Thursday, February 28, 2013

Forget post-2015 development goals – a global new deal is what's needed

Finance-led globalization has failed – which is our cue to forget about setting targets and adopt a development-led approach

Many familiar problems were raised at the Liberia meeting of the UN high-level panel tasked with drafting global post-2015 development goals: extreme poverty, lack of productive employment, environmental degradation and growing inequality. But these big questions are still being met with small answers, suggesting that the international community remains in the wrong frame of mind to meet such major challenges.

A recent Guardian editorial noted how "small", "technocratic" and "fragmented" the discussion within the international development community has become. But it missed a major reason for this: the continued but misplaced faith in "market fundamentalism". This adds to the perception that globalisation is an irresistible force beyond the control of governments, a process driven by countless invisible hands, infallible business acumen and continuous technological revolution, and reaching its zenith with the unleashing of finance.

Over the past three decades, open markets and global capital were supposed to raise savings, bolster investment, create jobs and spread new technologies; this would release a tidal wave of economic prosperity, above all in the poorest countries. But finance-led globalisation has not lived up to its billing: debt-riven global growth has trended downward, capital formation has been sluggish, and recurrent crises have destroyed jobs and threatened livelihoods, even as those at the very top enjoyed soaring incomes. Some big emerging economies have enjoyed sustained and even rapid growth, but it is no longer credible to think deregulated markets, financial engineering or shareholder value will deliver inclusive economic growth.

Business as usual simply will not work any more. The UN has recognised this in its call for a new post-2015 development agenda. But to move the agenda forward, some hard truths will need to be recognised. There is a good deal more to development than poverty reduction. Simply adding human rights, peace and security – however important these challenges are – will not necessarily point things in the right direction. However understandable, devoting attention to those at the bottom has resulted in insufficient attention being paid to those at the top with access to the resources needed to drive investment and create jobs.

Development is less about deprivation and more about transformation – structural, institutional and normative – in ways that add to a country's wealth-creating potential, ensuring the gains are widely shared and extending the possibilities of future generations. For most developing countries, that still means building industrial capacity, providing secure livelihoods for rapidly growing urban populations, and guaranteeing food security.
David Cameron's calls for eradicating extreme poverty and more responsible capitalism are well-intentioned. But his call to use aid to strengthen the "golden thread" of open markets misses the point, ignoring the strategies that have actually worked in successful developing countries over the past half century, where the state plays an active role in mobilising resources and disciplining their use.

President Obama's inaugural address, which recognised that a successful economy mixes dynamic entrepreneurial effort with effective collective action and a strong social contract, provides a more reliable compass. Success, he insisted, does not follow "when a shrinking few do very well and a growing many barely make it".

Making inequality part of the development policy agenda has already gained traction. But to make lasting progress, it will be necessary to move beyond MDG-style targets and instead consider a global new deal allowing different economic strategies providing benefits for all.

To start with, rebalancing the global economy should follow an expansionary macroeconomic path based on productive employment generation and shifting labour to higher value-added activities in developing countries. The rising threats posed by food and energy insecurity and environmental degradation require a strong investment response, which must necessarily be led by public action. International institutions should support countercyclical fiscal policy and public investment by making adequate funding available and attaching fewer conditions to their lending.

Second, unruly markets, especially financial markets, must be tamed. Even before the crisis, it was clear that stable and inclusive development is incompatible with speculative market behaviour and boom-and-bust cycles. Finance everywhere needs to get back to the business of providing security for people's savings and mobilising resources for productive investment. At the international level, that means promoting capital controls (something the IMF now seems ready to do), implementing a financial transaction tax (something the EU is now actively pursuing), and designing a sovereign debt workout mechanism that deals fairly with lenders and borrowers alike (a long-standing Unctad proposal).

Finally, growth is unlikely to be inclusive without effective measures for redistribution. Strengthening the position of labour to ensure wages match productivity growth is central, along with asset redistribution to prevent excessive concentration. Policies of universal social protection (including basic income policies) can help repair the social contract. Along with humanitarian aid for the poorest and most vulnerable, the international community needs to guarantee adequate policy space for countries to develop measures relevant to their own contexts.

The challenge in building such development-led globalisation is not so much the shortage of big ideas but their scaling up through international collective action. Current arrangements cannot serve this purpose, and have already lost legitimacy. A small number of economic powers, home to the world's largest corporations and financial institutions, continue to exercise a controlling influence at the IMF and the World Bank, driving negotiations at the World Trade Organisation and on the climate challenge. This dominance is no longer assured, but conditions for stable international economic co-operation remain elusive. Only a global new deal can help build the levels of trust needed to tackle shared problems and broaden the scope for effective development partnerships

Forget post-2015 development goals – a global new deal is what's needed

Wednesday, February 27, 2013

IPS – More Dead Than Red | Inter Press Service

The World Bank has declared the Red Sea-Dead Sea canal project feasible. Designed to “save the Dead Sea”, “desalinate water and/or generate hydroelectricity at affordable prices in Jordan, Israel and the Palestinian Authority”, and “build a symbol of peace in the Middle East”, the scheme, green groups warn, is fraught with environmental hazards. 

Currently at 426m below sea level, the Dead Sea, Earth’s lowest elevation on land, is drying and dying in the desert by roughly 1.1 metres a year. Its surface area has shrunk by a third during the last 50 years from 960 square kilometres to 620 square kilometres.

Set along the Great Rift Valley between the biblical Moab plateau and Judaean desert, the hyper-saline desert lake borders Jordan to the east, Israel and the nascent Palestinian state to the west.

As the world’s most buoyant lake, the Sea is a natural spa. Its minerals have been extracted for treatment of skin diseases since the times of Cleopatra. Today, the chemicals industry is a multibillion dollar operation, with the Israeli Dead Sea Works and the Jordanian Arab Potash Company exploiting the water as raw material.
The total inflow to the Dead Sea has reduced from 1.25 billion cubic metres a year to 260 million cubic metres a year within 60 years as a result of the diversion of water for agriculture from the Jordan River, its main tributary to the north.

Add to that a changing climate and the Sea is an ever receding horizon trapped in a man-induced dead zone. Route 90 used to wind its way along it. Now the shore is over a kilometre away.

Over 300 square kilometres of seabed have been exposed since the 1960s with some five square kilometres a year currently being exposed.

Bared mudflats have thus caved in without warning, and led to the formation of over 3,000 sinkholes which slowly swallow land, roads, buildings; posing a significant hazard to agricultural, industrial, and touristic infrastructures.

No wonder then that the three waterside neighbours failed last year to have the Dead Sea crowned as one of the Seven Wonders of Nature, and the probability of having the Dead Sea listed as a World Heritage Site is a sinking dream.

“We don’t want the Dead Sea to die; we want to revive it,” Israel’s minister for regional development Silvan Shalom tells IPS. “That’s our main goal – to bring more water to an arid region. The best option is a canal to pump 2 cubic billion metres a year from the Red Sea.”

What could save the Dead Sea from death foretold is a 180-km development project called the ‘Red Sea-Dead Sea Water Conveyance’.

This is how it would work: marine water would be pumped from the Red Sea. A pipeline conveyance system with six pipes and a tunnel would then flow the water by gravity, exploiting the difference in elevation at and below sea level, to a high-level desalination plant and two hydroelectric plants.

The high-salinity brine reject would be discharged to the Dead Sea to halt and, eventually, reverse its decline.
After a decade-long argument, the World Bank released a series of studies last month which deem the proposed ‘Red-Dead Canal’ (as the ambitious scheme is dubbed) technically, environmentally and socio-economically feasible.

The main objectives would thus be fulfilled, the World Bank assesses. All that for a total capital cost of 9.97 billion dollars, the World Bank estimates; half of it amortized by selling desalinated water and hydroelectricity, the other half financed out of international aid to development – “a win-win situation,” hails Shalom.

“The project doesn’t hold water,” counters Gidon Bromberg, director of Friends of the Earth Middle East-Israel (FoEME-Israel), a unique NGO which brings together Israeli, Jordanian and Palestinian eco-peace activists.

“The mixing of the Red Sea marine water with the unique brine of the Dead Sea is likely to lead to gypsum (a sedimentary deposit) excretions, to red algae bloom and will slime the water’s purity. The two bodies of water won’t mix, like oil and water. The Red Sea water will float on top.”

Indeed, World Bank experts note that massive intakes of Red Sea water might durably whiten the otherwise royal blue colour of the Dead Sea, but that “this problem could be mitigated by adding gypsum crystals at the discharge location allowing a faster sedimentation of the precipitated gypsum.”

Another concern lies with contamination of groundwater resulting from potential leakage of seawater while operating the pipeline conveyance system along the Arava Valley, an area classified as a “highly active seismic zone”.

“Pipes could explode in the midst of an earthquake, and we’d see millions of cubic metres of water polluting groundwater,” Bromberg tells IPS.

The World Bank suggests special arrangements like concrete boxes enclosing the pipes, isolation valves, and wave joints. A control system will close the valves in case of seismic stress on the pipes.

Addressing the fear that the pumping station might impact on the Red Sea coral reef, a modelling study commissioned by the Word Bank recommends that the intake be located at a depth of at least 140 metres. “The deeper the intake the less likely will be the impact.”

“There were many hearings and these redundant arguments were rejected by the World Bank. Green groups don’t want the project no matter what, that’s the bottom line,” says Shalom.

Prior to issuing a final report, the World Bank is currently holding a last series of hearings in Israel, Palestine and Jordan.

If the project is endorsed by the World Bank, intergovernmental negotiations will decide on how best to proceed. “There’ll be a need to obtain finances, from our respective governments, from the World Bank itself, or from the private sector,” Shalom clarifies.

“Then, tenders will be issued, contracts awarded for the design, procurement and construction of the canal. This should be discussed between the parties.”

The World Bank’s forecast is that the canal could be built within six years and start operating in 2020, reaching its maturity stage by 2060.

IPS – More Dead Than Red | Inter Press Service

Tuesday, February 26, 2013

Give grassroot groups a real say on what comes next in development

Civil society's voice is being drowned out by northern-led, top-down policymakers. When will David Cameron and co listen?
For 13 years international development policy has rested on a set of goals written in "relative casualness". So casual was the manner of the small team working out of a basement office of the UN in New York that they initially "forgot" to include an environment goal – what became millennium development goal (MDG) seven on environmental sustainability.

Those targeted by the MDGs, and from 2015 by their successor when the MDGs expire, do not forget the importance of the environment. More than 100 million people could die by 2030 from the impact of climate change without an immediate shift in our consumption and production. According to a report commissioned by 20 governments, 90% of those deaths would be in developing countries.

This is just one example of how the poorest people are most affected by international development concerns. But their voice continues to be largely absent from the northern-led, top-down way of creating policy and practice. This process operates at two levels: one is the dominance of northern governments in international institutions and official decision-making processes; the other, the continuing exclusion of civil society organisations (CSOs) and social movements from government processes.

This is of particular concern for global south groups, many of which remain closer to their grassroots constituencies than some big northern NGOs, which hold privileged access to and close ties with northern governments, and have the resources to maintain an international lobbying presence.

Soon after the final meeting next month in Bali of the UN high-level panel (HLP) on the post-2015 development agenda – co-chaired by UK prime minister David Cameron, Liberia president Ellen Johnson Sirleaf and Indonesian president Susilo Bambang Yudhoyono – a report on how to move beyond the MDGs will be submitted to UN member states.

It is expected that a set of sustainable development goals (SDGs) – an outcome of the Rio+20 conference – will replace the MDGs. Hope remains that where the MDGs failed, the SDGs may succeed such as replacing a focus on outcomes with prioritising processes to address the causes of poverty, inequality and environmental destruction. An overarching aim, expressed by the "people-centred agenda" described in the Monrovia communique, will be placing grassroots voices at the centre of the procedure to determine new goals.

This time round, far more effort seems to be being made on consulting with civil society. But appearances can be deceptive.

Clearly, it is impracticable to expect the nearly 2 billion people living in poverty to be reached by consultations, online or otherwise. And if not reflected in policies, consultations will be no more than symbolic. A clearer marker would be the inclusion of southern CSOs and social movements working with grassroots constituencies in the official process that continues long after the HLP.

The UN's roadmap for post-2015 outlines a phase to build "intergovernmental consensus" beginning after the UN general assembly in September and continuing until 2015. It is here that the new agenda will be determined. And it is from this process that civil society voices remain marginalised.

It is because of this that movements such as the Campaign for People's Goals, comprising a diverse group of CSOs, movements and networks from across the south, have arisen not to simply feed into consultations but to wage a campaign including engagement at official meetings and protests to demand government commitments that reflect people's concerns. At the forefront of these are issues including participation, redistribution and human rights, and an overarching assurance of grassroots participation in decision-making.

At the HLP meeting in Monrovia in January, Cameron said pursuing growth superseded tackling inequality. His words were at odds with the call for "socio-economic transformation" in both the official and civil society communiques, and from southern CSOs, which believe it is relentless pursuit of growth through profit that creates and entrenches inequality. A fear for grassroots groups is that if Cameron won't listen to his fellow panel members, will he listen to them?

Rather than inclusion as stakeholders in decision-making processes, the most "civil" of civil society voices are at best tolerated at international conferences. Against such a backdrop, how realistic is it that the grassroots can drive the post-2015 agenda and its anticipated goals? The UK government has not been shy to profess its self-interest in helping developing countries prosper. But the extent to which such governments will relinquish their role in determining the boundaries of that prosperity is questionable, and may largely depend on a global reconstitution of political-economic power.

There is much fanfare on civil society engagement in the post-2015 agenda. But the months to September and beyond will reveal if the next generation of policy will pay more than lip-service to a supposed new era of people-centred international development.

Give grassroot groups a real say on what comes next in development

Monday, February 25, 2013

Not a bankable strategy

By Richard Mahapatra,  DownToEarth

World Bank's forestry projects have not helped reduce poverty, says its own evaluator

In the past one decade, the World Bank lent a whopping US $4.1 billion for forestry-related projects with an aim to alleviate poverty. But the objective remains a pipe dream as the Bank failed to involve communities in the projects. This has been revealed by the Bank’s own evaluator, Independent Evaluation Group (IEG), which analysed all forestry projects funded by the Bank between 2001 and 2011. The Bank, the largest multilateral lender for forestry, funded 345 major forestry projects in 75 countries during the period.

The Bank’s Committee on Development Effectiveness debated the IEG report on February 4. Prior to this, the Bank’s management had disagreed on most of the points raised in the report (see ‘IEG recommends ...’).
IEG’s evaluation coincides with the 10th anniversary of the Bank’s change in strategy for forestry projects adopted in 2002. Poverty reduction and increasing community participation are two of the Bank’s key objectives. But its finance was mostly concentrated in protected areas that bypass community participation and ownership over forests, says the report available with Down To Earth.

The IEG report refers to the experience of India’s Joint Forest Management (JFM) as a failure on part of the Bank in ensuring transfer of power to communities. It says: “Only three of the 32 participatory forest management projects (across the globe) addressed the need for simplification of regulatory procedures or otherwise addressed the factors that create an unequal playing field for community forest enterprises.” This is evident from the Bank’s preference to work in only officially managed forests across the globe, the IEG report argues.

Of the total forestry projects, 43 per cent are for protected areas. This has bypassed large areas of community-managed forests. “By neglecting the informal sector (community managed forests), the World Bank has missed an opportunity to reach more forest-dependent rural poor,” says the report. In fact, in protected areas the Bank’s projects have negatively impacted communities. Only two of 37 projects that the Bank funded in protected areas achieved their aims to help people find work, while three-quarters of these projects forced people to move out. These projects hardly recognised community’s rights and interests over forests, it says.

“Poverty reduction, for the most part, has not been adequately addressed,” wrote Caroline Heider, director general and senior vice-president of IEG, in a memo to the Bank’s president and directors. “The World Bank-supported participatory or community forest management projects focus largely on state-local relations with measures to reduce government corruption, eliminate perverse regulations, and decentralise management authority presented as solutions.” The report says 75 per cent of the projects may not be sustainable in the long run due to this disconnect.

“The evaluation speaks of the overall failure of the Bank in its stated objectives,” says Joe Athialy of Bank Information Centre, a non-profit in Washington that monitors multilateral development banks. 

The evaluation comes at a time when the Bank is realigning its forestry projects to climate change issues and fundings.

Not a bankable strategy

Friday, February 22, 2013

Palm oil expansion threatens Congo Basin forests - report - AlertNet

Industrial cultivation of oil palm has "wreaked havoc" on rainforests and forest peoples in Southeast Asia and now threatens to do the same in the Congo Basin, a report from the Rainforest Foundation UK warned on Thursday.

Research commissioned by the forest protection group found that half a million hectares of new palm oil projects are getting underway in the Congo Basin rainforest, which will result in a fivefold increase in the area of large-scale palm plantations in the region.

"This is a stark new threat to the second largest contiguous rainforest in the world," the report said.
Around 1.6 million hectares of new developments have been announced in the central African region since 2009, and palm oil companies are actively searching for bigger areas, the report said. Some 115 million hectares, or two thirds of the total Congo Basin forest area, is believed to have suitable soil and climate for growing oil palms, it noted.

Simon Counsell, the Rainforest Foundation UK's executive director, said African governments are handing out large tracts of rainforest for palm oil development with little or no attention to the likely impacts on the environment or the people who depend on the forest.

"There is a need for regional agreement to ensure that best practices are mandatory for any new oil palm development, including avoiding high conservation-value forests and ensuring the rights of existing forest dwellers are respected,” he urged.

The report provides case studies of three large palm oil developments in the Republic of Congo, Gabon and Cameroon.

Thursday, February 21, 2013

What does the ‘Doha Climate Gateway’ mean for Africa? | Africa Renewal Online

A UN climate change conference in Doha, Qatar, concluded in December 2012 with a new agreement called the “Doha Climate Gateway.” Its major achievements include the further extension until 2020 of the 1997 Kyoto Protocol on reducing greenhouse gas emissions, as well as a work plan for negotiating a new global climate pact by 2015, to be implemented from 2020.

Despite these commitments, the Doha conference made only limited progress in advancing international talks on climate change and failed to set more ambitious goals for reducing greenhouse gas emissions.

That failure increases the risk of a rise in average global temperatures by 2 degrees Celsius by the end of this century.The Emissions Gap Report 2012 of the UN Environment Programme (UNEP) stresses that if the world does not accelerate action on climate change, total greenhouse gas emissions could rise to 58 gigatonnes by 2020 (compared to 40 gigatonnes in 2000), far above the level scientists say would likely keep temperature rises below 2°C.

Studies by the World Bank indicate that even with the current commitments and pledges fully implemented, there is roughly a 20 per cent likelihood that temperature increases would top 4°C by the end of this century, triggering a cascade of cataclysmic changes including extreme heat-waves, declining global food stocks and a rising sea level, affecting hundreds of millions of people.

All regions of the world would suffer, but the poor will suffer the most, seriously setting back the prospects for sustainable development in Africa. Severe droughts in the Horn of Africa in 2011 and in the Sahel region in 2012 alarmingly highlighted Africa’s vulnerability.

Not-so-fast finance
African countries are among those least likely to have the resources needed to withstand adverse impacts from climate change. At the 2009 Copenhagen negotiations, developed countries committed to pay $100 billion per year by 2020 (Green Climate Fund) to assist developing countries in adaptation and mitigation practices to counter climate change. They also pledged to deliver $30 billion as “fast start finance” by 2012.

Disappointedly, a report by the African Climate Policy Centre of the UN Economic Commission for Africa (ECA) shows that of the $29.2 billion pledged since 2009, only 45 per cent has been “committed,” 33 per cent “allocated” and about 7 per cent actually “disbursed.”

At the Doha conference, Germany, the UK, France, Denmark, Sweden and the EU Commission announced financial pledges for the period up to 2015 totaling approximately $6 billion. Most developed countries did not make pledges. African countries thus left Doha with little more than they already had.

Positive steps
Despite the limited advances on financing, African countries registered five positive developments from the Doha conference:
  • The formal extension of the Kyoto Protocol, with continued access to carbon-trading market mechanisms such as the Clean Development Mechanism.
  • Financing for the formulation and implementation of national adaptation plans for all particularly vulnerable countries, not just the small-island developing states and least developed countries, as previously.
  • Agreement to develop an international mechanism to address loss and damage, which would support countries affected by slow-onset events such as droughts, glacial melting and rising sea levels.
  • A programme for climate change education and training and the creation of public awareness to enable the public to participate better in climate change decision-making.
  • Agreement to assess developing countries’ needs for green technology, as well as a pledge that no unilateral measures will be taken on the development and transfer of technologies.
Effectively meeting the challenge of climate change will require a compromise of monumental proportions by all countries. But climate change will not wait for the adoption of binding international climate change agreements. Nor should individual governments, businesses and others hesitate to take bottom-up action and support local grassroots initiatives.

Wednesday, February 20, 2013

New Green Economy Partnership Responds to Rio+20 Call for Action - AlertNet

A new partnership launched today by four UN agencies aims to support 30 countries over the next seven years in building national green economy strategies that will generate new jobs and skills, promote clean technologies, and reduce environmental risks and poverty.

The new Partnership for Action on Green Economy, or PAGE, is a response to the outcomedocument of the United Nations Conference on Sustainable Development (Rio+20), entitled The Future We Want, which recognizes the green economy as a vehicle for sustainable development and poverty eradication.

The four UN agencies - the United Nations Environment Programme (UNEP), the International Labour Organization (ILO), the United Nations Industrial Development Organization (UNIDO) and the United Nations Institute for Training and Research (UNITAR) - will provide a comprehensive suite of green economy services that will enable countries to transform their national economic structures to meet the growing demands and challenges of the 21st century.

“This is yet another example of how UNEP with partners is implementing the outcomes of Rio+20. The Partnership for Action on Green Economy will work with countries to catalyze change at the national level, assisting  them with targeted economic and policy instruments and training that will accelerate their green economy transition across sectors ranging from clean energy to sustainable agriculture,” said Achim Steiner, UN Under Secretary-General and UNEP Executive Director. “With the support of PAGE, developing countries in particular can put in place the policies needed to reap the economic and environmental benefits of an inclusive, resource-efficient, low-carbon pathway, and avoid the risks and shocks of carbon-intensive infrastructures.”

The four agencies have previously undertaken joint green initiatives. However, this is the first time that all four partners have come together to coordinate their support, expertise and resources at the national level. During the first two years of the partnership, PAGE will focus on seven pilot countries, yet to be named, and scale up this support to a total of 30 countries by 2020. 

Adapted from: New Green Economy Partnership Responds to Rio+20 Call for Action - AlertNet

Tuesday, February 19, 2013

Can the green economy save us?

By Rina Saeed Khan,

The world is not in a good shape at the moment – food prices are rising, fresh water is depleting, energy prices are soaring, biodiversity is dying out, intense storms are damaging towns and cities, while floods and droughts are threatening the livelihoods of millions. Clearly, climate change is playing a major role in taking its toll on human populations, just as the scientists had predicted it would. And the rate of change is accelerating. 

That means the chance of keeping global temperatures below 2 degrees Celsius by the end of the century is getting slimmer. Scientists say that if the earth warms more than 2 degrees then we will not be able to avoid runaway climate change that will be catastrophic. In Pakistan, climate change is not a future prediction but a present reality with devastating consequences given the extensive flooding that is beginning to occur annually during the monsoon season. For the past two years, Pakistan has topped the list of the Global Climate Risk Index produced by Germanwatch, a non-governmental organisation that works on global equity issues.

The United Nations-led negotiations on a new global agreement to curb climate change have stalled after the massive momentum that was built up just before the Copenhagen Climate Change Summit held in 2009. The summit proved to be a major disappointment and soon after the week the Copenhagen Accord was signed, the urgency was gone from the talks. There is a worldwide recession at the moment and affluent countries, especially the US, don’t want to take any actions that they think will slow down their economies further. “I see multilateralism going nowhere,” remarked Barbara Unmuessig, the President of the Heinrich Boll Stiftung (HBS), a German green political foundation. Barbara, who has been involved with environmental issues for more than 20 years, was visiting Pakistan recently. “We need to rethink our strategy at the local and national level, and put pressure on our politicians to go in the right direction”. She gave the example of how German citizens put pressure on their political leadership to get rid of nuclear power and substitute it with renewable energy. Today Germany, which is a highly industrialised country, has an extensive renewable energy system. 

Her advice to Pakistan, especially given its current energy crisis: “What are the solutions? Try to build your own green economy. In such a large country you can build your own renewable energy industry”.

Green economy is the new buzzword that is replacing “sustainable development” in the global arena. The concept of the green economy was first created in 2008 to get governments to spend money on the environment and in 2009 it was presented by the United Nations Environment Programme (UNEP), as a way forward in response to the global financial crisis. The idea behind it was to shift investments away from business as usual to green activities making economic sense. Scientists have been calling for a major shift to clean energy technologies and energy efficiency in order to curb carbon emissions causing climate change. 

The UN’s Intergovernmental Panel on Climate Change in their special report on renewable energy sources and climate change mitigation called for nations around the globe to invest heavily in renewable energy to bring down prices and make it more affordable to everyone.

Many experts had pinned high hopes on last year’s UN Conference on Sustainable Development held in Rio de Janeiro, which had a theme of “green economy”. The Rio+20 conference (it had been 20 years since the last Earth Summit was held in Rio) failed to deliver anything substantive, however. Barbara had warned in a paper published just before the Rio conference, “Rio+20 must be more than just a repetition of previous international conferences – it must offer a true breakthrough to a social, just, low-carbon and resource efficient world”. Unfortunately, there was no sincere political will, either in the North or the South to do this and today the “business as usual, the ‘brown’ resource intensive development path, prevails”. Hence, Barbara questions whether the green economy is “the new magic bullet”? In her view, “UNEP’s green economy concept contains nothing that could revolutionise the (global) economy”.

Perhaps the solution is that: “We don’t have to follow big business, we can implement good solutions along with less consumption of resources”. She is clear that the green economy must benefit people and not big businesses and that wasteful consumption patterns and lifestyles (especially in the North) must change. “We need to rethink development to preserve nature, feed people and make lives better”. She is clear, however, that it is politics that has to set the standards, limits and goals. We urgently need institutions and decision makers who can make planet Earth deliver for the future.

Monday, February 18, 2013

Sánchez: Putting money where the green is

 By Benedicto Q Sánchez,  SunStar

PLACING economic value on environmental services might be politically incorrect for some environmentalists. That's like "commodifying" natural resources, as Bolivian President Evo Morales warned.

Morales's warning is not limited to Bolivian mountains, however. They have found a home in the Philippines. I have had some heated debates with colleagues on the concept of the green economy currently being promoted by the United Nations at last year's Rio + 20 summit on Agenda 21, its blueprint for sustainable development.

From where I sit as an advocate of sustainable mountain development, however, I can understand the UN position.

During my community forestry days, the mountain communities of barangays Bagong Silang in Salvador Benedicto and Marcelo, Calatrava have long graduated from the hunting and gathering social development phase of the "pure" Aetas in Cádiz that have been forced to resettle to change their nomadic lives.

Mountain peoples are now engaged in the market economy. While many still till the mountain slopes for their food consumption, they also need cash to buy their cooking oils, salt, salted fish, or even to pay to watch the neighborhood DVD shows of Philippine movies.

Understandably, they use natural resources to sell poached timber or wildlife and illegal charcoal making to earn cash. In the end, survival means risking their freedom to play a cat-and-mouse game with our local governments and the DENR.

Frankly speaking, I doubt that when it comes to survival and subsistence, no amount of environmental education can convince most mountain people to change their ways.

The government option now is to involve mountain-based people's organizations to plant native tree species under the National Greening Program (NGP). For every seedling raised, nursed, and planted, the DENR pays them P12.

I have no problem with that. In fact, I worked with people's organization to enable them to qualify for the NGP program. My problem is that government subsidies are not sustainable. Eventually, program funds will dry up after 2016 when PNoy's administration comes to an end. What then?

I hold that market-based instruments will enable mountain peoples to sustain their livelihoods, but along the lines of the green economy.

"The biodiversity of Earth is our biological wealth, our biological capital. The savings are every gene, every population, every species and every natural community that inhabits the oceans, the land, and the air. ... Biodiversity is, as far as anyone knows, totally irreplaceable," says the Wildlife Conservation Research Unit of the University of Oxford.

It cited some figures. In 1997, the global market for natural-product derived pharmaceuticals derived was estimated at US$75-$120 billion, where 1 in 125 plant species screened has produced a major drug, each with a value of US$200 million.

However, species losses have led to a huge loss of "option value" (opportunity cost): loss of 1 tree species per day translates into a loss of 3 potential drugs per year, or an opportunity cost of US$600 million.

WildCRU's Jerwood Business and Biodiversity Initiative have organized seminars and courses, designed to present the business case to executives for investment in biodiversity initiatives, and to provide practical advice to companies on how to integrate biodiversity into their business practices, how to engage with mountain-based stakeholders, and how to inform their employees about these issues.

Friday, February 15, 2013

New Agriculturist: Developments - Restoring Peru's lost cloud forests

"There is nothing more tragic than seeing families suffer in swathes of wasted, burnt land," says Alfonso Carrasco. As the South American regional director for the UK development charity, Practical Action, Carrasco has responsibility for a programme that aims to reverse deforestation currently taking place on a massive scale in the tropical rainforests - known as the cloud forests - of Peru. Over the last seven years, the charity has trained 5,000 Peruvian and Ecuadorian farmers to practise a form of agroforestry known as layer farming, safeguarding 100,000 hectares of forest and transforming agricultural productivity.

In August 2012, research to investigate the drivers of deforestation round the world found that clearing of land for agriculture is responsible for as much as 80 per cent of lost tree cover. Subsistence farming carried out by poor families is one of the key components, and the situation in Peru's cloud forests is typical of many: "The farming communities we train do not have the skills or simple technology required to make a sustainable and productive living," says Carrasco. "Trees are slashed and burnt to make way for crops like corn and cocoa, robbing the soil of its nutrients and forcing families to abandon the land after each harvest."

Farming in layers
The layer farming technique aims to combine short, medium and long term gains for farmers, creating a farming system that produces food from year one and generates long term, sustainable income from cash crops, while also protecting the forest environment. Instead of clearing of land for agriculture, the system is based on farmers growing crops beneath the forest canopy, in a series of five layers which complement and support each other.

The first layer is a crop such as cassava, which provides food and an income for the first few years. The second layer consists of coffee plants, which take four years to fruit, but then provide good quality coffee beans, which fetch a good price at market. The coffee plants are protected from the sun by the third layer, consisting of banana plants or laurel, which offer fruit or timber. Above that, is a layer of the native Inga tree which provides additional shade and also produce edible seeds, rich in minerals. As well as providing food and shade, leaf-fall from the Inga trees enriches the soil and keeps it fertile. They take four years to reach a height of ten metres. Finally, Cedar trees are grown up to 40 metres tall. They are planted for the long-term and provide shade and protection in addition to a supply of timber for future generations

Forest champions
In San Francisco de Asis, in the Cajamarca region of Peru, 57 year old Catalino Chanta Neyra, known locally as Don Cata, has been leading efforts in his community to adopt the layer system. "We have been trained, which is why we know how to work in an organized manner. They gave me some tubes so that I could sow laurel seeds. They taught me how to take care of the seedlings. I used to plant trees too closely together, so they would wither. Now I even have a fumigator and pruning shears and I know how to prepare organic fertilizers to preserve the earth."

Beyond the benefits Don Cata has seen on his own land, he is also excited that increasing numbers of local people are following his lead. "The nicest thing is that I am not the only one benefiting. My friends in San Francisco de Asis are also managing a community plot. It is looking beautiful and besides, the community is united and that is good for everyone," he says. Answering a call from a coffee buyer on his mobile phone, he smiles: "They want five quintals for the end of the month," he tells his partner.

Paulos Carlos Hurtado, who lives in Namballe district on the edge of the rainforest, is another local champion for replanting. In less that two years he, his wife and children have planted more than 1,000 laurel, romerillo and latero trees on their land. He has also formed an environmental association with others in his community, which has recently bought a plot and planted a further 500 trees. "My life has changed a lot since 2006," he says. "Before that, I had no idea about reforestation. Moreover, even though I had a plot, I never imagined that it could be so fruitful. It is all very different now."

Leaving a legacy
Paulo and his family are hoping that as time goes by, the entire settlement will be involved in reforestation, converting all of their land into agro-forestry plots. They are aware that they will not see all the fruit of their labour, but are serious about leaving a legacy and encouraging the conservation of native species. "There are timber species among these trees, but cedar for example will produce raw material in 100 years," he says. "I would never have been interested in planting these before, but although I will not reap the benefits of this work, the entire community will and maybe even the whole country, which is why my young children are already aware of the importance of reforestation. That knowledge makes me feel better."

Thursday, February 14, 2013

Dark side of the green economy

By Rina Saeed Khan 

The Heinrich Boll Stiftung (HBS) Foundation, a German green political foundation, on Friday hosted an expert talk by its President, Barbara Unmuessig, on the “Green Economy.”

Barbara is based at the headquarters of the HBS in Germany and has written many papers and articles critiquing the green economy.

A small audience of journalists, academics, NGO representatives and government officials attended the joint talk.

The event was supported by the Sustainable Development Policy Institute (SDPI) with Shafqat Kakakhel, who is on their Board of Governors, asking the questions at the end.

Since the current global economic recession began, presidents and prime ministers of different countries have been talking about the “green economy”, a term that was first coined by the United Nations Environment Programme in 2008. Scientists are now calling for a major shift to clean energy technologies and energy efficiency in order to curb carbon emissions that are causing disastrous climate change.

In the run up to last year’s Rio conference on Sustainable Development, the green economy was used to attract different actors.

According to Barbara the term was used for “business to buy into the conference… It was felt that ‘sustainable development’ was becoming meaningless, 20 years after Rio (the Earth Summit held in 1992).”
Clearly our resources are finite and we are now living in a rapidly changing climate constrained world with an increasing loss of biodiversity, she said.

Barbara had pointed out earlier that she was not opposed to the idea of the green economy for one cannot continue with “business as usual” but what is important is “what kind of green economy are we asking for?”
Although there are different perspectives of the green economy, depending on whether one comes from the north or south. The south is where the impacts of climate change are being felt the most.

Interestingly, Barbara comes from the north and she calls for “the north to reduce resource consumption” which is rare.

“All the reports are saying that we cannot continue with business as usual, we have to de-carbonise our economies, so the message is good”, explained Barbara.

“But when you look into the details, what do they mean…You see the dark side of the green economy… an arena for political battles,” she said.

The green economy is already being contested in several countries for lacking social safeguards and rights based policies.

Through clean large scale investments can arise conflicts of interest, said Barbara.

Barbara gave the example of Southern Mexico, where renewable policy had led to massive wind investment. “Large wind farms were set up, but on land belonging to the indigenous people. The wind parks were not benefiting the local people and they suffered,” she emphasised.

The local people did not receive any profits, not even electricity from the wind farms. “The green economy has to benefit the people, not big business,” explained Barbara.

The questions to ask are who owns it and who benefits from it? Similarly, in India, a recent study by the Centre of Science and Environment on renewable energy described who was getting the share of the investments, and it was certainly not the poor who have been left out.

In the North, Barbara explained that there was a strong axis of technology innovation and efficiency and the tendency was to “go big”. Under the green economy, they are looking at ideas like mirrors in space, ocean fertilisation, big dams and even nuclear power, she said.

“The context is to have a technological fix for big things… But we have to consider the social and environmental impacts,” she added.

Then there is the new idea of placing an economic value on nature by putting “a price on trees you won’t cut”.
But this “new economy for nature” is triggering a debate and countries in Latin America are rejecting the idea of a market based trade of trees and soil.

“The global concept of the green economy has to be better”, pointed out Barbara.

“Also, the North has to change its lifestyle and consumption patterns. Efficiency is not enough,” she said. Barbara concluded her talk with the advice that “the green economy offers a chance if we are able to hold decision makers accountable” and that “if we want to live in a better future then human rights and the participatory process must be respected”.

It was hoped that at the Rio Summit held last year, the world would come together to formulate an urgent action plan for a global green economy.

However, that did not happen and really if one look’s back at the first Rio conference held in 1992 and what happened subsequently in terms of massive carbon emissions and the staggering loss in biodiversity, the green economy is indeed beginning to look like the “new magic bullet” as Barbara described it.

According to Shafqat Kakakhel “the outcome of Rio (1992) was not positive”. He pointed out that Barbara, who had been involved with environmental issues for more than two decades, was one of the few environmentalists to have questioned “the mythological way in which Rio had been praised”.

He described that the green economy had its “advocates in the north and its skeptics in the south.”
He added that currently there was “no political will to do away with business as usual and there were no major initiatives that came out of the Rio+20 summit.”

In Mr Kakakhel’s view, “profligate and wasteful lifestyles must be abandoned” if the world is to have a chance. Unfortunately, rapidly developing India and China are currently aping western lifestyles, he said.
Also, the multi-lateral process of international negotiations is also going nowhere.

According to Barbara, “we need to reconsider the strategy, go back and think how to mobilise people at home. People at home need to put pressure on politicians to go in the right direction”. Ultimately, perhaps what is needed is to question the entire capitalistic growth model.

“We don’t have to follow business as usual,” said Barbara, adding, “we have to try our best by implementing good solutions along with less consumption of resources”.

What we need is a “de-growth movement” in which people look for local, and national solutions, she said.
Is the world ready to re-think development? Barbara thinks we have no choice unless we want to live in a significantly warmer world, where we can no longer take our survival for granted.

Dark side of the green economy

Wednesday, February 13, 2013

"Sustainable development in action" Post-Rio+20 Hangout, 12 February 2013

Bhutan set to plough lone furrow as worlds first wholly organic country | marketspace

By John Vidal and Annie Kelly

Bhutan plans to become the first country in the world to turn its agriculture completely organic, banning the sales of pesticides and herbicides and relying on its own animals and farm waste for fertilisers.

But rather than accept that this will mean farmers of the small Himalayan kingdom of 1.2 million people will be able to grow less food, the government expects them to be able to grow more – and to export increasing amounts of high quality niche foods to neighbouring India, China and other countries.

The decision to go organic was both practical and philosophical, said Pema Gyamtsho, Bhutan’s minister of agriculture and forests, in Delhi for the annual sustainable development conference last week.

“Ours is a mountainous terrain. When we use chemicals they don’t stay where we use them, they impact the water and plants. We say that we need to consider all the environment. Most of our farm practices are traditional farming, so we are largely organic anyway.

“But we are Buddhists, too, and we believe in living in harmony with nature. Animals have the right to live, we like to to see plants happy and insects happy,” he said.

Gyamtsho, like most members of the cabinet, is a farmer himself, coming from Bumthang in central Bhutan but studying western farming methods in New Zealand and Switzerland.

“Going organic will take time,” he said. “We have set no deadline. We cannot do it tomorrow. Instead we will achieve it region by region and crop by crop.”

The overwhelmingly agrarian nation, which really only opened its doors to world influences 30 years ago, is now facing many of the development pangs being felt everywhere in rapidly emerging countries. Young people reluctant to live just by farming are migrating to India and elsewhere, there is a population explosion, and there is inevitable pressure for consumerism and cultural change.

But, says Gyamtsho, Bhutan’s future depends largely on how it responds to interlinked development challenges like climate change, and food and energy security. “We would already be self-sufficient in food if we only ate what we produced. But we import rice. Rice eating is now very common, but traditionally it was very hard to get. Only the rich and the elite had it. Rice conferred status. Now the trend is reversing. People are becoming more health-conscious and are eating grains like buckwheat and wheat.”

In the west, organic food growing is widely thought to reduce the size of crops because they become more susceptible to pests. But this is being challenged in Bhutan and some regions of Asia, where smallholders are developing new techniques to grow more and are not losing soil quality.

Systems like “sustainable root intensification” (SRI), which carefully regulate the amount of water that crops need and the age at which seedlings are planted out, have shown that organic crop yields can be doubled with no synthetic chemicals.

“We are experimenting with different methods of growing crops like SRI but we are also going to increase the amount of irrigated land and use traditional varieties of crops which do not require inputs and have pest resistance,” says Gyamtsho.

However, a run of exceptionally warm years and erratic weather has left many farmers doubtful they can do without chemicals.

In Paro, a largely farming district in south-west Bhutan, farmers are already struggling to grow enough to feed their families and local government officials say they are having to distribute fertiliser and pesticides in larger quantities to help people grow more.

“I have heard of the plan to turn everything organic. But we are facing serious problems just getting people to grow enough”, said Rinzen Wangchuk, district farm officer.

“Most people here are smallholder farmers. The last few years we have had problems with the crops. The weather has been very erratic. It’s been warmer than normal and all the chilli crops are full of pests. We are having to rely on fertilisers more than we have ever had to in the past and even these are not working as well as they initially did.”

Dawa Tshering, who depends on his two acres of rice paddy and a vegetable garden, says that for decades his farming was chemical free.

“But its harder now because all our children are either in the capital or studying. Nobody wants to stay, which means we have to work harder. It’s just my wife an myself here. We cannot grow enough to feed ourselves and take crops to the market, so we have to use chemicals for the first time. We would like to go back to farming how we used to, where we just used what nature provided.”

But in a world looking for new ideas, Bhutan is already called the poster child of sustainable development. More than 95% of the population has clean water and electricity, 80% of the country is forested and, to the envy of many countries, it is carbon neutral and food secure.

In addition, it is now basing its economic development on the pursuit of collective happiness.

“We have no fossil fuels or nuclear. But we are blessed with rivers which give us the potential of over 30,000megawatts of electricity. So far we only exploit 2,000 megawatts. We exploit enough now to export to India and in the pipeline we have 10,000 megawatts more. The biggest threat we face is cars. The number is increasing every day. Everyone wants to buy cars and that means we must import fuel. That is why we must develop our energy.”

Agriculture minister Gyamtsho remains optimistic. “Hopefully we can provide solutions. What is at stake is the future. We need governments who can make bold decisions now rather than later.”

Tuesday, February 12, 2013

Advocates shocked by president's veto of Kenyan climate authority bill - AlertNet

Kenya’s hopes of becoming one of the first countries in sub-Saharan Africa with a body legally empowered to advise on mitigating the effects of climate change have hit a dead end, after President Mwai Kibaki rejected a law that would have created a Kenya Climate Change Authority (KCCA).

The Kenya Climate Change Authority Bill was passed by the country’s parliament in December. The KCCA would have advised national and regional governments on how to cope with climate change, punish environmental offenders and implement local and international agreements on climate issues.

The body would have been authorized to formulate policies on adaptation and response, besides setting regulatory measures to control activities that would impact the environment and climate.

Under the bill, a Climate Change Trust Fund would have been established, managed by a board of trustees, to source funds from within and outside government to finance mitigation and adaptation activities by KCCA and civil society.

But in January President Kibaki refused to sign the bill, citing lack of public involvement in its creation.
The president said that although the law was important to the country to deal with climate change and ensure a clean environment for citizens, public participation in the formulation of laws by the national assembly was enshrined in the constitution, and had to be observed.

“There was no public input in formulation of the bill in accordance with article 118 of the constitution. I recommend that the bill be referred back to parliament to allow for public input,” Kibaki’s statement said, effectively denying the country its first-ever climate law.


The president’s assertion about lack of public input has been disputed by groups involved in crafting the law, including the Kenya Climate Change Working Group (KCCWG), a nongovernmental organisation.
The group’s chief executive, Cecilia Kibe, called the president’s decision shocking.

 “We have held hearings across the country prior to the tabling of this bill in parliament for debate and adoption,” said Kibe. “We are all shocked by the turn of events.”

Documents provided by KCCWG indicate the involvement of the public in consultations, including  grassroots groups such as farmers and livestock keepers.

The prime mover of the bill, former legislator and leading climate scientist Wilbur Otichillo, said he was also taken aback by the president’s move. He asserted that the Network on Renewable Energy and Climate Change, a lobbying group, had sought and incorporated the public’s views on the bill.

“We can only hope the next parliament to be elected on March 4 will rectify the anomaly and make the president understand that the Kenyan people were exhaustively involved,” Otichillo said.

It is unlikely that the new parliament will look at the matter afresh before June, since there will be a month-long break after members are sworn in. The bill will also compete with other pending bills related to the country’s recently adopted constitution and those left unfinished by the previous parliament.

Climate-related matters in Kenya are currently handled by a small unit of experts from different government ministries, based in the prime minister’s office.

However, the unit is poorly funded by the government, and climate initiatives are mainly spearheaded by civil society and non-governmental organizations, experts said.

Monday, February 11, 2013

IPS – Saving a Shrinking Lake | Inter Press Service

Approaching the Lake Chad basin from Gulfe, a small locality 45 kilometres from Cameroon’s Far North Regional capital Maroua, the atmosphere of despair is palpable: dusty air, fierce and unrelenting winds, wilting plants and sand dunes suggest that this once lush area is undergoing a terrible change. 

Nothing breaks the expanse of sparse vegetation but the occasional withered tree and some scorched shrubs.
Bordered by Chad, Cameroon, Niger and Nigeria, Lake Chad once spanned 25,000 square kilometres but in the last half century it has shrunk by 90 percent, its total surface area now covering a mere 2,500 square kilometres.

As a result of feeble rainfall, the Chari and the Logone – the two main rivers that feed the lake – are bringing less and less water each year.

Herders, fisherfolk and farmers who have relied for generations on the rich soil of this basin are now struggling to survive, as the great lake dries up before their very eyes.

On the banks of the lake, Mahamat Aboubakar is disentangling a tiny black catfish from a large net.
“Before, you needed to cast the net just a few times to get thousands of fish,” Aboubakar tells IPS. “But today, it may require a whole day’s work to get this,” he says, pointing to the miserable catch, which is worth about two dollars and is likely to be his only income for the day.

Back when the lake was healthy and teeming with life, the 64-year old fisherman could earn as much as 50 dollars. Now, he can only expect his catch to get smaller – and himself poorer – as the lake’s waters continue to recede.

“This is a disaster,” Sanusi Imran Abdullahi, executive director of the Lake Chad Basin Commission (LCBC) – a regional body created by the countries bordering the lake with the aim of regulating water use and other natural resources in the basin – tells IPS.

“It is already taking its toll on residents around the lake,” he adds. In order to prevent a potentially catastrophic situation, “we are working to save Lake Chad and the 30 million people whose livelihoods depend on the natural resources” of this water body.

It is impossible to blame the crisis on one single factor, experts say.

Environmentalist Paul Ghogomou of the University of Yaounde in Cameroon tells IPS, “Desertification, climate change as well as the continuous diversion of water from the rivers that feed the lake are responsible.”
He explains that water from Cameroon’s Chari River – which, fed by its tributary, the Logone, provides over 90 percent of Lake Chad’s water – is being diverted to irrigation projects in the surrounding area.

Meanwhile, dams built along the Jama’are and Hadejia Rivers in northeastern Nigeria are “partly responsible for the shrinkage”, he says.

LCBC’s Abdullahi adds that population pressure is also stretching the lake to breaking point.
“Forty years ago, the population within the Lake Chad area was about 17 million. Now, we number about 30 million. So rising demand by the population, the rising numbers of livestock as well as massive evaporation as a result of climate change have all combined to shrink the lake,” he notes.

For the time being, farmers and fisher folk are showing resilience, adapting as best they can to a looming crisis.

Ahmadou Bello, a fisherman in Gulfe, has simply turned to farming, producing such crops as cowpea, maize, rice and peppers without using fertilisers.

Showing off this thriving farm with a wave of his hand, he tells IPS the disappearing lake has “left behind very fertile land”.

But if the lake does not return, even the remaining humidity left by its receding waters will evapourate, and farmers will be left with few options for a livelihood.

Can the waters be replenished?

In an effort to implement more sustainable solutions, member countries of the LCBC – Chad, Cameroon, Niger, Nigeria and the Central African Republic (CAR) – have developed an ambitious plan to replenish the lake with water from the Obangui, a tributary of the Congo River.

Abdullahi says the project will involve the “construction of a retention dam at Palambo (upstream of the CAR’s capital Bangui) to serve as a catchment area. The high flow through pumping will then enter River Fafa – a tributary of Ouham – and by gravity through a 1,350-kilometre-long feeder channel (flow) in to the River Chari in Cameroon and then to Lake Chad.

“There is so much water in the Congo that goes into the ocean. We are just going to take a fraction of it to save the lives of 30 million people who depend on the lake for their survival,” he says.

He further explained that the project would also extend the electricity supply, ensure river transportation in order to move goods from east to west across Africa and develop irrigation and agro-industry in the region.
“So the programme isn’t only (designed) to bring water to Lake Chad, but also to improve economic activity and the livelihoods of people within the Congo Basin,” he tells IPS.

But a dearth of financial resources is likely to delay the project’s implementation – according to Abdullahi the scheme will cost a staggering 14.5 billion dollars

While heads of state in the region have shown some political commitment, the LCBC is primarily looking to the global community for help.

“We will host an international donors’ conference early this year to see what we can get, and from there we will (assess) what the member states will contribute,” he explains.

The bulk of the financing is likely to come from the private sector, as long as funders are guaranteed a return on their investment. “I am sure they will be interested,” says an optimistic Abdullahi.

The cost of the project may look frightening, but the cost of inaction could be even more devastating, experts say.

According to the Canadian firm CIMA-International, which carried out feasibility studies on the water transfer project, Lake Chad could disappear altogether by 2025 if nothing is done to save it.


Saturday, February 9, 2013

GNP and GNI are outdated

By Sjoerd Nienhuys

There is a need for new values for wealth and national economic growth figures. GNP and GNI are outdated. 

The Human Development Index (HDI) is a much better measuring instrument for comparing countries than GNP (gross national product) or GNI (gross national income), but it only gives a ranking on a development ladder, and not a value. Bhutan evaluates its national situation, considering welfare and happiness as the most important indicators.

The World Bank and IMF use GNP and GNI as landmark figures to compare economic growth and development in different countries. These national total GNP figures do not reflect reality. It is more sensible to analyse the growth per head of the population (GNI) and additional parameters. But these other parameters are not easy to compile. 

GNP is calculated according to three different models, based on local production and the difference between imports and exports. GNP figures are used as if they were decisive for each country’s economic development.  A few billionaires and a larger group of millionaires on the one hand and many millions of people living in poverty on the other hand, as in India and China, may still produce a reasonable economic growth figure, even if the situation is not very social or democratic. In addition, the five points below do not include the gender gap.

Total GNP figures are based on flows of money, added together and converted to US$. These figures require adjustment and it is time that internationally new figures were developed which offer a better representation of real development. Here are five suggestions:

A.    Inflation correction:  This correction works well if the US$ remains a stable currency and is not devalued. All economic figures need to be corrected to allow for inflation of the US$ itself.  If they are not corrected, all these total GNP growth figures will be inflated. This will be similar to the devaluation of the poverty line of 1 US$ per day.

B.    Informal market: Governments do not measure the value of their informal market and do not include it in calculation of the total GNP; no product added value is calculated or taxes raised over the informal market. Many countries with a current high growth rate used to be developing countries with very large informal markets in which large quantities of goods and services were traded.  Yet many self-supporting people were listed as being under the poverty line as they did not make more than 500 US$ per year. Fifty years ago, in Africa, South America and Asia, many millions of subsistence farmers did not count as part of the economy despite having a reasonable and sustainable quality of living. When calculating total GNP, a realistic estimate must be made of the total value of the informal market, trade and subsistence farming. If these people enter the fiscal circuit, total GNP will grow, while in reality there will be no economic change at all. 

C.    Urban growth: A maize cob may cost a farmer € 0.05 to produce, but € 1 in the supermarket of a large town due to transport and trading. The effect is that the more urbanized a country is, the higher the price level will be, but without any added food quality. A farmer may live in a larger house than a city dweller, but the latter’s expensive house is included in GNP because it was constructed and is serviced within the framework of the formal market, while the farmer’s house is not. A subsistence farmer can have a reasonable quality of life on 500 US$/year, while the same amount may mean extreme poverty for an urban dweller.  Countries that currently have high total GNP growth also have a high level of recent urbanization. Current GNP figures therefore give an indication of the level of urbanization of a country, but not necessarily of wealth.

D.    Natural resources exports: When a country has resources of mineral gold, oil or hardwood forests, these represent a value in the country’s economy when they are made tradable through mining, refining and sawmills. When these resources are sold to another country, they are traded for virtual or paper money, which will lose its value by inflation if not wisely reinvested within that same country. Important here is the investment within that country.  Selling gold for paper money does not make a country richer. The current model of total GNP includes these exported resources and includes them in national economic figures. When Indonesia sells its hardwood lumber to Japan or Malaysia, or when the same lumber is transformed into timber products, and these products are then sold on the exterior markets, the added value makes timber workers and the country richer. A recalculation of total GNP considering only added value without resource exports would considerably change the figures of those countries which now sell their crude oil, raw copper or other minerals.

E.    Population growth: A country which has a total GNP of 3.5% and population growth of 2.5% over the same period has an average GNP per capita of only 1%. GNI per capita is a more realistic figure. A problem with this form of calculation is that birth rates in many less developed countries are estimated. In countries with low birth rates, like France or the Netherlands, the total GNP can be lower than in countries with high birth rates, while GNI per capita will be the same. A focus on total GNP figures is therefore misleading.

The above five issues are some of the reasons why fifty years ago many developing countries had a very low total GNP compared with all-registered and all-taxed European countries. Their large informal sector was not counted, their natural resourses were exported without internally added value, and they had high population growth. Export of unprocessed natural resources and population growth have a large influence on the more realistic value of GNP per capita. To compare growth figures over a longer period, these compensating factors need to be calculated over all these years. The IMF and World Bank should take the lead in presenting these adjusted growth figures. Since people’s social or economic welfare is not rated only to economic growth, better parameters such as the HDI, the Bhutan model or inequality need to be developed.

Thursday, February 7, 2013

Tame the markets, civil society tells David Cameron and co in Liberia

Civil society groups call on UN panel to consider new economic models and equality as they discuss next development agenda
Political leaders must "move urgently" to address unsustainable growth and address the rising inequalities that have wreaked havoc on poor people, civil society groups meeting in Monrovia this week have demanded.

In a strongly worded communique to the UN's high-level panel (HLP), which is discussing the development framework after the millennium development goals (MDGs) end in 2015, NGOs and grassroots organisations said governments need to "tame and regulate the hubris of financial markets and unsustainable growth, thereby generating greater national policy space and more resources for human development, and keeping socially disruptive inequalities from getting worse".

The communique, published on Wednesday, added: "Alternative economic models and approaches exist that combine growth with human development and human rights in ways that are environmentally sustainable. 

These models are more participatory, can draw on new financing mechanisms and build on the energy, dynamism and creativity of those who are traditionally marginalised and oppressed. What's needed is the political will among global and national leaders and decision-makers to adopt such approaches and make them central to the post-2015 development agenda."

The outcome document emphasised the importance of human rights, particularly the rights of women, in the post-2015 process. It called on the panel, chaired by the Liberian president, Ellen Johnson Sirleaf, Britain's prime minister, David Cameron, and the president of Indonesia, Susilo Bambang Yudhoyono, to prioritise tackling violence against women and girls, especially sexual violence, and recognise the unpaid work women do in supporting development, such as caring for children and families. It said promoting women's rights, including sexual and reproductive rights, is "critical" to the success of the post-2015 agenda.

It added: "The agenda should include a reinforced standalone gender equality goal and expanded gender targets and indicators across the entire framework. Failure to do so would reverse the gains of the last 20 years." There is near universal agreement among women's groups that a separate gender equality goal is required in any new targets to follow the MDGs.

The communique also called on the panel to realise the potential of children and young people, and to include provisions for better education and skills training, as well as support for young people in getting decent paid work. It added that older people and those with disabilities must have "full and equal participation" in all stages of the economic process, and said smallholder farmers need to be better supported.

"We strongly believe that the post-2015 development agenda should be based on a vision of socioeconomic transformation and a strategy that will have at its core a commitment to protect and promote the human rights of people, to build their economic capabilities and thereby harnessing their potential and recognise them as key contributors to development," said the communique.

At a meeting to discuss the outcome document with some panel members, Professor Gita Sen, from the Indian Institute of Management in Bangalore, said the perceived wisdom that economic growth is necessary for poverty reduction really depends on what type of growth it is. Some economic growth is "producing vulnerability and impoverishment". "Is it [economic growth] producing jobs, or is it unsustainable or ripping off resources and making it impossible for farmers to produce?" she said.

Ousainou Ngum, from the Agency for Co-operation and Research in Development, told the panel that Africans, whose voices were not given much thought in the creation of the MDGs, need to play a major role. "Being at the table is critical," he said. African civil society groups are working on an "Africa agenda", setting out "concrete" proposals that are particularly relevant to the continent. The agenda will be presented at the next HLP meeting in Bali in March.

Amina Mohammed, special adviser to the UN secretary general on post-2015 development planning and ex-officio member of the HLP, told the meeting that human rights are central, and civil society groups would have a key role in ensuring they are upheld.

Homi Kharas, who is lead author on the final report of the HLP, due to be published at the end of May, said integrating business, economics and the social agenda is "something the panel takes very seriously". He added that he is "sure we will have one agenda for 2015", after concerns were expressed about a possible two-track process: the HLP is running in parallel with the open working group discussing a set of sustainable development goals. The objective is for both streams to feed into recommendations.

Tame the markets, civil society tells David Cameron and co in Liberia