Latest Developments, May 28

In the latest news and analysis…

Wealth absorption
Inter Press Service looks into the role that governments and banks in rich countries have played in turning Africa into a “net creditor” to the rest of the world:

“ ‘While the onus for change is on both national and international players alike, the Western countries can control the international component of this dynamic – the international financial structure,’ [Global Financial Integrity’s Clark Gascoigne said].
The [African Development Bank] and GFI analysts are encouraging strengthened alignment of financial policies between African countries and those countries that are ‘absorbing’ these illicit flows. The United States, for instance, continues to be the largest incorporator of shell companies in the world, while Gascoigne says there is also far more that Washington and other Western capitals can do on swapping tax information and refusing to tolerate bank and tax haven secrecy.”

German guns
Deutsche Welle reports that German small arms exports hit an “all-time high” in 2012:

“The Süddeutsche [Zeitung] reported that approved exports from 2012 hit 76.15 million euros ($98.5 million) in 2012, compared to 37.9 million euros in 2011. The second-highest figure on record, with small arms only itemized in German government export reports since the late 1990s, was from 2009 – at 70.4 million euros.

German military exports by private companies must be approved by a special security council made up of German Chancellor Angela Merkel and most top government ministers, including the defense, foreign, finance and development ministers.”

Banana ethics
3 News reports that US agribusiness giant Dole is suspending its use of the Ethical Choice label following allegations of worker abuse at its plantations in the Philippines:

“Workers have allegedly been harassed for joining a union while others have been aerial sprayed with pesticide while still at work. Environmental degradation is also a significant problem, the report says.

‘It’s time for Dole to stop making unsupported claims that they are selling ethically produced bananas,’ [Oxfam’s Barry Coates said].
He called for the self-created Ethical Choice label, which the Commerce Commission last year warned may breach the Fair Trading Act, to be removed.”

Textile violence
Reuters reports that clashes with police have injured at least 23 workers at a Cambodian garment factory that supplies US sportswear giant Nike:

“Police with riot gear were deployed to move about 3,000 mostly female workers who had blocked a road outside their factory owned by Sabrina (Cambodia) Garment Manufacturing in Kampong Speu province, west of the capital, Phnom Penh.

[Free Trade Union president] Sun Vanny said the workers making the Nike clothing had been staging strikes and protests since May 21. They want the company, which employs more than 5,000 people at the plant, to give them $14 a month to help pay for transport, rent and healthcare costs on top of their $74 minimum wage.”

Lethal autonomy
Human Rights Watch urges all nations, and the US in particular, to endorse a UN call to say no to “fully autonomous robotic weapons”:

“For the first time, countries will debate the challenges posed by fully autonomous weapons, sometimes called ‘killer robots,’ at the United Nations Human Rights Council in Geneva on May 29, 2013.

Over the past decade, the expanded use of unmanned armed vehicles or drones has dramatically changed warfare, bringing new humanitarian and legal challenges, Human Rights Watch said. The UN report acknowledges that ‘robots with full lethal autonomy have not yet been deployed’ despite the lack of transparency on their research and development. The report lists several robotic systems with various degrees of autonomy and lethality that are in use by the US, Israel, South Korea, and the UK. Other nations with high-tech militaries, such as China, and Russia, are also believed to be moving toward systems that would give full combat autonomy to machines.”

Selling drones
NBC News reports on corporate excitement over the emerging market for armed drones:

[Denel Dynamics] aims to be among the first suppliers of armed drones to market, if tests of the armed versions of the Seeker 400 — expected to begin in ‘a month or two’ and last up to six months, according to [Denel’s Sello Ntsihlele] — are successful. South Africa would have to purchase the armed drones first before the company would begin marketing them elsewhere, but if that happens Denel sees opportunities for growth elsewhere, particularly in ‘Africa and the Middle East,’ he said.

There are no international restrictions on sales of armed drones. Beyond sanctions and embargoes governed by the Security Council, the United Nations does not regulate arms and arms-technology sales, although the Arms Trade Treaty approved in April by the General Assembly may change that if it is eventually ratified by enough nations.

Global tax deal
Columbia University’s Joseph Stiglitz argues that international corporate tax laws are “unmanageable, unfair, distortionary”:

“These international corporations are the big beneficiaries of globalisation – it is not, for instance, the average American worker and those in many other countries, who, partly under the pressure from globalisation, has seen his income fully adjusted for inflation, including the lowering of prices that globalisation has brought about, fall year after year, to the point where a fulltime male worker in the US has an income lower than four decades ago. Our multinationals have learned how to exploit globalisation in every sense of the term – including exploiting the tax loopholes that allow them to evade their global social responsibilities.

It would be good if there could be an international agreement on the taxation of corporate profits. In the absence of such an agreement, any country that threatened to impose fair corporate taxes would be punished – production (and jobs) would be taken elsewhere.”

Colonial compensation
Al Jazeera reports on the New Zealand government’s compensation package for historical injustices committed against the country’s indigenous population:

“ ‘It’s not a great deal, we were expecting much more. But considering all things, we’ve accepted it. I’ll put it that way,’ [Ngati Haua member Mokoro] Gillett said of the $13mn settlement.
[Minister for Treaty Negotiations Christopher Finlayson] acknowledges that the settlements are more symbolic than anything else.
‘The Treaty settlement process cannot, and does not attempt to, compensate claimants for the losses suffered as a result of Treaty breaches by the Crown,’ his spokesperson said. ‘Although it’s difficult to calculate, various estimates have put commercial redress at between one per cent and six per cent of what was lost.’ ”

Latest Developments, February 7

In the latest news and analysis…

Global New Deal
The UN News Centre reports on a new UN Conference on Trade and Development paper that calls for an overhaul of the world’s financial system to produce a “more stable and inclusive” global economy.
“ ‘Financial markets and institutions have become the masters rather than the servants of the real economy, distorting trade and investment, heightening levels of inequality, and posing a systemic threat to economic stability,’ warns the report, which also defines the dominant pattern of international economic relations during the past three decades as ‘finance-driven globalization.’
[UNCTAD Secretary-General] Supachai [Panitchpakdi] instead calls for financial and other resources to be channelled towards ‘the right kinds’ of productive activities, ensuring that measures to diversify economic development are consistent with job creation, food and energy security, and tackling the threat of climate change.”

Arms trade transparency
The BBC reports the UK government is promising to allow greater public scrutiny of arms exports following allegations that weapons it had sold to Middle Eastern regimes were used to suppress popular protests during last year’s Arab Spring.
“The government intends to publish information about licence applications and updates of sales, once they have been awarded.
An independent reviewer could also be appointed to scrutinise the process to ensure it is working ‘correctly’.”

Shooting the messenger
The Wall Street Journal reports a former General Electric executive is alleging he was fired for relaying concerns about the legality of the company’s behaviour abroad.
“ ‘The Plaintiff provided information to his immediate supervisor and to the Ombudsperson for GE regarding potential violations of the Foreign Corrupt Practices Act committed by GE during negotiations for a lucrative, multi-year deal with the Iraqi Ministry of Electricity,’ the complaint said.”

Unethical links
The Ecologist reports a number of “seemingly ethical” Brititsh companies – The Co-operative, Marks & Spencer and Waitrose – are facing criticism over their partnerships with controversial oil giants.
“Greg Muttitt, campaigns and policy director at international development charity War on Want, said: ‘People believe there is an ethical option. The fact these companies are doing deals with unethical businesses shows how limited their ethical commitments are. This will wake people up to how these companies’ ethical policies are only skin deep.’ ”

Democratic deficit
The recently signed international Anti-Counterfeiting Trade Agreement (ACTA) is a potential threat to Internet freedom but the extent of its menace remains unclear because of the opaque and undemocratic negotiation process, according to Oxford Internet Institute graduate student Alexander Furnas.
“It is worth noting that the negotiations throughout most of the process were highly secret with negotiators forced to sign non-disclosure agreements, a fact that, according to one [Wikileaks] cable, made even some of the negotiating parties uncomfortable. There were few avenues for public or civil-society input. Meanwhile many U.S. based multinational corporations and their interest groups, including the Recording Industry Association of America, the Motion Picture Association of America, Sony, and Time Warner were consulted via formal [Office of the US Trade Representative] advisory boards.”

Myth making
The Center for Global Development’s Michael Clemens writes about the birth of an “immigration fiction” as the UK Minister of State for Immigration Damian Green, with the help of the British media, distorts the findings of a recent report by attributing causation where it found only association.
“But the minister’s myth propagates anyway, with help from a docile press. The BBC article on the minister’s speech, for example, simply quotes the minister’s false interpretation of the [Migration Advisory Committee] report, without qualification. The article does not bother to interview any of the MAC report’s authors, who could clarify what they did or did not say. The BBC article does bother to interview anti-immigration activist Sir Andrew Green, who (shocker!) shares the minister’s sadly fictional interpretation of the MAC report.

What does the best economic research show? As I’ve discussed in a peer-reviewed article in a journal of the American Economic Association, barriers to migration from developing countries are far and away the most impoverishing obstacle to the global economy. Even slightly greater labor mobility out of developing countries would add trillions of dollars to the world economy, and most of those gains happen in countries of destination like the UK.”

Zero-sum madness
The Post Carbon Institute’s Richard Heinberg argues that perpetuating the current competition-based global system is not a viable option if survival of the species is our objective.
“Taken together, current cooperative efforts toward resource conservation, climate mitigation and population stabilisation are woefully insufficient – as exemplified by failed climate talks, continued global population growth and ever-heightening international competition for access to dwindling fossil fuel supplies. There are plenty of justifications for pessimism: after all, won’t the first nations to engage in resource conservation lose economic advantage to those that engage in conquest and consumption maximisation? Wouldn’t even one major national holdout undermine a worldwide cooperative effort at climate protection?
Dramatically expanding our international and domestic cooperative efforts at this worrisome moment in history may seem like a tall order. The only advantage to doing so is that it is the only path going forward that does not end in a global tragedy in which the fate of the ‘winners’ is hardly preferable to that of the ‘losers’.”

Body of evidence
The World Bank’s Markus Goldstein writes that there is remarkably little impact evaluation done on interventions and reforms relating to trade policy.
“The need for more evidence is key. As [Olivier] Cadot & co. point out, trade is receiving an increasing amount of policy attention and donors (the World Bank among them) are stepping up support of trade related interventions. But, alas, little work is being done. As a striking example, Cadot & co. review all World Bank trade projects from 1995-2005. Of these 85 projects, only 5 included an impact evaluation that used a comparison group. ”