender walk
Gender Action’s Elizabeth Arend argues there is an “alarming gap” between the World Bank’s rhetoric on gender equality and its actual investment policies.
“The World Bank’s gender-blind agriculture investments are even more appalling when they are offered in the form of loans, which increase poor countries’ debt burden and often compel governments to slash public spending on health and other social services to service debt. These cuts are devastating for poor women, who not only suffer directly from lack of access to healthcare, but are responsible for the health and welfare of their households.
Poor countries can appeal to the World Bank for debt relief, but only if they demonstrate a track record of adopting bank-imposed “free-market” policy reforms, including privatisation of state-owned enterprises and unilateral reduction of agricultural trade barriers while rich countries maintain theirs. Women inevitably bear the greatest burden when such policy reforms undermine poor countries’ investments in agriculture, health and education.”

Selling repression
In light of a recent Amnesty International report detailing the extent of arms sales to repressive Arab regimes over the last five years, Al-Jazeera asks if the proposed Arms Trade Treaty will really be able to rein in the global weapons trade.
“The human rights group reports that in the five years preceding the Arab spring $2.4bn worth of small arms, tear gas, armoured vehicles and other security equipment was sold to five specified countries that have faced or are facing popular uprisings – Bahrain, Egypt, Libya, Syria and Yemen.
And these sales were committed by at least 20 governments including Austria, Belgium, Bulgaria, the Czech Republic, France, Germany, Italy, Russia, the UK and the US.”

Blackwater and the US Supreme Court
The Leal Times reports former Blackwater security contractors charged with manslaughter over a shooting incident in Iraq that “left more than a dozen civilians either dead or injured” are trying to get the US Supreme Court to hear their case.
“At issue is whether the indictment is tainted from the prosecution’s use of statements the guards were compelled to make in the hours after the shooting in Baghdad in 2007.”

Happy Birthday to UN
UN Secretary General Ban Ki-moon marked his organization’s 66th anniversary by calling for the 193 member states to display “unity of purpose.”
“Global problems demand global solutions,” he said. “They compel all nations to unite in action on an agenda for the world’s people.

Latest Developments, August 10

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British Prime Minister David Cameron has attributed the UK’s rioting to “a lack of proper parenting,” but Reuters journalist Mohammed Abbas relates another side of the story: “They were not your typical hoodlums out there. There were working people, angry people. They’ve raised rates, cut child benefit. Everyone just used it as a chance to vent,” one man told him. A Futurismic map of London suggests a link between the locations of the violence and levels of deprivation. The map uses the British government’s latest English Indices of Deprivation, which provide an aggregate of seven variables: income deprivation, employment deprivation, health deprivation and disability, education skills and training deprivation, barriers to housing and services, living environment deprivation, and crime.

The UN says high food prices are making the Horn of Africa crisis worse, with grain and milk prices at record highs across the region. The US has given its support to a movement to impose international sanctions on Eritrea, which is also affected by East Africa’s severe drought, for allegedly attempting to destabilize its neighbours. US ambassador to the UN Susan Rice called the Ethiopian-led effort “timely” but added any sanctions “would not go in any way to harm the people of Eritrea, who are suffering enough as it is.”

The US has also imposed new sanctions on Syria, targeting its largest bank and biggest telecom company. Washington has little direct economic leverage because there are few American companies operating in Syria. It hopes, however, to influence European governments to take measures against the country’s oil and gas sector, a move that does not appear to be imminent. But a “group of social investment firms plans an e-mail campaign to urge 11 oil companies to either stop operations in Syria or communicate their condemnation of the violent crackdown on protesters to the government,” according to Pensions and Investments.

The World Bank has suspended lending to Cambodia over mass evictions of residents to make way for a luxury development on land around a lake in the capital Phnom Penh. “Until an agreement is reached with the residents of Boeung Kak Lake, we do not expect to provide any new lending to Cambodia,” the World Bank’s Annette Dixon said. Evictions have been the source of friction with foreign donors for some time but according to Reuters: “Land ownership is a complex subject in the impoverished Southeast Asian country, where legal documents were destroyed and state institutions collapsed under the Khmer Rouge regime of the 1970s and the civil war that followed.”

In the wake of Libyan accusations that a NATO air strike caused the “massacre” of 85 people earlier this week, Amnesty International is calling on the military alliance to investigate all alleged civilian killings: “NATO continues to stress its commitment to protect civilians,” the human rights group’s Hassiba Hadj Sahraoui said in a statement. “To that effect, it should thoroughly investigate this and all other recent incidents in which civilians were reportedly killed in western Libya as a result of air strikes.”

Canadian immigration minister Jason Kenney has struck back hard at Amnesty International for its criticism of his government’s plan to deport 30 men it alleges have committed war crimes or crimes against humanity. In addition to writing a scathing open letter of response, he told the Toronto Star the rights group is wrongly using “its voice and scarce resources to focus on criticizing what is probably the fairest immigration system in the world.” Last month, Amnesty had called on the Canadian government to try these individuals rather than deport them. But it was hardly alone in questioning an operation that involved publishing the pictures and names of the alleged criminals on a government website and led some experts to suggest the Canadian government was “conflating immigration and criminal law.” The Canadian Centre for International Justice’s Jayne Stoyles told Embassy Magazine: “The label of war criminals kind of implies that someone has been through a criminal process. But they haven’t. And they’re not even being investigated through a criminal process.”

Exxon Mobil is disputing a US Court of Appeals ruling that it can be held liable under the Alien Tort Statute for human rights abuses committed in Indonesia. In a petition for a rehearing, the company’s lawyers argue the decision’s “incorrect expansion of ATS liability threatens to unleash a flood of litigation in U.S. courts for actions lacking any salient connection to the United States” and called on the court to “reject the notion that the ATS can be used as a vehicle to bring suit in U.S. courts for alleged misconduct that occurred abroad.” And lawyers for alleged victims of human rights abuses surrounding a Guatemalan mine say Canada’s HudBay Minerals “cannot avoid liability for their past actions by selling the project.”

The Guardian’s John Vidal argues last week’s UN report on oil pollution in Nigeria’s Ogoniland region means “the conspiracy of silence between governments and oil companies has at last been broken.” While Kenya’s Business Daily carries the headline: “Multinationals, not corrupt politicians are the biggest source of dirty money flows.”

The University of the West of England, Bristol’s Diana Jeater reports on perceptions among Zimbabweans of international NGOs and aid agencies that “are mistrusted not least because they are perceived as part of the political strategies of donor governments.” She says there is also much “frustration at how the external agendas are introduced without proper research into local conditions and history” and a widespread “sense that the aid agencies are employers not helpers, who probably do more harm than good.” Jeater then concludes with a friend’s assessment of aid agencies operating in Zimbabwe: “They spend millions but they make no constructive difference. They just meet their funders’ benchmarks and get paid. They are parasites on the poor.”

Latest Developments, August 5

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Standard &Poor’s has downgraded the US credit rating from AAA to AA-plus for the first time ever. Although a lower credit rating tends to mean higher interest rates, Planet Money’s Jacob Goldstein is not convinced this particular adjustment will have much practical impact, arguing most financial institutions don’t distinguish between the two ratings. Princeton economist Paul Krugman, for his part, is totally dismissive based largely on the agency’s recent track record: “In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.” But even if there is little domestic impact, a continuation of negligible growth and extremely low interest rates in the US could mean “emerging market economies—Brazil, other strong performers in Latin America, much of Southeast Asia, and even the better performers in sub-Saharan Africa—will continue to experience a flood of capital seeking higher returns, hot money with all the attendant risks of a bubble,” according to the Center for Global Development’s Liliana Rojas-Suarez. And the Guardian reports that bubble may already be about to burst.

Only a month after replacing the disgraced Dominique Strauss-Kahn, International Monetary Fund head Christine Lagarde has learned she will face a criminal inquiry over her roll in a questionable $600 million payment to a political ally. According to the IMF’s website, the “Fund’s approach to combating corruption emphasizes prevention, concentrating on measures to strengthen governance, and limiting the scope for corruption. The IMF also has strong measures in place to ensure the integrity of its own organization.” Nevertheless, the allegations Lagarde faces had been widely reported well before her appointment as the organization’s managing director despite resistance from a number of non-European countries who felt it was time to end that continent’s six-decade hold on the IMF’s top job.

Canadian Prime Minister Stephen Harper sets off this weekend for a four-country Latin American tour that will focus on trade, rights and security, according to Postmedia News. In a recent statement, Amnesty International said many of the hemisphere’s governments are not doing a satisfactory job of balancing these considerations at home: “Countries across the region – including Argentina, Brazil, Canada, Colombia, Ecuador, Guatemala, Mexico, Panama and Peru – have failed to consult Indigenous Peoples before passing laws that would threaten their livelihoods. They also carried out development projects in Indigenous Peoples’ ancestral lands without respecting their right to give free, prior and informed consent.”  And in terms of international relations, the Canadian parliament approved a free trade agreement with Peru  in June 2009, a few days after dozens died in protests over new Peruvian laws facilitating oil and gas exploration in the Amazon.

A couple of telecommunications companies have run up against the US Foreign Corrupt Practices Act. Magyar Telekom, a Hungarian corporation controlled by German Deutsche Telekom, is currently in talks with the Securities and Exchange Commission over possible bribes paid in Macedonia and Montenegro. And a federal jury has convicted two former executives of Florida-based Terra Telecommunications Corp. for authorizing bribes paid in Haiti over a period of several years. Meanwhile, a pair of US lawmakers has proposed legislation absolving non-Americans living outside the US of having to report their bank deposits within the country to revenue authorities, according to a Task Force on Financial Integrity and Economic Development blog posting by Ann Hollingshead. In her view, such a law would encourage people to hide dirty money in US bank accounts. She sums up: “[Gregory] Meeks and [Bill] Posey, two officials elected to represent the interests of U.S. citizens, have introduced a bill that represents the interests of foreign money launderers, tax evaders, terrorist financers, and, perhaps, big banks.” Writing on the same blog, Global Financial Integrity’s Ryan Isakow writes about a PR/framing coup for the global anti-corruption movement: “It’s interesting to note that connecting corruption to something which directly interests those in power—economic growth— has elicited a bigger response from government leaders than the abundance of stories written everyday on the impoverishing effects corruption has on their own countrymen.  After all, if exploiting the poor bothered them, they would have more reservations about robbing their country’s resources in the first place.”

The US Navy has held a celebration to mark the launch of the 2,000th Tomahawk missile. “It was a great feeling to have taken part in the 2,000th missile launch,” according to a sailor quoted in a Navy press release. “There were a lot of us that had never shot before, so to be able to fire off the 2,000th one was a great experience; it means a lot to us.” The US Navy has launched over 200 Tomahawks in the Libyan conflict so far at a cost of $607,000 each, according to Defense Tech.

In other technology matters, Tactical Technology Collective’s Tanya Notley says mobile phones and the Internet are among the tools that can help people impose a certain level of accountability on governments and development agencies but “there are many “invisible” layers that track what we do online.” And given that such bodies do not always like questioning and exposure, there are real (and sometimes fatal) risks attached to engaging in such behaviour. Consequently, “we should all be thinking about what kind of digital future we want and what risks we might be taking or asking others to take when we promote digital technologies as tools for transparent, fair and just development.”

Former US assistant defense secretary Joseph Nye regrets that Bush Administration “policy failures” led to the view among many that democracy promotion smacked of imperialism and hypocrisy: “Democracy is not an American imposition, and it can take many forms,” he writes. But he stresses the need to “stimulate emulation” by maximizing domestic democracy, rather than trying to impose values on others. But Foreign Policy’s Josh Rogin sees little in the way of positive examples as he presents “the top eight foreign-policy items currently held up by the do-nothing 112th Congress.” Der Spiegel columnist Jakob Augstein is harsher still in writing of America’s “apparent political insanity” and arguing the “divided country has more in common with a failed state than a democracy.”

Latest Developments, July 20

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As expected, the UN has officially declared a famine in southern Somalia. French agriculture minister Bruno Le Maire writes in Le Monde that hunger in this day and age is a “scandal,” and a Globe and Mail editorial decries the slow international response to the food crisis in the Horn of Africa: “When an alarm of impending famine is sounded, the whole world should be galvanized into action.” But even though USAID’s Famine Early Warning Systems Network predicted the food crisis nearly a year ago and Islamist insurgents controlling much of Somalia recently lifted their ban on foreign aid, there are still legal obstacles to large-scale US assistance.

Earlier this year, the World Food Programme also launched an emergency operation in North Korea and an EU mission recently reported “widespread consumption of grass.” As of last week, the UN had received less than a quarter of the funds it was seeking for North Korean food assistance. The Brookings Institution’s Roberta Cohen says politics have prevented South Korea and the US from helping so far. “But taking no decision is really a decision, which gives the impression that there may be no urgent or extensive food crisis in North Korea requiring immediate action.”

But Columbia University economist Jeffrey Sachs says responding to food shortages, such as the one currently unfolding in the Horn of Africa, is not the way to go. The focus should instead be on lifting people out of poverty permanently, dealing with climate change and reining in population growth.

A Guardian editorial says the British public’s lack of enthusiasm for the government’s pledge to increase aid to 0.7 percent of GDP is understandable, given the frustratingly predictable cycle of development policies. “Fashions in giving have come and gone, interspersed with bursts of retrospective analysis purporting to show both why previous programmes have failed and how to reshape them so that they really will work and really will add to the sum of peace and prosperity in the world.” Nevertheless, the authors encourage the Cameron government to stick to its aid promise before concluding: “If we get it right this time, the public might eventually come round.”

A major problem with foreign aid, according to Bottom Up Thinking, is an accountability deficit resulting from the fact that its “‘customers’ are not the same people as those who pay the bills and that leads to massively misaligned incentives.” But the main reason why people have such little faith in aid’s usefulness is, paradoxically, the high expectations set up by an industry obsessed with sending out positive messages: “The problem, as I see it, is that we are very rarely upfront about the risks of failure. Far too much of the conservation and development industry is extremely reluctant to admit to failure (or even just disappointing results); glossy brochures proclaim an unending procession of success stories.”

The Center for Global Development’s Wren Elhai warns that a six-word amendment to proposed US legislation would make all American assistance to Pakistan conditional on the South Asian country’s demonstration that it is committed to preventing the Taliban and other perceived undesirables from operating within its borders: “The notion that a relatively small amount of civilian aid will change the strategic calculus of the Pakistani military is simply ludicrous. Meanwhile, attempting to use civilian aid as security leverage would upset the fragile two-track strategy that has guided U.S. strategy in Pakistan for the past several years.”

In a blog post entitled “Yes, South Sudan Can,” World Bank economist Shantayanan Devarajan lays out the three keys for South Sudanese success: stimulating sustained economic growth, implementing “home-grown solutions,” and embracing information and communications technology. Drawing on Africa’s recent history for inspiration, Devarajan points to “a number of countries, such as Mozambique and Uganda, which emerged from civil conflict and sustained above-7-percent GDP growth for over a decade.” In the UN’s latest Human Development Index ranking, Mozambique sat 168th out of 172 countries and Uganda scored better than only two non-African countries: Afghanistan and Haiti.

After discussing a recent study that suggests resource extraction is more often a blessing than a curse, Michael Levi of the Council on Foreign Relations turns to the specific possibility of a Liberian oil industry, reminding us the authors’ “analysis is statistical: while it might say that on average there isn’t a resource curse, that should be little reassurance for any particular country that’s diving into extraction.” Nor does the analysis, which focuses on political freedom, take socio-economic or environmental indicators into account. Of the 12 sub-Saharan countries whose daily crude production currently exceeds 50,000 barrels per day, only Gabon, South Africa and Congo do not rank in the bottom quintile in either the UN’s Human Development Index or Yale University’s Environmental Performance Index.

Reuters correspondent Peter Apps asks if Britain is more corrupt than it thinks. According to one expert quoted in the article: “If you look at the way we talk about and measure corruption in the West, it’s either Africa or Asia which comes out worse. But we are using a distorted prism.” Apps’s question is inspired by the UK’s ongoing phone hacking scandal, but there are also new developments concerning British companies behaving badly overseas. A parliamentary committee slammed military contractor BAE Systems for misusing funds in Tanzania and not paying the penalty imposed after a plea bargain. And miner Monterrico Metals has settled out of court on charges of collusion in the detention and torture of protesters in Peru.

The European Network on Debt and Development’s Alex Marriage sees an “apparent conflict of interest” in the fact that the European Commission assigned PricewaterhouseCoopers, an international accounting firm which boasts 415 of the Fortune Global 500 among its clients, to prepare a report on how poor countries can minimize financial losses due to corporate transfer pricing.  The practice allows large multinational corporations to reduce their tax bill by creatively billing themselves for transactions between subsidiaries so as to maximize declared expenses and minimize declared profits. “Transfer pricing is the single biggest source of illicit financial flows in the world costing developing countries hundreds of billions of dollars every year,” according to Marriage. PwC claims its own 2011 report on global transfer pricing – a separate document from the EU-commissioned one – “offers practical advice on a subject where the right amount of effort can produce huge dividends in the form of a low and stable tax charge, coupled with the ability to defend a company against tax auditor attack.”

Oxfam’s Duncan Green asks why development experts pay so little attention to “how poor people ‘do’ development.” And the Center on International Cooperation’s Alex Evans points out that poor people will not get a fair share of the world’s limited resources unless “developed countries and the “global middle class” dramatically reduce their consumption levels.”

Latest Developments, July 15

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The pre-negotiations for the proposed international Arms Trade Treaty have come to an end. In theory, the real negotiations will take place next year, culminating in a legally binding global compact. The Control Arms Coaltion says it is pleased with how the week went, particularly a joint statement of support for the process by the five permanent members of the UN Security Council, who together account for 88% of the global arms trade. But while there appears to be broad support for some kind of treaty, there is much disagreement on details, reportedly prompting Russia to say consensus is “very, very unlikely.”

After the latest Mumbai bombings, Ramesh Thakur, one of the formulators of the Responsibility to Protect doctrine, says India, a country where over half the population lives on less than $2 a day, “must invest all means necessary” to acquire the capabilities to take “the fight to neighbouring territory from where terror attacks originate through strikes and targeted killings of terrorists.” He concedes that such a policy would risk destabilizing India’s already fragile, nuclear-armed rival but concludes that “is no longer an unacceptable risk.” A quick reminder: The three bombs detonated in Mumbai this week killed 18 people, while the two atomic bombs dropped on Japan in August, 1945 killed an estimated 150,000-250,000 people.

A Reuters piece looks at the rise of the drone as America tries to extricate itself from its wars and avoid getting embroiled in new ones, while targeting perceived threats in an ever growing list countries. The EU, meanwhile, is looking to come up with a drone strategy within the next 12 months.

Canadian immigration authorities have denied internationally acclaimed Tinariwen visas to play this weekend’s Vancouver Folk Festival. A festival organizer, pointing out that the Malian band were in Vancouver during the 2010 Winter Olympics and are touring in the US right now, said the decision made no sense. Could it be the Canadian government, which is trying to toughen up its immigration laws, mistook a group originally formed in Libyan refugee camps three decades ago as current refugee claimants? An internal government report indicates a third of all such cases are refused because an officer does not believe the refugee’s story.

Writing about oil and corruption, Global Witness’s Brendan O’Donnell puts much of the blame on the likes of Muammar Gadhafi and other autocratic rulers, but not all of it. “Essentially, because oil companies do not currently have to disclose what they pay to foreign governments for resource deals, and banks do not have to report on their financial dealings with sovereign funds, it’s very hard for citizens to know how their leaders are using their countries’ natural resource wealth.”

According to Transparency International, the phone hacking scandal “shows that even in a well-functioning democracy where corruption levels are perceived to be low, weaknesses in institutions considered pillars of integrity can lead to breaches of trust if there is insufficient vigilance.”

In a Guardian piece about the post-2015 development agenda, the author reports Allister McGregor as telling the British Parliament the MDGs are outdated and a more nuanced view of the world is necessary: “It’s basically about inequality, how we live well together and how we share wealth.” The trick, according to Jack McConnell who was quoted in the same piece, will be to keep the new goals tangible and verifiable: “If you want to pin governments down, you need precise targets.”

A piece in the Globe and Mail points out “the microfinance revolution that rippled around the world focused squarely on the lending side of the ledger – largely overlooking microsaving.” As a result, poor people had nowhere secure to store their small savings. But that is now changing.

A new Institute of Development Studies bulletin on seed politics and the push for an African Green Revolution asks “who wins, who loses, and whose interests are being served?”