ONE: Creative thinking urgently needed to tap alternative sources of climate finance

An agreement of $10bn a year in fast track financing for the next three years and $100bn a year by 2020 for poor countries to cope with climate change must come over and above existing aid promises, Africa advocacy group ONE said after the Copenhagen climate summit. Currently these sums will largely be subtracted from promised resources to help these same countries fight poverty. But climate change is putting additional stress on poor countries – which is why they need additional funds to cope with it – on top of existing and promised aid levels,” said Jamie Drummond, Executive Director of ONE UK.

“Promises of aid made by the G8 in Gleneagles in 2005 must not be lost in Copenhagen. Without a clear commitment that these climate funds are additional, the dollar amounts are next to meaningless. This debate over ‘additionality’ might seem arcane, but within the details lie billions of dollars - and very real impacts on millions of lives,” Drummond said. “Without this additionality, Copenhagen adds up to nothing. It is not clear how a cap on two degrees will be achieved, but it is very clear that much more can and must be done, including harnessing the potential of African and other developing countries to be renewable energy hubs and help capture carbon through growing trees."

ONE supports the African proposal for an interim target of $50bn by 2015 on top of existing and promised aid to help the poorest countries – many of them in Africa – with pressing adaptation needs. The Copenhagen Accord mentions a High Level Panel to assess how alternative sources of funding can contribute to raising genuinely additional funds. ONE says this urgent High Level Task Force should be convened immediately and with links to the highest political level to look into alternative sources of climate finance to complement additional public funding from rich countries. These sources could include: revenue from aviation and shipping, international auctioning of emissions allowances, a financial transactions tax and the proposal to use the IMF’s own currency, known as Special Drawing Rights. ONE also highlighted the need for accountability and transparency for these new funds.

Betrayal or breakthrough?

Copenhagen Accord: Triumph of spin over substance

The ‘climate deal’ presented in Copenhagen (>>> Copenhagen Accord) is a triumph of spin over substance says Oxfam International. The deal provides no confidence that catastrophic climate change will be averted or that poor countries will be given the money they need to adapt as temperatures rise. Leaders have also put off agreeing a legally binding deal until the end of 2010. Jeremy Hobbs, Executive Director of Oxfam International said: “This deal barely papers over the huge differences between countries which have plagued these talks for two years.

The document recognizes the need to keep warming below 2° but does not commit to do so. The deal promises $100bn a year in climate cash for poor countries by 2020. This is an aspirational goal not a commitment – poor countries will have no confidence that they will receive the money they need to reduce their emissions and adapt to a changing climate. $100bn is only half the money needed. The shortfall could mean that health workers in South Asia and Sub Saharan Africa will not get the $1.5bn they need each year to prevent climate induced deaths from malaria and diarrhoea. There are no assurances that the $100bn will be additional to existing aid commitments. This means aid for education and health care could be diverted to pay for flood defenses. The $100bn will not all be public money. Unless climate cash comes from public sources, there are no guarantees that it will reach the right people, in the right places, at the right time.

Global temperature rises will be kept below 2° C, the Accord says. In reality the absence of any emissions reductions targets means there is no guarantee warming will be kept below 2°. Climate science is clear on the need for deep emissions cuts by 2020. Specific targets are essential. Shorbanu Khatun, a climate migrant at the summit with Oxfam said: “I came all the way from a displaced persons camp on the flooded coast of Bangladesh to see justice done for the 45,000 people made homeless by cyclone Aila. How do I tell them their misery has fallen on deaf ears?”

Copenhagen Accord: The financial side

Guest commentary by Liane Schalatek

It is ironic, really.

The question about financial transfers from the industrialized to the developing countries – one of the most contentious issues throughout the two weeks’ negotiations in the Bella Center – might be one issue area, where a final Copenhagen declaration could show a clear way forward — albeit in an otherwise weak and watered down political statement by Head of States, a sad remnant of the earlier, grander vision of a comprehensive “Copenhagen Deal”.

Finally, concrete numbers — the most to be expected for a future “Copenhagen Climate Fund” — are on the table. And while they are not as grandios as hoped for, they will, if collected and tranferred speedily, go a long way to improve the lives and livelihoods of men and women in the devleoping world as well as the world’s climate. Over the next three years, industrialized countries commit to transfer some $30 billion in short-term financing to developing countries. Most of these funds over the next three years would probably be delivered through existing (climate) financing mechanisms, including at the multilateral development banks and the GEF. (A reminder: It took seven years from COP decision to the start of operations of the new Adapation Fund). By 2020, a “Copenhagen Climate Fund” under the direct authority of the UNFCCC would then collect some $100 billion per year by 2020.

This at least, is what a three-page outline document for a political declaration, the result of a “green room”-type meeting of 30 countries came up with after a long night of negotiations early Friday morning. But it seems also the outline of what is politically possible as a financing framework, with its baselines seemingly holding throughout the high-level segment of the negotiations and the statements by Obama, Merkel, Lula & Co.

While US President Obama disappointed all those who had expected he would pull a financial trump card out of his sleeve and top the announcement that US Secretary of State Hilary Clinton had made on Thursday, Brazil’s President Silva da Lula surprised pleasantly by indicating that as an emerging economy his country might contribute to providing financial transfers to the poorest and most climatically exposed countries. An interesting side note: in his comments, President Lula’s explicitly warned of putting new climate funding under the control of the World Bank….

As encouraging as these stated intentions sound, a lot of the details are still missing. For example, it remains unclear how much the United States would contribute to such a Fund in the long-term. And nowbody knows how much the US are willing to cough up for the most urgent adaptation and mitigation action in developing countries in next three years. In contrast, the EU and Japan had both put their financial cards already on the table, promising $10 billion (EU) and $15 billon respectively from 2010-2012.

On the sources of financing, there is likewise ambiguity — but that might be a blessing in disguise. While the G30 draft outcome document lists private (carbon-markets) and public bilateral and multilateral sources, it also leaves room for “alternative sources of financing. This opens the door for the development of innovative tax instruments (for air or maritime travel or financial transactions a la Tobin), which a suggested high level panel under the COP could explore. Using (global or regional) sin taxes would go a long way to secure the truly additional and predictable revenue source that the developing countries are holding out for.

(Originally published in: Klima der Gerechtigkeit)

Leaked UN report: What Copenhagen pledges mean for future temperatures

Catholic CIDSE network and Caritas Internationalis say that the leak late yesterday of a UN report that proved that there is a significant gap between developed country rhetoric and their emission reduction commitments to date. They fall far short of what is required to prevent climate catastrophe in the future setting an unparalleled challenge to rich countries on the last day of the climate talks.

The internal UN report, dated 15 December, was never meant to be circulated. However, it merely confirms what many voices, civil society and developing countries most prominently, have been stating for months; rich countries fail to walk the talk on emission reductions, as their concrete commitments do not match with their expressed political will to tackle climate change. The report asserts that current developed country pledges would result in a further warming of the earth’s average temperature of 3° C, whilst developed countries continue to claim to be committed to limiting this rise to 2°.

“1° may not sound like very much to someone on the street, but the difference between 2° and 3° for developing countries is counted in hundreds of thousands of lost lives. In fact the most vulnerable countries are calling for 1.5° to be the limit,” said Anika Schroeder of German CIDSE member Misereor. “Developed countries claim to be committed to avoiding dangerous climate change in the future; this report reaffirms that they can no longer deny the science, and must now match these claims with adequate binding commitments.”

Thousands in Copenhagen to demand system change

At the end of the first week of the climate talks at Copenhagen, thousands of activists from the Climate Justice Action and Climate Justice Now! networks are joining the climate march under the banner of “System Change Not Climate Change” to denounce the climate negotiations as a predictable failure. The protesters are demanding radical changes in economic and political systems in order to address the climate crisis. The coming together of the Climate Justice Action and Climate Justice Now! is an unprecedented coalition of social movements, NGOs and grassroots climate activists from around the world to demand alternatives to the failed market solutions being pushed by governments and big business.

The ‘System Change’ contingent has been tipped as the largest and loudest section in the march and includes people from 50 different countries. It will include a flat bed truck broadcasting music and speeches from prominent activists from the global south.

Josie Riffaud from La Via Campesina a global coalition of peasant movements, said: “We’ve seen this week in Copenhagen that governments are turning the climate chaos into commodities. Farmers – men and women - are taking to the streets today because we are so outraged by the ineffective targets and false solutions such as agrofuels being peddled by business lobbyists and governments that listen to them.” Lidy Nacpil from the Jubilee South Coalition said: “All week we have heard a string of excuses from northern countries to make adequate reparations for the ecological crisis that they have caused. We are taking to the streets to demand that the ecological debt is repaid to the people of the South.”

Lars Fredikssen, an activist from Climate Justice Action said: “At the root of the climate crisis is an economic and political system that puts profit above people and the long term sustainability of this planet. Unless we address these root causes, climate change will devastate people around the world. These talks are a predictable failure and that’s why we will be taking action next week to create a People’s Assembly. We want the voices of ordinary people who are already being affected by climate change to be heard and listened to.”

Both networks will continue to work together on 16 December, where they are planning to bring the energy from the streets into the Centre where the talks are being held. A massive People’s Assembly will take place when thousands are expected to march to the Bella Centre to expose the false solutions and to propose positive alternatives and at the same time, hundreds of people inside the talks are expected to walk-out and join.

Spanish EU presidency 2010: Intermón Oxfam calls for tax justice

Intermón Oxfam has published a policy paper which outlines specific policy benchmarks for the Spanish government to push at the EU level during its presidency, starting on January 2010. These include the following:

* To support and defend within the G20 and prior to the IMF/World Bank Spring Meetings, the setting up of a multilateral and automatic information exchange models;
* To support the inclusion of a Finantial Transaction Tax at the International level and to include during 2010, at least in the Euro-zone, a Currency Transaction Tax of 0,005% to finance ODA;
* To promote a reform in the International Accounting Standard Board (IASB) governance in order to increase its accountability and the political control from the EU and from the National Authorities;
* To ensure that the coming IFRS 8 review (in 2010) becomes the opportunity to bind Multinational Corporations (MNCs) to submit, in the annual report, their accounting information on country by country (C-B-C) basis and to ensure that the already engaged procedure for a new IASB norm for the Extractive Industries (replacing the current IFRS 6) will include a compulsory C-B-C reporting requirement for MNCs;
* To support the introduction of C-B-C reporting as a compulsory requirement for MNCs of all sectors through the Directive 2004/109/EC (TOD Directive) review, that will probably take place during the first half of 2010.

The full report (in Spanish only) is available >>> here.

http://www.intermonoxfam.org/cms/HTML/espanol/3693/091123_Posicion_IO_sobre_fiscalidad_para_el_desarrollo.pdf

$200bn – the price of success in Copenhagen

Rich countries could set off a chain reaction that leads to success in Copenhagen if they put forward at least $200bn per year in new public funds to help poor countries reduce their emissions and adapt to a changing climate. Big developing countries such as China have signalled that they are willing to increase – and formalize – already significant pledges to reduce emissions if rich countries provide the necessary support. This, in turn, could help rich country leaders overcome domestic barriers to more ambitious targets. And it could secure the support of the world’s poorest countries that need help to adapt to a rapidly changing climate.

President Obama has already set the wheels in motion by agreeing to join other world leaders on 18 December and by announcing that the US is ready to pay its fair share towards the ‘fast start’ fund. Rich countries have said they are willing to put forward $10bn a year between 2010 and 2013 to help vulnerable countries tackle climate change. The European Union must now build on the US move by putting forward its share of the $200bn a year needed in the long term – and pushing for the US to do the same. In October the EU said that a global fund worth up to €50bn ($74bn) per year is needed to help poor countries tackle climate change but stopped short of saying how much it will contribute.

But Oxfam warned that climate finance must be new. Many rich countries still plan to use money from existing aid commitments to meet their climate obligations. Antonio Hill, Senior climate change advisor for Oxfam International said: “The price of success in Copenhagen is $200bn. $200bn could trigger off a chain reaction that delivers more ambitious emissions reductions and helps the world’s poorest people adapt to a changing climate. We need to see this figure sparkling overhead in Christmas lights by the end of the Summit. Its peanuts compared to the $8.4 trillion we found to save drowning banks.”

Rich countries are indeed mistaken if they think that less than a half of the emissions cuts demanded by the science and $10bn in re-packaged aid promises can be spun as a success in two weeks time. It underestimates the real needs of billions of poor people and overestimates the patience of poor countries who have clearly signalled their preference for no deal over green wash.

WTO Ministerial was a missed opportunity

The seventh WTO Ministerial Conference turned out to be a missed opportunity in addressing the serious challenges facing women and men in the global economy. It turned out a missed opportunity to promote a new model of multilateral trading system that addresses livelihood, employment, decent working conditions, food security, climate change and gender inequalities. Ministers of the 153 WTO Member States reassembled on 30 November to 2 December in Geneva for the seventh Ministerial Meeting under the theme of “The WTO, the multilateral trading system and the global economic environment.“ Despite eight years of ongoing negotiations on the Doha Round – the Ministerial was not a defining moment for coming closer to its conclusion. In addition, no major decision on the future of the WTO was taken.

While most governments paid lip-service to a swift conclusion of the Doha round in 2010, they showed no real political commitment and failed to provide concrete proposals on how to overcome the existing deep differences. On these parameters, the proposed stock-taking Conference in the first quarter of 2010 is nothing more than a PR exercise to affirm that the Doha round is not dead and the WTO as an institution still has some relevance. The WTO, and its Doha expansion agenda, is not appropriate to help resolve the current global economic challenges.

Unfettered trade liberalisation and market opening – embodied by the WTO – have not worked to promote human well-being for all – instead there is vast evidence of the contrary. The fact that most Ministers failed to recognise the link between neoliberal trade policies and the multiple crises facing the world today – including food, financial, economic, employment, climate and social crises – is cause for serious concern. At the Conference, Ministers discussed world trade in abstract terms as opposed to deliberating on the impact of trade liberalisation on sustainable livelihoods of women and men, food security and employment. The Conference, therefore, failed to examine how the structure and the content of the WTO could be changed to address these global challenges.

NGOs and social movements from all parts of the world used the Ministerial meeting to jointly discuss alternative proposals to the neoliberal trade agenda. Together they put forward the claim that a new model of governing multilateral trade must be developed, which shifts away from the neo-liberal trade model embodied by the WTO to allow for space for alternative, heterodox and feminist economic and development approaches. These approaches make the crucial link between economic and social policies, focus on people's needs, rights and livelihoods, including the empowerment of women, social justice and equality as well as an equal distribution of resources and power and put the social reproduction side of the economy at the core.

As a part of Geneva Trade and Development Symposium, WIDE, together with WEED, War on Want and Seattle to Brussels Network organized a session entitled “Trade, employment & Global Europe – looking beyond a ‘social clause’. Panel discussion evaluated critically current free trade policies that continue to dominate world trade and threaten to put millions more in rich and poor countries alike out of work and highlighted the importance of the links between trade and gender in these discussions.

>>> WIDE Statement

Climate change: ITUC statement for Copenhagen

With governments downplaying prospects for December’s UN climate summit and the chances of a binding agreement receding fast, the international trade union movement has called on governments to go to Copenhagen ready to make decisions that will put the world on an unequivocal path to a low-carbon future. “The science shows clearly that the longer we wait, the higher the human, environmental and economic costs will be. We need governments to make ambitious commitments which will set in stone the core elements of a treaty that must be completed as a matter of urgency. This means legally-binding targets on emissions and longer-term financing to assist developing countries to adapt, as well as “just transition” strategies to deal with the social and employment dimensions,” said ITUC General Secretary Guy Ryder.

The ITUC statement to the Summit sets out the international trade union movement’s position in detail, emphasising the need for creation of green and decent jobs, through investment in new low-carbon production and services and measures to reduce the carbon footprints of existing industries. The ITUC platform was developed through an exhaustive 18-month process of negotiation involving trade unions from every part of the world, and reflects the concerns and proposals of working people from developing and industrialised countries.

The ITUC Statement to the Copenhagen COP15 Summit and other information about trade unions and climate change can be found at http://climate.ituc-csi.org.

World Food Summit must tackle hunger with just and sustainable solutions

CIDSE and Caritas Internationalis, together the world’s largest development alliance, working with communities impacted by the food crisis across Asia, Africa and Latin America, travel to Rome for next week’s World Food Summit to call on world leaders to harness the potential of small-scale farmers. The catholic alliances believe urgent action is needed now; every day over a billion people go to bed hungry and currently over 23 million people across East Africa are in need of emergency food aid due to drought and a food price crisis made worse by the global economic recession. Since the global food crisis hit in 2007 there is increasing recognition by governments of the need to invest in small-scale agriculture in developing countries to ensure that small producers earn a decent income and enjoy the universal right to food.

“This is a very positive development, but recognition needs to be translated into national country policies and donor support strategies that promote small producer organisations and strengthen their ability to improve production, processing, and marketing - including their capacity to negotiate with buyers and other market actors. The Summit leaders should particularly prioritise farmer’s engagement in policy development, their access to land and water, inputs, credit, insurance, markets, training and extension services,” said Bob van Dillen, from the CIDSE and Caritas networks. However, there is a significant threat that the international community will promote the use of high-tech agricultural techniques, many of which are socially or environmentally unsustainable and create dependence on external inputs, rather than investing in what these farmers really need. The World Food Summit is also expected to reiterate support for further opening of markets and completion of the Doha Round of trade negotiations, which CIDSE and Caritas believe would hurt small-scale farmers rather than help them unless significant changes are made to current proposals.

CIDSE and Caritas believe that if the international community is serious about harnessing the potential of small-scale farmers, policies should particularly target women producers, who are the backbone of the rural economy and crucial actors in ensuring household food security. Both networks call on developing country governments to allocate, within 5 years, a minimum of 10% of their annual budgets to implement these urgent policies. The international donor community should make at least an equivalent commitment to agriculture and rural development in their Official Development Assistance (ODA), whose share within overall ODA spending has fallen from 17% in 1980 to around 5% today.

Parallel to the Summit a Civil Society Forum is taking place in Rome from 14-17 November. An APRODEV and CIDSE Briefing Paper and recommendations to the EU for the World Food Summit is available: >>> here

Oxam reacts to G20 finance ministers

According to Max Lawson, Oxfam senior policy adviser, a tax on banks would be a major step towards clearing up the mess caused by their greed. “The G20 has a responsibility to act. Every minute around the world 100 people are forced into extreme poverty as a result of the economic crisis. Money raised by a financial transaction tax on banks could make a massive difference to the lives of ordinary people.” A global financial transaction tax could raise $1.15 trillion annually to help those affected by the economic crisis in both poor and G20 countries.

On tax havens Lawson said: “It is not sustainable for the G20 to protect themselves from tax havens while allowing them to continue to deprive poor countries of hundreds of billions of dollars every year. A multilateral deal to ensure all countries are protected from tax havens must be a key priority for the G20 in 2010.”

G20 meeting in Scotland: Action for employment, but questions remain

The world’s trade union movement has welcomed the decision by G20 Finance Ministers meeting in St Andrews, Scotland, to keep jobs high on the agenda for economic recovery and reform, and to “maintain government support for the recovery until it is assured”. The meeting also decided that the ILO will have a role in assessing the effectiveness of G20 policies for “strong, sustainable and balanced growth”, although the major players in this process will still be the IMF and the World Bank. Nevertheless, several serious questions remain unanswered by the St Andrews meeting. While the Finance Ministers committed the G20 to responsiveness and legitimacy, especially concerning reform of the international financial institutions, trade unions are extremely concerned that the Financial Stability Board (FSB), which has a primary role in designing new architecture for financial regulation, still effectively operates in secret.

“The FSB has made no effort to discuss and consult outside a very narrow circle of people, many of whom bear heavy responsibility for the current crisis. The G20’s stated commitment to transparency won’t have much meaning at all unless governments make the FSB come out from behind closed doors and open up to discussion and consultation,” said ITUC General Secretary Guy Ryder. The unions have also expressed dismay at the lack of progress on a global transactions tax, championed by UK Prime Minister Gordon Brown who hosted the meeting. “The IMF, which has been asked to make recommendations on this, has traditionally opposed such a tax and now seems to be steering the G20 towards a weak option which would not generate many funds nor make banks help to pay for the crisis they caused. This would only add to the enormous burden working people are already bearing, and would do little if anything to restrain destructive speculation,” said John Evans, General Secretary of the OECD Trade Union Advisory Committee.

The communiqué issued by the St Andrews meeting does include references to the need for financing to tackle climate change; however, no concrete commitments are given either in terms of actual funds to be made available or on the emissions reductions that need to be agreed at the UN Conference in Copenhagen next month. “Finance will be critical to success or failure at December’s Copenhagen Climate Summit, and the absence of clear commitments from this weekend’s G20 meeting on financing within the industrialised economies, or to help developing economies find a low-carbon development path, does not bode well for success in Copenhagen,” said Ryder.

AOSIS States: No Backsliding in climate deal

The world’s threatened island states last week expressed alarm at suggestions that the Copenhagen Climate Summit will not produce legally binding outcomes to build on the current international climate regime. Speaking at the conclusion of climate talks in Bangkok, Ambassador Dessima Williams, Permanent Representative of Grenada to the United Nations in New York and current Chair of the 43-member Alliance of Small Island States, said her group was deeply concerned with the "divisive rhetoric" that had characterised some of the discussions in Bangkok.

Williams addressed the growing divide by proposing two separate and legally binding outcomes in December. Island states joined with other developing nations in calling for deeper emission reduction commitments by industrialised countries under the Kyoto Protocol for the period after 2012. She also called for a second, multilateral and legally binding agreement to define action for all countries, including the United States, sufficient to limit global warming to less than 1.5°C above pre-industrial levels.

Responding to a push by some industrialised countries to move forward without the Kyoto Protocol, Williams said: "It is essential that we build upon, and do not weaken, the existing legally binding framework". She added that "now is not the time for backsliding. The failure to deliver ambitious legally binding outcomes in Copenhagen will threaten the survival small island states." – Williams also noted that Bangkok had seen Costa Rica, Guatemala, Panama and Sri Lanka join AOSIS and the Group of Least Developed Countries (LDCs) in calling for global warming to be limited to below 1.5°C above pre-industrial temperatures. The AOSIS targets are now supported by close to 100 countries, more than half the UN membership.

Statement of the UNFCCC Women’s Caucus at the Bangkok Climate Change Talks

Bits of "women" for a chunk of the earth's population? We, women representing women`s organisations from around the world, appreciate UN Secretary General Ban Ki Moon's recognition of women as stakeholders in this process. We are grateful for the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat led by Yvo de Boer in recognizing us as a possible constituency. However women's leadership and participation in the discussions and ultimately, in the implementation of climate change solutions have yet to be clearly articulated.

While the documents mention "women" at least 20 times, "women" mostly appear in the lists of vulnerable groups. Yet women have made significant contribution in solving the climate crisis through their leadership, experience, perspectives and ideas. We deserve to be included as stakeholders with interests that outstrip individual governments and corporate entities particularly those that refuse to consider the gendered impacts of climate change.

The strong integration of gender dimensions in the discussions would have enabled a more comprehensive analysis of the causes of climate change. Until today, patriarchal politics and corporate greed are the helm of the UNFCCC process as it is held hostage by most developed countries that have been unconscientiously messing up the planet and are not showing any signs of restraint.

Women represent half of the world's population. Often through our unpaid labour, we provide up to 90% of the household's food and other needs. Many of us walk a long distance just to fetch water. Sometimes some of us are raped as we set out to gather firewood.

Yet we continue to venture outside, if only to feed and shelter our families and communities. We significantly make up small-scale fisheries which is far less intrusive to the marine ecosystem. Despite the deep relationship we have established with nature as resource managers, especially in ancestral domains, a majority have yet to be accorded land rights, credit, information and a string of even the most basic human rights.

This situation even worsens as access to natural resources becomes scarcer
due to climate change.

In times of displacement because of extractive industries such as oil exploration, mining, rising sea levels, droughts, floods, tsunamis, earthquakes and others, women and girls constitute more than half of the death toll because of cultural restrictions, lack the necessary know-how and resources to protect themselves While tired and lost, we continue to perform our reproductive roles as providers and nurturers wherever and however we settle.

As women's empowerment primarily comes from women themselves, we need the opportunities to meaningfully engage the process, whose framework so leaves much to be desired especially in terms of transparency, accountability and equity. Women's participation will be fundamental for realization of a gender integrated approach to climate change. It is for this reason that we urge governments to include the following paragraph in the Shared Vision, which serves as the outcome document's preamble:

"The full integration of gender perspectives is essential to effective action on all aspects of climate change, adaptation, mitigation, technology sharing, financing, and capacity building. UNFCCC processes must ensure compliance with existing women's rights standards and best practice as enshrined in the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), Millennium Development Goals (MDGs) and UN Security Council Resolution 1325 [Women and Peace-Building]. The advancement of women, their leadership and meaningful participation and engagement as stakeholders in all climate related processes and implementation must be guaranteed."

Bangkok, 8 October 2009

Climate negotiations stuck: US becoming key obstacle

The rift between rich and poor countries has intensified because rich countries have not put serious money on the table to help poor countries adapt to the escalating impacts of climate change and develop on a low carbon pathway, international aid agency Oxfam said on the last day of UN climate negotiations in Bangkok. Oxfam senior climate adviser Antonio Hill said a continued lack of political will from rich country leaders also meant there was no movement on the emissions reduction targets that would help safeguard billions of the world’s poorest from death and suffering.

“The millions of people facing greater floods, droughts and failed harvest after failed harvest will be the real losers if the US, Canada, EU, Japan and Australia continue as blockers to the UN negotiations,” Hill said. The US in particular was becoming the biggest obstacle to a fair and safe global climate deal in Copenhagen. “The US has been silent on the scale of finance it will commit to, and has yet to adopt an ambitious emissions reduction target by 2020, giving negotiators none of the political clout necessary to unblock negotiations in make-or-break areas.” He said the desire of the EU, Japan, Canada and Australia to accommodate the US and abandon the Kyoto Protocol was an example of the poor leadership on show by all these countries these past two weeks.

According to Oxfam, Bangkok has been a warm-up session for negotiators who have shown their skill in trimming text, but in political terms, when the starting gun fired it became a race to the bottom, with rich countries weakening existing commitments under the international framework. The poorest, most vulnerable countries looking ahead to Copenhagen now face an impossible choice - to accept an agreement that fails to reduce the life-or-death risks they face, or to hold out for a safe and fair deal but risk walking away from Copenhagen empty-handed. “It is useful that the US is prompting a debate on who does what under a global agreement, but if it really hopes to have a constructive dialogue with developing countries it has to up the ante first by tabling an offer of finance and emissions cuts commensurate with its historic emissions and economic weight,” Hill said.

“The US’ endorsement of a new fund for developing countries is an encouraging step forward, although big questions remain on how it will operate.” Hill pointed to other areas of useful progress in the areas of agriculture, mitigation action from developing countries, and aviation and shipping emissions over the past two weeks. “But what we have seen in Bangkok was a cosmetic procedure, when what was required was major surgery,” he said.

Developing countries came to Bangkok willing to negotiate. China is a world leader in renewable energy investment, has committed to reduce emissions in line with its economic growth path, and has offered support to help developing countries, including small island states and African nations, adapt to the impacts of climate change. Last week Indonesia committed to deep cuts below business as usual.

For developing countries, another disturbing development in Bangkok has been a hardening of rich country positions on the issue of finance: they are now openly insisting climate finance should come from existing aid budgets. But aid must be increased, not diverted, say NGOs. If promised aid increases are plundered for climate purposes, it could mean that 8.6 million fewer people have access to HIV and AIDS treatment, 75 million fewer children will be in school, and 4.5 million more children die than would otherwise be the case.

Financial Transaction Tax de facto in Pittsburgh Leaders’ Statement

France and Germany managed to get the financial transaction tax (FTT) proposal de facto into the Pittsburgh Declaration of the G20. The IMF is tasked to prepare for the next summit a report on instruments to make the financial industry "a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system" (point 16 of the Leaders’ Declaration).

“This is a positive step”, says WEED’s Peter Wahl. “As the head of the IMF, the French socialist Dominique Strauss Kahn, can be considered to be open to a Transaction Tax, we can expect that the proposal will be carried on. Not only Sarkozy but already Mitterand and Chirac were supporters of a similar tax, the Tobin Tax. The Tobin Tax, however, had only currency transactions as tax basis, whereas the Financial Transaction Tax (FTT) encompasses also bonds, equities, derivatives etc.

There is an extraordinary opportunity for civil society to make the FTT one of her prominent points to organize pressure from below in the time to come and to make the FTT not the solution for everything but a spearhead of campaigning.

The tax offers a lot of economic and politic leverage:
1. It has a regulatory potential. It contributes to curb speculation, will shrink the financial sector and thus contribute to breaking the dominance of finance over the whole economy and society.
2. It has a strong distributional or social equity dimension by making pay those, who were benefitting from the system and are responsible for the crash.
3. As the issue of public debt and who will pay for the bill off the crisis will be on top of the agenda in the coming years, with pressure to cut public expenditure and in particular social budgets, we have with the FTT a powerful tool to say "Let them pay for the crisis". The FTT is a powerful alternative in that respect.
4. There is a strong political momentum with Sarkozy, Merkel, Austria supporting the idea. Also the president of the EU Commission, Barroso, and commissioner Almunia are in favor, as well as the British foreign minister Miliband.
5. There are already a lot of allies in trade unions, churches and NGOs for a currency transaction tax and the media are acquainted with it.
6. There is already a lot of expertise, studies etc. on the issue on which we can build. So, we have not to start from scratch.

At the moment I see three main challenges:
a. All the new supporters of the FTT have an inbuilt self-destroying mechanism in the proposal: they all say that the proposal is only feasible on global level. This is wrong. Of course, it wold be nice to have the FTT globally, but it would already have a strong impact if it is implemented in one major currency zone, for instance the Euro zone. It is the same as with the Kyoto protocol, you can do something without the US having on board. We have to make this argument strong.
b. Civil society has to be flexible and to adjust its strategy to the new situation. This does not mean, that people give up their own agenda, but that we find ways to combine in an intelligent way with our usual work. We should not just do business as usual and try to reshuffle our agenda and resources.
c. Nobody of us loves the Merkels, Sarkozys e tutti quanti, and I know how difficult it is to admit that they could do something which is not per se an evil. But if there is such a clear split inside the elites we have to make those positions strong which have been ours since ten years, even if we Merkel and Sarkozy support it.”

Oxfam: G20 should protect poor countries from economic crisis

Developing countries across the globe are struggling to respond to the global recession that continues to slash incomes, destroy jobs and has helped push the total number of hungry people in the world above 1 billion. The economic crisis arrived as poor countries were already struggling to cope high food prices and floods, droughts and food shortages linked to climate change. Oxfam analysis of economic data has discovered that governments in Sub-Saharan Africa will be $70bn worse off this year as a result of the global slump and unlike rich countries they cannot borrow their way out of trouble. Without outside help governments will find it increasingly difficult to respond to the climate, food and economic crises and to avoid cutting spending on schools, clinics and other anti-poverty programs.

But despite feeding their own economies a much needed stimulus, the G20 has not yet provided even half the $50bn bailout it promised poor countries in April. Oxfam is calling for a $290bn package of measures to ease the burden on developing countries without hitting ordinary taxpayers. The package includes a Tobin tax on currency transactions, a debt moratorium and a crackdown on tax havens. Oxfam says: “Existing aid levels are not enough to protect the status quo let never mind reduce poverty in the face of the economic crisis, climate change and rising food prices. The G20 has the chance to change the bad habits of the past and come up with new solutions to the problems facing poor people. A currency transaction levy on the banks that helped cause the global slump could bring in $50bn to help those suffering in a crisis they did nothing to cause. It is time bankers paid a bonus to the world’s poor.”

Oxfam is also calling on G20 leaders to fulfil a promise made by President Obama in July to deliver new funds to help poor countries cope with climate change. This funding is vital to break the deadlock in climate change negotiations leading up to the make-or-break UN Summit in Copenhagen in December. Oxfam calculates that $50bn-a-year is needed to help poor countries cope with climate change and another $100bn is needed to help them control their emissions.

Trade Unions: Pittsburgh must be a jobs summit

The G20 meeting in Pittsburgh this week must tackle the growing global jobs crisis if real economic recovery is to take place, according to the world’s trade unions. With the global crisis set to cost 59 million jobs by the end of this year, and predictions that unemployment across the OECD countries could reach 10% in 2010 and increase into 2011, the ITUC, TUAC and the Global Union Federations are warning in their Pittsburgh Declaration that the chances of real economic recovery are under severe threat. A 50-strong delegation of top union leaders from every continent will hold a series of meetings with heads of government and global institutions at the Pittsburgh Summit to press the case for stronger and more coordinated action.

Last week’s gloomy predictions in the OECD’s annual Employment Outlook reinforce the union concerns. On top of an estimated 15 million jobs already lost in the richer countries, the OECD has warned that the worst is yet to come for labour markets in several countries. The OECD also confirms that young people, those with fewer skills, immigrants, ethnic minorities and those in temporary or untypical jobs are being worst hit. “The G20 must move on several fronts, quickly and with determination,” said John Evans, general secretary of the TUAC. “Jobs must be the first priority, but action on jobs will be undermined without reforms of the financial system, action for development in particular in the poorest countries, and concrete steps to create green jobs and ensure a just transition to a low-carbon future,” he added.

The unions’ Pittsburgh Declaration sets out detailed and workable plans to tackle bank insolvency, deal with excessive corporate pay and bonuses, reform taxation and ensure effective financial market regulation. A global tax on financial transactions is put forward as means both of reducing unproductive speculation and generating funds for development. Trade unions demand changes to the programmes of the International Financial Institutions, which are imposing job-destroying conditions on developing and transition countries with devastating consequences for health, education and social protection in the future, and insist that the G20 move forward on creating green jobs and ensuring proper protection for workers affected by urgently needed action on climate change.

Sign-on letter to G20 on an international capital transaction tax

Dozens of civil society organisations from across the world are urging the Heads of State and Government of the G20 meeting this week in Pittsburgh to take steps towards the implementation of an International Financial Transaction Tax. In an open letter the NGOs say:

“Such a tax would be levied on all cross border financial transactions including currencies, equities and all kinds of derivatives. Even with a low rate of 0.05% such a tax could generate an annual income of tens of billions dollars.
This revenue could be used to pay for the cost of the crisis in the North, in particular the heavy burden of public debt, which has been accumulated to rescue the financial system. As well, to assist countries in the South to meet their development objectives, which have been thrown off track by the crisis. We are sure you agree that it is unacceptable for citizens in both the North and South to pay for the damage caused by the finance industry. Those who have benefited so much from the way in which the system has worked ought to be obliged to take responsibility for their actions. This tax is a measure of political fairness and social justice.
Furthermore, such a tax would contribute to a reduction in speculation, which was at the heart of the collapse of the financial system. The tax would thus enhance financial stability and prevent the finance industry from continuing with a ‘business as usual’ approach.
Around the world national financial transaction taxes (FTTS) are commonplace on shares and bonds. Since these transactions are electronic, they are simple and inexpensive to implement. Payment of an International Financial Transaction Tax would thus be automatic with no scope for avoidance, even in off-shore centres. It could, in fact, be introduced unilaterally by those countries wishing to see it implemented; although it would be preferable that all major economies participate.”

A measure of this type has recently gained considerable support from the German finance Minister, Mr Steinbrück and his colleague in the Foreign Office, Mr Steinmeier. Two weeks ago the head of the British Financial Services Authority proposed a tax on financial transactions to prevent excessive profiteering by banks. Governments in Europe and South America already have experience of specific FTTs, and parliaments in France, Belgium, Canada and Finland have considered implementing a tax on foreign exchange transactions. In 2005, at the United Nations 115 countries voted to explore the potential of taxing cross-border currency transactions.

For further information on the initiative go to >>> http://www.stampoutpoverty.org/

Europe’s climate offer would rob tomorrow's hospitals and schools in poor countries

This week the European Commission published its paper on climate financing ahead of the Copenhagen summit in December. Even if Europe’s climate offer could divert money already promised for education and health in poor countries, Oxfam International welcomed the European Commission’s intentions to break the deadlock in global climate talks by moving first. Putting climate financing figures on the table was a necessary first step to open up meaningful negotiations.

"However, the European Commission proposes that rich countries should take money from existing promises to increase overseas aid spending to 0.7% of national incomes. This would rob tomorrow's hospitals and schools in developing countries to pay for them to tackle climate change today. This will undermine progress towards meeting the Millennium Development Goals”, Elise Ford, head of Oxfam International’s EU office, said. “This is scandalous, especially given Europe's responsibility as one of the world's biggest polluters who has caused the problem, and the onus on them to clean up.”

It’s now up to EU Member States to come up with a stronger proposal at the European Summit on 17 September, to get a good climate deal that does not come at the price of the future development of poorer countries, who are already being hurt by global warming. Funds to help developing countries to tackle climate change must be additional to aid – not instead of it. William Chadza, Executive Director for the Malawian Center for Environmental Policy and Advocacy (CEPA), said: “We must consider Europe's top-end offer of €50 billion to be an opening negotiation tactic, which might be a good start to kick-off the talks. However, the real need of developing countries to cope with the impacts of global warming and develop their own low carbon futures will go far higher than this. The rich world will need to do much more to make a real difference to poor people suffering climate change.”

* Read the media briefing >>> Paying the Climate Bill.

The Steinbrück tax proposal: No reason for too much optimism

Peer Steinbrück (see photo), Germany’s minister for finance, and Frank Steinmeier, his colleague in the foreign ministry, are in favour of a global financial transaction tax. They announced their proposal in a conversation with the national newspaper Süddeutsche Zeitung. "The costs for the crisis must not stay with the small and medium taxpayers", they said. "There must be a fair burden sharing." They suggest an international financial transaction tax, which is levied not only on currency transactions, like the Tobin Tax, but on all kinds of financial transactions, including equity, certificates and derivatives.

The idea had been initially suggested last year by the Vienna Institute for Economic Research WIFO (>>> Stephan Schulmeister, Margit Schratzenstaller, Oliver Picek, General Financial Transaction Tax Motives, Revenues, Feasibility and Effects). They propose a tax rate of 0.05%. Steinbrück also said, he would bring the issue on the agenda of the Pittsburgh G20 summit. The initiative comes two weeks after the head of the British supervisory authority, Lord Turner, had proposed to introduce a currency transaction tax.

Although the initiative gives a strong boost to civil society advocating the Tobin Tax or variants of it such as the Spahn Tax for decades “we should not be overoptimistic”, says Attac Germany’s Peter Wahl. According to him, the proposal has very much to be seen in the light of the German election campaign in the run-up to 27 September. “The Social Democratic Party (SPD) is, like all parties of New Labour, in a desperate situation. In recent regional and European elections the SPD was suffering the deepest decline in its 100 years of existence. At the same time the new left party DIE LINKE is getting stronger with the crisis and the issue of social justice becoming more and more to the forefront.”

Furthermore, Wahl explains, the Steinbrück proposal has not been agreed with the chancellor. Merkel has not yet reacted. But given her ideological and political dependence on the finance industry, it would be a miracle if she would accept to present the proposal in Pittsburgh. Last but not least, Steinbrück says that such a tax would have to be implemented at global level. This is a preventive explanation of failure, because he knows very well that Wall Street and the London City will not allow their governments to accept such a proposal. Nevertheless, civil society should use the opportunity and intervene strongly into the debate.

Doing Business 2010: World Bank discourages social protection

Even though the World Bank has endorsed improved social safety nets to protect the millions of workers who have lost their jobs due to the global economic crisis, the latest edition of the Bank’s highest circulation publication discourages countries from adopting social protection schemes by designating governments that do so as anti-business. Doing Business 2010 also recommends that countries should reduce severance pay for dismissed workers and reduce or eliminate requirements for prior notice about job cuts.

In April 2009, the Bank announced that the Doing Business labour market flexibility indicator, which encourages the reduction of workers’ protection, “does not constitute World Bank policy and should not be used as a basis for policy advice or in any country program documents”, and that the indicator would be removed from the Bank’s conditionality framework (known as CPIA: Country Policy and Institutional Assessment). The Bank also stated, “Doing Business 2010 will include a commentary explaining these steps”, but the new edition of the publication issued today ignores this commitment posted on the Bank’s web site in April.

“If the president of the World Bank truly believes that countries should improve social protection in order to mitigate the impact of the global recession, as he has said on numerous occasions, then it is high time for the Bank’s highest circulation publication to stop promoting the elimination of social and workers’ protection,” said Guy Ryder, general secretary of the International Trade Union Confederation. The ITUC called attention to the fact that Doing Business 2010 puts Cambodia in the category of countries that are “making it more difficult to do business” because it introduced a social security contribution. Conversely, Georgia is praised and given a better ranking by Doing Business because it abolished its social tax. Doing Business 2010 criticizes the democratic government of Honduras, whose president was expelled after a coup d’état in June, because it increased severance pay and advance notice requirements in response to the economic crisis (Honduras has no unemployment insurance). Similarly, Doing Business downgrades Portugal for increasing the dismissal notice period by two weeks.

On the other hand, the authoritarian regime of Belarus, which lost its preferential trade status with the European Union for violating fundamental conventions of the International Labour Organization (ILO), obtains high marks from Doing Business 2010 for making it easier to eliminate jobs. Rwanda wins this year’s Doing Business “top reformer” prize because “employers are no longer required to consult beforehand [about job cuts] with the employees’ representatives or notify the labor inspector”. The Bank’s publication also praises Macedonia for getting rid of measures to retrain redundant workers, and Mauritius for eliminating mandatory severance pay.

Three innovative proposals for G20 to help the poor

G20 finance ministers meeting in London this weekend should provide a $280 billion bailout for millions of poor people struggling to survive the economic crisis, Oxfam is proposing. A currency transaction tax is one of three measures that could raise much needed funds for developing countries without putting any extra burden on ordinary taxpayers. The proposals are set out in a new Oxfam briefing paper, Money for Nothing: Three ways the G20 could deliver up to $280 billion for poor countries. Reforming tax havens alone could release $160bn, reallocating an already agreed IMF bailout could free up another $89bn, and introducing a currency transaction tax could raise at least a further $30bn – each a significant sum to help poor people suffering in the crisis.

The money is desperately needed to prevent the crisis derailing efforts to reduce poverty as developing countries suffer job losses because of falling trade and capital flows. According World Bank and UN estimates, between 50-100 million more people will be trapped in poverty this year, forced to survive on less than $1.25 per day. Max Lawson, Oxfam senior policy adviser, said: “The beauty of these proposals is that they allow the G20 to bailout poor people without asking ordinary taxpayers at home to put their hands in their pockets. Rich countries that spent $18 trillion bailing out banks should not be allowed to plead tight budgets as an excuse for failing to help poor people – especially when there are alternative sources of funding available that would cost them little or nothing.”

The G20 in April promised to provide $240bn to help developing countries deal with the financial crisis – including $50bn for the poorest. But the World Bank estimates that developing countries will need up to $635bn in 2009 just to stand still. Much more is needed to reduce poverty, increase the number of children who attend school and tackle health problems such as HIV/AIDS and malaria.

How the three proposals would work:

* Implement a Currency Transaction Tax (CTT) of at least 0.005% on international currency transactions. It is estimated that such a tax could generate a minimum of $30bn per year if applied to the four major international reserve currencies (US Dollar, Yen, Euro and British Pound). If more currencies were included, this figure could increase as high as $50bn. A slightly higher rate could also provide more resources for government spending in rich countries facing cuts in services.

* Transfer half of rich countries’ new Special Drawing Rights allocations. Agree that at a minimum all the G8 and other major donor countries will transfer half of their allotted new allocations of IMF Special Drawing Rights (SDRs) to Low Income Countries. SDRs are a form of IMF quasi currency distributed to member countries. The April G20 agreed to create $285 billion worth of SDRs, and rich nations will receive $177 billion of this amount. Oxfam is calling for half of this, $89 billion, to be transferred to the poorest countries.

* Deal with tax havens. Put in place a multilateral agreement for the automatic exchange of full tax information and require country-by-country reporting of subsidiaries, sales and profits by multinational corporations, to help developing countries recoup lost tax revenue. This could result in a further US$160bn for poor countries, and at the same time would enable rich countries to recover their lost tax revenues. The current OECD initiative on tax havens, supported by the G20, relies on bilateral agreements between countries. To date no developing country has signed a bilateral agreement with a tax haven.

Oxfam reacts to WTO judgement on US cotton subsidies

The United States this week has lost a battle in its dispute over cotton subsidies with Brazil at the World Trade Organization (WTO), said international organization Oxfam. The WTO confirmed the injury caused by these subsidies and authorized Brazil to retaliate against the US. “American farm policy is broken and bloated, and now other sectors of the US economy may suffer as Brazil retaliates,” said Gawain Kripke, policy director for Oxfam America. Total direct support to cotton production hovered over $3bn in the 2008-2009 growing season, or an equivalent of 50 cents per pound of actual production, according to the International Cotton Advisory Committee.

“The global trading system depends on countries obeying rules and submitting to orderly dispute resolution,” said Kripke. “Thus far, the US has ignored the ruling of the WTO adjudication and continues large subsidies for cotton production. If the US continues this way, the integrity of the multilateral trade system is at stake.” An Oxfam study found that with a complete removal of US cotton subsidies, the world price of cotton would increase by 6-14%, resulting in additional income that could feed an additional million children for a year or pay school fees for at least two million children living in extremely poor West African cotton growing households.

The longstanding dispute started in 2002. In 2005, the WTO ruled that US cotton subsidies harmed Brazilian cotton farmers and violated WTO rules, but the US did little to abide by the ruling and reduce its trade distorting subsidies. In September 2006, Brazil asked for a WTO “compliance panel” to determine whether the US has done enough to comply with the ruling and the WTO confirmed that the US has failed to reform its agricultural subsidies enough to comply. The recent ruling confirms that Brazil is entitled to start retaliation procedures, and possibly cross-retaliate by lifting intellectual property protections.

G8 in Italy must prove its relevance

Caritas Internationalis and CIDSE say G8 countries meeting in Italy need to roll back years of broken promises if they’re to regain authority on their flagship issue of tackling poverty. Leaders of France, the United States, Britain, Germany, Italy, Canada, Japan, and Russia hold a make-or-break meeting 8-10 July in the Italian town of L’Aquila to prove the annual jamboree is not past its sell-by-date.

The summit comes in a critical year for international development. The global economic crisis threatens gains made in reducing poverty over the last ten years. As many as 100 million more people will remain poor or become poor as a result of the crisis. Negotiations on climate change are not making the progress needed to achieve an adequate deal to be signed in Copenhagen in December. Hopes are not high. G8 countries have backtracked on their aid pledges, particularly Italy and France, citing the crisis as an excuse. However, world military spending surged to a new high of $1.4 trillion in 2008 while $8.7 trillion of state financing was found to shore up banks

Caritas Internationalis Secretary-General Lesley Anne Knight said, “If the G8 is to have any credibility left after this summit, it must make up for the broken promises of the past. This means committing to a firm timetable for achieving its previously agreed aid targets. To be cutting aid budgets whilst pouring billions into a bankrupt banking system is like robbing the poor to feed the rich. The G8 has an opportunity this month to show real leadership in the fight against global poverty. If it fails, it will show itself to be irrelevant.”

CIDSE Secretary-General Bernd Nilles said, "G8 countries have so far failed to commit to the necessary cuts in greenhouse gasses to avoid dangerous climate change. They have also failed to commit to providing developing countries with the support they need to enable them to adapt to the impacts of climate change and to pursue sustainable development paths. They’re fiddling while Rome burns.”

The G8 is one of the few moments where leaders of the richest countries will meet in the run up to Copenhagen and should play a crucial role in unlocking stalled talks and securing a deal. The G8 must commit to a minimum of 40% cuts in greenhouse gas emissions by 2020, based on 1990 levels. They must provide their fair share of financing for adaptation and mitigation in developing countries. Conservative estimates indicate $153bn of additional finance will be needed for mitigation and adaptation in developing countries by 2020.

Read CIDSE - Caritas Internationalis G8 recommendations >>> here.

Civil Society Background Document on the UN Conference on the World Financial and Economic Crisis and its Impact on Development

We are facing a global systemic financial and economic crisis, which originated in the increasing financialization of the global economy, coupled with deregulation, over-reliance on trade liberalization and the use of financial instruments that created systemic risks and asymmetries. These factors have resulted in a financial industry disconnected from the real productive economy and in a severe slow-down in the real economy, with tremendous human and social costs. Before the financial crisis, the world was already suffering from a food crisis, and facing environmental challenges of historic dimensions. With this Conference, the UN as the most comprehensive intergovernmental forum, has a historic opportunity to start a longer-term inclusive process for a fundamental transformation of the economic and financial system and to make social and gender justice and the fulfillment of human and environmental rights the key objectives of all crisis-related measures. As a first step, global fiscal stimulus measures are crucial, both for industrialized countries, economies in transition, and developing countries, to stimulate their economies in a sustainable manner, and implement counter-cyclical policies, without, however, reverting to the same export-led growth model based on unsustainable over-production and over-consumption patterns. However, equally important are concrete commitments for an intergovernmental time-bound process towards long-term structural reforms to prevent future financial bubbles and economic busts. This UN Conference must be the beginning of a process for systemic change, crisis resolution and economic justice between developed and developing countries and economies in transition.

>>> Full text

UN takes the ball on global economic policy

The UN agreement on the financial crisis takes important steps toward a global consensus on response to the crisis, according to CIDSE, an international alliance of 16 Catholic development agencies working together for global justice. Member nations have already agreed the text of a final declaration of the conference, which ends today in New York. The document includes the recognition that the UN should have a role in ensuring in ensuring that the global economic and financial system should work for developing countries.

“Global economic policy should be like the World Cup, with every nation playing – not a tournament for rich countries and their invited guests. With this agreement, the UN took the ball,” said René Grotenhuis, President of CIDSE and Director of Dutch organization Cordaid. “The US ought to be particularly commended for supporting economic justice – anyone at the Bush or Bill Clinton State Department would have been fired for approving this. Agreement for countries to impose capital controls is a total reversal of Clinton and Bush-era policies. And US support for World Bank and IMF hiring according to geographic and gender diversity moves them part of the way from G8-dominated clubs towards accountability to the world,” said Aldo Caliari, Director of the Rethinking Bretton Woods project at Center of Concern, the US member of CIDSE.

Progress includes:
* Trade: Developing countries earn half their GDP from exports, and trade is the main way the financial crisis is hitting them. The document recognizes many countries will need to change trade and investment rules or impose capital account restrictions, to implement crisis recovery measures.
* Debt: Developing countries face more than $3 trillion in debt maturing this year. The agreement includes temporary standstills on debt payments for countries in crisis, and agreement to go beyond existing ad hoc responses to a structured mechanism for sovereign debt settlements.
* Stimulus: The agreement calls on countries with stimulus spending not to impose rules that hurt third countries.
* Continuing mandate: While some countries opposed follow-up to the conference, the UN will have a continuing working group to implement these measures and an expert group to provide “independent technical expertise and analysis” on the subject of the conference.

“This is slow progress for more than 50 million people are expected to lose their jobs, and 100 million newly hungry in the world. But the UN is asserting influence on the global economy, and that’s good news for the majority of people who aren’t represented at the G8 or the World Bank and IMF they control,” said René Grotenhuis.

Voices on the UN financial summit in New York

* Head of South Centre: Most collateral damage in developing world
The United Nations should be the place that “educates the innocent and the victims” on how to deal with the world economic and financial crisis, Martin Khor, Executive Director of South Centre, said at a press conference in the run-up to the UN conference on the impact of the global crisis on developing countries in New York. He said that, having played no role in causing the crisis, the developing countries had suffered the most “collateral damage”, with losses averaging 6% of gross national income as their economic growth was expected to fall from 8.3% in 2007 to 1.6% in 2009.
>>> Full text

* ITUC: Global crisis needs global coordination
As the United Nations kicks off a major three-day Conference in New York, the International Trade Union Confederation (ITUC) is drawing the attention of world leaders to the severe human costs of the deepening slowdown in the global economy. This is most evident in the jobs crisis, with increasing income inequality, rapid increases in unemployment, and growing hunger and poverty in developing countries. Women are bearing a disproportionate share of the hardships brought on by the global crisis.
>>> Full text

* CIDSE: Global crisis requires global reform
According to CIDSE, an international alliance of Catholic development agencies working together for global justice, the worlds’ poor risk being let down once more as no leaders from developed countries are expected to attend. Their constructive engagement in inclusive fora like the UN is needed for structural changes like a Global Economic Council, to address economic issues the way the Security Council addresses security-related ones, and in keeping promises like the development finance agreements made in Doha.
>>> Full text

Finance Ministers must find funds to secure climate deal

The G8 must commit $2bn to help poor countries adapt to a changing climate Oxfam urged ahead of a meeting of Finance Ministers in Lecce, Italy, on 12 and 13 June. The international agency also called for European Finance Ministers meeting in Luxembourg today to back a proposal from European experts for poor countries to receive €100bn ($142bn) a year to help them reduce emissions. Putting money on the table to fund least developing countries' most urgent adaptation needs would be an important first step by rich countries towards delivering on longstanding promises of assistance. At least $50bn per year is needed to assist poor countries deal with the impact of climate change and at least $100bn to help poor countries reduce their emissions.

In 2001, the Least Developed Countries Fund was set-up, and the poorest countries were invited to prepare National Adaptation Plans of Action to address their most urgent adaptation priorities. These plans need $2bn to implement; however, rich countries have committed less than 10% of the money to date. European Finance Ministers, meeting on 9 June, could also address a crucial issue threatening to undermine hopes of a global climate deal by backing a proposal which contains concrete figures on the level of support poor countries need to tackle their emissions. To date rich countries have not said how much public funding they think should be made available.

Rich countries are responsible for two thirds of green house gas emissions currently in the atmosphere but it is the world's poorest people who are being hit first and hardest by the changing climate. In Africa, changes to rainfall are already affecting food production, and rising temperatures are boosting the spread of disease. Antonio Hill, Senior Policy Advisor for Oxfam International said: "Funding to help poor countries adapt to a changing climate has been promised by G8 leaders - but it has largely failed to materialize. These politicians found the determination and $8tr to save the banks. They must now deliver the immediate financing which is needed to help the most vulnerable developing countries adapt to a changing climate."

Bernard Kouchner suggests a tax on foreign exchange transactions

As French Foreign Minister Bernard Kouchner stressed, development aid is a crucial tool to fight the impact of the recent financial turmoil on developing countries but not enough. According to him, innovative development funding is decisive, especially in the areas of education, health and environment. A pilot group in charge of thinking about solidarity contributions in favour of development was established in 2006 following an initiative from France, Brazil, Spain and Norway. The pilot group is a kind of think-tank and gathers 58 countries to which NGOs and international organisations are associated. France is currently chairing the group which gathered on 28 and 29 May in Paris.

Following a suggestion by Bernard Kouchner, a working group has been created to evaluate the technical and legal feasibility of a tax on foreign exchange transactions. The implementation of this tax could save millions of lives as well as facilitate the funding of global common goods in order to resolve the economic, social and environmental issues created by globalisation. This tax would not really affect the global economy as only 0.005% would be taken from foreign exchange transactions. According to Alain Joyandet, the French Secretary of State for Cooperation, between $30bn and $60bn per year could be raised through such a tax.

France and Belgium have already established a legal framework: France passed a law in December 2001 imposing this tax, but it will come into effect only if it is enforced at the European Union level; Belgium did the same in 2004. Civil society actors, mainly NGOs, are supporting the proposal: According to Jean-Louis Vielajus, president of Coordination SUD, "NGOs have asked the implementation of a tax on foreign exchange transactions for several years. We rejoice with the support of Bernard Kouchner and Alain Joyandet and urge them to bring this question at the European level and within the United Nations."

However, much effort remains to make the proposal a reality. The proposal of Bernard Kouchner has met the opposition of the French Economy Minister, Christine Lagarde, who declared that "nothing is prepared for the moment". Instead, she encouraged governments to implement taxes on airplane tickets (also known as "Chirac Tax") which is currently working. The proposal has also met the opposition of Great Britain and the United States, two of the biggest financial markets of the world.

Adapting to a changing climate: it’s time to talk technology

CIDSE and Caritas Internationalis, the largest networks of Catholic development and relief agencies in the world, say UN climate change talks in Bonn will fail the poor unless they provide the tools to deal with the dire consequences of climate change. They call on governments negotiating a new global climate change agreement not to forget about adaptation in their efforts to strike a deal on technology. In their joint report launched at the UN climate change negotiations taking place in Bonn since last week, Reducing Vulnerability, Enhancing Resilience: The importance of Adaptation Technologies for the Post-2012 Climate Agreement, CIDSE and Caritas Internationalis highlight the need for urgent enhanced action on adaptation technologies, which are key for adapting to climate change, reducing poverty and promoting sustainable development.

A substantial increase in investment and international cooperation on technology is one of the keys to reaching consensus amongst developed and developing nations on a new global agreement. Up until now, however, the negotiations have focused on high technologies for reducing emissions in developed and industrialising countries and technology for adaptation has received little attention.

“The negotiations must ensure a coherent and coordinated approach to technology and adaptation under the new agreement, and dedicate the financing and institutional capacity necessary to support them”, said Sol Oyuela, policy expert from the CIDSE and Caritas networks. “The negotiating text which has come out contains some promising language which can be built on in this direction, but there still is a need for more focus on the adaptation technologies, vital for the future of those most exposed to the effects of climate change,” she added. Sustainable afforestation projects in the Satkhira district of Bangladesh demonstrate how communities in developing countries are successfully implementing adaptation technologies. These projects not only protect riverbanks from erosion in face of increasing floods, the fruit provides additional income for the local community and the trees contribute to mitigation by absorbing CO2.

Please find the report >>> here.

European U-turn on the poor as economic crisis grips

As poor countries face the full impact of the economic crisis, European governments are falling short by nearly €40bn on their aid promises, a new report from CONCORD, the European confederation of development NGOs reveals. As Development Ministers prepare to meet in Brussels next week, the 2009 Aidwatch report, Lighten the load: in a time of crisis, European aid has never been more important, shows that European governments will not meet their 2010 aid target until 2012 unless serious action is taken now. Many governments are still inflating their aid levels by counting money that does not reach poor people.

Official figures show that in 2008, Europe allocated 0.40% of its gross national income (GNI) to aid. However, the report shows that most European donors have provided misleading aid figures. Out of almost €50bn provided as aid in 2008, close to €5bn went to debt cancellation, €2bn to hosting foreign students and close to €1bn to hosting and repatriating refugees. Real European aid amounted to only 0.34% of collective GNI. Missed targets and non-genuine aid will mean poor countries will have missed out on nearly €40bn by 2010 – enough to increase the income of 380 million Africans living in absolute poverty by one quarter.

CIDSE, the international alliance of Catholic development agencies, member of CONCORD and contributor to the report, urges the European Commission to set the example stepping up efforts in EU development aid. CIDSE observes a consistent gap between the Commission’s stated objectives and policies, on the one hand and the reality of the implementation and resources actually devoted on the other. It also reckons the Commission needs to step up efforts on equality commitments, poverty focus of EC aid and aid effectiveness. “Europe can and must get aid right, it is a matter of justice,” Bernd Nilles, Secretary General of CIDSE, said. “Making aid work means hope, while failing to do so implies privation and grim perspectives for our future.”

UNCTAD: Debt moratorium and stimulus for poor countries needed

UNCTAD's Secretary-General called for temporary debt relief for countries hard-hit by the economic crisis, telling a UN meeting that world attention to the crisis must not wane, regardless of signs of recovery in wealthier nations. Debt-ridden developing countries already struggling with the economic crisis will be particularly hard hit if they do not receive some form of debt relief in the immediate future, Secretary-General Supachai Panitchpakdi said at the annual dialogue at ECOSOC among the World Bank, IMF, World Trade Organization, and UNCTAD on 27 April. A temporary moratorium on their official debt servicing would give them some breathing space. “In the current global crisis situation, both debtor and creditor countries would probably be better served if scarcer foreign exchange earnings in the debtor economies were used for the purchase of imports rather than for debt servicing," he told the meeting.

The developing world, beset by declining export earnings, diminished foreign direct investment (FDI), and reduced remittances from citizens working overseas, as well as by rising social and financial difficulties, will also take much longer to recover from the crisis than will developed countries, Supachai said. And if better-off nations indeed begin their recovery this year and next – as some are predicting – the current sense of urgency may fade away, along with laudable measures now under way to assist less-wealthy countries. Any monitoring mechanism designed to predict or avert future crises should therefore consider trends throughout the world economy, including in developing countries, and not just in the advanced economies, he urged.

Supachai also recommended that supplementary International Monetary Fund (IMF) cash should be used to stimulate and expand developing-country economies, as the US and other developed countries are doing for their domestic economies. The IMF should not compel governments to curb public spending or tighten monetary policy, which would have exactly the opposite effect, he said. UNCTAD is predicting a US$2tr financial shortfall for developing countries, along with a 30% drop in exports in some sectors. A decline in food production is also likely, as is a recurrence of food crises in some parts of the developing world.

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Trade unions call on IFIs to act quickly on G20 goals

The international trade union movement has called on the World Bank and IMF to use the opportunity of their spring meetings in Washington to accelerate efforts to stem the global collapse in employment and economic prospects. In a statement released by the ITUC and its Global Unions partners, trade unions warn that global unemployment could increase by 50 million people in 2009 unless the IFIs and governments take immediate action to implement the commitments made at the G20 London Summit.

The statement notes that among the groups most affected by the financial meltdown are workers close to retirement in countries that adopted mandatory privatized pension funds as advocated by the World Bank. Global Unions suggests that the Bank participate in providing compensation for the loss of retirement incomes suffered by these workers. The trade union statement emphasizes that job creation and public investment must be an essential part of all economic recovery strategies, and further proposes the reform of global governance systems to ensure that the world economy remains sustainable after the crisis. Noting that longstanding demands for governance reform of the IFIs remain unfulfilled, the statement urges both the World Bank and IMF to quickly and substantially increase the representation of developing countries in their decision-making structures. It also suggests that the IMF should monitor recovery programmes and advocate for stronger fiscal stimulus measures if current expansion plans prove insufficient.

In addition to outlining the international trade union movement's proposals for new financial sector regulation, including the nationalization of insolvent banks, the statement encourages the IFIs to promote active labour market policies, extend social safety nets, and invest in "green" projects to shift the world economy onto a low-carbon growth path. It calls on the IFIs to work with the International Labour Organization to find employment-driven solutions to the crisis, to support the proposed Global Jobs Pact at the upcoming International Labour Conference, and to cooperate in establishing a global Charter for international governance that would include all the major international labour, financial, trade and development instruments.

IMF lending still requires harmful and inappropriate economic conditions

The Center for Economic and Policy Research (CEPR) released a new paper that finds that the International Monetary Fund (IMF) is still prescribing inappropriate policies that could unnecessarily worsen economic downturns in a number of countries. The paper, Empowering the IMF: Should Reform be a Requirement for Increasing the Fund's Resources?, examines conditions tied to the IMF's new lending to El Salvador, Pakistan, Ukraine and other countries and finds the IMF is requiring macroeconomic conditions that can unnecessarily exacerbate the effects of the global economic recession on these countries.

Among the harmful conditions cited in the paper are agreements that unnecessarily tighten fiscal and monetary policy in countries facing declining output and negative external economic shocks. The IMF has at the same time advocated the passage of economic stimulus packages and expansionary monetary policy in developed economies such as the U.S., Europe, and Japan. "The main purpose of the IMF's lending and the increased resources for the Fund right now is supposed to be to help low-and middle-income countries do what the high-income countries are doing - stimulate their economies," said Mark Weisbrot, Co-Director of CEPR. "It defeats the purpose to require them to do the opposite."

The authors also find that Fund-supported policies may have contributed to the vulnerability of countries in the current crisis, as it did in the run-up to the Asian crisis a decade ago. The paper concludes that governments allocating new resources to the IMF should first ensure that there is sufficient reform of IMF governance and past IMF practices, and that accountability mechanisms are put in place at the Fund.