G20 summit results: Chance for a new globalization?

According to the International Trade Union Confederation (ITUC) and the OECD Trade Union Advisory Committee (TUAC), the statement adopted at the London G20 meeting gives the chance for a new globalisation, with jobs at the centre and an end to the failed policies of the last three decades. "The G20 has given us the chance to turn back decades of deregulation and restore the role of government in making sure that finance serves the real economy, which in turn must serve people. Massive challenges still lie ahead in restoring economic growth and employment, notably how the structures and policies of the international financial institutions will be reformed," said ITUC General Secretary Guy Ryder.

Central for the trade union’s view are the following decisions taken at the Summit:

* A major emphasis on saving and creating jobs, with a key role for the International Labour Organisation (ILO) in monitoring developments and setting future global economic policies;

* Regulation of financial markets and action on tax havens and executive pay;

* Further support for developing and emerging economies, reform of the international financial institutions and a reaffirmed commitment to the Millennium Development Goals;

* Policies to avoid "boom and bust" economic swings and support for counter-cyclical economic activity;

* A renewed commitment to tackling climate change with a pledge to reach agreement at the Copenhagen climate summit in December 2009; and,

* Work on a new charter for sustainable economic activity.

"The enhanced role for the ILO is particularly welcome, and will be essential to meeting the G20's commitment that the recovery plan has the needs and jobs of working people at its heart. The Global Jobs Pact is the key to this," Ryder said. John Evans, General Secretary of the OECD Trade Union Advisory Committee, welcomed the movement on banking and finance regulation, but insisted that "trade unions must have the opportunity to influence the structure and workings of the new Financial Stability Board, and ongoing access to its decision-making and work programme, which has to be fully transparent and accountable. We cannot allow the same people who got us into this mess to be given the job of getting us out of it".

Advocacy work by trade unions around the world, including meetings with G20 leaders in the days prior to the Summit and in London itself, was a major factor in ensuring that employment is included as a top priority in the reform and recovery plan, and that the G20 is calling on the ILO to "assess the actions taken and those required for the future". The need and scope for further fiscal stimulus also remains a pressing issue, given the scale and depth of the jobs crisis. Governments need to begin now to prepare further job-creation measures to be implemented over the months ahead.

A number of important aspects of the G20 plan have yet to be finalised in detail. According to the unions, particular emphasis should be placed on reform of the financial institutions and their policies, ensuring that the stimulus packages and trade and development financing translates into decent and sustainable jobs, keeping the governments to their commitments on development aid and climate change, and guaranteeing that the ILO is able to play its role alongside the global finance and trade agencies. The Summit's agreement on the "desirability of a new global consensus on the key values and principles that will promote sustainable economic activity", and to start discussion on a "charter for sustainable economic activity", is especially welcomed by the international trade union movement.

G20 summit: We should look at specific numbers

Comment by Mary Robinson

I am worried about what the outcome of this G20 Summit will be for poor developing countries. I understand from experience how these kind of discussions are held and the pressures that are exerted. But I do get the strong sense today that the G20's focus is much closer to home - that this meeting is about reforms through stronger regulation and stimulus packages all designed to move the richer and more powerful countries out of financial crisis.

I have just returned from Liberia, the DRC, Rwanda and Kenya where I have been with poor people who are living on the very edge of survival. They are truly desperate. They are still suffering from the crippling effects of inflated food and energy prices, and from worsening climate change, and now they're being hit by a financial crisis that their governments played no part in causing. The financial crisis is hurting rich countries - but it is truly catastrophic for the poor.

Can I remind about Article 28 of the Universal Declaration of Human Rights. It's very short. "Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized." Today, I see our "social and international order" unraveling. There have been food riots. There will be others. The financial crisis is having a profound destablising effect. I believe that the security concern is an extremely strong one.

The developing world needs its own stimulus package to help ensure better global security and to meet finally the millennium development goals particularly to halve poverty and achieve people's rights to health and education. The amount of money needed to do this is minimal compared to the vast bail-outs of the banks; one of the biggest lessons we have learnt in the past 12 months is that huge resources can certainly be mobilized if there's a will to do so.

This afternoon we should look to the G20 for specific numbers to help poor and developing countries. We should be wary of rhetoric only. More money to the IMF and World Bank is welcome but alone will not be sufficient. The G20 must put poor countries at the centre of its agreement, not in the margins.

Mary Robinson is Honorary President of Oxfam.

Bank bailout could end poverty for 50 years

The $8.42 trillion promised by rich country governments to bailout banks would be enough to end global extreme poverty for 50 years and a massive step towards ending it forever, Oxfam said ahead of today’s meeting of G20 leaders in London. The $8.42 trillion – made up of capital injections, toxic asset purchases, subsidised loans and debt guarantees – is equivalent to more than $1,250 for every man woman and child on the planet. The annual cost of lifting the 1.4 billion people living on less than $1.25-a-day above this threshold is $173bn. G20 leaders could make a massive difference to the world’s poorest people by diverting a tiny fraction of the bailout money to provide an economic stimulus, social safety nets and health services for those affected by the economic crisis. Oxfam is calling for a $580bn-a-year rescue package for poor countries made up of an immediate fiscal stimulus for the poorest countries of at least $24bn, debt relief and fulfillment of existing pledges to increase development aid.

Urgent action is also needed to crackdown on tax havens, which deprive developing countries of hundreds of millions of pounds of tax revenue every year – much more than they receive in development aid. Barbara Stocking, Oxfam Chief Executive, said: “When you look at the amount of money that has been found for banks it seems inconceivable that G20 leaders will stand aside and allow the economic crisis to destroy poor people’ lives." An Oxfam report, published earlier this week, revealed women are hit hardest and are often the first to lose their jobs as countries slide into recession. For many, in developing countries the recession comes on top of high fuel and food prices that have already stretched communities to breaking point.

Oxfam is pressing for rich country governments to promote a ‘green new deal’ by ensuring their domestic rescue packages help tackle climate change by accelerating the transition to a low-carbon economy. Stocking said: “We cannot return to the situation where the greed of the richest was allowed to take precedence over the needs of millions. G20 leaders have a real opportunity to take a significant step towards a fairer, more sustainable world.”

Jobs, Justice, Climate

Further video >>> here.

Trade unions to G20: Half measures will not fix broken global economy

In a worldwide push for action by G20 governments to pull the global economy out of recession and chart a new course for job creation, financial regulation and global governance, trade unions across the world have delivered a common set of demands to their national governments. The five-point union plan, which includes detailed policy proposals, sets out the actions needed to tackle the crisis and build a fairer and more sustainable world economy for the future. It calls for:

* a coordinated international recovery and sustainable growth plan to create jobs and ensure public investment;
* nationalisation of insolvent banks and new financial regulations;
* action to combat the risk of wage deflation and reverse decades of increasing inequality;
* far-reaching action on climate change;
* a new international legal framework to regulate the global economy along with reform of the global financial and economic institutions (IMF, World Bank, OECD, WTO).

The Global Unions G20 London Declaration, developed by the ITUC and the Trade Union Advisory Committee (TUAC) at the OECD, sets out the steps which need to be taken by the G20 in cooperation with other governments. It was presented by national trade union movements to their governments, and will be formally submitted to the G20 Leaders’ Summit in London on 2 April. Trade unions from around the world are also joining their colleagues from the British TUC in a huge civil society mobilisation planned for London on 28 March, to press home the need for coordinated global action by governments.

Recovery and sustainable growth can be achieved, according to the Declaration, but only if the focus is on job creation and public investment, active labour market policies, extending social safety nets and special measures for developing and emerging economies. The trade unions also put forward an eight-point specific action plan for global financial regulation, with immediate action to nationalise insolvent banks.

The London Declaration points to the real risk of wage deflation, and highlights the fact that growing income inequality across the world has been a major contributor to the current recession, as workers’ purchasing power has been insufficient to help maintain demand for goods and services. Ensuring that all workers have the right to collective bargaining, and strengthening wage-setting institutions, will establish a decent floor in labour markets and feed economic stimulus through more household buying power. This is closely linked to the broader requirement for reform of the IMF, World Bank, WTO and OECD, with the inclusion of the International Labour Organisation at the centre of an effective and accountable system of global governance.

The union proposals also focus on the urgent need for impetus to tackle climate change, given the enormous environmental, social and economic costs of inaction. Already, governments should be using coordinated global fiscal response to the economic crisis to set the world on a “green economy” path. Creation of green jobs, and action to ensure “just transition” in communities and sectors affected by the move to environmentally-friendly production, are central to achieving the levels of greenhouse gas reduction needed, and will contribute to pulling the world out of recession.

The declaration is available >>> here.

Subprime Carbon report points to dangers of unregulated carbon markets

If it is not structured properly, global warming legislation could lead to the creation of an enormous, poorly regulated derivatives market with failures mirroring those that led to the current financial crisis, according to a report released by Friends of the Earth US. The report, Subprime Carbon? Re-thinking the World’s Largest New Derivatives Market, finds that existing financial regulations, as well as those in major cap- and-trade bills, are inadequate to govern carbon trading, creating a potentially huge regulatory gap.

“Global warming has reached a crisis point, and it’s imperative that Congress move quickly to put solutions in place, but it’s also important to be careful and do this the right way from the start,” said Michelle Chan, a senior policy analyst at Friends of the Earth and the author of the report. “If we aren’t careful, we could end up creating a massive, poorly regulated derivatives market that not only poses risks to the broader financial markets, but also undermines efforts to save the climate.”

The report outlines how lessons from the current financial crisis apply to carbon markets, which could become the largest derivatives markets in the world. In particular, it raises concerns about “subprime carbon,” risky carbon credits based on uncompleted offset projects (projects designed to sequester or reduce greenhouse gases). Subprime carbon credits may ultimately fail to reduce greenhouse gases and, like subprime mortgages, could collapse in value, yet they are already being securitized and resold in secondary markets. The report recommends that lawmakers include carbon trading in current debates about financial reform, and warns against hastily creating carbon markets without proper oversight.

The full report can be viewed >>> here.

World Water Forum: Turkey deports International Rivers' staff after peaceful protest

Two International Rivers' staff members were arrested and detained yesterday for unfurling a banner at the opening ceremony of the World Water Forum (WWF) in Istanbul. They will be deported this morning or face a year in Turkish prison. As the opening ceremony of the WWF began, International Rivers' South Asia Director Ann-Kathrin Schneider and Climate Campaigner Payal Parekh unfurled a banner reading "No Risky Dams" in protest at the World Water Forum's promotion of destructive dams (see photo). They shouted slogans as the chair of the World Water Forum and government dignitaries were about to take the stage.

While many WWF participants applauded the protest, the police detained the two protestors. Meanwhile, outside the conference center riot police used water cannons and tear gas against 150 peaceful protestors who shouted "water for life, not for profit" in opposition to the WWF's agenda of water privatization and river destruction. Seventeen protestors were arrested.

As she was being detained, Payal Parekh said: "Large dams have left a legacy of lies and loss. Continuing to build destructive dams will bring unacceptable risks to people and the planet." Ann-Kathrin Schneider said as she unfurled the banner: "The Ilisu Dam in Southeast Turkey is a symbol of outmoded water and energy policies which destroy communities and the environment. We call on the participants of the World Water Forum to embrace smarter and cleaner solutions which are readily available." Peter Bosshard, International Rivers Policy Director, said "The response by the Turkish authorities highlights the undemocratic nature of the World Water Forum. Two protestors being deported for unfurling a banner is unacceptable. We call on the World Water Council to respect and support the rights of all people to speak freely and protest peacefully."

The World Water Forum takes place every three years. It is organized by the World Water Council, a private organization whose most influential members are private water companies and some of the world's biggest dam construction companies, funders and government agencies.

Women call for a future based on alternatives to the current mainstream economic system

8 March, the International Women’s day is an occasion for women all over the world to celebrate and to unite for social and gender justice, environmental sustainability, peace and equality and make their voices heard. “We are in the midst of the most serious crises since decades. The lives and livelihoods of hundreds of millions of women and men, girls and boys worldwide are threatened by the complex set of the financial, economic, energy, food, climate, and inequality crisis”, the Brussels based Women in Development Europe network (WIDE) says in a statement. WIDE is deeply concerned that again women will have to carry the major burden of this multiple crises: indeed, prior economic crisis in Latin America and in Asia in the 1990’s, have largely affected women and children by increased unemployment and decreased household incomes, cuts in government costs on social services and most of all additional reproductive and unpaid care work.

WIDE believes that the current financial and economic crisis signals the failure of the mainstream economic system - that favours large capital interests at the expense of people's lives and sustainable livelihoods - to respond to the enormous global challenges. WIDE understands current situation as an opportunity to call for a change of the unsustainable, gender-blind economic development system that is built on women’s subordination. In this context, WIDE urges the international community:

* to promote people–centered sustainable development including empowerment of women, social justice and equality as well as an equal distribution of resources;
* to acknowledge and value in economic terms the unpaid and invisible care work and contribution of women to economic and social development as being essential for the reproduction of the labour force and the well-being of societies;
* to pursue a truly cooperative and participatory solution to the current systemic crisis where all countries are able to voice the concerns of their most vulnerable groups;
* to increase political and financial support to women’s networks and organizations working for social, economic and political change in the South, East and West.

EU climate approach puts world’s poorest people at peril

EU Environment Ministers have failed to live up to repeated promises to fight climate change. They have called on poor countries to curb their emissions, but have not put cash on the table to help them deal with the effects of the crisis or develop in a low carbon way. Following a proposal from the European Commission in January, the EU will agree the key elements of its position for a global climate deal in Copenhagen at a Heads of State summit on 19-20 March in Brussels. Climate finance for developing countries, which is a make-or-break part of the deal, is supposed to be the main focus. But Member States have used the economic crisis as an excuse to further water down the Commission’s already weak plans on finance. Environment Ministers have admitted on 2 March the huge costs involved, but not agreed how the money will be raised globally, or what the EU will commit.

The lives and livelihoods of millions of poor people are at stake from worsening climate change, created by rich countries. Oxfam International estimates that at least €40bn a year is needed to help poor countries adapt to the impact of global warming – with the EU owing at least €12bn. This is a fraction of the $3.3trn committed by the EU and the US to rescue financial institutions in 2008. Katia Maia, head of Oxfam International’s Campaign and Advocacy Office in Brazil, said: “The latest science shows the climate crisis is more urgent than ever but the EU is putting the brakes on efforts to address it. Europe is one of the world’s biggest polluters but it is doing as little as possible to help poor countries deal with the impacts of a crisis it helped create. The EU needs to put money on the table now. Treating poor people's lives as a bargaining tool in climate negotiations is both immoral and misguided as a negotiating strategy.”

Elise Ford, head of Oxfam International’s EU office, said: “It is now up to EU Finance Ministers and Heads of State to right these wrongs later this month. They must give strong backing for innovative finance mechanisms, so these are at the heart of Europe’s negotiating position for Copenhagen. The excuse of waiting for the US to move first on climate finance is wrong-headed. As EU Commissioner Dimas pointed out, if the EU does not offer real cash, there may be no global deal. And, unless there is a clear EU commitment, there will be little external pressure for the US also to come forward - as it must."

Oil and mining industry: Anti-corruption efforts too slow mandatory regulations needed

Voluntary approaches to increasing transparent and accountable management of natural resources wealth are making sluggish progress, says international aid agency Oxfam. On the eve of the fourth global conference of the Extractive Industry Transparency Initiative (EITI) in Doha, 16-18 February, EITI should be commended for putting in place a strong governance structure, but additional mandatory disclosure rules are needed to make oil, gas and mining industry transparency a true global standard for all countries and companies.

With more than half of the world's poorest people living in countries rich in natural resources, the problems associated with oil, gas and mining booms – increased corruption, conflict and environmental degradation – are pressing concerns for Oxfam and its partners around the world. "These industries generate billions of dollars per year in poor countries," said Bennett Freeman, Oxfam board member and civil society EITI board member. "The revenues amount to far more than official aid flows and could fund health, education and other essential services, but are often squandered or siphoned off by corrupt elites."

The EITI is a voluntary initiative designed to increase transparency of payments by companies to governments. Since October 2006, a strong governance structure has been put in place for EITI, including a multi-stakeholder board including company, government and civil society representatives; a clear process for implementation and for third party verification of performance ("validation"); and significant international assistance to countries willing to undertake the Initiative. Unfortunately, the EITI has had limited reach and, while some progress has been made in many countries, the EITI has yet to be truly tested. "The EITI board's main challenge now is to ensure that the validation process is followed through for signatory countries. This has to be a main goal going forward, and it can only be achieved by guaranteeing the highest level of transparency in the process," said Maria Dolores López Gómez from Oxfam's campaigns and policy department.

Twenty-four countries have become EITI "candidate" countries, but more than fifty developing countries are resource-rich. EITI does not require companies to act unless host governments decide to join the Initiative and the countries that need transparency, and EITI, are those least likely to join or to credibly implement the Initiative. Therefore, other mandatory measures need to be taken – and quickly. The Extractive Industry Transparency Disclosure (EITD) bill was introduced in the US House and Senate in 2008. This legislation, expected for reintroduction in 2009, would require all oil, gas and mining companies disclose their payments to host countries and extend transparency as a truly global standard for company operations. The EITD Act would apply not only to US companies, but to all companies registered with the US Securities Exchange Commission (SEC). This includes European companies, such as Shell and BP, as well as those in emerging markets like China, India and Brazil.

In addition to the US passage of the EITD, other financial jurisdictions in Europe and elsewhere should pass similar legislation. In tight credit markets, extractive industry companies are seeking financing from public sources, including regional development banks and export credit agencies. All international financial institutions – including regional development banks such as the African Development Bank, Asian Development Bank and Inter-American Development – should require the disclosure of payments as a pre-condition for finance. – The next year will be crucial for real progress in the global movement for extractive industries transparency. Faithful implementation of the EITI complemented by new mandatory disclosure requirements will create a new global standard for transparency and help citizens around direct money to poverty reduction efforts that need it the most.

Study: World Bank loans exacerbate climate change

The World Bank has a difficult task at hand; it must continually work to provide the impoverished with access to energy while at the same time, mindfully investing in technologies that do not further compound the effects of climate change. Heike Mainhardt-Gibbs, a consultant with the Bank Information Center (BIC), examines the World Bank’s approach to energy sector investments in her February 2009 study, World Bank Energy Sector Lending: Encouraging the World’s Addiction to Fossil Fuels. The assessment finds that even with important gains in renewable energy and energy efficiency in recent years, the World Bank Group’s overall lending approach to the energy sector does not support developing countries’ transition towards a low-carbon development path.

First, World Bank fossil fuel lending is on the rise. During its 2008 fiscal year, the World Bank and International Finance Corporation (IFC) increased funding for fossil fuels by 102% compared with only 11% for new renewable energy (solar, wind, biomass, geothermal energy, small hydropower). On average, fossil fuel financing by the Bank is still twice as much as new renewable energy and energy efficiency projects combined and five times as much as new renewable sources taken alone. During the last three years, the Bank spent 19% more on coal than on new renewable energy. Bank lending to coal projects will make a low-carbon transition difficult given that coal emits almost twice as much CO2 as natural gas per unit of energy.

Secondly, Bank fossil fuel projects have a clear impact on global CO2 emissions. “When the fossil fuels involved in the World Bank and IFC lending projects for the 2008 fiscal year are combusted, the project lifetime CO2 emissions from this one-year of financing will amount to approximately 7% of the world’s total annual CO2 emissions from the energy sector, or more than twice as much as all of Africa’s annual energy sector emissions,” emphasized Mainhardt-Gibbs. Clearly, the World Bank’s investments in fossil fuel-based energy are far-reaching and yet none of their current climate change initiatives adequately incentivize for a reduction in financing for fossil fuels.

Finally, the Bank must carefully reassess its approach to financing the development of fossil fuels. They share the blame – and thus the shame – for the global climate change crisis. “The Bank’s continued lending focus on fossil fuels commits many developing countries to fossil-fuel based energy for the next 20 to 40 years,” Mainhardt-Gibbs noted. When developing countries eventually take on GHG emissions reduction targets of their own, the World Bank’s current approach to energy will make meeting these targets more difficult and costly for these countries.

Blind optimism on privatized health in poor countries

According to Oxfam International, rich country donors and the World Bank are wasting money and risking lives by continuing to push unproven and discredited private healthcare programs in poor countries. Oxfam’s warning comes in a new report, Blind Optimism: Challenging the myths about private health care in poor countries. The report gives considerable evidence of the poor performance of private sector-led health care initiatives globally. In China, for example, one third of drugs dispensed by private vendors are counterfeit, while in seven sub-Saharan African countries the WHO found that most anti-malarial drugs in private facilities failed quality tests. The World Bank itself has said that the private sector generally performs worse on technical quality than the public sector.

Anna Marriott, author of the report, said: “Donors’ romantic views of private sector health providers are completely divorced from the facts. In Malawi 70% of private providers are shops. For the most part, private health care in poor countries is made up of unqualified shopkeepers selling out-of-date medicines. Is that what you would want for your sick baby?” Oxfam has found that the World Bank uses its unmatched policy influence worldwide to promote privatized health despite lack of evidence. At the same time its private sector arm, the International Finance Corporation, recently announced it will mobilise $1bn to finance the growth of the private sector’s role in health care in Africa. Many other donors and influential organizations have also increased their efforts to encourage and fund more expansion of private-sector lead health care projects. The United States Agency for International Development (USAID), the Department for International Development in the UK (DFID), and the Asian Development Bank have followed the Bank’s example in spending millions of aid dollars funding large-scale programs to contract-out service delivery to the private sector.

Meanwhile, aid for primary health-care services in poor countries has almost halved in the last decade. Oxfam warns that cuts in public health services are condemning hundreds of millions of people to early preventable death or needless suffering – and a massive scale up in public health spending is required. After years of disinvestment, and with the allocation of aid for primary health-care services in poor countries dropping by almost half in the last decade, the public sector in many instances is weak and badly run. Oxfam’s research shows that scaling up government provided health services has been central to rapidly improving life chances in poor countries.

Development Ministers in Prague: British reluctance on tax havens

The consequences of the financial crisis for developing countries have been discussed at the Informal Meeting of EU Development Ministers held in Prague end of January, attended by European Commissioner for Development and Humanitarian Aid Louis Michel and representatives of the European Parliament Committee on Development. Although the effects of the financial crisis on developing countries are not yet fully visible, they are likely to be considerable, the Ministers declared. It was also observed that, therefore, it is all the more important that the European Union and other developed countries fulfill their obligations in the area of development aid, from the perspective of quantity as well as quality. During the debates on the reform of the international financial architecture, the ministers also evaluated possibilities of taking into consideration developmental aspects, including more influence for the developing countries themselves in the International Financial Institutions.

According to the CIDSE network, particularly disappointing was the reluctance of the British side and of some other member states to undertake any action in favour of combating tax evasion and better regulate and control tax havens. It was also surprising that a new round of debt cancellation has not been given more consideration, given that it could quickly release extra revenues to many developing countries facing serious fiscal pressures.

A major challenge for development (and environment) ministers will be to make sure that their concerns regarding the impact of the financial crisis on developing countries and climate change finance inform the debates of the EU finance ministers and the G20. A proposal for a “support plan for the developing world” is currently being developed by the European Commission, to be finalized together with Development Ministries in March as an input to the EU position for the G-20 summit.

New environmental finance architecture or inflation of climate funds?

A new website, www.climatefundsupdate.org, is online now. The Website, which will be improved and expanded over the next several months going forward, is a joint cooperation project by the Washington Office of the Heinrich Boell Foundation as well as the London-based Overseas Development Institute (ODI) and is a follow up to last Summer’s study on new climate financing instruments (done by the Boell Foundation with WWF US and ODI) and related shifts in the global environment finance architecture.

The site lists descriptions of some 18 multilateral and bilateral funds; some new fund proposal not yet off ground, as well as a database of some 800 projects funded by the new and existing climate funds. The idea for the website is to provide fairly neutral “one-stop” introductory information on some of the complexities of the new climate finance architecture leading up to the discussions at the COP in Copenhagen in December on a post-Kyoto Climate Architecture, of which an agreement on financial will be a crucial prerequisite.

The EU passes climate change burden to world’s poorest

Europe’s refusal to commit money to help poor people cope with climate change could derail the chances of reaching a fair climate deal in Copenhagen, warned Oxfam International today. The EU's Climate Change Communication, published on 28 January and due to be adopted by Member States in March, sets out Europe’s position for the post-2012 negotiations. The proposal recognizes that massive resources are needed to help developing countries adapt to climate impacts and adopt green technologies, and has promising ideas on how to raise the money. But it completely fails to specify how much money the EU and other rich countries will make available. As Commissioner Dimas today acknowledged, finance is a make-or-break part of a global climate agreement. Yet early funding commitments have been stripped out of the final document.

Elise Ford, head of Oxfam International’s EU office, said: “Unless developing countries see hard cash on the table, there is a real danger they will simply walk away. It seems the Commission is pandering to Member States’ expected opposition to put money on the table – fueled by their worries about the impact of the recession.” A year ago, the European Union set a much needed minimum floor for negotiations with a call for a 20-30% mitigation cut by 2020. Now, instead of setting a target for adaptation finance too, the Commission has shrunk from any ambition, let alone responsibility as a major polluter. This seems to be a new EU, one that's signaling it's ready to race to the bottom.

Oxfam estimates that at least €38bn ($50bn) per year is needed to fund adaptation in developing countries, with Europe owing at least €12bn ($16bn). This needs to be managed by the United Nations and come on top of existing aid commitments. This is to ensure donors don’t divert money meant for schools and health services, and pass it off as climate finance they owe as a result of on-going pollution. “Developing countries will be alarmed that the UN – which by rights should be the governor-in-chief of new climate funds – is side-lined in the Communication. This leaves the way open for a spaghetti bowl of money flows, with no trusted referee to ensure countries pay their dues and the funds reach the poorest,” said Hugh Cole, Oxfam's Regional Climate Change Advisor for Southern Africa.

Oxfam welcomed the EU’s strong line that all rich countries should reduce emissions on a just basis, but argued the fairest way to cut the carbon pie by measuring countries’ historic responsibilities (per capita emissions) and wealth.

EU development ministers in Prague

The EU development ministers meet today and tomorrow in Prague for the first time in 2009. On the occasion of the meeting, CIDSE, the solidarity network of catholic aid agencies, urges the ministers to implement financing commitments and ensure that the needs of poor communities in developing countries are addressed in the global discussion on the financial crisis. The network of 16 development organisations from Europe and North America asks that EU member states should make sure that developing countries are given an equal voice in policy making to address the present crises and to prevent future ones.

CIDSE asks the EU development ministers to implement the commitments laid out in the European Council Conclusions of 10-11 November 2008 and the Doha Outcome Document. Moreover, it reckons that they should clearly call for the equal participation of developing countries in discussions on the reform of the international financial architecture, from a development perspective – one of the issues the Czech Presidency has put on the agenda of the Prague meeting. In particular, the network urges EU member states to:

1. Publish binding timetables on aid targets, as committed in the May GAERC council conclusions, by end 2009, to ensure that the EU meets the 0.56% ODA/ GNI commitment by 2010, and 0.7% by 2015;
2. Support the implementation of impartial and transparent debt workout mechanisms in order to deal efficiently and equitably with future debt crises. As expressed in the European Parliament report on FFD, the EU should also address the issue of odious and illegitimate debts;
3. Strengthen “international cooperation to combat tax evasion and tax havens” in order to ensure effective taxation to mobilise resources for development. To this effect, it is crucial to:
* take concrete measures to end all bank secrecy jurisdictions and tax havens;
* agree upon “principles of transparency, exchange of information and fair tax competition” such as country-by-country reporting standard for multi-national corporations;
* take specific measures and commit the necessary resources to “strengthen institutional arrangements, including the United Nations Committee of Experts on International Cooperation in Tax Matters”;
* lead on the “drafting and urgent finalisation of the United Nations Code of Conduct on cooperation in combating international tax evasion.”
4. Ensure financial reforms are participatory of all world governments; inclusive, comprehensive, and transparent. The current financial and economic crisis shines light on the need for far-reaching reforms of the international financial architecture. These reforms must see all world governments participate. The UN conference “at the highest level on the world financial and economic crisis and its impact on development” agreed in Doha provides a unique opportunity to take this process forward. Therefore, CIDSE urges EU governments to provide the political leadership and necessary resources to make this conference a milestone in the process towards a fairer and democratic international financial architecture which works for the world’s poor.

Trade Unions call for a new growth model

On the occasion of the World Social Forum in Belem, the International Trade Union Confederation (ITUC) has released a statement on the global economic and financial crisis. For the ITUC, the financial markets of today are characterised by the reckless pursuit of quick profits against a background of unbridled economic and financial liberalisation. Casino capitalism is clearly to blame for the scale of the crisis. The financial markets have failed their primary mission, which is to ensure the financing of the real economy. Another key factor underlying the crisis are the imbalances arising from excessive market deregulation and the non-intervention of States.

On the fringe of the WSF, the ITUC, ITUC-CSA (Trade Union Confederation of the Americas) and the Brazilian trade union organisations CUT, FS and UGT are organising a World Trade Union Forum from 28-30 January. It is open to all the organisations and movements present in Belem. The Decent Work Alliance, led by the ITUC, the ETUC, Solidar, the Global Progressive Forum and Social Alert, is also organising events during the WSF on the following themes: a new financial architecture to ensure decent work; a global welfare state; and the decent work, decent life campaign.

The ITUC underlines that without a social dimension, globalisation has forced workers from the North and South to compete with each other to attract multinationals and private equity funds whose profits were constantly soaring until the onset of the current credit crisis. "A new model of growth must be developed without further delay; a model based on market regulation and that generates green growth, which will spawn huge opportunities in terms of job creation," said Guy Ryder, general secretary of the ITUC. The ITUC defends the idea of an economic system that is ecologically sustainable, socially just, geopolitically balanced, and that takes on board the proposals of the trade union movement and other civil society actors.

To read the full statement: >>> here.

Global food crisis will worsen - 1bn people need help now

Urgent action is needed to prevent hundreds of millions more people slipping into hunger as a result of volatile food prices and increasing energy and water scarcity, said international agency Oxfam today. Decades of underinvestment in agriculture coupled with the increasing threat of climate change mean that despite recent price falls, future food security is by no means guaranteed, and in fact the situation could get worse, said Oxfam on the opening day of a UN conference in Madrid to address the issue. Oxfam’s warning comes on the day that two new reports are published, detailing the threats to global food security and exposing the lack of adequate coordinated international action to tackle hunger.

The reports, A Billion Hungry People and The Feeding of the Nine Billion are published by Oxfam and the UK think tank, Chatham House respectively, and together are a call to action to politicians, and representatives from the private sector and civil society meeting to discuss the implementation of the UN Taskforce’s response. Although global food prices have fallen in the last few months, they are not back to previous levels, and are likely to rise sharply again in the future. Furthermore, price volatility itself is a problem, and more needs to be done to address the underlying structural issues that cause the chronic hunger affecting 1 in 6 people in the world today, according to Oxfam. Current severe food shortages in Afghanistan, Ethiopia, Kenya, Mozambique and Zimbabwe are evidence that the global food crisis is far from over. Even before recent price rises, there were over 850m people classified as undernourished. Now, there are nearly a billion, as a result of the price rises, alongside other factors such as political instability and conflict.

“Not enough has been done to tackle the situation. There is a lack of coordination at all levels and the opportunity for root and branch reform of the aid system has not yet been taken. International institutions and donors must reverse decades of under-investment in agriculture and scrap blatantly distortionary polices such as biofuels mandates that make things worse,” said an Oxfam representative, who is attending the conference. “The recent decision by the EU to reinstate export subsidies for dairy is the direct opposite of what’s needed: a retrograde step that calls into question their commitment to longer term reforms,” he added.

The Feeding of the Nine Billion, published by Chatham House and part-funded by Oxfam, predicts demand for food will increase as the world’s population grows by 2.5bn to 9.2bn by 2050. It also notes a UN prediction that climate change will increase the number of undernourished people worldwide by between 40m and 170m. Meanwhile, Oxfam’s A Billion Hungry People includes recommendations for reform of the humanitarian aid system and makes a strident call to poor countries to do their bit by investing more in agriculture, targeting women and small-scale producers. Developing countries must increase social protection measures for vulnerable populations – including cash payments and employment creation programs for those at risk of hunger. Rich countries must ensure long-term predictable funding to developing countries for investment in agriculture and climate change adaptation.

The Paris Declaration: Confronting the crisis from below

More than 150 representatives of trade unions, farmers’ movements, global justice groups, environmental groups, development groups, migrants’ groups, faith-based groups, women’s groups, the have-not movements, student and youth groups, and anti-poverty groups from all over Europe gathered on 10 and 11 January 2009 in Paris to analyse collectively the current crises, to develop joint strategies and to discuss joint demands and alternatives in response to these crises. Participating organizations have also been Attac, Friends of the Earth Europe, Oxfam, and the German and Italian trade unions Verdi and CGIL. Together, they endorsed a ‘Paris Declaration’ which says:

“As the financial and the economic crises intensify, millions of women and men are losing their jobs, houses and livelihoods. Tens of millions more are forecast to join the 1.4 billion people already living in extreme poverty. The crises worsen the social, ecological, cultural and political situation of the majority of people on our planet.
Despite the evident and foreseeable failure of the current economic model, world leaders are responding by trying to preserve the system that is responsible for the crises. Governments have been quick to bail out bankers, corporate share holders and their financial backers with hundreds of billions in public money. To solve the problem, they put into place bankers and heads of corporations: the same actors that created the crises. The workers, the jobless, the poor – all those affected have received no help in their daily struggle to make ends meet, and to cap it all, they are now supposed to pay the bill.
Governments´ proposals to deal with the unfolding economic crisis do not address the other dimensions of the crisis we face today – global justice, food, climate and energy – and with it the need to transform the economic system towards one that allows us to satisfy the basic needs of all people, to implement all human rights and to restore and preserve the ecological basis of life on our planet.

It is time for change!
We can build a system that works for people and the environment, a system to serve the needs of the many, a system based on the principles of public benefit, global equity, justice, environmental sustainability and democratic control.
As a first step, immediate measures must be implemented to address the social impacts on people, whilst supporting the ecological conversion of the economy.
We call upon all social movements in Europe to engage in a process of change.”

The meeting supported mass mobilisation for a central demonstration in London on 28 March 2009 ahead of the G20 meeting: ”20 governments cannot decide on the future of the global financial system and economy.” It called to undertake a day of action in the week of the G20 meeting, preferably on the 1 April (Financial Fools' Day) all across the world, exposing unaccountable financial power and promoting democratic control of finance. Participants said the meeting was a further step in a long-term process of building spaces for European networks to meet. A follow-up event is planned for 18-19 April 2009 in Frankfurt am Main, Germany.

Trade Unions urge World Bank and IMF to take action against unemployment

An 80-strong high-level delegation of trade union representations from around the world is meeting with the International Monetary Fund Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick, as well as Board members and several other officials of the two bodies, this week in Washington to push for further immediate anti-recession measures and effective global regulation to ensure future global economic stability. The delegation is led by ITUC (International Trade Union Confederation) President Sharan Burrow and General Secretary Guy Ryder. Top of the list of union concerns is the spectre of spiralling global unemployment, as more and more employers cut staffing in the face of the credit squeeze.

"Action by governments and the international financial institutions to support decent jobs is essential in the face of the expected world-wide employment crisis, and will lay the foundation for economic recovery. While the IMF has been encouraging industrialised countries to adopt vigorous fiscal stimulus polices, which we believe it is correct in doing, it has been putting forward a much more traditional 'fiscal discipline' approach in its advice to most developing countries. Developing and transition economies are now rapidly beginning to suffer from the global economic crisis and the IMF and the World Bank should jettison failed policies of the past and focus their efforts on maintaining and creating employment, both to deal with the present crisis and to lay the foundations for economic recovery," said ITUC General Secretary Guy Ryder.

The IMF has agreed to emergency loans to several countries particularly affected by the economic crisis. While the conditionality of these loans is not as complex and onerous as that imposed during the Asian financial crisis of 1997-98, ITUC affiliates are concerned by the some of the conditions or required "prior actions" that feature in many of these, such as interest rate and utility price hikes, restrictions and even reductions in wages, particularly in the public sector, and reductions of pension payments other public spending cuts. All of these will dampen the level of activity of economies already in recession and lead to a reduction in workers' living standards, and are inconsistent with the fiscal stimulus polices the IMF is encouraging rich countries to adopt. The ITUC is particularly concerned with the some conditions of a loan agreement that the IMF just concluded with the authoritarian government of Belarus. In exchange for a $2.46bn emergency loan, the government of Belarus, which has been condemned by the ILO for violating fundamental workers' rights, has promised to apply wage restraint throughout the broad public sector, increase utility prices and pursue privatization. Belarus is also required to reform its the social safety net and focus assistance on "the most vulnerable groups", which could result in reduced social protection for many workers since they cannot express and defend themselves freely due to repression of trade unions carried out by the Lukashenko regime.

The union delegation is putting forward a comprehensive and practical recovery and reform package, based on the "Washington Declaration" presented to the November G20 leaders meeting in Washington. The package stresses that governments need to be prepared to ensure further coordinated cuts in interest rates and to front-load investment in infrastructure, education and health to help stimulate demand growth and reinforce public services. This needs to be accompanied by tax and spending measures to support the purchasing power of low- and middle-income earners, and concrete steps to launch investment in green goods and services, to help address climate change.

Noting that the IMF was called upon by the G20 to assume a major role in designing a new regulatory framework for the global financial system, the international trade union delegation will insist that they must have a seat at the table in a re-regulation process that puts the real economy, not the interests of global financial speculators, as the central priority. The union delegation is also urging the World Bank to help contribute to avoiding a repetition of the catastrophic impact of the recent food price crisis on poor countries' populations by going beyond providing emergency relief loans and helping developing countries increase their food security. In so doing, both IFIs must reverse some of the policies they encouraged poor countries to adopt in the past, such as the reduction of state aid to agriculture through low-cost seeds and fertilizer, the dismantling of public grain stocks, and the shift from food to bio-fuel production.