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Tag: Trade & Investment

  • The Grand Narrative of Private Finance: Over-Reliance on Attracting Investment is Undermining Change at World Bank

    The Grand Narrative of Private Finance: Over-Reliance on Attracting Investment is Undermining Change at World Bank

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    • Opinion by Bhumika Muchhala, Maria Jose Romero (new york / brussels)
    • Inter Press Service

    NEW YORK / BRUSSELS, Jul 06 (IPS) – One message that was repeated throughout last month’s summit on a so-called “New Global Financing Pact” was that developing countries urgently need mass financing to tackle the climate and biodiversity emergency. And there is not enough of it in public coffers.

    Unfortunately, the false narrative that the only way to fill this gap is to ‘leverage’ more private finance also persisted. The resulting Paris Agenda for People and Planet stated: “meeting global challenges will depend on the scaling up of private capital flows.” This should be achieved in large part by revamping the role of multilateral development banks (MDBs).

    Last December, the World Bank Group (WBG), the biggest MDB, launched its so-called “evolution” process, with the support of G7 governments. This set the institution to work on increasing its lending by deepening its reliance on the financial market.

    The dogged reliance on private capital as saviour appears to be steeped in capitalist realism. It is believed to be implausible for the public sector to deliver the scale of financing needed to address the climate and development crisis.

    Private capital, which can be leveraged using public money, securitised and reproduced is favoured as the pragmatic choice. However, while the financing gap to deliver on the sustainable development goals is very real, the neat narrative buttressing private capital obscures two empirical realities.

    First is the absence of rich countries’ political will to deliver on agreed commitments, from the 0.7 per cent of Gross National Income in development aid made in 1970 to the US$100 billion per year climate financing agreed in 2009.

    Second, the ongoing systemic wealth drain from developing to rich countries. Since 1982, developing countries as a whole have transferred an estimated US$4.2 trillion in interest payments to global north-based creditors, far outstripping aid flows and concessional lending during the same period.

    Additionally, tax-related illicit financial flows cost countries hundreds of billions of dollars in lost tax income every year. Debt servicing is draining approximately 25 per cent of total government spending in developing countries as a whole, hijacking both climate and SDG (Sustainable Development Goals) financing.

    The allure of private finance

    Last month, in a new attempt to ‘leverage’ private capital, the WBG launched the Private Sector Investment Lab, a partnership with the private sector that aims to “rapidly scale solutions that address the barriers preventing private sector investment.”

    Furthermore, it announced “an expanded toolkit for crisis preparedness, response, and recovery” that includes providing “new types of insurance” to backstop private sector projects. This follows a not-so-new pattern articulated in the WBG’s Evolution Roadmap draft published in April

    While the WBG is set to expand its mandate to incorporate “sustainability” considerations, the approach is still rooted in a heady cocktail of de-risking instruments such as risk guarantees, blended finance and first-loss positions by governments, and in tweaking national regulatory frameworks to enable a business-friendly environment.

    The goal is as singular as the solution: to make investment more profitable for the private sector. The (optimistic) rationale: ‘incentivising’ private capital will ‘crowd in’ economic growth and climate, biodiversity and development financing. This assumes that it is possible to equate commercial goals and the public interest, which is not always the case without creating financial barriers that undermine access to public services, such as user fees.

    It also ignores that risks are transferred from private to public actors, further increasing debt vulnerabilities, and the developmental dilemma posed by prioritising private profits over distributive goals and state sovereignty.

    In ongoing discussions about the Roadmap, it is yet to be seen if the WBG will incorporate sufficient provisions within its plans to ensure the recipient state’s right to regulate in the public interest for a rights-based economy that upholds distributive justice. That is, economic, climate and gender equity.

    Solutions with legitimacy

    The largest coalition of developing countries in the United Nations (known as the “Group of 77”), representing 134 nations, have been calling for reform of the international tax, debt and financial architecture for many years.

    These calls, enshrined in resolutions adopted by the UN General Assembly, includes establishing a multilateral legal framework that would comprehensively address unsustainable and illegitimate debt, including through extensive debt restructuring and cancellation, and agreeing on a UN Tax Convention with equitable participation of developing countries to address tax abuse by multinational corporations and other illicit financial flows.

    As was made clear last month in several developing countries’ calls, a reform agenda should not be limited to merely boosting MDBs’ coffers – via financial innovation techniques – but rather include governance reform that meaningfully augments the voice and vote of developing countries in macroeconomic decision-making, which is the litmus test for legitimate and democratic economic governance.

    Furthermore, for many in civil society, for the WBG to “evolve” in a credible way it must also seek to independently evaluate the development impact of its policy prescriptions for developing countries over recent decades. Civil society organisations are stating this again in official feedback on the Evolution Roadmap submitted to the Bank this week.

    The ways in which the mythology of the private financier is construed dangerously omits the concrete reforms for historical economic justice, and state sovereignty, that the global south are demanding. This disjuncture calls for a clear-eyed questioning of the allure of private finance. Here lies the difference between new forms of extraction as opposed to change towards redistributive justice.

    https://www.eurodad.org/civil_society_calls_for_rethink_of_world_banks_evolution_roadmap

    Bhumika Muchhala is Political Economist and Senior Advisor at Third World Network
    and María José Romero is Policy and Advocacy Manager at the European Network on Debt and Development (Eurodad)

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  • The Rotenberg Files: A Guide on How Russian Oligarchs Dodge Sanctions

    The Rotenberg Files: A Guide on How Russian Oligarchs Dodge Sanctions

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    • Opinion by Matti Kohonen (london)
    • Inter Press Service

    LONDON, Jun 22 (IPS) – The author is Executive Director of Financial Transparency CoalitionThe sanctions against Russian oligarchs who hold billions of dollars have mostly failed to have a real impact beyond freezing a few yachts and properties. So, what went wrong? Now we know.

    The “Rotenberg Files”, a mass leak of over 42,000 emails and documents, has showed how Russian oligarchs Boris and Arkady Rotenberg hid their assets and those of Vladimir Putin, using trusts and private equity investment funds, taking advantage of the lack of public beneficial ownership registries.

    Since the Russian invasion of Ukraine in 2014 and especially since 2022, sanctions on Russian oligarchs and legal entities linked to the Russian invasion of Ukraine include 12,900 designations against Russia. Some estimates say that Russian oligarch offshore wealth is over US$1 trillion, but sanctions so far have only frozen US$58 billion, due to difficulty in establishing ownership.

    Sanctions vary but have been mainly implemented by G7 countries and the European Union. Their effectiveness depends on setting up beneficial ownership registries that cover all possible legal vehicles, and the obligation to cross-check beneficial owners against sanctions regimes by a wide variety of professional enablers for due diligence purposes.

    This has largely not happened. Despite progress in establishing centralised beneficial ownership registries, a commitment made by nearly 100 countries, very few of them are open to public access and are ridden with loopholes. In reality, global South countries are now leading the way in establishing effective BO registries after the European Court of Justice ended public access to EU-wide BO registries in November 2022.

    This has allowed trusts to become the legal vehicle of choice by Russian oligarchs to hide their wealth. They are also very hard to detect as the presence of a trust deed can be kept at a lawyer’s office if there is no requirement to register the trust in a beneficial ownership registry. Many BO registries do require declaring trusts, but there are loopholes that allow for setting up trusts in jurisdictions that do not require registration of trusts or have loopholes regarding thresholds or exemptions. Only 65 countries require some form of registration of trusts.

    Eight of the 18 BVI companies mentioned in the Rotenberg leaks were ultimately dissolved, and two relocated to Cyprus. This implies that Cyprus has become a key location to use trusts and other instruments to conceal ownership. As a European Union member, Cyprus was obliged to create a central register of beneficial ownership in line with the EU’s fifth Anti-Money Laundering Directive. Trusts based in Cyprus do come under this requirement, but the Rotenbergs used a loophole in the BO laws to conceal ultimate ownership that goes around the existing EU 5th Anti-Money Laundering Directive.

    They effectively created a complex ownership structure around different entities in order to be below the trigger points for reporting beneficial ownership (in most cases 25 percent of control), yet still retaining control through power through potential voting coalitions in the complex structure that were concealed elsewhere. The structure used by the Rotenbergs involved a US entity that is owned by entities elsewhere, including Italy, the UK, Luxembourg, Cyprus, Bahamas (four entities), the British Virgin Islands and Cayman Islands,

    Along with trusts, private equity firms have been revealed as another preferred vehicle to dodge sanctions. Investment vehicles called “closed mutual funds,” in Russian abbreviated as “ZPIFs,” held these assets. They are not considered legal entities under Russian law, and thus are not under obligations to reveal their shareholders to the authorities. The leaked files show that 13 ZPIFs were linked to the Rotenbergs.

    To evade questions about the true nature of the beneficial owners, the leaked files show that “there is a practice where the General Director of the Management Company is recognized as the ultimate beneficiary”. The ZPIF’s invested in Russian companies, Monaco real estate, and other assets where beneficial ownership checks do not take place. Companies where they owned minority stakes could do business relatively normally.

    Private equity and mutual funds are a global concern. According to a recent report, “Private Investments, Public Harm”, there are nearly 13,000 investment advisers in an $11 trillion industry with little or no anti-money laundering due diligence responsibilities in the USA, with the real possibility that sanctioned oligarchs use such vehicles to conceal their ownership. The US Enablers Act seeks to remove the exemption from due diligence checks from investment managers but the bill did not pass last December.

    Art is another way to conceal ownership, as art dealers are not under any reporting requirements for money laundering purposes. A July 2020 report by a U.S. Senate subcommittee detailed an elaborate scheme in which the Rotenberg brothers spent more than US$18 million on art purchases in the months after they were sanctioned by the U.S. in March 2014. They acquired several artworks, including a US$7.5 million René Magritte, through a web of offshore companies based in Cyprus and the British Virgin Islands.

    The tools to hide wealth used by Russian oligarchs to evade sanctions are exactly the same than the ones used by those behind natural resource crimes such as illegal, unregulated and unreported fishing, or indeed wealthy billionaires abusing laws to pay less than what they should in taxes. One cannot create a regime to just catch Russian billionaires. An overhaul of ownership transparency, from companies and trusts to art, vessels, aircraft and among other asset classes, including private equity and hedge funds, is required. Otherwise Russian oligarchs and kleptocrats around the world will continue dodging controls, keeping their shady money safely hidden.

    IPS UN Bureau


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  • As Game of Thrones Rages in Sudan, the Neighbors Pay the Price

    As Game of Thrones Rages in Sudan, the Neighbors Pay the Price

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    Long wait at the border between Sudan and Egypt. Credit: Hisham Allam/IPS
    • by Hisham Allam (cairo)
    • Inter Press Service

    CAIRO, May 25 (IPS) – The conflict in Sudan is impacting the economy in Egypt, and those who make their living moving goods across the borders have spent weeks hoping the situation will normalize.

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

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

    Saqr was stuck at the border for 28 days.

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

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

    Muhammad Saqr at the border of Sudan and Egypt.
    Muhammad Saqr at the border of Sudan and Egypt.

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

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

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

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

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

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

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

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

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

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

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

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

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

    IPS UN Bureau Report


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  • UNDP Good Growth Partnership: Smallholders Key to Reducing Indonesian Deforestation (Part 2)

    UNDP Good Growth Partnership: Smallholders Key to Reducing Indonesian Deforestation (Part 2)

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

    JOHANNESBURG, Apr 27 (IPS) – Smallholder farmers are critical to the success of Indonesia’s efforts to address deforestation and climate change. Creating an understanding and supporting this group, internally and abroad, is a crucial objective for those working towards reducing deforestation and promoting good farming practices, especially as smallholders often work hand-to-mouth and are vulnerable to perpetuating unsustainable farming practices.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    In April 2023, the European Parliament passed the law introducing rigorous, wide-ranging requirements on commodities such as palm oil. The UNDP is now researching how it should step up its assistance to producers to meet the criteria.

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

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

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

    Traceability and Deforestation

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

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

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

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

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

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

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  • UNDP Assistance Helps Farmers to Meet New EU Deforestation Rules

    UNDP Assistance Helps Farmers to Meet New EU Deforestation Rules

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    • by Alison Kentish (new york)
    • Inter Press Service

    NEW YORK, Apr 26 (IPS) – For the last five years, the United Nations Development Programme has worked with some of the world’s biggest producers of commodities like beef, soy, palm oil, and cocoa to protect livelihoods and the planet.In 2015, just over 30 cocoa farmers from Padre Abad in Ucayali, a province in the lush and ecologically diverse Peruvian Amazon, formed an alliance to tackle long-standing concerns such as soil quality, access to markets, fair prices for their produce and a growing number of illegal plantations. The result was the Colpa de Loros Cooperative, and from the start, the goal was to produce the finest quality, export-ready cocoa.

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

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

    Then in 2022, as the farmers worked to meet demanding international certifications, the European Parliament passed a new law that is introducing rigorous, wide-ranging requirements on commodities such as palm oil, soy, beef and cocoa. Now the United Nations Development Programme (UNDP) is researching how it should step up its assistance to producers to meet the new criteria.

    New EU Requirements

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

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

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

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

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

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

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

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

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

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

    UNDP Support – and Good Growth Partnership Scoping

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

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

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

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

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

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

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

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

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

    Action Plans

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

    https://www.youtube.com/watch?v=kBiNtHbEMZQ

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

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

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

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

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

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

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

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

    The Future of Sustainable Agriculture

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

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

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

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

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

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

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  • Localizing SDGs Means Truly Empowering Citizens

    Localizing SDGs Means Truly Empowering Citizens

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    • Opinion by Simone Galimberti (kathmandu, nepal)
    • Inter Press Service

    KATHMANDU, Nepal, Apr 18 (IPS) – The Future We Want was the groundbreaking outcome of the Rio+20 Summit, the summit, held in 2012, where the idea of Sustainable Development Goals (SDGs) was first conceptualized.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    But it is easier saying it than doing it!

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

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

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

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

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

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

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

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

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

    The opinions expressed in this article are personal.

    IPS UN Bureau

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  • We can Achieve the Sustainable Development Goals but it will take Courage & Urgent Transformations

    We can Achieve the Sustainable Development Goals but it will take Courage & Urgent Transformations

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    Navid Hanif
    • Opinion by Navid Hanif (united nations)
    • Inter Press Service

    UNITED NATIONS, Apr 17 (IPS) – The world is at a crossroads. This week, the United Nations Secretary-General, government ministers and senior leaders are gathered in New York at the ECOSOC Financing for Development Forum. (scheduled to take place April17-20).

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

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

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

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

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

    Navid HanifWe estimate that by 2027 LDCs and other low-income countries will need US$220 billion in external financing, 30% higher than the US$172 billion they needed in 2021. Many countries are falling behind, or even going backwards on the SDGs.

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

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

    The possibilities of green industrialization

    There is hope.

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

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

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

    An SDG investment push

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

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

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

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

    Reforms to the international financial architecture

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

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

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

    Failure is not an option

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

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

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

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

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

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

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

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  • The Saudis New Geostrategic Doctrine

    The Saudis New Geostrategic Doctrine

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    • Opinion by Alon Ben-Meir (new york)
    • Inter Press Service

    NEW YORK, Apr 11 (IPS) – The resumption of diplomatic relations between Saudi Arabia and Iran, and the Saudis’ diplomatic overtures toward Syrian President Bashar al-Assad, are part and parcel of the Saudis’ overall reassessment of their geostrategic interests, which rest on three distinctives goals: regional stability, exerting greater regional and international influence, and uninterrupted oil exports. These three fundamental goals are tightly linked and are within the Saudis’ reach.

    Regional stability

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

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

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

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

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

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

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

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

    Regional influence

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

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

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

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

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

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

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

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

    Uninterrupted oil export

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

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

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

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

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

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

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

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

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

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

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  • Privatization: Egypts Only Weapon To Survive the Repercussions of the War in Ukraine

    Privatization: Egypts Only Weapon To Survive the Repercussions of the War in Ukraine

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    Egypt plans to sell shares in 32 state-owned businesses, including three banks. Credit: Hisham Allam/IPS
    • by Hisham Allam (cairo)
    • Inter Press Service

    Cairo, Apr 06 (IPS) – Egypt intends to sell shares in 32 state-owned businesses within a year, including three banks, two military-owned businesses, and numerous businesses in the energy and transportation sectors. This is part of the administration’s efforts to reduce the role of the state in the economy and attract foreign capital.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • How Covid-19 Proved an Opportunity for Youth in Small-Town India

    How Covid-19 Proved an Opportunity for Youth in Small-Town India

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    Young people from small towns are now able to work close to home thanks to co-working spaces that opened up during the COVID-19 pandemic. Credit: Rina Mukherji/IPS
    • by Rina Mukherji (pune, india)
    • Inter Press Service

    PUNE, INDIA, Feb 08 (IPS) – While a 2017 study by the Confederation of Indian Industry Jones Lang LaSalle India and WeWork noted the potential in India’s co-working segment, it took COVID-19 for people to transition to co-working spaces close to home.

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

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

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

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

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

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

    This is where the pandemic has helped.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • It’s Time to Move Away from Public-Private Partnerships & Build a Future That is Public

    It’s Time to Move Away from Public-Private Partnerships & Build a Future That is Public

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    Protesters in Mulhouse, France warn of the dangers of privatisation. The sign reads ‘when everything is privatised, we will be deprived of everything. Credit: NeydtStock / Shutterstock.com
    • Opinion by Oceane Blavot – Rodolfo Bejarano – Mae Buenaventura (brussels / lima / manila)
    • Inter Press Service

    BRUSSELS / LIMA / MANILA, Feb 02 (IPS) – Last month, we joined more than 1000 representatives from all sectors of civil society who came together in Santiago de Chile to debate the future of – and threats to – public services the world over.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • The People of Africa Need Relief: the Biden Administration can Provide it

    The People of Africa Need Relief: the Biden Administration can Provide it

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    US-Africa Leaders Summit. Credit: Wikimedia Commons
    • Opinion by Pauline Muchina, Emira Woods (nairobi, kenya)
    • Inter Press Service

    NAIROBI, Kenya, Jan 19 (IPS) – United States Treasury Secretary Janet Yellen is traveling to South Africa, Zambia, and Senegal this week in the hopes of strengthening U.S.-Africa relations at a time of waning U.S. influence on the continent — the first in a series of Biden administration trips announced at last month’s U.S.-Africa Leaders Summit.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • The Value of Strong Multilateral Cooperation in a Fractured World

    The Value of Strong Multilateral Cooperation in a Fractured World

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    • Opinion by Ulrika Modeer, Tsegaye Lemma (united nations)
    • Inter Press Service

    UNITED NATIONS, Jan 18 (IPS) – The multilateral system, even in the face of heightened geopolitical tension and big power rivalry, remains the uniquely inclusive vehicle for managing mutual interdependencies in ways that enhance national and global welfare. The complex challenges of a global pandemic, climate emergency, inequality and the risk of nuclear conflict cannot be dealt with by one country or one region alone. Coordinated collective action is required.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Source: UNDP

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  • Africas Vast Arable Land Underutilized for Both Cash and Food Crops

    Africas Vast Arable Land Underutilized for Both Cash and Food Crops

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    A new conversation is needed about food production in Africa. Credit: Joyce Chimbi/IPS
    • by Joyce Chimbi (nairobi)
    • Inter Press Service

    NAIROBI, Jan 16 (IPS) – Concerns are rife that while Africa is growing more crops, these are not for food and that on the current trajectory, present food import costs into Africa, now estimated at 55 billion US dollars a year, could double by 2030.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • The Energy Dilemmas of Roraima, a Unique Part of Brazils Amazon Region

    The Energy Dilemmas of Roraima, a Unique Part of Brazils Amazon Region

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

    BOA VISTA, Brazil, Dec 21 (IPS) – “Roraima did not have a Caribbean character; now it does, because of its growing relations with Venezuela and Guyana,” said Haroldo Amoras, a professor of economics at the Federal University of this state in the extreme north of Brazil.

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

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

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

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

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

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

    In search of energy alternatives

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

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

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

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

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

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

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

    Hydroelectric damage

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Oil wealth, route to the Caribbean

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

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

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

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

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

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

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

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

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  • Can Asia and the Pacific Get on Track to Net Zero?

    Can Asia and the Pacific Get on Track to Net Zero?

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    • Opinion by Armida Salsiah Alisjahbana (bangkok, thailand)
    • Inter Press Service

    BANGKOK, Thailand, Nov 29 (IPS) – The recent climate talks in Egypt have left us with a sobering reality: The window for maintaining global warming to 1.5 degrees is closing fast and what is on the table currently is insufficient to avert some of the worst potential effects of climate change. The Nationally Determined Contribution targets of Asian and Pacific countries will result in a 16 per centincrease in greenhouse gas emissions by 2030 from the 2010 levels.

    Armida Salsiah Alisjahbana

    The Sharm-el Sheikh Implementation Plan and the package of decisions taken at COP27 are a reaffirmation of actions that could deliver the net-zero resilient world our countries aspire to. The historic decision to establish a Loss and Damage Fund is an important step towards climate justice and building trust among countries.

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

    Accelerate energy transition

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

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

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

    Green the rides

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

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

    Adapting to a riskier future

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

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

    Make finance available where it matters the most

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

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

    Lock in higher ambition and accelerate implementation

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

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

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

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

    IPS UN Bureau


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  • A Looming Debt Crisis is Threatening Global Health Security. It is time to Drop the Debt

    A Looming Debt Crisis is Threatening Global Health Security. It is time to Drop the Debt

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    • Opinion by Jaime Atienza, Charles Birungi (geneva)
    • Inter Press Service

    GENEVA, Nov 21 (IPS) – In this moment of profound challenge in international relations, it was understandable that the conclusion of the G20 meeting left leaders feeling relieved that the meeting took place without a breakdown. Leaders were justifiably proud too of important steps forward they made including the launch of the new pandemics fund.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    IPS UN Bureau


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  • G20 Summit, a Missed Opportunity to Tackle Global Cost of Living Crisis

    G20 Summit, a Missed Opportunity to Tackle Global Cost of Living Crisis

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    • Opinion by Matti Kohonen (london)
    • Inter Press Service

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

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

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

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

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

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

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

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

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

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

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

    Matti Kohonen is executive director, Financial Transparency Coalition.

    IPS UN Bureau


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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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