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  • While Developing Nations Hang on to a Cliffs Edge, G20 & IMF Officials Repeat Empty Words at Their Annual Meetings

    While Developing Nations Hang on to a Cliffs Edge, G20 & IMF Officials Repeat Empty Words at Their Annual Meetings

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    Credit: IMF
    • Opinion by Bhumika Muchhala (new york)
    • Inter Press Service

    NEW YORK, Oct 26 (IPS) – Held in-person for the first time in three years, the annual meetings of the International Monetary Fund and World Bank last week in Washington, D.C. failed to offer solutions to the dozens of developing countries in debt distress or on the forewarned global recession instigated by monetary tightening.

    Meanwhile, austerity measures are reinforced through a repeated emphasis on fiscal tightening, underpinned by a monetarism upheld by the IMF and rich country central banks.

    The scenario of a dual tightening in both monetary and fiscal policy is only exacerbated by the absence of political will among creditors to cooperate in debt restructuring, bolstered by narratives of losing market access to financial flows.

    New loan programs are created by the IMF to boost concessional financing for food price shocks, climate transitions and liquidity shortfalls. However, these very loans create new debt and reinscribe the very austerity measures that worsen the challenges of inflation and climate.

    Within these asymmetries of power and access in the world economy, and the foreclosing of developmental policy tools for developing countries, what then is the fate of the vast majority of people and nations in the world?

    The IMF’s World Economic Outlook warned of an imminent recession amidst a shift of financial regime from cheap and easy money to an aggressive synchronization of global monetary tightening.

    “In short, the worst is yet to come, and for many people 2023 will feel like a recession,” said IMF Chief Economist Pierre-Olivier Gourinchas. Convening the world’s finance ministers, central bank governors, and financial market leaders, the IMF announced a slowdown in global growth by 2.7%, down from the 3.2% growth projected for this year.

    On the heels of a global pandemic followed by the war in Ukraine, the US Federal Reserve’s interest rate hikes, aimed toward domestic price stability, is creating a global push toward more expensive money.

    A stronger dollar, higher international and domestic interest rates, coupled with depreciating currencies and sell-offs in many developing country assets, is generating protracted economic and social pain across the globe.

    The spillover impacts are seen in soaring food and fuel prices, increases in dollar-denominated debt and imports costs, volatile commodity markets and debt distress intensifying into a 50-year record across the developing world.

    The UN’s 2022 Trade and Development Report warns that the most vulnerable countries and communities are being hit the hardest. Warnings of another ‘lost decade’ abound, in that the current interest rate hikes resemble those of 1979-82, which triggered debt crises in over 40 developing countries where ‘structural adjustment programs’ through IMF loans contributed to a decade of lost growth and development across the Global South.

    Inflation targeting consumes financial rule makers

    The tightrope global central banks are walking is acknowledged by IMF Managing Director, Kristalina Georgieva, who says, “Not tightening enough would cause inflation to become de-anchored and entrenched — which would require future interest rates to be much higher and more sustained, causing massive harm on growth and massive harm on people.

    On the other hand, tightening monetary policy too much and too fast — and doing so in a synchronized manner across countries — could push many economies into prolonged recession.”

    Meanwhile, the topline recommendation of the IMF’s Global Financial and Stability Report is that “central banks must act resolutely to bring inflation back to target.” Doing otherwise would risk credibility and market volatility, or in other words, create difficulties in market access to financial and investment flows and/or worsen borrowing terms.

    One of the central tenets of neoclassical economic consensus among global central banks is that of maintaining price stability through a low inflation target of 2%. Financial rulemakers have for decades deemed inflation a threat to economic growth by way of the specter of hyperinflation. However, empirical evidence points to the contrary.

    Collating data from 31 countries from 1961-94, World Bank chief economist Michael Bruno and William Easterly concluded that the inflation does not lead to lower growth, even when the significant oil price increase of 1974-75 is included.

    The US Federal Reserve’s own historical archives demonstrate that the so-called ‘Great Inflation’ of 1965-82 did not harm growth either. In light of these studies by neoclassical economists and central bank institutions, economists Anis Chowdhury and Jomo Kwame Sundaram argue that “there is no empirical basis for setting a particular threshold, such as the now standard 2% inflation target – long acknowledged as ‘plucked from the air.’”

    From press conferences to panel speeches, the IMF leadership repeats that the danger of “entrenched” inflation requires a global commitment to tackle it head on through global to domestic monetary tightening.

    This stems in large part from a belief that once inflation begins, it has an inherent tendency to accelerate. Consequently, IMF loans and surveillance recommend central bank independence (from the executive) as a means to ensure unbiased financial policymaking, while critics contend that it has only enhanced the influence and power of big banks and financial actors, largely at the expense of the real economy.

    However, history again demonstrates that inflation does not accelerate easily, even when workers have more bargaining power, or wages are indexed to consumer prices – as in some countries.

    Lost decade redux?

    The IMF’s Fiscal Monitor, published on October 12, called upon all policymakers to “maintain a tight fiscal stance, so that fiscal policy does not work at cross-purposes with monetary policy.” In essence, fiscal policy must serve monetary policy in its “fight against inflation,” by retrenching public spending for the singular objective of sending “a powerful signal that policymakers are aligned in the fight against inflation.”

    The rationale is straightforward: “In a time of high inflation, policies to address high food and energy prices should not add to aggregate demand.” Increased demand is anathema, as it “forces central banks to raise interest rates even higher.”

    The fiscal tightening is not new. In 2021, 131 governments started scaling back public spending. The geographic and population scale of austerity cuts is expected to intensify up to 2025.

    Governments are implementing, or discussing, a range of fiscal adjustment policies, such as targeting social protection, regressive taxation, reducing public expenditure in social sectors, eliminating subsidies, privatizing public services or State-Owned Enterprises, pension reforms, labor flexibilization.

    All have long histories of negative social impacts on economic and social rights, such as the right to food, water, health, housing, education, and livelihoods. The human impact will reach over 6 billion people, or 85% of humanity, in 2023.

    In a time of poly-crisis, retrenching public spending and imposing regressive taxes that disproportionately hurt the poor, especially women, not only extinguishes the hope of achieving the Sustainable Development Goals by 2030, but more fundamentally, regresses decades of fighting poverty.

    Meanwhile, the IMF’s Board has approved the creation of two new loan facilities, the new Food Shock Window, available for a year to countries reeling from the global food price crisis, and the Resilience and Sustainability Trust (RST), through which many rich countries may re-channel their unused Special Drawing Rights if the funds are used to address “external shocks, including climate change and pandemics” by rules set out by the Fund.

    While both loans address urgent threats, they also create new debt. The RST is also conditional upon an IMF loan program hinged on fiscal consolidation.

    The severity of the food crisis warrants aid in the form of grants not loans. Based on prior research done by the World Bank and Center for Global Development on food price spikes, Oxfam estimates that another 65 million people could be pushed below the $1.90 extreme poverty line as a consequence of food price increases.

    Debt crises nearing point of no return

    Despite the imminent threat of a debt crises imploding across many developing countries, sovereign debt solutions, the Group of 20, IMF, World Bank as well as the Institute of International Finance, the consortium of private financial actors, have to date failed to create viable solutions.

    The G20’s Debt Service Suspension Initiative, which suspended debt payments for 73 low-income countries, was terminated at the end of 2021. And two years after the Common Framework was established in 2020, it’s multiple flaws have led even the World Bank to call it a ‘slow-motion debt tragedy.’

    One key dilemma is the lack of political will to enforce a comparability of treatment, where all creditors, including private, participate on equivalent terms or restructuring and in the principle of burden sharing. Another challenge is the glacial pace of restructuring is not only protracted but also riddled with uncertainty.

    Middle-income countries, where the vast majority of the world’s poor reside and where serious debt defaults are taking place, are not included. Low-income countries fear that access to commercial financing will be cut off if they apply to the Common Framework, as evidenced by Fitch and S&P slashed Ethiopia’s sovereign rating when the nation applied to the Common Framework in 2021.

    Out of the three countries that have so far asked for their debt to be treated – Chad, Ethiopia and Zambia – only Zambia has seen some forward movement.

    The narratives coming from within the IMF reiterate a subservience to market access and creditor interests. Across panels and webinars, senior level IMF staff remarked that a large debt restructuring is a serious event, which may result in a decrease of future multilateral and private financing, in amounts that outweigh the financing gained in relief or restructuring.

    Some warned that private creditors will not participate in debt restructuring where national fiscal instability reigns. To secure market access, countries have to tighten fiscal belts even more. The logic here is that financial stability imperative for accessing private credit requires fiscal consolidation that generates social devastation.

    The lack of official creditor participation and the dilemma of transparency, referring in large part to China, was repeatedly stressed as a key problem. At the same time, an old and wholly condescending trope of the need to increase debtor discipline in light of its financial mismanagement and irresponsibility repeatedly emerged.

    Meanwhile, there is no mention of the often-legalized corruption of private actors, such as tax evasion and avoidance, speculative and/or rigged trading. Amidst the talk, actual debt solutions are in omission. While political will is already in short supply, the lack of cooperation toward problem-solving is exacerbated by the finger-pointing between the creditor groups of bilateral, private, and multilateral.

    History has repeatedly illustrated the way forward on debt, and the waves of austerity that it generates. For decades, advocates and policymakers alike have called for a transparent and binding debt workout mechanism within a multilateral framework for debt crisis resolution, in a process convening all creditors.

    The UN General Assembly has adopted multiple resolutions calling for such a mechanism over the years. Debt justice movements from across the developing world have urged for the cancellation of all unsustainable and illegitimate debts in a manner that is ambitious, unconditional, and without repercussions for future market access.

    Past cases show how reducing debt stock and payments allow for countries to increase their public financing for urgent domestic needs.

    The principle of burden-sharing ensures genuine debt relief, as does the commitment to include all creditors in an automatic or orderly way. Recognizing that multilateral institutions account for around one-third of the outstanding debt of low- and lower-middle-income countries, the World Bank and IMF must participate in such efforts.

    They should both cancel debt payments owed, and the IMF should eliminate surcharges. Protection needs to be provided to debtor states against holdouts and lawsuits by non-participating creditors, while laws and procedures for responsible borrowing and lending need to be ensured to protect citizens and communities against corrupt, predatory and odious debts.

    Last but not least, an automatic mechanism for a debt standstill in the wake of an extreme exogenous shock should be created. As proposed by the G77 group of developing countries in the UN General Assembly in response to the global financial crisis of 2007-8, such a mechanism must “be established for a determined period in response to external catastrophe events, as climate and natural disasters, health pandemic, military conflict and inflation.” The prescience of the G77 group in 2009 offers a salient message.

    While the developing world has little recourse but to ‘dance to the tune of the Federal Reserve,’ the devastating toll of the human, social and economic crisis must be addressed through tools and choices that can be generated.

    The question is how to muster political will, be it from the moral pressure of global justice movement to analysis of the effects that soaring poverty and intensifying climate change will have on the very survival of our planet and species.

    Bhumika Muchhala is development economist and senior advocate on economic governance at Third World Network. She works on research, analysis, advocacy and public education on the international political economy of development, feminist economics and decolonial theory and approaches.

    IPS UN Bureau


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    © Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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  • Macroeconomic Policy Coordination More One-Sided, Ineffective

    Macroeconomic Policy Coordination More One-Sided, Ineffective

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    • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
    • Inter Press Service

    SYDNEY and KUALA LUMPUR, Oct 25 (IPS) – Widespread adverse reactions to the UK government’s recent ‘mini-budget’ forced new Prime Minister Liz Truss to resign. The episode highlighted problems of macroeconomic policy coordination and the interests involved.

    Macro-policy coordination
    But macroeconomic, specifically fiscal-monetary policy coordination almost became “taboo” as central bank independence (CBI) became the new orthodoxy. It has been accused of enabling CBs to finance government deficits. Critics claim inflation, even hyperinflation, becomes inevitable.

    Anis ChowdhuryGovernment finance ministries and CBs are the two main macroeconomic policy protagonists. Poor ‘macro-policy’ coordination has generated problems, including contradictory policy responses. This has meant more macroeconomic and financial instability, worrying markets and investors.

    Fiscal policy – notably variations in government tax and spending – mainly aims to influence long-term growth and distribution. CB monetary policy – e.g., variations in short-term interest rates and credit growth – claims to prioritize price and exchange rate stability.

    By the early 1990s, the ‘Washington consensus’ implied the two macro-policy actors should work independently due to their different time horizons. After all, governments are subject to short-term political considerations inimical to monetary stability needed for long-term growth.

    Claiming to be “technocratic”, CBs have increasingly set their own goals or targets. CBI has involved both ‘goal’ and ‘instrument’ independence, instead of ‘goal dependence’ with ‘instrument independence’.

    CBI was ostensibly to avoid ‘fiscal dominance’ of monetary policy. Meanwhile, government fiscal policy became subordinated to CB inflation targets. For former Reserve Bank of Australia Deputy Governor Guy Debelle, monetary policy became “the only game in town for demand management”.

    Debelle noted that except for rare and brief coordinated fiscal stimuli in early 2009, after the onset of the global financial crisis, “demand management continued to be the sole purview of central banks. Fiscal policy was not much in the mix”.

    Jomo Kwame SundaramSub-optimal outcomes
    But more than three decades of “divorce” between independent CBs and fiscal authorities have failed to deliver its promised benefits. Instead, monetary policy dominance has worsened financial instability.

    Adam Posen found the costs of disinflation, or keeping inflation low, higher in OECD countries with CBI. Carl Walsh found likewise in the European Community.

    For Guy Debelle and Stanley Fischer, CBs have sought to enhance their credibility by being tougher on inflation, even at the expense of output and employment losses.

    Committed to arbitrary targets, independent CBs have sought credit for keeping inflation low. They deny other contributory factors, e.g., labour’s diminished bargaining power and globalization, particularly cheaper supplies.

    John Taylor, author of the ‘Taylor rule’ CB mantra, concluded CB “performance was not associated with de jure central bank independence”. De jure CB independence has not prevented them from “deviating from policies that lead to both price and output stability”.

    The de facto independent US Fed has also taken “actions that have led to high unemployment and/or high inflation”. As single-minded independent CBs pursued low inflation, they neglected their responsibility for financial stability.

    CBs’ indiscriminate monetary expansion during the 2000s’ Great Moderation enabled asset price bubbles and dangerous speculation, culminating in the global financial crisis (GFC).

    Since the GFC, “the financial sector has become dependent on easy liquidity… To compensate for quantitative easing (QE)-induced low return…, increased the risk profile of their other assets, taking on more leverage, and hedging interest rate risk with derivatives”.

    Independent CBs also never acknowledge the adverse distributional consequences of their policies. This has been true of both conventional policies, involving interest rate adjustments, and unconventional ones, with bond buying, or QE. All have enabled speculation, credit provision and other financial investments.

    They have also helped inefficient and uncompetitive ‘zombie’ enterprises survive. Instead of reversing declining long-term productivity growth, the slowdown since the GFC “has been steep and prolonged”.

    Workers’ real wages have remained stagnant or even declined, lowering labour’s income share and widening income inequality. As crises hit and monetary policies were tightened, workers lost jobs and incomes. Workers are doubly hit as governments pursue fiscal austerity to keep inflation low.

    Dire consequences
    The pandemic has seen unprecedented fiscal and monetary responses. But there has been little coordination between fiscal and monetary authorities. Unsurprisingly, greater pandemic-induced fiscal deficits and monetary expansion have raised inflationary pressures, especially with supply disruptions.

    This could have been avoided if policymakers had better coordinated fiscal and monetary measures to unlock key supply bottlenecks. War and economic sanctions have made the supply situation even more dire.

    Government debt has been rising since the GFC, reaching record levels due to pandemic measures. CBs hiking interest rates to contain inflation have thus worsened public debt burdens, inviting austerity measures.

    Thus, countries go through cycles of debt accumulation and output contraction. Supposed to contain inflation, they adversely impact livelihoods. Many more developing countries face debt crises, further setting back progress.

    Needed reforms
    Sixty years ago, Milton Friedman asserted, “money is too important to be left to the central bankers”. He elaborated, “One economic defect of an independent central bank … is that it almost invariably involves dispersal of responsibility… Another defect … is the extent to which policy is … made highly dependent on personalities… third … defect is that an independent central bank will almost invariably give undue emphasis to the point of view of bankers”.

    Thus, government-sceptic Friedman recommended, “either to make the Federal Reserve a bureau in the Treasury under the secretary of the Treasury, or to put the Federal Reserve under direct congressional control.

    “Either involves terminating the so-called independence of the system… either would establish a strong incentive for the Fed to produce a stabler monetary environment than we have had”.

    Undoubtedly, this is an extreme solution. Friedman also suggested replacing CB discretion with monetary policy rules to resolve the problem of lack of coordination. But, as Alan Blinder has observed, such rules are “unlikely to score highly”.

    Effective fiscal-monetary policy coordination requires appropriate supporting institutions and operating arrangements. As IMF research has shown, “neither legal independence of central bank nor a balanced budget clause or a rule-based monetary policy framework … are enough to ensure effective monetary and fiscal policy coordination”.

    Although rules-based policies may enhance transparency and strengthen discipline, they cannot create “credibility”, which depends on policy content, not policy frameworks.

    For Debelle, a combination of “goal dependence” and “instrument or operational independence” of CBs under strong democratic or parliamentary oversight may be appropriate for developed countries.

    There is also a need to broaden membership of CB governing boards to avoid dominance by financial interests and to represent broader national interests.

    But macro-policy coordination should involve more than merely an appropriate fiscal-monetary policy mix. A more coherent approach should also incorporate sectoral strategies, e.g., public investment in renewable energy, education & training, healthcare. Such policy coordination should enable sustainable development and reverse declining productivity growth.

    As Buiter urges, it is up to governments “to make appropriate use of … fiscal space” created by fiscal-monetary coordination. Democratic checks and balances are needed to prevent “pork-barrelling” and other fiscal abuses and to protect fiscal decision-making from corruption.

    IPS UN Bureau


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    © Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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  • Europe in Its Labyrinth

    Europe in Its Labyrinth

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    European Union leaders struggle to find solutions for the energy crisis. Credit: Bigstock
    • by Baher Kamal (madrid)
    • Inter Press Service

    MADRID, Oct 24 (IPS) – European politicians continue to run in all directions to find a way out of their energy crisis. One of them – Simonetta Sommaruga, the Swiss Environment Minister, asked people to ‘shower together’. Others are competing to grant the business of transporting energy from the North of Africa to the continent. All this is not new.

    The MidCat

    In 2010, a project aimed at transporting 7.500 million cubic metres of gas by linking Catalonia (Spain) to Occitania (France) and from there to other European Union countries.

    With an initial estimated cost at over three billion Euro, this MidCat project quasi-blocked just one year later, to be finally stopped in 2018 following cost and impact studies.

    Following the energy impact of the condemnable proxy war in Ukraine, Spain has recently proposed relaunching the MIDCAT. But France continued to block the project alleging high costs. Maybe also under the heavy pressure of its extended, powerful business of nuclear plants?

    The Italian Connexion

    Meanwhile, taking advantage of the deteriorated relations between Spain and Algeria due to Madrid’s support to the annexation of Western Sahara by Morocco, Rome rushed to negotiate with Algiers the transportation of the Algerian gas and oil to Europe through Italy.

    But this project hasn’t worked out either.

    The Turkish Pipe

    At that state, Ankara proposed in September 2022 transporting Russian fossil fuels to Europe through a Turkish pipeline crossing the country’s territory. Also this way out was soon discarded.

    The BarMar

    During their yet another summit in late October, the European Union’s heads of state and governments launched more debates on how to grant their energy supplies.

    At the end, the leaders of Spain, Portugal, and France agreed on 20 October 2022 to replace the MidCat project with a new “green energy corridor” that would be able to transport hydrogen. And they called it BarMar.

    Where From?

    So far, no accurate details are known of the major features of such a project. For instance: where will this hydrogen come from?

    According to the European Union’s data, hydrogen accounts for less than 2% of Europe’s present energy consumption and is primarily used to produce chemical products, such as plastics and fertilisers. 96% of this hydrogen production is through natural gas, resulting in significant amounts of CO2 emissions. So?

    How Green Is the “Green Energy Corridor”?

    The BarMar project’s defenders say that hydrogen is the future of energy. Critics insist that hydrogen is most efficient if it is used around its source.

    Anyway, if it is so green, why has the West, including Europe, not turned up sooner to this source of energy?

    For How Long. How Much? Who Will Pay?

    This BarMar project implies great costs and, according to European sources, it would be a sort of a “transitional” plan. To what? How long will it take to implement the project?

    Not having released specific final details, the Spanish, Portuguese and French leaders decided to meet in December 2022 to discuss those details.

    Where Will the Money Come From?

    For now, French President Emmanuel Macron rushed to put the bandage before the wound, saying that the BarMar project would “benefit from European funding.”

    The European Union’s funds are composed of the proportional contribution of each one of its 27 member countries, with Germany being the major contributor.

    However, in view of the big European financial crisis caused by the COVID-19 pandemic and now exacerbated by Ukraine’s proxy war, a big portion of such reserves have been designated to alleviate the economic and social impacts, let alone the spectacular rise of fossil fuels prices for citizens.

    The Military Race

    During NATO’s Summit in Madrid, this Western alliance of 30 countries, decided to further militarise Europe by increasing the continent’s spending on weapons and multiplying its troops, in addition to further extending its presence in Africa. Such militarisation process implies high costs to Europe.

    In addition, following the United States’ huge weapons supplies to Ukraine, which for now are estimated at more than 17 billion US dollars, European countries have also continued to send weapons to Ukraine.

    Here, some European politicians started talking about the urgent need to replenish the continent’s “empty weapons shelves.”

    Furthermore, the European leaders have just decided to transfer to Ukraine up to 1.5 billion US dollars… every single month… as part of the estimated 3 to 3.5 billion… a month… that the West decided to send to Ukraine.

    Is the Fossil Fuels Rush Over Soon?

    Not really. Germany seems to be thinking about reopening their nuclear plants to produce electricity.

    Norway is reported as planning to increase oil production from the Northern Sea. The United States, being the world’s largest oil producer, has doubled its liquified gas supplies to Europe.

    Venezuela, Saudi Arabia

    Washington decided that the heavily sanctioned Nicolas Maduro’s government in Venezuela is not all that bad, therefore the US has approached Caracas to increase its fossil fuels production.

    At the time, Western leaders pressured the Organisation of the Petroleum Exporting Countries (OPEC), which groups 13 oil-exporting ‘developing nations,’ to pump more oil and gas in the market.

    Having OPEC’s top producer: Saudi Arabia shown reluctance, the US-led West has threatened to punish their own “friend and ally” — the Saudis, through sanctions.

    Carbon, Fracking

    Meanwhile, several European states, mostly the EU Eastern member countries, have been steadily intensifying the extraction and use of another fossil fuel: coal.

    And one more European country however is no longer an EU member: the United Kingdom plans to extend the business of “fracking”.

    Further to the United Kingdom’s parliamentary debates around the already ousted Liz Truss Conservative government plan to lift the 2019 decision to ban fracking, the British Broadcasting Corporation (BBC) reminded that hydraulic fracturing, or fracking, is a technique for recovering gas and oil from shale rock.

    And that it involves drilling into the earth and directing a high-pressure mixture of water, sand and chemicals at a rock layer in order to release the gas inside.

    Environmental organisations and activists worldwide continue to warn about the high dangers to Earth of carrying out such an activity. An activity that, by the way, is still widely extended in the world’s biggest fossil energy producer–the United States.

    © Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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  • Austerity: A Raging Storm for the Developing World that can be Avoided

    Austerity: A Raging Storm for the Developing World that can be Avoided

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    • Opinion by Isabel Ortiz, Matti Kohonen (london / new york)
    • Inter Press Service

    LONDON / NEW YORK, Oct 24 (IPS) – Finance ministers of the G20 and the world met in Washington, October 10-16, to discuss how to navigate multiple crises, including rising cost-of-living, broken global supply chains, climate shocks, and the lingering COVID-19 pandemic.

    All this weighted heavily on the IMF outlook, pointing to a bleak future ahead.

    This is particularly bad news for developing countries. Using IMF data, our research showed that recovery spending in the last two years of the pandemic in the Global South was only 2.4% of GDP on average, a quarter of the level recommended by the UN and a fraction of what rich countries spent.

    Meanwhile, only 38% of the total went to social protection, with corporate loans and tax breaks getting the lion’s share.

    Things will get worse unless there is a fundamental policy change. This year recovery funds have dried up and, as most countries are heavily indebted, the IMF projects large expenditure cuts.

    In 2023, at least 94 developing countries are expected to cut public spending in terms of GDP. Our report estimates that 85% of the world’s population living in 143 countries will live in the grip of austerity measures by 2023, and the trend is likely to continue for years.

    Unless these policies are reversed, people in developing countries will suffer as a result cuts to social protection and public services at a time they are most needed, with 3.3 billion people (or nearly half of mankind) expected to be living below the poverty line of US $5.50/day by the end of 2022.

    This crisis will affect especially women who received half less COVID-19 recovery funds than their male counterparts.

    But the impact goes far beyond women. Elderly pensioners and persons with disabilities will receive lower pension benefits. Workers around the world will see less job security, poorer pay and working conditions as regulations are dismantled.

    A recent study on inequality found that the vast majority of countries were making labor markets more flexible to help big corporations. As inflation keeps rising, worsened by higher consumption taxes, families will be much affected while any support they receive will be less due to austerity cuts.

    South Africa reflects the crisis of countries falling into the austerity trap. The government provided Social Relief of Distress (SRD) grants of R350 (US$24 in 2021) per month that were instituted at the start of the pandemic, supporting for the first-time low-income individuals who are of working age.

    These grants have been extended several times, providing a lifeline for those worst hit by the pandemic.

    However, despite the cost-of-living crisis, the government -advised by the IMF- is now considering reducing social expenditures and helping only the most vulnerable, leaving many low-income households without any support. Other austerity measures being discussed include cuts to the salaries of civil servants, and labor flexibilization reforms.

    Instead of these austerity cuts, the South African government and the IMF should focus on raising additional revenues to fund social protection and public services, making sure everyone pays taxes, reducing corporate tax loopholes and exemptions, taxing excess profits and wealthy individuals.

    Similarly, Ecuador has been shaken by social unrest because of austerity reforms. In 2019, after large riots, the government of Lenin Moreno flew from the capital and had to stop a loan with the IMF that had proposed cuts to subsidies and other austerity reforms.

    In 2021, the same austerity policies were proposed again by the IMF, such as cuts to subsidies and public services, reducing social protection and labor regulations.

    In 2022, farmers, indigenous men and women, marched again to the capital with pitchforks to join students and workers protesting austerity policies, forcing President Lasso to back down and agree to grant subsidies and other demands.

    These are only two examples reflecting the austerity storm gathering around the world. This is extremely unfair and will generate unnecessary social hardship, as populations are struggling with a severe cost-of-living crisis, especially at a time when many countries are losing significant amounts of revenue to tax abuses, illicit financial flows and tax exemptions to large corporates that are wholly unnecessary.

    Austerity cuts are not inevitable, there are alternatives even in the poorest countries. Instead of austerity cuts, governments can increase progressive tax revenues, restructure and eliminate debt, eradicate illicit financial flows, and re-allocate public expenditures, among other options.

    Policy makers must act on this. All the human suffering and social unrest that austerity inflicts is unnecessary.

    Civil society organizations have launched a global campaign to End Austerity, including, among others, ActionAid International, European Network on Debt and Development (Eurodad), Fight Inequality Alliance, Financial Transparency Coalition and Oxfam International.

    Austerity campaign calls on citizens and organizations from all around the world to fight back against the wave of austerity sweeping the globe, supercharging inequality and compounding the effects of the cost-of-living crisis.

    Our decision-makers need to wake up and change course. There is no time to lose.

    Matti Kohonen is Executive Director of Financial Transparency Coalition; Isabel Ortiz is Director of the Global Social Justice Program at Joseph Stiglitz’s Initiative for Policy Dialogue

    IPS UN Bureau


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  • Public Development Banks Cant Drag Their Feet When It Comes to Building a Sustainable Future

    Public Development Banks Cant Drag Their Feet When It Comes to Building a Sustainable Future

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    Civil society organisations at the Finance in Common Summit. Credit: Noel Emmanuel Zako
    • Opinion by Bibbi Abruzzini (abidjan, ivory coast)
    • Inter Press Service

    ABIDJAN, Ivory Coast, Oct 21 (IPS) – A coalition of civil society organisations is demanding public development banks (PDBs) to take radical and innovative steps to tackle human rights violations and environmental destruction. No project funded by PDBs should come at the expenses of vulnerable groups, the environment and collective liberties, but should instead embody the voices of communities, democratic values and environmental justice.

    The demands, part of a collective statement signed by more than 50 civil society organisations, come as over 450 PDBs gather in Abidjan, Ivory Coast, from October 19th, for a third international summit, dubbed Finance in Common.

    The COVID-19 pandemic and climate emergency, coupled with human rights violations and increasing risks for activists worldwide, is bringing the need to change current practices into even sharper focus. While public development banks may drag their feet on addressing intersecting and structural inequalities, civil society organisations are taking actions aimed at creating dignified livelihoods by embedding development with concrete affirmative measures towards climate, social, gender, and racial justice.

    PDBs cannot be reluctant to act. They need to hit the target when it comes to supporting the transformation of economies and financial systems towards sustainability and addressing the most pressing needs of citizens worldwide – from food systems to increasing support for a just transition towards truly sustainable energy sources. PDBs must recognise that public services are the foundation of fair and just societies, rather than encouraging their privatisation and keep austerity narratives alive.

    9 out of 10 people live in countries where civic freedoms are severely restricted, and with an environmental activist killed every two days on average over the past decade, development banks have an obligation to recognize and incorporate human rights in their plans and actions, following a “do not harm” duty.

    Civil society organisations at the Finance in Common Summit. Credit: Noel Emmanuel Zako

    Communities cannot be left out of the door. They need to be given the space to play the rightful role of driving forces in the answers to today’s global challenges, without them PDBs will move backwards rather than forward – and this means more environmental degradation, less democratic participation, and to put it bluntly an even greater crisis than the one we are facing today. And nobody needs that.

    The recommendations in the collective civil society statement emerge from a three-year process of engagement and exchange, involving civil society networks in an effort to shape PDBs policies and projects. You can find some of their words and messages below.

    As the call for accountability grows, the Finance in Common summits are an opportunity for PDBs to show moral leadership and help remedy the lack of long-term collaborations with civil society, communities and indigenous groups, threatening to curtail development narratives and practices.

    Here are the messages from civil society organisations from around the globe directed at public development banks.

    Oluseyi Oyebisi, Executive Director of Nigeria Network of NGOs (NNNGO) the Nigerian national network of 3,700 NGOs said: “The Sahara and Sahel countries especially have been facing the most serious security crisis in their history linked with climate change, social justice and inequalities in the region. Marked by strong economic (lack of opportunities especially for young people), social (limitation of equitable access to basic social services) and climatic vulnerabilities, the region has some of the lowest human development indicators in the world – even before the covid pandemic. Access to affected populations is limited in some localities due to three main factors: the security situation, the poor state of infrastructures and difficult geographic conditions. PDBs must prioritise civil society organisations and Communities initiatives supporting state programs of decentralization, security sector reforms and reconciliation. This will help reduce the vulnerability of populations and prevent violent extremism.”

    Mavalow Christelle Kalhoule, Forus Chair and President of Spong, the NGO network of Burkina Faso said: “Development projects shape our world; from the ways we navigate our cities to how rural landscapes are being transformed. Ultimately, they impact the ways we interact with one another, with plants and animals, with other countries and with the food on our plates. The decisions taken by public development banks are therefore existential. Such responsibility comes with an even greater one to include communities directly concerned by development projects, those whose air, water and everyday lives are affected for generations to come. For this to happen, public development banks must reinforce their long-term efforts to create dialogue with civil society organisations, social movements and indigenous communities in order to fortify the democratic principles of their work. We encourage them to listen, to ask and to cooperate in innovative ways so that development stays true to its original definition of progress and positive change; a collective, participative and fair process and a word which has a meaning not for a few, but for all.”

    Tity Agbahey, Africa Regional Coordinator, Coalition for human rights in development said: “Many in civil society have expressed concerns about Finance in Common as a space run by elites, that fails to be truly inclusive. It is a space where the mainstream top-down approach to development, instead of being challenged, is further reinforced. Once again, the leaders of the public development banks gathered at this Summit will be taking decisions on key issues without listening to those most affected by their projects and the real development experts: local communities, human rights defenders, Indigenous Peoples, feminist groups, civil society. They will speak about “sustainability”, while ignoring the protests against austerity policies and rising debt. They will speak about “human rights”, while ignoring those denouncing human rights violations in the context of their projects. They will speak about “green and just transition”, while continuing to support projects that contribute to climate change.”

    Comlan Julien AGBESSI, Regional Coordinator of the Network of National NGO Platforms of West Africa (REPAOC), a regional coalition of 15 national civil society platforms said: “Regardless of how they are perceived by the public authorities in the various countries, non-governmental organisations (NGOs) contribute to covering the aspects and spaces not reached or insufficiently reached by national development programmes. Despite the undeniable impact of their actions on the living conditions of populations, NGOs remain the poor cousins of donor funding, apart from the support of certain philanthropic or charitable organisations. In such a context of scarce funding opportunities, aggravated by the health crisis due to COVID-19 and the subsequent economic crisis, Pooled Finance, which is in fact a paradigm shift, appears to be a lifeline for CSOs. This is why REPAOC welcomes the commitments made by both the Public Development Banks and the Multilateral Development Banks to directly support CSO projects and programmes in the same way as they usually do with governments and the private sector. Through the partnership agreements that we hope and pray for between CSOs and banks, the latter can be assured that the actions that will be envisaged for the benefit of rural and urban communities will certainly reach them with the guarantees of accountability that their new CSO partners offer”.

    Frank Vanaerschot, Director of Counter Balance, said: “As one of this year’s organisers of the Finance in Common Summit, the EIB will brag about the billions it invests in development. The truth is the bank will be pushing the EU’s own commercial interests and promoting the use of public money for development in the Global South to guarantee profits for private investors. Reducing inequalities will be second-place at best. The EIB is also co-hosting the summit despite systemic human rights violations in projects it finances from Nepal to Kenya. Instead, the EIB and other public banks should work to empower local communities by investing in the public services needed for human rights to be respected, such as publicly owned and governed healthcare and education – not on putting corporate profits above all else.”

    Stephanie Amoako, Senior Policy Associate at Accountability Counsel said: “PDBs must be accountable to the communities impacted by their projects. All PDBs need to have an effective accountability mechanism to address concerns with projects and should commit to preventing and fully remediating any harm to communities”.

    Jyotsna Mohan Singh, Regional Coordinator, Asia Development Alliance said: “PDBs should have a normative core; they should start with the rights framework. This means grounding all safeguards into all the various rights frameworks that already exist. There are rights instruments for indigenous people, the elderly, women, youth, and people living with disability. They are part and parcel of a whole host of both global conventions and regional conventions. Their approach should be grounded in those rights, then it will be on a very firm footing.

    Asian governments need to support, implement, and apply strict environmental laws and regulations for all PDBs projects. The first step is to disseminate public information and conduct open and effective environmental impact assessments for all these projects, as well as strategic environmental assessments for infrastructure and cross-border projects.”

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  • Time is Running Out for Decisions on Debt Relief as Countries Face Escalating Development Crisis

    Time is Running Out for Decisions on Debt Relief as Countries Face Escalating Development Crisis

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    • Opinion by Lars Jensen, George Gray Molina (united nations)
    • Inter Press Service

    UNITED NATIONS, Oct 19 (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

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

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  • Agroecological Women Farmers Boost Food Security in Perus Highlands

    Agroecological Women Farmers Boost Food Security in Perus Highlands

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    Lourdes Barreto squats in her greenhouse garden in the village of Huasao in the municipality of Oropesa, in the Andes highlands of the southern Peruvian department of Cuzco, proudly pointing to her purple lettuce, grown with natural fertilizers and agroecological techniques. CREDIT: Mariela Jara/IPS
    • by Mariela Jara (cuzco, peru)
    • Inter Press Service

    CUZCO, Peru, Oct 13 (IPS) – This article forms part of IPS coverage of International Day of Rural Women, Oct. 15.Lourdes Barreto, 47, says that as an agroecological small farmer she has improved her life and that of Mother Earth. “I love myself as I love Mother Earth and I have learned to value both of us,” she says in her field outside the village of Huasao, in the highlands of the southern Peruvian department of Cuzco.

    On the occasion of the International Day of Rural Women, commemorated Oct. 15, which celebrates their key contribution to rural development, poverty eradication and food security, Barreto’s story highlights the difficulties that rural women face on a daily basis, and their ability to struggle to overcome them.

    “I was orphaned when I was six years old and I was adopted by people who did not raise me as part of the family, they did not educate me and they only used me to take their cow out to graze,” she said during a visit by IPS to her village.

    “At the age of 18 I became a mother and I had a bad life with my husband, he beat me, he was very jealous. He said that only he could work and he did not give me money for the household,” she said, standing in her greenhouse outside of Huasao, a village of some 200 families.

    Barreto said that beginning to be trained in agroecological farming techniques four years ago, at the insistence of her sister, who gave her a piece of land, was a turning point that led to substantial changes in her life.

    Of the nearly 700,000 women farmers in Peru, according to the last National Agricultural Census, from 2012, less than six percent have had access to training and technical assistance.

    “I have learned to value and love myself as a person, to organize my family so I don’t have such a heavy workload. And another thing has been when I started to grow crops on the land, it gave me enough to eat from the farm to the pot, as they say, and to have some money of my own,” said the mother of three children aged 27, 21 and 19.

    Something she values highly is having achieved “agroecological awareness,” as she describes her conviction that agricultural production must eradicate the use of chemical inputs because “the Pacha Mama, Mother Earth, is tired of us killing her microorganisms.”

    “I prepare my bocashi (natural fertilizer) myself using manure from my cattle. And I also fumigate without chemicals,” she says proudly. “I make a mixture with ash, ‘rocoto’ chili peppers, five heads of garlic and five onions, plus a bit of laundry soap.”

    “I used to grind it with the batán (a pre-Inca grinding stone) but now I put it all in the blender to save time, I fill the backpack with two liters and I go out to spray my crops naturally,” she says.

    The COVID pandemic in 2020 and 2021 prompted many rural municipal governments to organize food markets, which became an opportunity for Barreto and other women farmers to sell their agroecological products.

    Lourdes Barreto (L) began to learn agroecological farming techniques four years ago, which improved her life in many aspects, including relationships in her family. At the Saturday open-air market in Huancaro, in the city of Cuzco, she wears the green apron that identifies her as a member of the Provincial Association of Agroecological Producers of Quispicanchi. CREDIT: Courtesy of Nadia Quispe
    Lourdes Barreto (L) began to learn agroecological farming techniques four years ago, which improved her life in many aspects, including relationships in her family. At the Saturday open-air market in Huancaro, in the city of Cuzco, she wears the green apron that identifies her as a member of the Provincial Association of Agroecological Producers of Quispicanchi. CREDIT: Courtesy of Nadia Quispe

    “I sold green beans, zucchini, three kinds of lettuce, broccoli, cauliflower, carrots, Chinese onions, coriander and parsley,” she says, pausing to take a breath and look around in case she forgot any of the vegetables she sells in the city of Cuzco, an hour and a half away from her village, and in Oropesa, the municipal seat.

    Another less tangible benefit of her agroecological activity was the improvement in her relationship with her husband, she says, because she gained financial security with the sale of her crops, in which her children have supported her. Now her husband also helps her in the garden and the atmosphere in the home has improved.

    Barreto, along with 40 other women farmers from six municipalities, is part of the Provincial Association of Ecological Producers of Quispicanchi, known by its acronym APPEQ – a productive and advocacy organization formed in 2012.

    The six participating municipalities are Andahuaylillas, Cusipata, Huaro, Oropesa, Quiquijana and Urcos, all located in the Andes highlands in the department of Cuzco, between 3100 and 3500 meters above sea level, with a Quechua indigenous population that depends on family farming for a living.

    Training to strengthen the organization is part of the activities of the Provincial Association of Ecological Producers of Quispicanchi. Maribel Palomino (2nd-R, wearing a headband), the association’s president, talks with fellow members at a workshop held on Sept. 28, 2022. CREDIT: Mariela Jara/IPS
    Training to strengthen the organization is part of the activities of the Provincial Association of Ecological Producers of Quispicanchi. Maribel Palomino (2nd-R, wearing a headband), the association’s president, talks with fellow members at a workshop held on Sept. 28, 2022. CREDIT: Mariela Jara/IPS

    Spreading agroecology

    The president of APPEQ, Maribel Palomino, 41, is a farmer who lives in the village of Muñapata, part of Urcos, where she farms land given to her by her father. The mother of a nine-year-old son, Jared, her goal is for the organization and its products, which the rural women sell under the collective brand name Pacharuru (fruits of the earth, in Quechua), to be known throughout Cuzco.

    “I recognize and am grateful for the training we received from the Flora Tristán institution to follow our own path as agroecological women farmers, which is very different from the one followed by our mothers and grandmothers,” she tells IPS during a training workshop given by the association she presides over in the city of Cuzco.

    The Flora Tristan Peruvian Women’s Center disseminates ecological practices in agricultural production in combination with the empowerment of women in rural communities in remote and neglected areas of this South American country of 33 million people, where 18 percent of the population is rural according to the 2017 national census.

    Now, Palomino adds, “we are part of a generation that is leading changes that are not only for the betterment of our children and families, but of ourselves as individuals and as women farmers.”

    She is referring to the inequalities that even today, in the 21st century, limit the development of women in the Peruvian countryside.

    “Without education, becoming mothers in their adolescence, without land in their own name but in their husband’s, without the opportunity to go out to learn and get training, it is very difficult to become a citizen with rights,” she says.

    According to the National Agricultural Census, eight out of 10 women farmers work farms of less than three hectares and six out of 10 do not receive any income for their productive work. In addition, their total workload is greater than men’s, and they are underrepresented in decision-making spaces.

    In addition, women in rural areas experience the highest levels of gender-based violence between the ages of 33 and 59, according to the National Observatory of Violence against Women.

    Maribel Palomino (L), president of the Provincial Association of Ecological Producers of Quispicanchi, sells chemical-free vegetables every week at the agroecological market in the neighborhood of Marcavalle in the city of Cuzco, Peru. CREDIT: Courtesy of Maribel Palomino
    Maribel Palomino (L), president of the Provincial Association of Ecological Producers of Quispicanchi, sells chemical-free vegetables every week at the agroecological market in the neighborhood of Marcavalle in the city of Cuzco, Peru. CREDIT: Courtesy of Maribel Palomino

    In this context of inequality and discrimination, Palomino represents a new kind of rural female leadership.

    “I am a single mother, my son is nine years old and through my work I give him education, healthy food, a home with affection and care. And he sees in me a woman who is a fighter, proud to work in the fields, who defends her rights and those of her colleagues in APPEQ,” she says.

    Palomino says it is crucial to contribute “to change the chip” of the elderly and of many young people who, if they could look out a window of opportunity, could improve their lives and their environment.

    “With APPEQ we work to share what we learn, so that more women can look with joy to the future,” she said.

    María Antonieta Tito, a farmer from the Andes highlands village of Secsencalla in the southern Peruvian department of Cuzco, shows her seedbeds of lettuce and celery plants. In March 2022 she began learning agroecological practices and is happy with the results that have allowed her to improve the quality of her family's nutrition while generating her own income from the sale of vegetables at the local market. CREDIT: Mariela Jara/IPS
    María Antonieta Tito, a farmer from the Andes highlands village of Secsencalla in the southern Peruvian department of Cuzco, shows her seedbeds of lettuce and celery plants. In March 2022 she began learning agroecological practices and is happy with the results that have allowed her to improve the quality of her family’s nutrition while generating her own income from the sale of vegetables at the local market. CREDIT: Mariela Jara/IPS

    This is the case of María Antonieta Tito, 32, from the municipality of Andahuaylillas, who for the first time in her life as a farmer is engaged in agroecological practices and whom IPS visited in her vegetable garden in the village of Secsencalla, as part of a tour of several communities with peasant women who belong to the association.

    “I am a student of the APPEQ leaders who teach us how to work the soil correctly, to till it up to forty centimeters so that it is soft, without stones or roots. They also teach us how to sow and plant our seeds,” she says proudly.

    Pointing to her seedbeds, she adds: “Look, here I have lettuce, purple cabbage and celery, it still needs to sprout, it starts out small like this.”

    Tito describes herself as a “new student” of agroecology. She started learning in March of this year but has made fast progress. Not only has she managed to harvest and eat her own vegetables, but every Wednesday she goes to the local market to sell her surplus.

    “We have eaten lettuce, tomatoes, cucumber, and chard; everyone at my house likes the vegetables, I have prepared them in salads and in fritters, with eggs. I am helping to improve the nutrition of my family and also of the people who buy from me,” she says happily.

    Every Tuesday evening she picks vegetables, carefully washes them, and at six o’clock the next morning she is at a stall in the open-air market in Andahuaylillas, the municipal capital, assisted by her teenage son.

    “The customers are getting to know us, they say that the taste of my vegetables is different from the ones they buy at the other stalls. I have been selling for three months and they have already placed orders,” she adds.

    But the road to the full exercise of rural women’s rights is very steep.

    As Palomino, the president of APPEQ, says, “we have made important achievements, but there is still a long way to go before we can say that we are citizens with equal rights, and the main responsibility for this lies with the governments that have not yet made us a priority.”

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  • How Digital Can Drive a Green Recovery

    How Digital Can Drive a Green Recovery

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    • Opinion by Riad Meddeb (united nations)
    • Inter Press Service

    UNITED NATIONS, Oct 13 (IPS) – As much of the world was starting to glimpse recovery from the COVID-19 pandemic, it now finds itself amid a cost-of-living crisis brought on by disruptions in global energy and food markets that are the result of conflict and climate change.

    This again highlights how societal and planetary imbalances reinforce each other, as well as the need for a truly inclusive and green recovery. One that is foundational for achieving the Sustainable Development Goals (SDGs).

    The COVID-19 pandemic demonstrated that digital is no longer optional. Countries with existing digital foundations were much better equipped to respond to citizens’ needs, including through the effective delivery of public services such as healthcare, social security benefits, and remote education. Digital will play a similarly important role in shaping a global green recovery.

    Beyond building national socioeconomic resilience, digital transformation is also proving a key enabler in advancing global climate commitments. Countries supported by UNDP are leveraging digital in innovative ways to redouble their efforts to adopt renewable energy, transition to a circular economy, and to protect biodiversity.

    Ecuador is building a digital traceability system for monitoring land use change and to track commodities through the supply chain. Papua New Guinea has piloted a mobile phone application to assist law enforcers to quickly record and report environmental harms such as illegal logging and bush fires.

    Riad Meddeb

    Whether it’s emerging technologies like Artificial Intelligence (AI) or more established digital tools like the mobile phone digital can be a fundamental driver of change. It is reshaping the dynamics between the economy, governments, businesses, and civil society and is an important tool in rebalancing our planetary, societal, and economic priorities.

    However, digital is fast becoming the global metric of both inclusion and exclusion. With 37 percent of the world’s population still offline, the digital divide, notably, the lack of accessible broadband, gaps in digital skills, and marginalized groups excluded from technology, has become a key barrier for countries wanting to capitalize on the potential opportunities of the increasingly digital economy.

    And digital technologies themselves could constrain a Green Recovery. The industry’s carbon footprint could account for about 14 percent of global emissions by 2040. If digital were a country, it would nearly surpass the US as the second largest contributor to climate change. And this impact may worsen, with emerging technologies also contributing to increased emissions.

    Digital and a green recovery

    Integrating sustainable development in digital is central to ensuring a green recovery – one that drives inclusive digital access and capacity, promotes openness and open data, and fosters innovations that increase the efficiency of digital technologies and mitigates their environmental footprint.

    In this context, the UNDP Global Centre for Technology, Innovation and Sustainable Development organized its flagship event ‘Digital for a Green Recovery’ on the sidelines of the World Cities Summit in Singapore. The event highlighted three priorities for an inclusive and green digital transformation.

    First, we must put people at the centre of innovation. This includes ensuring the availability of foundational digital infrastructure so that everyone can benefit. We must also ensure that the technical standards and explorations of emerging technologies are ‘human-centred’, founded on the local needs and aspirations of populations, but also ‘environment-centred’.

    Second, we need to strengthen collaboration between innovation ecosystems. Innovation doesn’t happen in a vacuum. It requires an enabling ecosystem comprising policies and regulations, investors, incubators and accelerators; and educational institutions. Digital can be a potent enabler for connecting dispersed national and global innovation ecosystems in pursuit of sustainability.

    Third, data is the lifeblood of digital transformation and could be an important equalizer for countries in accelerating their efforts towards the Sustainable Development Goals.

    However, a number of countries lack even foundational data infrastructure, such as data centres, communication networks, and energy grids. We need to accelerate efforts to build data capacity to ensure that existing digital divides are not widened.

    Digital is an indispensable enabler for driving a green and inclusive recovery. But it is truly a ‘whole-of-society’ endeavour.

    As a platform to showcase innovation, best practice, and to foster partnerships, the UNDP Global Centre for Technology, Innovation, and Sustainable Development will continue to convene global discussions, support and align innovation ecosystems around the world, and guide governments in leveraging the potential afforded by digital. Through driving the experimentation, adoption, and scaling of digital, we can shape a Green Recovery that works for both people and planet.

    Riad Meddeb is Acting Director, UNDP Global Centre for Technology, Innovation and Sustainable Development & Senior Principal Advisor for SIDS

    These insights were drawn from ‘Digital for a Green Recovery’ – the Flagship Event of the UNDP Global Centre for Technology, Innovation and Sustainable Development, held on the sidelines of the World Cities Summit 2022 in Singapore.

    Source: UNDP Blog

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  • Doubts about Chiles Green Hydrogen Boom

    Doubts about Chiles Green Hydrogen Boom

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    The administration of President Gabriel Boric, a self-described environmentalist, is facing a growing rift between scientists, social leaders and energy companies that have differences with regard to the production of green hydrogen in Magallanes. The first wind turbines have already been installed in the Magallanes region, in the far south of Chile, such as these in Laredo Bay, east of Cabo Negro, where companies are pushing green hydrogen projects in a scenario where environmental costs are beginning to take center stage. CREDIT: Courtesy of Erika Mutschke
    • by Orlando Milesi (santiago)
    • Inter Press Service

    SANTIAGO, Oct 12 (IPS) – In Magallanes, Chile’s southernmost region, doubts and questions are being raised about the environmental impact of turning this area into the world’s leading producer of green hydrogen.

    The projects require thousands of wind turbines, several desalination plants, new ports, docks, roads and hundreds of technicians and workers, with major social, cultural, economic and even visual impacts.

    This long narrow South American country of 19.5 million people sandwiched between the Andes Mountains and the Pacific Ocean has enormous solar and wind energy potential in its Atacama Desert and southern pampas grasslands. This has led to a steady increase in electricity generation from clean and renewable sources.

    In 2013, only six percent of the country’s total electricity generation came from non-conventional renewable sources (NCREs) – a proportion that climbed to 32 percent this year. Installed NCRE capacity in September reached 13,405 MW, representing 40.7 percent of the total. Of the NCREs, solar energy represents 23.5 percent and wind power 12.6 percent.

    In Chile, NCREs are defined as wind, small hydropower plants )up to 20 MW), biomass, biogas, geothermal, solar and ocean energy.

    According to the authorities, the wind potential of Magallanes could meet 13 percent of the world’s demand for green hydrogen, with a potential of 126 GW.

    Green hydrogen is generated by low-emission renewable energies in the electrolysis of water (H2O) by breaking down the molecules into oxygen (O2) and hydrogen (H2). It currently accounts for less than one percent of the world’s energy.

    However, it is projected as the energy source with the most promising future to advance towards the decarbonization of the economy and the replacement of hydrocarbons, due to its potential in electricity-intensive industries, such as steel and cement, or in air and maritime transportation.

    The National Green Hydrogen Strategy, launched in November 2021 by the second government of then right-wing President Sebastián Piñera (2018-2022), seeks to increase carbon neutrality, decrease Chile’s dependence on oil and turn this country into an energy exporter.

    The government of his successor, leftist President Gabriel Boric, in office since March, created an Interministerial Council of the Green Hydrogen Industry Development Committee, with the participation of eight cabinet ministers.

    A spokesperson from the Ministry of Energy told IPS that “this committee has agreed to bring forward, from 2025 to 2022, the update of the National Green Hydrogen Strategy and the new schedule for the allocation of state-owned land for these projects.”

    “We will promote green hydrogen in a cross-cutting manner, with an emphasis on harmonious, fair and balanced local development. By bringing forward the update of the strategy, we seek to generate certainty for investors and to begin to create the necessary regulatory framework for the growth of this industry in our country,” he said.

    In the area known as Cabo Negro, in the Chilean region of Magallanes, several companies have installed wind turbines to generate wind energy. The installation of thousands of turbines will affect the landscape of Magallanes and environmentalists believe it will impact many birds that migrate annually to this southern region. CREDIT: Courtesy of Erika Mutschke
    In the area known as Cabo Negro, in the Chilean region of Magallanes, several companies have installed wind turbines to generate wind energy. The installation of thousands of turbines will affect the landscape of Magallanes and environmentalists believe it will impact many birds that migrate annually to this southern region. CREDIT: Courtesy of Erika Mutschke

    Warnings from environmentalists

    In a letter to the president, more than 80 environmentalists warned of the risk of turning “Magallanes y La Antarctica Chilena” – the region’s official name – into an environmental sacrifice zone for the development of green hydrogen.

    “The energy transition cannot mean the sacrifice of migratory routes of birds that are in danger of extinction, otherwise it would not be a fair or sustainable transition,” said the letter, which has not yet received a formal response.

    Environmentalists argue that the impact is not restricted to birds, but also affects whales that breed there, due to the effects of desalination plants, large ports and harbors.

    Carmen Espoz, dean of science at the Santo Tomás University, who signed the letter, told IPS that “the main warning that we have tried to raise with the government, and with some of the companies with which we have spoken, is that there is a need for zoning or land-use planning, which does not exist to date, and for independent, quality baseline information for decision-making” on the issue.

    Espoz, who also heads the Bahía Lomas Center in Magallanes, based in Punta Arenas, the regional capital, clarified that they are not opposed to the production of green hydrogen but demand that it be done right.

    It is urgently necessary, she said in an interview in Santiago, to “stop making decisions at the central level without consultation or real participation of the local communities and to generate the necessary technical information base.”

    The signatories asked Boric to create a Regional Land Use Plan with Strategic Environmental Assessment to avoid unregulated development of projects.

    “We are not only talking about birds, but also about profound social, cultural and environmental impacts,” said Espoz, who argued that the model promoted by the government and green hydrogen developers “does not have a social license to implement it.”

    Sunset at Laredo Bay in the Magallanes region where the Chilean government will have to decide on what changes in the grasslands are acceptable, in the face of a flood of requests to use the area for largescale green hydrogen projects. CREDIT: Courtesy of Erika Mutschke
    Sunset at Laredo Bay in the Magallanes region where the Chilean government will have to decide on what changes in the grasslands are acceptable, in the face of a flood of requests to use the area for largescale green hydrogen projects. CREDIT: Courtesy of Erika Mutschke

    The bird question

    Prior to this letter to Boric, the international scientific journal Science published a study by Chilean scientists warning about potential impacts of wind turbines on the 40 to 60 species of migratory birds that visit Magallanes.

    “It is estimated that the installation of wind turbines along the migratory paths of birds could affect migratory shorebird populations, which is especially critical in the cases of the Red Knot (Calidris canutus rufa) and the Magellanic Plover (Pluvianellus socialis),” said Espoz.

    Both species, she said, “are endangered, as is the Ruddy-headed Goose (Chloephaga rubidiceps).”

    She added that if 13 percent of the world’s green hydrogen is to be generated in southern Chile, some 2,900 wind turbines will have to be installed by 2027, “which could cause between 1,740 and 5,220 collisions with bird per year.”

    Jorge Gibbons, a marine biologist at the University of Magallanes, based in Punta Arenas, said the big problem is that Magallanes does not have a baseline for environmental issues.

    “The scale of production creates uncertainties, heightened because there is no baseline. The question is whether Chile currently has the capacity to carry out large-scale green hydrogen projects,” he told IPS from the capital of Magallanes.

    Gibbons believes it would take about two years to update the data on the dolphin and Southern Right Whale (Eubalaena australis) populations

    “The greatest risks to dolphins will be seen in the Strait of Magellan. I am talking about Commerson’s Dolphins (Cephalorhynchus commersonii), which are only found there in Chile and whose population is relatively small,” he said.

    He proposed studying the route to ports and harbors of these species and to analyze how they breed and feed.

    “The issue is how noise disturbs them or interrupts their routes. These questions are still unanswered, but we know some things because it is the best censused species in Chile,” he explained.

    According to Gibbons, the letter to Boric is timely and will help reduce uncertainty because “the process is just beginning and the scientific and local community are now wondering if the plan will be well done.”

    Conflict of interests

    The partnership between HIF Chile and Enel Green Power Chile withdrew from the Environmental Evaluation System the study of the Faro del Sur Wind Farm project, involving an investment of 500 million dollars for the installation of 65 three-blade wind turbines on 3,791 hectares of land in Magallanes.

    The study was presented in early August with the announcement that it was “a decisive step for the future of green hydrogen-based eFuels.”

    But on Oct. 6, its withdrawal was announced after a series of observations were issued by the Magallanes regional Secretariat of the Environment.

    “The observations of some public bodies in the evaluation process of this wind farm exceed the usual standards,” the consortium formed by the Chilean company HIF and the subsidiary of the Italian transnational Enel claimed in a statement.

    The companies argued that “the authorities must provide clear guidelines to the companies on the expectations for regional development, safeguarding the communities and the environment.

    “In light of these exceptional requirements, it is necessary to understand which requirements can be incorporated and which definitely make projects of this type unfeasible in the region,” they complained.

    The government reacted by stating that it is important to remember that Faro del Sur is the first green hydrogen project submitted to the environmental assessment process in Magallanes.

    “During the process, some evaluating entities made observations on the project, so the owners decided to withdraw it early, which does not prevent them from reintroducing it when they deem it convenient,” the Ministry of Energy spokesperson told IPS.

    He added that the ministry stresses “the conviction to develop the green hydrogen industry in the country and that this means sending out signals, but in no case should this compromise environmental standards and citizen participation in the evaluation processes.”

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  • University Outreach Project Teaching Tissue Culture to Potato Farmers

    University Outreach Project Teaching Tissue Culture to Potato Farmers

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    Richard Mbaria makes a point at his potato in Kapsita village of Nakuru County, Kenya. The farmer has increased his production per acre thanks to training by a CARP+ project implemented in the area by Egerton University. Credit: Maina Waruru/IPS
    • by Cecilia Russell (nairobi)
    • Inter Press Service

    Nairobi, Oct 11 (IPS) – World Food Day is celebrated on October 16, 2022, with the theme Leave NO ONE behind. During this week IPS will look at features that showcase better production, better nutrition, a better environment, and a better life.Until a few years ago, Kenyan potato farmer Richard Mbaria used to harvest just four tonnes of the crop from an acre of land thanks to poor quality seeds, combined with an attack on the crop by pests and diseases.

    The middle-aged farmer would select seeds from his previous harvest, picking the smallest tubers that could not fetch good prices in the market. This was the practice every other smallholder farmer in his Kapsita village in Elburgon, Nakuru County in Kenya’s Rift Valley region and beyond would do too. The reason is that many rarely afford certified seeds, and those who could were unaware of the importance of using approved seeds.

    “That was then and today, but today I get an average of nearly 8 tonnes of the produce from an acre of land and want to improve the harvests to 10 to 12 tonnes from the same land in the near future,” Mbaria proudly discloses.

    The father of four did not transform his farming miraculously. He has been trained in better management of crops and also on the selection and preservation of healthy planting seeds, which he is now selling to local farmers.

    Even more radical transformation has happened to his farming. He’s now on the journey to becoming qualified to produce certified tissue culture planting material, thanks to the training he has received from Egerton University’s Enhancing Access to High Quality Seed Potato for Improved Productivity and Income of Smallholder Farmers in Nakuru County (HQSPIPI), implemented under the Community Action Research Programme (CARP+).

    Tissue culture is the cultivation of plant tissues or organs in specially formulated nutrient solution in a lab or a controlled environment using mainly sprouts or tissue-like leaves, which are grown in a medium with nutrients and disease-killing chemicals. This way, an entire plant is regenerated from a single tissue.

    This is done in a controlled environment – usually in a lab or a greenhouse to produce plantlets, also known as apical root cuttings and mini tubers (tiny-sized potato seeds), but which are clean and free of disease, explains Professor Anthony Kibe, Associate Professor of Agronomy at Egerton University.

    When transplanted in the field, the result is seed potatoes which can be sold to farmers for high productivity and at relatively affordable prices.

    The resulting plantlet or its small tubers at the bottom of the roots can be transplanted in the fields. The crop is usually high-yield and also free of disease when properly managed.

    “Tissue culture (also known as in vitro culture) offers an excellent way for the rapid propagation of seed potato offering high yielding disease-free planting material using hydroponics or aeroponics technologies,” says Kibe.

    The technique, he says, is critical in the production of disease-free and high-yielding fruits and vegetables and is widely used in bananas in East Africa. In potatoes, it is mainly practiced by large commercial farms, seed companies, and government research institutions due to the costs and complexity for an ordinary farmer.

    The implication is that certified seeds are relatively expensive and out of reach of most of the nearly 1 million smallholder farmers engaged in potato farming in Kenya.

    The programme is one of the activities under Transforming African Agricultural Universities to meaningfully contribute to Africa’s growth and development (TAGDev), an initiative by Uganda-based Regional Universities Forum for Capacity Building in Agriculture (RUFORUM), in partnership with the MasterCard Foundation.

    One of its aims is to train farmers to plant quality seeds, test their soils, effectively manage diseases and pests, among others, for increased productivity, and organize them in marketing cooperatives for higher incomes, explains Kibe.

    “About ten years ago, the average yield for potatoes per hectare in Kenya was 22.5 tonnes; today, it has dropped to around seven tonnes a hectare due to, among others, the transmission of diseases through seeds,” he adds.

    It is a concern that his farmers’ outreach project has been addressing by offering free advice, addressing the major constraints to the production of the critical food crop.

    “One way of addressing the problem is by training a number of farmers to become producers of disease-free seeds for sale to their colleagues for increased yields and higher income,” he says. Sadly, he notes, only about 2% of Kenyan farmers who grow potatoes use certified seeds, compromising yields.

    “This is in stark contrast with leading world producers such as the Netherlands producer, where 99% of farmers use certified seeds,” Kibe explains.

    In Kenya, average yields are around 10 tonnes per hectare, while the crop’s potential is as high as 30 tonnes for the size. The lack of quality disease-free seeds of improved varieties is a major cause of this yield gap. This is in contrast to countries like Egypt and South Africa, where yields stand at 40 tonnes per hectare, he told IPS.

    “The planting material many farmers use each season for a new crop is produced, stored, and traded by farmers without regulation,” says Kibe.

    Farmers select the seeds from their previous harvest. Part of the challenge is that only a few privately-owned farms and a handful of state-owned seed enterprises produce certified seed potatoes.

    Where new varieties have been produced and propagated under the technology, yields have been as high as 30 tons per hectare.

    Potato, he notes, has been a low-priority food crop in Kenya’s research agricultural research system, despite its importance as a staple food and its potential contribution to the country’s food security.

    Under his project, nearly 5,000 farmers have been reached and trained on good husbandry for higher yields since 2017.

    Of the three roles bestowed on universities – teaching, research, and outreach, the latter has been the least applied, with universities doing research with the expectation that the extension arms in government would do the knowledge transfer, says Anthony Egeru, who heads TAGDeV project at RUFORUM.

    “However, the universities need to have visibility and prove relevant to communities in which they operate and assert their roles as facilitators of development,” he says.

    Under the initiative, farmers such as Mbaria are reached by the universities and benefit from the knowledge in their possession, which largely remains stored in journal publications. On their side, universities fulfill their obligation of giving back to society.

    While hydroponics is a technology out of reach of many growers, it is essential for the fast multiplication of seeds, according to Michael Cherutich, a potato expert at Kenya’s Agriculture Development Corporation.

    The seed producers, including the state corporation, can hardly meet the demand for certified seeds. One way of ensuring affordability has many seed producers in the villages in potato farming areas.

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  • Development Banks Should Reform Their Lending Practices

    Development Banks Should Reform Their Lending Practices

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    • Opinion by Alexander Kozul-Wright, Ruurd Brouwer (geneva)
    • Inter Press Service
    • The International Monetary Fund (IMF) and the World Bank share a common goal of raising living standards in their member countries. This week, the two international institutions will convene in Washington DC (through October 16) for their annual meeting. The strength of the US dollar will be a key talking point. By adjusting their lending practices, these institutions have a unique opportunity to relieve suffering in the world’s poorest countries.

    GENEVA, Oct 11 (IPS) – In the last week of September, emerging market (EM) bond fund outflows hit $4.2 billion, according to JP Morgan, bringing this year’s total to a record $70 billion. The exodus, set off by a rising U.S. dollar, is heaping pressure on low-income countries.

    The greenback’s rise has been fuelled by interest-rate hikes by the Federal Reserve. Since March, the Fed has raised rates by three percentage points, prompting global investors to move their funds into U.S. financial assets and away from (riskier) EM investments.

    While economists continue to wrangle over their U.S. growth forecasts, this ‘flight to quality’ has sent financial shockwaves across the developing world, already straining under elevated costs for food and fuel – typically priced in U.S. dollars. Moreover, attempts by EM policy makers to stem the dollar’s rise have largely failed.

    Over the course of this year, central banks around the world have drained their U.S. dollar reserves at the fastest rate since 2008. To stem currency depreciations, they have also raised interest rates aggressively. In Argentina, for instance, policy makers raised rates to 75% last month. To little avail.

    The MSCI Emerging Market Currency Index, which measures the total return of 25 emerging market currencies against the U.S. Dollar, is down nearly 9 percent from January 1st. The Egyptian pound has depreciated by 20% over the same period, according to Bloomberg data. In Ghana, the Cedi has fallen by 41%.

    On top of higher imports costs, a plunging currency makes the servicing of dollar- denominated debt more expensive. This concern may seem abstract to people in advanced economies. In developing nations, however, the effects are painfully real.

    As the dollar appreciates relative to other currencies, more domestic currency (in the form of tax revenues) has to be generated to service existing dollar debts. For low-income governments, budget cuts have to be implemented in the hope of avoiding sovereign default.

    Currency depreciations have the power to strongarm authorities into reducing health and education spending, just to stay current on their debts. This leaves officials with a grim choice: either risk unleashing a full-blown debt crisis, or confiscate essential public services.

    Given the painful costs of insolvency, governments tend to prioritize austerity over bankruptcy. Together with the oft-publicized effects of lost access to foreign investment, subdued growth and high unemployment, sovereign default also imposes severe social tolls.

    In August, the World Bank published a paper measuring the decline in country living standards – looking at access to food, energy and healthcare – after state bankruptcies. The paper showed that ten years after default, countries experience 13% more infant deaths per year, on average, compared to the synthetic control (counterfactual) group.

    Admittedly, more developed emerging markets like Brazil and India can issue bonds in their own currency to limit budget cutbacks. In most of the world’s poor countries, however, financial markets are too shallow to support domestic lending.

    With no recourse to borrow from private creditors, public bodies like multi-lateral development banks (MDBs) usually step in to fill the gap. Indeed, almost 90% of low-income countries’ (LICs) funding takes the form of concessional, or non-commercial, loans from official lenders.

    Even accounting for these favourable terms, financial pressures are beginning to build outside of well-known hot spots like Lebanon, Sri Lanka and Pakistan. As it stands, LICs have outstanding debts to MDBs and other official creditors to the tune of $153 billion (mostly denominated in USD).

    Given the exogenous trigger for capital outflows from developing countries this year, multi-lateral lenders need to be more innovative. Where possible, they should use their robust credit ratings to assume greater risk by lending to poor countries in domestic currencies.

    Failing that, they could lend in synthetic local currencies. These instruments index dollar debts to local exchange rates, allowing borrowers to service liabilities in their own currency while ensuring that creditors receive payments (both interest and principal) in dollars.

    Synthetic currencies can improve debtor credit profiles by limiting foreign capital outflows and, by extension, improve debt management capacity. In particular, they boost economic resiliency by making government finances less a function of international currency volatility.

    Multilateral financial institutions have been tasked with designing a stable international monetary system to try and ease global poverty. But the loans provided by these groups undermine their own mission, as dollar debts force currency risk onto the countries least able to handle it.

    This week, the World Bank and the IMF will convene in Washington (October 10-16) for their annual meeting. The strength of the USD will be a key talking point. By adjusting their lending practices, these institutions have a unique opportunity to relieve suffering in the world’s poorest countries.

    Alexander Kozul-Wright is a researcher at Third World Network and Ruurd Brouwer is Chief Executive Officer at TCX, a currency hedging firm (https://www.tcxfund.com).

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  • Central Bank Myths Drag down World Economy

    Central Bank Myths Drag down World Economy

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    • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
    • Inter Press Service

    SYDNEY and KUALA LUMPUR, Oct 10 (IPS) – The dogmatic obsession with and focus on fighting inflation in rich countries are pushing the world economy into recession, with many dire consequences, especially for poorer countries. This phobia is due to myths shared by most central bankers.

    Anis Chowdhury

    Myth 1: Inflation chokes growth

    The common narrative is that inflation hurts growth. Major central banks (CBs), the Bretton Woods institutions (BWIs) and the Bank of International Settlements (BIS) all insist inflation harms growth despite all evidence to the contrary. The myth is based on a few, very exceptional cases.

    “Once-in-a-generation inflation in the US and Europe could choke off global growth, with a global recession possible in 2023”, claimed the World Economic Forum Chief Economist’s Outlook under the headline, “Inflation Will Lead Inexorably To Recession”.

    The Atlantic recently warned, “Inflation Is Bad… raising the prospect of a period of economic stagnation or even a recession”. The Economist claims, “It hurts investment and makes most people poorer”.

    Jomo Kwame Sundaram

    Without evidence, the narrative claims causation runs from inflation to growth, with inevitable “adverse” consequences. But serious economists have found no conclusive supporting evidence.

    World Bank chief economist Michael Bruno and William Easterly asked, “Is inflation harmful to growth?” With data from 31 countries for 1961-94, they concluded, “The ratio of fervent beliefs to tangible evidence seems unusually high on this topic, despite extensive previous research”.

    OECD evidence for 1961-2021 – Figures 1a & 1b – updates Bruno & Easterly, again contradicting the ‘standard narrative’ of major CBs, BWIs, BIS and others. The inflation-growth relationship is strongly positive when 1974-75 – severe oil spike recession years – are excluded.

    The relationship does not become negative even when 1974-75 are included. Also, the “Great Inflation” of 1965-82 did not harm growth. Hence, there is no empirical basis for setting a particular threshold, such as the now standard 2% inflation target – long acknowledged as “plucked from the air”!

    Developing countries also have a positive inflation-growth relationship if extreme cases – e.g., inflation rates in excess of 20%, or ‘excessively’ impacted by commodity price volatilities, civil strife, war – are omitted (Figures 2a & 2b).

    Figure 2a summarizes evidence for 82 developing countries during 1991-2021. Although slightly weakened, the positive relationship remained, even if the 1981-90 debt crises years are included (Figure 2b).

    Myth 2: Inflation always accelerates

    Another popular myth is that once inflation begins, it has an inherent tendency to accelerate. As inflation supposedly tends to speed up, not acting decisively to nip it in the bud is deemed dangerous. So, the IMF chief economist advises, “Don’t let inflation ‘genie’ out of the bottle”. Hence, inflation has to be ‘nipped in the bud’.

    But, in fact, OECD inflation has never exceeded 16% in the past six decades, including the 1970s’ oil shock years. Inflation does not accelerate easily, even when labour has more bargaining power, or wages are indexed to consumer prices – as in some countries.

    Bruno & Easterly only found a high likelihood of inflation accelerating when inflation exceeded 40%. Two MIT economists – Rüdiger Dornbusch and Stanley Fischer, later International Monetary Fund Deputy Managing Director – came to a similar conclusion, describing 15–30% inflation as “moderate”.

    Dornbusch & Fischer also stressed, “Most episodes of moderate inflation were triggered by commodity price shocks and were brief; very few ended in higher inflation”. Importantly, they warned, “such inflations can be reduced only at a substantial … cost to growth”.

    Myth 3: Hyperinflation threatens

    Although extremely rare, avoiding hyperinflation has become the pretext for central bankers prioritizing inflation prevention. Hyperinflation – at rates over 50% for at least a month – is undoubtedly harmful for growth. But as IMF research shows, “Since 1947, hyperinflations in market economies have been rare”.

    Many of the worst hyperinflation episodes in history were after World War Two and the Soviet demise. Bruno & Easterly also mention breakdowns of economic and political systems – as in Iran or Nicaragua, following revolutions overthrowing corrupt despotic regimes.

    A White House staff blog noted, “The inflationary period after World War II is likely a better comparison for the current economic situation than the 1970s and suggests that inflation could quickly decline once supply chains are fully online and pent-up demand levels off”.

    Myth 4: Evidence-based policymaking

    Central bankers love to claim their policymaking is evidence-based. They cite one another and famous economists to enhance the aura of CB “credibility”.

    Unsurprisingly, the Reserve Bank of New Zealand promoted its arbitrary 2% inflation target mainly by endless repetition – not strong evidence or superior logic. They simply “devoted a huge amount of effort” to preaching the new mantra “to everybody who would listen – and some who were reluctant to listen”.

    The narrative also suited those concerned about wage pressures. Fighting inflation has provided an excuse to further weaken workers’ working conditions and pay. Thus, labour’s share of income has been declining since the 1970s.

    Greater central bank independence (from the executive) has enhanced the influence and power of financial interests – largely at the expense of the real economy. Output and employment growth weakened as a result, worsening the lot of the many, especially in the global South.

    Fact: Central banks induce recessions

    Inappropriate CB policies have often slowed economic growth without mitigating inflation. Hawkish CB responses to inflation can become self-fulfilling prophecies with high inflation seemingly associated with recessions or growth collapses.

    Before becoming Fed chair, Ben Bernanke’s research team concluded, “an important part of the effect of oil price shocks on the economy results not from the change in oil prices, per se, but from the resulting tightening of monetary policy”.

    Thus, central bank interventions have caused contractions without reducing inflation. The longest US recession after the Great Depression – in the early 1980s – was due to Fed chair Paul Volcker’s 1979-81 interest rate hikes.

    A New York Times opinion-editorial recently warned, “The Powell pivot to tighter money in 2021 is the equivalent of Mr. Volcker’s 1981 move”, and “the 2020s economy could resemble the 1980s”.

    Fearing an “extremely severe” world recession, Columbia University history professor Adam Tooze has summed up the current CBs’ interest rate hike frenzy as “the single most dramatic simultaneous tightening of monetary policy ever”!

    Phobias, especially if based on unfounded beliefs, never offer good bases for sound policymaking.

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  • How to Get on Track to Eradicate Extreme Poverty

    How to Get on Track to Eradicate Extreme Poverty

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    The Graduation approach’s impact goes well beyond that of the individual participant. Not only does the household greatly benefit from its various interventions, but now studies show subsequent generations are able to stay out of the poverty trap. (Rangpur, Bangladesh). Credit: BRAC/2021
    • Opinion by Gregory Chen (washington dc)
    • Inter Press Service
    • Gregory Chen is Managing Director of BRAC’s Ultra-Poor Graduation Initiative

    WASHINGTON DC, Oct 10 (IPS) – As we approach 2030, the Sustainable Development Goals look harder than ever to achieve. Shocks to the global economy caused by climate change, COVID-19, and conflict threaten humanity’s survival. For the most vulnerable, trends are moving in the wrong direction with an additional 75 to 95 million people now living in extreme poverty compared to pre-pandemic World Bank projections. By the end of this year more than 657 million people will still be living in extreme poverty substantially more than in 2018.

    Though we cannot blame the recent crises alone. Even before the crises of the past few years the globe was beginning to realize addressing extreme poverty required new approaches. Economic growth alone remains insufficient and conventional anti-poverty policies and programs were not addressing the root problems affecting the most marginalized.

    What can countries do to end the most severe forms of poverty?

    While private organizations like BRAC (where I work) have a role to play, it is governments that are best positioned to take the lead tackling extreme poverty at scale. Governments have the mandate, the infrastructure, and the financing to transform the lives of the most vulnerable people.

    Governments increasingly recognize a growing body of research which tells us people in extreme poverty face multiple reinforcing barriers – a lack of nutrition, education, and social exclusion which contribute to a deficit of hope and self-confidence. Together, these multiple factors create a poverty trap that is challenging to escape. Addressing only a few of these barriers at a time is insufficient for people out of poverty traps. Many governments have begun to recognize this in the past decade as growth lifted many out of poverty but large pockets of people remained excluded.

    Women gather to discuss social issues and add to their group savings as part of the Bab Amal (Door of Hope) Graduation project in Upper Egypt (Sohag, Egypt). Credit: BRAC/Robert Irven 2022

    Escaping a poverty trap requires a “big push” – a significant transfer of resources and support that can address multiple barriers in one go. One “big push” proven to break the poverty trap is referred to as the Graduation approach (though it may be called different things in diverse settings). Graduation is a sequenced set of interventions that address the unique circumstances of poverty within the local context. This approach meets participants’ day-to-day needs, provides training and assets for income generation, financial literacy and savings support, and social empowerment through community engagement and life skills training – all facilitated through coaching that calls for regular interactions with participants.

    A period of intense coaching enables participants to build resilience and self-confidence by empowering them to save, diversify their sources of income, access safety nets, and develop coping mechanisms to major shocks and build up self confidence. These combined interventions are delivered in a 2-3 year time bound period, empowering participants to begin an upward trajectory out of extreme poverty and with greater ability to link to wider government support.

    Graduation programs are designed to positively impact all household members, but the approach focuses on direct engagement with working age women. These women are disproportionately affected by extreme poverty and most likely to use their greater capacities to reinvest in their households’ development.

    At its core, Graduation is about recognizing that when empowered with the right tools and resources, people can be agents of change for themselves, their households, and their communities.

    A high return on investment

    The Graduation approach is an investment with returns that grow over time. Rigorous evaluations report that four years after participants start, Graduation delivered benefits that began to exceed program costs. Compared to standalone narrower interventions like lump sum cash transfers, after 3 to 4 years after the initial intervention, Graduation programs deliver greater household benefits – including greater consumption, income, and savings. Research from India shows that ten years after starting the program, participants see approximately 400% ROI, and projections suggest this return could reach 1100% over the participant’s lifetime. Since the investment is time limited and may not be repeated its ROI over the longer term can save costs and build resilience.

    Many Government are Adopting Graduation

    Due to Graduation’s proven impact, many governments are investing in the approach, integrating it into existing programs. It is estimated that more than 15 government programs have developed Graduation approaches across Latin American, Africa, and Asia. Among them include governments in Kenya, the Philippines, and India. These are most often not new standalone programs but integrated within existing Graduation programs, where the Graduation package is particularly emphasized for certain target populations.

    Yolanda, a participant of the DSWD’s Padayon SLP Graduation project, is visited by her coach Julius, who helps ensure she is making steady progress and has the tools and knowledge she needs to overcome any challenges or shocks. (Iloilo City, Philippines). Credit: BRAC/Robert Irven 2022

    In the Philippines, despite the many challenges created by COVID-19 in 2020, participants in the Philippines’ Department of Labor and Employment (DOLE) Graduation program had more resilient livelihoods and better savings and financial management, according to Asian Development Bank (ADB). The Government of the Philippines is now on its second iteration of Graduation integration offered through the Department of Social Welfare and Development with support from ADB and the Australian government.

    The Government of Kenya is also investing in Graduation with the Kenya: Social and Economic Inclusion Project (KSEIP) in partnership with Global Development Incubator, BOMA Project, Village Enterprise, the World Bank, and the UK government (FCDO). Following a successful pilot in 2019, KSEIP will transition from a narrower unconditional cash transfer to a fuller package of Graduation.

    A Few Leading Governments are Implementing at Scale

    Some governments have moved beyond testing to delivering at scale. In the Province of Bihar in India, a large rural development program (called JEEViKA) established a special window for a Graduation program known as Satat Jevvikoparjan Yojana (SJY), which has reached 140,000 households in extreme poverty since 2018. Other Provinces in India may follow suit expanding their own Graduation programs as well. Additionally, countries such as Ethiopia and South Africa are looking to further adapt their already large scale programs with more Graduation elements added that can deliver long term results.

    As governments implement scaled programs we have reasons to be confident that these investments will bring durable results. While we must address today’s crises, our work to dramatically reduce and eliminate extreme poverty will not happen with slipshod short-term band-aids. Governments can begin to fully address extreme poverty with smart investments that will over time lead to permanent changes that eliminate extreme poverty.

    While governments will lead, they cannot do it alone. The international community, particularly multilateral institutions, can provide the financing required to operate at scale. NGOs and community-based institutions can be partners in last mile delivery assisting the government where needed. Researchers can focus their methods more on how scaled programs operate (rather than on repeat small scale impact evaluations) so that we can make wider decisions on adapting for scale.

    It is high time for us to lean on the evidence, evolve programmatically, put government in the lead, and benefit from all the testing and research that has led us to solutions that can work.

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  • Ideology and Dogma Ensure Policy Disaster

    Ideology and Dogma Ensure Policy Disaster

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    • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
    • Inter Press Service

    SYDNEY and KUALA LUMPUR, Oct 04 (IPS) – Central banks (CBs) around the world – led by the US Fed, European Central Bank and Bank of England – are raising interest rates, ostensibly to check inflation. The ensuing race to the bottom is hastening world economic recession.

    Going for broke

    New UK Prime Minister Liz Truss has already revived ‘supply side economics’, long thought to have been fatally discredited. Her huge tax cuts are supposed to kick-start Britain’s stagnant economy in time for the next general election.

    Anis Chowdhury

    But studies of past tax cuts have not found any positive link between lower taxes and economic or employment growth. Oft-cited US examples of Reagan, Bush or Trump tax cuts have been shown to be little more than economic sophistry.

    Reagan’s Council of Economic Advisers chairman, Harvard professor Martin Feldstein found most Reagan era growth due to expansionary monetary policy. Volcker’s interest rate hikes to fight inflation were reversed. This enabled the US economy to bounce back from its severe 1982 monetary policy inflicted recession.

    George W Bush’s 2001 and 2003 tax cuts also failed to spur growth. Instead, deficits and debt ballooned. “The largest benefits from the Bush tax cuts flowed to high-income taxpayers”. Likewise, Trump tax cuts failed to lift the US economy, with billionaires now paying much less than workers.

    After Boris Johnson stepped down, UK Conservative Party leadership contenders started by promising more tax cuts. But The Economist was “sceptical that such cuts will lift Britain’s growth rate”. Instead, it worried tax cuts would compound inflationary pressures, triggering ever tighter monetary policy.

    The Economist concluded, “It is hard to spot a connection between the overall level of taxation and long-term prosperity”. Unsurprisingly, The Economist sees Truss’ “largest tax cuts in half a century” as “a reckless budget, fiscally and politically”.

    Jomo Kwame Sundaram

    While such tax cuts mainly benefit the very rich, the costs of such monetary and fiscal policies are borne by workers and other consumers. Workers are harshly punished by austerity measures, losing both jobs and incomes to interest rate hikes.

    Tax cuts usually make things worse. Typically, these require cutting social protection and essential public services, ostensibly to balance the budget. So, already greater wealth and income inequalities will worsen.

    Governments have to cut public investments due to ballooning budget deficits. Higher interest rates and public spending cuts will also derail efforts needed to transition to more sustainable, greener futures.

    Class war

    Policy fights over inflation have many dimensions, including class. Instead of helping people cope with rising living costs, increasing interest rates only makes things worse, hastening economic slowdowns. Thus, workers not only lose jobs and incomes, but also are forced to pay more for mortgages and other debts.

    Unemployment, lower incomes, deteriorating health and other pains hurt workers. As workers want higher incomes to cope with rising living expenses, such austere policies are deemed necessary to prevent ‘wage-price spirals’.

    As usual, workers are being blamed for the resurgence of inflation. But research by the International Monetary Fund (IMF) and others has found no evidence of such wage-price spirals in recent decades.

    Experience and evidence suggest very low likelihood of such dialectics in current circumstances, although some nominal wages have risen. Since the 1980s, labour bargaining power and collective wage determination have declined.

    Policymakers should address stagnant, even declining real wages in most economies in recent decades. These have hurt “low-paid workers much more than those at the top”. Even the Organization for Economic Cooperation and Development club of rich countries has “worryingly” noted these trends.

    The IMF Deputy Managing Director has explained why wages do not have to be suppressed to avoid inflation. Letting nominal wages rise will mitigate rising inequality, plus declining labour income shares (Figure 1) and real wages.

    Source: IMF, World Economic Outlook, April 2017

    Profit margins had already risen, even before the Ukraine war and sanctions. US trends prompted the Bloomberg headline, “Fattest Profits Since 1950 Debunk Wage-Inflation Story of CEOs”. Aggregate profits of the largest UK non-financial companies in 2021 rose 34% over pre-pandemic levels.

    Policymakers should therefore restrain profits, not wages. Recent price increases have been due to rising profits from mark-ups. Recent trends have made it “easier for firms to put their prices up” notes the Reserve Bank of Australia Governor.

    Addressing inequality

    The IMF Managing Director (MD) recently warned, “People will be on the streets if we don’t fight inflation”. But people are even more likely to protest if they lose jobs and incomes. Worse, the burden of fighting inflation has been put on them while the elite continues to enrich itself.

    Raising interest rates is a blunt means to fight inflation. It worsens living costs and job losses, while tax cuts mainly benefit the rich. Instead, the rich should be taxed more to enhance revenue to increase public provisioning of essential services, such as transport, health and education.

    The IMF MD noted raising taxes on the wealthy will help close the yawning gap between rich and poor without harming growth. Public provision of childcare and labour market programmes (e.g., retraining) will improve labour supply. Easing worker shortages can thus dampen price pressures.

    The current situation requires addressing growing inequality. Redistributive fiscal measures – taxing high earners to fund expanded social protection and public provisioning – are time-tested means to address disparities.

    Increasing top tax rates and tax system progressivity are also socially progressive, checking growing inequality. Meanwhile, as consumer prices spiral, rising profits and high executive remuneration have to be checked.

    Supply-side policies

    The World Bank and Bank of International Settlements heads have urged reducing the current focus on demand management to counter inflation. They both insist on addressing long-term supply bottlenecks, but do not offer much practical guidance.

    Poorly coordinated ‘unconventional’ monetary policies since the 2008-09 global financial crisis have created property and stock market bubbles. These damage the real economy, worsen inequality and slow labour productivity growth, with the worst spill over effects in developing counties.

    Addressing supply bottlenecks can involve tax incentives and credit policies. But discredited supply-side mantras – e.g., labour market deregulation – must be discarded. Related fiscal and monetary policies – e.g., tax cuts for the rich and inappropriate interest rate hikes – should also be abandoned.

    Governments are losing chances to boost productivity, achieve low carbon transformation and cut inequalities. Instead, policymakers should pro-actively push desired economic changes by favouring less carbon-intensive and more dynamic investments.

    This may also require checking CBs’ monetary policy independence to more effectively coordinate fiscal with monetary policies. But this should not undermine CBs’ ‘operational independence’ to foster “orderly economic growth with reasonable price stability”.

    Governments must rise to the extraordinary challenges of our times with pragmatic, appropriate and progressive policy initiatives. To do this well, they must boldly reject the ideologies and dogmas responsible for our current predicament.

    IPS UN Bureau


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    © Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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  • Nepal Government, UN Agency Seek Investors for Latest Cash Crop to Boom in Countrys East

    Nepal Government, UN Agency Seek Investors for Latest Cash Crop to Boom in Countrys East

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    Large cardamom grower Kaushila Moktan at her farm in Salakpur, eastern Nepal. Credit: Birat Anupam/IPS
    • by Birat Anupam (salakpur, nepal)
    • Inter Press Service

    SALAKPUR, Nepal, Sep 29 (IPS) – Two and a half hours’ drive north from Kakarbhitta, Nepal’s eastern-most border crossing with giant neighbour India, lies the hilly hamlet of Salakpur where lives Kaushila Moktan, a famed farmer of large cardamom.

    “I run a homestay for guests visiting our village, I also grow green vegetables and do beekeeping,” said Moktan. “However, our biggest source of family income is alaichi (large cardamom, in the Nepali language).”

    The plant has helped keep her family of three — including her husband and 31-year-old son —afloat, said Moktan. “This year we produced some 24 man (960 kg) of cardamom,” she added in an interview at her farm. “I have sold 5man for 160,000 rupees (Rs) (equivalent to US$1,229 ).”Locals have their own cardamom measurement. Forty kg equals one man. A man currently sells for about Rs 30,000.

    Moktan has stored a large part of her harvest in hopes of a better price in the days ahead. “I have experience of selling 1 man for Rs 98,000 some six years ago. This time, the price has been reduced to around Rs 30,000.”

    She added that beekeeping has improved her cardamom harvest. “This year, we fetched 30 kg of honey and 24 man of cardamom, but last year the cardamom harvest was just around 9 man and the honey harvest was 3 kg. I have seen that good pollination leads to better productivity both for cardamom and honey,” said Moktan.

    Used as a cooking spice, large cardamom has a smoky, camphor-like flavour. It is also an ingredient in traditional medicine in countries including India and China.

    A close-up of a large cardamom plant, post-harvest. Credit: Birat Anupam/IPS
    A close-up of a large cardamom plant, post-harvest. Credit: Birat Anupam/IPS

    Farmers can’t get enough

    Moktan’s neighbours tell similar positive stories about the crop. “I have a grocery shop, homestay and beekeeping but the good source of stable income is cardamom,” said Laxmi Tamang. She added that her farm produces around 5 man of the crop and that she recently sold this year’s harvest for Rs 160,000.

    Nearby, Pabitra Gahatraj said she produces around three man per year. “We sell milk to the dairy, but if we had more land, we would plant more large cardamom.”

    The three women are among the 300 households of Salakpur, in Rong Rural Municipality-6 of Ilam District, which rely on the crop. “Every household in our locality has large cardamom farming,” said Ward Chairperson Satyam Rai.

    Located on the bank of the Mechi River, which runs between India and Nepal, Salakpur’s large cardamom production emerged because of cross-border migration. “This village had no trend of cardamom faming because we did not have much water and the soil wouldn’t grow the regular variety,” said Moktan. “But, relatives coming from India suggested that we try their variety, which is grown in water-scarce areas.”

    The formula proved successful some 15 years ago. Soon word of the new crop spread to other districts of Nepal, bringing hordes of people looking to buy saplings. “We would sell them for Rs 5 per sapling and people as far as Dolakha district (500 km west of Ilam) came here to buy this plant,” said Moktan. “Even today, people occasionally arrive to buy saplings.”

    The Government of Nepal has taken notice of the boom in large cardamom. Working with the UN Food and Agriculture Organization (FAO) it has singled out the crop, and four others, as strong candidates for investment in a new project, the Hand in Hand Initiative (HiH).

    Large cardamom grower Kaushila Moktan with sacks of large cardamom she has stored in hopes that prices will rise. Credit: Birat Anupam/IPS
    Large cardamom grower Kaushila Moktan with sacks of large cardamom she has stored in hopes that prices will rise. Credit: Birat Anupam/IPS

    Investment in production and processing

    “In terms of production, we will aim to create quality planting material which is disease-free, expand the production area, and provide capacity-building, including for post-harvest marketing,” said Ken Shimizu, FAO Representative in Nepal and Bhutan, in an interview. “For processing, there is a shortage of drying and storage facilities, which will be addressed,” he added in his office in Nepal’s capital Kathmandu.

    The other crops identified under Nepal’s HiH are mountain potato, ginger and timur (Szechuan pepper). All have been assessed using the government’s Climate-Smart Agriculture Investment Plan, which FAO says identifies climate-smart farming practices and aims for higher yields, better climate resilience, sustainability and efficiency. The crops targeted under HiH generate a rate of return on investment of 20-25 percent.

    Shimizu said that the agency plans to reach 100,000 producers of large cardamom production through HiH. “What we want to see is impact. First, more income generated from cardamom, which will help to enhance livelihoods and increase income for farmers.”

    HiH is an evidence-based, country-owned and led initiative of the FAO to accelerate agricultural transformation, which also aims to eradicate poverty, end hunger and malnutrition, and reduce inequalities. The initiative supports 52 countries in Africa, Asia, Europe, Latin America, and the Middle East as of May 2022.

    Locals in Salakpur call the large cardamom they grow Pakhe alaichi, which refers to cardamom grown on slopes. The responsible Nepal Government office has given it another name — jirmale. According to Anupa Subedi, Horticulture Development Officer and the Information Officer at the Cardamom Development Centre, jirmale is grown at an altitude varying from 600 m to 1,200 m, in water-scarce areas. It is harvested in the last three weeks of August.

    Cardamom is grown is 46 districts of Nepal, the vast majority in the eastern hills. Harvested on 17,015 hectares (ha), large cardamom production was 11,621 tonnes in 2021, said Subedi. She added that less than five percent of cardamom is consumed in country and the rest is exported, mainly to India. Nepal is one of the world’s largest cardamom exporters, accounting for 68 percent of global production. It earns around $37 million from its cardamom exports, according to FAO data.

    Large cardamom growing near a house in Salakpur, eastern Nepal. Credit: Birat Anupam/IPS
    Large cardamom growing near a house in Salakpur, eastern Nepal. Credit: Birat Anupam/IPS

    Growers see warning signs

    Despite its booming success in recent years, the large cardamom growers of Salakpur are not optimistic the trend will continue. Moktan said yellowing leaves have been sounding a warning bell to the farmers for a couple of years. Previously the locals farmed oranges and ginger, but eventually those crops too declined.

    “Once there used to be huge cultivation of ginger. We would fetch around Rs 100,000 in a year,” she said. “This ended some 10 years ago, and orange cultivation has been non-existent for the past five years.” Where once Moktan and her neighbours earned a healthy living, and reputation, growing the two crops, today the orange trees are withering, as did the ginger plants before them.

    “We are now unable to grow and earn from ginger and orange for reasons we do not know,” said Tamang. “We are asking ourselves: how long will cardamom farming last?”

    The women have heard that climate change might have contributed to the problems, and there are other theories. “Some people said the orange trees died because we planted cardamom saplings around them,” said Moktan. But in some cases the trees died even in the absence of cardamom.”

    However, she is confident that support to deal with any growing issues will be provided by the local government, Cardamom Development Centre, and international organizations like FAO. ”We cannot solve any technical problems on our own,” said Moktan. “We need support from outside.”

    © Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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