Tag Archives: IMF conditionality

Latest Developments, May 22

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Dead miners
The New York Times reports that an “independent team” will investigate an accident that killed 28 workers at a US-owned mine in Indonesia:

“Rescue workers on Tuesday night recovered the last body from the debris of the collapsed tunnel, in the Big Gossan underground training facility. The tunnel’s roof caved in May 14 with 38 mining company employees inside, with only 10 surviving, [Freeport-McMoRan Copper & Gold] officials said.
…
Freeport Indonesia is the largest taxpayer to the Indonesian government, but it is a regular target of nationalist politicians who have called on it to pay higher royalties. The company has also had labor disputes in recent years.”

Rendition immunity
Al Jazeera reports that the UK wants the case of a former Libyan opposition figure sent back to face torture during the Gadhafi years “heard in a secret court, or not at all”:

“In the first preliminary hearing over the claim brought by Abdel Hakim Belhadj, a prominent rebel fighter-turned-politician, the government’s lawyers held on Tuesday that the case should either not go to trial in the UK, or that UK officials were ‘immune’ from prosecution.
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Belhadj and Fatima Boudchar, his heavily pregnant wife, were captured in exile in China. The ‘rendering’ operation was co-ordinated between the UK, US and Libyan intelligence agencies.
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Belhadj has offered to settle the matter out of court if the British government agrees to pay a token amount of one British pound each, apologise and admit liability. The defendants have refused these terms.”

Fashion disaster
The Wall Street Journal reports that clothes were being made for Swedish fashion giant H&M at a Cambodian factory where a building collapse has injured 23 people:

“The Stockholm-based retailer also said its orders had been placed at the factory without its knowledge, highlighting the lack of control some of the world’s biggest brands may have over their supply chains.
Garment factories in Cambodia and other countries sometimes subcontract orders from retail brands to other factories to help meet demand or save costs, even though major brands often officially forbid the practice. Workers’ rights activists condemn such subcontracting because they say it makes it harder to track the origin of garments, obscuring responsibility for working conditions at the factories. Subcontracted factories may also be subjected to less rigorous auditing than factories approved by the brands.
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On Monday, 23 workers were injured when a rest area outside the subcontracted factory operated by Hong Kong’s Top World Garment (Cambodia) Ltd., and located near the Cambodian capital of Phnom Penh, collapsed and fell into a pond.
The incident came just a few days after portions of another Cambodian garment factory collapsed, killing three people and injuring several others.”

Criminalized migration
Human Rights Watch has released a new report criticizing the US government’s “skyrocketing” prosecutions of migrants who have entered the country illegally:

“The 82-page report, ‘Turning Migrants Into Criminals: The Harmful Impact of US Border Prosecutions,’ documents the negative impact of illegal entry and reentry prosecutions, which have increased 1,400 and 300 percent, respectively, over the past 10 years and now outnumber prosecutions for all other federal crimes. Over 80,000 people were convicted of these crimes in 2012, many in rapid-fire mass prosecutions that violate due process rights. Many are separated from their US families, and a large number end up in costly and overcrowded federal prisons, some for months or years.”

Dirty jewellery
An international coalition of labour and environmental groups has released a report that is highly critical of the Responsible Jewellery Council’s certification system:

“The RJC system is riddled with loopholes relating to membership, auditing, and accountability, allowing, for example, member companies as a whole to be certified as RJC compliant even when some of their gold, platinum and diamond-producing facilities — or projects they are invested in — are excluded from RJC audits. The system lacks transparency. Auditors’ reports are not made public, and equally troubling, the RJC itself doesn’t receive evidence or detailed auditors’ reports about operations that it certifies.
Several RJC standards are weak and violate widely accepted social and environmental principles. Under the RJC Code, mining companies can operate in conflict zones, fail to protect workers’ rights to join unions, and allow children as young as 14 to work. It also fails to place limits on water and air pollution and allows toxic waste disposal into lakes and ocean environments.”

Debt crimes
Jubilee Debt Campaign’s Nick Dearden says the debt repayments and austerity measures demanded by Pakistan’s external creditors are “tantamount to economic torture”:

“From 1998 Pakistan was lent $500m by the World Bank and others to build a drainage project to improve land irrigation. This might have been a good thing, if it had worked. But it was so badly constructed that the project increased, rather than decreased, the salinity of the land and seriously damaged ecosystems. In 2003 flooding, partially caused by the drainage project, killed more than 300 people. Pakistan has just start repaying the World Bank (with interest) for the project.
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The IMF’s loans have made Pakistan a more unequal country. One condition the IMF imposed was to increase sales tax and cut trade taxes. Over the 1980s and 1990s, as a result, taxes on the poorest households increased by 7%, while falling by 15% for the richest.”

Extractive transparency
The Revenue Watch Institute’s Daniel Kaufmann calls on rich countries to require more transparent overseas operations from their oil, mining and gas companies:

“Building on the pioneering Lugar-Cardin provision in U.S. Dodd-Frank legislation and the newly minted agreement in the European Union (EU), the G-8 should endorse both home — and host-country mandatory disclosure standards in line with these new U.S. and EU regulations and support their implementation. In particular, Canada and Russia ought to adopt these standards and ensure that G20 and emerging economies including Australia, Brazil, China, South Africa and Switzerland follow suit. [Extractive Industries Transparency Initiative] should also fully align itself with these disclosure standards, helping countries and companies report detailed revenues paid to governments.”

AU turns 50
The University of North Carolina’s Georges Nzongola-Ntalaja assesses the African Union’s achievements and shortcomings as the organization celebrates its 50th birthday this week:

“This unswerving opposition to white minority rule and colonialism is undoubtedly the [Organisation of African Unity]’s greatest achievement. It succeeded in mobilising African and world opinion against colonialists in the Portuguese colonies and settler states of Namibia, South Africa and Zimbabwe.
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A major problem confronting the AU is resources. With so much dependence on the EU and other external funding, questions arise about African ownership and initiative in some of the theatres of intervention.”

Latest Developments, September 24

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Françafrique lives
Le Figaro reports that France’s involvement in the looming international fight for northern Mali may go beyond the “logistical support” discussed by the country’s defence minister:

“About 100 members of the French special forces have already been deployed to the region. They should receive reinforcements shortly, most notably from Navy commandos. French assistance also includes naval patrol aircraft, which gather intelligence, and a surveillance system based in Niger. The plan, from Paris’s perspective, would be to assemble an action force of several hundred troops to reconquer northern Mali, which has been occupied for several months by armed Islamist groups.” [Translated from the French.]

Liberalizing Egypt
Jubilee Debt Campaign’s Nick Dearden argues that Western media portrayals of Egypt “through the prism of political rights versus Islam” ignore the potential impacts of policies being pushed by organizations such as the International Monetary Fund:

“The IMF says it has changed its ways since working with [former Egyptian president Hosni] Mubarak to restructure the Egyptian economy in the 1990s, and won’t ask for many conditions this time around.
However, many people remain sceptical about the IMF’s agenda – privatisation, indirect taxation, removal of subsidies (many of which are corrupt, but some of which do genuinely support the poor) and an economy based around exports. As one government insider said last week: ‘In Egypt, we call privatisation what it is – stealing.’ A propaganda campaign aims to convince Egyptians that ‘there is no alternative’.
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‘The question is not whether to take a loan, but who will run this country for the next five years,’ Amr Adly from the Egyptian Initiative for Personal Rights told an anti-privatisation conference in Cairo. He’s right because the IMF’s plan is to extend and promote new loans to Egypt so that it can continue to pay (rather than question) Mubarak’s debts, and use this influence to impose a whole host of liberalisation policies.”

Oil spills
The Observer reports that Shell’s efforts to clean up a pair of oil spills in Nigeria’s Niger delta are described as “totally amateurish” in a new assessment:

“Shell, which made £19.1bn profit last year, accepted responsiblity and pledged to fully restore the damage done by spills from its rusting pipelines near the Ogoni village of Bodo in 2008.
But an assessment has found only small pilot schemes were started and the most contaminated areas around Bodo and the Gokana district of Ogoniland remain untouched. The impoverished Ogoni fishing and farming communities say they still cannot return to work and have received no compensation. They have accused Shell of applying different standards to clean-ups in Nigeria compared with the rest of the world.”

Carbon controls
Reuters reports that the US Senate has voted unanimously for a bill meant to ensure the country’s airlines will not have to pay for the carbon they emit on European flights:

“The bill increases pressure on the U.N. International Civil Aviation Organization (ICAO) to devise a global alternative to the EU law.
Connie Hedegaard, the European Climate Commissioner, said on Saturday that while the bill encourages the United States to work within the U.N. organization for a global deal on aviation emissions, she is skeptical that Washington will accept such a deal.
‘It’s not enough to say you want it, you have to work hard to get it done,’ she told Reuters on Saturday. ‘That means that the U.S. needs to change its approach in ICAO and show willingness to actually seal a meaningful global deal that will facilitate action.’ ”

Exclusive growth
The Globe and Mail reports on the uneven benefits of a Swiss-owned sugar plantation for nearby communities in Sierra Leone:

“The 700 villagers [in Lungi Acre] have been boxed in by the Swiss project, their huts surrounded by the vast plantation. Rice and cassava fields were bulldozed, and people were left with so little water and farmland that they say they must buy imported rice in the markets. Just outside the village, a water reservoir is fenced off with razor wire, and guards patrol to chase villagers away from the sugar cane.
‘Addax [Bioenergy] is making the situation much worse,’ says Abdullah Serry, an elder. ‘There’s no water for the little land we have left. We were dependent on those lands for all these years. We depended on them for survival. Now, we rely on Addax for everything.’ ”

Bank transparency
The Tax Justice Network argues it would be “a disaster” for Italy, Belgium and Greece to sign so-called Rubik tax deals with Switzerland:

“These deals are the centrepieces of a plot by Swiss bankers to sabotage progress on a major global initiative on financial transparency, the EU Savings Tax Directive which is in the process of being strengthened.  As we noted earlier, the [Swiss Bankers’ Association] said the initiative was designed as an ‘independent counter-concept’ to prevent the global emergence of the gold standard of transparency, automatic information exchange”

America’s forgotten war
Agence France-Presse reports that despite the ongoing violence of the conflict, America’s war in Afghanistan is virtually absent from the US presidential campaign:

“ ‘To the extent that we are waging this war without a public debate, I think that is a mistake,’ said Stephen Biddle, professor of political science and international affairs at George Washington University.
‘I understand that the economy will be a dominant issue (but) we are killing others, and suffering casualties ourselves and spending billions of dollars.’
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Polls reveal that by two-to-one margins, Americans don’t think the Afghan conflict is worth fighting.
But there are no peace marches on the White House from a weary public content to ignore the war, so there is little direct pressure on politicians.”

Show me your papers
A Washington Post editorial describes as “obnoxious” an immigration law that came into force in Arizona last week and predicts its impacts will be similar to those of controversial Alabama legislation implemented about a year ago:

“There, according to a recent report by the National Immigration Law Center, an immigrant advocacy group, law enforcement officers have created an ‘environment of racial profiling’ that has encouraged private citizens to discriminate and abuse people they regard as foreign. The report, based on thousands of calls to a hotline, recounted instances of Hispanics, including legal residents, who were repeatedly stopped by police on flimsy pretexts and, in some cases, subjected to prolonged roadside detentions.”

Latest Developments, July 24

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Bad news on inequality
The Tax Justice Network has released a pair of reports on the extent and the impacts of the global offshore banking system, which together argue that the “at least $21 trillion hidden in secret tax havens” mean economic inequality is actually much worse than generally thought:

“At its simplest, our argument is that if an asset is hidden in an offshore bank account, or an offshore trust or company, and the ultimate owner or beneficiary of the income or capital cannot be identified, then this asset and the income it produces will not be counted in the inequality statistics. Almost all these hidden assets are owned by the world’s wealthiest individuals. So it follows that the inequality statistics, particularly at the top end of the scale, underestimate the scale of the problem.”

AND

“For our focus subgroup of 139 mostly low-middle income countries, traditional data shows aggregate external debts of $4.1tn at the end of 2010. But take their foreign reserves and unrecorded offshore private wealth into account, and the picture reverses: they had aggregate net debts of minus US$10.1-13.1tn. In other words, these countries are big net creditors, not debtors. Unfortunately, their assets are held by a few wealthy individuals, while their debts are shouldered by their ordinary people through their governments.”

Strings attached
The International Monetary Fund has announced it has approved a $156 million loan for Malawi, as a result of new president Joyce Banda’s policies, even though they may be exacerbating the country’s growing food crisis:

“Following the Board’s discussion of Malawi, Naoyuki Shinohara, Deputy Managing Director and Acting Chair, issued the following statement:
‘Malawi’s new administration moved swiftly to devalue the kwacha, adopt a flexible exchange rate regime and liberalize current account transactions to address the country’s chronic balance of payment problems and improve the outlook for poverty reduction and growth.’
…
‘Tight control over non-priority spending will be needed to ensure that expenditures are aligned with the government’s priorities, including scaled up spending on social protection programs to mitigate the impact of adjustment measures on the poor.’ ”

Regulatory capture
The New York Times discusses a new book by Neil Barofsky, “the man whose job it was to police the $700 billion Troubled Asset Relief Program”:

“ ‘There has to be wide-scale acknowledgment that regulatory capture exists, dominates our system and needs to be eradicated,’ Mr. Barofsky said in the interview.
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‘We need to re-educate our regulators that it’s O.K. to be adversarial, that it’s not going to hurt your career advancement to be more skeptical and more challenging,’ he said. ‘It’s implicit in so much of the regulatory structure that if you don’t make too many waves there will be a job for you elsewhere. So we have to limit those job opportunities and develop a more professional path for regulators as a career. That way, they won’t always have that siren call of Wall Street.’
Mr. Barofsky’s assessment of his former regulatory brethren is crucial for taxpayers to understand, because Congress’s financial reform act — the Dodd-Frank legislation — left so much of the heavy lifting to the weak-kneed.”

Expanding footprint
MENAFN reports that Barrick Gold subsidiary African Barrick Gold is growing its operations beyond Tanzania, where controversies involving the company’s mines have included alleged toxic spills and fatal shootings, into Kenya with newly acquired exploration assets:

“Aviva’s Kenyan assets are located in the southwest corner of Kenya, about 300 kilometers northwest of Nairobi, near the border of Uganda and on the shores of Lake Victoria, it said.
‘This acquisition represents the first step in expanding our footprint outside of Tanzania and building our future growth pipeline,’ said Chief Executive Greg Hawkins. ‘The acquisition is an attractive entry into an under explored and highly prospective land package in a country bordering our existing operations.’ ”

Democratic calculus
Responding to a Human Rights Watch report condemning the current state of human rights in Venezuela, the Overseas Development Institute’s Jonathan Glennie counters that in some instances, freedom of the press “can actually mitigate against progress for the majority poor”:

“Take the Murdoch empire, multiply it by about a thousand and you are somewhere close to how powerful the rightwing media is in Latin America. In [the Center for Economic and Policy Research’s Mark] Weisbrot’s words the ‘unelected owners [of major media outlets] and their allies use their control of information to advance the interests of the wealth and power that used to rule the country’.
It is proven beyond doubt that the rightwing media was an active and key player in the 2002 coup that briefly removed [Venezuelan President Hugo] Chávez from power (see the brilliant documentary The revolution will not be televised). In such a context, reducing the rightwing media’s room for manoeuvre may be a crucial element in any plan to radically transform a country. (In the run-up to elections in October, Chavez has accused Venezuela’s privately owned media companies of bias towards the opposition and of ignoring his government’s achievements.) Where single-issue civil rights organisations see media crackdowns, what may be happening is an elected and popular government trying to implement the will of the people in the face of powerful business interests prepared to undermine democracy if need be.”

Fatal laws
Reuters reports that Mexican President Felipe Calderon has called America’s gun laws “mistaken” and is urging the US government to change them: 

“In comments posted on his Twitter account on Saturday, Calderon offered his condolences to the United States after a gunman went on the rampage with an assault rifle at a midnight premier of the new Batman film in Aurora, Colorado.
But Mexico’s president, who has repeatedly called on Washington to tighten gun controls to stop weapons flowing from the United States into the hands of Mexican drug cartels, said U.S. weapons policy needed a rethink after the killings.”

Fostering homophobia
The Guardian reports that US-based thinktank Political Research Associates is accusing American evangelical groups of attempting a “cultural colonisation” of Africa by opening offices across the continent to promote attacks on abortion and homosexuality.

“Entitled Colonising African Values: How the US Christian Right is Transforming Sexual Politics in Africa, the study analysed data from seven African countries and employed researchers for several months in Kenya, Malawi, Zambia and Zimbabwe.
It identified three organisations it believes are aggressively targeting the continent: [televangelist Pat Robertson’s American Center for Law and Justice], the Catholic group Human Life International and Family Watch International, led by the Mormon activist Sharon Slater.
Each of these ‘frame their agendas as authentically African, in an effort to brand human rights advocacy as a new colonialism bent on destroying cultural traditions and values’, the report says.”

Latest Developments, April 22

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French right
Agence France-Presse reports that the National Front’s Marine Le Pen finished third with nearly a fifth of all votes cast in the first round of France’s presidential election, the highest total for the  “anti-immigrant, anti-European, far-right party” in its 40-year history.
“Calling for ‘economic patriotism’ and vowing to leave the eurozone, she railed against globalisation and the ‘Islamisation’ of France, initially gaining some ground with attacks on the production of Islamic halal meat.
[French President Nicolas] Sarkozy sought to steal her thunder on two key issues for the far-right — immigration and security — with his calls for fewer immigrants and his handling of deadly attacks lat month by an Islamist extremist in Toulouse.
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Analysts see [Marine Le Pen] as part of a new age of far-right leaders across Europe seeking to shake off the fascist stigma of their predecessors.
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Like her father, Marine Le Pen has not avoided causing outrage with outspoken comments. Last year she compared Muslims praying in the streets outside overcrowded mosques in France to the Nazi occupation.”

Turning IMF conditionality on its head
Reuters reports that the International Monetary Fund has secured nearly half a trillion dollars in new funding from G20 nations but in return, emerging economic powers are demanding more say in how the institution is run.
“The battle over the next round of voting reforms begins with the elaborate formula for setting the quotas that determine each nation’s voting share, how much it must contribute to the Fund and how much it can borrow. The formula takes into account the size of each economy, foreign-exchange reserves and trade.
The current formula fails to capture the massive changes that have taken place globally since the IMF was founded after World War Two, especially the rise of emerging economic powers. Now that emerging markets are being asked to bulk up the Fund’s coffers to battle a crisis centered in Europe, their leverage to push for more change has increased.
‘Our demands are mostly for reforms, and those reforms are always finding obstacles,’ said Brazilian Finance Minister Guido Mantega. ‘It’s very easy for the Europeans to get the money and not do any reforms.’ ”

Generic ruling
Reuters also reports that a Kenyan court has ruled the country’s lawmakers must ensure efforts to crack down on counterfeit drugs do not impede access to generic drugs.
“Generic medicines constitute the lion’s share of medicines used in Kenya, and have enabled poor people in the developing country to get the necessary treatment for various ailments.
A previous court order issued before Friday’s ruling had blocked the act from coming into force, and Friday ruling means lawmakers will now have to amend the bill to clearly distinguish between generic and counterfeit drugs.”

Lobbying against transparency
ProPublica reports that media companies behind many of America’s top news organizations are fighting against greater transparency of US political funding.
“The corporate owners or sister companies of some of the biggest names in journalism — NBC News, ABC News, Fox News, The Washington Post, The Wall Street Journal, USA Today, Politico, The Atlanta Journal-Constitution and dozens of local TV news outlets — are lobbying against a Federal Communications Commission measure that would require broadcasters to post political ad data on the Internet.
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In a speech this week at the National Association of Broadcasters convention in Las Vegas, FCC Chairman Julius Genachowski excoriated the broadcasters as working ‘against transparency and against journalism.’ ”

Improving mining contracts
The BBC cites Guinea as an example of the growing number of African countries that are renegotiating what they view as “abusive” mining contracts with foreign companies.
“The Guinean state will now receive a 15% free stake in all mining projects for the country’s flagship minerals – bauxite, iron, gold and diamonds.
The secretary general of Guinea’s mining ministry, Guillaume Curtis, says the new legislation was a response to ‘mining contracts with abusive clauses that made it impossible to increase the state’s revenue’.
Export taxes are now indexed on global metal prices and fiscal exemptions have been cut.
‘Yes, there are heavy investments, but the eight-to-12-year tax holidays given by our countries are exaggerated,’ Mr Curtis says.”

Reformophobia
The Guardian reports that the head of the UN Conference on Trade and Development – an organization it describes as “an intellectual counterweight to the International Monetary Fund (IMF) and the World Bank” – has criticized the international community’s apparent unwillingness to undertake fundamental global financial reforms.
“As for reforms, [UNCTAD secretary general Supachai Panitchpakdi] identified as key greater disclosure of information from the likes of hedge funds on the kinds of financial instruments they were trading.
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At a time of austerity, Supachai said it was time to move beyond official development assistance from rich countries, which has declined for the first time in 15 years. He argued a financial transactions tax, or Tobin tax, would achieve a dual function, helping to curb the power of international finance while also providing funds for developing countries.
‘It would not be expensive for the financial services industry,’ he said. ‘That argument is an excuse for masters of the universe to remain masters of the universe.’ ”

Global law
Open Society’s James Goldston writes that despite the international community’s rhetorical enthusiasm for the “rule of law,” there remains much disagreement on the concept’s meaning and how it should be implemented.
“Many developing countries want more ‘international’ law to restrain the U.S. and other veto-wielding Permanent-5 powers on the UN Security Council, a body sorely in need of reform. By contrast, western donor governments are keen to focus on ‘national’ rule of law needs in conflict regions of Africa and the Middle East.”

Uncivilized Europeans
South African satirical newspaper Hayibo reports that Africans have been shocked by recent “uncivilized antics” by Europeans.
“Africans say they have little hope that Europe will ever become civilized, after a week in which Spain’s King Carlos went on an elephant-killing spree and the Swedish Culture Minister was entertained by a racially offensive cake.
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‘I don’t want to sound racist, and some of my best friend are white, but let’s be honest: violence is hard-wired into their DNA,’ said [Libreville resident August] Mwanasa. ‘I mean, Europeans killed over 20 million other Europeans in the 1930s and 1940s. That’s barbarism on a scale unprecedented in history.’ ”

Latest Developments, December 21

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Corporate liability
Lawfare reports the Obama administration has filed a brief with the US Supreme Court supporting Nigerian plaintiffs in the Kiobel lawsuit against oil-giant Shell, arguing corporations can be held liable under federal law for abuses committed abroad.  
“The brief –signed by State Department Legal Adviser Harold Koh and (somewhat surprisingly) by Commerce General Counsel Cameron Kerry in addition to Solicitor General Don Verrilli – argues that the question of corporate liability under the Alien Tort Statute is governed by federal common law, not by international law, although international law “informs” the issue.  And the brief goes on to argue that under federal common law, corporations may be held liable for violations of both domestic and international law: “[C]orporations have been subject to suit for centuries, and the concept of corporate liability is a well-settled part of our ‘legal culture.’”  The brief states that the United States is not aware of any international law “norm” that would prohibit corporations from being sued for violations of international law.”

Nationalization
Agence France-Presse reports a provincial branch of South Africa’s ruling African National Congress party has voted in favour of a resolution calling for land expropriation and mine nationalization. 
“ ‘All productive land must be nationalised. Compensation must not be paid on the land itself but on improvements. The price must be determined by the state through the state evaluator,’ the party’s Limpopo provincial chairman Soviet Lekganyane was shown as saying by the eNews channel.
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‘We reiterate our call for nationalisation of mines and other key strategic sectors like Sasol and ArcelorMittal,’ Lekganyane was quoted as saying by the Sapa news agency, referring to major oil and steel activities.”

Air battle
The Associated Press reports that an EU court has upheld a law charging airlines flying to Europe for their carbon emissions but a US trade group, Airlines for America, is vowing to continue fighting the “unilateral” and “counterproductive” measures. 
“The European Court of Justice in Luxembourg dismissed arguments that imposing the European Union’s cap-and-trade carbon credits program on flights to and from European airports infringes on national sovereignty or violates international aviation treaties. U.S. and other non-European airlines had sued the EU, arguing that they were exempt from the law.”

Selling development
The Institute of Development Studies’ Spencer Henson raises some concerns over NGO efforts to “sell development” by promoting the idea that buying certain products will benefit poor people half a world away.
“First, it is very much based on the notion of benevolence of the (powerful) rich towards the (powerless) poor. UK consumers can decide how to spend their money at Christmas whereas the poor have little money to spend on anything. Further, as a wealthy donor the consumer can decide who is ‘deserving’ of their charity, however they might judge this.
Second, and more importantly, efforts to sell development do little or nothing to challenge the very reasons that people are poor…and the need for benevolence by the rich in the first place. Thus, how is it that such global inequality exists, and what can be done about it? The act of buying a goat, a charity Christmas card or a handicraft fails to challenge the status quo. Some would even argue that buying development perpetuates the very systems that make people poor in the first place.”

IFI reform
PIMCO’s Mohamed El-Erian argues the economic convergence that is changing the previously Western-dominated global order is unpredictable and requires “deep reform of the multilateral system” and its institutions.
“Multilateral institutions, particularly the IMF, have responded by pumping an unfathomable amount of financing into Europe. But, instead of reversing the disorderly deleveraging and encouraging new private investments, this official financing has merely shifted liabilities from the private sector to the public sector. Moreover, many emerging-market countries have noted that the policy conditionality attached to the tens of billions of dollars that have been shipped to Europe pales in comparison with what was imposed on them in the 1990’s and early 2000’s.”

Food speculation
The Guardian speaks to a food expert whose research predicted the Arab Spring and forecasts high food prices will trigger global riots and revolutions in the next two years unless something is done to rein in speculation. 
“[The New England Complex Systems Institute’s Yaneer Bar-Yam] believes the time has come for global regulators to step in and manage the global market. Their first task would be to guarantee transparency and make public information previously shrouded in secrecy – such as who holds the biggest stakes in global commodities. Transparent accounting practices would have made the disappearance of $1.2 bn worth of customer money from the books of MF Global less a matter of sleight of hand and more a matter of international crime.
The second part of the speculation solution hinges on a return to traditional position limits in commodities, limits enforced by international laws geared to stop bankers, hedge funds and sovereign wealth funds from going long on the world’s food supply and, in effect, gambling on hunger.”

Charter cities
Oxfam’s Duncan Green expresses concern over the life-size radical experiment with charter cities Honduras is about to undertake. 
“On the basis of the Economist piece, at least, the Trujillo charter city looks like a mess. The government is going to bypass constitution, laws etc, outsource the lot to private interests and rely for good governance on a commission of overstretched VIPs. If the hyperactive [Center for Global Development president Nancy] Birdsall is typical, they will have so many other commitments that they really are not going to be able to invest the time to micromanage a potentially chaotic period of institution-building. I emailed Nancy about this and she replied that yes, there are big risks, but the world needs more experiments like this not least because ‘we don’t know in the development community how to ‘produce’ good governance’. She points out that there are resources, e.g. to pay at least one aide per member of the transparency board. But that still seems like a pretty skeletal arrangement and many of the criticisms I quoted in my original post apply in this case too. Got a bad feeling about this one.”