Long wait at the border between Sudan and Egypt. Credit: Hisham Allam/IPS

By Hisham Allam
CAIRO, May 25 2023 (IPS)

The conflict in Sudan is impacting the economy in Egypt, and those who make their living moving goods across the borders have spent weeks hoping the situation will normalize.

Muhammad Saqr, a truck driver, left Cairo with a load of thinners on April 13, heading to Khartoum. By the time he had arrived at the border, the battle had flared up. Saqr remained, like dozens of trucks, waiting for the borders to be reopened.

On April 15, 2023, clashes erupted in Sudan between the army led by Lieutenant General Abdel Fattah al-Burhan and the Rapid Support Forces led by Lieutenant General Muhammad Hamdan Dagalo, known as “Hamidti.” According to the UN, the clashes have resulted in hundreds of deaths and displaced more than a million people, with 840,000 internally displaced while another 250,000 have crossed the borders.

Saqr was stuck at the border for 28 days.

“We began to run out of supplies, and we reassured ourselves that the situation would improve tomorrow. Twenty-eight days passed while we slept in the open. The information we received from the bus drivers transporting the displaced from Sudan to Egypt convinced us that there would be no immediate relief. We knew that if we entered Khartoum alive, we would leave in shrouds,” Saqr told IPS.

“The merchant to whom we were transferring the goods asked us to wait and not return (home), particularly because he could not pay the customs duties due to the banks’ closure.”

Muhammad Saqr at the border of Sudan and Egypt.

Eventually, they returned with the goods to Cairo, Saqr said.

Mahmoud Asaad, a driver, was stuck on the Sudanese side of the border. Due to customs papers and permits, the livestock he was transporting had already been stuck in the customs barn in Wadi Halfa, Sudan, for thirty days. Then when the conflict broke out, the cows were trapped for another thirty days.

“We used to transport shipments of animals from Sudan to Egypt regularly,” Asaad explains. The average daily transport of animals to Egypt was roughly 60 trucks laden with cows and camels. This trade has stopped, and many Sudanese importers have fled to Egypt while waiting for the conflict to end.

“Sudan is regarded as a gateway for Egyptian exports to enter the markets of the Nile Basin countries and East Africa, and the continuation of war and insecurity will reduce the volume of trade exchange between the two countries, negatively impacting the Egyptian economy, which is currently experiencing some crises,” Matta Bishai, head of the Internal Trade and Supply Committee of the Importer’s Division of the General Federation of Chambers of Commerce, told IPS.

According to Bishai, commodity prices have risen significantly in recent months as the Egyptian pound has fallen against the US dollar. He also stated that the current situation in Sudan would result in additional price increases in the coming months, particularly for commodities imported from Sudan, such as meat.

Bishai explained that while Egypt had an ample domestic meat supply, it was nevertheless reliant on imports. Importing it from other countries such as Colombia, Brazil, and Chad would take longer and be more expensive than importing it from Sudan, as land transport is more convenient and cheaper than transporting the goods by sea.

According to Bishai, Sudan is a major supplier of livestock and live meat to Egypt, supplying about 10 percent of Egypt’s requirements. Higher meat prices will put additional pressure on Egypt’s inflation rates.

“Rising commodity prices, combined with the current situation in Sudan, are expected to result in higher inflation rates in Egypt in the coming months,” said Bishai.

According to data from the General Authority for Export and Import Control on trade exchange between Egypt and the African continent during the first quarter of this year, Sudan ranked second among the top five markets receiving Egyptian exports, valued at USD 226 million.

According to Ahmed Samir, the Egyptian Minister of Trade and Industry, the volume of trade exchange between Egypt and African markets amounted to about USD 2,12 billion in the first quarter of this year, with the value of Egyptian commodity exports to the continent totaling USD 1,61 billion and Egyptian imports from the continent totaling UD 506 million.

Mohamed Al-Kilani, an economics professor and member of the Egyptian Society of Political Economy, said: “The negative consequences will be felt in the trade exchange, which has recently increased and reached USD2 billion. Egypt has attempted to expedite the import process from Sudan by expanding the road network and building a railway.”

Credit rating agency Moody’s warned that should the conflict in Sudan continue for an extended period, it would have an adverse credit impact on neighboring countries and impact multilateral development banks. Moody’s added that if the clashes in Sudan turn into a long civil war, destroying infrastructure and worsening social conditions, there will be long-term economic consequences and a decline in the quality of Sudan’s multilateral banks’ assets, as well as an increase in non-performing loans and liquidity.

As the conflict entered its sixth week, attempts at a ceasefire have failed – with both sides accusing each other of violating agreements.

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

Carrying the Mayan flag, members of the Colibrí Collective lead a march against the Mayan Train in the city of Valladolid, in the southern Mexican state of Yucatán, in May 2023. The construction of the Mexican government’s most important megaproject has drawn criticism from affected communities due to its environmental, social and cultural effects. CREDIT: Arturo Contreras / Pie de Página

By Emilio Godoy
MEXICO CITY, May 18 2023 (IPS)

Mexico’s development banks have violated their own socio-environmental standards while granting loans for the construction of the Mayan Train (TM), the flagship project of the presidency of Andrés Manuel López Obrador.

The National Bank of Public Works and Services (Banobras), the Nacional Financiera (Nafin) bank and the Foreign Commerce Bank (Bancomext) allocated at least 564 million dollars to the railway line since 2021, according to the yearbooks and statements of the three state entities.

Banobras, which finances infrastructure and public services, granted 480.83 million dollars for the project in the Yucatan peninsula; Nafin, which extends loans and guarantees to public and private works, allocated 81 million; and Bancomext, which provides financing to export and import companies and other strategic sectors, granted 2.91 million.

Bancomext and Banobras did not evaluate the credit, while Nafin classified the information as “confidential”, even though it involves public funds, according to each institution’s response to IPS’ requests for public information.“(The banks) are committing internal violations of their own provisions in the granting of credits, in order to give loans to projects that are not environmentally viable and that do not respect the local communities.” -- Gustavo Alanís

The three institutions have environmental and social risk management systems that include lists of activities that are to be excluded from financing.

In the case of Bancomext and Nafin, these rules are mandatory during the credit granting process, while Banobras explains that its objective is to verify that the loans evaluated are compatible with the bank’s environmental and social commitments.

Bancomext prohibits 19 types of financing; Banobras, 17; and Nafin, 18. The three institutions all veto “production or activities that place in jeopardy lands that are owned by indigenous peoples or have been claimed by adjudication, without the full documented consent of said peoples.”

Likewise, Banobras and Nafin must not support “projects that imply violations of national and international conventions and treaties regarding the indigenous population and native peoples.”

The three entities already had information to evaluate the railway project, since the Superior Audit of the Federation, the state comptroller, had already pointed to shortcomings in the indigenous consultation process and in the assessment of social risks, in the 2019 Report on the Results of the Superior Audit of the Public Account.

The total cost of the TM has already exceeded 15 billion dollars, 70 percent above what was initially planned, mostly borne by the government’s National Fund for Tourism Promotion (Fonatur), responsible for the megaproject.

Mexico’s three state development banks are partially financing the Mayan Train, for which they have failed to comply with the due process of the evaluation of socio-environmental risks that are part of their regulations. The photo shows the clearing of part of the route of one of the branches of the railway line in the municipality of Playa del Carmen, in the southeastern state of Quintana Roo, in March 2022. CREDIT: Emilio Godoy / IPS

Violations

Angel Sulub, a Mayan indigenous member of the U kúuchil k Ch’i’ibalo’on Community Center, criticized the policies applied and the disrespect for the safeguards regulated by the state financial entities themselves.

“This shows us, once again, that there is a violation of our right to life, and there has not been at any moment in the process, from planning to execution, a will to respect the rights of the peoples,” he told IPS from the Felipe Carrillo Port, in the southeastern state of Quintana Roo, where one of the TM stations will be located.

Sulub, who is also a poet, described the consultation as a “sham”. “Respect for the consultation was violated in all cases, an adequate consultation was not carried out. They did not comply with the minimum information, it was not a prior consultation, nor was it culturally appropriate,” he argued.

In December 2019, the government National Institute of Indigenous Peoples (INPI) organized a consultation with indigenous groups in the region that the Mexican office of the United Nations High Commissioner for Human Rights questioned for non-compliance with international standards.

Official data indicates that some 17 million native people live in Mexico, belonging to 69 different peoples and representing 13 percent of the total population.

INPI initially anticipated a population of 1.5 million indigenous people to consult about the TM in 1,331 communities. But that total was reduced to 1.32 million, with no official explanation for the 12 percent decrease. The population in the project’s area of ​​influence totaled 3.57 million in 2019, according to the Superior Audit report.

The conduct of the three financial institutions reflects the level of compliance with the president’s plans, as has happened with other state agencies that have refused to create hurdles for the railway, work on which began in 2020 and which will have seven routes.

The Mayan Train, run by Fonatur and backed by public funds, will stretch some 1,500 kilometers through 78 municipalities in the states of Campeche, Quintana Roo and Yucatán, within the peninsula, as well as the neighboring states of Chiapas and Tabasco. It will have 21 stations and 14 other stops.

The Yucatan peninsula is home to the second largest jungle in Latin America, after the Amazon, and is notable for its fragile biodiversity. In this territory, furthermore, to speak of the population is to speak of the Mayans, because in a high number of municipalities they are a majority and 44 percent of the total are Mayan-speaking.

The government promotes the megaproject, whose locomotives will transport thousands of tourists and cargo, such as transgenic soybeans, palm oil and pork – key economic activities in the area – as an engine for socioeconomic development in the southeast of the country.

It argues that it will create jobs, boost tourism beyond the traditional attractions and energize the regional economy, which has sparked polarizing controversies between its supporters and critics.

The railway faces complaints of deforestation, pollution, environmental damage and human rights violations, but these have not managed to stop the project from going forward.

In November 2022, López Obrador, who wants at all costs for the locomotives to start running in December of this year, classified the TM as a “priority project” through a presidential decree, which facilitates the issuing of environmental permits.

Gustavo Alanís, executive director of the non-governmental Mexican Center for Environmental Law, questioned the way the development banks are proceeding.

“They are committing internal violations of their own provisions in the granting of credits, in order to give loans to projects that are not environmentally viable and that do not respect the local communities. They are not complying with their own internal guidelines and requirements regarding the environment and indigenous peoples in the granting of credits,” he told IPS.

Groups opposed to the Mayan Train protest along a segment of the megaproject in the municipality of Carrillo Puerto, in the southeastern state of Quintana Roo, on May 3. CREDIT: Arturo Contreras / Pie de Página

Trendy guidelines

In the last decade, socio-environmental standards have gained relevance for the promotion of sustainable works and their consequent financing that respects ecosystems and the rights of affected communities, such as those located along the railway.

Although the three Mexican development banks have such guidelines, they have not joined the largest global initiatives in this field.

None of them form part of the Equator Principles, a set of 10 criteria established in 2003 and adopted by 138 financial institutions from 38 countries, and which define their environmental, social and corporate governance.

Nor are they part of the Principles for Responsible Banking, of the United Nations Environment Program Finance Initiative, announced in 2019 and which have already been adopted by 324 financial and insurance institutions from more than 50 nations.

These standards address the impact of projects; sustainable client and user practices; consultation and participation of stakeholders; governance and institutional culture; as well as transparency and corporate responsibility.

Of the three Mexican development banks, only Banobras has a mechanism for complaints, which has not received any about its loans, including the railway project.

In this regard, Sulub questioned the different ways to guarantee indigenous rights in this and other large infrastructure projects.

“The legal fight against the railway and other megaprojects has shown us in recent years that, as peoples, we do not have effective access to justice either, even though we have clearly demonstrated violations of our rights. Although it is a good thing that companies and banks have these guidelines and that they comply with them, we do not have effective mechanisms for enforcement,” he complained.

In Sulub’s words, this leads to a breaching of the power of indigenous people to decide on their own ways of life, since the government does not abide by judicial decisions, which in his view is further evidence of an exclusionary political system.

For his part, Alanís warned of the banks’ complicity in the damage reported and the consequent risk of legal liability if the alleged irregularities are not resolved.

“If not, they must pay the consequences and hold accountable those who do not follow internal policies. The international banks have inspection panels, to receive complaints when the bank does not follow its own policies,” he stated.

The replanting of palm oil plants aimed at producing better trees through good agricultural practices. The UNDP’s Good Growth Partnership (GGP) in Indonesia included several projects under one umbrella. Credit: ILO/Fauzan Azhima

By Cecilia Russell
JOHANNESBURG, Apr 27 2023 (IPS)

Smallholder farmers are critical to the success of Indonesia’s efforts to address deforestation and climate change. Creating an understanding and supporting this group, internally and abroad, is a crucial objective for those working towards reducing deforestation and promoting good farming practices, especially as smallholders often work hand-to-mouth and are vulnerable to perpetuating unsustainable farming practices.

Musim Mas, a large palm oil corporation involved in sustainable production, says smallholders “hold approximately 40 percent of Indonesia’s oil palm plantations and are a significant group in the palm oil supply chain. This represents 4.2 million hectares in Indonesia, roughly the size of Denmark. According to the Palm Oil Agribusiness Strategic Policy Initiative (PASPI), smallholders are set to manage 60 percent of Indonesia’s oil palm plantations by 2030.” 

Since last year a new World Bank-led programme, the Food Systems, Land Use and Restoration (FOLUR), incorporates the United Nations Development Programme Good Growth Partnership (GGP). It will continue to be involved in the success of palm oil production and smallholders’ support—crucial, especially as a study showed that the “sector lifted around 2.6 million rural Indonesians from poverty this century,” with knock-on development successes including improved rural infrastructure.

Over the past five years, GGP conducted focused training with about 3,000 smallholder farmers, says UNDP’s GGP Global Project Manager, Pascale Bonzom:

“The idea was to pilot some public-private partnerships for training, new ways of getting the producers to adopt these agricultural practices so that we could learn from these pilots and scale them up through farmer support system strategies,” Bonzom says.

Farmer organizations speaking to IPS explained how they, too, support smallholder farmers.

Amanah, an independent smallholder association of about 500 independent smallholders in Ukui, Riau province, was the first group to receive Indonesian Sustainable Palm Oil (ISPO) certification as part of a joint programme, right before the start of GGP, between the Indonesian Ministry of Agriculture, UNDP, and Asian Agri. This followed training in good agricultural practices, land mapping, high carbon stock (HCS), and high conservation value (HCV) methodologies to identify forest areas for protection.

“The majority of independent smallholders in Indonesia do not have the capacity to implement best practices in the palm oil field. Consequently, it is important to provide assistance and training on good agricultural practices in the field on a regular and ongoing basis,” Amanah commented, adding that the training included preparing land for planting sustainably and using certified seeds, fertilizer, and good harvesting practices.

A producer organization, SPKS, said it was working with farmers to implement sustainable practices. It established a smallholders’ database and assisted them with ISPO and Roundtable on Sustainable Palm Oil (RSPO) certifications.

Jointly with High Conservation Value Resource Network (HCVRN), it created a toolkit for independent smallholders on zero deforestation. This has already been implemented in four villages in two districts.

“At this stage, SPKS and HCVRN are designing benefits and incentives for independent smallholders who already protect their forest area (along) with the indigenous people,” SPKS said, adding that it expected that these initiatives could be used and adopted by those facing EU regulations.

SPKS sees the new EU deforestation legislation as a concern and an opportunity, especially as the union has shown a commitment to supporting independent small farmers—including financial support to prepare for readiness to comply with the regulations, including geolocation, capacity building, and fair price mechanisms.

Amanah also pointed to the EU regulations, which incentivize independent smallholders to adhere to the certification process.

“As required by EU law, the EU is also tasked with implementing programs and assistance at the upstream level as well as serving as an incentive for independent smallholders who already adhere to the certification process. The independent smallholder will be encouraged by this incentive to use sustainable best practices. Financing may be used as an incentive. The independent smallholders will be encouraged by this incentive to use sustainable best practices,” the organization told IPS.

SPKS would like to see final EU regulations include a requirement for companies importing palm oil into the EU to guarantee a direct supply chain from at least 30 percent of independent smallholders based on a fair partnership.

“In the draft EU regulations, it is not yet clear whether the due diligence is based on deforestation-related risk-based analysis. Indonesia is often considered a country with a high deforestation rate, and palm oil is perceived to be a factor in deforestation. Considering this, we hope the EU will consider smallholder farmers by ensuring that EU regulations do not further burden them by issuing Technical Guidelines specifically designed for smallholder farmers.”

In April 2023, the European Parliament passed the law introducing rigorous, wide-ranging requirements on commodities such as palm oil. UNDP is looking into how it can tailor its support to producing countries with compliance of this and other similar current and future regulations.

Setara Jambi, an organization dedicated to education and capacity building for oil palm smallholders for sustainable agricultural management, says that while they are concerned about the EU regulations, small farmers have “many limitations, which are different from companies that already have adequate institutions.

“This concern will not arise if there is a strong commitment from both government and companies (buyers of smallholder fresh fruit bunches) to assist smallholders in preparing and implementing sustainable palm oil management.”

The next five years with FOLUR will face significant challenges. There is a need to ensure that the National Action Plan moves to the next level because it is going to expire at the end of 2024. It will require updating and expanding.

In Indonesia, there are 26 provinces and 225 districts that produce palm oil. And at the time of writing, eight provinces and nine districts have developed their own versions of the pilot Sustainable Palm Oil Action Plan and developed their own provincial or district-level Sustainable Palm Oil Action Plans.

There is a lot to do, including supporting the Indonesian government’s multi-stakeholder process, capacity building for the private sector, supporting an enabling environment for all, and working with financial institutions to make investment decisions aligned with deforestation commitments.

The biggest issue is to get the smallholder farmers on board. Because they live a life of survival, often they are vulnerable to “short-termism.”

On the positive side, the FOLUR initiative has the government’s backing. At the launch in Jakarta last year, Musdhalifah Machmud, Deputy Minister for Food and Agriculture at the Coordinating Ministry for Economic Affairs, said that the implementation of the FOLUR Project was expected to be able to create a value chain sustainability model for rice, oil palm, coffee, and cocoa through sustainable land use and “comprehensively by paying attention to biodiversity conservation, climate change, restoration, and land degradation.”

At that launch workshop in Jakarta, the World Bank’s Christopher Brett, FOLUR co-leader, noted: “Healthy and sustainable value chains offer social benefits and generate profits without putting undue stress on the environment.”

Bonzom agrees: “At the end of the day, they (smallholders) will need to see the benefits—better market terms, better prices, better, more secure contracts—that’s what is attractive for them.”

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

A harvester checks the ripeness of oil palm fresh fruit. The UNDP’s Good Growth Partnership has worked with all sectors of the palm oil supply chain to reduce deforestation. Credit: ILO/Fauzan Azhima

By Cecilia Russell
JOHANNESBURG, Apr 27 2023 (IPS)

Indonesia finds itself in a delicate balancing act of uplifting people from poverty, managing climate change and biodiversity, and satisfying an increasingly demanding international market for sustainable farming practices—and at the pivot of this complexity is the management of its palm oil sector.

As the UNDP-led Good Growth Partnership (GGP) joins a new World Bank-led project with similar objectives—the Food Systems, Land Use, and Restoration (FOLUR) Impact Programme, it acknowledges that the government of Indonesia has made considerable advancements in improving the sustainability of the industry and the value chain over the past five years with GGP support.

The GGP, using a multi-stakeholder approach, included several projects under one programmatic umbrella, linking production, demand, responsible sourcing, traceability, and transparency, with supporting financial institutions and investors in relation to reducing deforestation from land use change. The project aimed to connect all components of the supply chain—which, in the case of Indonesian palm oil, represents 4.5 percent of the country’s GDP and 60 percent of global exports.

Late in 2022, Trase, in its report From Risk Hotspots to Sustainability Sweet Spots, confirmed Indonesia had reversed its deforestation trends in 2018-2020; deforestation for palm oil was 45,285 hectares per year—only 18 percent of its peak in 2008-2012. The improvement is attributed to strengthened law enforcement, moratoria, certification of palm oil plantations, and implementation of corporate zero-deforestation commitments.

“Importantly, deforestation has fallen during a period of continued expansion of palm oil production. Although the decline in deforestation has been linked to a drop in the market value of crude palm oil, the recent spike in palm oil prices has not yet been accompanied by a boom in palm-driven deforestation—a cause for cautious optimism,” Robert Heilmayr and Jason Benedict commented on Trase’s website.

However, CDP Palm Oil Report 2022 notes that while companies are adopting a wider range of actions to end deforestation, these “actions are not yet robust enough to end commodity-driven deforestation in the palm oil value chain.”

CDP says while 86 percent of companies implemented no-deforestation policies, only 22 percent have public and comprehensive policies: “Traceability systems have been implemented by 87 percent of companies, but only 25 percent have the capacity to scale these to over 90 percent of their production/consumption back to at least the municipality or equivalent.”

One major challenge is the inclusion of smallholders in the supply chains—and while 44 percent of companies work with smallholders to reduce or remove forest degradation, less than a third support “good agricultural practices and provide financial or technical assistance to help them achieve this.”

It is precisely these challenges the GGP confronted in Indonesia.

“Systemic change in commodity supply chains is one of the essential transformations that must occur this decade to mitigate the combined threats of catastrophic climate change, biodiversity loss, and food insecurity and to achieve resilience for humanity globally,” GGP says in its assessment report, Reducing Deforestation from Commodity Supply Chains.

These deforestation commitments are not new and followed the New York Declaration on Forests (NYDF), adopted in 2014, which called for the end of forest loss and the restoration of 350 million hectares of degraded landscapes and forestlands by 2030. Then came the Paris Climate Agreement, which in terms of its Reducing Emissions from Deforestation and Forest Degradation (REDD+) agreements, was crucial for reducing emissions from deforestation and degradation in developing countries. More commitments flowed after the 2015/2016 fires, which were blamed on slash-and-burn agricultural practices, exacerbated by a dry El Niño; the fires raged for months, leading to deaths, respiratory tract infections, and cost, according to the World Bank, 16 billion US dollars.

The fires were also thought to cause a global rise in emissions and put wildlife, including the endangered orangutan population, at risk. Indonesia is a place where companies have been making commitments for some time, but implementing them with both direct and indirect suppliers is not easy.

Recognizing this challenge, the GGP supported the “improvement of sustainable production and land use policies and increased farmers’ capacities to shift to sustainable practices. At the same time, it has increased supply chain transparency and consumer demand for sustainable palm oil and built the awareness of financial institutions to invest sustainably and screen out deforesters in their portfolio.”

The GGP supported Indonesia’s National Action Plan—which is now being implemented at sub-national provincial, and district levels, too.

The action plan, along with Indonesia’s Enhanced Nationally Determined Contribution (NDC), recognizes the country’s climate change vulnerabilities, especially in the low-lying areas throughout the archipelago and its position in the so-called ring of fires. The Enhanced NDC has set ambitious deforestation and rehabilitation targets, including peat land restoration of 2 million hectares and rehabilitation of degraded land of 12 million hectares by 2030.

Despite good results, stress ratcheted up for the industry as a new European Union policy now excludes sourcing palm oil or produce from areas deforested and degraded after December 31, 2020.

The new regulation will require companies to prove their bona fides through recognized traceability techniques. The sector is still working out its detailed response to the requirements, which some see as a unilateral EU move that does not respect the rights of the producing countries.

While the EU is a small market for Indonesia compared with the domestic, Chinese, and Indian markets, the regulations put additional pressure on an industry still strongly associated with small-scale farmers. It is also likely that other large markets will eventually align themselves with these regulations.

Even before the regulations became an issue, the GGP involved itself in communication campaigns to sensitize the public to sustainable certification, from the Indonesia Sustainable Palm Oil (ISPO)to the Roundtable on Sustainable Palm Oil (RSPO) standards.

The communication campaigns worked to create awareness about sustainability issues among consumers, but also with large retailers (including one called Super Indo) to place RSPO-certified palm oil products on their shelves.

It’s critical to get all players in the supply chain on board, which is where multi-stakeholder tactics work effectively; the GGP believes that this multi-faceted approach is crucial to influencing companies.

“You influence companies through government policies, through the market, but you also influence them through the financial institutions,” says UNDP’s GGP Global Project Manager, Pascale Bonzom. “If the financial institutions that fund these downstream companies require them to show that they have no deforestation commitments, and they are implementing them with results, then they (the companies) are going to have to do something about it.”

Elaborating on the strategy, she said GGP and its partner World Wildlife Fund (WWF) worked at a regional level on building capacity in financial institutions to understand the impacts of their investments.

Now a scorecard is available—to equip and influence the investors to make better decisions and to use this kind of Environmental, Social, and Governance factors (ESG) screening for deforestation.

See Part 2: Smallholders Key to Indonesian Deforestation Successes

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

Cocoa farmers in Padre Abad in Ucayali, Peru, benefitted from UNDP support to produce sustainable cocoa. Credit: UNDP

By Alison Kentish
NEW YORK, Apr 26 2023 (IPS)

In 2015, just over 30 cocoa farmers from Padre Abad in Ucayali, a province in the lush and ecologically diverse Peruvian Amazon, formed an alliance to tackle long-standing concerns such as soil quality, access to markets, fair prices for their produce and a growing number of illegal plantations. The result was the Colpa de Loros Cooperative, and from the start, the goal was to produce the finest quality, export-ready cocoa.

Membership would grow to over 500 partners covering 200 hectares of land today.

For almost four years, the cooperative’s small producers worked tirelessly on the transition of the area from traditional but environmentally taxing cocoa harvesting to growing premium cocoa that could meet export demand in the chocolate industry. This was no easy feat, as fine-flavor cocoa production demanded significant investment in technical training for members, initiatives to monitor deforestation, and data systems to ensure cocoa traceability, production, and sales. On the education side, it demanded a change from centuries-long cocoa farming practices to the principles of agroecology.

Then in April 2023, as the farmers worked to meet demanding international certifications, the European Parliament passed a new law introducing rigorous, wide-ranging requirements on commodities such as palm oil, soy, beef, and cocoa. Now the United Nations Development Programme (UNDP) is researching how it should step up its assistance to producers to meet the new criteria.

New EU Requirements

Colpa de Loros sells 100 percent of its cocoa to a European buyer, the French company Kaoka. When word of the new European regulations hit, the cooperative had already achieved organic production and fair-trade certification. It had also attained ‘fair for life’ certification, a Kaoka-led initiative.

Attaining these credentials meant that members had been working on a blueprint for environmentally friendly agriculture systems. However, for Peru, the world’s third largest cocoa supplier to Europe, the new regulations triggered frenetic action to maintain contracts with buyers and protect the almost 100,000 small producers who depend on cocoa exports to sustain their households.

“The law affects not only Colpa de Loros, but all producers,’ said Ernesto Parra, Manager of Colpa de Loros Cooperative.

“We already have laws which require analysis of pesticides, which makes costs higher. To ensure compliance with this rule, they implement measures like regular audits. Every grain must be free of contamination. There are organizations bigger than Colpa that are experiencing difficulties to respond, and no actions have been taken by the government to support them,” he said.

The European Commission has now also introduced new forest conservation and restoration rules. The Commission said the deforestation regulation would promote EU consumption of deforestation-free supply chain products, encourage international cooperation to tackle forest degradation, reroute finance to aid sustainable land-use practices, and support the collection and availability of quality data on forests and commodity supply chains.

Parra says this commitment to the environment complements the cooperative’s core values.

“The cooperative aligns with this green pact signed by all actors in Europe to not buy chocolate from deforested areas or involving child or forced work. They not only promote the protection of the environment, but reforestation, land protection, recycling programmes, and biogas from cacao liquid. We agree that cocoa can’t come from deforested areas or make new plantations in protected areas.”

While the cooperative is firm in its environmental consciousness, Parra says the investment is needed in educational activities and technical support for rural farmers who are struggling to accept the realities of land degradation and climate change.

“Some of them are still burning forests. Organizations need to convince the base of producers and farmers to change. Not only their partners but all people in the communities. Incentives can help. For example, I can be carbon neutral, but I’m going to have a higher cost, and if the market does not recognize it, if I don’t have an incentive, the standard will be difficult to maintain. Our cooperative gives its own incentives: those who commit to the organic certification receive fertilizer produced by Colpa de Loros to increase production.

“It is a start, but this is not enough. The state or the market needs to offer incentives as well.”

UNDP Support – and Good Growth Partnership Scoping

The United Nations Development Programme (UNDP) has been working with the world’s commodity-producing countries to put sustainability at the center of supply chains.

For the past five years, its Good Growth Partnership (GGP), based on the tenets of the Sustainable Development Goals and funded by the Global Environment Facility, has struck a balance between livelihoods and environmental protection—prioritizing people and the planet.

From Brazil to Indonesia, the GGP has embraced an Integrated Approach, working with producers, traders, policymakers, financial institutions, and multinational corporations to build sustainability in soy, beef, and palm oil supply chains.

Peru has so far not been covered by GGP but is being scoped for possible assistance under a next phase of the programme.

In the meantime, the UN agency has been supporting Peru to achieve sustainable commodity production- a target that remains crucial in the face of the new EU regulation.

“The control and monitoring of all production processes had to be doubled, and UNDP is vital here. With its finance, the technical department was strengthened, agricultural technology was incorporated, and members received capacity building in sustainability and food security,” said Parra.

Each member of Colpa de Loros is responsible for 3-4 hectares of land. The GEF-financed Sustainable Productive Landscapes (SPL) in the Peruvian Amazon project, led by the Ministry of Environment with technical assistance from UNDP, has been supporting projects that enhance food production while protecting water and land resources.

“The organization’s cocoa is not conventional cocoa. It is a fine aroma cocoa. So, producers needed equipment for special analysis. Then all information needed to be organized in a digital platform. UNDP helped in these areas,’ he added.

“The GEF-financed SPL project provided US$150,000 to complement the work of the organization with maps, digital platforms, and traceability. As there is no global system of traceability, Colpa is using its own, which is expensive.”

Action Plans

The UN organization, working closely with the Ministry of Agriculture, has also been assisting the Government and industry partners to develop and implement national action plans for the cocoa and coffee sectors. The Peruvian National Plan for Cocoa and Chocolate was unveiled in November 2022. It breaks down divisions between production, demand, and finance issues in agriculture. It also contains clear strategies to increase sustainability based on science, technology, and tradition.

The plan complements the values of UNDP and represents a win for both farmers and the environment.

“It is important to recognize that many Peruvian farmers’ cooperatives and companies, regardless of the EU regulation, are concerned about the potential impacts of their production systems on the environment, and they are increasingly conscious of the impacts that climate change is having on their production systems,” said James Leslie, Technical Advisor Ecosystems and Climate Change at UNDP Peru.

“Now, the concern is the feasibility of complying with the EU regulation and in the timeframe required. This concern is directly related to the fact that the EU markets are important for Peruvian agricultural products, particularly coffee, and cocoa. There is a concern that with the new EU regulation, there can be restricted or more challenging access to the market.”

The UNDP official says meeting stringent sustainable production requirements comes at a hefty cost to owners of small and medium-sized farms.

“There is not necessarily a price premium for their products due to certification,” he said. Incentives are a key factor in GGP’s work in encouraging farmers to adopt sustainable practices.

“It’s important also to recognize that there is a difference within the farmer population. Some farmers are organized and are part of cooperatives. For example, roughly 20 percent of cocoa and coffee farmers are organized in some way, which means that 80 per cent are not. Those unorganized farmers are less likely to be certified, and they are less likely to be accessing stable markets that provide some price guarantee.”

According to the UNDP, Peru ranks 9 in the world’s top ten cocoa producers and tops the world in organic cocoa production. The majority of farmers are small-scale and medium scale. Leslie says many of these farmers are either living in poverty or vulnerable to falling below the poverty line.

“Add to that additional restrictions and costs in order to access markets, and it poses a risk for these farmers—for their wellbeing and livelihoods,” he said.

The Future of Sustainable Agriculture

Looking ahead, Leslie says access to traceability systems is important. The farmers will need to prove that their production has met the EU requirements.

He says the Government will also need to expand technical assistance, increase investment in science and technology, including the purchase of climate change-resistant crop varieties, and ensure that farmers can receive finance aligned with the EU regulation’s sustainability criteria.

Clear land use policies will also be needed to delineate land that is appropriate for agriculture and particular types of crops. Areas that must be regenerated should be clearly marked, along with those that should be conserved, such as watersheds and zones of high biodiversity value.

For Colpa de Loros, Parra says the goal must be to strike a balance between sustainable land use and livelihoods.

“For deforestation, there is a big relation to poverty. The majority of the time a producer cuts down a tree, it’s because of need.”

He says the challenge is to create a supply chain that is sustainable, competitive, and inclusive – a goal that is attainable with adequate support and buy-in from every link in the value chain.

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

Excerpt:

Credit: Shutterstock

By Thalif Deen
UNITED NATIONS, Apr 24 2023 (IPS)

The United Nations has warned that the February 2022 Rusian invasion of Ukraine has threatened to force up to 1.7 billion people — over one-fifth of humanity — into poverty, destitution and hunger.

Long before the war, Ukraine and Russia provided about 30 per cent of the world’s wheat and barley, one-fifth of its maize, and over half of its sunflower oil. But the ongoing 14th-month-old war has undermined– and cut-off– most of these supplies.

Together, the UN pointed out, their grain was an essential food source for some of the poorest and most vulnerable people, providing more than one-third of the wheat imported by 45 African and least-developed countries (LDCs), described as “the poorest of the world’s poor”.

At the same time, Russia was the world’s top natural gas exporter, and second-largest oil exporter.

The negative fall-out from the war, and the rise in arms spending, are a blessing in disguise for US and Western arms suppliers. The US administration alone has provided an estimated 113 billion dollars in weapons, economic and humanitarian aid and security assistance to Ukraine—and with no end in sight.

As a result of the war, world military expenditures reached a new record high, according to a report from the Stockholm International Peace Research Institute (SIPRI).

The study, released April 24, says total global military expenditure grew for the eighth consecutive year in 2022. And an increase of 3.7 per cent in real terms last year resulted in a new high of $2.24 trillion.

By far the sharpest rise in spending (+13 per cent) was seen in Europe and was largely accounted for by Russian and Ukrainian spending. However, military aid to Ukraine and concerns about a heightened threat from Russia strongly influenced many other states’ spending decisions, as did tensions in East Asia.

Military expenditure in Europe, a new battleground since World War II, is the steepest year-on-year increase in at least 30 years.

The three largest spenders in 2022—the United States, China and Russia—accounted for 56 per cent of the world total.

All three, along with Britain and France, are veto-wielding permanent members of the UN Security Council who are expected to abide by one of the core principles in the UN charter: maintaining international peace and security.

The United States remains by far the world’s biggest military spender. US military spending reached $877 billion in 2022, which was 39 per cent of total global military spending and three times more than the amount spent by China, the world’s second largest spender.

The 0.7 per cent real-term increase in US spending in 2022 would have been even greater had it not been for the highest levels of inflation since 1981, according to the SIPRI study.

Dr Nan Tian, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Programme, said “the continuous rise in global military expenditure in recent years is a sign that we are living in an increasingly insecure world.’

She said States are bolstering military strength in response to a deteriorating security environment, which they do not foresee improving in the near future.

Ukraine’s military spending reached $44.0 billion in 2022. At 640 per cent, this was the highest single-year increase in a country’s military expenditure ever recorded in SIPRI data.

As a result of the increase and the war-related damage to Ukraine’s economy, the military burden (military spending as a share of GDP) shot up to 34 per cent of GDP in 2022, from 3.2 per cent in 2021, according to the SIPRI study.

“The invasion of Ukraine had an immediate impact on military spending decisions in Central and Western Europe. This included multi-year plans to boost spending from several governments,” said Dr Diego Lopes da Silva, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Programme.

“As a result, we can reasonably expect military expenditure in Central and Western Europe to keep rising in the years ahead,” he said.

Some of the sharpest increases were seen in Finland (+36 per cent), Lithuania (+27 per cent), Sweden (+12 per cent) and Poland (+11 per cent).

‘While the full-scale invasion of Ukraine in February 2022 certainly affected military spending decisions in 2022, concerns about Russian aggression have been building for much longer,’ said Lorenzo Scarazzato, Researcher with SIPRI’s Military Expenditure and Arms Production Programme.

‘Many former Eastern bloc states have more than doubled their military spending since 2014, the year when Russia annexed Crimea,’ while Russia and Ukraine have raised military spending as war rages on.

Russian military spending grew by an estimated 9.2 per cent in 2022, to around $86.4 billion. This was equivalent to 4.1 per cent of Russia’s gross domestic product (GDP) in 2022, up from 3.7 per cent of GDP in 2021.

Figures released by Russia in late 2022 show that spending on national defence, the largest component of Russian military expenditure, was already 34 per cent higher, in nominal terms, than in budgetary plans drawn up in 2021.

‘The difference between Russia’s budgetary plans and its actual military spending in 2022 suggests the invasion of Ukraine has cost Russia far more than it anticipated,’ said Lucie Béraud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Programme.

Ukraine’s military spending reached $44.0 billion in 2022. At 640 per cent, this was the highest single-year increase in a country’s military expenditure ever recorded in SIPRI data.

As a result of the increase and the war-related damage to Ukraine’s economy, the military burden (military spending as a share of GDP) shot up to 34 per cent of GDP in 2022, from 3.2 per cent in 2021.

Other notable developments, according to SIPRI included:

** The real-terms increase in world military spending in 2022 was slowed by the effects of inflation, which in many countries soared to levels not seen for decades. In nominal terms (i.e. in current prices without adjusting for inflation), the global total increased by 6.5 per cent.

** India’s military spending of $81.4 billion was the fourth highest in the world. It was 6.0 per cent more than in 2021.

** In 2022, military spending by Saudi Arabia, the fifth biggest military spender, rose by 16 per cent to reach an estimated $75.0 billion, its first increase since 2018.

** Nigeria’s military spending fell by 38 per cent to $3.1 billion, after a 56 per cent increase in spending in 2021.

** Military spending by NATO members totalled $1232 billion in 2022, which was 0.9 per cent higher than in 2021.

** The United Kingdom had the highest military spending in Central and Western Europe at $68.5 billion, of which an estimated $2.5 billion (3.6 per cent) was financial military aid to Ukraine.

** In 2022, Türkiye’s military spending fell for the third year in a row, reaching $10.6 billion—a decrease of 26 per cent from 2021.

** Ethiopia’s military spending rose by 88 per cent in 2022, to reach $1.0 billion. The increase coincided with a renewed government offensive against the Tigray People’s Liberation Front in the north of the country.

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

By Simone Galimberti
KATHMANDU, Nepal, Apr 18 2023 (IPS)

The Future We Want was the groundbreaking outcome of the Rio+20 Summit, the summit, held in 2012, where the idea of Sustainable Development Goals (SDGs) was first conceptualized.

Amid the unfolding of several global crises, where geopolitics mixes with structural unbalances that are putting at risk the long-term viability of planet Earth, isn’t really high time we got serious about our future?

Can the SDGs be turned not just in a tool for global pressure and advocacy but also a planning tool that involves, mobilizes and empower the people? There is still so much to be done and the levels of urgency can’t be greater.

According to the recently released Asia and the Pacific SDG Progress Report 2023, “the region will miss all or most of the targets of every goal unless efforts are accelerated between now and 2030”.Can localizing the SDGs in the Asia Pacific region and also elsewhere, change the status quo?

In theory, localizing the goals can make a huge difference but we need to ensure that such process means the truly involvement and engagement of the citizens.

A recent online workshop tried to assess where we stand following the Rio+20 Summit whose ultimate scope was, twenty years after the 1992 Rio Earth Summit, to relaunch humanity’s commitment towards a different model of development.

One of the key points that emerged in the event, which also saw the participation of Paula Caballero, one of key architects of the SDGs, is the fact that these goals still remain a powerful but mostly unleveraged tool for change.

While it is essential to mobilize more funding for their implementation, the Secretary General is rightly pushing with the idea of an SDG Stimulus— a missed goal to see the SDGs as a tool to radically re-think the way governance works.

The best intentions and the many, often overlapping efforts now at play in terms of localizing the SDGs, do not even aim at such scope of ambition. At the best, localizing the SDGs is about planning local actions rather than new ways of governance.

Moreover, the UN is struggling to come up with anything effective at operational level. For example, the Local 2030 Platform remains still an unfinished job despite its ambitious objectives.

A December 2021 analysis about ways to strengthen it, authored by the Stockholm Environment Institute, did indeed confirm the need to an all-encompassing platform that brings the SDGs closer to the people.

Still, there is so much to be done to ensure that Local2030 Platform can become a catalyst for change. Unfortunately, we are still far from a global mechanism capable of turning the goals in a such a way that the people can use them as a tool of participation and genuine deliberation. The scattered, fragmented and often ineffectual way the UN System works certainly does not help the cause.

A similar initiative, the SDG Acceleration Actions, is supposed to be an accelerator of SDG implementation that is “voluntarily undertaken by governments and any other non-state actors – individually or in partnership”.

In the Asia Pacific region, we can find also a new partnership, ESCAP-ADB-UNDP Asia-Pacific SDG Partnership mostly focused on research creation and knowledge delivery.

As important as they are, such initiatives lack linkages and risk becoming not only overlapping but also a duplication to each other. Could local bodies do the job and truly democratize the SDGs?

Such entities, both local and regional governments (LRGs) have a huge role. For example, the United Cities and Local Governments, a powerful advocacy group based in Barcelona, is undoubtedly breaking ground in this direction.

With now a much user-friendly web site and with a new catchy messaging, UCLG is a global force pushing strong towards empowering local governments and cities so that they can truly take the lead in matter of localizing the SDGs. UCLG also runs the most updated database on local efforts to implement the SDGs, the Global Observatory on Local Democracy and Decentralization or GOLD.

For example there are the “Voluntary Subnational Reviews (VSRs), considered as “country-wide, bottom-up subnational reporting processes that provide both comprehensive and in-depth analyses of the corresponding national environments for SDG localization”.

In addition, the Voluntary Local Reviews could be even more impactful tools as they assess how municipalities, small and big alike, are implementing the SDGs. In Japan, the Institute for Global Environmental Strategies, IGES, is doing a great deal of work to also track the implementation of the SDGs locally with its online Voluntary Local Review Lab.

Still there is a disconnection among all these initiatives despite the fact that UCLG has been championing the Global Task Force of Local and Regional Governments. As an attempt at bringing together a myriad of like-minded groups run by mayors and local governments around the world, it is a praiseworthy undertaking.

While it is essential to create coherence and better synergies between what the UN is trying to do and the actions taken by mayors and governors globally in the area of SDGs localization. But it is not enough. There is even one bigger and more worrying disconnection.

Even if local authorities are truly given the resources and powers to shape the conversation about the implementation of the SDGs and back it up with actions on the grounds, we are at risk of forgetting those who should be truly at the center of the debate: the people.

Localizing the SDGs should mean truly giving the people the voice and the agency to express their opinions and ideas rather than become an exclusive fiefdom of local politicians.

Finding ways to truly allowing and enabling people to take central stage in implementing the SDGs implies a rethinking of old assumptions where local officials, elected or not, have the sole prerogative of the decision making. This is fundamentally a question of reinventing local governance and make it work for and by the people.

But it is easier saying it than doing it!

It is a real conundrum because, if it is certainly possible to come up with symbolic initiatives, all tainted by forms of fake empowerment, a totally different thing is to devise new forms of genuine bottom up, inclusive governance indispensable to achieve the SDGs.

The Global Platform in its Vision 2045 refers to genuine and better democracy practices leading the planning of local governments.What are they going to do to translate these words into real deeds?

There are other ways to involve people in the global discussions but they are just tokenistic. For example, UNESCAP recently organized in Bangkok its 10th Asia-Pacific Forum on Sustainable Development (APFSD).

It is an important event and the regional commission has been striving to be more inclusive and each year the summit also counts with a People’s Forum and even a Youth Forum. The problem is that, while integral part of the discussions, they are officially considered just as “associated and pre- events”.

Changing the protocol and the way the UN works is not easy but why should we keep holding such important engagements as just nice “add-ons”?

Even with the release of comprehensive Call to Action by the youths of the region before the APFSD summit, what real difference are their opinions and voice making? As simplistic as it sounds, much more should be done in making these conclaves really inclusive even though the real game won’t happen in these fora but at grassroots levels.

It is there where the challenge of localizing the SDGs must be won. It is where citizens really need to be listened to and where their power should be exercised.

In imaging the future, we really want, is to put citizens at the center of it. And it is high time we truly democratized the SDGs. After all, there is no, better form of localizing them.

Simone Galimberti is the co-founder of ENGAGE and of the Good Leadership, Good for You & Good for the Society.

The opinions expressed in this article are personal.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Ain Beni Mathar Integrated Combined Cycle Thermo-Solar Power Plant, Morocco. Credit: Dana Smillie / World Bank. Photo ID: DS-MA111 World Bank

By Navid Hanif
UNITED NATIONS, Apr 17 2023 (IPS)

The world is at a crossroads. This week, the United Nations Secretary-General, government ministers and senior leaders are gathered in New York at the ECOSOC Financing for Development Forum. (scheduled to take place April17-20).

This follows the recent World Bank/IMF Spring Meetings of heads of international financial institutions leaders, finance ministers, and other leaders. These discussions are a timely chance to decide on urgent action to address the global crises we face.

Among others, the war in Ukraine, the resultant food and energy crisis, the effects of COVID-19, climate change impacts and rising global interest rates – all have contributed to increased hunger and poverty.

Many hard-hit developing countries have slow growth, high inflation, and unsustainable debt, which undermine development prospects and prevent them from investing in health, education, infrastructure, and the energy transition.

We recently released the Financing for Sustainable Development Report 2023: Financing Sustainable Transformation, the 8th report from the Inter-Agency Task Force on Financing for Development.

Given the scale and number of crises, it won’t be a surprise to learn that financing needs for the Sustainable Development Goals are growing. Unfortunately, development financing is not keeping pace.

Navid Hanif

Faced with food and energy shocks, there may be a temptation to concentrate resources on urgent short-term problems. But FSDR 2023 emphasizes that delaying long-term investment in sustainable transformations would put the 2030 Agenda for Sustainable Development and climate targets out of reach and further exacerbate financing challenges down the line.

The Financing for Sustainable Development Report 2023 calls for: (i) a new generation of sustainable industrial policies to chart national green transformations; (ii) immediate international action to scale up development cooperation and SDG investments to support this investment boost, the SDGs, and climate action; and (iii) reforms to the international financial architecture that are needed to support this boost in investment, and to make the system more equitable and fit for purpose.

The possibilities of green industrialization

There is hope.

We have seen in recent years a sharp and swift uptake in new technology and in the transition to green solutions. Energy transition investments rose to US$1.11 trillion in 2022, surpassing fossil fuel system investments for the first time. The green economy became the fifth largest industrial sector, totalling US $7.2 trillion in 2021.

A new green industrial age is not only possible, but it can be the breakthrough needed to bring the SDGs back on track. Industrialization has historically been an engine for progress. Sustainable industrialization—which would include low-carbon transitions—can lead to growth, job creation, technological advancement, and lay the foundation for poverty reduction and enhanced resilience. Industrialization must also be made equitable and sustainable, aligned with the SDGs, and deliver climate action.

Unfortunately, most developing countries are not yet able to benefit from the new technological advances. Many, especially least developed countries, have insufficient resources to invest in the needed transformations, including green energy and sustainable agriculture. Developing countries cannot make the necessary progress on their own, though their advancement would benefit all countries.

An SDG investment push

The international community must scale up investment to support sustainable transformations, the SDGs, and climate action. The push for greater investment is in line with the UN Secretary-General’s call for an SDG Stimulus, aimed at scaling up affordable long-term financing for countries in need by at least US$500 billion a year.

The SDG Stimulus calls on the World Bank and other multilateral development banks (MDBs) to massively expand lending and offer it on better terms. Development banks can do this through both increased capital bases and better leveraging of existing paid-in capital.

This includes urgently rechanneling special drawing rights through the MDBs, which can then leverage the impact by borrowing on capital markets, building on the model developed by the African Development Bank.

Debt challenges faced by developing countries are among the obstacles to progress. Already, about 60% of poorer countries are in or at a high risk of debt distress, twice the level from 2015. The international community must work together to urgently develop an improved multilateral debt relief initiative.

Reforms to the international financial architecture

Fixing the debt architecture is just one element of needed architecture reforms. The international financial architecture system, which guides how global funds are invested, is in a state of flux, with multiple reform processes taking place simultaneously.

We are undergoing the biggest rethink of our international systems since the Bretton Woods Conference in 1944. But unlike Bretton Woods, which was done as one under the UN umbrella, the current multiple reform processes are piecemeal, fragmented, and lack inter-institutional coherence.

From debt architecture to international tax norms, to trade rules, to revamping investment agreements, the reform processes must aim for a coherent international system that takes the Sustainable Development Goals and climate action fully into account. We must have targeted action to make the architecture fit for purpose to serve the needs of the world, and developing countries in particular.

Failure is not an option

Given current trends, 574 million people – nearly 7% of the world’s population – will still be living in extreme poverty in 2030. Without urgent and scaled up action on sustainable development financing, the prospects for achieving the SDGs grow dimmer.

In fact, the already great gulf between developed and developing countries could widen to become a permanent sustainable development divide. It will take deliberate and coordinated action to ensure that reforms serve the needs of developing countries – and thus help deliver the SDGs. But it must be done.

There must be a recognition that we all share a common future as we share a common earth. With global financial assets of almost $500 trillion, there is no shortage of money. The world has the means: all that is lacking is the will.

Navid Hanif is a United Nations Assistant Secretary-General, and Acting Director, Financing for Sustainable Development Office, Department of Economic and Social Affairs. He is also the UN sous Sherpa to the G20 finance and main tracks.

The 2023 Financing for Sustainable Development Report: Financing Sustainable Transformations is a joint product of the Inter-agency Task Force on Financing for Development, which is comprised of more than 60 United Nations Agencies and international organizations.

The Financing for Sustainable Development Office of the UN Department of Economic and Social Affairs serves as the substantive editor and coordinator of the Task Force, in close cooperation the World Bank Group, the IMF, World Trade Organization, UNCTAD, UNDP and UNIDO. The Task Force was mandated by the Addis Ababa Action Agenda and is chaired by Mr. Li Junhua, United Nations Under-Secretary General for Economic and Social Affairs.

A copy of the report is available at https://developmentfinance.un.org/fsdr2023.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Ending Islamophobia a prerequisite for world peace, Saudi deputy envoy tells UN Mohammed Abdulaziz Alateek urged member states to condemn bigotry, violence and extremist acts targeting Muslims, and foster understanding between cultures. He was speaking during a high-level General Assembly event in the run-up to the first International Day to Combat Islamophobia, on March 15. Credit: Arab News

By Alon Ben-Meir
NEW YORK, Apr 11 2023 (IPS)

The resumption of diplomatic relations between Saudi Arabia and Iran, and the Saudis’ diplomatic overtures toward Syrian President Bashar al-Assad, are part and parcel of the Saudis’ overall reassessment of their geostrategic interests, which rest on three distinctives goals: regional stability, exerting greater regional and international influence, and uninterrupted oil exports. These three fundamental goals are tightly linked and are within the Saudis’ reach.

Regional stability

The resumption of diplomatic relations between Saudi Arabia and Iran mediated by China was central to its strategy. Both countries have come to the conclusion that notwithstanding their enmity and regional rivalry, they have to coexist in one form or another.

They realized that the eight-year-long war in Yemen has done nothing to improve their regional standing. It was a lose-lose proposition. Iran failed to establish a strong and permanent foothold in the Arabian Peninsula and although Iran continues to support the Houthis, they have no illusion about converting Yemen into an Iranian satellite.

Saudi Arabia, on the other hand, having prevented Iran from dominating Yemen, no longer feels that the continuation of the war will yield any further benefit regardless of how much more money and human resources they pour into the war effort.

This explains why they have agreed on the ceasefire and further extended it until they could find a mutually accepted solution. The resumption of diplomatic relations would accelerate this reconciliation process.

This, needless to say, is not guaranteed because the adversarial relations between the two countries run deep, but their national interest resulting from their rapprochement overrides, for the time being, those concerns.

Both sides know that it will take time to fully normalize relations while testing each other’s true intentions as well as their conduct.

For the same reason, the Saudis decided that Syria’s President Assad is not going anywhere. He has weathered the most devastating war since the last World War, albeit at the expense of destroying half of the country while inflicting massive suffering on nearly half of Syria’s population.

Millions are still refugees languishing in camps in many countries in the region, especially in Turkey, and millions more are still internally displaced. Thus, mending relations with Syria will be a win-win for the Saudis as this would only enhance its influence.

Regional influence

The Saudis fully understand that they cannot boost their regional influence by remaining disengaged from their neighbors. Given Iran’s nuclear weapons program and the Saudis’ extreme concerns, the resumption of diplomatic relations could potentially ease those apprehensions.

How the Saudis can help change the dynamic of Iran’s nuclear program remains to be seen. One thing, however, is certain: the Saudis have placed themselves where they can potentially bring Iran back to negotiating with the US, albeit indirectly. Whether or not they succeed, they can still exert greater influence in this area by engaging Iran, which they did not have before.

And to further exert regional influence, the Saudis wisely decided to invite Syria’s Assad to the Arab League summit that Riyadh is hosting in May. Syria was suspended from the organization in 2011, and was sanctioned by many Western powers and Arab states because of Assad’s fierce onslaught against protesters that led to a long, drawn-out civil war during which more than 600,000 lost their lives.

The Saudi invitation certainly signals an extremely important development that will bring about the reintegration of Syria into the Arab fold—a move that would lead to the resumption of full diplomatic relations between the two countries.

There is no doubt that other Arab states will follow suit, which only strengthens Saudi Arabia’s leadership role among its fellow Arab countries.

By reopening diplomatic relations with both Iran and Syria, the Saudis will have a say about any future settlement to the Syrian conflict, where Iran still exerts considerable influence.

Given that the Saudis have deep pockets and the Syrian regime is dire economic strains and needs tens of billions to rebuild, the Saudis can do a great deal more than Iran to provide financial aid to Syria. And, of course, with financial aid comes influence.

President Assad is more than eager to cooperate not only for the critically important financial aid, but also to begin the process of ending Damascus’ isolation. Restoring diplomatic relations between Syria and the other Arab states will contribute significantly to calming the region and making it possible for Saudi Arabia to sustain its ability to supply oil in huge quantities without interruption.

Uninterrupted oil export

For the Saudis, continuing to export oil in enormous quantities and the revenue it generates is central to its objective to becoming a regional player to be reckoned with. Having the largest reservoir of oil gives the Saudis significant advantages, as many of its oil customers know they can rely on the Saudis for energy supplies for many years to come.

Thus, its resumption of diplomatic relations with Iran and Syria and financially aiding other Arab states like Egypt, would invariably contribute to stabilizing the region and in turn allow the Saudis to continue its oil exports with the least interruptions.

None of the above however will impact adversely the Saudis’ relationship with the US nor its tacit relations with Israel. The Saudis are fully aware of how critical the US’ role in both, as the main supplier of weapons to the kingdom and the region’s ultimate security guarantor.

Moreover, regardless of its discord with Israel regarding the Palestinian conflict, Saudi Arabia’s tacit cooperation with Israel on intelligence sharing and transfer of Israeli technology are and will remain an integral part of its geostrategic objective.

Riyadh wants to develop inroads into both its past adversaries including Iran and Syria while maintaining its current relations with the US and Israel, regardless of the occasional ups and downs between them.

At the same time, Riyadh is cementing its bilateral relations with China, the world’s second-largest superpower to which Saudi Arabia exports one quarter of its annual oil output ($43.9 billion’s worth in 2021, out of $161.7 billion in total exports), while becoming the de facto leader of the Arab states.

To be sure the Saudis have, thus far, been able to successfully utilize its wealth to its advantage.

Needless to say, however, many external and regional occurrences could directly and indirectly impact Saudi Arabia’s new geostrategic calculus, including the Ukraine war, the growing tension between the US and China and Russia, and the ongoing Israeli-Palestinian conflict.

However, under any circumstances the Saudis stand to gain as time and circumstances are on their side.

Dr. Alon Ben-Meir is a retired professor of international relations at the Center for Global Affairs at New York University (NYU). He taught courses on international negotiation and Middle Eastern studies for over 20 years.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Egypt plans to sell shares in 32 state-owned businesses, including three banks. Credit: Hisham Allam/IPS

By Hisham Allam
Cairo, Apr 6 2023 (IPS)

Egypt intends to sell shares in 32 state-owned businesses within a year, including three banks, two military-owned businesses, and numerous businesses in the energy and transportation sectors. This is part of the administration’s efforts to reduce the role of the state in the economy and attract foreign capital.

That also follows the government’s December USD 3 billion deal with the IMF to resume privatization initiatives.

The IMF approved the USD 3 billion loan to strengthen the private sector and reduce the state’s footprint in the economy.

Egypt planned to sell 23 state-owned enterprises in 2018, but the plan was postponed due to the worldwide crisis.

The Russia-Ukraine conflict has put pressure on the Egyptian economy and currency, making the proposal more urgent.

According to Rashad Abdo, head of the Egyptian Forum for Economic Studies, Egypt had already received sovereign loans from many donors, including international institutions, such as the International Monetary Fund and Gulf countries, and these parties either set harsh lending conditions or would be reluctant to lend due to increased risks.

The State Ownership Policy Plan, adopted by President Abdel-Fattah El-Sisi in December, outlines how the government would participate in the economy and how it would increase private sector involvement in public investments. Egypt wants to increase the contribution of the private sector to the nation’s economic activity from 30 percent to 65 percent within the next three years. One-quarter of these enterprises will be listed by the government within six months.

Egypt announced the offering of these companies, intending to sell them to strategic investors, specifically Gulf sovereign funds. Egypt is expected to sell enterprises worth USD 40 billion within three years, including those held by the army.

Attracting foreign investment requires strengthening the investment climate, lowering inflation rates, and expanding anti-corruption efforts, Abdo told IPS.

The State Ownership document states that 32 Egyptian state companies will be listed on the Egypt Exchange (EGX) or sold to strategic investors within a year, beginning with the current quarter and ending in the first quarter of 2024. Stakes in three significant banks, Banco du Caire, United Bank of Egypt, and Arab African International Bank, are among the scheduled transactions. Insurance, electricity, and energy companies, as well as hotels and industrial and agricultural concerns, will also be on the market. Prime Minister Moustafa Madbouly announced that the first stakes would be offered in March and a quarter by June, and more businesses could be added over the next year.

Abdo pointed out that the Monetary Fund affirmed the Egyptian government’s commitment to implementing the State Ownership Document when it agreed to grant it this loan and the Egyptian government saw it as a favorable opportunity to implement the terms of the document set by the Organization for Economic Cooperation and Development.

Mohamed Al-Kilani, professor of economics and member of the Egyptian Society for Political Economy, said the privatization effort seeks to eliminate the dollar gap in Egypt and thus provide indirect compensation in the form of services and benefits from the International Monetary Fund’s debt.

The state would also send a message to foreign investors that it responds to the private sector and is willing to withdraw from certain sectors to benefit the private sector.

“The state is attempting to exploit this proposal to stimulate and revitalize the Egyptian Stock Exchange while taking into account the fair valuation of these companies in comparison to the global market. However, the state was unclear about the details of this offering and whether it is a long-term or short-term investment, and it has not clarified the size of employment or the percentages offered in terms of ownership and management,” Al-Kilani told IPS.

“The state is trying to create new types of foreign investment to attract foreign currency due to the fluctuation in exchange rates and high-interest rates,” Al-Kilani added.

According to external debt data published on the central bank’s website in mid-February, Egypt’s external debt fell by USD 728 million to USD 154.9 billion at the end of last September, but its foreign exchange reserves remain low, prompting renewed demand for state assets. The Russia-Ukraine conflict has further pressured the economy and local currency, prompting the proposal for new urgency.

Despite its relatively modest improvement in the latest data from the central bank at the beginning of February (USD 34.2 billion), it lost about 20 percent of the level of USD 41 billion at the end of February last year.

Last January, the IMF suggested that the volume of the financing gap in Egypt would reach about USD 17 billion over the next 46 months in light of its decline in foreign exchange resources and the high cost of its imports as one of the largest countries in the world to import its food and the first importer of wheat in the world.

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

The Puente Madera community, in the municipality of San Blas Atempa in the southern Mexican state of Oaxaca, is opposed to the sale of land to an industrial park in that town, one of the 10 projects in the Isthmus of Tehuantepec Interoceanic Corridor, as demonstrated at a February 2022 protest. CREDIT: APIIDTT

By Emilio Godoy
MEXICO CITY, Mar 28 2023 (IPS)

In March 2021, the community assembly of the municipality of San Blas Atempa, in the southern Mexican state of Oaxaca, approved the sale of 360 hectares for the creation of an industrial park. But part of the community opposed the initiative due to irregularities, such as the falsification of signatures of supposed attendees, including those of people who had already died.

The facility is one of 10 planned within the Isthmus of Tehuantepec Interoceanic Corridor (CIIT), which in turn is part of the Program for the Development of the Tehuantepec Isthmus that the Mexican government has been implementing since 2019 with the aim of developing the south and southeast of this country of 1,964,375 square kilometers and almost 130 million inhabitants."It is the replica of the maquiladora model, jobs that exploit workers and cheap labor. There are legitimate concerns, like water, and what kind of industries will be installed. The isthmus is not an industrial zone.”
-- Geocomunes

Mario Quintero, a member of the Assembly of Indigenous Peoples of the Isthmus in Defense of Land and Territory (APIIDTT), said the plan is plagued by “land grabbing, exploitation, dispossession, and displacement of peoples.”

“It is a large-scale geopolitical project in a geostrategic region. The system is corrupt. The way this is being carried out is obscene. The government agrees to the lease, but then says it is going to expropriate,” the activist told IPS from the municipality of Juchitán, in Oaxaca, some 480 kilometers south of Mexico City.

The 200-km wide isthmus is the narrowest area in Mexico between the Pacific and Atlantic oceans, in the Gulf of Mexico, which has a large indigenous population and is abundant in biodiversity, hydrocarbons and minerals.

In addition to the 10 industrial sites of 360 hectares each in size, called “Development Poles for Well-being” and focused on exports, the CIIT includes the renovation of the ports of Salina Cruz, on the Pacific Ocean in Oaxaca, and Coatzacoalcos in the state of Veracruz.

It also includes the reconstruction of the Tehuantepec Isthmus Railroad, which links Chiapas, in the state of the same name, with Dos Bocas, in Tabasco.

In addition, it involves the upgrade of the Salina Cruz and Minatitlán refineries, in the state of Veracruz, the laying of a gas pipeline and the construction of a gas liquefaction plant off the coast of Salina Cruz.

But this industrial model is criticized for the few benefits it brings the host communities and the fact that the largest economic benefits go to exporters, and due to its environmental impacts. For example, the municipality of Coatzacoalcos is one of the most polluted in the country.

The non-governmental organization Geocomunes, dedicated to building maps for the defense of common goods, provided IPS with a list of effects such as the pollution of rivers and aquifers, as well as poor working conditions.

“Except for the promise of jobs, it’s business as usual. It is the replica of the maquiladora model, jobs that exploit workers and cheap labor,” the organization said. “There are legitimate concerns, like water, and what kind of industries will be installed. The isthmus is not an industrial zone, it implies a change in the traditional economy. It’s important to look at what kind of employment it will bring. Construction means precarious employment.”

The organization also anticipates that the industries will not arrive as soon as promised, since industrial production does not only consist of the installation of companies.

The Interoceanic Corridor seeks to connect both coasts of Mexico, the Pacific and the Atlantic, through highways and a refurbished railway, to promote industrial development in the south-southeast of the country and foment exports. CREDIT: Fonadin

Appetite for exports

Mexico, the second largest economy in Latin America, is home to more than 500 industrial parks on more than 51,000 hectares, which swell the automotive, electronic, food and beverage, metallurgical, medical, textile and aerospace industries.

Altogether, more than 3,700 companies generate some three million jobs in these industrial parks.

The trilateral North American Free Trade Agreement (NAFTA) – ​​in force between 1994 and 2020, when it was replaced by the U.S. Mexico Canada Agreement (USMCA) – fomented the installation of export assembly plants or maquilas.

They mainly set up shop in northern Mexico, the area closest to the United States, drawn by tax benefits, lower wages and more lax environmental regulations than in their nations of origin.

The northern state of Nuevo León and the central states of Mexico and Guanajuato are home to the largest number of maquilas.

But the socioeconomic conditions in these places have not improved, as demonstrated by the available statistics.

Figures from the government’s National Council for the Evaluation of Social Development Policy (Coneval) indicate that poverty and extreme poverty increased in Nuevo León, home to some 150 industrial poles, between 2018 and 2020.

Overall poverty rose from 1.07 million people to 1.34 million (from 19.24 percent to 24.3 percent of the population) while extreme poverty climbed from 40,000 to 124,000 people (0.7 percent to 2.1 percent).

In Nuevo León, one of the states with the highest levels of income per person and social development in the country, home to 5.78 million people, the unemployment rate stood at 3.57 percent in 2022, and 35.8 of the workforce was in the informal sector of the economy.

In the state of Mexico, adjacent to Mexico City and home to 113 industrial facilities, poverty grew from 7.04 million to 8.34 million people (from 41.8 percent to 48.9 percent of the population), while extreme poverty rose from 783,000 to 1.4 million people (from 4.7 percent to 8.2 percent).

The state of Mexico, population 17 million, had 4.46 percent unemployment in 2022 while 56.8 percent of the workforce was in the informal sector.

The results are similar in other states where industrial parks have been built.

In contrast, in the southern state of Oaxaca, poverty and extreme poverty declined, from 2.75 million to 2.58 million people (from 64.3 percent to 61.7 percent) and from 868,000 to 860,000 (from 21.7 percent to 20.6 percent), respectively.

Oaxaca, which so far has only one industrial pole, is home to 4.13 million people, with an unemployment rate of 1.28 percent in 2022 and 81 percent of the labor force in the informal sector.

The Interoceanic Corridor is part of the Program for the Development of the Tehuantepec Isthmus, covers the southern state of Oaxaca and the southeastern state of Veracruz, and has drawn opposition from local communities who consider it an imposition by the government and a threat to their culture and territory. The photo shows a Mar. 21, 2023 protest against the megaprojects, outside the United States Embassy. CREDIT: Emilio Godoy/IPS

More hydrocarbons

The Program for the Development of the Tehuantepec Isthmus covers 46 municipalities in Oaxaca and 33 in Veracruz, forming an area where 11 of the country’s 69 indigenous peoples live, totaling 17 million native people.

The Corridor revives a set of similar projects that then President Ernesto Zedillo (1994-2000) proposed in 1996 but which never were carried out. Now President Andrés Manuel López Obrador, in office since December 2018, is recycling them.

The CIIT budget, under the Ministry of the Navy, grew from 162 million dollars in the first year, 2020, to 203 million in 2021 and to more than double that, 529 million, in 2022. But in 2023 it has shrunk to 374 million.

The Corridor divides the 10 projected industrial poles equally between Oaxaca and Veracruz. On Mar. 21 López Obrador announced that the tender for four locations in Oaxaca would be held in early April.

The Tehuantepec isthmus is a region already impacted by the presence of other infrastructure, such as 29 wind farms, most of them private. That installed capacity, plus new wind and solar fields, will fuel the new industrial facilities.

The Mexican government also projects the laying of a 270-km gas pipeline with a transport capacity of 500 million cubic feet per day (MMcf/d), between the towns of Jáltipan and Salina Cruz.

The pipeline will complement the 247-km Jáltipan-Salina Cruz gas pipeline that has been operating since 2014 and transports 90 Mmcf/d.

The new pipeline, at a cost of 434 million dollars, will carry 430 MMcf/d to the planned liquefaction plant near Salina Cruz and between 50 and 70 MMcf/d to the industrial parks.

The Federal Electricity Commission, responsible for the project, calculates that it will supply gas to 470 plants and 30 industrial parks.

The communities are fighting it and will seek to build autonomy through local self-management projects, according to Quintero.

“The project is not going to improve the lives of the communities, just as the railroad in the 20th century or the hydroelectric plants failed to do, or the refinery (in Salina Cruz) or the wind farms, because their promises translate into belts of marginalization,” said the activist. “Development and benefits for whom?”

Geocomunes doubts the promise of development. “The land, the water, basic things that are at risk. Who will bear the costs? What is the government going to demand?”

Young people from small towns are now able to work close to home thanks to co-working spaces that opened up during the COVID-19 pandemic. Credit: Rina Mukherji/IPS

By Rina Mukherji
PUNE, INDIA, Feb 8 2023 (IPS)

While a 2017 study by the Confederation of Indian Industry Jones Lang LaSalle India and WeWork noted the potential in India’s co-working segment, it took COVID-19 for people to transition to co-working spaces close to home.

The study, Future of Work – The Co-working Revolution, which saw the potential market size of the co-working segment standing at 12-16 million, anticipated 400 million USD in investments by 2018, triggering a 40-50 percent growth in 2017 itself.

This was to be driven by India’s emerging start-ups (given that India is currently the world’s largest start-up hub) and India’s freelance workforce (with India having the 2nd largest freelancer workforce in the world, more than 15 million professionals).

In 2020, India was hit by the pandemic. Owing to a forced lockdown in operations, many companies faced heavy losses. On resumption, they had to operate at 50 percent capacity (as per government directives), which meant curtailment in operations. Layoffs and salary cuts were invoked to survive. Barring manufacturing operations, the attendance of many employees was deemed unnecessary in the office. This ushered in the work-from-home culture.

Salary cuts, and work-from-home options, saw many employees move out of expensive metropolitan centres and return home to smaller towns and cities. Some who faced layoffs and salary cuts opted to launch start-ups. This gave further impetus to the demand for commercial spaces in small towns and Tier-2 or Tier-3 cities for co-working spaces.

Over the last few decades, small-town India has seen professional education pick up in a big way, with several reputed engineering and management institutions nurturing brilliant students. However, conservative values continue to rule here, unlike cosmopolitan metropolitan centres. Since many youngsters are first-generation professionals and belong to rural families of modest means, moving to a metropolitan city can be a big financial strain for a fresher. Internships, too, are difficult to come by for a student straight out of college.

As a result, many remain confined to low-paid jobs in their towns and end up frustrated in the long run.

This is where the pandemic has helped.

Take the case of the pilgrim city of Tirunelveli in the state of Tamil Nadu at the southern tip of the Indian peninsula. Adjoining the port town of Tuticorin, it has many engineering, management and science colleges. Tirunelveli is close to Nagercoil town in Kanyakumari district, which is the southernmost district of the Indian mainland and boasts a high rate of literacy. Yet, students from these parts have always had to move to either Chennai or Bangalore for a suitable job or internship.

Ronaldsen Solomon of Virudhunagar, though, has been lucky. A final-year student of Engineering studying at Francis Xavier College in Tirunelveli, he has landed an internship with an IT infrastructure company with local offices in a co-working space.

“I am acquiring hands-on experience, even as I attend college lectures for my degree,” he tells me of his job at 3i Infotech.

For Jenima Hyrun of Chermahadevi town in Tirunelveli district, landing a job was an uphill task, despite her Computer Science degree, owing to opposition from her conservative Muslim family.

“I had a job offer from Chennai. But although my father has always encouraged me, my aunts and others would not allow it. Being part of a joint family, living alone in a metropolitan city was unthinkable for me.”

When 3i Infotech acquired dedicated premises under Mikro Grafeio, Hyrun’s prayers for a suitable opening were answered. She easily traverses the short distance to work from her home using public transport.

When Vijay Roshan acquired his Bachelor of Computer Applications degree from MDT Hindu College in Tirunelveli, his faltering English made him unsure of himself. As a farmer’s son, he felt uncertain about moving to a metropolitan city either. However, when the same IT infrastructure company launched its office through a dedicated space, Roshan was immediately recruited as a promising fresher.

For those who would rather not travel a long distance to work, low-cost rentals are not too difficult to come by in Tier-2 and Tier-3 cities.

Take the case of college-mates Vignesh M and Ashwin S.C from Thiruvananthapuram in the adjoining state of Kerala, who completed their degrees at the Nurul Islam Institute of Higher Education. Taking up lodgings in Tirunelveli is far cheaper than if they had moved to metropolitan centres like Bangalore or Chennai.

“We pay Rs 1500 per head, sharing a room among three colleagues in a nearby home. The place is only a 15-minute walk from our workplace, saving commuting time and money,” Ashwin says.

The same is true of Shiny Evangeline and Abarnadevi from the neighbouring district of Nagercoil (in Tamil Nadu), Tamilselvi of Thenkasi, and Sahanya Wilson of Kanyakumari. This ensures a better take-home salary for these freshers, who would have needed to spend upwards of Rs 10,000 for a co-living space in a metropolitan city. Shared rentals also nurture better camaraderie among colleagues, which is essential for better project teamwork.

When blue chip companies move into Tier-2 and Tier-3 cities, it can mean a lot for specially-abled persons like V Saumya, who has battled many odds to emerge as a Human Resources Head today. Victim of an accident as an infant, Saumya had to fall back on help from her parents all through her school and college years, fighting despite her physical disability to complete her Master’s in Business Administration. Proximity to her workplace in Tirunelveli has helped her secure a job, and she too works for 3i Infotech and is appreciative of the facilities at Mikro Grafeio.

“For the first time, I was greeted by a disabled-friendly toilet that I could use.”

The world has opened up for Saumya, who now looks forward to travelling far and wide, even as she travels up and down to work on her motorised wheelchair.

Although Mikro Grafeio intends to develop co-working spaces for individual use in small towns eventually, it currently confines itself to operating dedicated areas for companies. Chief Growth Officer Sundar Rajan tells IPS, “We are still exploring the market; in small towns, the concept is yet to catch up. However, Mikro Grafeio operates co-working spaces within cafes and breweries in cities like Coimbatore, Pondicherry and Bangalore and has Memoranda of Understanding in place with Café Coffee Day in Tamil Nadu, Kerala and Karnataka.”

It has several clients, 3i Infotech, CIT Services, Sotheby’s International Realty, and others that are slated to follow suit.

Indiqube has followed a similar pattern by handing over dedicated spaces and co-working offices. According to Indiqube Co-Founder Rishi Das, 85 percent of their clientele have dedicated spaces, while 15 per cent belong to the co-working segment.

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

Protesters in Mulhouse, France warn of the dangers of privatisation. The sign reads ‘when everything is privatised, we will be deprived of everything. Credit: NeydtStock / Shutterstock.com

By Océane Blavot, Rodolfo Bejarano and Mae Buenaventura
BRUSSELS / LIMA / MANILA, Feb 2 2023 (IPS)

Last month, we joined more than 1000 representatives from all sectors of civil society who came together in Santiago de Chile to debate the future of – and threats to – public services the world over.

Participants discussed the chronic underfunding which continues to drive economic inequality, injustice and austerity, and the neocolonial policies that maintain the status quo.

Today those debates have resulted in the launch of “Our Future is Public: The Santiago Declaration for Public Services” – a momentous agreement signed by more than 200 organisations vowing to work to “transform our systems, valuing human rights and ecological sustainability over GDP growth and narrowly defined economic gains.”

One of the most damaging initiatives that has deeply affected the delivery of public services and infrastructure projects on all continents is the rise of public-private partnerships, or PPPs.

They have long been promoted by institutions such as the World Bank as a silver bullet to close the so-called gap to finance investments in services and infrastructure. The premise is that the private sector can deliver these services more efficiently and to a higher standard than the public sector, despite extensive evidence to the contrary.

We lay the pitfalls of PPPs bare in our new report History RePPPeated II: Why public-private partnerships are not the solution – the second in a series of investigations documenting the impacts of PPPs across Africa, Asia, Latin America and Europe.

Launched at the Santiago conference with some of the partners responsible for investigating and authoring the case studies, the report not only highlights negative impacts of PPPs, but sets out recommendations for how to better finance infrastructure and public services in the face of false solutions that have been proposed given the context of the current polycrisis.

These narratives wholly reflect red flags that are raised in the Santiago Declaration.

Through these investigations, we discovered failures on multiple levels in PPPs covering infrastructure such as roads and water supplies, as well as vital public services like healthcare and education.

From escalating costs for the stretched public sector to environmental and social impacts, we found time and again that communities had been ignored, displaced, and had their basic rights violated by thoughtless projects designed and implemented in the pursuit of profit.

A prime example is that of the the Melamchi Water Supply Project (MWSP) in Nepal. First announced nearly a quarter of a century ago, the project’s aim was to deliver clean, reliable and affordable water to 1.5 million people in Kathmandu.

And yet, 24 years later, residents are still waiting, while communities at the Melamchi water source are facing scarcity of water and eroded livelihoods. Instead of safe, clean drinking water – an internationally recognised human right – they have witnessed an extraordinary revolving door of private companies and institutional funders, including the World Bank, who have each failed to deliver.

To add to the MWSP’s colossal failure, 80 hectares of farmland have been lost to the project, a heavy blow to local residents, and up to 80 households have been forcibly displaced due to construction.

Who owns and controls our resources and public services became even more vitally important with the outbreak of the Covid pandemic in March 2020. Market-based models cannot be relied upon to deliver on human rights or the fight against inequalities as they are accountable only to their shareholders and not to their users.

This resulting focus on profit is overwhelmingly apparent in our case study from Liberia. Here, US firm Bridge International Academies (now NewGlobe) ‘abandoned’ its students and teachers during the height of the Covid-19 pandemic, shutting down schools and cutting teachers’ salaries by 80-90 per cent, despite being paid by the government.

And yet, in 2021 the Liberian government indefinitely extended the project, effectively subsidising a US for-profit firm at a cost that is at least double government spending on public schools.

In Peru, the Expressway Yellow Line has emerged as one of the most controversial projects ever carried out. This toll road was supposed to ease congestion issues in the capital city Lima, but instead toll rates have been unreasonably increased on at least eight occasions.

This generated almost $23 million for the private company involved and transpired with the complicity of public officials. Meanwhile, the Peruvian state suffered economic damages of US$1.2 million due to under the table negotiations between public officials and the private company, which led to the incorrect implementation and improper modifications of the contract years after it was initially signed.

Today, questions regarding the project and conflicts surrounding its implementation remain, while Lima residents’ expectations of quality road infrastructure to improve living conditions for those who have been most affected, continue to go unmet.

The human cost of the PPP projects showcased by History RePPPeated II is self-evident, but they are far from the exception. Rather they serve to illustrate common failures with the PPP model that risk compromising fundamental human rights and that undermine the fight against climate change and inequalities.

Their continuing promotion is one of the many reasons why we support the Santiago Declaration. Together with all its signatories, we will strengthen resistance to PPPs with their focus on private-led interests and promote public-public or public-common partnerships for a future that is public.

Océane Blavot is Senior Campaign and Outreach Coordinator, Development Finance, European Network on Debt and Development; Rodolfo Bejarano is Economist and Analyst – New Financial Architecture, Latin American Network for Economic and Social Justice; Mae Buenaventura is Debt Justice Programme, Team Manager, Asian People’s Movement on Debt and Development

The Santiago Declaration on Public Services, is a global manifesto signed by more than 300 organisations from around the world, and which was launched at the end of last week. The Declaration signals the start of an international movement to move away from the privatisation of public services and towards a future that is publicly funded and controlled. It is also the outcome of a 4-day conference during which several CSOs from around the world launched a report containing a series of investigations highlighting the failures of the PPP model in projects around the world, titled History RePPPeated II.

This OpEd is authored by three of the report’s authors.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

US-Africa Leaders Summit. Credit: Wikimedia Commons

By Pauline Muchina and Emira Woods
NAIROBI, Kenya, Jan 19 2023 (IPS)

United States Treasury Secretary Janet Yellen is traveling to South Africa, Zambia, and Senegal this week in the hopes of strengthening U.S.-Africa relations at a time of waning U.S. influence on the continent — the first in a series of Biden administration trips announced at last month’s U.S.-Africa Leaders Summit.

As African women leaders working for peace and climate justice, we welcome this renewed engagement with a region that is too often sidelined. But meetings and photo-ops are not enough.

If the United States wants the trust of the African people, we need more than words. We need tangible action to materially improve the lives of communities across the continent.

There are two steps the Biden administration could take today to do just that: supporting a new issuance of Special Drawing Rights (SDRs) for cost-free, debt-free crisis relief, and providing additional financial support for the Loss and Damage Fund agreed to at COP27, the most recent UN Climate Conference.

Three years since the COVID-19 outbreak, under one-third of Africans have received a single vaccination dose. Economic growth in Africa slowed “sharply” in 2022, due to a worldwide economic slump, inflation, and an ongoing series of shocks.

The World Bank is warning of a “sharp, long-lasting slowdown” in 2023 that will “hit developing countries hard.” One-fifth of Africa’s population faces chronic hunger—double the world average—and the climate crisis is only deepening these stark statistics.

For perspective: Driven by climate and conflict, half of Somalia’s population faces acute food insecurity. Trekking for weeks to refugee camps for food, many Somalis are forced to bury starved loved ones in shallow graves.

Against such challenges, the 2021 issuance of $650 billion in SDRs by the International Monetary Fund provided a lifeline for millions of Africans. SDRs are a reserve asset that can be issued in times of crisis at no cost to the U.S. or any other country. Developing countries can then use these SDRs to pay debts, stabilize currencies, or fund critical purchases like vaccines and food supplies.

Since the 2021 issuance, over 100 low- and middle-income countries have used their SDRs for often life-saving care for their citizens. African countries used SDRs more than any other region, with 47 of 54 African nations using some or all of their allocation.

Though last year’s SDR issuance was impactful, it was not enough. That’s why African leaders like African Union Chair Macky Sall and finance ministers across the continent are calling for a new SDR issuance of at least the same size.

The UN Global Crisis Response Group on Food, Energy, and Finance; dozens of US lawmakers; the International Chamber of Commerce; and nearly 150 civil society organizations worldwide also support the proposal.

Additionally, African countries must be compensated for the harms caused by a climate crisis for which they bear little responsibility. Despite having contributed the least of any continent to greenhouse gas emissions, Africa remains the most vulnerable to climate change.

Nineteen million Africans have been affected by extreme weather events in 2022 alone, and cyclones and droughts wrought havoc on infrastructure, agriculture, and domestic economies.

In the words of the Pan-African Climate Justice Alliance, “you cannot set fire on someone’s house and sell them the fire extinguisher, or worse still, loan them money to rebuild it.” The Loss and Damage Fund will provide climate reparations through financial support to nations most vulnerable to climate shocks.

The Fund’s impact, however, will only be as strong as the world’s commitment. While nations like Germany and Belgium have made symbolic pledges to the fund, current contributions fail to address the existential magnitude of the crisis. Increased U.S. financial backing will pave the way for additional support from other high-income countries.

Naysayers may balk at the cost of these proposals, or suggest they do not align with U.S. national interests. However, a new SDR issuance, while costing nothing to U.S. taxpayers, would foster global economic—and therefore political—stability, while proving U.S. responsiveness to African needs.

Following the passage of the highest-ever Pentagon budget, the Biden Administration should recall their own analysis that climate change exacerbates global security challenges.

Instead of paying massive sums for weapons of war, often in the name of debunked strategies to counter terrorism, the U.S. should invest in measures that address the root causes of violent conflict in places like Somalia and the Sahel.

During last month’s U.S.-Africa Leaders Summit, 60 organizations, including Partners In Health, Africans Rising, and Friends of the Earth US, called on President Biden to support these two urgent proposals. At the time, he failed to do so.

As Secretary Yellen travels to our continent, the administration has another opportunity to move beyond rhetoric and toward action to improve the lives of Africa’s 1.2 billion people.

Supporting a new SDR issuance and contributing funding for the Loss and Damage Fund would go a long way toward salving the ever-present economic wounds of colonialism, addressing the climate crisis, and bolstering opportunities for Africans to chart their own course in the 21st century and beyond.

Pauline Muchina comes from the Rift Valley in Kenya, where her family still resides. She is the Policy, Education and Advocacy Coordinator for Africa for the American Friends Service Committee in Washington, DC, and the Chair of the COVID-19 Working Group of the Advocacy Network for Africa.

Emira Woods, originally from Liberia, is the Executive Director of Green Leadership Trust and an ambassador for Africans Rising for Justice, Peace, and Dignity, a network of African social movements on the continent and the diaspora.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The COVID-19 pandemic demonstrates the value of multilateralism. Human suffering was greatly reduced by collective actions such as the COVAX initiative to accelerate development and deployment of vaccines. Credit: UNDP India

By Ulrika Modéer and Tsegaye Lemma
UNITED NATIONS, Jan 18 2023 (IPS)

The multilateral system, even in the face of heightened geopolitical tension and big power rivalry, remains the uniquely inclusive vehicle for managing mutual interdependencies in ways that enhance national and global welfare. The complex challenges of a global pandemic, climate emergency, inequality and the risk of nuclear conflict cannot be dealt with by one country or one region alone. Coordinated collective action is required.

Without coordinated and timely collective global action in recent years to respond to the COVID-19 pandemic, global suffering would have been far greater.

Initiatives such as COVAX and the UN’s socio-economic response to COVID-19 not only helped mitigate the public health emergency, but also help decision-makers look beyond recovery towards 2030, managing complexity and uncertainty.

The devastating war in Ukraine has been a colossal blow to multilateral efforts by the international community to maintain peace and prevent major wars. However, multilateral cooperation cannot be declared obsolete – it is crucial in efforts to put human dignity and planetary health at the heart of cross-border cooperation.

The recent Black Sea Grain Initiative agreement represents a key testament to the value of multilateral cooperation working even in the most difficult circumstances, ensuring the protection of those that are most vulnerable to global shocks.

Without this agreement, global food prices would have risen even further, and vulnerable countries pushed further into hunger and political unrest.

The multilateral system is faced with the ostensible imbalance in matching humanitarian and development needs with Official Development Assistance (ODA) commitments. Despite some donors’ efforts to maintain – and even increase – their ODA commitments, others are faced with increasing politicization of aid – and it is part of the political calculus.

With the war in Ukraine still raging, there is real possibility that several donors will tap into ODA budget to cover the partial or entire cost of hosting Ukrainian refugees and rebuilding the devastated Ukrainian infrastructure and economy.

The UN system, a core part of the rule-based international order, is funded dominantly by voluntary earmarked contributions. Ultimately, this gives donor countries influence over the objectives of global public good creation.

Funding patterns tend to be unpredictable, making it hard to strategize and plan for the long term. Although earmarked funding allows the system to deliver solutions to specific issues with scale, the system’s lack of quality funding support risks eroding its multilateral character, strategic independence, universal presence, and development effectiveness.

The recently launched report by the Dag Hammarskjöld Foundation and the UN’s Multi-Partner Trust Fund Office showed that more than 70 percent of funding to the UN development system is earmarked, compared to 24 percent for the World Bank Group and IMF, and only 3 percent for the EU.

As the world faces daunting development finance prospects in 2022-2023, investments should focus on protecting a strong and effective multilateral system; the system that remains trusted by countries and partners for its reliable delivery of services.

It has also proven to complement bilateral, south-south and other forms of cooperation – beyond the traditional development narrative. An ODI study showed that the multilateral channel, when compared with bilateral channel, remains less-politicized, more demand-driven, more selective in terms of poverty criteria and a good conduit for global public goods.

Notwithstanding the institutional and bureaucratic challenges that the multilateral system faces, which must be addressed head-on, a retreat from a shared system of rules and norms that has served the world for seven decades is the wrong response.

Those of us in the multilateral system, especially in the UN development system, must recognize the difficult work that lies ahead. We must continue to demonstrate that each tax dollar is spent judiciously and show traceable results, while upholding the highest standards set out in the UN charter.

Improved transparency on how and where we spend the funds entrusted to us by our key partners and the IATI standard have long been adopted as key requirement outlined in the funding compact.

The Multilateral Organisation Performance Assessment Network and other donor assessments have recognized the systems’ value for money and confirmed that partnerships with other UN entities improve programmes and effectively integrates multiple sources of expertise.

Of course, the system must continue to build on successes and lessons to prove to our partners that we remain worthy of their trust and drive our collective agenda.

However, the true value of multilateral cooperation can only be fully realized with strong political commitment by partners matched with the necessary financial investment.

Ulrika Modéer is UN Assistant Secretary-General and Director of the Bureau of External Relations and Advocacy, UNDP; Tsegaye Lemma is Team Leader, Strategic Analysis and Corporate Engagement, Bureau of External Relations and Advocacy, UNDP.

Source: UNDP

IPS UN Bureau

Follow @IPSNewsUNBureau
  

A new conversation is needed about food production in Africa. Credit: Joyce Chimbi/IPS

By Joyce Chimbi
NAIROBI, Jan 16 2023 (IPS)

Concerns are rife that while Africa is growing more crops, these are not for food and that on the current trajectory, present food import costs into Africa, now estimated at 55 billion US dollars a year, could double by 2030.

Three crop species-maize, wheat and rice meet an estimated 50 percent of the global requirements for proteins and calories, according to the UN’s Food and Agriculture Organization (FAO).

Yet despite Africa’s expensive agricultural sector, the continent’s maize, rice, and wheat account for 7, 5, and 4 percent of the world’s production, respectively. But experts say pitting food crops against cash crops is not the right conversation to have.

“The most productive conversation should be firmly centered on how to support farmers to produce more food for everyone and to export even more as this will improve the farmer’s quality of life and get themselves out of poverty,” says Hafez Ghanem, former regional Vice President of the World Bank Group and a current nonresident senior fellow in the Global Economy and Development Program at the Brookings Institution.

He tells IPS the mistake many countries made after independence was to try to ensure cheap food for people in the cities by keeping farmgate prices low and by trying to coerce farmers into producing certain food crops. The result was that the farmer became poor. If the farmer is poor, they cannot produce, and in the long run, everybody becomes poor and hungry.

“No country can produce all the foods that it needs. We will have to export some and produce some. If we start increasing yields for cereals, for instance, through increased use of quality seeds, fertilizer, and irrigation, farmers can produce more food crops without interfering with cash crops production, and the farmer will be richer.”

According to the Africa Agriculture Status Report 2022, “for Africa, accelerating the transformation of our food systems is more vital than ever. Africa has a few other incentives for transforming its food system; with one of the most degraded agricultural soils in the world and increasing droughts, Africa will face significant exposure to water-related climate risks in the future.

At least 90 percent of sub-Saharan Africa’s rural population depends on agriculture as its primary source of income. More than 95 percent of agriculture is reliant on rainfall, according to the report.

The report finds that the consequences of unpredictable rainfall, rising temperatures, extreme drought, and low soil carbon will further lower crop yields exposing Africa’s poorest communities to increasingly intense climate- and water-related hazards with disastrous results.

Ghanem does not believe that the issue of food security in Africa is a consequence of producing too many cash crops. The real issue, he says, is two-fold.

“The first part of the issue is that, in general, the productivity of land under cultivation for both cash and food crops is low. We need to increase land yields for both cash and food crops. The solution, I do not believe, is to stop exporting cash crops to produce more food,” he explains.

The second part of the issue, he says, is the challenge presented by climate change, and “we need to do much more to make agriculture more resilient to climate change.”

He says that concerns that there is the prioritization of cash crops over food crops are misplaced, “think about the profile of farmers in Africa. We are talking about very smallholder farmers. In countries such as Cote d’Ivoire and Ghana, farmers are making much more profits producing cocoa or coffee than producing rice, for example.“We cannot ask our farmers to produce crops that are lower yielding and therefore less profitable.”

Any solution that we propose for food security, he cautions, has to bear in mind that the most food insecure and poorest people in Africa are in the rural areas.

Against this backdrop, experts such as Ghanem see no conflict between the production of food and cash crops, saying that Africa has vast lands to produce both. Outside of countries such as Egypt and other countries in North Africa, he says the rest of the continent has vast and available arable land.

Data by FAO shows Africa is home to an estimated 60 percent of the world’s uncultivated arable land. Ghanem, therefore, says the solution is to facilitate farmers to irrigate their lands and access high-quality seeds and fertilizer.

Africa needs about $40 to $70 billion in investment from the public sector and another $80 billion from the private sector annually to sustain food production on the continent, according to Africa Agriculture Status Report.

Ghanem says investing in technology that can produce critical inputs such as fertilizer and climate-resilient high-quality seeds will prove highly productive in the future.

Take, for instance, fertilizer which is expensive because it is imported. He lauds the establishment of some of the world’s largest fertilizer-producing companies in Nigeria and Morocco, calling for such investments in other parts of the continent.

Ghanem says subsidies for farm inputs such as fertilizer are not the solution and that producing inputs that farmers need in-country or at least on the continent will set the agricultural sector on a resilience path to greater productivity, enough food for all, and profitability.

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

A riverside park in Boa Vista, which would probably disappear with the construction of the Bem Querer hydroelectric plant, 120 kilometers downstream on the Branco River. The projection is that the reservoir would flood part of the capital of the state of Roraima, in the extreme north of Brazil. CREDIT: Mario Osava/IPS

By Mario Osava
BOA VISTA, Brazil , Dec 21 2022 (IPS)

“Roraima did not have a Caribbean character; now it does, because of its growing relations with Venezuela and Guyana,” said Haroldo Amoras, a professor of economics at the Federal University of this state in the extreme north of Brazil.

The oil that the U.S. company ExxonMobil discovered off the coast of Guyana since 2015 generates wealth that will cross borders and extend to Roraima, already linked to Venezuela by energy and migration issues, predicted the economist, the former secretary of planning in the local government from 2004 to 2014.

Roraima, Brazil’s northernmost state, which forms part of the Amazon rainforest, is unique for sharing a border with these two South American countries on the Caribbean Sea and because 19 percent of its 224,300 square kilometers of territory is covered by grasslands, in contrast to the image of the lush green Amazon jungle.

It is also the only one of Brazil’s 26 states not connected to the national power grid, SIN, which provides electricity shared by almost the entire country. This energy isolation means the power supply has been unstable and has caused uncertainty in the search for solutions in the face of sometimes clashing interests.

From 2001 to 2019 it relied on imported electricity from Venezuela, from the Guri hydroelectric plant, whose decline led to frequent blackouts until the suspension of the contract two years before it was scheduled to end.

The closure of this source of electricity forced the state to accelerate the operation of old and new diesel, natural gas and biomass thermoelectric power plants. It also helped fuel the proliferation of solar power plants and the debate on cleaner and less expensive alternatives.

Alfredo Cruz would lose the restaurant and home he inherited from his great-grandfather, who registered the property in 1912. The Bem Querer reservoir would lead to the relocation of many riverside dwellers and would even flood part of the capital of the northern Brazilian state of Roraima, Boa Vista, 120 kilometers upriver. CREDIT: Mario Osava/IPS

In search of energy alternatives

Against this backdrop, the Roraima Renewable Energies Forum emerged, promoted by the non-governmental Socio-environmental Institute (ISA) and the Climate and Society Institute (ICS) and involving members of the business community, engineers from the Federal University of Roraima (UFRR) and individuals, indigenous leaders and other stakeholders.

The objectives range from influencing sectoral policies and stimulating renewable sources in the local market to monitoring government decisions for isolated systems, such as the one in Roraima, as well as proposing measures to reduce the costs and environmental damage of such systems.

“Not everyone (in the Forum) is opposed to the construction of the Bem Querer hydroelectric plant, but there is a consensus that there is a lack of information to evaluate its benefits for society and whether they justify the huge investment in the project,” biologist Ciro Campos, an ISA analyst and one of the Forum’s coordinators, told IPS.

Bem Querer, a power plant with the capacity to generate 650 megawatts, three times the demand of Roraima, is the solution advocated by the central government to guarantee a local power supply while providing the surplus to the rest of the country.

For this reason, the project is presented as inseparable from the transmission line between Manaus, capital of the state of Amazonas with a population of 2.2 million, and Boa Vista, the capital of Roraima, population 437,000. The line involves 721 kilometers of cables that would connect Roraima to the national grid.

Indigenous people in the northern Brazilian state of Roraima are striving to install solar plants in their villages and are studying how to take advantage of the winds in their territories, which are considered favorable for wind energy. Their aim is to prevent the construction of Bem Querer and other hydroelectric plants that would affect indigenous lands, according to Edinho Macuxi, coordinator of the Indigenous Council of Roraima. CREDIT: Mario Osava/IPS

“In its design, Bem Querer looks towards Manaus, not Roraima,” Campos complained, ruling out a necessary link between the power plant and the transmission line. “We could connect to the SIN, but with a safe and autonomous model, not dependent on the national system” and subject to negative effects for the environment and development, he argued.

Hydroelectric damage

The plant would dam the Branco River, the state’s main water source, to form a 519-square-kilometer reservoir, according to the governmental Energy Research Company (EPE). It would even flood part of Boa Vista, some 120 kilometers upstream.

The hydropower plant would both meet the goal of covering the state’s entire demand for electricity and abolish the use of fossil fuels, diesel and natural gas, which account for 79 percent of the energy consumed in the state, according to the distribution company, Roraima Energia.

But it would have severe environmental and social impacts. “It would make the riparian forests disappear,” which are almost unique in the extensive savannah area, locally called “lavrado,” of grasses and sparse trees, said Reinaldo Imbrozio, a forestry engineer with the National Institute of Amazonian Research (Inpa).

A view of the Branco River, five kilometers above where its waters would be dammed if the controversial Bem Querer hydroelectric plant is built, which would generate enough electricity to meet the entire demand of the Brazilian state of Roraima as well as a surplus for export, but would have environmental and social impacts magnified by the flatness of the basin that requires a very large reservoir. CREDIT: Mario Osava/IPS

In addition to the flooding of parts of Boa Vista, the flooding of the Branco and Cauamé rivers, which surround the city, will directly affect nine indigenous territories and will have an indirect impact on others, complained Edinho Macuxi, general coordinator of the Indigenous Council of Roraima (CIR), which represents 465 communities of 10 native peoples.

The CIR, together with ISA and the ICS, built two solar energy projects in the villages and carried out studies on the wind potential, already recognized in the indigenous territories of northern Roraima.

“The main objective of our initiatives is to prove to the central government that we don’t need Bem Querer or other hydroelectric projects…that represent less land and more confusion, more energy and less food for us,” he stressed to IPS at CIR headquarters.

“We will have to leave, said the engineers who were here for the studies of the river,” said Alfredo Cruz, owner of a restaurant on the banks of the Branco River, about five kilometers upstream from the site chosen for the dam. At that spot visitors can swim in the dry season, when the water level in the river is low.

Economics Professor Haroldo Amoras says the state of Roraima is becoming more Caribbean, because its economy is increasingly linked to its neighboring countries to the north of Brazil, Guyana and Venezuela, which, in addition to being importers, are the route to the Caribbean for Roraima’s agricultural and agro-industrial products. CREDIT: Mario Osava/IPS

The rapids there show the slight slope of the rocky riverbed. It is a flat river, without waterfalls, which means a larger reservoir. The heavy flow would be used to generate electricity in a run-of-river power plant.

Cruz inherited his restaurant and house from his great-grandfather. The title to the land dates back to 1912, he said. But they will be left under water if the hydroelectric plant is built, even though they are now located several meters above the normal level of the river, he lamented.

Riverside dwellers, fishermen and indigenous people will suffer the effects, Imbozio told IPS. The property of large landowners and people who own mansions will also be flooded, but they have been guaranteed good compensation, he added.

What the Forum’s Campos proposes is the promotion of renewable sources, without giving up diesel and natural gas thermoelectric plants for the time being, but reducing their share in the mix in the long term, and ruling out the Bem Querer dam, which he said is too costly and harmful.

Energy issues will influence the future of Roraima, according to Professor Amoras. The most environmentally viable hydroelectric plants, such as one suggested on the Cotingo River, in the northeast of the state, with a high water fall, including a canyon, are banned because they are located in indigenous territory, he said.

The participation of civil society is important for the Brazilian state of Roraima to make progress towards sustainable energy alternatives that can reduce diesel consumption, offer energy security and avoid the impacts of hydroelectric dams, according to Ciro Campos, an analyst with the non-governmental Socio-environmental Institute. CREDIT: Mario Osava/IPS

Oil wealth, route to the Caribbean

In the neighboring countries, oil wealth opens a market for Brazilian exports and, through their ports, access to the Caribbean. The Guyanese economy will grow 48 percent this year, according to the World Bank.

Roraima’s exports have grown significantly in recent years, although they reached just a few tens of millions of dollars last year.

Guyana’s small population of 790,000, the unpaved road connecting it to Roraima and the fact that the language there is English make doing business with Guyana difficult, but relations are expanding thanks to oil money.

This will pave the way to the Caribbean Community (CARICOM), whose scale does not attract transnational corporations, but will interest Roraima companies, said Fabio Martinez, deputy secretary of planning in the Roraima state government.

Venezuela expanded its imports from Roraima, of local products or from other parts of Brazil, because U.S. embargoes restricted trade via ports and thus favored sales across the land border, he said.

“The liberalization of trade with the United States and Colombia will now affect our exports, but a recovery of the Venezuelan economy and the rise of oil can compensate for the losses,” Martinez said.

Roraima is a new agricultural frontier in Brazil and its soybean production is growing rapidly. But “we want to export products with added value, to develop agribusiness,” said Martinez.

That will require more energy, which in Roraima is subsidized, costing consumers in the rest of Brazil two billion reais (380 million dollars) a year. If the state is connected to the national grid through the transmission line from Manaus, there will be “more availability, but electricity will become more expensive in Roraima,” he warned.

Calls for more government regulation and intervention are common during crises. But once the crises subside, pressures to reform quickly evaporate and the government is told to withdraw. New financial fads and opportunities are then touted, instead of long needed reforms.

Global financial crisis
The 2007-2009 global financial crisis (GFC) began in the US housing market. Collateralized debt obligations (CDOs), credit default swaps (CDSs) and other related contracts, many quite ‘novel’, spread the risk worldwide, far beyond US mortgage markets.

Jomo Kwame Sundaram

The GFC also exposed massive resource misallocations due to financial liberalization with minimal regulation of supposedly efficient markets. With growing arbitrage of interest rate differentials, achieving balanced equilibria has become impossible except in mainstream economic models.

Financialization has meant much greater debt and risk exposure as well as vulnerability for many households and firms, e.g., due to ‘term’ (duration) and currency ‘mismatches’, resulting in greater overall financial system fragility.

This has worsened global imbalances, reflected in larger trade and current account deficits and surpluses. In unfavourable circumstances, exposure of firms and households to risky assets and liabilities has been enough to trigger defaults.

Bold fiscal efforts succeeded in inducing modest economic recoveries before they were nipped in the bud soon after the ‘green shoots of recovery’ appeared. Instead, the US Fed initiated ‘unconventional’ monetary policies, offering easy credit with ‘quantitative easing’.

Currencies in flux
The seemingly coordinated rise of various, apparently unconnected asset prices cannot be explained by conventional economics. Thus, speculation in commodity, currency and stock markets has been grudgingly acknowledged as worsening the GFC.

The exchange rates of many currencies have also come under greater pressure as residents borrowed in low interest rate currencies such as the Japanese yen. In turn, they have typically bought financial assets promising higher returns.

Thus, higher interest rates attract capital inflows, raising most domestic asset prices. Exchange rate movements are supposed to reflect comparative national economic strengths, but rarely do so. But conventional monetary responses worsen, rather than mitigate, contractionary tendencies.

Globalization of trade and finance has generated contradictory pressures. All countries are under pressure to generate trade or current account surpluses. But this, of course, is impossible as not all economies can run surpluses simultaneously.

Many try to do so by devaluing their currencies or cutting costs by other means. But only the US can use its ‘exorbitant privilege’ to maintain both budgetary and current account deficits by simply issuing Treasury bonds.

Currency markets can also undermine such efforts by enabling arbitrage on interest rate differentials. International imbalances have worsened, as seen in larger current account deficits and surpluses.

Contrary to mainstream economics, currency speculation does not equilibrate national, let alone international markets. It does not reflect economic fundamentals, ensuring exchange rate volatility, to damaging effect.

Commodity speculation
Thanks to currency mismatches, many companies and households face greater risk. Exchange rate fluctuations, in turn, exacerbate price volatility and its harmful consequences, which vary with circumstances.

Changes in ‘fundamentals’ no longer explain commodity price volatility. Meanwhile, more commodity speculation has resulted in greater price volatility and higher prices for food, oil, metals and other raw materials.

These prices have been driven by much more speculation, often involving indexed funds trading in real assets. The resulting price volatility especially affects everyone, as food consumers, and developing countries’ agricultural producers.

Sharp increases in commodity prices since mid-2007 were largely driven by speculation, mainly involving indexed funds. With the Great Recession following the GFC, most commodity producers in developing countries faced difficulties.

Since then, nearly all commodity prices fell from the mid-2010s as the world economic slowdown showed no sign of abating until economic sanctions in 2022 pushed up food, energy, fertilizer and other prices once again.

Besides hurting export revenues, lower commodity prices and even greater volatility have accelerated depreciation of earlier investments in equipment and infrastructure following the commodity price spikes.

Integrated solutions needed
The uneven financial system meltdown following the GFC raised expectations that ‘finance-as-usual’ would never return. But lasting solutions to threats, such as currency and commodity speculation, require international cooperation and regulation.

Meanwhile, goods and financial markets have become more interconnected. Thus, a truly multilateral and cooperative approach has to be found in the complex interconnections involving international trade and finance.

In this asymmetrically interdependent world, policy reforms are urgently needed. All countries need to be able to pursue appropriate countercyclical macroeconomic policies. Also, small economies should be able to achieve exchange rate stability at affordably low cost.

Although prompt actions were undertaken in response to the GFC, the world economy experienced a protracted slowdown, the ‘Great Recession’. Myopic policymakers in most developed economies focus on perceived national risks, ignoring international ones, especially those affecting developing countries.

Contrary to widespread popular presumption, the Bretton Woods multilateral monetary and financial arrangements did not include a regulatory regime. Nor has such a regime emerged since, even after US President Nixon unilaterally ended the Bretton Woods system in 1971.

With the gagged voice of developing countries in international financial institutions and markets, the United Nations must lead, as it did in the mid-1940s.

It is the only world institution which could legitimately develop a better alternative. Thankfully, the UN Charter assigns it responsibility to lead efforts to do so.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The recent climate talks in Egypt have left us with a sobering reality: The window for maintaining global warming to 1.5 degrees is closing fast and what is on the table currently is insufficient to avert some of the worst potential effects of climate change. The Nationally Determined Contribution targets of Asian and Pacific countries will result in a 16 per cent increase in greenhouse gas emissions by 2030 from the 2010 levels.

Armida Salsiah Alisjahbana

But they are not enough to help us arrive at a better future without, what the UN Secretary General calls, a “giant leap on climate ambition”. Carbon neutrality needs to at the heart of national development strategies and reflected in public and private investment decisions. And it needs to cascade down to the sustainable pathways in each sector of the economy.

Accelerate energy transition

At the Economic and Social Commission for Asia and the Pacific (ESCAP), we are working with regional and national stakeholders on these transformational pathways. Moving away from the brown economy is imperative, not only because emissions are rising but also because dependence on fossil fuels has left economies struggling with price volatility and energy insecurity.

A clear road map is the needed springboard for an inclusive and just energy transition. We have been working with countries to develop scenarios for such a shift through National Roadmaps, demonstrating that a different energy future is possible and viable with the political will and sincere commitment to action of the public and private sectors.

The changeover to renewables also requires concurrent improvements in grid infrastructure, especially cross-border grids. The Regional Road Map on Power System Connectivity provides us the platform to work with member States toward an interconnected grid, including through the development of the necessary regulatory frameworks for to integrate power systems and mobilize investments in grid infrastructure. The future of energy security will be determined by the ability to develop green grids and trade renewable-generated electricity across our borders.

Green the rides

The move to net-zero carbon will not be complete without greening the transport sector. In Asia and the Pacific transport is primarily powered by fossil fuels and as a result accounted for 24 per cent of total carbon emissions by 2018.

Energy efficiency improvements and using more electric vehicles are the most effective measures to reduce carbon emissions by as much as 60 per cent in 2050 compared to 2005 levels. The Regional Action Programme for Sustainable Transport Development allows us to work with countries to implement and cooperate on priorities for low-carbon transport, including electric mobility. Our work with the Framework Agreement on Facilitation of Cross-border Paperless Trade also is helping to make commerce more efficient and climate-smart, a critical element for the transition in the energy and transport sectors.

Adapting to a riskier future

Even with mitigation measures in place, our economy and people will not be safe without a holistic risk management system. And it needs to be one that prevents communities from being blindsided by cascading climate disasters.

We are working with partners to deepen the understanding of such cascading risks and to help develop preparedness strategies for this new reality, such as the implementation of the ASEAN Regional Plan of Action for Adaptation to Drought.

Make finance available where it matters the most

Finance and investment are uniquely placed to propel the transitions needed. The past five years have seen thematic bonds in our region grow tenfold. Private finance is slowly aligning with climate needs. The new Loss and Damage Fund and its operation present new hopes for financing the most vulnerable. However, climate finance is not happening at the speed and scale needed. It needs to be accessible to developing economies in times of need.

Innovative financing instruments need to be developed and scaled up, from debt-for-climate swaps to SDG bonds, some of which ESCAP is helping to develop in the Pacific and in Cambodia. Growing momentum in the business sector will need to be sustained. The Asia-Pacific Green Deal for Business by the ESCAP Sustainable Business Network (ESBN) is important progress. We are also working with the High-level Climate Champions to bring climate-aligned investment opportunities closer to private financiers.

Lock in higher ambition and accelerate implementation

Climate actions in Asia and the Pacific matter for global success and well-being. The past two years has been a grim reminder that conflicts in one continent create hunger in another, and that emissions somewhere push sea levels higher everywhere. Never has our prosperity been more dependent on collective actions and cooperation.

Our countries are taking note. Member States meeting at the seventh session of the Committee on Environment and Development, which opens today (29 November) are seeking consensus on the regional cooperation needed and priorities for climate action such as oceans, ecosystem and air pollution. We hope that the momentum begun at COP27 and the Committee will be continued at the seventy-ninth session of the Commission as it will hone in on the accelerators for climate action.

In this era of heightened risks and shared prosperity, only regional, multilateral solidarity and genuine ambition that match with the new climate reality unfolding around us — along with bold climate action — are the only way to secure a future where the countries of Asia and the Pacific can prosper.

Armida Salsiah Alisjahbana is an Under-Secretary-General of the United Nations and Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP)

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Ann Potokri, a nurse and service provider working with ICW, and Queen Kennedy, a community pharmacist and mentor mother. Maararaba, Nasarawa State, North Central Nigeria, June 2020. Photo courtesy of International Community of Women Living with HIV West Africa.

By Jaime Atienza and Charles Birungi
GENEVA, Nov 21 2022 (IPS)

In this moment of profound challenge in international relations, it was understandable that the conclusion of the G20 meeting left leaders feeling relieved that the meeting took place without a breakdown. Leaders were justifiably proud too of important steps forward they made including the launch of the new pandemics fund.

But G20 leaders did not manage to resolve the fiscal crisis that threatens many low-and middle-income countries, and which risks undermining global health security because it is driving countries to slash investments in essential health services.

As the world approaches the end of 2022, no resolution mechanism to properly resolve the debt crisis has been established by either the IMF or the G20. In 24 months, the “G20 common framework” has delivered a debt relief agreement for just one country, Chad.

UNAIDS report “A pandemic triad” shows how growing debt burdens across developing countries are impairing their ability to fight and end AIDS and COVID, and their readiness for future pandemics. Half of the low-income countries in Africa are already in debt distress or at high risk of being so.

Across the world, the 73 countries which are eligible for the Debt Service Suspension Initiative have been recorded as spending on average four times as much on debt servicing as they have been able to invest in the health of their people. Only 43 of those countries have seen even a temporary suspension – totalling less than 10% the money they continued to pay back.

Two thirds of people living with HIV are in countries that received absolutely no support from the Debt Service Suspension Initiative at all during the critical 2020-2021 period. The seven Debt Service Suspension Initiative eligible countries with the largest population of people living with HIV – Kenya, Malawi, Mozambique, Uganda, Tanzania and Zambia – saw their public debt levels grow from 29% in 2011 to 74% in 2020.

According to the World Bank, “interest payments will constrain the capacity of low-income countries to spend on health, on average by 7%, and in lower middle-income countries by 10%, in 2027.”

110 out of 177 countries will see a drop or stagnation in their health spending capacity and are not set to be able to achieve pre-COVID spending levels by 2027.

During the COVID-19 pandemic, deficits increased worldwide, and debt accumulated much faster than they did in the early years of other recessions including the Great Depression and the Global Financial Crisis. The scale is comparable only to the twentieth century’s two world wars.

Government expenditure cuts are expected to take place across 139 countries in the coming years. In the case of the 73 countries that were eligible to the Debt Service Suspension Initiative, primary expenditures are expected to decline an average of 2.8% of GDP between 2020 and 2026.

This comes at a moment when economic forecasts have been downgraded by the IMF for a fourth time in a year. Austerity will mean dangerous reductions in health expenditure. To even restrain the damage will require a systemic reprioritization of public resources towards health systems.

There is a direct correlation between deepening fiscal problems and worsening health outcomes.

The COVID-19 crisis is dragging on. The impacts of the war in Ukraine on the global economy are making things worse. The HIV response is in danger, with the promise to end AIDS by 2030 under threat.

The world is not prepared today for the pandemics of to come. The international response to resolve the health financing crisis is nowhere close enough. Even as developing countries struggle with the debt crisis, the Ukraine war has led several donors to cut aid.

But there is a way out. With bold action, the health and development financing crisis can be overcome. Barbados Prime Minister Mia Mottley’s Bridgetown Agenda for action on debt, expansion of multilateral finance and effective SDR reallocation sets out the order of magnitude of response required.

There is an urgent need for debt cancellation for countries in fiscal distress, and for an effective and fast mechanism to deal with debt restructuring at scale. Health and education must be central considerations in debt negotiations.

Vital too is an expansion of the use of existing Special Drawing Rights (SDRs) from high income countries for investments in lower income countries of at least twice the 100 billion committed.

The G20 leaders’ work has not ended in Bali. The consequences of an unresolved debt crisis, and the lack of additional resources, would be disastrous for lives, livelihoods and health security. We don’t have time. No one is safe until everyone is safe.

Jaime Atienza is the Director of Equitable Financing at UNAIDS. Charles Birungi is the Senior HIV Economics, Finance and Policy Advisor.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

By Matti Kohonen
LONDON, Nov 18 2022 (IPS)

G20 leaders met in Indonesia in the midst of multiple crises, with 85 percent of the world population expected to face austerity measures and severe budget cuts next year that will impact the most vulnerable compounded by an insufficient response to the Covid-19 pandemic, with only 38 percent of relief funds going to social protection in global South countries.

The G20 summit motto was “Recovering Together, Recovering Stronger” yet the Joint Declaration failed to deliver any alternatives to the wave of austerity engulfing the world. It ignored the option of raising enough tax revenues from large corporations, taxing the wealthy and tacking illicit financial flows and tax abuses which alone accounts for over US$200 billion of tax revenue lost per year due to profit shifting in the global South.

For one, the summit blocked any progress towards the negotiations of a UN Tax Convention that would address the issues of corporate tax abuses and illicit financial flows, as denounced in an open letter from the Asian People’s Movement on Debt and Development (APMDD).

In an open letter denouncing this inaction to tackle corporate tax abuses and IFFs, delivered to embassies of Indonesia, India and Brazil, Lidy Nacpil from the Asian People’s Movement on Debt and Development (APMDD) said that the summit blocked “any progress towards the negotiations of a UN Tax Convention that would address the issues of corporate tax abuses and illicit financial flows,” but there was no reaction.

Making matters worse, the Organisation for Economic Co-operation and Development (OECD) failed to deliver on mandates to publish country-by-country reporting before the summit. This would have allowed to monitor the performance of mechanisms to prevent for example multinational companies shifting profits to tax havens and avoid paying taxes.

The data was only published on 17 November, a day after the summit, which was too late to hold the G20 leaders accountable. According to Alex Cobham, Director at the Tax Justice Network, “without the transparency data, neither the Tax Justice Network nor any other independent research can evaluate how much each government is losing to multinationals’ corporate tax abuse, or any progress made to curb tax losses in recent years.”

But that is not everything since the summit did not confront the hidden offshore wealth and kleptocracy problem. Maira Martini from Transparency International said that the G20 members “in recent years have dragged their feet, unable to agree on key measures and failing to implement even those to which they had already committed. In the meantime, the corrupt have consolidated wealth and power, allowing them to attack everything from sustainable development to global security to democracy.”

In an open letter released ahead of the Bali summit, Transparency International representatives from across G20 countries called on their governments to take immediate action against cross-border corruption. The Joint Declaration stated its support towards implementing Financial Action Task Force (FATF) recommendations for improved financial transparency, but does not say that beneficial ownership registries should be public, a critical element to enable stakeholders and the authorities to uncover hidden assets.

Also the declaration included regional efforts related to signing of the Asia Initiative Declaration in July 2022 on tax and financial transparency in Asia. However, it did not specify whether this initiative would create a stronger standard than the current OECD transparency standard, or simply implement an OECD standard in the Asian regional context.

Positively, the Bali Joint Declaration made a link between increased beneficial ownership information and tackling natural resource crimes, but offered no specific proposals to address this issue. Indonesia loses an estimated US$4 billion in Illicit Financial Flows (IFFs) each year due to illegal, unregulated and underreported (IUU) fishing alone, while Africa loses an estimated US$11.5 billion to this illicit activity. It would be vital that beneficial ownership information on all vessels and fishing companies is collected on a public registry, to hold those responsible for illicit fishing activities accountable.

Between 75 and 95 million people are expected to be thrown into extreme poverty this year as a result of the pandemic and the effects of rising inflation and the war in Ukraine, according to the UN. Many other are struggling to make a living and feed themselves as governments around the world are resorting to painful austerity measures.

The G20 had an opportunity to offer solutions to these crises and a lifeline to struggling nations. Unfortunately for all of us, they have failed.

Matti Kohonen is executive director, Financial Transparency Coalition.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Illegal fishing is not only affecting the environment but impacting on the livelihoods of millions of fishers are also at stake, according to a new report. Here residents wave to fishers on boats in Saint Louis, Senegal. Credit: Carsten ten Brink/Flickr

By Ed Holt
BRATISLAVA, Nov 2 2022 (IPS)

As a new report lays bare the massive financial costs to developing states of illegal fishing, campaigners are hoping that drawing attention to the practice’s devastating economic effects will help push governments to greater action against the illicit trade.

Research by the Financial Transparency Coalition (FTC) released at the end of October showed that states are losing up to 50 billion US Dollars per year to the trade, with almost half of all vessels involved in illegal, unreported, and unregulated (IUU) fishing plundering African waters.

The massive ecological damage of IUU fishing has made headlines in recent years, but the report’s authors say they believe by focusing on the financial aspect of the practice, governments will have more incentive to deal with the issue.

“Until now, IUU fishing has been seen mostly as an environmental issue and a food security issue. But what we’re trying to do, almost for the first time, is to show that this is a serious financial issue, that countries are losing billions of dollars because of IUU fishing, so the issue moves from fisheries ministries to finance ministries,” Alfonso Daniels, lead author of the report, told IPS.

“Fisheries organisations are beginning to recognise that this is a financial issue, of money lost to illicit financial flows. Once this is established, there will be more incentive for countries to act because they are losing money,” he said.

The ecological damage of IUU fishing has been widely documented. The UN has warned that more than 90% of global fishing stocks are fully exploited, overexploited or depleted, describing the situation as an ‘ocean emergency’.  IUU fishing is a key contributor to overfishing, accounting for as much as one-fifth of global fisheries catches.

But the report from FTC – a group of 11 NGOs from around the world – draws attention to the economic costs of IUU fishing, which disproportionately affects poorer coastal states.

It says IUU fishing accounts for as much as one-fifth of global fisheries catches, representing up to 23.5 billion USD every year, with overall economic losses estimated to be 50 billion USD, making it the third most lucrative natural resource crime after timber and mining.

Meanwhile, Africa concentrates 48.9% of identified industrial and semi-industrial vessels involved in illegal, unreported, and unregulated (IUU) fishing, with 40% in West Africa alone, which has become a global epicentre for these activities.

But it is not just the direct financial losses that are creating economic problems in poorer states. The UN estimates that globally, 820 million people rely on fishing for their livelihoods, while in west Africa, as much as 25 percent of the labour force are involved in fishing.

IUU fishing is destroying key local fishing industries, driving communities into poverty and in some cases, malnutrition – the FTC report points out that fish consumption accounts for a sixth of the global population’s intake of animal proteins, and more than half in countries such as Bangladesh, Ghana, Indonesia, Sierra Leone and Sri Lanka.

“Illegal fishing and overcapacity in the Ghanaian trawl sector is having catastrophic impacts on coastal communities across the country,” Max Schmid, CEO of the Environmental Justice Foundation, told media earlier this year.

The group said in Ghana, for example, 80-90 percent of local fishers had seen a fall in income over the last five years.

The FTC report focuses on the financial secrecy behind IUU fishing that drives it.

It paints a picture of a practice being enabled by lax global legislation, poor international co-operation, and weak enforcement measures, coupled with a lack of resources for local bodies to fight it.

Much IUU fishing involves large foreign distant water fishing (DWF) fleets from industrialised countries. These work especially in Global South countries which cannot effectively monitor their waters and enforce regulations, and are prone to corruption, the report highlights.

It also underlines how IUU operators use complex, cross-jurisdictional corporate structures such as shell companies and joint ventures, and flags of convenience, to mask links to owners, allowing them to operate with virtual impunity.

Ending the financial secrecy around the practice is key to stopping it, say experts.

“[Solving the issue of ultimate beneficial ownership] is critical because it allows law enforcement to track ownership and go after individuals more effectively.” Lakshmi Kumar, Policy Director at the Global Financial Integrity NGO, told IPS.

But campaigners say that tackling financial secrecy alone is not going to bring an end to IUU fishing and that more measures need to be implemented, with the world’s richest countries taking the lead.

“Local governments are unable to crack down on this. Officials in West Africa have said they don’t have the means to patrol their borders and western countries are not prepared to give them that means.

“The only way there will be any change is through pressure from the main seafood markets, which is Japan, the US and EU. The G7 countries must force change by not opening their markets to anyone involved in IUU fishing, and provide the means to local governments to patrol their waters,” Daniels said.

Kumar said China also needs to be involved.

The study showed that 10 companies involved in IUU fishing were responsible for nearly a quarter of all reported cases, and that of those ten, eight were from China.

“In countries like China where most of these vessels originate, the government only gives vessels allegedly involved in IUU fishing a slap on the wrists and in other cases the vessels are part of a Chinese state-owned enterprise,” he said.

In its report, whose authors claim it is the largest analysis of IUU fishing ownership data to date, FTC calls for a number of steps to be taken.

It wants to see, among others, fisheries included in national beneficial ownership registries in all jurisdictions, with information made available to the public, fisheries included as an extractive industry in key initiatives including the Extractive Industry Transparency Initiative (EITI).

It also wants governments to publish an up-to-date list of IUU vessels allowing the use of fines and sanctions on the companies and real owners which would be collated internationally under IMO-FAO auspices to allow institutions focusing on fisheries management and Illicit Financial Flows to work together and wants to see more external support to boost monitoring capacity by coastal state governments.

The group is planning to present its findings to the European Parliament in November, and hopes to organise a high-level event in early November with representatives from the African Union and other institutions to discuss the report.

But FTC officials and other campaigners against IUU fishing are under no illusions about how quickly governments might begin to ramp up any efforts to stop their practice.

They say though that a combination of growing crises may soon force their hands.

“A combination of crises makes me think governments will be pushed into doing something. The UN has talked of an ‘ocean emergency’ because of overfishing and with the current combination of a cost of living crisis, a food crisis, the rise of the fishmeal industry in west Africa – the situation is not sustainable in ten years, or even in five or six years from now,” said Daniels.

And it would be in rich countries’ long-term interest to make sure they do address the problems IUU fishing is causing in Global South states, he added.

“All the money being lost by African countries through illicit financial flows is being lost to these other [richer] countries. They may think why should we care so much about this? But that’s a very short-sighted view, because if you mistreat fisheries grounds in West Africa then you will encourage the loss of fishing jobs and fishermen will want to migrate to Europe, then you have a migration crisis,” Daniels said.

“This is not something theoretical – you go to coasts and ports in Senegal, for example, and many people cannot catch fish, so what else are they going to do? I spoke to some people who tried to go to Spain. They failed, but this phenomenon is happening now. The approach [from these richer countries] is so short-sighted, they’re not taking this seriously.”

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

Rich countries have the resources to end the debt crisis, which has deteriorated rapidly in part as a consequence of their own domestic policies. October 2022. Credit: UNDP

By Lars Jensen and George Gray Molina
UNITED NATIONS, Oct 19 2022 (IPS)

Developing low- and middle-income economies are taking hard hits from global economic developments outside their control. Monetary tightening in advanced economies coupled with increasing fears of a global recession have weakened currencies, sent interest rates soaring, and investors fleeing.

All of which is contributing to a rapid deterioration of an already damaging debt crisis which is, as ever, hitting the most vulnerable the hardest.

In new research released by the United Nations Development Programme (UNDP), 54 developing (low- and middle-income) economies are identified as suffering from severe debt problems, equal to 40 percent of all developing economies. ¹

Providing this group of countries with the debt relief they need should be a manageable task for the international economy as the group only accounts for little more than 3% of the world economy. Failing to do so, however, could result in catastrophic development setbacks as the group of 54 accounts for more than 50 percent of the world’s extreme poor and 28 of the world’s top-50 most climate vulnerable countries.

Countries are stuck between a rock and a hard place. They cannot spend what is required to protect their citizens and safeguard their development prospects while continuing to also service their fast-rising debt burdens.

Time is running out. Without an urgent step-up of debt relief efforts from the international community, many more defaults will follow, and the debt crisis will turn into an entrenched development crisis as history has taught us.

Contrary to the advice given in the early stages of the COVID-19 pandemic, in the face of high interest rates, inflation, and debt levels, the International Monetary Fund is now urging countries to reign in fiscal spending while providing targeted and time-bound support to vulnerable populations.

But many developing economies cannot easily shift to effective and targeted social transfers or quickly increase tax revenues, – as the administrative capacity to do so takes years to build up.

Without a viable alternative in the form of access to orderly and comprehensive debt restructuring, and additional liquidity support from the international community, countries will have to choose between a string of messy and costly defaults and/or abrupt spending cuts with disastrous consequences for low-income and vulnerable populations and development prospects at large.

Furthermore, both options greatly increase the risk of political and social unrest threatening further setbacks and a deepening crisis.

We must also remember that these things are happening against the backdrop of an intensifying climate crisis which we can only combat together as a global community. Without a rethink on debt relief the global climate transition will be delayed, the economic costs of the transition will rise, and developing economies, who have contributed the least to the problem, will continue to bear a disproportionate size of the costs.

Developing economies must be allowed sufficient fiscal space to undertake ambitious sustainable development plans – including the undertaking of much-needed climate adaptation and mitigation investments.

Debt relief is one of several crucial components of providing it. The G20’s Common Framework for Debt Treatments, under which countries with debt distress can seek a restructuring, will have to be reformed, including a shift in focus towards comprehensive debt restructurings in return for sustainable development objectives.

This will require a change in attitude and sense of urgency, especially among major official creditors, as well as full debt transparency from both debtors and creditors. In our latest paper we discuss possible ways forward for the Common Framework focusing on country eligibility, debt sustainability analyses, official creditor coordination, private creditor participation, policy conditionalities and the use of debt clauses that target future economic and fiscal resilience.

Decisions on debt relief can no longer wait.

Nineteen developing economies – more than one-third of developing economies issuing dollar debt in international markets – have now lost markets access on account of skyrocketing interest rates, more than doubling from 9 countries at the beginning of 2022.

Similarly, credit ratings have been sliding with 27 countries – close to one-third of credit-rated developing economies – rated either ‘substantial risk, extremely speculative, or default’, up from 10 countries at the beginning of 2020.

Hard-won development gains achieved in the global south over decades are now being eroded by the intertwined cost-of-living and debt crises. Not only will a deepening development crisis result in great human suffering, but the cost of regaining whatever development gains are lost will increase substantially the longer we wait.

It is inconceivable, both morally and economically, that we would allow a development crisis to escalate when the international community has the resources needed to stop it now.

Lars Jensen is Economist at UNDP Strategic Policy Engagement Unit.; George Gray Molina is Head of Strategic Engagement and Chief Economist at UNDP

¹ https://www.undp.org/publications/avoiding-too-little-too-late-international-debt-relief

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Tanzanian officials tour the Kingfisher upstream oil project in Uganda. The African Union has adopted a position of energy access which includes deploying all forms of energy resources, including non-renewable and renewables, to address the energy crisis in the continent. Credit: Wambi Michael/IPS

By Wambi Michael
Kampala, Oct 5 2022 (IPS)

Thirty-year-old Difasi Amooti Kisembo is one of the demonstrators near the EU delegation offices in Kampala. He and a handful of others have traveled from Uganda’s oil and gas-rich Albertine region’s district to Uganda’s capital Kampala to express their displeasure with an EU Parliament’s resolution against the planned construction of the East African Crude Oil Pipeline.

“EU Stop neocolonialism and imperialism on Uganda’s oil projects,” reads the placard that Kisembo holding. Next to Kisembo is Lucas Eikiriza with a message: “Our pipeline is safe, EU stand aside”.

While there is opposition to the planned construction of a 1,443km pipeline from Uganda through Tanzania and Tilenga and Kingfisher upstream oil projects in Uganda, Kisembo told IPS that he has, over the last 16 years, patiently waited to see oil flow from this formerly sleepy and remote part of Uganda.

“I have not seen that oil with my eyes, but I’m already seeing the benefits. The roads are very good now, there were grass-thatched huts all over my village, but those have been replaced with iron-roofed (ones) thanks to oil that was discovered in Bunyoro,” Kisembo told IPS. “So when I heard that the Europeans want the government to stop the projects, I said that we, the young Banyoro, should stand up against that nonsense just like our forefathers fought the British colonialists.”

TotalEnergies and its partner China National Offshore Oil Corporation (CNOOC) in February decided to invest more than $10 billion into Lake Albert Development Project.

The landscape in Buliisa and Hoima districts has drastically changed with a number of needed infrastructures like the Central Processing Facility, an international airport, and well pads under construction.

“Everyone is going to gain. Anytime I’m sure that everybody is going to enjoy this oil and the developments which are coming in,” said Peter Mayanja, a real estate dealer and owner of Farm Bridge Investments, told IPS

President Yoweri Museveni in February said, “This project is a very important one for this region. This money will boost our economy,”

The EU parliament in mid-September adopted a resolution denouncing the Tilenga and EACOP projects by TotalEnergies, China National Offshore Oil Corporation, or CNOOC Group, backed by the governments of Uganda and Tanzania.

“Put an end to the extractive activities in protected and sensitive ecosystems, including the shores of Lake Albert,” reads part of the resolution. They suggested that to have a chance to limit global warming to 1,5°C, no new oil extraction project should be developed.

The resolution has since attracted criticism from Uganda, Tanzania, and from some of the advocates in Africa who believe that Africa should be allowed to harness their oil and gas discoveries to develop their economies as they transition to renewable energy sources.

Uganda’s Vice President, Jessica Alupo, took the matter to the just concluded UN General Assembly in New York. She said it is hypocritical for countries that have been at the center of polluting the environment to preach to countries that have borne the impact of those environmental violations how to act responsibly. “Our view is that development should be environmentally friendly, inclusive, and provide benefits for all; it should leave no one behind,” Alupo said

While Uganda’s International Relations Minister, Henry Okello Oryem, told IPS, “So the European don’t want Africa to develop its natural resources? And yet it is the only way to solve our problems. Our people continue to cut trees as the cheapest source of fuel. So if we don’t avail them with alternatives like gas, who will?” asked Oryem.

On the other hand, Proscovia Nabbanja, the chief executive of the Uganda National Oil Company (UNOC), which has stakes in EACOP, told IPS that the suggestion by the wealthier nations to Africa and other developing countries to leave their oil and gas underground was unfair.

“While I understand the concerns related to climate change, I don’t want to ignore the value that the projects bring to alleviate energy poverty, which is a critical issue in Uganda, improving the economy, and also propelling our country to industrialization,” said Nabbanja.

Uganda expects 160,000 jobs to be created by the projects located in Uganda’s Albertine Graben, bordering DRC. The East Africa Crude Oil Pipeline (EACOP) is expected to create five thousand jobs during its construction.

NJ Ayuk, executive chair of the African Energy Chamber lobby group told IPS the EU Parliament’s resolution was part of the overall move to block the extraction of oil and gas in Africa. He said apart from Uganda’s case, there are similar attempts to block fight the proposed onshore liquefied natural gas project at Lindi — which could help commercialize about 50 trillion cubic feet of offshore gas by Tanzania.

Ayuk told IPS that some of the campaigns are being funded by groups from the west to civil society organizations based in countries that have vast oil and gas resources.

Sizeable deposits of oil and gas have been discovered in Uganda, Namibia, Côte d’Ivoire, Kenya, Ghana, Angola, DRC, and South Sudan, among others.

“I want the civil society to fiercely advocate for the environment so that we don’t have any kind of environmental risks. But it is important that they don’t put out misinformation,” said Ayuk. “It is really important because that misinformation comes to the detriment of young people who need jobs. It comes to the detriment of a country that needs investment, that wants to grow. That wants to survive on its resources without going for aid.”

He said the drive against investment in fossil fuel in Africa is an ideological position from the western countries against Africa’s oil and gas discoveries.

“Africans are asking themselves why should we pay the price and punishment for western countries that have taken our resources, have invested and developed their economies, and now that it is our time, you tell us that we cannot because it is going to hurt the environment. When you were doing it, didn’t you think it was going to hurt the environment?” asked Ayuk.

Modestus Martin Lumato, Director General Energy and Water Utilities Regulatory Authority (EWURA), who recently visited Uganda, told IPS that 70% of Tanzania’s power generation is from natural gas and that abandoning it that fast would negatively impact the country.

“Sixty of our industries are powered by natural gas. In 2010 we discovered a huge deposit of natural gas in the deep sea; Tanzania is looking forward to exporting it. We expect oil and gas companies to invest over $30 billion in a project planned to produce 10 million tons per annum,” said Lumato.

Tanzania’s natural gas reserves are said to be equivalent to US$150 billion- or 6-times Tanzania’s current GDP.

COP 27 Africa to Talk Tough

A number of meetings have been held in Africa in preparation for the 27th UN Climate Change Conference of Parties (COP27) will be held in Egypt from November 7 to 18, 2022.

In mid-July, a technical committee of the African Union adopted “The African Common Position on Energy Access and Just Transition”. It stipulates that Africa will continue to deploy all forms of its abundant energy resources, including non-renewable and renewable, to address the energy crisis in the continent.

This position was discussed at the 4th Africa Climate talks at the University Eduardo Mondlane in Maputo, Mozambique, as well as African Climate Week in Togo.

Linus Mafor, a Senior Environmental Affairs Officer leading work on energy, infrastructure, and climate change at the African Climate Policy, said the Africa position was aimed at attaining sustainable energy for Africa.

He told IPS that Africa accounts for 17% of the global population and contributes to less than 4% of emissions, and it is the least energized region in the world.

“Africa is home to 78% of people who don’t have electricity; at the same time, it needs to industrialize, it needs to close the development gap to meet the SDG. So there should be a win-win situation. Let Africa use its natural gas as a transition fuel to renewable energy,” said Mafor.

According to Mafor, energy poverty is holding Africa from development. “Africa has got a rich source of energy, whether fossils or renewables. The demand is there, but the supply is not there; we can’t progress on SDGs or Africa Union Agenda 2063 if there is a huge energy access problem that is not addressed,” he said

The African Union, through UN Economic Commission for Africa (UNECA), has indicated that over the past ten years, less than two percent of the public clean energy investment globally went to Africa.

That finding was buttressed by the International Energy Agency’s  Cost of Capital Dashboard launched this month. It observed that emerging and developing economies, excluding China, account for less than one-fifth of global investment in clean energy.

One of the key barriers, according to IEA, is a high cost of capital, reflecting some real and perceived risks about investment in these economies

The COP26 in Glasgow noted with regret that developed country parties had not met the $100 billion goal annually. At COP27 in Sharm El-Sheikh, Egypt, the African Group wants developed country parties to agree to honor the $100 billion in climate finance promise.

The Special Representative of COP27, President-Designate Wael Aboulmagd, has indicated the developed countries have fallen short of delivering the $100 billion.

“It has never been delivered … But what people don’t talk about is if we had the $100 billion, would we be much better off? The $100 is an arbitrary figure that was put out of thin air that has no reality on the ground,” observed Aboulmagd.

“We as responsible global citizens said we will come along on the understanding that appropriate funding will be there. So this trust has been broken by failure to deliver year, after year,” said Aboulmagd.

According to Aboulmagd, at present, only 2% of renewable energy investment from the private sector goes to Africa.

“With more than 600 million in Africa lacking access to basic electricity, universal access to energy is a priority,” he said.

Back in Uganda and Tanzania, Ayuk told IPS that citizens like Zephaniah and Mayanja, and Awadh should be worried about campaigns trying to block projects like Lake Albert Development and EACOP.

“They should be worried because there is a very strong movement saying the money should not come into African oil and gas. I think we need to rally African financing for projects.”

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

View of the port of Pecém, in the state of Ceará in northeastern Brazil, with its container yard and the bridge leading to the docks where the ships dock, in the background. Minerals, oil and gas, steel, cement and wind blades are some of the products imported or exported through what is the closest Brazilian port to Europe. CREDIT: Mario Osava/IPS

By Mario Osava
FORTALEZA, Brazil , Sep 15 2022 (IPS)

Brazil could become a world leader in the production of green hydrogen, and the northeastern state of Ceará has anticipated this future role by making the port of Pecém, with its export processing zone, a hub for this energy source.

The government of Ceará has already signed 22 memorandums of understanding with companies interested in participating in the so-called “green hydrogen hub,” which promises to attract a flood of investment to the Pecém Industrial and Port Complex.

“If 30 to 50 percent of these projects are effectively implemented, it will be a success and will transform the economy of Ceará,” predicted engineer and administrator Francisco Maia Júnior, secretary of Economic Development and Labor (Sedet) in the government of this state in Brazil’s Northeast region.

The lever will be demand from “countries lacking clean energy,” especially the European Union, pressured by its climate targets and now by reduced supplies of Russian oil and gas, in reaction to Western economic sanctions on Russia for its invasion of Ukraine.

Ceará has special advantages because of its huge wind energy potential, both onshore and offshore, in addition to abundant solar energy.

Hydrogen is produced as a fuel through the process of electrolysis, which consumes a large amount of electricity, and in order for it to be green, the electricity generation must be clean.

The state also has Pecém, a port built in 1995 with an industrial zone and an export zone, which is the closest to Europe of all of Brazil’s Atlantic ports.

Water, the key input from which the hydrogen in oxygen is broken down, will be reused treated wastewater from the metropolitan region of Fortaleza, capital of Ceará, 55 kilometers from the port. “It is cheaper than desalinating seawater,” Maia told IPS in his office at the regional government headquarters.

Fortaleza has the first large-scale desalination plant in Brazil, which is the source of 12 percent of the water consumed in this city of 2.7 million people.

Francisco Maia Júnior, Secretary of Economic Development and Labor of the Ceará state government, sits in his office in Fortaleza, the state capital. He believes that demand from the European Union will fuel the production of green hydrogen in Pecém, an industrial and port complex in this northeastern state of Brazil, which has great clean energy potential to produce it. CREDIT: Sedet Communication

Wind and solar potential

“Ceará is extremely privileged in renewable energies,” electrical engineer Jurandir Picanço Júnior, an experienced energy consultant for the Federation of Industries of Ceará (Fiec) and former president of the state-owned Ceará Energy Company, which was later privatized and acquired by Enel, the Italian electricity consortium, told IPS.

Wind and solar generation potential in the state was double the electricity supply in 2018, according to the Wind and Solar Atlas of Ceará, prepared in 2019 by Fiec together with the governmental Ceará Development Agency and the Brazilian Micro and Small Business Support Service.

Moreover, the two sources complement each other, with wind power growing at night and dropping in the hours around midday, exactly when solar power is most productive, said Picanço at Fiec headquarters, showing superimposed graphs of the daily generation of both sources.

The Northeast is the Brazilian region where wind power plants have multiplied the most, and their supply sometimes exceeds regional consumption. The local winds “are uniform, they do not blow in gusts” that affect other areas in the world where they can be stronger, said Maia. They are also “unidirectional,” said Picanço.

“The International Renewable Energy Agency (Irena) has recognized the Northeast as the most competitive region for green hydrogen,” said Picanço, forecasting Brazil’s leadership in production of the fuel by 2050. “Brazil is still hesitating in this area, but Ceará is not,” he said.

Duna Uribe is commercial director of the Industrial and Port Complex of Pecém, in northeastern Brazil. She studied in the Netherlands and negotiated the participation of the port of Rotterdam as a partner in Pecém, with 30 percent of the capital. CREDIT: Mario Osava/IPS

Having Pecém, a port through which 22 million tons a year pass, and its neighboring special economic zone (SEZ), with benefits such as tax reductions, enhances the competitiveness of Brazil’s hydrogen.

The port will have structures for storing hydrogen in the form of ammonia, which requires very low temperatures, with companies specialized in its transport and electrical installations with plugs for refrigerated containers, all factors that save investments, said Duna Uribe, commercial director of the Pecém Complex.

Link with Rotterdam

In addition, Rotterdam in the Netherlands, Europe’s largest port, has been a partner in Pecém, a state-owned company of Ceará, since 2018, with 30 percent of the shares. That brings credibility and attracts investments to the Brazilian port, Maia said.

This partnership is due in particular to Uribe, a young administrator with a master’s degree in Maritime Economics and Logistics from Erasmus University in the Netherlands, who worked at the Port of Rotterdam.

The complex currently generates about 55,000 direct and indirect jobs, 7,000 of which are in the port, where some 3,000 people work directly in port activities and in companies that operate there.

These wind blades were manufactured in the industrial zone of the Pecém Complex, in northeastern Brazil. Local production of green hydrogen will require a great deal of electricity to be generated by wind and solar plants. CREDIT: Mario Osava/IPS

Pecém was born in 1995 with an initial focus on maritime transportation and two basic projects: a private steel industry to be installed in the SEZ and a state-owned oil refinery, which did not work out.

But the complex has always had an energy vocation, with four thermoelectric power plants, two coal-fired and two natural gas-fired, as well as a wind blade factory and two cement plants.

Social effects

“The port was good because it gave jobs to many people here who used to grow beans, sugarcane, bananas, and today they no longer have land to farm,” Zefinha Bezerra de Souza, 76, who has lived in the town of Pecém since 1961, told IPS.

One of her sons is still fishing. The port did not affect fishing, which is done far out at sea, she said.

One of the first to start working at the port was Terezinha Ferreira da Silva, 54. She started working for the Andrade Gutierrez construction company in 1997, in charge of the port’s initial works, and was later hired by the Complex’s administrator, where she is in charge of receiving documents and is a telephone operator.

Zefinha Bezerra de Souza (right) recognizes the good jobs offered by the Pecém Industrial and Port Complex for the residents of the small town of Pecém. They have stopped growing beans and sugarcane because the land has become more expensive, but the fishermen continue to fish, like her son, married to Marcia da Silva, seated to her left. CREDIT: Mario Osava/IPS

“I was earning very well, I was able to build my house” in the town of Pecém, she said. The town, a few kilometers from the port, had 2,700 inhabitants according to the official 2010 census and twice as many people living in the surrounding rural area.

The “hydrogen hub” will start to become a reality in December, when the private company Energias de Portugal, from that European country, inaugurates a pilot hydrogen plant in the SEZ.

The wealth generated by the hub will initially be concentrated in Pecém, but will then radiate throughout the Northeast, because it will require numerous wind and solar energy plants to be installed in the region’s interior, Uribe told IPS in Fortaleza.

The installation of offshore wind farms is planned, but in the future. This activity has not yet been regulated and there will be a need for power transmission lines and training of technicians, she explained.

Brazil could lead in the production of green hydrogen in a few decades, due to the possibility of generating high volumes of wind and solar energy at low cost and because it has the port of Pecém, with the best conditions for exporting to Europe, according to Jurandir Picanço, energy consultant for the Federation of Industries of Ceará, the northeastern state of the country where it is located. CREDIT: Mario Osava/IPS

Hydrogen culture

Adaptations in local education, with changes at the university, are picking up speed. Since 2018, the state-owned Federal University of Ceará has had a Technological Park (Partec).

A hotel that was built on the university campus to host fans for the 2014 World Cup has been transformed from a white elephant into a green hydrogen research center, said Fernando Nunes, director-president of Partec.

Encouraging practical research and the emergence of new technology companies is one of its tasks, which are gaining new horizons with hydrogen.

It is necessary to train technicians even in the interior, because in the future hydrogen, initially intended for export, will be disseminated in the domestic market, “with mini-plants, when the cost comes down to reasonable levels,” Nunes told IPS.

“Energy will be the redemption of the Northeast, especially Ceará, where we already generate more electricity than we consume,” he said.

The promotion of hydrogen in Ceará is being carried out in a unique way, by a Working Group made up of the state government, represented by Sedet and the Secretariat of Environment, the Federation of Industries, the Federal University and the Pecém Complex.

María del Carmen Aguirre, 52, stands outside her home and pizza business in El Zonte, on the Pacific coast of El Salvador. Her daughters send her remittances from the United States, but they use traditional systems and not the bitcoin electronic wallet, after this country became the first to make bitcoins legal tender on Sept. 7, 2021. CREDIT: Edgardo Ayala/IPS

By Edgardo Ayala
SAN SALVADOR, Sep 7 2022 (IPS)

A year after Salvadoran President Nayib Bukele decided to make El Salvador the first country where bitcoin is legal tender, the experiment has so far failed, as few of the original plan’s objectives have been achieved.

This result was foreseeable since Sept. 7, 2021, when Bukele’s government decided, out of the blue and without any precedent, to make bitcoin legal tender through a law approved by the legislature, controlled by members of the ruling party, Nuevas Ideas.

The aims of that decision were never explained in detail in an official plan, but were basically set out by Bukele, in power since 2019, through his tweets, as well as by officials who merely repeated what the president, given to governing with an authoritarian style, in which he is the only authorized voice for almost everything, has said."In the end, the majority of the population is not using either the government e-wallet or bitcoins in general.” -- Tatiana Marroquín

“Unfortunately there is no formal document or official information from the government in which the specific objectives of the measure have been laid out,” economist Tatiana Marroquín told IPS.

But judging by the president’s announcements, and by communications between the government and the International Monetary Fund (IMF), which requested in January 2022 that the measure be annulled, several aims can be highlighted, such as boosting financial inclusion and tourism and improving the country’s “brand”, said Marroquín.

Disenchantment with the Chivo Wallet

The government claimed that bitcoin as legal tender would reduce the gap of unbanked people, which is around 70 percent of the population.

That segment would begin to carry out digital financial transactions with several clicks from their cell phones, according to the government.

However, because much of the information on bitcoin transactions has been classified by the authorities, it is unknown, for example, what percentage of the population is still actively using the Chivo Wallet, the digital wallet created by the government, and in what amounts.

Chivo is basically slang for “cool” in El Salvador.

It is known that at the beginning of the cryptocurrency’s implementation, around four million people downloaded the application, but basically they did so in order to collect a 30 dollar bonus granted by the government to promote the use of bitcoins.

But by this point it is clear that very few people are still using the application, judging by what you hear and see in the towns and cities of this Central American country of 6.7 million people.

“In the end, the majority of the population is not using either the government e-wallet or bitcoins in general,” Marroquin said.

Some businesses use them to receive payments, but there are very few transactions, analyst Ricardo Chavarría, director of Renta Asset Management, a company that manages investment funds in the international market, told IPS.

Nor has the government managed to convince Salvadorans living abroad to use the app to send family remittances to El Salvador, one of its main aims when it dove headfirst into bitcoins.

Each year, the country receives around seven billion dollars in remittances, representing 26 percent of GDP.

In August 2021, a month before the approval of the so-called Bitcoin Law, Bukele said in a tweet that Salvadorans pay around 400 million dollars in commissions to send money to their families in El Salvador.

That amount of money would be saved by sending it through the Chivo Wallet.

One of the Chivo ATMs scattered throughout El Salvador, in an attempt by the government to make it easier for the public to make transactions in bitcoin, the cryptocurrency that is legal tender in El Salvador, but which very few are using a year after its implementation. CREDIT: Edgardo Ayala/IPS

Not even the diaspora trusts the cryptocurrency

However, according to official figures, only 1.5 percent of remittances were sent through e-wallets in the first quarter of 2022, a percentage far below what the government expected.

This was probably influenced by the high volatility of cryptoassets such as bitcoin, which is currently going through a crisis in its value, dubbed as a crypto winter.

Bitcoin’s price plunged to 19,813 dollars at the close on Sept. 5, well below last year’s peak, when it surpassed the 60,000 dollar mark.

And the Salvadoran population abroad, especially in the United States, where more than three million live, is reluctant to bet on something so volatile and, therefore, risky.

“People are extremely careful, despite the political capital of the president (Bukele), the same people over there (Salvadorans in the United States) do not risk their money,” said Chavarría.

That is the case of María del Carmen Aguirre, a 52-year-old entrepreneur who runs a small pizza business in El Zonte, a coastal community on El Salvador’s Pacific coast, some 50 kilometers southeast of San Salvador, part of the municipality of Chiltiupán, in the central department of La Libertad.

Aguirre told IPS that she regularly receives remittances from her two daughters who live in the United States, in San Francisco, California, but neither of them send the money through Chivo Wallet or any other similar platform.

“They send it only through the bank. It seems that they are quite afraid. ‘What happens if we send 200 dollars and at that moment the price of bitcoin goes down?’ they say to me,” said Aguirre, in her pizzeria.

El Zonte is a beach area known for its surfing and because an unusual community effort to use the cryptocurrency was launched there, about two years before the government decided to try bitcoins.

This initiative was promoted thanks to a donor, who remains anonymous, who gave money to carry out works in the town, but on the condition that those who worked on them would be paid in bitcoins and not in dollars, the legal tender in El Salvador since 2001.

That still raises suspicions: why would anyone be interested in promoting the crypto-asset in a poor coastal town, with dirt roads and modest shacks, although there are also some luxury hotels, hostels and restaurants.

During the COVID-19 pandemic, families in El Zonte received, on several occasions, 30-dollar vouchers from the mystery donor to use for bitcoin transactions.

“They gave us the bonus three or four times so we could go to the stores that already handled bitcoin,” Aguirre said.

Chavarría said the cryptocurrency is probably at the end of the so-called crypto winter, and he expects it to rise again in the future.

“For me, in a medium to long term horizon it is going to recover and it is going to win out,” he argued.

A street corner in the town of El Zonte, on the Pacific coast of El Salvador, which became the place where a project to promote the use of bitcoins in the country started, before the government of Nayib Bukele gave the cryptocurrency legal status in September 2021. Most businesses in this town accept them as a form of payment, but in the rest of the country the use of bitcoins is marginal. CREDIT: Edgardo Ayala/IPS

Not just gangs

One thing that Marroquín the economist and financial analyst Chavarría agreed on is that, with the passage of the Bitcoin Law, El Salvador made the global headlines about something other than the recurring issue of gang violence, which used to be the only issue of interest to the international press.

In this sense, it could be argued that the country’s image improved somewhat on the world news agenda.

“The fact that El Salvador is on the news map and that it appears in Bloomberg, in The New York Times, in Spain’s El País, when the only topic before was the gangs, is good news for me as a Salvadoran,” said Chavarría.

Marroquín concurred that “El Salvador is undoubtedly no longer known as it used to be solely for violence.”

She added that the adoption of the bitcoin has also bolstered tourism in the country by attracting a segment of visitors interested in the cryptocurrency, although it remains to be seen whether this improvement will have an impact on poor communities near tourist spots.

The bitcoin symbol can be seen everywhere in El Zonte, a coastal community in southern El Salvador, such as on this 1970s Volkswagen van or ‘furgoneta’, called the Bitcoineta. The implementation of the cryptocurrency in this country has not gone well and so far has been a setback for President Nayib Bukele, although the outlook could change if the price of the cryptoasset rallies. CREDIT: Edgardo Ayala/IPS

A cloak of secrecy

The government has been harshly criticized for the secrecy with which it has handled not only the adoption of the bitcoin but also other important issues about which the public has demanded information, since they have involved the use of public funds for which the Bukele administration has not been held accountable.

When it has been made available, Information has arrived in dribs and drabs.

It is known that the government has purchased 2,381 bitcoins, on which it has spent 106.04 million dollars. But when related investments are factored in, such as the ATMs placed at various points around the country, the total investment exceeds 300 million dollars.

“There is a big black cloak surrounding the government’s use of public funds,” Marroquín said.

A partial view of the city of Punto Fijo, with the Cardón refinery in the background, on the Paraguaná peninsula, projected as a special economic zone overlooking the Caribbean in northwest Venezuela. CREDIT: Megaconstrucciones

By Humberto Márquez
CARACAS, Sep 3 2022 (IPS)

Venezuela is preparing to replicate the experience of Special Economic Zones (SEZs), a mechanism with which more than 60 countries have tried to draw investment and accelerate economic growth, while under its avowedly socialist government a “silent neoliberalism” is gaining ground.

The aim of the SEZs is “to provide special conditions to gain the economic confidence of investors from all over the world, and productive development to put an end once and for all to oil rentism,” said President Nicolás Maduro when he promulgated the Organic Law of Special Economic Zones on Jul. 20.

The SEZs, “90 percent of which are in the global developing South, are a catalyst for economic restructuring processes and go hand in hand with the expansion of the neoliberal economy,” sociologist Emiliano Terán, a researcher with the non-governmental Venezuelan Observatory of Political Ecology, told IPS.

According to the United Nations Conference on Trade and Development (Unctad), there were 5,383 SEZs in the world in 2019 and another 508 under construction, of which 4,772 were in developing countries – 2,543 in China alone and 737 in Southeast Asia.

In Latin America and the Caribbean there were 486 – 73 in the Dominican Republic, some 150 in Central America, seven in Mexico and 39 in Colombia.

SEZs are mainly commercial, such as free ports or free trade zones, where import quotas, tariffs, customs or sales taxes are eliminated; industrial, with an emphasis on improving infrastructure available to companies; urban or mining ventures; or export processing.

Their main characteristic is that, in order to stimulate investment, especially foreign investment, there are more flexible regulations on taxes, investment requirements, employment, paperwork and procedures, access to resources and inputs, export quotas and capital repatriation.

One of the camping areas improvised by tour operators on La Tortuga, an island with no permanent population where tourist developments are being planned that are triggering environmentalist alarms, as they may severely affect the still almost pristine ecosystem of the island and its surrounding Caribbean waters. CREDIT: Jorge Muñoz/Aleteia

An eye on the environment

In Venezuela, the first five zones decreed are the arid Paraguaná Peninsula, in the northwest; Margarita Island, in the southeastern Caribbean; La Guaira and Puerto Cabello, which are the largest ports, along the central portion of the Caribbean coast; and the remote La Tortuga Island, some 200 kilometers northeast of Caracas.

Paraguaná (an area of 3,400 square kilometers) is home to a large oil refining complex, and Margarita Island (1,020 square kilometers) has for decades been a sales tax-free zone and a tourist mecca for Venezuela’s middle class.

Puerto Cabello and La Guaira are essentially ports for imports to the populated north-central part of the country, whose main exports, oil and metals, are shipped from docks in the production areas in the east and west.

Hotel complexes, airports, marinas and golf courses are being planned for La Tortuga, which covers 156 square kilometers and has no permanent population. Environmental groups warn that its waters, reefs and the island itself are home to five species of turtles, 73 species of birds and dozens of species of fish and cetaceans.

Sociologist Emiliano Terán (R) with economists Luis Crespo (C) and Carlos Lazo (L) take part in a forum at the Central University of Venezuela critical of the announced special economic zones. CREDIT: Humberto Márquez/IPS

Limited economy

“The environmental issue is a concern, but it is hard to believe that the government has the resources or the investors for the number of hotels planned for La Tortuga,” economist Luis Oliveros, a professor at the Metropolitan and Central Universities of Venezuela, told IPS.

The decreed Venezuelan SEZs “seem more like announcements than realities, and although we like the government to think of growth and development hand in hand with private investment, much more is needed. It has yet to be clarified what exactly the government is pursuing with these zones,” Oliveros said.

In Venezuela “creating SEZs has limitations, such as the sanctions (imposed by the United States and the European Union) and the need to generate macroeconomic stability and legal certainty, which are pending issues,” he added.

After seven years of sharp decline – and three years of hyperinflation – Venezuela’s annual gross domestic product, which exceeded 300 billion dollars a decade ago, now stands between 50 and 60 billion dollars, according to economists.

Oil production, the main lever of the economy and source of tax revenues, has shrunk and is starved of new investments, while the State desperately seeks income by exporting crude oil at a discount or selling gold that is extracted at the cost of great environmental damage in the southeast of the country.

Attracting investment may be an uphill struggle for SEZs that have still not been fully mapped out, considering that, for example, major companies have not knocked on the door to raise oil production – 600,000 barrels per day when a decade ago it was three million – despite the favorable signals sent by the United States.

Since March, informal contacts between Washington and Caracas, prompted by the impact of the war in Ukraine on the world energy market, have explored, without success so far, easing sanctions and other measures to bring Venezuela back to the U.S. oil market with new investments.

Juan Griego Bay in the north of Margarita Island, already half a century old as a sales tax-free zone and tourist mecca for Venezuela’s middle class, is now one of the country’s five special economic zones. CREDIT: Mipci

Neoliberal plan

In the southeast of the country, an area rich in gold, iron, diamonds, coltan and other minerals, the 112,000 square kilometer Orinoco Mining Arc (larger than Bulgaria, Cuba or Portugal) was decreed in 2016 as a “strategic development zone”, and its control and management was handed over to the armed forces.

The Mining Arc “has been a precedent for a new model promoted by the State to attract investments, but with depredation of the environment and restriction of wages and workers’ rights,” warned Luis Crespo, professor of Economics at the Central University of Venezuela, during a forum at that university.

“The special economic zones are part of a silent neoliberal adjustment plan driven forward by the government of President Maduro,” said Crespo.

The Venezuelan SEZ law – enacted by the legislature, which has been boycotted by most of the political opposition – states that its purpose is to develop a new production model, promote domestic and foreign economic activity, and diversify and increase exports.

It also aims to promote innovation, industry and technology transfer, create jobs and “ensure the environmental sustainability of production processes.”

The terminology about socialism or transition to socialism, frequent in the political discourse of the government and the ruling United Socialist Party, is absent from the legislation of the SEZs and from the repeated calls for private capital.

“The example of China is being followed, as it is by other countries, in using the SEZs as a showcase for heterodox forms of capital accumulation, in a process of progressive neoliberalization of the economy, as the oil model of production and distribution of wealth is being exhausted,” Terán said.

He added that “the SEZs cannot be seen only in terms of macroeconomic indicators,” as they become “zones of social and environmental sacrifice, with a new political geography of dispossession, and with the cheapening of labor, especially that of women workers.”

According to UNCTAD, although there are differences in SEZs from one country to another and within countries, their common features include having a clearly defined geographic area, a regulatory regime that is distinct from the rest of the economy, and special infrastructure support for the development of their activities.

A view of the border crossing between Colombia and Venezuela over the Simón Bolívar Bridge (in southwest Venezuela and northeast Colombia), when there was free transit and intense activity before the border was closed and relations between the two countries broke down. Now Caracas proposes to create a binational special economic zone in the area. CREDIT: Humberto Márquez/IPS

More politics

Venezuela’s SEZs will be guided by a council to be freely appointed by the president, each will have a single authority to be named by the president, and the decree establishing one of the zones must be considered by the legislature within 10 working days or it will be approved, without discussion.

Areas such as the SEZs, the Mining Arc or special military zones in practice modify the political-administrative division of the country, which only in theory is a federal republic with 23 states plus a capital district.

In another political move, on Aug. 23 Maduro publicly proposed to his new Colombian counterpart, leftwing President Gustavo Petro, who took office on Aug. 7, the creation of a special binational economic zone between southwestern Venezuela and northeastern Colombia.

“We are going to propose to President Petro the construction of a large economic, commercial and productive zone between the department of Norte de Santander (Colombia) and the state of Táchira (Venezuela),” Maduro said.

Diplomatic, political, commercial and transit relations between the neighboring countries have been severed since February 2019.

In Táchira, business spokespersons have expressed their support for this Andean state of 11,000 square kilometers to obtain special regimes that favor trade with the neighboring country, and their peers in Colombia are betting on a recovery of bilateral trade, which prospered until the first decade of this century.

Terán described the projected creation of the SEZs as a possible “new pact of elites in Venezuela,” after more than 20 years of acute political confrontation, but warned that “there is an alternative, because although fragmented, dispersed and with a new look, protests against these pacts have never ceased.”

As we approach this year’s Transforming Education Summit, global leaders can and must prioritize expertise and mobilize political will to support efforts to ensure inclusive and quality education for all, especially girls. This is at the heart of Sustainable Development Goal 4 in the 2030 Agenda for Sustainable Development, as well as the commitments made in the Charlevoix Declaration and the G7 Declaration on Girls’ Education.

Helen Grant

Despite the progress made in recent decades, gender inequality between girls and boys, in all their diversity, is deepening. According to a recent United Nations report, the interlinked crises: of armed conflicts, climate change and COVID-19 are putting the 2030 Agenda in “grave danger, along with humanity’s very own survival.” These multiplying challenges are “creating spin-off impacts on food and nutrition, health, education, the environment, and peace and security, and affecting all the Sustainable Development Goals.”

The COVID-19 pandemic has deepened the global learning crisis. Approximately 147 million children missed over half of in-person learning in 2020 and 2021 and it is estimated that 50% of refugee girls in secondary school may not return, when their classrooms reopen after COVID-19, whilst 222 million girls were not able to be reached by remote learning during the pandemic.

Shocking new estimates published by Education Cannot Wait (ECW) indicate that 222 million school-aged children caught in crises globally are in urgent need of access to a quality education. These include 78.2 million who are out of school – a majority (54%) of whom are girls – and 119.6 million who are in school but not achieving minimum competencies in mathematics or reading.

Yasmine Sherif

Girls impacted by the horrors of war and displacement in places like the Democratic Republic of the Congo, Ethiopia, Mali, Nigeria, Pakistan, Somalia, South Sudan, Sudan, Ukraine and Yemen face even greater risks, such as gender-based violence, early child-marriage and unwanted pregnancies.

The banning of secondary girls’ education in Afghanistan is especially intolerable. In the past year, girls were estimated to be more than twice as likely to be out of school, and nearly twice as likely to be going to bed hungry compared to boys.

This is the global picture as we approach, Transforming Education Summit, and why it is such a critical moment for girls education around the world.

ECW’s Case for Investment

ECW’s new Case for Investment is our case for humanity. It speaks up for girls’ rights to a 12-year education everywhere, not least in contexts of humanitarian crisis. It is our collective responsibility to deliver on the promise of 222 Million Dreams and the Sustainable Development Goals.

According to ECW’s recent Annual Results Report, conflict, forced displacement, climate-induced disasters and the compounding effect of the COVID-19 pandemic fueled increased education in emergencies needs with funding appeals reaching US$2.9 billion in 2021, compared with US$1.4 billion in 2020. While 2021 saw a record-high US$645 million in education appeal funding – the overall funding gap spiked by 17%, from 60% in 2020 to 77% in 2021.

Financing for education has not aligned with the deepening and growing needs. The gap has only widened.

It is only by closing this gap that we protect girls, support gender equality and empower the next generation of female leaders, teachers, lawyers, doctors and nurses.

Investing in 50% of a country’s population, its girls, is the best investment we can make. For every dollar invested in girls’ education, we see $2.80 in return. And a World Bank study estimates that the “limited educational opportunities for girls, and barriers to completing 12 years of education, cost countries between $15 and $30 trillion in lost lifetime productivity and earnings.”

The United Kingdom is a leading donor to Education Cannot Wait, and its support has allowed Education Cannot Wait and its strategic partners to have reached close to 7 million children and adolescents since 2016. In 2021 alone, the Fund reached 3.7 million children across 32 countries and an additional 11.8 million through COVID-19 interventions. Of all children reached by ECW’s investments to date, over 48% are girls, and 92% of programmes demonstrated an improvement in gender parity.

The Transforming Education Summit, and this year’s UN General Assembly will be a critical moment to address these challenges, and to assess the efficiency, effectiveness, scalability, sustainability and overall return-on-investment of ongoing and new initiatives and works streams as we look to increase girls access to quality education.

Delivering on Our Promise

Hosted by Switzerland and Education Cannot Wait – and co-convened by Germany, Niger, Norway and South Sudan – ECW’s 2023 High-Level Financing Conference offers an opportunity for leaders to turn these commitments into action.

We urge people everywhere to show their support for #222MillionDreams and #Everygirleverywhere with posts on social, individual donations, letters to your elected officials and calls to actions through the broad group of strategic partners.

Now is our chance to deliver on our promise of universal, equitable education. Now is our chance to transform girls’ education to transform the world. Now is our chance to deliver with humanity and for humanity.

About the Authors

Helen Grant is a Member of UK Parliament and the United Kingdom’s Special Envoy for Girls’ Education, leading the UK’s efforts internationally to ensure all girls get 12 years of quality education. Prior to politics, Helen was a children and family lawyer for 23 years.

Yasmine Sherif is the Director of Education Cannot Wait (ECW), the United Nations global fund for education in emergencies and protracted crises. A lawyer specialized in International Humanitarian Law and Human Rights Law (LL.M), she has over 30 years of experience with the United Nations and international NGOs.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Asia and the Pacific is the most digitally divided region of the world, and South-East Asia is the most divided subregion. The Covid-19 pandemic detonated a “digital big bang” that spurred people, governments and businesses to become “digital by default;” a sea change that generated vast digital dividends. These benefits that have not been distributed equally, however. New development gaps have emerged as digital transformation reinforces a vicious cycle of socioeconomic inequalities, within and across countries.

Armida Salsiah Alisjahbana

Typically, those most comfortable with technological innovation are younger and better educated people who have grown up with the Internet as ”digital natives”. Older persons may be more distrustful, or slower to acquire the necessary skills or suffer declines in aptitude. But at any age, poor communities – especially those in rural areas – are most at risk as they may be unable to afford electricity or digital connections or lack the relevant skills, even if the necessary infrastructure and connectivity are there.

The most significant driver of digital transformation is business research and its development and adoption of frontier technologies. Another major component is e-government; the delivery of public information and services via the Internet or through other digital means. This has the potential for more efficient and inclusive operations; especially when linked to national digital ID systems. However, because e-government services often evolve in complex regulatory environments, providing appropriate levels of accessibility for older generations, the disabled, or those with limited education has become more challenging.

It is clear that digital technologies are enabling the delivery of previously unimagined services while enhancing productivity and optimizing resource use that helped reduce emissions of greenhouse gases and pollutants. These technologies also helped track and contain pandemic spread. Social networks are fostering and diversifying communications among people of all ages sharing common interests, irrespective of location. This helps them stay in touch, broaden their experiences, continue education or deepen subject knowledge. This provided a veritable lifeline that has continued as we enter the post-pandemic era.

At the same time, the risks have also proliferated. Social networks also created social ”echo chambers” and generated torrents of misinformation and hate speech. New cryptocurrencies have opened the way to speculative financial bubbles, while cybercrime increased alarmingly as it assumed prolific variations. In addition, digital gadgets and the Internet are thought to contribute to more than 2 per cent of the global carbon footprint. The manufacture of electronic hardware can also exhaust supplies of natural resources such as rare-earth elements and precious metals like cobalt and lithium.

Moreover, digital transformation has led to the creation of an immense amount of digital data which become an essential resource to understand digital transformation. However, it raises concerns about the ethical and responsible use of data for privacy protection. A common understanding among countries on the operationalization of such principles has yet to evolve.

The Asia-Pacific Digital Transformation Report 2022 highlights the importance of digital connectivity infrastructure as “meta-infrastructure.” 5G and other high-speed networks can make all other infrastructure – such as transport and power grid distribution – much smarter, optimizing resource use for sustainable development. To contribute to these needs, the Report recommends three pathways for action, which are not mutually exclusive and are aligned with the ESCAP Action Plan of the Asia-Pacific Information Superhighway initiative for 2022-2026.

The first pathway focuses on the supply side and provides relevant policy practices for the development of cost-effective network infrastructure. The second addresses the demand side and recommends capacity-building programmes and policies to promote uptake at scale, of new, more affordable and accessible digital products and services. The third involves improving systems and institutions that are related to collecting, aggregating and analysing data in a way that builds public trust and deepens policymakers’ understanding of the drivers of digital transformations.

Finally, in a world where digital data can flash around the globe in an instant, the report highlights the importance of regional and global cooperation. Only by working together can countries ensure that these technological breakthroughs will benefit everyone; their peoples, economies and societies, as well as for the natural environment, in our new “digital by default” normal.

Armida Salsiah Alisjahbana is an Under-Secretary-General of the United Nations and Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP)

IPS UN Bureau

Follow @IPSNewsUNBureau
  

By External Source
Aug 26 2022 (IPS-Partners)

The long and distant epoch of pre-history, dated to the time before the start of the Common Era, is conventionally divided into three periods: the Stone Age, the Bronze Age, and the Iron Age. Subsequently, in the era of written history, we generally have not relied upon specific metals or minerals to define our periods. Too many metals and minerals, harnessed by new production techniques and new labour patterns, have contributed to our immense capacity to generate large surpluses. There is the Age of Industry but not, for instance, the Age of Steel, the core metal of our period.

‘We grow out of iron’, wrote the Russian poet Aleksei Gastev in 1914. He watches the furnaces and the forges, the hammers and the machinery, and then:

Gazing upon them, I draw myself up straight.
Pouring into my veins is a new, iron blood,
And I begin to grow.
I myself am growing steel shoulders and infinitely strong hands.
I am merging with the iron edifice.
With my shoulders, I am pushing the rafters and the beams up to the roof.
My feet are grounded, but my head is higher than the building.
And while I am still choking from my inhuman efforts,
I am already crying out:
a word, comrades, a word!
The iron echo has heeded my words, the whole building
trembles with impatience.
I continue to rise upwards; I am on level with the pipes.
And there is no story here, there is no speech.
There is only the cry:
we will triumph!

The virus of deindustrialisation that beset North America and Europe in the 1970s created a field of scholarly literature on post-work and post-industrial society. These writings led to the curious assumption that the digital economy would be the primary motor of capital accumulation; there was marginal interest in the fact that even the digital economy needed infrastructure, including satellites and undersea cables as well as plants to generate electricity and gadgets to link to the digital highways. This digital economy is grounded in a range of metals and minerals – from copper to lithium. Old steel, tempered in large factories, however, continues to be the foundation of our society. This steel – a thousand times stronger than iron – is as ubiquitous in our world as plastic.

Visual Capitalist, 50 Years of Global Steel Production Visualised, 2021.

Over the past fifty years, steel production has tripled. The major steel producers are now China, Europe, India, Japan, Russia, and the United States. During the pandemic, steel production only fell by 1%, largely because internal demand in countries such as China and India kept the furnaces burning. While steel production in China decreased moderately due to concerns about overproduction, Indian steel factories have increased steel production over the course of the pandemic.

Many of these factories in India are in the public sector, built with state funds and administered by state and para-statal entities. Amongst these factories is Rashtriya Ispat Nigam Limited (RINL), a steel complex in Visakhapatanam in India’s south-eastern state of Andhra Pradesh. The factory, affectionately called Visakha Steel, was born out of a mass struggle led by the people of Andhra Pradesh that began in 1966 and lasted till the furnaces were lit in 1992. The factory complex was established at a time when the Indian state – under pressure from the Indian ruling class and the International Monetary Fund – began to liberalise the economy, including through the privatisation of state assets. The factory was born into a liberalised world with the government eager to scuttle its possibilities to sell it off to private capital in a wave of privatisation that could better be called piratisation.

The inspirational story of Visakha Steel is the subject of our dossier no. 55 (August 2022), The People’s Steel Plant and the Fight Against Privatisation in Visakhapatanam. The dossier describes the struggles of the people of Andhra Pradesh to force the government to build a factory, a ‘temple of modern India’, as India’s first Prime Minister Jawaharlal Nehru called them. Visakha Ukku, Andhrula Hakku, the youth and students chanted: ‘Visakha Steel is the Andhra people’s right’. In 1966, the struggle was met by terrible state violence that resulted in the death of thirty-two people and the arrests and torture of many, many more. Unable to crush the movement, which was shaped by the communists, and understanding the imperative of more steel for an India that desperately sought to transcend the problems of hunger and illiteracy, the government agreed to build the factory and spent Rs. 17 billion till the mid-1980s to start building the plant.

Since Visakha Steel emerged at a time when the religion of privatisation had become dominant, the Indian government sought on several occasions to scuttle its ability to survive in the public sector by preventing the steel factory from acquiring captive mines, building a captive port nearby in Gangavaram, building sufficient capacity in its steel melt shop (to process the crude iron into steel), and receiving adequate and timely government funding. The government instead tried to let a private company set up a steel melt shop that would use molten iron from Visakha Steel’s blast furnaces to produce processed steel which could be sold in the market at high profit margins – a move that the workers defeated. At no point did the government demonstrate its commitment to either the production of steel or to improving the living conditions of the steel factory workers and their families.

The workers, on the other hand, had their own ideas. Led by the Centre for Indian Trade Unions (CITU) and other unions, the workers fought to restructure government loans and convert them into state equity, to allot a captive iron ore mine for the plant, and to increase the capacity of the steel melt shop. As our dossier notes, the steel workers have been ‘strongly committed to the company’s growth as a technically efficient and financially viable plant, whether by fighting to expand the plant, gain captive mines, or resolve technical glitches and issues. Whenever a technical problem has arisen in the plant, be it with coke ovens, power plants, steel melt shop, or otherwise, the workers and trade unions have tirelessly conducted thorough study and analysis to come up with and implement adequate solutions’. What we have here is a government eager to cannibalise Visakha Steel and workers committed to production at ‘the people’s steel plant’.

Instead of setting up the Gangavaram Port in the public sector as initially envisaged, the government has given the port to the Adani Group – whose owner has intimate ties with Prime Minister Narendra Modi – which charges Visakha Steel substantial fees. It is important to note that this port was built on land that originally belonged to the steel plant. Further, while Visakha Steel pays property taxes in the city, Adani’s private port is exempt from paying taxes. At the same time, Modi’s government tried to deliver Visakha Steel’s land to the South Korean steel giant POSCO to set up its own rolling mills to produce special auto grade steel products using the steel from the Visakha plant. In a typical example of privatisation by stealth, the dossier explains, ‘Visakha Steel was being asked to handle the most complex, dangerous, and messy kinds of work – procuring ore, running coke ovens, oxygen plants, and various furnaces – while POSCO would take over the most lucrative part of the value chain’.

Nothing doing, said the workers. Drawing from the historic struggle that built the plant in the first place, the workers began a movement to save Visakha Steel. The tidal wave of this movement – which has received key support from the farmers’ struggle, unionised rural childcare workers, and the people of Andhra Pradesh – stayed the hand of the government. While the government dithered during the pandemic, it was the steel workers who ran their oxygen plants continuously to produce medical grade oxygen for the hospitals.

Not much is written about struggles such as this one, led by the brave steel workers who are mostly forgotten or, if remembered, then maligned. They stand beside the furnaces, rolling the steel out, tempering it, wanting to build better canals for the farmers, to build beams for schools and hospitals, and to build the infrastructure so that their communities can transcend the dilemmas of humanity. Our dossier is built through our interactions with the steel workers and their union, who told us how they see their past and how they understand their struggle. They also shared with us their photographs (as well as photographs taken by Kunchem Rajesh of the Andhra Pradesh-based newspaper Prajasakti), out of which our art department made the collages which illustrate the dossier (some of which are shared in this newsletter).

At their demonstrations, the workers sing, chant, and recite poems that tell them to get ready for battle ‘before the earth disappears under our feet, before the steel slips away from our hands’. If you try to privatise the factory, they sing, ‘Visakha city will turn into a steel furnace, North Andhra into a battlefield… We will defend our steel with our lives’.

Source: Tricontinental: Institute for Social Research.

The production floor of an apparel exporting factory in Bangladesh. Credit: ILO/Marcel Crozet

By Ngozi Okonjo-Iweala, Rebeca Grynspan and Pamela Coke-Hamilton
GENEVA, Aug 16 2022 (IPS)

We are in the toughest period the world economy has faced since the creation of the multilateral system more than three-quarters of a century ago. A quadruple shock of COVID, climate change, conflict and cost-of-living has undone years of hard-fought development gains.

As financial conditions tighten, even countries that had seemed on track to prosperity and stability now stare into the abyss of debt distress, fragility and uncertainty about the future.

Coordinated, multilateral action is necessary to tackle the crises we face. Both aid and trade have key roles to play in reversing the impacts of this quadruple shock and putting the world back on track to achieve the Sustainable Development Goals.

We head the three international agencies that comprise the Geneva trade hub – the World Trade Organization (WTO), UN Conference on Trade and Development (UNCTAD) and the International Trade Centre (ITC).

The WTO makes and monitors the rules for global trade. UNCTAD delivers research and consensus-building to guide governments. ITC helps small business go global, especially firms led by women and young entrepreneurs. We work together so that trade works better for development.

All three of us share a deep commitment to trade-led prosperity. All three of us understand that a world in crisis means no more business as usual. And all three of us want our organizations to “walk the talk” on making aid and trade deliver for real people.

To guide aid and trade towards a better world, policymakers need to pivot in three fundamental ways.

First, make trade greener. Global trade can play an important role in a transition to a low-carbon economy. Preliminary research at the WTO suggests that removing tariffs and regulatory trade barriers for a set of energy-related environmental goods would reduce global CO2 emissions by 0.6% in 2030 just from improved energy efficiency, with additional potential gains from innovation spillovers and as lower prices accelerate the shift towards renewable energy and less carbon-intensive products.

Second, make trade more inclusive. Promoting greater trade by small businesses and greater participation by women and youth make companies and countries more competitive, drives economic transformation and reduces poverty.

Yet ITC business surveys found that one only out of every five exporting companies is women-led. WTO data show that micro, small and medium-sized firms represent around 95 percent of all companies globally but only one-third of total exports.

Third, make trade more connected. In our networked world, the future of trade is through digital channels and platforms, especially for small businesses. During the pandemic, we saw how doing business online went from being useful to critical for survival. UNCTAD data shows that digitally delivered services reached almost two-thirds the level of global services exports.

These themes were discussed at the Global Review of Aid-for-Trade, which took place 27-29th July in Geneva.

The event took place one month after the WTO’s successful Twelfth Ministerial Conference, which put trade multilateralism back on track and delivered a landmark agreement on fisheries subsidies, and two months before the COP27 meeting in Egypt (November 6-18) that could determine the world’s chances to keep the 1.5C target alive.

The data shows promising signs that aid-for-trade is tilting towards greater sustainability, inclusivity and connectivity. OECD and WTO data reveal a record high of nearly US$50 billion in aid for trade disbursements in 2020, of which half were either climate or gender related, and one-third supported the digital economy.

Despite growing budgetary pressures at home, it is critically important to continue and increase these aid-for-trade flows.

Apart from a stronger thematic focus on sustainability, inclusivity and connectivity, maximizing the contribution of aid for trade to achieving the Sustainable Development Goals requires a resolute focus on the “where” and “how” of delivering development results.

This means a focus on those countries whose trade and development needs are highest – particularly Least Developed Countries and fragile/conflict-affected countries – and regional initiatives like African Continental Free Trade Area, to ensure they become stepping-stones to wider and more inclusive regional value chains and trade-led growth.

It means partnership across international organizations. The WTO, UNCTAD, and ITC already collaborate on initiatives like the Global Trade Helpdesk, which simplifies market research by bringing key trade and business information into a single portal, as well as on support to cotton-exporting countries in Africa.

Last but certainly not least, it means mobilizing public and private finance. The IFC estimates a worldwide US$300 billion financing gap for women, and the global trade finance gap has nearly doubled from an already-staggering $1.5 trillion. Without access to finance, firms cannot grow, diversify or formalize.

We want to end with a call to action. Creating a more sustainable, inclusive and connected future is the moon shot of our times. Aid, trade and multilateralism – working together – are part of the solution.

It is normal and understandable that governments act to shore up their own economies in troubled times. But we must act now to ensure that the world’s poorest and most vulnerable can still see a pathway to prosperity through global trade.

The joint opinion piece is authored by Ngozi Okonjo-Iweala, Director-General, World Trade Organization, Rebeca Grynspan, Secretary-General, UN Conference on Trade and Development, and Pamela Coke-Hamilton, Executive Director, International Trade Centre.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Students in a BRAC primary school decorate the classroom with their own artwork. Credit: BRAC, Bangladesh

By Jaideep Prabhu
CAMBRIDGE, UK, Aug 2 2022 (IPS)

The world needs tens of millions of new teachers by 2030, according to UNESCO – an order of magnitude that requires “frugal innovation.” I’ve studied frugal innovation for more than a decade, and it holds a vital key to this global challenge. A model created by BRAC in Bangladesh deserves special attention in this worldwide pursuit.

Frugal innovation is not innovation on the cheap. Rather it’s innovation that is designed from the outset to be affordable, scalable – and better performing than traditional models. That’s why it’s so important to achieving UN Sustainable Development Goal 4, which is to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

That goal requires that education be both universally available and able to meet quality standards. It must, therefore, be affordable, or it won’t be scalable globally.

I co-authored an early book on frugal innovation in emerging markets 10 years ago, titled Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth. It focuses on the private sector in emerging markets like India, China, and Bangladesh. Its thesis is that in such markets, innovation – the creation of new products and services – needs to be very different from innovation in the West, where it is synonymous with high technology, typically expensive and highly structured, and often elitist. In contrast, we argued that to reach large numbers of people on low incomes in informal economies of emerging markets, firms need products and services that are affordable and an approach that is frugal, flexible, and inclusive.

At that time, I was introduced for the first time to the founder of BRAC, Sir Fazle Hasan Abed, and many other inspiring people at BRAC. From them I learned that the ideas we had written about in 2012 had been discovered and perfected by BRAC over four decades, and not for private profit but for social impact instead.

When BRAC started its work in education in 1985, poverty was widespread in Bangladesh. Forty percent of Bangladesh’s primary-aged children were not in school, and only 30 percent went on to complete primary education.

At that time, like elsewhere in the world, delivering education at scale in Bangladesh prioritized developing new infrastructure: building schools and hiring credentialed teachers to meet the demand. But building new schools in every community was impossible, and highly trained teachers were scarce.

Many children could not arrange to travel the distance to school because it was too far or unsafe – or they were needed at home during harvests. Children in ethnic minority groups faced additional obstacles, as did those with disabilities. Most teachers were men, which made parents unwilling to send young girls to school.

The key to BRAC’s approach to providing education at scale was not new infrastructure, but a new mindset. Indeed, the hallmarks of the BRAC approach were more or less exactly those we had written about in our book Jugaad Innovation: it was all about being frugal, flexible and inclusive. It was all about lateral thinking and working backwards from a deep understanding of the problem as faced by the people in the communities being served. And it was all about empowering those communities to be part of the solution.

BRAC’s eventual solution was ingenious. Instead of requiring students to go to distant schools, with all the related burdens and costs, BRAC brought schools to the students.

Instead of building expensive school infrastructure, BRAC took already existing infrastructure. It stitched together an extensive system of rented one-room schools in almost every community.

Instead of taking urban trained teachers, it trained local women to teach grades one through five, with up to 30 children maximum per classroom, instead of 50 to 60. Training non-formal women teachers from within the communities made scaling possible.

The outcomes were impressive. Almost 100 percent of students completed fifth grade, and BRAC students consistently did better than public school students on government tests. At its peak, this network consisted of 64,000 schools, and it has graduated 14 million students, mostly at the pre-primary and primary levels.

That is frugal innovation at its best: affordable, scalable, and better. It is community-based and locally led.

It is transformational on many levels: the number of children educated; the number of girls educated; the number of communities with schools; the number of women trained as teachers; the pipeline of students prepared for ongoing education.

Making significant progress toward achieving SDG 4 will require that kind of frugal innovation. BRAC is pointing the way.

The author is the Jawaharlal Nehru Professor of Business and Enterprise at the Judge Business School at the University of Cambridge in England.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Colonial-style currency board arrangements have enabled continuing imperialist exploitation decades after the end of formal colonial rule. Such neo-colonial monetary systems persist despite modest reforms.

In 2019, Italian Deputy Prime Minister Luigi Di Maio accused France of using currency arrangements to “exploit” its former African colonies, “impoverishing Africa” and causing refugees to “leave and then die in the sea or arrive on our coasts”.

Anis Chowdhury

The ostensible intent of the ‘Franc of the French Colonies of Africa’ (FCFA) was to cushion its colonies from the drastic French franc (FF) devaluation required to peg its value to the US dollar, as agreed at Bretton Woods.

Then French finance minister René Pleven claimed, “In a show of her generosity and selflessness, metropolitan France, wishing not to impose on her faraway daughters the consequences of her own poverty, is setting different exchange rates for their currency”.

In December 1958, the CFA franc became the ‘Franc of the Communauté Financière Africaine’ (still FCFA). In 1960, President Charles de Gaulle made CFA membership a pre-condition for French decolonization in West and Central Africa.

The CFA recently involved 14 mainly Francophone sub-Saharan African countries belonging to two currency unions, both using the CFA franc (FCFA): the West African Economic and Monetary Union (UEMOA) and the Economic and Monetary Community of Central Africa (CEMAC).

UEMOA comprises Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo, while CEMAC includes Cameroon, the Central African Republic, Republic of Congo, Gabon, Equatorial Guinea and Chad.

Jomo Kwame Sundaram

First, France could pay for imports from CFA countries with its own currency, saving foreign exchange for other international obligations. This became especially advantageous when the FF was weak and unstable.

Second, the French Treasury often paid negative real interest rates for CFA reserves. Thus, CFA countries have been paying it to hold their foreign reserves! Investment income is then deployed as French aid to CFA countries in the form of loans to be repaid with interest!

But CFA countries themselves cannot use their own reserves as collateral to secure credit as these are held by the French Treasury. Thus, during the global financial crisis, they had to borrow, mainly from France, at commercial rates.

Third, by supplying FCFA at the fixed rate, seigniorage – the difference between the cost of issuing currency and its face value – has effectively accrued to France and, more recently, the European Central Bank.

For every euro so deposited, the FCFA equivalent is issued and made available to the depositing country. When France joined the euro in 1999, one euro fetched 6.55957 FFs, or 655.957 FCFA.

CFA economies have thus effectively ceded monetary sovereignty to the French Treasury. Unsurprisingly, France’s monetary control has served its own, rather than CFA members’ economic interests.

Fourth, French companies operating in the CFA have been able to freely repatriate funds without incurring any foreign exchange risk. Worse, when CFA countries have faced foreign exchange problems, France has made things worse!

CFA elites, French patrons
The CFA not only benefits France, but also elites in CFA countries. Their appetite for faux French lifestyles explains their preference for overvalued exchange rates.

The CFA also facilitates financial outflows, no matter how illicitly acquired, as long as they do not challenge the neo-colonial status quo. For decades, all manner of French governments have consistently backed these elites, typically supporting despotic rule.

When its interests in Africa have been threatened, France has unilaterally deployed combat troops and superior armaments, always insisting on its ‘legitimate’ right to do so.

France is alleged to be behind military coups and even assassinations of prominent personalities critical of its interests, policies and stratagems. On 13 January 1963, only two days after issuing its own currency, Togo President Sylvanus Olympio was killed in a coup.

In 1968, six years after withdrawing Mali from the CFA, its independence leader and first President, Modibo Keita was ousted in a coup after trying to develop its economy along more independent and progressive lines.

Plus ça change, plus c’est la même chose
When the CFA was first created in 1945, the colonies deposited 100% of their foreign exchange reserves in a special French Treasury ‘operating account’. This requirement was reduced to 65% from 1973 to 2005, and then to 50%, plus an additional 20% for daily foreign currency transactions or “financial liabilities”.

Thus, CFA states are still deprived of most of their foreign exchange earnings, retaining only 30%! Meanwhile, Banque de France holds 90% of CFA gold reserves, making it the world’s fourth largest holder of gold reserves.

The FCFA arrangement was supposed to end for UEMOA countries from 20 May 2020. While only six former French colonies in Central Africa formally remain in the CFA, the reform is less than meets the eye.

France remains UEMOA’s ‘financial guarantor’, appointing an ‘independent’ member to its central bank board. Meanwhile, the proposed West African ‘eco’ currency is still not yet in circulation, while the transfer of euro reserves from the French Treasury to the West African Central Bank has yet to happen.

After its creation, FCFA parity was set at 50 to one FF. On 12 January 1994, the FCFA was devalued by half, as demanded by the International Monetary Fund, with support from France. This followed problems due to commodity price slumps.

The devaluation shocked CFA economies as the FCFA’s value fell by half overnight! This pushed up prices of imported goods, including food, while increasing the FF’s purchasing power.

Meanwhile, eight FF devaluations between 1948 and 1986 against the US dollar and gold have also meant great losses to the value of CFA reserves. CFA countries have ostensibly benefitted from anchoring the FCFA to a supposedly stable FF. But in fact, the FF experienced a 70% cumulative devaluation over this period!

Less inflation, no development
CFA advocates also claim that pegging the West and Central African FCFA to the FF, and later the euro, has ensured less inflation than in other African countries. But CFA members “traded decreased inflation for fiscal restraint and limited macroeconomic options”.

The cost of lower inflation “has been slower per capita growth and diminished poverty reduction”. They have had lower growth, on average, than in non-CFA countries. Eleven of the 14 CFA member states are least developed countries at the bottom of UNDP’s Human Development Index.

The CFA has also limited credit for economic growth and industrialization. This has been seen in lower credit-GDP ratios of between 10% to 25% in CFA countries, against over 60% in other Sub-Saharan African countries. These lower ratios also reflect weak financial and banking sectors, unable to be effectively developmental.

The CFA has also not enhanced trade among members. After six decades, trade among CEMAC and UEMOA members averaged 4.7% and 12% of total trade respectively – much less than, say, ASEAN’s 23%. Low intra-CFA trade and pegged exchange rates have ensured persistent balance of payments imbalances.

The currency arrangement also encourages capital outflows. Aggregate net capital flight out of CFA countries during 1970-2010 averaged $83.5 billion, 117% of combined GDP! Unregulated capital transfers between CFA countries and France have enabled much more capital flight than elsewhere during 1970-2015.

No sovereignty, no development
Socialist Party President François Mitterrand was no less neo-colonial. He warned that without control of Africa, France would become irrelevant in the 21st century.

In January 2001, French President Jacques Chirac reputedly admitted, “While speaking of Africa, we must check our memory. We started draining the continent four and a half centuries ago with the slave trade. Next, we discovered their raw materials and seized them.

“Having deprived Africans of their wealth, we sent in our elites who destroyed their culture. Now, we are depriving them of their brains thanks to scholarships … [as] the most intelligent students do not go back to their countries … In the end, noticing that Africa is not in a good state … we are giving lectures”.

In 2008, Chirac reportedly noted, “We have to be honest and acknowledge that a big part of the money in our banks comes precisely from the exploitation of the African continent. Without Africa, France will slide down [to] the rank of a Third World power.”

Claiming to be from a different generation, President Emmanuel Macron promised to end such neo-colonial arrangements. Yet, at the 2017 G20 Summit, he patronizingly declared Africa’s problem “civilizational”.

Such neo-colonial condescension refuses to acknowledge France’s continued exploitation of its West and Central African ex-colonies. Clearly, CFA currency arrangements have limited their economic policy space and progress.

Colonial style exploitation has thus continued in Africa long after decolonization. Unsurprisingly, Chad President Idriss Deby declared, “we must have the courage to say there is a cord preventing development in Africa that must be severed”.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Sir Fazle Hasan Abed, the founder of BRAC and “one of the unsung heroes of modern times,” according to Nicholas Kristof of The New York Times, authorized his own biography before dying of brain cancer in 2019. Author Scott MacMillan wrote Hope Over Fate based on hundreds of hours of interviews with Abed and his friends, family and co-workers. Credit: courtesy of BRAC

By Scott MacMillan
Redding Conn, USA, Aug 1 2022 (IPS)

About seven years ago, I started working on a project with Sir Fazle Hasan Abed, the founder of BRAC. It was originally supposed to be a memoir: the story of Abed, the mild-mannered accountant who would rid the world of poverty, as told by the man himself. I was privileged to be Abed’s speechwriter for the last several years of his life, and I would sit for hours listening to stories from his remarkable life: of his boyhood in British India, his love life in London in the 1960s, his three marriages, and how, in 1972, with a few thousand pounds from the sale of his flat in Camden, he launched a small nonprofit organization to aid refugees, originally called the Bangladesh Rehabilitation Assistance Committee. Many people would go on to call BRAC, which Abed led until his death in 2019, the world’s most effective anti-poverty organization.

That seemed like a story worth telling in full, and after some coaxing, Abed gave me permission to begin ghostwriting his autobiography. He was an exceptionally private person, however, and cringed at anything with a whiff of self-promotion. “You have me pontificating!” he once scolded me after an early draft of one speech.

I was about halfway done with his memoir when he told me to stop. The story, as I had written it, did not feel right coming from him. He much preferred to let BRAC’s work speak for itself—which may explain why so few people outside his native Bangladesh knew who he was or the magnitude of what he had accomplished.

Abed eventually came around to the idea that his story needed to be told by someone, even if it would not ultimately be him. He asked that I use the material I had gathered to write the book myself, in my own words—which I did, even knowing that many of those words would fall short of the task. The book, Hope Over Fate: Fazle Hasan Abed and the Science of Ending Global Poverty, is released today by Rowman & Littlefield.

An accountant’s story

Abed told stories, but he was not a good storyteller in the typical sense. He did not sprinkle his speeches with anecdotes of the “ordinary” people he had met, as politicians sometimes do. He was an accountant, and for him, numbers told stories.

So here is the story he would tell of his native Bangladesh—no names or faces, just a chorus of statistics. At the moment of its independence in 1971, Bangladesh was the world’s second-poorest country, with a per capita GDP of less than $100, a nation of sixty-six million living on a patch of flood-prone land the size of Iowa. One in four children died before their fifth birthday. As late as 1990, the country still had one of the highest maternal mortality rates, at 574 per 100,000.

Sir Fazle Hasan Abed in his later years, visiting a BRAC school. Credit: courtesy of BRAC

In the 1990s, however, things began to change, rapidly and almost miraculously. Quality of life improved at a historically unprecedented rate. By 2013, under-five mortality had plummeted to just 40 per 1,000 live birthdays; maternal mortality had dropped similarly. These and other changes constituted “some of the biggest gains in the basic condition of people’s lives ever seen anywhere,” according to The Economist.

People standing up for themselves

What happened? Abed’s work had much to do with it. BRAC trained and mobilized people, giving them a sense of self-worth that many had never felt before. They began standing up for themselves against landlords, corrupt government officials, and imams opposed to women’s rights. Often, he found what people really needed was hope—a sense that, with a modicum of outside help, their fate could be in their own hands.

His methods were varied and novel. Incentive-based training gave health information to mothers so they could save their own children’s lives. Women took small loans from BRAC to buy cows and handlooms, the first time they had owned anything of substance. Since they had nowhere to sell the milk and fabric they produced, Abed built up the dairy and textile industries by launching enterprises that bought the women’s goods. These enterprises, owned by BRAC, turned out to be profitable, so he plowed the money back into the poverty programs. Abed also launched fifty thousand schools, plus a commercial bank and a university. BRAC now likely reaches more than one hundred million people in about a dozen countries in Africa and Asia. No other nonprofit or social enterprise has reached such scale.

Yet Abed was no ascetic, self-abnegating Gandhi. He left the office at a reasonable hour and enjoyed coming home to the comforts of domestic life, to the sound of family and the warm smell of spices from the kitchen. Twice a widower, he told me of his loneliness between his marriages, and how, despite his preoccupation with work, he found it hard to return to an empty house.

The science of hope

How, then, did he do it? Remarkably, Abed would sometimes say that BRAC had done relatively little to help Bangladesh rise from the ranks of one of the poorest nations on earth. It merely created the enabling conditions: it was the poor themselves, especially women, who worked tirelessly, once those conditions were in place, to change the conditions of their lives.

I suspect this is why he thought his own story did not deserve so much attention, especially compared to the millions of women who had long labored on the fringes of society, who would one day, in his words, “be their own actors in history, and write their own stories of triumph over adversity.”

So this is the biography of a man, yes, but it is also the biography of an idea—the idea that hope itself has the power to overcome poverty. Near the end of his life, Abed spoke of “the science of hope”—the study and practice of giving people a sense of control over their own lives. “For too long, people thought poverty was something ordained by a higher power, as immutable as the sun and the moon,” he wrote in 2018. His life’s mission was to put that myth to rest, which is why the story of Abed is the story of the triumph of hope over fate.

Scott MacMillan is the author of the Hope Over Fate: Fazle Hasan Abed and the Science of Ending Global Poverty (Rowman & Littlefield), from which this is adapted.
This excerpt is adapted by permission of the publisher. The book is available now from major retailers.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Credit: United Nations

By Antonio Guterres, Secretary-General of the United Nations
UNITED NATIONS, Jul 14 2022 (IPS)

Our world is in deep trouble – and so too are the Sustainable Development Goals (SDGs).

Time is running out. But there is still hope. Because we know what we need to do:

End the senseless, disastrous wars – now. Unleash a renewable energy revolution – now. Invest in people and build a new social contract – now.

And deliver a New Global Deal to rebalance power and financial resources and enable all developing countries to invest in the SDGs.

Let’s come together, starting today, with ambition, resolve and solidarity, to rescue the SDGs before it is too late.

We meet at a time of great uncertainty. The world faces cascading crises that are causing profound suffering today, and carry the seeds of dangerous inequality, instability and climate chaos tomorrow.

The ripple effects of Russia’s invasion of Ukraine have hit amid a fragile and uneven recovery from the COVID-19 pandemic, while the climate emergency is gathering pace.

Some countries are investing in recovery through a transition to renewable energy and sustainable development.

But others are unable to do so, because of deep-rooted structural challenges and inequalities, at global and national levels.

Some 94 countries, home to 1.6 billion people, face a perfect storm: dramatic increases in the price of food and energy, and a lack of access to finance.

And so there is a real risk of multiple famines this year. Next year could be even worse, if fertilizer shortages affect the harvests of staple crops, including rice.

The United Nations Global Crisis Response Group on Food, Energy and Finance has warned of the impacts of the current cost of living crisis and the future risks for next year.

Sixty per cent of workers today have lower real incomes than before the pandemic; developing countries are missing $1.2 trillion per year, just to fill the social protection gap; And sixty percent of developing economies are currently in, or at high risk of, debt distress.

Meanwhile, the number of people forced from their homes has risen to 100 million — the highest number since the creation of the United Nations.

The planet’s largest ecosystems – oceans and forests – are in danger. Biodiversity is declining at unprecedented rates.

Discrimination against women and girls continues in all sectors and all societies, while gender-based violence is at emergency levels. Attacks on women’s reproductive rights are reverberating around the world.

Implementing the Sustainable Development Goals will require $4.3 trillion USD per year — more money than ever before — because the international community is simply not keeping pace with the commitments it made;

In the face of these cascading crises, we are far from powerless. There is much we can do, and many concrete steps we can take, to turn things around.

I see four areas for immediate action.

First, recovery from the pandemic in every country.

We must ensure equitable global access to COVID-19 vaccines, therapies and tests. And now it is very important to have a serious effort to increase the number of countries that can produce vaccines, diagnostics, and other else technologies thinking about the future.

Governments must work together with the pharmaceutical industry and other stakeholders to share licenses and to provide technical and financial support to allow many other countries to produce vaccines and other medical important products.

Then we must redouble our efforts to make sure future outbreaks of disease are better managed by strengthening health systems and ensuring Universal Health Coverage.

Second, we need to tackle the food, energy and finance crisis.

Ukraine’s food production, and the food and fertilizer produced by Russia, must be brought back to world markets — despite the war.

We have been working hard on a plan to allow for the safe and secure exports of Ukrainian produced foods through the Black Sea and Russian foods and fertilizers to global markets.

I thank the governments involved for your continued cooperation.

But there can be no solution to today’s crises without a solution to the crisis of economic inequality in the developing world.

We need to make resources and fiscal space available to countries and communities, including Middle Income Countries, that have an even more limited financial toolbox than three years ago.

This requires global financial institutions to use all the instruments at their disposal, with flexibility and understanding.

Among other measures, they must consider raising access limits, re-channeling all unused Special Drawing Rights to countries in need, and reviving the Debt Service Suspension Initiative to provide immediate support to those in debt distress.

We should not forget that the majority of poor people do not live in the poorest countries; they live in Middle Income Countries.

If they don’t receive the support they need, the development prospects of heavily indebted Middle-Income Countries will be seriously compromised.

Looking ahead, we need a New Global Deal so that developing countries have a fair shot at building their own futures.

My report on Our Common Agenda calls for concerted efforts to rebalance power and resources through an operational debt relief and restructuring framework; lower borrowing costs for developing countries; and investment in long-term resilience over short-term profit.

The global financial system is failing the developing world.

Although since it was not designed to protect developing countries, perhaps it is more accurate to say the system is working as intended.

So, we need reform.

We need a system that works for the vulnerable, not just the powerful.

Third, we need to invest in people.

The pandemic has shown the devastating impacts of inequality within and between countries.

Time and again, it is the most vulnerable and marginalized who suffer most when crises hit.

It is time to prioritize investment in people; to build a new social contract, based on universal social protection; and to overhaul social support systems established in the aftermath of the Second World War.

Education is one critical example.

Any hope of solving the world’s challenges starts with education. But education today is racked by a crisis of equity, quality and relevance.

The Transforming Education Summit that I will convene in September is a platform for world leaders to recommit to education as a global public good; to chart a new vision for education systems fit for the future; and to mobilize support in order to move from vision to reality, especially in developing countries.

The Global Accelerator on Jobs and Social Protection for Just Transitions offers another critical entry point.

I urge all countries to make full use of this tool to reskill and retool their workforces for the economies of the future: powered by renewable energy and based on digital connectivity.

Fourth, we cannot delay ambitious climate action.

The battle to keep the 1.5 degree goal alive will be won or lost this decade.

While achieving this goal requires a reduction in global emissions of 45 percent below 2010 levels by 2030, current pledges would result in a 14 percent increase in emissions by that date.

This is collective suicide. We must change course.

Ending the global addiction to fossil fuels through a renewable energy revolution is priority number one.

I have been asking for no new coal plants and no more subsidies to fossil fuels because funding fossil fuels is delusional and funding renewable energy is rational.

Developed countries must make good on their $100 billion climate finance commitment to developing countries, starting this year.

Developing economies must have access to the resources and technology they need.

Half of all climate finance should go to adaptation. Everyone in climate- related high-risk areas should be covered by early warning systems within the next five years.

And we need to review access and eligibility frameworks for concessional finance, so that developing countries, including Middle Income Countries, can get the finance they need, when they need it.

The World Bank and the other international financial institutions must provide much more concessional funding, especially in relation to climate adaptation.

The High-level Political Forum is the place where the world comes together around solutions for sustainable development; for rebuilding differently and better; for achieving the SDGs.

We have the knowledge, the science and technologies and the financial resources to reverse the trajectories that have led us off course.

We have inspiring examples of transformative change.

In just over one year’s time, we will meet here for the 2023 SDG summit marking the halfway point between the adoption of the 2030 Agenda, and its target date.

Let’s do everything in our power to change course and build solid progress by then.

I wish you a successful meeting.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Excerpt: