Latest Developments, August 8

In the latest news and analysis…

Australia’s so-called Malaysia Solution is on hold for now. The country’s high court has said the Australian government may not have the legal authority to carry out the terms of the deal, which would involve sending 800 boat people to Malaysia to have their refugee claims processed in exchange for 4,000 who have been approved for permanent resettlement. Malaysia is not a signatory to the UN convention on refugees.

UNESCO head Irina Bokova has condemned last month’s NATO attack on Libyan state television that left 3 dead and 21 injured. “Media outlets should not be targeted in military actions,” she said, pointing to a 2006 UN Security Council resolution on the safety of media workers in conflict zones. Following the bombing, NATO justified its choice of targets: “Striking specifically these critical satellite dishes will reduce the regime’s ability to oppress civilians while [preserving] television broadcast infrastructure that will be needed after the conflict.” But Bokova appeared to head off this argument by saying “the NATO strike is also contrary to the principles of the Geneva Conventions that establish the civilian status of journalists in times of war even when they engage in propaganda.”

The US is eager to get more involved in Mexico’s escalating drug war but faces laws forbidding foreign soldiers or police from operating on Mexican soil, according to the New York Times. The solution so far has been the deployment of CIA agents, with possible reinforcements to come from private security contractors. Meanwhile, there will soon be 5,500 private troops operating under State Department command in Iraq, but “no one outside State knows anything more, as the department has gone to war with its independent government watchdog to keep its plan a secret,” according to Wired’s Spencer Ackerman.

There is much uncertainty in Somalia’s capital Mogadishu after Islamist rebels withdrew from the city over the weekend, leaving observers to wonder whether the move represents a retreat or simply a shift to guerrilla tactics. There also appears to be lingering confusion among humanitarian organizations in Al Shabab-controlled areas over strict US rules that are ostensibly meant to ensure the rebels do not benefit from foreign assistance but are having a chilling effect on groups looking to provide emergency food aid. “USAID says they want to move, they do want to get us funding, and from their perspective it’s all sort of green light, ready to go,” an anonymous aid official told the Huffington Post. “Maybe they’re not really understanding that NGOs are quite nervous, especially the American ones — and the European ones are taking their cues from the Americans.” US aid to Somalia dropped from $230 million in 2008 to below $30 million last year. But the White House has just announced an additional $105 million in emergency aid for the Horn of Africa, bringing the total up to $565 million for the year so far.

South Africa’s maternal mortality rate has “more than quadrupled over the last decade,” according to a new report by Human Rights Watch. But in a piece on Africa’s high rates of economic growth, Witney Schneidman, president of Washington-based consulting firm Schneidman & Associates International says “Africa’s moment is at hand.”  He praises South Africa where “for the past 15 years, the government has pursued an economic policy that has brought greater financial discipline and macroeconomic stability.” Schneidman does, however, concede South Africa “has a first-world economy” but “faces developing-world challenges.”

The Guardian reports on the Nigerian fishing village of Goi destroyed by oil spills and one of its inhabitants suing Shell in The Hague for reparations. Another piece in the same paper suggests Gaza’s new, Spanish-run five-star hotel provides “hope” in a place “where there are no tourists and around 70% of the population lives below the poverty line.”

In the ongoing punditry frenzy over credit rating agency S&P’s decision to downgrade the US debt slightly, “chutzpah” and “overreach” are two frequently recurring terms. Paul Krugman, who wrote last year that such agencies “were a big part of that corruption” which triggered the financial crisis in the first place, now compares S&P to a “young man who kills his parents, then pleads for mercy because he’s an orphan.” The author of a post on the Economist’s Democracy in America blog does not necessarily disagree but also sees plenty of chutzpah in those now blasting S&P: “So yeah, S&P failed to accurately identify the junk that made up those troublesome mortgage securities. But I can hardly fault them for trying not to repeat the mistake when evaluating the make-up of America’s political system, which is ultimately responsible for paying the country’s bills.” And the Overseas Development Institute’s Jonathan Glennie, sounding a little annoyed at the Americentrism of it all, asks via Twitter: “why has s&p overreached itself just because it has downgraded us bonds? Are its analyses of other countries less important!?”

Fraud lawyer Monty Raphael shows little enthusiasm for the UK’s new bribery act, arguing that without proper enforcement, “it will change little or nothing.” And while the act only deals with offences occurring since it came into force, he wants to see a mechanism to deal with “all the accumulated corruption committed before July 1 this year.” He calls for an integrated anti-corruption agency, along the lines of those currently operating in Hong Kong, Singapore and New South Wales. Recognizing that governments are not eager to take on new spending these days, he suggests: “Resources presently available can be channelled into a single investigation and prosecution agency with a wide remit, and with penal, civil and administrative powers. It should include within its remit Parliament, the legal system and all public and private sectors.”

Former World Bank economist Dennis Whittle praises his former employer for its attempts at “democratizing” development, by which he seems to mean the increased use of focus groups. “If the World Bank can make progress in this area,” he argues, “the payoff for the entire aid field could be large, both in terms of finding effective policies as well as catalyzing more openness and accountability.”

Latest Developments, August 5

In the latest news and analysis…

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 6

In today’s news and analysis…

Joseph Stiglitz says rich countries have learned nothing from the global financial crisis or the failure of earlier austerity measures in Latin America, Asia and elsewhere. But the Nobel laureate’s emphasis on growth and “still further growth” suggests sustainability does not factor into his vision.

Patrick Michaels goes a step further, arguing there are no limits to potential growth, at least when it comes to food production, and it is policies aimed at halting global warming that are killing people: “This “limits to growth” argument is as tired as a farmer at the end of harvest.”

Harvard economist Dani Rodrik lays out his position on the place of democracy in economic policy making: “Ultimately, the question concerns whom we empower to make the rules that markets require. The unavoidable reality of our global economy is that the principal locus of legitimate democratic accountability still resides within the nation state. So I readily plead guilty to my economist critic’s charge. I do want to make the world safe for democratic politicians. And, frankly, I wonder about those who do not.”

One of the architects of the Kimberley Process praises Canada’s stand on blood diamonds, while an editorial (also in Embassy Magazine) refers to asbestos as Canada’s blood diamond after Canada opposed the substance’s inclusion in the Rotterdam Convention’s list of hazardous substances. “So in the same day,” the editorial reads, “Canada stood up for a process designed to save lives and provide accountability in an industry that is wrought with death and hypocrisy, and then took a position of hypocrisy that will contribute to more deaths in developing countries.”

Meanwhile, gold is reportedly fanning the flames of Colombia’s violence. Canada, which is home to a number of the world’s largest gold mining companies, has signed a bilateral free trade agreement which is set to kick in next month. A similar US-Colombia agreement appears stalled for now.

And one final Canadian mining note: The Canadian International Development Agency is teaming up with Teck Resources and the Micronutrient Initiative for zinc treatment in Senegal. Perhaps surprisingly, a spokesperson for watchdog group Mining Watch Canada believes the project goes beyond the kind of “advertising” he says is typical of corporate social responsibility endeavours: “This looks to me like a perfectly positive thing with concrete benefits to children, and it has accountability already built in.”

UNAIDS is praising India’s decision to resist pressure, most notably from the European Union, to adopt more stringent intellectual property protections that would make it more difficult to produce generic HIV/AIDS treatments. “Millions of people will die if India cannot produce generic antiretroviral drugs, and Africa will be the most affected,” UNAIDS executive director Michel Sidibé said. “For me, it is an issue of life or death.”

Marta Ruiz draws attention to a couple of initiatives, one in Africa and one in the Netherlands, intended to rein in abusive transfer pricing by transnational corporations. But the tax news out of the Netherlands is not necessarily all good for poor countries.

A Chinese prosecutor is calling for international cooperation in tackling the “global cancer” of trans-border corruption, the world’s largest mining company has banned “facilitation payments” in order to comply with the UK’s new anti-corruption law, and the World Bank is looking into possible asset recovery in foreign bribery cases.

In case anyone needed a reminder of the problems inherent in trying to establish a one-size-fits-all global justice system, an angry crowd in Egypt wants tough penalties for police officers who used violence against protesters earlier this year, while a woman who lost her home in Cote d’Ivoire’s recent violence has other priorities.

Nigeria’s president worries about his country’s “huge food import bills,” and the Economist asks if housing is the most dangerous asset of all.