Mark Weisbrot and Jomo Kwame Sundaram on closing the development gap

Strauss-Kahn backs ITUC unemployment analysis

As the World Bank, the International Monetary Fund (IMF) and G20 finance ministers meet this weekend to discuss the state of the global economy and priorities for development cooperation, the international trade union movement is calling on the international financial institutions (IFIs) to change course in their policy directions and to pay as much attention to employment deficits as they do to fiscal deficits by taking coordinated action to support job creation as well as education and skills training.

Parallel to these meetings, ITUC General Secretary Sharan Burrow took part in a debate in Washington with IMF Managing Director Dominique Strauss-Kahn on Wednesday to voice trade union views about the IFIs’ responsibility to adopt economic recovery programmes consistent with a more equitable and sustainable growth and development model. Emphasizing the failure of G20 countries to reduce the number of unemployed, which is currently at the highest level ever recorded, Burrow said: “The G20 in 2011 must mark the defining moment that things start to change, or otherwise the world will see just another failure in global governance.” She challenged the G20 and all IMF member countries to incorporate employment targets into national economic programmes and to work in establishing a global social protection floor, for which she invited the IMF and the ILO to jointly develop sustainable financing mechanisms. Burrow further urged the IMF to recognize “the growing political momentum in favour of financial transactions taxes” and to support the FTT so that the financial sector makes a contribution to public revenue “to match the costs it imposes each time it triggers a crisis in the real, productive economy.” (>>> Burrow’s speech)

At the debate, Strauss-Kahn noted the record levels of unemployment and inequality and stated: “Just as we managed to tame inflation in the 1980s, this decade should be the one that takes full employment seriously once again.” To combat growing inequality, Strauss-Kahn emphasized the importance of “strong social safety nets combined with progressive taxation … investment in health and education, and collective bargaining rights … especially in an environment of stagnating real wages.” He spoke of the joint work that the IMF has undertaken with the ILO in the past year and said that “employment and equity are the building blocks of stability and prosperity,” which go “to the heart of the IMF’s mandate.” (>>> Strauss-Kahn’s speech)

End the US-led armed intervention in Libya

Statement of Focus on the Global South

Focus on the Global South supports the democratic opposition in Libya that seeks to end the 43-year-old dictatorship of Muammar Gaddafi. Focus shares the Libyan people’s desire to be free of a corrupt and repressive ruler who does not hesitate to employ massive force against his own people to hang on to power. Focus cannot, however, support the massive armed intervention launched by the United States, France, and Britain on Sunday, 20 March.

A “No Fly Zone” to protect civilians is one thing. An armed assault aimed at regime change is another thing altogether. The latter is the intent of the US/UK/French-led intervention, which, although displaying the fig leaf of a United Nations Security Council resolution, goes far beyond the defensive aims of a no-fly zone to cross over into aggression against Libya.

Firing on ground troops and pre-emptively and indiscriminately destroying anti-aircraft installations will bring about precisely that loss of life that the intervention ostensibly seeks to prevent. Civilians are being killed by the western assault when civilians were supposedly the very people the action was supposed to protect.

The fight for democracy waged by the Libyan people must be supported, but not by western military action that is an instrument of regime change. This action may ostensibly have humanitarian objectives, but its main objective is to reassert western hegemony in a region that is caught up in the winds of democratic change.

Owing to its support for authoritarian regimes in the Middle East, the US has lost much of its credibility among the Arab peoples. Indeed, the US may be said to be one of the targets of the Arab democratic revolution. In this context, the intervention in Libya for regime change is Washington’s belated attempt to appear as a pro-democratic force, shore up its tattered legitimacy, and remind the Arab nations of its strategic hegemony in the region. Yet the world will not miss the hypocrisy of a hegemony which shouts that it is supporting democracy in Libya while it stands on the side as a reactionary regime it has armed and supported, Saudi Arabia, has invaded and is crushing democratic forces in Bahrain.

The West’s “armed intervention for democracy“ will not advance the cause of democracy. Indeed, it will discredit it by associating democracy with a western show of force. The intervention in Libya risks stoking forces as powerful as the democratic movement: Arab nationalism and Islamic solidarity. It will end up creating conflicts among movements which should be complementary, and the only victor will be western hegemony.

We in Focus on the Global South call for an immediate end to the US/UK/French-led war on Libya.

We call on global civil society and on governments throughout the world to support the Libyan people’s struggle for democracy against Gaddafi.

We ask especially the democratic movements in Tunisia and Egypt to come to the aid of the Libyan people.

We call for an end to all efforts to maintain or reassert US hegemony in the Middle East.

22 March 2011

Deutsche Bank cancels interest in Jaitapur Nuclear Project India

India’s Nuclear Power Corporation (NPCIL) encounters difficulties in raising funds for a new nuclear plant situated in an earth quake prone zone. Earlier this year, the company invited over a dozen large banks from around the world to participate in financing the construction of the world’s largest nuclear complex near the town of Jaitapur in Western India. While Germany’s Commerzbank turned down this invitation, other international banks such as BNP Paribas, Crédit Agricole, Citibank and Deutsche Bank expressed interest in participating in the project.

Last week, people close to the situation confirmed to NGOs, enquiring about the possible role of Deutsche Bank in this project, that Deutsche has decided to cancel its participation in the bidding process for Jaitapur. “We welcome this decision of Deutsche Bank and call on other banks to follow suit,” says Heffa Schuecking, director of the German environment and human rights organization ‘urgewald’. Jaitapur is one of the world’s most controversial nuclear projects as it is located in a high risk zone for earthquakes. Only 17 years ago, an earthquake of over 6.3 on the Richter scale took place in the vicinity, killing some 9,000 people.

The Indian Government, however, ignored these risks during site selection for the project. According to Karuna Raina of Greenpeace India, “India not only has an alarming track record regarding nuclear hazards but also a complacent safety culture.” She points out, that in 1994 for example, the containment of the Kaiga nuclear power plant in the Indian State of Karnataka collapsed due to flawed construction. “It is astonishing that after ‘Fukushima’, the Indian government is still willing to gamble on Jaitapur being different. Responsible banks should back away from such highly irresponsible projects, especially when located in a earthquake zone; we expect banks to learn at least that lesson from the disaster in Japan” warns Yann Louvel, climate and energy coordinator of the international NGO network BankTrack.

Among the other banks that have been approached to finance Jaitapur are HSBC, Standard Chartered, Société Génerale, Crédit Agricole, Citibank and Santander. Financial advisor for the project is BNP Paribas. BankTrack, Greenpeace and urgewald have written to all banks asking them to dissociate themselves from this project.

Trade Union letter: G20 Finance Ministers on wrong track

Trade unions are demanding a fundamental change in direction from the G20 Finance Ministers, who are ignoring the desperation of hundreds of millions of people without decent jobs or social protection. The union concerns are set out in a letter being sent by national trade union centres in G20 countries to their Finance Ministers. According to the International Trade Union Confederation (ITUC), jobs with fair wages are central to achieving economic recovery, but the G20 Finance Ministers are doing nothing to promote employment, focusing instead on keeping financial markets happy and allowing banks to regain control of the economy. They will have to do much better than this when they meet again in Washington in mid-April.

“The promises made by the G20 leaders at the beginning of this crisis to avoid a jobless recovery are not being followed through. Ministers dealing with labour and development issues cannot realise the ambition for sustainable job growth while their Finance Ministry colleagues are pushing in the opposite direction. We are looking to the French G20 Presidency to help fix this deepening incoherence in international policy. The alternative would be yet more inequality, massive youth unemployment and a stagnating global economy, with terrible social consequences,” said John Evans, General Secretary of the Trade Union Advisory Committee to the OECD.

Please find the letter >>> here.

Appeal to G20: Stop Gambling on Food & Hunger

More than 100 civil society organizations from all over the world have sent an appeal to the G20 Finance Ministers meeting this weekend under the French presidency in Paris. The appeal urges the G20n for immediate action on financial speculation on food commodities. The document says:

Over the past few years, price hikes in basic foods have created dramatic shortages in many of the world’s poorest countries. In 2008, the world saw a major crisis with skyrocketing prices over a short time span for crops like rice, wheat and corn. Food riots erupted in 25 countries and more than 100 million people were added to the world’s undernourished and starving.

Now, with food prices rising again, a similar crisis could be just around the corner. We urge political leaders and heads of government in the European Union, United States and elsewhere to act immediately to avoid the repetition of such a scenario. While developing solutions to hunger and malnourishment in the world is a huge challenge, reining in financial speculation on agricultural commodities is of paramount importance. With global financial markets still in turmoil, agricultural commodity ‘futures’ have become increasingly attractive to financial investors and speculators. Enormous amounts of capital are flooding these markets, causing sudden food price spikes that can be lethal for low-income families in developing countries. Increased volatility caused by the influx of ‘hot money’ into and out of commodity markets is also causing havoc for farmers, who cannot predict what price their crops will command from one month to the next.

At the moment, action to crack down on excessive speculation in commodity markets is being considered in the US and EU, and in both places there are opportunities to implement reforms that would stabilise food prices. The G20 governments have also identified it as a top priority. This political context represents an historic opportunity to secure a sustainable relationship between financial markets and agricultural markets.

The financial services industry has already spent billions of Euros trying to persuade governments not to limit speculation. These lobbyists represent a small but powerful group of vested interests who are profiting from an activity that is fundamentally harmful to the vast majority of people.

We call on governments and parliamentarians to listen instead to the millions of consumers, workers, farmers, businesses, religious groups, academics, international development activists and others who believe effective controls over financial speculation on agricultural commodities is necessary to defend the world’s poorest people and the world’s food producers from exposure to sudden food price hikes and extreme price volatility.

Rules are needed in several key areas. These include ensuring full transparency and supervision of financial markets in food commodities, imposing strict limits on the level of participation by purely financial actors in commodity futures markets, and banning financial institutions from buying up physical stocks in food and farmland.

This is an urgent matter. Not only because of the live discussions in the US, EU and G20, but mostly because prices in agricultural and food markets are becoming more volatile with each passing month. Unless steps are taken to stop excessive speculation, it is only a matter of time until a disastrous new chapter in the global food crisis begins.

* Please find the signatories >>> here.

Finance Ministers in Paris: Early acid test for G20

The world’s leading economies must act now to stop the price of basic foods from surging further out of the reach of poor people. They must also commit to a Financial Transaction Tax (FTT) to help millions of people hit by the economic crisis and climate change. International agency Oxfam has welcomed the promise of action on these issues from France, the current G20 chair. Oxfam says that this week’s Finance Ministers’ meeting in Paris, on Feb 18-19, is an early acid test as to whether the G20 can turn words into action.

“Finance ministers will define the G20’s development credentials this weekend. They could make or break Sarkozy’s pledges to tackle the food price crisis and push through an FTT,” said Oxfam spokesperson Luc Lampriere. “The G20’s money ministers must now plan how exactly they will deliver on these promises – or otherwise G20 leaders will be left looking like emperors with no clothes.” Oxfam is seeing mounting impacts on poor people as a result of the economic crisis and food price hikes. Countries are being affected differently, but in general poor people are having to spend more of their limited income on food, and are therefore eating less, less often, and in some case less nutritious food. “We see anecdotal evidence of people slipping into food insecurity and malnourishment,” Lampriere said.”We hear about affected rural communities cutting back on health spending and having to sell productive animals earlier than they normally would in order to buy food.”

On a Financial Transaction Tax, Oxfam says: “This is the zeitgeist tax, a popular and progressive policy worth as much as $400bn a year. It would be small change from those who can most afford it but make a big difference to those who most need it. A financial transaction tax would be like a breath of fresh air clearing away the stench of bankers’ bonuses and offering hope to those trapped by the economic crisis,” he said. Oxfam is calling for an average tax of 0.05% on share, currency, bond and derivative deals. Recent research for Oxfam shows that 56 of the poorest countries in the world face a combined $65bn hole in their budgets as a result of the economic crisis. Oxfam also wants the G20 to endorse a recent finding by the UN High Level Advisory Group on Climate Finance (AGF), that at least $12 billion a year can be raised from levies on international transport, particularly on shipping.

WSF 2011: Getting to grips with landgrabbing

By Gisele Henriques*)

At the 10th World Social Forum, the issue of land grabbing has undoubtedly emerged as one of the most discussed among the hundreds of civil society organisations which have come to Dakar to mobilise and share experiences on their respective struggles. Official data on land grabbing and its magnitude remains elusive and the actual numbers of hectares involved is contested. The FAO estimates that of the land grabs taking place today about 70% is occurring in Africa, the same continent facing the greatest food security challenges. In response CIDSE member Misereor, together with Caritas Senegal, FIAN and NAD sponsored a three day event with partners from Africa, Asia and Latin America, to expose the realities behind this phenomenon and the consequences for local communities.

There are various forces driving the scramble for land. Mining and appropriation of forest resources are not particularly new occurrences. Neither is the acquisition of land by international corporations for plantations, such actions were common in Latin America in the 70s and 80s. What is different now is the rate in which it is happening and the fact that land grabbing is being sanctioned in the name of supporting a green economy. Evidence suggests that one third of the land grabs today are going for the production of agro-fuels, most notably jatropha, maize and sugar for ethanol. These will be supplied to meet the EU’s commitment of blending at least 10% agro-fuels to reduce the use of non-renewable energy sources. According to Ruth Hall of the Institute for Poverty, Land and Agrarian Studies in South Africa, some 5 million hectares have already been grabbed in Africa, to satiate Europe’s thirst for ‘green’ energy. Whilst reduced dependence on non-renewable energy sources is a worthy cause, the commitment has created a business for agro-fuels. This business is having disastrous consequences for small farmers who are being pushed off their land and loosing access to their resources, livelihoods and capacity to feed themselves. It is estimated that the amount of corn used to fill a 4x4 could feed an adult for a year.

In addition to agro-fuel production which displaces food production, oil rich nations and Asian economic powers like China and Korea, are acquiring land to produce food for their own populations. The World Bank estimates that 37% of all the land grabbed globally is going to supply these markets. The land grabbing process is largely legal and is usually sanctioned by governments, who have been encouraged to attract foreign investment if they are to develop”. Globally, there is a generally accepted notion that Africa is a “sleeping giant”, a continent not yet maximizing its economic potential. Land is widely deemed as an abundant resource which could be traded and commoditized to meet the demands of the international market, in turn eradicating poverty in the continent. Evidence suggests just the opposite is taking place. Small farmers, who are deemed unproductive by their government, are finding themselves squeezed off their land and forced into contract servitude. This so-called, ‘empty and vast’ territory is actually their land, which they steward for future generations. Examples for Madagascar, DRC, Benin, Uganda, Nepal, Cambodia, Brazil and Argentina demonstrate that this phenomenon is taking place all over the world.

*) Gisele Henriques is CIDSE Policy and Advocacy Officer on Food, Agriculture and Sustainable Trade (FAST)

New European Social Watch Report: Time for Action

The second European Social Watch Report was launched in Brussels with a roundtable discussion at the European Parliament. The event was chaired by Irish MEP Proinsias De Rossa, who was labour minister and head of country delegation to the Social Summit in 1995, when Social Watch was created. From its mere title, “Time for Action: Responding to Poverty, Social Exclusion and Inequality in Europe and Beyond”, the European Social Watch report reflects the Egyptian political crisis as a true demonstration of its findings.

The report points out that 17% of people in the European Union live below the poverty line. Social Watch looks at Europe's approaches to addressing poverty, social exclusion and inequality both inside the EU and in the wider world. The report examines the issues from different angles, including employment, healthcare, housing and financial exclusion. Since “one child in five is born and grows up with economic and social deprivation” and “twenty per cent of young people are currently living at risk of poverty in the EU”, Mirjam van Reisen argues in the report summary that the policies in place to address poverty and social exclusion are “weak” and “have come under pressure in the aftermath of the financial crisis”.

“The fiscal constraints that developing countries have experienced in previous decades resulting from IMF policies are now confronting European countries” says the report, and as a consequence “the ability of governments to implement their national and international obligation to guarantee social security has been compromised”. Social Watch Europe analyses the reality for groups of people particularly vulnerable to poverty and social exclusion, such as migrants and the Roma. Special attention is given to gender and poverty, as well as the young and old who are more vulnerable to social exclusion. It concludes by calling for a universal standard for social protection. It also concludes that if the EU is to play the global role that it claims then the EU must also establish its own “social floor”.

The Report is available >>> here.

World Social Forum 2011 Dakar: A new direction to tackle global challenges

The world needs a new direction, rather than small course-adjustments. This motto brings CIDSE, members and partner organisations from around the globe to the 2011 World Social Forum (WSF) in Dakar. Between 6 and 11 February the international alliance of Catholic development agencies and partners will discuss the profound changes needed to tackle issues such as hunger, climate change and global financial instability. The World Social Forum offers an alternative and more democratic model of leadership, where people are at the heart of solutions to global challenges.

“Governments have not put in place just and adequate policies to tackle the multiple crises the world faces”, said Bernd Nilles, Secretary General of CIDSE who will attend the forum. “Rising food prices, unresolved climate negotiations, global economic imbalances... they are all symptoms of our failure to act on global challenges. The World Social Forum demonstrates that people want the world to take a new course. It is time that politicians sit up and listen to their ideas.”

The World Social Forum (WSF), designed as an alternative to the World Economic Forum, provides a powerful antidote to a system which puts money rather than people first. In Dakar, CIDSE, its members, and partner organisations will join thousands of people from all over the world to plot out strategies to achieve pro-poor policies in the short term, and find answers to fundamental questions for our future.

More than 250 Economists Call for Trade Reforms to Allow Capital Controls

In a letter delivered 31 January, more than 250 economists urged the Obama administration to reform US trade rules that restrict the use of capital controls. The statement reflects growing consensus among economists that capital controls, while no panacea, are legitimate policy tools for preventing and mitigating financial crises. Signatories include several economists who have been generally supportive of free trade but are critical of the capital control restrictions (e.g., Arvind Subramanian, Senior Fellow of the Peterson Institute for International Economics and Nancy Birdsall, President of the Center for Global Development), as well as former IMF officials (e.g., Olivier Jeanne of Johns Hopkins University) and a Nobel laureate (Joseph Stiglitz).

The United States has trade or investment agreements with 52 countries that restrict the use of capital controls and allow private foreign investors the right to sue governments that violate these restrictions. Several additional deals are in the works, including:
* U.S.-South Korea free trade agreement. Status: pending congressional approval.
* Trans-Pacific Partnership. Status: Trade negotiators from the United States and eight other countries will meet for a 5th round of talks in Chile on 15 February.
* Investment treaty with China. Status: The U.S. government is expected to soon complete a review of its model Bilateral Investment Treaty (BIT), which will accelerate negotiations with China, India, and several other countries. Presidents Obama and Hu “reaffirmed their commitment” to these ongoing negotiations in a 19 January joint statement.

Kevin Gallagher, Boston University professor and research associate at the Global Development and Environment Institute at Tufts University (GDAE), and Sarah Anderson, director of the Institute for Policy Studies Global Economy Project, initiated the statement. In 2009, Gallagher and Anderson examined this issue as members of the Investment Subcommittee of the State Department's Advisory Committee on International Economy Policy. “It’s in the US interest to allow other governments the authority to apply sensible capital controls,” says Anderson. “In a globalized world, expanding the policy options to combat financial crisis makes sense for US businesses, workers, and the environment.” “US trade treaties are inconsistent with the emerging consensus in the economics profession and among the international financial institutions that capital controls are a legitimate part of the toolkit,” says Gallagher. “The US and its trading partners should have all the possible tools available to prevent and mitigate future financial crises.”

>>> Click here for the full statement and list of endorsers.

Global Wage Report: Call for collective bargaining, minimum wages and social protection

The just published second ILO’s Global Wage Report 2010/2011, Wage policies in times of crisis, confirms that global wages have stagnated during the crisis. Excluding questionable figures for China and adjusting for inflation, global wage growth slowed from 2.2% in 2007 to only 0.8% in 2008 and 0.7% in 2009. While these world averages remained slightly positive, wages actually decreased in many countries. The International Trade Union Confederation (ITUC) has welcomed the Report. “Today’s report reinforces what unions around the world have been saying about the economic crisis and the policy responses that governments need to put in place,” said ITUC General Secretary Sharan Burrow. “Even workers who remained employed during the crisis experienced flat or falling pay.”

Over-reliance on exports and consumer borrowing for economic growth has proven to be unsustainable. To achieve a meaningful economic recovery, countries need to increase domestic demand based on rising wages and a more equal distribution of income. The ILO emphasizes three policy solutions in today’s report: inclusive collective bargaining, legislated minimum wages, and social protection programmes.

In addition to providing new data on wages during the crisis, the report also presents a longer-term analysis of low pay, defined as being below two-thirds of a country’s median wage. Since the late 1990s, the incidence of low pay has increased in two-thirds of the countries for which figures are available. However, the ILO found that low pay is much less prevalent in countries with higher levels of union membership. “Unions are part of the solution, in terms of ensuring that wages rise along with productivity and that these gains are shared fairly,” said Burrow.

* See also >>> Making the case for progressive universalism

Foundation for climate deal laid in Cancún

Governments at the UN climate talks in Cancún, Mexico, managed to approve a series of tangible if modest steps that sets up a "global climate fund" to help poor nations, create a mechanism to share clean technologies, protect tropical forests and help the poor adapt to impacts ranging from storms to rising sea levels, according to the International Union for the Conservation of Nature (IUCN). The UN climate talks are off the life-support machine, following a last-minute agreement that gives the Kyoto Protocol a lifeline, says international agency Oxfam.

The deal’s Climate Fund will be designed by a committee with a strong voice for developing countries, which should ensure that life-saving finance will be delivered to those who are most vulnerable to the effects of climate change. The Climate Fund will be a major channel for adaptation finance, helping to plug the gap in adaptation funding, so that vulnerable communities have the resources they urgently need. Meanwhile, the emissions cuts pledged after Copenhagen have been set as a minimum, with an expectation to raise them according to the demands of climate science.

Oxfam International’s Executive Director Jeremy Hobbs said: “Negotiators have resuscitated the UN talks and put them on a road to recovery. This deal shows the UN negotiations can deliver.” But many of the most difficult issues remain. According to Oxfam, we will not be able to offer a safe future for vulnerable women, men and children unless governments realize that we swim together or sink together. Our challenge is to elevate our vision and commit to the deep emissions cuts that are urgently needed.

“The progress in Cancún puts talks back on track and revives hopes that a wider, legally binding treaty that sets concrete and credible targets to reduce harmful greenhouse gas emissions is possible in the future,” also says Stewart Maginnis, IUCN’s Director of Environment and Development. "Under Mexico’s strong leadership and guidance, governments in Cancun have ensured that confidence in the UNFCCC process is being rebuilt, which brings us a step closer to that final deal.”

Adaptation, finance and Reducing Emissions from Deforestation and forest Degradation (REDD) were some of the key issues the 194-nation talks moved forward on. According to IUCN, today’s deal is a move in the right direction, but in the end, only an equitable, comprehensive and legally binding agreement will bring the much needed international commitment to manage the climate crisis.

The inclusion of REDD as part of the Cancún deal is a key step towards resolving the issue of climate change, says IUCN. Other NGOs have strongly opposed it. However, “reducing greenhouse gas emissions, while at the same time conserving forest natural resources on which millions of vulnerable people depend is a win-win solution for people and nature,” says Maginnis. “It has been one of the most promising developments in the negotiations so far, and now this further push by governments makes REDD an integral part of the climate deal.” IUCN welcomes the recognition of women within the deal struck on REDD. Women make up 70% of the world’s poor and provide up to 90% of the food in forest-dependent communities. They depend on forest resources for gathering fuelwood, forest fruits, vegetables and medicines.

Civil society and trade unions on EU-India Free Trade Agreement

As the EU-India Summit meets in Brussels today, civil society organisations and trade unions have reiterated their views on a draft free trade agreement. A broad civil society alliance called on the European Commission and the Indian Government to immediately halt the ongoing free trade negotiations between India and the EU. More than 240 concerned civil society groups signed an open letter, in which they warned that the talks would damage the livelihoods of millions of people in both India and Europe, exacerbating poverty and undermining economic and social development.

The proposed agreement would undermine people’s rights to food, to health and to gender just and social development. “The EU persistently puts pressure on India to open up its market to European dairy and meat products, while the EU continues to export these products at prices far below production costs with the help of subsidies”, said Armin Paasch, trade expert of the German Catholic Bishops’ Organisation for Development Misereor. “Around 90 million people are working in the dairy sector in India, most of them being small scale farmers or herders and 70 percent being women. Their livelihoods would be severely threatened if subsidized EU exports are permitted to flood the Indian market”, said Paasch.

Tightened intellectual property rights (IPR) would limit India’s ability to provide affordable medicines for the treatment of HIV-AIDS, malaria and cancer, not only for Indian patients but worldwide. “It is outrageous for Europe to undermine the Indian drug industry’s capacity to provide affordable and safe medicine to the poor. Despite massive protests the EU continues to insist on data exclusivity and other provisions, which would hinder timely production and delivery of generics”, said Rebecca Varghese Buchholz, trade policy advisor at Traidcraft, UK. “This example illustrates the corporate capture of the negotiation agenda: public health objectives are pushed aside in the interest of pharmacy industry profits.”

Representatives from Indian and European civil society groups claim that the behind-closed-door negotiations must be made more transparent – and be accountable to wider interests in society. “The EU-India summit is another example of the lack of transparency and undemocratic nature of the negotiations. Neither civil society groups nor Members of the European Parliament are allowed to attend the annual summit of political leaders from either region. At the same time, the 11th EU-India business summit will be held bringing together the European and Indian high level business and political representatives to network and shape a joint agenda,” explained Ska Keller, Member of the European Parliament. “This is unacceptable; the broad resistance against the FTA shows that people on both sides are no longer willing to leave the decision-making on their future in the hands of the business and political elite.”

The EU-India summit coincides with the official international human rights day. As civil society, “we believe that December 10 presents a timely opportunity to halt free trade talks until coherence of all provisions with human and women rights obligations can be guaranteed”, urged Barbara Specht, advocacy officer of the gender network WIDE. “Instead of profit interests the negotiations should be guided by gender and social justice and sustainable development objectives.”

“As we have said since talks started in 2007, any agreement must contain a comprehensive and effective chapter on sustainable development entailing the commitment of both parties to the attainment of decent work, including respect for fundamental workers’ rights,” insisted ITUC General Secretary Sharan Burrow. “A social chapter is essential so that an agreement could lead to growth, development and the creation of decent and productive employment,” stated ETUC General Secretary John Monks. “And trade unions must have rights and mechanisms to be able to raise issues under the procedures of the agreement.”

“The impact on the textiles sector stands to be particularly great unless effective measures to protect workers’ rights,” said ITGLWF General Secretary Patrick Itschert. “Our Indian and European affiliates are united in insisting on a strong social chapter.” Trade unions are also concerned at proposals to include provisions on the temporary cross-border movement of workers in the agreement – unions have always stated that trade agreements should not contain provisions to regulate migration. Should any such articles nonetheless be included, these must provide for full respect for national labour law and existing collective agreements in order to ensure that migrant workers receive employment conditions no less favourable than those of nationals.

Reflection group on global development launched

An alliance of civil society groups, networks and foundations, including Third World Network, Social Watch, DAWN, the Friedrich-Ebert-Foundation, Global Policy Forum, terre des hommes, and the Dag Hammarskjöld Foundation, has launched the Civil Society Reflection Group on Global Development Perspectives. The group (>>> www.reflectiongroup.org) consists of about 15 leading civil society activists, experts and academics from around the globe. The group will assess conventional and alternative models of development and well-being, reconsider development goals and indicators, including the Millennium Development Goals (MDGs), draw conclusions for future development strategies and provide specific policy recommendations for the UN Conference on Sustainable Development 2012.

The Group starts its work at a crucial point in time – fast approaching the 2015 deadline for the MDGs, while preparing for the 2012 Conference on Sustainable Development. Today’s unprecedented coincidence of global crises – economic, financial, food and climate – reveals the dead end to which the dominating models of development have led. “It is now time to break old ground, to draw lessons from these crises and to fundamentally rethink our goals and measures of development and social progress – in North and South”, says Jens Martins who is a group member. “The time between the Summits 2010 and 2012 provides a unique window of opportunity to reconsider the current development paradigm and to develop strategies towards a holistic, rights-based approach of global development and well-being.”

Four meetings of the Reflection Group are scheduled to take place throughout 2011. The expected outcome will be presented in a report to be published prior to the 2012 UN Conference on Sustainable Development.

Group Members
Barbara Adams (Global Policy Forum, US), Beryl d’Almeida (Abandoned Babies Committee, Zimbabwe), Alejandro Chanona Burguete (National Autonomous University of México), Chee Yoke Ling (Third World Network, China), Ernst Ulrich von Weizsaecker (Germany), Filomeno Santa Ana III (Action for Economic Reforms, Philippines), George Chira (terre des hommes India), Gigi Francisco (Development Alternatives with Women for the New Era, Philippines), Henning Melber (Dag Hammarskjöld Foundation, Sweden), Jorge Ishizawa (Proyecto Andino de Tecnologias Campesinas, Peru), Karma Ura (Centre for Bhutan Studies, Bhutan), Roberto Bissio (Third World Institute/Social Watch, Uruguay) Victoria Tauli-Corpuz (Tebtebba Foundation, Philippines), Yao Graham (Third World Network-Africa, Ghana), Jens Martens (Global Policy Forum Europe, Germany), Hubert Schillinger (Friedrich-Ebert-Foundation, Germany), Danuta Sacher (terre des hommes Germany)

ActionAid International: G20’s temporary ceasefire

As the G20 in Seoul discussed the ‘currency wars’, ActionAid International called on world leaders to remember the poor and vulnerable that will be most affected by their decisions. Soren Ambrose, ActionAid International’s International Finance policy expert said from Seoul: “The G20 leaders may sign a temporary ceasefire in Seoul, but the ‘currency wars’ will persist. Leaders must acknowledge that a ‘system’ of massive deficits, surpluses, and accumulation of dollar reserves, with developing countries subsidising the US economy, is simply no longer sustainable.

According to Ambrose, the casualties in this war will be the developing countries that can’t defend against hot money flows and the threat of rising prices. The G20 leaders must act now to aim for a lasting peace by examining new proposals for a neutral world reserve currency that can end the distortions before next year’s summit.

Trade unions see mixed outcome of G20 Seoul Summit

Trade unions have welcomed the recognition by the G20 that decent jobs are at the heart of the recovery and their commitment to provide social protection for the most vulnerable, while expressing deep concern about the global consequences of premature austerity measures. “Unions now want to see real action to fix the bitter and unprecedented social crisis of global unemployment between now and the G20 meetings in France in 2011, and remain opposed to slashing fiscal deficits in the short-term before employment is back on track,” stated ITUC General Secretary Sharan Burrow. “We are worried that without coordinated investment in jobs and social protection, the G20 stands to become a transmission belt for communicating recession from one G20 country to another, ultimately damaging the entire global economy.”

“The global economy is far weaker than the G20 admit and far from reassuring the financial markets, a headlong rush to austerity and cutting deficits prematurely will further depress investment, and hit sovereign debt ratings as current growth forecasts are downgraded,” explained TUAC General Secretary John Evans. “Governments are trying to talk up growth by calling for structural reform, but the Seoul Action Plan looks too much like the old agenda of reducing benefits and weakening job protection and will sap the confidence of households. We need a G20 action plan for jobs that promotes fairer income distribution and a demand-led recovery.”

In Seoul, the 50-strong global trade union delegation discussed trade union demands with the summit host President Lee Myung-bak and many other heads of government as well as the chiefs of major international institutions and the European Commission. “G20 Labour Ministers must now meet as soon as possible to discuss best-practice measures for decent work and the ILO’s Global Jobs Pact, and how to stop a recurrence of the labour market inequalities that were a major causative factor in bringing about the crisis,” Burrow added.

Trade unions welcome the G20 commitment to engage with unions in the G20 process, while at the same time warning that the G20 remains unduly tilted towards the narrow self-interest of the financial community. Unions warn that without genuine financial reform, the introduction of a financial transactions tax and an end to tax havens, the resources needed for investment in jobs, development and tackling climate change will be lacking. While the Seoul Development Consensus for Shared Growth is important, it does not compensate for the absence of concrete commitment of resources for the Millennium Development Goals or for the establishment of a global social protection floor, Trade Unions pointed out. Great hopes have been set into the French G20 Presidency for 2011.

G20: Take Action on Financial Transaction Taxes

A global alliance of 183 organisations from 42 countries has just released the following open letter to the G20 Heads of State and Government meeting to their fifth summit later this week in Seoul:

International Civil Society Statement to the G-20 Leaders Summit in Seoul

We, the undersigned 183 civil society organisations from 42 countries collectively representing over 200 million people, urge G20 leaders to make concrete progress towards the introduction of an internationally coordinated financial transactions tax (FTT) at the upcoming summit in Seoul.

Our organizations have long advocated that such taxes are a practical way to generate revenues needed to fill domestic and international financing gaps, discourage the type of short-term financial speculation that has little social value but poses high risks to the economy and serve as a desperately-needed and sustainable source of financing for health and development. In recent months, the case for an FTT has been strengthened with new inputs from sometimes unexpected sources. Several developments have contributed to building a solid foundation for going beyond discussion of options to implementation:

IMF research commissioned by the G-20 recognizes technical feasibility of FTTs
At the 2009 Summit in Pittsburgh, the G20 charged the International Monetary Fund (IMF) with preparing a report on various financial sector taxation options. While the IMF report delivered in June 2010 favoured an alternative approach (devoting only 3 of its 74 pages to FTTs), it did confirm the administrative feasibility of this option. A follow-up IMF technical paper has pointed out that most G20 countries have already implemented some form of transaction tax, and offered useful information on how to design the taxes to make them most effective. The paper also confirmed that such taxes can generate substantial revenues.

A report by the ‘Leading Group on Innovative Financing’ endorses one form of FTT
In July 2010, a group of international finance experts confirmed the feasibility of taxing financial transactions, with a view to financing international commitments for health and development made to developing countries. The experts had been commissioned to produce a feasibility study for a group of 12 governments -- Germany, UK, Japan, France, Belgium, Korea, Norway, Senegal, Brazil, Spain, Austria and Chile. These countries are part of the Leading Group on Innovative Financing for Development, comprised of 60 nations (including 75% of G20 member states). In their report, the experts point to foreign exchange transactions between banks as the easiest option for collecting a solidarity tax. They calculated that an extremely small tax of only 0.005% on such transactions would generate $33bn per year.

European Union and UN High-level Advisory Group on Climate Change Financing consider FTT
Meanwhile, the European Commission is considering the possibility of introducing an FTT at European level, following the support shown by the European Parliament earlier this year. A European Commission report notes that, depending on the rate and coverage, an FTT could potentially generate more than $1 trillion per year. The FTT is also being addressed by a workstream of the High Level Advisory Group of the UN Secretary General on Climate Change Financing (AGF). The Group, made up of heads of state, high-level officials from ministries and central banks, and other finance experts, is expected to release a report on climate finance options this week.

The need for FTTs has grown more urgent

FTTs are one of the few available options that could generate the enormous financial resources required to pay for the continuing costs of the global financial and economic crisis, including reducing the unacceptably high rate of job loss, and to achieve key development, health, education and climate change objectives in developing countries. Several hundred billion dollars worth of untapped revenue could potentially be harnessed. This new financing is required in addition to official development assistance in order to meet the Millennium Development Goals. Alternative financial sector taxes as proposed by the IMF would fall far short of the volume required. At the same time, the potential benefit of FTTs to enhance market stability is of equal interest as the world has become more aware of the dangers posed by automated high-frequency trading that increasingly predominates in financial markets. Even extremely low transactions tax rates would reduce the incentive for such speculative activities.

At the recent UN Summit on Millennium Development Goals, French President Nicolas Sarkozy made a very welcome vow to press for an international agreement on FTTs during his term as G-20 chair in 2011. There is, however, no reason to delay. We call for G-20 action on this critical issue to begin in Seoul.

The complete list of signatories can be accessed >>> here.

South Centre: The missing issues on the G20 agenda

The hopes of a rapid global economy recovery have recently been dashed by renewed turmoil in the world economy. The sovereign debt problems in several European countries, the gyrations in currency exchange rates, volatility in capital flows, and the war of words among major economies over “trade sanctions” and “competitive devaluations” are some of the many troubling signs of a new crisis that may be worse than the 2008-9 crisis triggered by the US sub-prime mortgage problem.

A new South Centre report, Why the IMF and the International Monetary System Need More than Cosmetic Reform, authored by the Centre's Special Economic Advisor, Yilmaz Akyüz argues that these recent problems reflect the lack of international mechanisms to prevent financial crises that have global repercussions and that threaten to spill over to the trading and economic systems. The report points out that:
* There are no effective rules and regulations to bring inherently unstable international financial market and capital flows under control.
* There is no multilateral discipline over misguided monetary, financial and exchange rate policies in systemically important countries despite their strong adverse international spillovers.
* National and international policy makers are preoccupied primarily with resolving crises by supporting those who are responsible for these crises, rather than introducing institutional arrangements to reduce the likelihood of their recurrence. Through such interventions, they are creating more problems than they are solving, and indeed sowing the seeds for future difficulties.

The South Centre report is being issued on the eve of the G20 Summit 10-12 November in Seoul. The G20 has established itself as the forum to deal with the financial crisis. According to the report, however, the G20 and the IMF agendas do not include some of the most important issues that need to be addressed to deal adequately with the financial crisis or prevent future crises. The missing issues include enforceable exchange rate and adjustment obligations, orderly sovereign debt workout mechanisms and the reform of the international reserves system.

Developing countries are especially vulnerable to the effects of the global financial problems, and they also have limited capacity to respond to shocks. They thus have a special interest in the reform of the international financial and monetary system, including the IMF. The reforms should lead to the establishment of an orderly and equitable international monetary and financial system. However, if this does not materialise, developing countries should find ways and means of protecting themselves and looking after their interests through regional mechanisms. These include arrangements regarding regional currencies and exchange rate mechanisms, intra-regional provision of international liquidity, policy surveillance and regulation of financial markets and capital flows.

Global solutions are better than such regional arrangements and developing countries should strive to realise them. But if major economic powers do not cooperate in building the new global system, it is definitely better to have the regional arrangements than to have a “non-system” in which the developing countries continue to be the victims of global financial crises.

Please find the report >>> here.

ITUC calls on World Bank to complete overhaul of Doing Business

The 2011 edition of the World Bank’s Doing Business report includes a welcome first step for revising the report’s past practice of encouraging countries to dismantle labour and social regulations, which it did by granting its best ratings to countries with the lowest levels of workers’ protection. Doing Business 2011 has removed the “Employing Workers Indicator” (EWI) from the “Ease of Doing Business Index” and country rankings, although the basic data from which the EWI is calculated remains in an annex to the report. The Bank has furthermore, according to Doing Business 2011, “instructed staff not to use the [EWI] indicators as a basis for providing policy advice or evaluating country development programs or assistance strategies”.

ITUC general secretary Sharan Burrow invited the Bank to complete the process of overhauling Doing Business. “By considering labour regulations only from the view of whether they are deemed to be good for business, the World Bank has caused enormous damage to workers by advising borrowing countries through its highest-circulation publication that labour standards should be dispensed with,” said Burrow. “The global economic crisis has made clear that well-designed and enforced labour regulations and social protection are essential for securing employment and for providing adequate income for those who lose their jobs. The Bank should carry through on the positive step it has made in Doing Business 2011 by removing the EWI from all future editions and, instead, adopting policies on labour issues that recognise and reward the importance of adequate labour regulations and comprehensive social protection.”

The ITUC noted that even though Doing Business’s annex on “Employing Workers” speaks positively of countries that provide financial support for reduced working time programmes designed to prevent lay-offs or that have increased unemployment benefits, the report penalizes countries that require any sort of contribution by employers for unemployment insurance, workmen’s compensation, old-age pensions, maternity leave or other social protection programmes. Through its “Paying Taxes Indicator”, which has not been modified in Doing Business 2011, the Bank continues to advocate that business should be exempt from all forms of taxation, whether it be corporate income tax, property tax, social security contributions, property tax, capital gains tax or financial transactions tax. Doing Business 2011’s top ten best performers for their very low total tax rate on business include Timor Leste, Vanuatu, Maldives, Macedonia, United Arab Emirates, Saudi Arabia and Georgia.