Tag Archives: ease of doing business index

Latest Developments, May 16

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Fear of laws
Business Insider reports that US retailers Walmart and Gap are refusing to sign on to legally binding protections for Bangladesh’s garment workers:

“Gap has said it will sign the safety accord only if it’s amended to alleviate liability from the company. Wal-Mart introduced its own safety plan that mandates independent factory safety audits but isn’t legally binding.
…
But safety agreements that don’t carry any legal weight aren’t usually effective, said Bjorn Claeson, senior policy advisor for the International Labor Rights Forum.
‘What we need brands to do is be accountable for worker safety in Bangladesh,’ he told us in an interview last week. ‘The problem is that brands are not willing to make anything else but voluntary, non-binding commitments to worker rights and health and safety standards. … They are under no obligation to fix the problems, to make the factories safe or to tell workers the dangers they face.’ ”

A bribe by any other name
The CBC reports on Canadian engineering giant SNC-Lavalin’s use of the term “project consultancy cost” to conceal the bribes it routinely paid around the world:

“The documents show that from 2008 until 2011, the company included these ‘consultancy costs’ in 13 projects.
The terms ‘PCC’ or ‘CC’ appear as line items on eight of the projects in Nigeria, Zambia, Uganda, Ghana, India and Kazakhstan.
…
According to various company emails, cheques and other accounting records, the money was routinely calculated as a percentage of the total value of contracts, typically around 10 per cent.”

Rubber barons
A new Global Witness report shows how the World Bank’s International Finance Corporation and Germany’s Deutsche Bank are fuelling land grabs by rubber companies in Cambodia and Laos:

“Cambodia and Laos are undergoing a land grabbing crisis that has seen more than 3.7 million hectares of land handed over to companies since 2000, forty percent of which is for rubber plantations.
…
These investments [by IFC and Deutsche Bank] stand in stark contrast to both institutions’ public commitments on ethics and sustainability, as well as the World Bank’s core mandate to end global poverty”

Museum loot
The New York Times reports that Cambodia is asking US museums and collectors to return Khmer antiquities acquired during the country’s two decades of genocide and civil war in the late 20th Century:

“Hundreds of Cambodian antiquities are in American museums, as well as in the hands of foreign institutions and private collectors. Many were acquired after 1970 and lack paperwork showing how they left Cambodia.
…
Today, most museums have pledged not to collect items that lack a paper trail dating back to 1970, the year that a United Nations convention aimed at blocking illicit antiquities trafficking was adopted.”

Trade mission
The Canadian government has announced it is pushing for yet another “foreign investment promotion and protection agreement” with a poor country:

“ ‘Our government is committed to increasing trade and diversifying our engagement with fast-growth countries like Ghana,’ said [Canadian foreign minister John] Baird. ‘Ghana is very much a symbol of the new Africa—one in which aid recipients are becoming important trading partners, and political stability allows for economic dynamism.’
He added, ‘Such an agreement, once in effect, will help bolster investment confidence to make the most of the abundant opportunities that exist here, contributing to job creation and economic growth in both countries.’ ”

Policy damage
Michael Scaturro writes in the Atlantic about the “nasty downside” of economic austerity measures, such as healthcare spending cuts, in Greece:

“ ‘Greece is an example of perhaps the worst case of austerity leading to public health disasters,’ [Oxford University’s David] Stuckler explained in a telephone interview.
‘After mosquito spraying programs were cut, we’ve seen a return of malaria, which the country has kept under control for the past four decades. New HIV infections have jumped more than 200 percent,’ he noted.
Malaria returned because municipal governments lacked the funds to spray against mosquitoes. HIV spiked because government needle exchange programs ran out of clean syringes for heroin addicts. By Stuckler’s estimate, the average Greek junkie requires 200 clean needles in a given year.
‘But now they’re only getting three a year each,’ Stuckler said.”

Thoughtless harmonization
The Center of Concern’s Aldo Caliari argues that a review of the World Bank’s Doing Business rankings, which assess countries on the business friendliness of their policies, is “overdue”:

“The success of institutional reforms is strongly conditioned by the indigenous environment where they are implemented, an environment which varies country by country. So it is not thoughtless harmonization but attention to the particular requirements and nuances needed in each country and region which will make reform programs successful. The conceptual flaw Doing Business suffers from is the illusion that a universal numerical ranking can capture the evolution of variables whose significance for development (and even for businesses themselves) are bound to be quite different country to country. This is true whether we are talking about tax rates, licensing requirements, labor protection policies or access to credit.
It would not be so bad if, at least, the reductionist set of indicators Doing Business equates with a good investment climate were unequivocally positive, or neutral, for development and the well-being of the population.
But we cannot assume that.”

Locus of control
Former Norwegian foreign minister Erik Solheim calls for a “new model of partnership” in which conflict-affected and fragile states, rather than donors, determine their own priorities:

“The [New Deal for Engagement in Fragile States] recognizes what the history of peace-building teaches us: national leadership and ownership of agendas are key to achieving visible and sustainable results. As Kosti Manibe Ngai, South Sudan’s finance minister, has put it, ‘Nothing about us without us.’
In many conversations with South Sudan’s president, Salva Kiir, we have discussed setting out a short list of clear priorities for the new state. But such goals are meaningful only if a fragile state’s partners are ready to accept the lead from a capital like Juba rather than from their own headquarters.
…
As partners, we must accept this national leadership. After Haiti’s catastrophic earthquake in 2010, the country was dubbed ‘the republic of NGOs.’ Unable to create conditions in which Haitians themselves could take the lead in rebuilding their country, Haiti’s external partners undermined the establishment of a functioning internal governance system.”

Latest Developments, October 30

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Financial dependency
Business Day reports that new African Union head Nkosazana Dlamini-Zuma is unhappy with the extent to which her organization depends on funding from outside the continent:

“ ‘No liberated mind can think their development agenda can be funded by donors,’ Ms Dlamini-Zuma told a Business Unity South Africa banquet in her honour at the weekend in Johannesburg.
‘Over 97% of programmes in the AU are funded by donors.
…
She said donors were even footing the bill for African institutions to develop the continent’s strategic agenda, a fundamental task in what has been dubbed the African century.”

Conditional rights
The Guardian reports that a pair of high-profile UN figures are calling for a crackdown on out-of-control land grabbing in Africa:

“Olivier De Schutter, the UN special rapporteur on the right to food, acknowledges the importance of the [committee on world food security] voluntary guidelines, but points out the lack of an effective enforcement mechanism. He argues that governments in sub-Saharan Africa or south-east Asia with poor governance, or tainted by corruption, will continue to seek to attract investors at all costs.
‘The international community should accept it has a role in monitoring whether the rights of land users, as stipulated in the guidelines, are effectively respected,’ De Schutter told the Guardian. ‘Since there is no “sheriff” at global level to achieve this, at the very least, the home states of investors should exercise due diligence in ensuring that private investors over which they can exercise control fully respect the rights of land users. Export credit agencies, for example, should make their support conditional upon full compliance with the guidelines, and in the future, the rights of investors under investment treaties should be made conditional upon the investors acting in accordance with the guidelines.’ ”

Big changes
Reuters reports that the Kenyan government plans to show some flexibility in implementing its new mining law:

“ ‘For those who have been licensed, we have asked them to provide clear proposals on how they want to implement this, taking into consideration commitments they have and we will consider that,’ Mohammed said in a interview.
‘But for those who have not been licensed, it will be immediate. We will not be issuing any new mining licences without the ownership of 35 percent by local citizens.’
…
The new requirement of 35 percent local equity follows a new tax of 10-20 percent targeting sales of property or shares in oil, mining and mineral prospecting firms, introduced recently to help plug a growing funding gap.”

GM crops on trial
The Times of India reports that the country’s highest court will not consider a proposed 10-year ban on field trials of genetically modified crops before hearing from stakeholders, such as a group of biotech companies whose members include agribusiness giant Monsanto:

“The five-member [court-constituted Technical Expert Committee] was unanimous in recommending suspension of field trials for 10 years, a period which it said should be used to put in place additional safeguards. It recommended identification of specific sites for field trials, setting up of an independent scientific panel to evaluate bio-safety data, recognition of conflict of interest in regulatory body and requirement of preliminary bio-safety tests prior to such trials.”

Blind sanctions
The University of Southern California’s Muhammad Sahimi and
 Al-Monitor’s Eskandar Sadeghi-Boroujerdi argue that the economic sanctions imposed on Iran by the West are not “smart” and “targeted” as initially promised:

“The world was promised that the sanctions will not hurt millions of ordinary Iranians who go about their daily lives and, in fact, oppose many of their government’s policies.
But, the sanctions are now in full force, and are hurting the same people who we were told were not meant to be their target, in what is yet another case of ‘collateral damage’ inflicted by Western policy towards Iran, and its disenfranchised people who have lost control over their destiny at both home and abroad. In fact, there are very strong indications that a human catastrophe could emerge whose scale poses as much a threat as an outright military attack.”

Not lovin’ it
Yale University graduate student Justin Scott takes issue with Black365, a new McDonald’s website aimed at African-Americans, in which the fast-food giant compares itself to the iconic baobab tree:

“Aside from issues of health, hegemony, and markets, what we have here is McDonald’s, a Western behemoth pushing a product that could not be even remotely considered African, using an African symbol to appeal to a population of African origin, in order to make itself look like something it isn’t. And it’s a shame that this tactic hasn’t been attacked more widely.”

Opposing views
Reuters reports that the Tanzanian government and foreign mining companies have very different ideas on how the country can enjoy more benefits from its mineral wealth:

“East Africa’s second biggest economy argues it is not seeing the fruits of soaring commodity prices, in particular gold. It plans to increase the mining sector’s contribution to the economy to 10 percent of GDP by 2025 from 3.3 percent last year.
But the miners say hiking taxes and increasing royalties is the wrong approach. They say Tanzania should focus on attracting more investors and issuing additional mining licenses.”

Ruinous rankings
The Guardian reports that the World Bank’s latest Ease of Doing Business Index is once again coming under fire for promoting “a neo-liberal agenda of privatisations, welfare cuts, limited employment rights and low wages to please and entice foreign multinationals”:

“Bin Han, one of China’s senior representatives at the World Bank, says the rankings are fundamentally flawed.
‘The Chinese conclusion is straightforward: the report has used a wrong methodology, failed to reflect facts in individual countries, and misled readers. The questionable quality of the report has ruined the Bank’s reputation,’ he said at the debate.
The new boss at the World Bank, Jim Yong Kim, has pledged to review the rankings.”

Latest Developments, December 8

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Tabula rasa
The Economist reports on a controversial large-scale development experiment getting underway in Honduras.
“In a nutshell, the Honduran government wants to create what amounts to internal start-ups—quasi-independent city-states that begin with a clean slate and are then overseen by outside experts. They will have their own government, write their own laws, manage their own currency and, eventually, hold their own elections.
This year the Honduran legislature has taken the first big steps towards the creation of what it called ‘special development regions’. It has passed a constitutional amendment making them possible and approved a ‘constitutional statute’ that creates their autonomous legal framework. Mauritius has just announced that it will allow its supreme court to hear cases from the new entities (beyond that, in a relic of colonialism, is Britain’s Privy Council, to which the decisions of the island state’s supreme court can be appealed). And on December 6th Porfirio Lobo, the Honduran president, appointed the first members of the ‘transparency commission’, the body that will oversee the new entities’ integrity.”

Right to science
Intellectual Property Watch reports on a UN-sponsored event that highlighted the need for greater attention to the “right to enjoy the benefits of scientific progress and its application.”
“A delegate from Pakistan said that the most important point was to address the issue of access and that the privatisation of science and knowledge has led to some concerns. In particular, he asked how the role of the private sector could be regulated at the international level, as the intellectual property regime was restricting the right to enjoy the benefits of scientific progress and its application.”

Dangerous tech exports
Agence France-Presse reports on the introduction in the US House of Representatives of a bill – the Global Online Freedom Act – intended to limit the export of Internet surveillance or censorship technology.
“‘There is a criminal cooperation between Western hi-tech companies and authoritarian regimes,’ [Reporters Without Borders’ Clothilde] Le Coz said.
‘The surveillance tools sold by these companies are used all over the world by armed forces, intelligence agencies, democratic governments and repressive regimes.
‘The leading exporters of these technologies include the United States, France, Germany, Italy, United Kingdom and Israel,’ she said. ‘Companies should have a responsibility when selling their technologies abroad.’”

Corporate negligence
The Canadian lawyers of a Guatemalan man have announced he is suing Toronto-based mining company HudBay – the third human rights lawsuit related to violence near a project it used to own in Guatemala – for alleged negligence over its handling of security operations.
“HudBay knew it was operating in a very violent country, but instead of hiring or training security staff with acceptable standards and supervision, HudBay’s Guatemalan subsidiary hired local security personnel with a track record of violence, supplied them with guns and deployed them without the controls or supervision we demand and take for granted in Canada.”

Mission impossible
The Overseas Development Institute’s Neil Bird reflects on the apparent futility of trying to get nearly 200 self-interested governments to agree on anything of substance at summits like the Durban climate talks.
“In some respects, these negotiations hardly matter. The global response to climate change continues to progress at a snail-like pace: just consider for a moment that this is the 17th Conference of the Parties, it is not the 3rd, 4th, 5th or even 10th meeting. How many more international gatherings will be required for the countries attending to agree a global compact that both protects the environment and offers hope to the poorest people who are most vulnerable to climate change?
Perhaps what we have learned most over the past decade is that global negotiations take on a life of their own and, at worse, appear little more than a self-serving exercise.”

Enduring colonialism
As controversy continues to swirl over living conditions in northern Canada’s Aboriginal community of Attawapiskat, Queen’s University’s Robert Lovelace argues “that while the misery is in the ‘North’, the source of the problem is in the ‘South’.”
“It is difficult in the face of human suffering to turn attention to the systemic and structural reasons that have led to this catastrophe, but this is the very time when thoughtful analysis is needed. The homes are small and cold. The tedium of poverty bears down day by day and those who have stolen your children’s future call the daily bread on your table a ‘handout.’ It is difficult to feel anything but shame through the numbing that is required to get by every day.
But there are reasons behind this suffering. There is a history. There is a structure to oppression, denial and indifference that houses this suffering and there is a system that perpetuates it.”

Business friendly
The World Bank’s Célestin Monga argues that improving “all the many ‘doing business’ indicators” is not the key to success for poor countries.
“By the way, China, Vietnam, and Brazil, which have been among the top-performing countries in the world for the past 20 years, are consistently ranked quite low when it comes to the ease of doing business; Brazil is 126th, Vietnam 98th, and China ranks 91st, behind such star economies as Kazakhstan, Azerbaijan, Belarus and Vanuatu.”

Oppressed by carbon
Le Monde Diplomatique provides a write-up of a new book by “heterodox ecologist” Frédéric Denhez who rails against “the dictatorship of carbon.”
“Society obeys ‘mechanical’ rules: we knew the markets, free trade, gross domestic product (GDP); now we are discovering the measurement of carbon emissions as the indicator of the 21st century. The economic ruling class uses it to construct a narrative that pins blame on the individual and impedes all structural change. So we measure the emissions linked to the use of a product, but rarely those associated with its manufacture.
As a result, cash for clunkers promotes the destruction of cars that pollute less than the industrial process required to build new ones!’” (Translated from the French)

Latest Developments, October 21

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World Bank and human rights
The Guardian’s John Vidal reports on fears that the World Bank’s proposed Programme-for-Results lending could be disastrous for human rights and the environment in poor countries.
“According to the proposals, the new instrument would eliminate or greatly dilute 25 existing safeguards and policies. They include those that apply to forced resettlement, natural habitats, physical and cultural resources, indigenous peoples, forests, safety of dams, natural habitats, and environmental action plans. Most of these policies have taken years of pressure by NGOs to secure.
The bank, which lends more than $50bn a year, is one of the world’s largest providers of loans for mega-projects, many of which are particularly damaging to local people, the environment and the climate. If countries wanting to build giant dams, roads, power and water projects are to be largely freed from acting in a socially responsible way, the NGOs fear bank lending could lead to more forced evictions and human rights abuses.”

Deregulation fever
The Tax Justice Network slams the World Bank’s new Doing Business report for assuming that deregulating the business environment is inherently good and accuses it of being unduly influenced by corporate lobbyists.
“This has meant that countries that don’t provide effective worker protection are deemed ‘business-friendly’, while those that try to protect their environment are deemed ‘unfriendly’.
Among the indicators used in the guide is a Paying Taxes Indicator (PTI), and – you guessed it – countries are ranked according to their corporate tax rates. In Bankspeak taxing business is ‘unfriendly’.”

Beyond GDP
The Broker magazine’s Steffie Verstappen summarizes an online discussion in which the contributors agreed that growth and per capita GDP are inadequate indicators of human wellbeing.
“What we need, suggests [executive director of WOTRO Science for Development in The Hague, Henk] Molenaar, is ‘a single, powerful concept to rival growth’ as the driving force behind development. Needless to say, this is not an easy task. Nonetheless, the concept is likely to be found in the social nature of human beings and not in the logic of accumulation and competition. If we want to make a difference, we should start looking at and measuring development as a social phenomenon that is ‘nested in relations rather than individuals’, Molenaar contends.”

Food trade
The International Food Policy Research Institute’s Sara Gustafson welcomes new limits on commodity trading in the US as “a step toward reducing food price volatility and thus food insecurity.”
“Specifically, the new rules limit the number of commodity contracts that any investor can hold in agriculture, energy, or metals contracts. The trade limits, originally mandated in the Dodd-Frank Financial Reform Act which was passed in July 2010, stemmed from worldwide concerns that commodity index and other funds contributed to the 2008 surge in food and fuel prices, and could again be contributing to recent price spikes. The new rules are intended to prevent commodities markets from becoming too concentrated, which can lead to speculation and market manipulation. Under the new limits, a single trader would be allowed to hold spot month positions equal to 25% of the estimated physical deliverable supply of a given commodity.”

Libyan bonanza
The Press Association reports UK Defence Secretary Philip Hammond is pushing British companies to compete for Libyan reconstruction contracts amid expectations the former rebels will be looking to reward the countries that helped them come to power.
“With the military campaign all but over after the death of Muammar Gaddafi and the defeat of what appears to have been the last pockets of resistance, Mr Hammond said sales directors should be ‘packing their suitcases’ for Libya.”

War and peace
The University of Cambridge’s Tarak Barkawi argues it is far too simplistic to think the death of former Libyan leader Moammar Gadhafi’s death will mean the end of that country’s conflict, in part because NATO’s military support meant the erstwhile rebels never had to cooperate  amongst themselves in a way that might have fostered lasting cohesion.
“Diplomats and the UN make tidy distinctions between ‘conflict’ and ‘post-conflict’, upon which their policies are based.
Yet fighting, out in the open or in the shadows, has often preceded and post-dated the official period of hostilities. More fundamentally, there is a continuum between peace and war.”

Out of Iraq
The Associated Press reports US President Barack Obama has announced all American troops will withdraw from Iraq by the end of the year, though several thousand private security contractors will remain.
“Denis McDonough, the White House’s deputy national security adviser, said that in addition to the standard Marine security detail, the U.S. will also have 4,000 to 5,000 contractors to provide security for U.S. diplomats, including at the U.S. embassy in Baghdad and U.S. consulates in Basra and Erbil.
In recent months, Washington had been discussing with Iraqi leaders the possibility of several thousand American troops remaining to continue training Iraqi security forces.
Throughout the discussions, Iraqi leaders refused to give U.S. troops immunity from prosecution in Iraqi courts, and the Americans refused to stay without that guarantee.”

W abroad
The Canadian Centre for International Justice’s Matt Eisenbrandt and the Center for Constitutional Rights’ Katherine Gallagher explain why they believe the Canadian government should have arrested former US president George W. Bush during yesterday’s visit to a Vancouver suburb.
“Canada has ratified the Convention Against Torture and incorporated it into its domestic legislation. Under the global treaty, Canada has the obligation to prosecute a torture suspect present in Canada unless another country seeks the suspect’s extradition to stand trial elsewhere. This is not a matter of discretion. When Mr. Bush is present in Canada, he must be extradited or prosecuted.”

Latest Developments, October 20

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Deregulating Africa
The top headline in the World Bank’s new Doing Business report is Sub-Saharan Africa’s newfound enthusiasm for business-friendly regulations.
“Over the past year a record number of governments in Sub-Saharan Africa changed their economy’s regulatory environment to make it easier for domestic firms to start up and operate. In a region where relatively little attention was paid to the regulatory environment only 8 years ago, regulatory reforms making it easier to do business were implemented in 36 of 46 economies between June 2010 and May 2011. ”

Seed politics
Intellectual Property Watch’s Catherine Saez reports that the Geneva-based International Union for the Protection of New Varieties of Plants is facing calls for greater transparency and protests from farmers over seed policies.
“Protesters’ main concern is the fact that the 1991 UPOV Convention prevents the saving and sharing of farmers seeds. If they originally buy protected varieties, farmers would like to be able to save some of their harvest and share and exchange some of it with other farmers without paying additional royalties.
They claim that original seeds were removed freely from farmers’ fields by breeders. They add that those seeds that were used to engineer new varieties were selected and saved over thousands of years by farmers.”

Connecting the dots
The UN News Centre reports that Secretary General Ban Ki-moon and General Assembly President Nassir Abdulaziz Al-Nasser are calling for a “courageous” blueprint to tackle both world poverty and environmental destruction ahead of next year’s sustainable development summit in Rio de Janeiro.
“Mr. Al-Nasser stressed the need for policy-makers to ‘connect the dots between issues’ so that they develop policies that are ‘coherent, effective and beneficial.’
He added it was vital to ensure that the outcome of Rio+20 ‘is innovative and at the same time practical in its approach to tackling issues of sustainable development and poverty eradication.’”

The everywhere war
The UN News Centre also reports that Christof Heyns, the organization’s top expert on “extrajudicial, summary or arbitrary executions” is calling on national governments to respect international agreements in pursuing their security interests.
“On targeted killings, the Special Rapporteur said the current use of drones and raids into countries where there is not a recognized armed conflict to kill an opponent, such as in Pakistan or Yemen, is highly problematic
While such operations may be designed to hit a particular target, civilian casualties remain, and it is used on such a large scale that it can hardly be described as targeted.
‘The use of such methods by some States to eliminate opponents in countries around the world raises the question why other States should not engage in the same practices. The danger is one of a global war without borders, in which no one is safe,’ stressed Mr. Heyns.”

Sins of omission
Research firm Maplecroft has released a report assessing the worldwide risks faced by businesses of being complicit in human rights violations, with a particular emphasis on countries that are essential the global supply chain, such as China, India and Mexico.
“The ongoing use of forced labour in emerging economies indicates an unwillingness or a critical lack of capacity to address both the symptoms and causes, leaving business to police the problem itself,” according to Maplecroft’s Alyson Warhurst. “Responsible organisations must ensure that they and their business partners are fully compliant with international labour standards or they risk damaged reputations, litigation, investor alienation and reduced profits from consumer backlash and hidden costs relating to reduced productivity linked to adverse working conditions.”

Greasing palms, pumping oil
IRIN reports that even before Uganda begins pumping oil, concerns over the dreaded “resource curse” are growing, due in no small part to the actions of foreign companies.
“Prime Minister Amama Mbabazi has been accused of receiving funds to lobby for oil production rights on behalf of the Italian oil firm ENI, which eventually lost its bid for exploration rights to British firm Tullow Oil. Along with Mbabazi, Foreign Affairs Minister Sam Kutesa and Internal Affairs Minister Hilary Onek are both accused of taking bribes from Tullow Oil worth over US$23 million and $8 million respectively.”

Smokin’ profits
The Wall Street Journal reports Philip Morris International’s third-quarter earnings were up 31 percent, largely thanks to increased sales in Asian markets such as Indonesia and the Philippines.
“The company has sought to increase growth in emerging markets as volumes have slipped in more established European markets. As a result of the volume decline in developed countries, Philip Morris must enact price increases or cut costs to increase or maintain profitability.”

The price of gold
Blogger Tim Hoiland draws attention to a recent Tufts University report on the costs and benefits of Guatemala’s Marlin gold mine, which is owned by Canada’s Goldcorp.
“Overall, the report concludes that, when juxtaposed against the long-term and uncertain environmental risk, the economic benefits of the mine to Guatemala and especially to local communities under a business-as-usual scenario are meager and short-lived.”