US spending cuts will hit also the South

The government spending cuts in the United States as the President and Congress fail to reach a deal will be felt not only by Americans but also the developing countries. This comes at a bad time as the rich economies are already on a downward path. Last week, the Organisation for Economic Cooperation and Development, the group of 34 rich countries, said that the gross domestic product of its members fell by an annual rate of 0.6% in the last quarter of 2012. The European Commission, meanwhile, predicted that the Euro-zone economies would contract by 0.3% this year, which could prove to be optimistic given the recent political uncertainties in Italy. The spending cuts in the US would add to the contractionary trend in the rich countries.

The continuously weakening of the Western economies will have adverse effects on exports, tourism, workers’ remittances and incomes in developing countries. There is another and more direct dimension to the “sequestration” on the developing world. The government’s spending cuts will affect the budget for aid given to poor countries and to development programmes such as provision of medicines and food, according to a report by the Inter Press Service (IPS).

The new secretary of state, John Kerry, revealed that the State Department and its aid agency USAID, would have to cut US$2.6bil (RM8bil) from their 2013 budget. The cuts would include $200m from humanitarian assistance and $400m from global health programmes. For example, the US would reduce its contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria by $300m this year, meaning there will be less medicine donated to poor countries. Kerry has written to Congress stating that this reduction would reduce the United States’ ability to provide food assistance to two million people and USAID would have to cease, reduce, or not initiate assistance to millions of disaster affected people, and would “gravely impede” efforts at reducing AIDS-related and child deaths.

The IPS report also quoted Jeremy Kadden of InterAction (an alliance of NGOs aiding developing countries) as saying: “These cuts will cost lives. We’ve made very significant progress over the past 10 years, with real people improving their lives, and this would set that process back enormously, devastating actual people on the ground.” He estimated that the budget cuts would lead to some three million children losing access to the basic education they currently receive; two million people would suffer reductions in or stop receiving food aid, while 600,000 children would lose nutrition assistance. Unlike in the United Kingdom, where the Cameron government decided not to cut its aid budget despite huge slashing of the overall government budget, there is no exemption for overseas spending in the US sequestration exercise.

The poor in America will also be affected. About 600,000 low-income women and children will stop receiving food aid. Also affected in the $26bn cut in domestic programmes are health, education, drug enforcement, national parks and Hurricane Sandy relief. Low-income families will also be affected by a cut in public housing subsidies, which could hurt about 125,000 poor families, according to The Guardian. The National Institutes of Health, which will suffer a 5% budget cut, is cancelling hundreds of research grants. Another $16bn in mandatory spending will be cut, including in medicare, agriculture programmes and unemployment benefits.

* Excerpt of the weekly ‘Global Trends’ column of Martin Khor >>> here.

The Big 10: Behind the Brands campaign

The social and environmental policies of the world’s ten biggest food and beverage giants are not fit for modern purpose and need a major shake-up, says international agency Oxfam. The “Big 10” food and beverage companies – that together make $1bn a day – are failing millions of people in developing countries who supply land, labour, water and commodities needed to make their products. Behind the Brands – part of Oxfam’s GROW campaign to fix the broken food system – for the first time ranks the agricultural policies, public commitments and supply chain oversight of Associated British Foods (ABF), Coca Cola, Danone, General Mills, Kellogg’s, Mars, Mondelez, Nestlé, Pepsico and Unilever.

ABF (19%), Kellogg’s (23%) and General Mills (23%) scored most poorly. They have weaker policies than Coca-Cola (41%), Unilever (49%) and Nestle (54%) for example. “Some companies recognize the business case for sustainability and have made important commitments that deserve praise” says Jeremy Hobbs, Executive Director for Oxfam International. “But none of the ten biggest food and beverage companies are moving fast enough to turn around a 100-year legacy of relying on cheap land and labour to make mass products at huge profits, with unacceptably high social and environmental costs. No company emerges with a good overall score. Across the board all ten companies need to do much more. ”

The Behind the Brands campaign reveals:
● While some of the “Big 10” have publicly committed to women’s rights, none have committed to eliminating discrimination against women throughout their supply chains.
● None of the companies have adequate policies to protect local communities from land and water grabs, despite all of them sourcing commodities plagued by land rights violations, such as palm oil, soy and sugar. Not one company has declared ‘zero tolerance’ against land grabs in their supply chains
● All ten companies are overly secretive about their agricultural supply chains, making their claims of ‘sustainability’ and ‘social responsibility’ difficult to verify. Nestle and Unilever are most open about the countries they source from, but no company is providing enough information about their suppliers.
● Companies are generally increasing their overall water efficiency but most have failed to put policies in place to limit their impact on local water sources. Only Pepsi has publicly recognized water as a human right and committed to consult local communities. Nestle has developed guidelines for its suppliers to manage water and was ranked top for policies on water.
● All of the companies have taken steps to reduce direct emissions, but only five – Mondelez, Danone, Unilever, Coca-Cola and Mars – publicly report on agricultural emissions associated with their products. Unilever alone has committed to halve its greenhouse gas footprint by 2020. None have yet developed policies to help farmers in their supply chains to build resilience to climate change.
● None have publicly committed to pay a fair price to farmers or fair business arrangements with them across all agricultural operations. Only Unilever – which is top-ranked for its dealings with small-scale farmers – has specific supplier guidelines to address some key issues faced by farmers.

According to Oxfam, it’s time these companies take more responsibility for their immense influence on poor people’s lives. 80% of the world’s hungry people work in food production and these companies employ millions of people in developing countries to grow their ingredients. They control hundreds of the world’s most popular brands and have the economic, social and political clout to make a real and lasting difference to the world’s poor and hungry. “Analyzing their social policies is an important first step. These policies indicate a company’s intent to do good. They are ultimately how consumers and producers can begin to hold them to account. No brand is too big to listen to its customers. If enough people urge the big food companies to do what is right, they have no choice but to listen. By contacting companies on Twitter and Facebook, or signing a petition to their CEO, consumers can do their part to help bring lasting change in our broken food system by showing companies their customers expect them to operate responsibly.”

The ‘Behind the Brands’ campaign has been launched in more than 12 countries including the US, Mexico, China, Brazil and across Europe. Its first public action will target Nestle, Mondelez and Mars for their failure to address inequality faced by women who grow cocoa for their chocolate products. Oxfam is urging the three companies to do more to know and show how women are treated in their supply chains, create an action plan to address inequality for women in their supply chains and engage in advocacy to influence other powerful actors to do the same.

Oxfam has engaged with all 10 companies during the last year who have cooperated in providing data to inform this scorecard. The scorecard will be updated if companies change their policies. Oxfam rated the companies on their policies on seven topics: how they ensure the rights of the workers and farmers who grow their ingredients, how they protect women’s rights, management of land and water use, climate change and the transparency of their supply chains, policies and operations. It did not review other important policies such as those dealing with nutrition, tax and waste, for example.

>>> More information about the campaign >>> here.
>>> Download of the study >>> here.

European perspective on post-2015 goals

The European Commission has published a Communication this week, proposing a change to the EU’s global poverty strategy after 2015 by integrating environmental sustainability and poverty eradication efforts into a single agenda. With the Communication, entitled A decent life for all: Ending poverty and giving the world a sustainable future, the Commission is reclaiming a role in the ongoing debate aiming at a new generation of development goals for the time after 2015 when the MDGs expire. The document should ensure a unified EU positions in the negociations.

However, after the recent cuts in the development budget of the block NGOs remain sceptical. For CONCORD, the European confederation of Relief and Development NGOs, representing over 1,800 NGOs to the European institutions, the EU is is right to recognize that development and environmental sustainability are two sides of the same coin. Yet CONCORD Director, Olivier Consolo can find only few new proposals for “how we’ll actually achieve sustainable development that benefits everyone and especially the extremely poor”. “The Commission also wants an agenda whose goals apply globally, not just to developing countries, which is welcome” says CONCORD. “However more clarity is needed on what changes the EU and richer countries would have to make themselves to fulfil this agenda.” CONCORD believes the Communication is extremely light on accountability mechanisms to ensure leaders and countries fulfil their commitments. The poverty and sustainability challenges set out in the Communication need to be met with real commitment to the changes needed if the EU wants to be taken seriously by the international community.

In September 2013, a UN special event will take stock of the efforts made towards achieving the Millennium Development Goals (MDGs), discuss ways to accelerate progress until 2015 and start exchanges on what could follow after the MDG target year of 2015. The UN Secretary General Ban Ki-moon asked the UN High Level Panel on the post-2015 development agenda to which European Commissioner for Development Andris Piebalgs is a member, to prepare a special report, to be presented by the end of May.