Africa

Credit: SIPRI

By Thalif Deen
UNITED NATIONS, Jan 27 2020 (IPS)

Donald Trump, the vociferously unpredictable US president, has long chastised China for seeking “unfair” advantage over trade and tariffs, violating intellectual property rights and “manipulating” the country’s currency to its advantage.

But while this blatant political rhetoric has continued ever since Trump assumed office in 2017, the Chinese have steadily built a massive military arsenal — and joined the world’s major players in arms production and arms exports.

In a new report, released January 27, the Stockholm International Peace Research Institute (SIPRI), said that China is now the world’s second-largest arms producer, ranking behind the United States and ahead of Russia.

And in 2014-18, the five largest arms exporters were the United States, Russia, France, Germany and China—in that order.

At the United Nations, China is a veto-wielding permanent member of the Security Council, along with the US, UK, France and Russia.

According to SIPRI, China has invested considerably in the modernization of its arm industry since the 1960s, and particularly since 1999.

One of its primary aims is to be self-reliant in the production of advanced weapons and technologies for its armed forces.

However, due to lack of transparency, the value of Chinese arms sales has been either unknown or based on unreliable estimates – until now.

Based on estimated arms sales in 2015–17, SIPRI has identified four major Chinese arms companies as the front-runners.

In 2017, of the 20 largest companies in the SIPRI Top 100, 11 were based in the US, six in Western Europe and three in Russia.

If the four Chinese arms companies, investigated in the study, were included in the top 100, they would all rank among the top 20, with combined estimated arms sales totalling $54.1 billion. Three of the companies would be ranked in the top 10, said SIPRI.

The four have been identified as Aviation Industry Corporation of China (AVIC), China North Industries Corporation (NORINCO), China Electronics Technology Group Corporation CETC) and China South Industries Group Corporation (CSGC).

These companies are ranked behind the world’s four biggest arms producers: Lockheed Martin, Boeing, Northrop Grumman and Raytheon—all based in the US.

Asked whether the quality of Chinese weapons was on par with Western military equipment, Dr Nan Tian, Researcher, Arms and Military Expenditure Programme at SIPRI, told IPS generally there is the opinion that some of the Chinese weapons are still a bit behind in quality as compared to those made by Western countries.

“But we have seen massive improvements in the quality of Chinese weapons,” he added.

“This is also one of the factors why Chinese weapons are considered less expensive than Western alternatives,” he added.

The large buyers of Chinese weapons include Pakistan, Bangladesh, Myanmar and Algeria. “Most of these countries are considered friendly or are allies of China”, he pointed out.

Asked if these sales were tied to Chinese foreign policy and meant to advance political causes, he said: “Yes, indeed it has foreign policy ties, but so is the case with Russia, US and other countries as well.”

Meanwhile, according to the China Power Project at the Washington-based Center for Strategic and International Studies (CSIS), China is also an arms supplier to two other Asian countries, namely Indonesia and Thailand.

In Africa, its arms markets include Algeria, Egypt and Morocco while Chinese weapons have also been used in several military conflicts in the region, including in Sudan, Somalia and the Democratic Republic of the Congo.

Dr Nan said that China, like most other arms suppliers, often provides exports through loans or economic partnerships (i.e. 1st access to certain mineral fields).

On loans, it is common that over the course of the repayment, China will write-off the loan as a form of aid, and thus there will be no need for the buyer to pay back the loan, he explained.

According to SIPRI, the largest of the Chinese companies is Aviation Industry Corporation of China (AVIC), with arms sales totalling $20.1 billion would be sixth largest in the world.

China North Industries Group Corporation (NORINCO), which would be placed eighth in the Top 100, with sales of $17.2 billion, is in fact the world’s largest producer of land systems.

Contrary to most other major global arms producers, SIPRI said, Chinese arms companies specialize primarily in one arms production sector. For example AVIC produces mostly aircraft and avionics.

And most of the large non-Chinese arms companies produce a wider range of military products across different sectors—covering aerospace, land systems and shipbuilding within one company.

According to SIPRI, these new estimates are most likely still an underestimate. A lack of transparency in the arms sales figures of Chinese arms companies continues to hinder a complete understanding of China’s arms industry. This new research, however, acts as an important scoping study that opens the possibility for further research and prepares the ground for a fuller estimate of Chinese arms sales.

*The authors of the report are Dr Nan Tian, Researcher, Arms and Military Expenditure Programme at SIPRI and Fei Su, a Researcher with SIPRI’s China and Asia Security Programme.

The writer can be contacted at thalifdeen@ips.org

The post China Ranked World’s Second Largest Arms Producer Trailing Behind US appeared first on Inter Press Service.

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By External Source
Jan 24 2020 (IPS-Partners)

As the world marks the second International Day of Education on 24 January 2020, Education Cannot Wait’s Director, Yasmine Sherif, interviewed one of today’s most prominent and passionate advocates for the global movement to ensure education for all. In his role as UN Special Envoy for Global Education and as Chair of the ECW High-Level Steering Group, Rt. Hon. Gordon Brown has successfully galvanized financial and political support globally with the hope and opportunity of quality education for every child in this world.

1. You are the leading global advocate for education worldwide. What inspired you to take on the cause of education out of so many issues facing our world?

I’m just one of many who realized that – as the Education Commission concluded – education unlocks not only individual opportunities, but also unlocks gender equality, better health, better qualities of life and a better environment. The Education Commission’s report illustrates how education is the very foundation for unlocking all other Sustainable Development Goals. For example, I am struck by the fact that infant and maternal mortality can be as much as twice as high among uneducated women compared to those who are educated, and I continue to be shocked by several brutal facts:

• 260 million school-age children are not in school
• 400 million children are completely out of education for good at age 11 or 12
• 800 million children are leaving the education system without any qualifications worth their name

In fact, it’s even worse than that: In 2030, we could be as far away from meeting SDG4 as we currently are, unless we act decisively together, now. One reason why the situation is so grave is that today there are 75 million children and youth in need of urgent education support in crisis-affected countries, of whom 20 million are internally displaced children and 12 million are child refugees. Indeed, only a fraction – 1 to 3 per cent – of refugees go on to higher education, whereas, for example, in pre-conflict Syria it used to be 20%. That is why Education Cannot Wait (ECW) is so crucial to meeting SDG4. We need action now. It simply cannot wait if we are to meet the target by 2030.

2. As the UN Special Envoy for Global Education, what is your vision for some of the key multilateral actions, such the UN, EU and the World Bank to achieve SDG4 by 2030?

We need a renewed focus on education and we need resources, response and reform. We set up the Global Education Forum, working with UNESCO, to ensure that we have maximum coordination of our efforts between the UN, EU and the World Bank and we will soon outline plans for raising the profile of global education in countries across the world.

As humanitarian crises and refugee flows are multiplying at an unprecedented speed, it is critically important to fund ECW’s investments delivering quality education to children and youth impacted by armed conflicts, forced displacement and natural disasters. Furthermore, and in partnership with these actors, we have set up the International Finance Facility for Education (IFFEd). Through IFFEd, we are aiming for $10 billion in extra funds for educational investment. Currently, we are now around $2-2.5 billion. To achieve our goal, we have to secure the support of more countries.

3. What do you see as the biggest challenges in ensuring that every child and young person has continued access to a quality education and what are the priorities to meet those challenges?

Quality education is crucial. As I said, we need resources, speed in the response during crisis and long-term reform to succeed.

Children and youth affected by emergencies and crisis cannot be out of school or wait for a decent education for years simply because a crisis has erupted in their country. As a matter of fact, education is their only hope and opportunity to be able to sustain conflicts and disasters. By the same token, every crisis-affected country needs human capital to rebuild and recover.

We need to train and properly remunerate teachers. Teachers are so important – no one ever forgets their teachers and teachers are the key to improved school standards. We also need the best school leaders serving as head teachers. We need a more relevant curriculum. We need to use technology more effectively, especially in outlying areas – to ensure children are not denied the input and the resources they need for a good education. We need to use technology effectively not just for school education, but for higher educational opportunities that could be both on-line and tutor-led.

4. You are also the Chair of the High-Level Steering Group of the Education Cannot Wait Global Fund, which was created during the World Humanitarian Summit largely thanks to your leadership. Education Cannot Wait is a rather unique name. How did you come up with such name and why did you think this fund was necessary?

I saw the urgency and the need for speed in situations of crisis and forced displacement. Education in countries affected by conflicts and disasters was falling between two stools – humanitarian aid, which prioritized health, food and shelter, with hardly any resources allocated for education – and development aid, which is more long-term and often is slow to react to a crisis. Millions of children and young people were left behind with no education, no hope and no means of bouncing back and plan for their future.

Education Cannot Wait was established at the World Humanitarian Summit to inspire political support and mobilize the resources that we lacked. It was also established to bring together both humanitarian and development actors to jointly provide the crucial flow of educational support for children and youth impacted by crises. And so far it has worked! It is a fast moving fund that is focused on bringing education to the most difficult humanitarian contexts. We now have investments in over 30 countries.

One example is the comprehensive Uganda Education Response Plan for Refugees to give support to South Sudanese and other refugees – where all organizations have come together and where we are providing support to the government in mainstreaming refugee education. This is important because the common impression people have of refugees is that they are only out of their country for a short time. But in fact, the average humanitarian crisis now lasts more than nine years, and families caught up in conflicts spend an average of 17 years as refugees. For far too many children, this mean being a refugee throughout their entire school age years. So, they need help with education now. It cannot wait until a conflict or crisis has ended and they can return home.

5. How do you see the Education Cannot Wait Global Fund progressing in advancing UN reform, the New Way of Working and making a real difference for children and youth in conflicts, disasters and forced displacement?

I think we are learning all the time. We now see that education in emergencies and protracted crises requires joint programming where governments, UN agencies, civil society organizations, and private sector organizations work cooperatively together to bridge the gap between humanitarian and development systems. Education Cannot Wait brings all these actors together through one joint programme whereby humanitarian and development activities are coordinated and complementary towards collective outcomes. This in turn accelerates delivery and strengthens the collective capacity to produce real learning outcomes.

Since Education Cannot Wait is situated in the UN, it is well placed to translate the New Way of Working, the Grand Bargain and Humanitarian-Development coherence into very tangible action in-country. It is encouraging to see how education in emergencies and protracted crises is now playing such an instrumental role in setting an example. In Uganda, for instance, the Education Response Plan for Refugees is now modeling response plans and joint programming in other sectors, such as health. Education Cannot Wait has developed a crisis-sensitive formula that is not only aligned with, but also has the potential of supporting the New Way of Working across the SDG Agenda.

6. What are the three most important value-adds of the Education Cannot Wait Global Fund?

Education Cannot Wait was born in an era when we couldn’t provide for Syrian refugees an education without new ideas and coordination. One of them was double-shift schools. With refugees dispersed across Lebanon, Turkey and Jordan, the idea was conceived to share existing schools, so that in Lebanon 300,000 or so Syrian refugee children are educated in their native Arabic in the afternoons in the same classrooms that Lebanese children are taught French and English in the mornings. We were creating the wheel in developing plans like the RACE plan in Lebanon with all of the donors and partners, and were determined to create a system that could provide rapid education delivery and medium term planning and financing in emergencies.

Education Cannot Wait works with governments, while supporting vulnerable populations, such as refugees, internally displaced, war-affected, marginalized groups, girls and children with disabilities. As a global fund, ECW was designed to reduce bureaucracy and strengthen accountability towards these children and youth. Hosted by UNICEF, the fund is able to operate with speed and quickly access those left furthest behind in crisis areas thanks to a business model and support mechanisms designed for crisis-contexts. A major added value is the way in which ECW serves as a catalyst for humanitarian-development coherence in the education sector. This is quite unique.

7. You also conceived of the International Financing Facility for Education (IFFEd). How did it come about and how can it become a game-changer? What makes it different and how can it be optimized in cooperation with partners?

There are 200 million children in low income countries and what the World Bank has done by enhancing IDA is make more resources available from the international community. In theory, IDA could raise educational aid from $1.6 billion to $3.5 billion over the next few years and we’ve advocated that education in low incomes countries should be 15 per cent of all IDA spent.

But there’s a gap that hurts the 700 million children in lower middle-income countries where we have the most out-of-school children and the largest number of refugees. Here, the World Bank provides not 10 or 15 per cent of its resources for education but around 4 per cent, and sadly, the recapitalization of the World Bank – while successful – has also created a ceiling limiting the future availability of new resources.

Therefore, with World Bank support, we are creating a new fund for education that will focus resources and financing help for the 700 million children in lower middle-income countries, on similar terms that the World Bank offers, but with far more resources.

We aim to raise $10 billion, which would require $2 billion in guarantees and perhaps $2 billion in grants to create four to five times as many resources for investment in education. This will be of special help to countries where there are large numbers of forcibly displaced persons, including refugees.

8. How do you see the complementarity between the International Financing Facility for Education, the Education Cannot Wait Global Fund and the Global Partnership for Education?

Each of us have complementary jobs to do in a synchronized way. The chair of GPE, Julia Gillard, was a member of our Education Commission, which recommended the new facility. GPE does important work – thankfully with increased resources after their recent replenishment – and this work, mainly in low-income countries, is complemented by what is offered through IFFEd.

Education Cannot Wait provides a different business model. It is grounded in the UN system’s ability to move with speed in crises, while also applying a crisis-sensitive development response, which is so important to reach SDG4 for those left furthest behind. It is no longer a start-up fund, but is growing rapidly in outreach and influence. So funding needs to continue to increase to complement other funds, such as GPE and IffEd.

9. In your view, where will we be in 2030? Will we still be in a global education crisis or will we have resolved it?

One of the tragedies is that while the numbers of qualified young people have risen, still less than 25 per cent will have any recognizable qualifications by 2030. More than 27 per cent will have left school by the age of 11 or 12 years, or have ever been at school. This educational divide between the ‘education-poor’ and the ‘education-rich’ will only grow and what worries me most in this regard is Africa. I’ve already shared earlier on in this interview the shocking figures for 2030, but worse still, Africa will see a rise in ‘out-of-school’ and in ‘unqualified school-leavers’, unless we act now. To inspire such action, we must share the data, show how challenging the situation is and propose the solutions that are so desperately need now and which all funds can help provide.

10. Any final thoughts as we enter the Decade for Action? How do we best translate the vision of SDG4 into action in the coming 10 years?

We must become the first generation in history where every child goes to school.

Instead of just developing some of the talents of some of the young people in some of the countries, we must develop all the talents of all young people in all countries. I am very conscious that universal education cannot be achieved unless we include the 75 million crises-affected children and youth whose education cannot wait. Their needs must be met if we are to meet SDG4 and achieve the noble objective that no one is left behind.

I am a great believer in the power of young people. We have seen this in the global march against child labor, by girls getting together to prevent child marriages, and through the work of global youth ambassadors in UNICEF, UNHCR and Their World who are an effective pressure group for change.

We must enlist students and parents and we must put pressure on both national governments and international institutions to achieve change. Politicians say that adjudicating is their top priority, but the current state of financing for education does not yet recognize this; some countries spend only 2 per cent of their national income on education.

We must have a coalition of education advocates that ensures that governments and international institutions take action when they say education is a priority. This must start by acknowledging how far behind we have been in securing education for crisis-affected children, including refugee and displaced children. Their needs and aspirations must be at the forefront of our thoughts.

We know that hope dies when a food convoy does not get through to refugees or a boat carrying them is lost at sea – but hope also dies when education is denied to children who desperately want and need it, and who cannot prepare for, nor plan for, their future. We must restore that sense of hope in the future for every child and young person living in abject poverty, on the margins of their societies or in countries of war, as refugees or affected by sudden disasters. We cannot leave any child or young person behind.

###

The interview is also available here.

About Education Cannot Wait

Education Cannot Wait (ECW) is the first global, multi-lateral fund dedicated to education in emergencies. It was launched by international humanitarian and development aid actors, along with public and private donors, to address the urgent education needs of 75 million children and youth in conflict and crisis settings.

Follow us on Twitter: @EduCannotWait
Additional information is available at www.educationcannotwait.org

For press inquiries:
Kent Page, kpage@unicef.org, +1-917-302-1735
Anouk Desgroseilliers, adesgroseilliers@un-ecw-org, +1-917-640-6820

For any other inquiries: info@un-ecw.org

This story was originally published by Education Cannot Wait

The post Education Cannot Wait Interview with Rt. Hon. Gordon Brown appeared first on Inter Press Service.

By Star Online Report
Jan 24 2020 (IPS-Partners)

Amnesty International released a music video today on the occasion of the International Day of Education to encourage people of Bangladesh and around the world to support education for Rohingya children and those of host communities in Bangladesh.

Bangladeshi hip-hop lyricist and musician Mahmud Hasan Tabib and child artist Rana Mridha, who became popular on YouTube for their songs promoting education of underprivileged children in the country, lent their voices to the track, according to an Amnesty International media release.

“As humanity is not limited to the confines of any one race or border, supporting education of the oppressed Rohingya children is all of our responsibility. This song for Rohingya children’s education is driven by that belief. I felt inspired to work with Amnesty International after learning about their work to promote education of the oppressed Rohingya children,” said Tabib.

The Bangla song, with English subtitles, contains the lyrics: “If all children today are enlightened with education, the future of the world will be bright. Otherwise, it will be a mistake, injustice will increase. They will be silenced by the rage of the sinners.”

Thousands of Rohingya children and youth are denied access to education in villages and towns in Myanmar as well as in places where they have sought refuge. Raising these children without access to education exposes them to poverty and exploitation, which in some cases include serious criminal activity such as drug smuggling, child trafficking or recruitment into violent armed groups.

“Education is not at odds with repatriation. Instead, a quality education in appropriate language and accredited curriculum can empower the Rohingya children to claim their rights, contribute to the society and economy they live in,” said Saad Hammadi, South Asia campaigner at Amnesty International.

Nearly a million Rohingya refugees have fled to Bangladesh from their homes in Myanmar because of action by the military in the country, many of which amount to crimes against humanity. Almost half a million are children below 18 years living in threadbare camps in Cox’s Bazar, which has the lowest primary school enrolment rate in the country at 71 percent and the second highest drop-out rate at 31 percent.

Amnesty International launched a petition in major countries calling on governments to support Bangladesh in educating the children of Rohingya refugees and those of the host community.

A global petition also calls on Bangladesh Prime Minister Sheikh Hasina to ensure quality education in appropriate language and accredited curriculum to protect the social, cultural and linguistic identities of both communities.

“As we encourage the international community to share responsibility for the crisis that has hit Bangladesh as a result of the refugee influx, using this moment to improve access to education for all children in Cox’s Bazar will be a step in a positive direction for the government of Bangladesh,” said Saad Hammadi.

This story was originally published by The Daily Star, Bangladesh

The post Amnesty’s musical appeal for education of Rohingya and host community children appeared first on Inter Press Service.

Vanessa Nakate was the only one cropped out of a photo with four white climate activists at Davos.

Comoros and Malmo midfielder Fouad Bachirou credits his determination to succeed to advice and inspiration from France great Claude Makelele.

Inequality out in the open. Credit: A.D. McKenzie/IPS

By Yilmaz Akyüz
GENEVA, Jan 24 2020 (IPS)

The failure of large-scale bailout operations, historically low interest rates and rapid injection of liquidity to bring about a strong recovery from the 2008-2009 financial crisis and recession created a widespread concern that advanced economies suffered from a chronic demand gap and faced the spectre of stagnation.

The subsequent growth experience has reinforced these concerns.  Since the crisis the US has sustained the longest economic expansion in history, but it is also one of the slowest in terms of income, investment and job creation, lagging other post-war recoveries despite exceptionally favourable monetary policy.

Recovery has been slower and more erratic in Europe. Recently advanced economies have slowed further and global growth in 2019 was the lowest since the financial crisis, intensifying the fear of another recession.

Sluggish investment and growth, rising inequality, low inflation and interest rates, and rapid debt accumulation have become common features of major advanced economies and indeed much of the global economy at large.

These are all interrelated. At the centre of this state of affairs lies inequality ‒ wage suppression and concentration of wealth. It is the main reason for the chronic demand gap, exceptionally low inflation and interest rates, and rapid build-up of debt.

In sharp contrast with a long-standing belief that income shares stay relatively stable in the course of economic growth, there has been a secular downward trend in wage shares in all major advanced economies with real wages falling or lagging behind productivity growth.

In sharp contrast with a long-standing belief that income shares stay relatively stable in the course of economic growth, there has been a secular downward trend in wage shares in all major advanced economies with real wages falling or lagging behind productivity growth

In most countries this started in the 1980s, and continued unabated in the new millennium, both before and after the 2008-2009 crisis.  In China too the wage share started to decline in the 1990s.

Although this was reversed after 2010 as a result of efforts to establish a buoyant domestic consumer market, the wage share in China remains significantly lower than that in major advanced economies.  Wage suppression has been accompanied almost everywhere by growing concentration of wealth, resulting also in greater inequality in the distribution of incomes from assets.

Three factors have played an important role in growing inequality.

First, liberal policies have led to the erosion of labour market institutions, weakening labour while consolidating the power of large corporations.

Second the increased size, scope and influence of finance (financialization) has widened inequality and the demand gap as well as reducing growth potential by diverting resources to unproductive uses.

Finally, globalization has shifted the balance between labour and capital with the integration of China, India and the countries that constituted the Soviet Union into the global economy.

The erosion of labour market institutions and financialization have gone further in the Anglo-American world, and this explains why inequality is greater in the US and the UK than in other major economies.

The growing gap between labour productivity and wages means declines of the purchasing power of workers over the goods and services they produce.  This, together with the increasing concentration of wealth and asset incomes, results in underconsumption.

Although sustained declines in wages would reduce the cost of production and increase the surplus in the hands of the capitalist class, they would also limit the extent of the market since wages are the most important component of aggregate demand.

Wage suppression thus creates the classical-Marxian problem of monetary realization of the surplus ‒ a reason why Keynes also rejected declines in wages as a recipe for unemployment. It adversely affects demand and profits expectations and hinders investment regardless of how low the cost of borrowing is.

Exports can provide a way out.   Until the 2008-2009 crisis, China, Germany and Japan all relied on foreign markets in different degrees to fill the demand gap, using macroeconomic, labour market and exchange rate policies.

GDP grew faster than domestic demand in all three economies thanks to a strong growth in exports. After the crisis China’s exports plummeted and the country first moved to a debt-driven investment bubble and then sought to boost consumption to close the demand gap while moving to a significantly lower growth path.  Germany replaced China as a major surplus country and Japan also increased its reliance on exports to address the demand gap.

However, this solution is not feasible for major underconsumption economies taken together ‒ it faces fallacy of composition and breeds trade conflicts.  The Global South outside China is not big enough to provide an adequate market for the US, Europe, Japan and China.

They would need to run trade deficits in the order of several percentage points of their GDP for each percentage point trade surplus needed to avoid stagnation in the underconsumption economies.  They cannot rely on international capital flows to sustain such deficits.

The alternative is debt-driven expansion.  Sluggish wages reduce price pressures and allow and encourage central banks to create credit and asset bubbles to overcome stagnation without fear of inflation. 

There is indeed a remarkable correlation between the declining wage share and declining interest rates.  In the US over the past three cycles the Fed has been quite restrained in raising policy rates at times of expansion while cutting them drastically during contractions, creating a downward bias in interest rates.

This policy stance creates destabilizing interfaces between debt and interest rates.  Lower wages and subdued inflation lead to lower interest rates which, together with financial deregulation, encourage debt accumulation and asset bubbles.

This, in turn, makes it difficult for central banks to raise policy interest rates without causing disruptions in financial markets, thereby making low interest rates self-reinforcing.  Indeed, the downward bias in interest rates in G7 countries has been associated with a strong upward bias in debt since the mid-1980s, suggesting that ultra-easy monetary policies made possible by wage suppression and low inflation have led to a debt trap.

Financial boom-bust cycles generated by attempts to reignite growth by monetary easing and financial deregulation exacerbate the stagnation problem by creating waste and distortions on the supply side and reducing potential growth.

During booms, the financial sector crowds out real economic activity and cheap credit entails massive capital misallocation, diverting resources to low-productivity sectors such as construction and real estate.

Misallocations created by the booms are exposed during the ensuing crises when the economy would have to make a shift back to viable sectors and companies, but this is often impeded by credit crunch and deflation.

Second, boom-bust cycles also aggravate the demand gap by increasing inequality.  In the US, for instance, the crisis impoverished the poor, particularly those subject to foreclosures, while policy interventions benefitted the rich.  In the recovery, the top one per cent captured almost 60 per cent of total growth.

From 2008 onwards real hourly wages stayed behind hourly labour productivity and the share of wages fell both during the contraction and the subsequent recovery.  Two-thirds of households in 25 advanced economies were in income segments whose market incomes did not advance or were lower in 2014 than they had been in 2005.

These imply that when credit and asset bubbles burst and the economy contracts, even a bigger bubble may be needed for recovery and growth.  In the US the bursting of the Savings and Loans bubble of the 1980s was followed by a bigger technology (dot-com) bubble in the 1990s which ended at the turn of the century, followed by an even bigger subprime bubble and bust, leading to more aggressive interest rate cuts and liquidity expansion.

The past ten years have been relatively calm and stable.  Several instances of heightened market volatility including during the “taper tantrum” of May 2013 and on the eve of the first rise in US policy rates in December 2015 did not lead to a lasting turbulence.

However, this period of tranquillity has encouraged excessive risk taking and a rapid build-up of debt, thereby sowing the seeds of future instability, very much as during the so-called Great Moderation preceding the Great Recession.

Permanently low interest rates and massive injection of liquidity have led to a search for yield in high-risk, high-return assets globally.  Starting with the US, major stock markets have reached record highs and global debt has shot up to exceed $255 trillion or 320 per cent of world GDP in 2019.

Emerging economies, in particular, have seen a rapid build-up of private debt in reserve currencies and increased penetration of their markets by international capital and firms, heightening their external vulnerabilities and entailing large transfer of resources to advanced economies through financial channels.

As recognized by the World Bank, despite exceptionally low interest rates, this wave of debt accumulation could follow the historical pattern and eventually end in financial crises.

In the next global economic downturn, an important part of the debt accumulated in the past ten years could become unpayable, leading to debt deflation and asset price declines.  The central banks would no doubt try to respond in the same way as they did during the 2008-2009 crisis.

But the scope for cuts in interest rates are now limited because they are at very low levels and there is already plenty of cheap money in the system.  These may severely compromise their ability to stabilize the economy.

A countercyclical Keynesian fiscal reflation may save the day, but much more would be needed to address the structural demand gap and its underlying causes: a permanently bigger government financed by progressive income and wealth taxes and money printing; greater state ownership of productive assets and control over economic activity; income redistribution through the budget; a level playing field between labour and capital; a shift to wage-led growth; and taming financial capital.

 

The post Inequality, Stagnation and Instability ‒ the New Normal for Finance Capitalism appeared first on Inter Press Service.

Excerpt:

Yilmaz Akyüz is former Director, UNCTAD, and former Chief Economist, South Centre, Geneva

The post Inequality, Stagnation and Instability ‒ the New Normal for Finance Capitalism appeared first on Inter Press Service.

Zeinab is the only survivor of the al-Shabab attack on the office of the Mogadishu mayor in July 2019.

Small-scale slash-and-burn agriculture is one of the deforestation problems in Brazil’s Amazon jungle. Credit: Mario Osava/IPS.

By External Source
Jan 24 2020 (IPS)

More than half of worldwide GDP is moderately or highly dependent on nature, putting biodiversity loss among the top five risks to the global economy, according to a report presented at the World Economic Forum (WEF) in Davos, Switzerland.

The report, compiled by WEF in collaboration with accountancy firm PricewaterhouseCoopers (PwC), finds that some of the fastest-growing economies in the world are particularly exposed to nature loss, and calls for “a radical reset of humanity’s relationship with nature”.

Around one-third of the GDP of India and Indonesia comes from sectors that are highly dependent on nature, such as agriculture, construction and food and drink, according to the analysis. Africa generates 23 per cent of its GDP in such sectors while in Latin America, the figure is 55 per cent.

These industries rely on extraction of resources from forests and oceans, or rely on nature to provide things like healthy soils, clean water, pollination and a stable climate, the document explains.

“Given their significant nature dependencies, it is critical that these economies with significant exposure to nature loss assess, prioritise and invest in nature,” said the Nature Risk Rising report, presented at the global gathering of business and political leaders on 19 January.

Failure to do so could result in heavy losses for nature-dependent sectors, authors warn. The report says 60 per cent of coffee varieties are in danger of extinction due to climate change, disease and deforestation. If these varieties became extinct, the global coffee market—with retail sales of $83 billion in 2017—would be “significantly destabilized, affecting the livelihoods of many smallholder farmers”, it says.

 

Risk to life and livelihoods

The report also highlights the pharmaceutical industry’s dependence on tropical forest biodiversity, such as in the Amazon, for new drug discoveries, with 25 per cent of drugs used in modern medicine derived from rainforest plants.

“As tropical forests face threats from felling and wildfires, pharmaceutical companies face losing a vast repository of undiscovered genetic materials that could lead to the next medical – and commercial – breakthrough,” it warns.

It says that 75 per cent of approved anti-tumour pharmaceuticals in the last 70 years have been non-synthetic, with 49 per cent derived entirely from natural products.

Amazon deforestation – which has resulted in the loss of 17 per cent of forest cover since 1970 – could also lead to huge agricultural production losses and longer periods of drought, affecting water availability across the region, the report forecasts.

Akanksha Khatri, head of WEF’s nature and biodiversity initiative, who worked on the report, told SciDev.Net: “Latin American economies are especially dependent on nature. Two of the main economic sectors in Latin America are mining and agriculture which currently are in the top five industries driving nature loss.

“As the impact from nature loss intensifies, soon the economies and people’s livelihoods associated with these sectors will be put at risk,” said Khatri, who believes that countries must treat their diverse resources as valuable knowledge-banks.

“Models suggest that if 20-25 per cent of the Amazon forest is lost, this would lead to increased duration of droughts in the region and annual agricultural production losses of $422 million in Brazil alone.”

Amazon forest losses due to fires in 2019 – many of them started intentionally – are related to cattle rearing and agricultural exports such as soy, said Hernán Giardini, coordinator of forest campaigns at Greenpeace Argentina, Chile and Colombia.

 

Trade deal impacts

Amazon deforestation linked to cattle rearing also threatens to derail the not-yet-ratified EU-Mercosur trade agreement after 20 years of negotiations, the WEF warns.

Trade between the two blocs is worth 122 billion Euros and the deal is expected to generate significant new market opportunities through the reduction or elimination of tariffs. However, some EU countries reject products coming from regions with a high environmental footprint.

“Brazil is the leading meat exporter worldwide, but at the same time the deforestation generates conflicts in Europe, where sectors ask their governments not to import products from South America with such low environmental standards,” explained Giardini.

“This is the reason why Amazon fires are jeopardizing the deal, which is also tied to the Paris Agreement and other climate accords.”

Luciana Ghiotto, researcher at Argentina’s scientific and technical research council, CONICET, and the National University of San Martin, Argentina, is the co-author of a broad analysis of the EU-Mercosur deal.

She said: “For Mercosur countries, the agreement implies a deepening of extractivist industries, in particular cows and soy, but it raises criticisms over the consequences for the Amazon and over the need to use more pesticides for agricultural production.”

“Curiously, it’s European companies that ship their chemical products to South America after they are forbidden in European countries,” she added.

 

Business case for action

For the reasons above, biodiversity loss is one of the five human threats for the next decade, according to another report on Global Risk presented 15 January at the WEF.

The reports are part of the New Nature Economy series, being published by WEF this year, making a business case for action on what it calls the “nature crisis”. It comes ahead of the UN Convention on Biological Diversity COP15 to be held in Kunming, China, in October.

The reports seek to identify “priority socioeconomic systems for transformation” and “scope the market and investment opportunities for nature-based solutions to environmental challenges”, the WEF says.

 

This story was originally published by SciDev.Net

The post Nature Losses Threaten Emerging Economies appeared first on Inter Press Service.

Desert locusts swarms which are devouring crops in East Africa are forcing farmers into desperate measures.

The BBC's Africa editor Fergal Keane will work in a new role for the corporation.

A meeting of the Human Rights Council in Geneva. Credit: UN / Jean-Marc Ferré

By Thalif Deen
UNITED NATIONS, Jan 24 2020 (IPS)

The UN’s ongoing cash crisis, which has virtually destabilized the Organization’s day-to-day operations, has also undermined the human rights mandate of the Geneva-based Human Rights Council (HRC).

The HRC’s programme of work has been hindered by dwindling resources resulting in shorter working hours, cancellation of meetings, reduction in staff and leaving some of the UN Special Envoys investigating human rights violations worldwide — grounded.

The new austerity measures, prompted by a shortfall in assessed contributions from member states, came into force last October. But so far there are no signs of any significant improvement.

Kyle Ward, Director, a.i., Human Rights Council & Treaty Mechanisms Division, Office of the UN High Commissioner for Human Rights (OHCHR), told IPS that the human rights treaty bodies, established under the international human rights conventions, have been struggling with reductions in their overall regular budget resources, including a 25% reduction in travel resources for members (applied by the General Assembly in the last biennium), as well as reduced staffing, which has had already a serious impact on their ability to meet.

“Last year, with the financial crisis, it appeared that they would not be able to complete all of their sessions, until the UN Controller intervened and agreed to ensure we would have access to sufficient funds to enable them to meet”.

It was a bit touch-and-go, said Ward, “but for the most part we managed.”

But some of the work of the treaty bodies, he pointed out, was nevertheless blocked because of the shortfall in resources.

“The situation has unfortunately not improved this year, as the main budgetary constraints remain – while the potential impact of a continuing liquidity crisis for the Organization also remains a serious concern,” he warned.

Secretary-General António Guterres (right) meets with Mary Robinson, Chair of The Elders and former UN High Commissioner for Human Rights (1997–2002). 08 January 2020. Credit: UN / Mark Garten

Dr. Simon Adams, Executive Director of the Global Centre for the Responsibility to Protect, told IPS the Human Rights Council and its mechanisms and the Geneva treaty bodies form an essential early warning system with regard to potential atrocity crimes.

“Starving the system of funds, and undermining its effectiveness, will only benefit those who prefer silence and inaction when it comes to human rights abuses and violations in the world today”, he added.

Moreover, he pointed out, “weakening the Human Rights Council only benefits torturers, atrocity perpetrators and those who consider universal human rights to be an affront to the unrestrained exercise of state power.”

Meanwhile, the Human Rights Council has been looking at efficiency measures for some time and had some success there, rearranging its schedule to be able to reduce the number of its annual meetings.

But this is now being threatened by the Department of General Assembly and Conference Management (DGACM) due to the “special measures” arising from the cash flow crisis, with the refusal to provide interpretation for any lunchtime meetings (which are essential – even in the reduced format – to enable the Council to cover its agenda in its ten allotted weeks per year).

The President of the Council, Ambassador Elisabeth Tichy-Fisslberger of Austria, has written to the Secretary-General to request that this be allowed notwithstanding – still waiting for an outcome, with the main annual session just a few weeks away.

Similarly, the restrictions have also led DGACM to restrict the interpretation services to the Universal Periodic Review (UPR) meetings beyond the two standard three-hour meetings per day, in order to save money.

The UPR has since the beginning allocated 3.5 hours to each State under review . . . so this will shave at minimum 15 minutes from each (given a 15-minute “courtesy” extension by the interpreters).

As this comes in the midst of the UPR Third cycle, there is some concern about equity in treatment to all States . . . but in reality, the statistics show that only 20% of the total have actually gone over 3h15 for their reviews, so the impact is not *that* extreme.

As it stands, in an effort to better manage cash flow, the Controller has decided (presumably in consultation with the SG) to allocate resources only on a quarterly basis (rather than the usual full allotment at the beginning of the year).

Although fully understandable, says one staffer, it also difficult to manage as the work is not simply linear . . . “so for a number of important mandates we cannot manage on just 25% right now.”

The Commission of Inquiry on Syria is a case in point, as the current mandate is only through March – so they need 100% of their considerable 2020 resource requirements now.

Once again, the OHCHR will have to juggle resources and move allocations around in order to make this work as best it can, which is extremely inefficient and time-consuming.

“A more tailored approach to the situation would be unwieldy for the colleagues at UNHQ to manage across the entire Organization, but it certainly feels like those of us at the operational end are being made to bear the brunt of all the various “emergency” measures, making everything we are trying to accomplish even more difficult,” said another staffer.

In her letter to Guterres last month, Ambassador Tichy-Fisslberger said “the United Nations Office at Geneva (UNOG) has informed me that due to the special emergency measures you instituted last October to address the United Nations’ liquidity crisis, the meetings of intergovernmental bodies cannot be serviced outside of normal official hours”

It is furthermore of great concern that according to UNOG, they will be unable to service meetings of the upcoming 35th session of the Universal Periodic Review in accordance with Human Rights Council Decision 17/119 of 19 July 2011.

“When it established the Human Rights Council through resolution 60/251 of 15 March 2006, the General Assembly decided that the Human Rights Council should schedule no fewer than three sessions per year, for a total duration of no less than ten weeks,” the letter said.

As its programme of work has grown over the past 13 years, the Human Rights Council has often been obliged to schedule more than two meetings per working day in order to complete its programme of work.

Consequently, a considerable number of lunchtime meetings have been required in recent years in order to deal with numerous thematic and country human rights crises.

“In 2016, the Director-General of UNOG and the Under-Secretary-General for General Assembly and Conference Management drew the attention of my predecessor to the growing dichotomy between the workload entailed in servicing the Council and the resources allocated to UNOG”, the letter adds.

In her letter, Ambassador Tichy-Fisslberger also said: “In your address to the Human Rights Council on 25 February 2019, you emphasized that “the Human Rights Council is the epicentre for international dialogue and cooperation on the protection of all human rights.”

In order for the Council to fulfil its responsibilities vis-àvis the international community and carry out all of its mandated activities, some lunchtime meetings are necessary.

Should the Human Rights Council not be afforded the opportunity to meet, as is required by its programme of work, it would be prevented from fulfilling its responsibilities under General Assembly Resolution 60/251, and the work of the United Nations in the area of human rights, and the human rights cause as a whole, would suffer as a result.

The writer can be contacted at thalifdeen@ips.org

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