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Anna Ikeda. Credit: Soka University of America Photography

By Anna Ikeda
NEW YORK, Apr 10 2023 (IPS)

The current war in Ukraine has shown that nuclear deterrence is deeply flawed. It relies on the assumption of “rational actors” in power and credibility of threats, which we know are far from reality, especially in times of conflicts.

Beyond their potential use, nuclear weapons continue to threaten us through their mere presence. For instance, resources spent on those weapons hinder the advancement towards achieving the SDGs and building the post-pandemic world. Therefore, they tangibly affect other priority areas to be addressed at the G7 summit.

Thus, this year’s G7 summit presents an opportunity to seriously rethink our understanding of security and international peace.

The 2022 SGI Peace Proposal, authored by our international president Daisaku Ikeda, urges that we must “detoxify” ourselves from current nuclear-dependent security doctrines. Based on this, I offer some recommendations on controlling nuclear weapons:

1. Adopt a No First Use policy

To reduce current tensions and create a way toward resolving the Ukraine crisis, the nuclear-weapon states must urgently initiate action to reduce nuclear risks. With nuclear arsenals in a continuing state of high alert, there is a considerably heightened risk of unintentional nuclear weapon use.

For this reason, SGI has renewed its commitment to advocate for the principle of No First Use to be universalized as the security policy of all states possessing nuclear weapons as well as nuclear-dependent states.

We believe that adopting the doctrine of No First Use by nuclear-armed states would significantly stabilize the global security climate and help create a much needed space for bilateral and multilateral dialogue toward ending the conflict.

A No First Use policy would also operationalize the recent statement by the G20 leaders that the use or threat of use of nuclear weapons is inadmissible, as well as the statement by the P-5 countries in January 2022 that “a nuclear war cannot be won and must never be fought.”

Certainly, such declaratory policy must be accompanied by changes in actual postures and policies, such as taking all nuclear forces off hair-triggered alert, in order to build mutual trust.

Overall, No First Use would be a critical step toward reducing the role of nuclear weapons in national security and serve as an impetus to advance nuclear disarmament. We therefore urge G7 leaders to seize the opportunity to discuss and announce strategies of risk reduction, de-escalation, and disarmament, particularly by declaring the policy of No First Use.

2. Engage productively in multilateral disarmament discussions and take bold leadership

It is critically important that G7 leaders take bold leadership and renew their commitment to fulfill obligations for disarmament stipulated under Article VI of the NPT.

Equally important would be to further explore the complementarity between the NPT and the Treaty on the Prohibition of Nuclear Weapons (TPNW). We especially hope Japan will fulfill its commitment as a bridge-builder by engaging productively in the TPNW discussions, recognizing that, despite divergent approaches, all countries share grave concerns about the potential use of nuclear weapons.

We strongly urge G7 countries to work cooperatively with the TPNW States Parties by committing to attend meetings of states parties to the treaty in the future.

3. Commit to work towards the elimination of nuclear weapons

It is often said that a world without nuclear weapons is the “ultimate goal.” However, we have to be sure this goal is achieved before nuclear weapons destroy our world. There have been some calls by experts to set the year 2045 as the absolute deadline for the elimination of nuclear weapons. At the Hiroshima Summit, G7 leaders could possibly agree on setting such a timeline and determine to begin negotiations accordingly.

4. Support disarmament and nonproliferation education initiatives

Lastly, we call on G7 leaders to demonstrate their support for educational initiatives at every level. We strongly hope that they set an example by visiting the Hiroshima Peace Memorial Museum and meeting the atomic bomb survivors, to directly hear from them, and learn from their experiences.

To shift the current security paradigm, we must transform the way people think about peace and security, and challenge the dominant narrative that nuclear weapons keep us safe. We need to raise the public’s awareness that the surest way to avoid a nuclear war is by eliminating these catastrophic weapons.

A 2009 nuclear abolition proposal by the SGI president states that, if we are to put the era of nuclear terror behind us, we must confront the ways of thinking that justify nuclear weapons; the readiness to annihilate others when they are seen as a threat or as a hindrance to the realization of our objectives.

For this reason, we ask for the G7 leaders’ commitment to make available the opportunity for everyone, especially but not limited to young people, to learn about the humanitarian consequences of nuclear weapons.

We welcome Prime Minister Kishida’s initiative for the Hiroshima Action Plan, and establishing a “Youth Leader Fund for a world without nuclear weapons.” We hope Japan will exercise its leadership to affirm that the purpose of such initiatives is not to provide only the education about disarmament, but education for disarmament.

To close, the current tensions and uncertainties in the global security climate elevates, not undermines, the value and role of dialogue and diplomacy. Forums like the G7 and the United Nations serve more important functions than ever.

Anna Ikeda is representative to the United Nations of Soka Gakkai International (SGI), and the program coordinator for disarmament of the SGI Office for UN Affairs, where her work focuses on nuclear abolition and stopping killer robots. This is a slightly shortened transcript of her paper presented to the conference on ‘Advancing Security and Sustainability at the G7 Hiroshima Summit‘ at Soka University, Tokyo on March 29, 2023.

IPS UN Bureau

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Technology increasingly sits at the intersection of many aspects of our lives: how we work and learn, how we interact with the people in our lives and the world around us, and how we access and consume the products and services we use every day. Diversity in engineering and technology is critical to ensuring different perspectives are considered when we identify and solve problems with technology and results in more creative solutions. Credit: United Nations

By Padmini Sharma
MILAN, Italy, Apr 10 2023 (IPS)

Excessive reliance on algorithmic management has raised concerns regarding its opaque decision-making mechanisms and implication for workers.

In less than a decade, digital platforms have evolved from a niche market to engulf diverse industries and services across the globe, in developed and developing nations alike.

Defined as online mechanisms that enable exchanging goods, services, or information between different actors, these include the likes of Amazon, eBay, Uber, Deliveroo and Airbnb.

In India, both location-dependent jobs like ride-hailing, food delivery and caregiving to location-independent jobs like crowd work have grown due to the high demand for these services in the market, coupled with huge labour reserves comprising both local and migrant labour forces.

As more than 88 per cent of the total employees in India is engaged in the informal economy, some considered the rise in the platform economy to hold significant potential in addressing existing economic and social disparities.

The term ‘platform economy’ encompasses the growing digital platforms, the models of which are gaining significance over other traditional setups as they offer the possibility to save significantly on structural and labour costs, reduce transaction costs and eliminate barriers.

These have constrained labour force participation across disadvantaged groups and ensure a high degree of autonomy for workers to decide about their workload, work portfolio, time and place of work.

Thus, many workers consider these platforms to extend viable opportunities for earning a living, whether at home or abroad. However, despite these advantages, these platforms have raised concerns over deteriorating working conditions.

Pitfalls of algorithmic management

These platforms depend on algorithmic management to mediate labour relations. In practice this means that algorithms manage labour through certain practices like assigning orders to specific workers, optimising delivery routes, calculating income and incentives, and monitoring and evaluating the performances of workers.

Initially, algorithmic management was seen as a positive development for workers due to its comparison with previous job experiences. Most workers found it to be less stressful, offering them more autonomy and flexibility and above all the belief that the algorithm is more ‘reliable’ in allocating tasks or calculating their income.

Compared to dealing with humans as managers, dealing with apps was a more rewarding experience in the pre-Covid19 era. Undoubtedly, introducing algorithms has its advantages.

When extracting and using massive real-time data, algorithms can execute faster and make more accurate decisions, therefore enhancing workers’ productivity and efficiency while reducing transaction costs.

The use of algorithmic management is seen to have indirect negative implications on the physical and mental health of the workers, which, to meet the targets, are working 14 to 17 hours per day.

Positive as it may seem at first glance, algorithmic management has also introduced certain risks. Although most workers are aware that platforms such as Uber Eats and Deliveroo are strategically leveraging workers’ data to calculate remuneration or assess performances, many workers find it hard to understand the functioning of these apps, in particular the techniques that go into the programming.

This lack of understanding results in doubts about the claimed ‘logical’ and ‘unbiased’ mechanisms of these apps;

‘It does not understand what problems we face on the road […] like when we go to deliver the order to the customer, if there is any problem on the way like a bike accident or anything, then that is not considered […] the company does not understand that […] if I have taken the order, it means I have to deliver it […] and if I am not being able to deliver it, then the app will directly deduct the amount of the order or even its double from the pay-out’, explains a Mumbai delivery worker.

The excessive reliance on algorithmic management has raised concerns regarding these opaque decision-making mechanisms, their implications for workers, their random and inscrutable logic that leaves less room for human comprehension and for workers to contest as well as the high potential for them to propagate existing biases and discrimination.

In addition to this, the use of algorithmic management is also seen to have indirect negative implications on the physical and mental health of the workers, which, to meet the targets, are working 14 to 17 hours per day on average — severely disrupting their work-life balance.

Linking the delivery time to ratings, moreover, makes workers jump traffic signals and ride at high speed, often ignoring the risks associated with such decisions. The assignment of tasks based on several often ‘beyond controllable’ factors by the algorithm increases stress among workers.

These highly controlled unilateral relations with the app are further seen to be disrupting the social relations among the workers which restricts their potential to engage in collective resistance.

Many platform workers are thus moving towards individualistic approaches such as waiting at specific locations or maintaining good terms with the team leaders to make themselves more visible to possibly secure higher orders and income.

Even when some workers are resorting to digital means in uniting, it is not clear whether such mechanisms can contribute towards arousing significant pro-working-class consciousness among the workers.

The challenge of regulating platforms

At the EU level, with multiple cases coming up against algorithmic manipulation and discrimination, and the inaccessibility of data, significant attention is devoted to regulating the rights and interests of platform workers by introducing new governing mechanisms.

As platform workers, with or without support from unions, have brought up several cases against these platforms relating to algorithmic functioning. For example, in Italy, based on the cases filed against app-based delivery platforms, the Courts of Palermo and Courts of Bologna have agreed that the work in these platforms is highly managed via algorithms, the deliveries are assigned based on criteria that are not related to the workers’ preferences or their general interests and that it runs on principles that violate Italian law prohibiting discrimination against employees or self-employed.

The debate in India has mostly centred around including platform workers under the proposed Code on Social Security to ensure more uniform coverage for workers engaged across different platforms.

However, unlike in the European context, the Judiciary in India has not been able to extend recommendations to protect and regulate the interests of the platform or the gig workers. Instead, the debate has mostly centred around including platform workers under the proposed Code on Social Security to ensure more uniform coverage for workers engaged across different platforms.

However, this Code is criticised on several grounds, as it does not solve the main issues concerning workers’ classification and minimum wages and because of its approach to social security, which is still not enough to address existing concerns.

The Code also does not mention any timelines to implement the schemes, thereby adding to the uncertainties of workers. Lastly, the division of powers is also a problem since there is no clear demarcation of responsibilities between the central and state government on labour issues.

A further attempt at regulation in the Motor Vehicles Act of 2020 has sought to place obligations on platforms to maintain transparency over the ‘functioning of the app algorithm’, however, it has not incorporated the ‘right to explanation’, meaning that workers still do not have access to understanding the mechanisms that go into calculating their income, allocating tasks or evaluating their performances.

As workers are coming up with multiple complaints concerning threats to personal data, a lack of transparency, unaccountable algorithmic programming, as well as algorithmic manipulation, there is a strong need to create a more robust governing structure that ensures platform workers greater access to data and to the mechanisms involved in designing their work practices.

Padmini Sharma is a PhD Candidate in Economic Sociology and Labour Studies at the Universita Degli Studi di Milano.

Source: International Politics and Society (IPS), published by the Global and European Policy Unit of the Friedrich-Ebert-Stiftung, Hiroshimastrasse 28, D-10785 Berlin.

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Patients outside the Mycetoma Research Center in Sudan. Credit: DNDi

By Geoffrey Kamadi
NAIROBI, Apr 7 2023 (IPS)

The disease burden and distribution of mycetoma—a neglected tropical disease—are not very well understood. However, it is known to affect people in Sudan, Senegal, Mauritania, Kenya, and Niger, as well as people in Nigeria, Ethiopia, India, and Cameroon. Cases have also been reported in Djibouti, Somalia, and Yemen.

“It is currently unknown what the incidence, prevalence and the number of reported cases per year per country is,” observes Dr Borna Nyaoke, head of the Mycetoma Program at the Drugs for Neglected Diseases initiative (DNDi) – Africa Regional office. DNDi is a not-for-profit international R&D organisation operating in Kenya, Ethiopia, Uganda and Sudan.

Mycetoma is one of a group of 20 diseases referred to as neglected tropical diseases or NTDs in short. These diseases usually affect marginalized and poor communities.

NTDs are caused by viruses, bacteria, fungi and toxins from snake bites. They affect 1.7 billion people globally.

According to the Centres for Disease Control and Prevention, mycetoma is caused by certain types of bacteria and fungi found in soil and water. Mycetoma can be caused by bacteria (actinomycetoma) or fungi (eumycetoma).

For years now, little attention has been directed towards NTDs in terms of research and the development of new treatments, hence their neglected categorization status.

Between 2000 and 2014, only 66 novel products entered phase I clinical trials intended to prevent or treat NTDs, according to Dr Maurice Odiere, head of the Neglected Tropical Diseases Unit, Centre for Global Health Research at the Kenya Medical Research Institute (KEMRI). This represented just 1.65 percent of all 4,006 phase I trials in the world.

However, this has changed over the last couple of years, with concerted efforts producing new drugs and research initiatives.

For example, the world’s first randomized double-blind clinical trial on eumycetoma (fungal mycetoma) was completed last year in Sudan, according to Nyoke.

“We were comparing the investigational drug Fosravuconazole against a treatment against Itraconazole, which is the standard treatment of eumycetoma in Sudan,” she explains.

This clinical trial started in 2017 in Khartoum, Sudan, with phase II clinical trials completed in March 2022, and the top-line results were presented in September 2022. The clinical report is under review and is expected to be finalized later in 2023.

The study was conducted in Sudan because it is one of the countries where mycetoma is endemic.

Expensive Toxic Treatment

The existing treatments for eumycetoma, such as the antifungals Ketoconazole and Itraconazole, are expensive, ineffective, and have serious side effects. Patients oftentimes undergo multiple amputations, which may prove fatal.

However, scientists think that Fosravuconazole, a drug developed for onychomycosis (a fungal nail infection), could offer an effective and affordable treatment for eumycetoma, hence the study. The drug’s interaction with body tissues is said to be favourable, and its toxicity levels are low. Lab tests show its activity against agents causing eumycetoma to be effective.

Mohamed Safi Ahmed El-Safi, who hails from the Kordofan region of Sudan, is a survivor of mycetoma. Initially, he did not think much of what appeared to be a pimple on his toe.

However, he would soon seek medical attention when he began experiencing excruciating pain emanating from the toe.

“The infection and pain increased, giving me a fever. My body felt like I was on fire,” recounts El-Safi.

Medical tests later revealed that the infection had spread to the bone. His lower right leg had to be amputated as a result. He now urges people to immediately seek medical attention once they notice a boil or pimple on the leg.

Mycetoma Research Centre (MRC)

Sudan boasts of the Mycetoma Research Centre (MRC) in Khartoum, which was established in 1991 under the auspices of the University of Khartoum, which is based at Soba University Hospital.

“It is the only referral hospital in the country, providing integrated medical care for mycetoma patients as well as training for medical and health professionals,” says Nyaoke.

Not only does the centre receive patients from within Sudan, patients from across Africa and the Middle East are referred to the Centre as well.

Nyaoke maintains that plans are underway to conduct epidemiological studies in Sudan, Senegal and India, among other endemic countries, to gather information on the burden and distribution of disease.

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By Roopa Dhatt and Susannah Schaefer
WASHINGTON DC / NEW YORK, Apr 7 2023 (IPS)

As World Health Worker Week draws to a close on April 7, health organizations from around the world have been celebrating women’s vital role in the health workforce and sharing stories about the enormous value they bring to all areas of health and care.

But platitudes are not enough. It’s time for global health leaders to step up and turn these words into action.

Globally, women make up almost 70% of the global health workforce and 90% of the frontline health workforce, contributing over $3 trillion to global health each year. The health systems in which they work play a significant role in remote and marginalized groups’ access to health, especially in times of crisis. Despite this, the challenges faced by community health workers (CHWs) are frequently overlooked.

CHWs play a critical role in providing care to vulnerable populations, but they are undervalued and accorded lower status in the “informal” workforce. Upwards of six million women are estimated to be either unpaid or grossly underpaid despite working in core health systems roles and just 14% of CHWs in Africa are salaried.

It is unjust that global health systems rely on the labor of unpaid women who are creating social and economic value that is uncounted and unrewarded. Unpaid work reduces women’s economic security and increases their lifetime poverty.

It also weakens health systems. The pandemic has demonstrated the need for strong and resilient health systems, but there can be no global health security while health systems are subsidized by some of the world’s poorest women.

Women health workers continue to make huge sacrifices to work on the frontlines. They went door-to-door educating households on the COVID-19 virus, tracing contacts, and delivering vaccines.

At last year’s World Health Assembly, India’s one million women community health workers known as accredited social health activists (ASHAs) were honored for successfully protecting the health of millions of people during the pandemic.

At the start of the pandemic, however, reports were coming out of India about the unacceptable risk faced by ASHA workers who were being sent into communities without lack of infection controls and facing stigma and abuse as perceived vectors of the virus.

In 2020, they launched widespread street protests and strikes to demand better pay, protection, and working conditions. ASHA workers may have been acknowledged as global health leaders, but they continue to be underpaid with small performance-based honorariums. They are still fighting for a fair and regular salary and the benefits that come with formal sector roles.

Pre-pandemic the World Health Organization (WHO) projected a global shortage of 10 million health workers by 2030, which COVID-19 now has deepened. Health workers lost their lives to the virus and significant numbers are unable to work, affected by ‘long-COVID’. There have been increased reports of violence towards women health workers during the pandemic–from colleagues as well as patients and their families.

In a 2018 report on health policy and system support to optimize CHW programs, one of the primary WHO recommendations included fair remuneration for CHWs, but this is still far from the norm. When CHWs are compensated, it often fails to align with WHO recommendations, which call for financial packages that are commensurate with the demands of the job, the level of complexity, the training required, and the hours worked.

This World Health Workers Week, we come together with our partners to call on global health leaders, governments and policy makers to disrupt the status quo. We believe that every person, regardless of gender, should have access to quality health and care and opportunities to thrive.

We know a fairly-compensated health workforce–alongside training, supervision, and safe working environments–leads to improved productivity, wider access to healthcare, and better patient outcomes.

The gender pay gap in health of 24% is one of the largest of any sector. We are calling on leaders to take measures to close that gap. We stand with our partners in calling for and focusing on transformative change, including gender-equal leadership in global health and a new social contract for women health workers centered on the need for fair and equal pay and safe and decent work.

There is increasing urgency in both high-income and low- and-middle income countries to prioritize changes in guidelines, funding, and policies. After three years of COVID-19, women health workers, who have been the majority in patient-facing roles, are burned out and traumatized.

Understandably, women are leaving the health sector at all levels in a ‘Great Resignation,’ which threatens to deepen the global health worker shortage crisis.

Addressing these injustices is a moral obligation and an economic necessity. Investing in health workers is a win-win proposition and will send a message that we recognize and value them as professionals.

Not only can we restore justice to neglected global health systems, but we can improve the working conditions and pay of health workers, unleashing broader economic benefits.

We would like to send a clear message that as heads of global health organizations we are committed to building stronger health systems and a more equitable world. Achieving true health equity includes quality care for all–including health workers.

Dr Roopa Dhatt is Executive Director and Co-Founder Women in Global Health, a fast- growing women-led movement with 47 chapters worldwide.

Susannah (“Susie”) Schaefer is Executive Vice Chair, President, and Chief Executive Officer (CEO) of Smile Train, the world’s largest cleft-focused organization with a sustainable and local model of supporting surgery and other forms of comprehensive cleft care.

IPS UN Bureau

 

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By Inés M. Pousadela
MONTEVIDEO, Uruguay, Apr 7 2023 (IPS)

The uncertainty that’s the hallmark of a democratic election was absent on 26 March, the day Cubans were summoned to appoint members of the National Assembly of People’s Power, the country’s legislative body. A vote did take place that day – people went to the polls and put a ballot in a box. But was this really an election? Cubans weren’t able to choose their representatives – their only option was to ratify those selected to stand, or abstain.

If each seat already had an assigned winner, why even bother to hold an election? Why would people waste their Sunday lining up to vote? And why would the government care so much if they didn’t?

Voting, Cuban style

According to its constitution, Cuba is a socialist republic in which all state leaders and members of representative bodies are elected and subjected to recall by ‘the masses’. Cuba regularly goes through the motions of elections, but it’s a one-party state: the Communist Party of Cuba (CPC) is constitutionally recognised as the ‘superior driving force of the society and the state’.

The CPC is indistinguishable from the state, and the party and its ideology penetrate every corner of society. This means the nomination process for elections can be presented as ‘non-partisan’, with candidates nominated as individuals rather than party representatives – they are all party members anyway.

Cubans vote in two kinds of elections: for municipal assemblies and the National Assembly. Candidates for municipal assemblies are nominated by a show of hands at local ‘nomination assemblies’. The most recent local elections took place on 27 November 2022, with a record-breaking abstention rate of 31.5 per cent – an embarrassment in a system that’s supposed to routinely deliver unanimous mass endorsement.

According to the new constitution and electoral legislation, National Assembly candidates are nominated by municipal delegates alongside nominations commissions controlled by the CPC through its mass organisations, from whose ranks candidates are expected to emerge. The resulting slate includes as many names as there are parliamentary seats available. There are no competing candidates, and as most districts elect more than two representatives, options are limited to selecting all proposed candidates, some, one or none. But all a candidate needs to do is obtain over half of valid votes cast, so ratification is the only possible result. That’s exactly what happened on 26 March.

At the minimum, democracy could be defined as a system where it’s possible to get rid of governments without bloodshed – where those in power could lose an election. In all of Cuba’s post-revolution history, no candidate has ever been defeated.

A different kind of campaign

Unsurprisingly, since there is no real competition, there are typically no election campaigns in Cuba. Instead, there’s a lot of political and social pressure to participate, while abstention is accordingly promoted by the political opposition and democracy activists.

Eager to avoid the abstention rate seen in the November municipal elections, the government spared no effort. Against its own legal prohibitions of election campaigns, it ran a relentless propaganda assault.

Eyewitness accounts abounded of a voting day characterised by apathy, with no evidence of lines forming at voting places. A number of irregularities were reported, including coercion and harassment, with people who hadn’t voted receiving summons or being picked up from their homes. The official statement published the following day – that lack of independent observation made impossible to verify – reported a 76 per cent turnout that the government presented as a ‘revolutionary victory’. It might have helped that the electoral rolls had been purged, with over half a million fewer voters than in the previous parliamentary election held in 2018.

But a closer look suggests that abstention is becoming a regular feature of Cuban election rituals – this was the lowest turnout ever in a legislative election – and beyond this, other forms of dissent in the polls are growing, including spoilt ballots.

What elections are for

In Cuba, elections are neither the means to select governments nor a channel for citizens to communicate their views. Rather, they serve a legitimising purpose, both domestically and internationally, for an authoritarian regime that seeks to present itself as a superior form of democracy. They also serve to co-opt and mobilise supporters and demoralise opposition.

Ritual elections just one of many tools the regime employs to maintain power. Determined to prevent a repetition of mobilisations like those of 11 July 2021, the government has criminalised protesters and activists and curtailed the expression of dissent online and offline.

But all this, and the efforts to present a lacklustre election as a glittering victory, only reveal the cracks running through an old system of totalitarian power in decay. In Cuba, the fiction of a unanimous general will is a thing of the past.

Inés M. Pousadela is CIVICUS Senior Research Specialist, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report.

 

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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, Apr 6 2023 (IPS)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

IPS UN Bureau Report

 

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The carts of “cartoneros” or garbage pickers stand in front of a merchandise purchase warehouse in the La Paternal neighborhood in the city of Buenos Aires. CREDIT: Daniel Gutman/IPS

By Daniel Gutman
BUENOS AIRES, Apr 6 2023 (IPS)

It’s a Monday morning in April on Florida, a pedestrian street in the heart of the Argentine capital, and a small crowd gathers outside the window of an electronic appliance store to watch a violent scene on a TV screen. But it is not part of any movie or series.

The scene, broadcast live, is happening a few kilometers away, in a poor suburb of Buenos Aires: colleagues of a city bus driver who was murdered during a robbery throw stones and fists at the Minister of Security of the province of Buenos Aires, Sergio Berni, who had come to talk and offer the government’s condolences in front of the cameras.

No one seems surprised among the office employees watching the scene on TV, and several make no effort to hide a certain sense of satisfaction that other ordinary people have decided to take action against a representative of the political leadership, the target of widespread discontent, as reflected by the opinion polls.“There is growing social polarization in Argentina, with an increasingly weak middle class. Each crisis leaves another part of society outside the system.” -- Agustín Salvia

“This was bound to happen sometime, if the politicians earn a fortune for doing nothing and we work all day to earn a pittance… And on top of that you go out on the street and they kill you just to rob you,” comments one of the viewers, as the rest listen approvingly.

The scene reflects the climate of tension and the sense of being fed-up that is felt in large swathes of Argentine society, in the midst of a long, deep economic crisis, which in the last five years has constantly chipped away at the purchasing power of wages, due to inflation that occasionally stops growing for a couple of months, only to surge again with greater force.

If there was room for modest optimism in 2022, as the result of a recovery in economic activity after the peak of the COVID-19 pandemic, it seems distant today, since the beginning of this year brought news that reflects the magnitude of the breakdown of the social fabric in this Southern Cone country.

On Mar. 31, the official poverty rate for the second half of 2022 was announced: 39.2 percent of the population, or 18.1 million people in this South American country of 46 million, according to the most up-to-date figures.

Since 2021 ended with a poverty rate of 37.3 percent, this means that in one year a million people were thrown into poverty, despite the fact that the economy, thanks to the rebound in post-pandemic activity, grew 4.9 percent, above the average for the region, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

But these data are already old and the figures for 2023 will be worse due to the acceleration of inflation, which is surprising even by the standards of Argentina, a country all too accustomed to this problem.

The price rise in February reached 6.6 percent, exceeding the 100 percent year-on-year rate (from March 2022 to February 2023) for the first time since 1991.

When you look a little closer, perhaps the worst aspect is that prices grew much more than the average, 9.8 percent, for food, the biggest expense for the lowest-income segments of society.

To this picture must be added an extreme drought that has affected the harvest of soybeans and other grains, which are the largest generator of foreign exchange in Argentina. The estimates of different public and private organizations on how much money the country will lose this year in exports range between 10 and 20 billion dollars.

This is one of the reasons why the World Bank, which had forecast two percent growth for the Argentine economy this year, revised its estimates at the beginning of April and concluded that there will be no economic growth in 2023.

 

Luis Ángel Gómez sits in the soup kitchen that he runs in the municipality of San Martín, one of the most densely populated areas in Greater Buenos Aires. For the past 10 years, he has been serving lunch and afternoon snacks to about 70 children, but lately he has also been helping their parents and grandparents. CREDIT: Daniel Gutman/IPS

 

Soup kitchens

About 15 kilometers from the center of Buenos Aires, in the Loyola neighborhood, the cold statistics on the economy translate into ramshackle homes separated by narrow alleyways, with piles of garbage at the corners and skinny dogs wandering among the children playing in the street.

In a truck trailer that carries advertising for a campaigning politician, a dentist extracts teeth free of charge for local residents, who have increasing problems accessing health services.

The neighborhood is in San Martín, one of the municipalities on the outskirts of Buenos Aires. Eleven million people live in these working-class suburbs (almost a quarter of the country’s total population), where the poverty rate is 45 percent, higher than the national average.

“I have never before seen what is happening today. Before, only men went out to pick through the garbage (for recyclable materials to sell), because the idea was that the streets weren’t for women. But today the women also go out,” Luis Ángel Gómez, 58, born and raised in the neighborhood, who does building work and other odd jobs, told IPS.

Indeed, the carts of the “cartoneros” or garbage pickers, which used to be seen only in the most densely populated working-class neighborhoods of Buenos Aires after sunset, when the building managers take out the garbage, are now seen throughout the city and at all hours.

 

A market selling clothes at low prices in Parque Centenario, one of the best-known markets in Buenos Aires, located in Caballito, a traditional upper middle-class neighborhood of Buenos Aires. This type of street fair has mushroomed in Argentina in the face of persistent inflation that is destroying the purchasing power of wages. CREDIT: Daniel Gutman/IPS

 

Gómez has been running a soup kitchen in Loyola for 10 years, where he provides lunch three times a week and afternoon snacks twice a week to more than 70 children and adolescents. It is in a room with a tin roof, a couple of gas stoves and photos of smiling boys and girls as decoration.

“The municipality gives me some merchandise: 20 kilos of ground meat and two boxes of chicken per month. Besides that, I cook with donations,” said Gómez. “This box was given to me by the company that collects garbage in the municipality,” he added, pointing to cartons of long-life milk.

But the soup kitchen cannot meet all the needs of the local residents, said Gómez. “My concern was to give the kids a better future and I fed them until they were 14 or 15 years old. Today I also have to help their parents and grandparents.”

 

The carts of “cartoneros” or garbage pickers, which until a few years ago were only seen after sunset in the most densely populated low-income neighborhoods, today have become a common image in every part of Buenos Aires at all times of the day. One is seen here in the neighborhood of Flores. CREDIT: Daniel Gutman/IPS

 

The middle class on the slide

The crisis has picked up speed since 2018 and deepened with the pandemic, but Argentina is going through a period of stagnation, with low economic growth and very little formal private sector job creation for more than a decade.

A study recently presented by the Pontifical Catholic University of Argentina (UCA) shows that since 2010 access to food, healthcare, employment and social security have steadily worsened, despite social assistance, affecting five million households out of a total of 12 million.

“There is growing social polarization in Argentina, with an increasingly weak middle class. Each crisis leaves another part of society outside the system,” sociologist Agustín Salvia, director of the UCA’s Social Observatory on Argentine Social Debt, which is considered a chief reference point in the country, told IPS.

Salvia explained that the improvement in economic activity after the peak of the COVID-19 pandemic drove the creation of new jobs until the third quarter of last year, although poverty grew just the same because they were almost all precarious low-wage jobs.

“The post-pandemic recovery cycle is over. Since the last quarter of 2022 there has been no more job creation, which added to inflation will cause poverty to grow in 2023,” added Salvia.

The expert said structural or chronic poverty used to be 25 or 30 percent in Argentina, but has now held steady at 40 or 45 percent, with a deterioration marked by the stagnation of quality employment, which has pushed many formerly middle-class families into poverty.