Global Perspectives on a Nuclear Free World, Human Rights and the Economic Crisis

In the light of the latest nuclear bomb test in North Korea the cover story of the latest issue of the magazine 'Global Perspectives' sums up the latest initiatives and developments on nuclear disarmament and non-proliferation.

Furthermore a report from the UN Human Rights Conference in Geneva and on the recent elections of the USA to the UN Human Rights Committee looks at the future role of the world power in this area. According to the author the US is committed to fight the dominance of human rights violators in the UN organ in the upcoming 3-years term.

Further a report of the Commission on Climate Change and Development, chaired by the Swedish Development Minister Gunilla Carlsson, urges donors to honor their commitment to climate change adaptation in developing countries and demands an additional 1.2 billion US-$ to support the most vulnerable that already suffer from the effects of climate change.

The recent report on the African Economic Outlook says that although the Financial Crisis has dramatic effects on Africa, the continent is better prepared than 10 years ago.

"...we should not despair." says Kasekende (chief economist of the African
Development Bank), "The decade of reform has introduced efficiency in macroeconomic management and made African economies more competitive. Countries should therefore desist from implementing policies that restrain further integration of the continent into the global trading and financial environment."

Global Perspectives is a bi-lingual (English/German) joint production by IPS Inter Press Service Europe and the Global Cooperation Council, published by Globalom Media. The monthly editions on various themes of international cooperation and development are downloadable for free.

See also the Euforic newsfeeds on IPS Europe, security, human rights, climate change, and the financial crisis

by Martin Behrens

Global Perspectives on the G20: Trillions for Whom?

The cover story of the latest issue of the magazine 'Global Perspectives' looks at the commitments of the London G20 summit to overcome the economic and financial crisis.

Andrew F Cooper (Waterloo University) underlines the symbolic function of the G20 meeting sending out the message that the seriousness of the financial and economic breakdown is recognized by important leaders across the North-South divide. Nonetheless he reminds us that the group is still criticized for its imbalanced composition with too many European members and only one African participant. Furthermore the new G20 questions the leading role of the G8. The next G8 summit will take place in July hosted by Italy. During this meeting also the so called G5 (China, Brazil, India, South Africa, Mexico) will meet a whole day with G8 countries. It remains to be seen which model will be more effective to solve the global policy challenges ahead.

During the G20 meeting 1.1 trillion dollars were promised to tackle the economic and financial crisis. Sanjay Suri (IPS London) doubts that this will actually help to improve the current economic situation. According to him financial stimuli provided in the US or the UK had no effect at all on market figures or for confidence building. Sanjay Suri claims that the main problem is that governments themselves lost credibility meaning that their promises are trusted no more. The Financial Times Index showed even a slightly negative reaction after more than a trillion US dollar was promised at the summit. Keeping in mind that much lower commitments during the 2005 Geneagles summit to help developing countries where not met, there can be serious doubts about the reliability of the new promises.

Furthermore in this issue a report from the Climate negotiations which took place in Bonn to prepare for the upcoming Copenhagen summit in December 2009.

Global Perspectives is a bi-lingual (English/German) joint production by IPS Inter Press Service Europe and the Global Cooperation Council, published by Globalom Media. The monthly editions on various themes of international cooperation and development are dowloadable for free.

See also the Euforic newsfeeds on IPS Europe and on the financial crisis

by Martin Behrens

G20 outcomes: the end of the promise of a new world order?

Source: EU News, Issue 3, April 2009

The much-anticipated G20 London Summit ended in an anti-climax. The measures announced appear to be more of the same old solutions the world has relied on so far to deal with financial problems. Have we arrived at the ‘beginning of the end’ of a promise of a new world order rather than at the ‘beginning of the beginning’ of a new world order? CIDSE’s main criticisms of the outcomes:

• The IMF with a slight face-lift will continue to regulate global finance. The IMF, bastion of industrialised country influence, will be given a 500 billion USD boost to continue to be the guardian of the global financial system, a role it has failed at so far. The G20 acknowledges the need to reform the mandates, scope and governance of these institutions by increasing the voice and representation of emerging and poor economies; ‘to take steps’ to make them more accountable and credible; and to appoint the heads and senior management on merit through open and transparent process. Will this make a difference to the numerous low income countries who are recognised to be the most adversely affected by the crisis? Highly unlikely.
  
  
• Tax havens will continue to flourish so long as they sign bilateral agreements that have proven not to be effective. The black-listing measures that the G20 announced will do little to return the millions of euros that have been illegally taken out of developing countries and deposited in secret European Bank Accounts. The OECD’s new black list will be reduced to no more than a diplomatic exercise. Countries like Liechtenstein, Monaco, Switzerland, Luxemburg, Belgium and Austria have found an easy way to stay off the list through bilateral tax agreements, while hardly changing their bank secrecy rules. Such bilateral agreements have delivered meagre results until today.
  
  
• The announced 50 billion USD for low income countries is little more than a repackaging of existing resources. With many countries in the EU set to default on their aid commitments, the Summit’s reaffirmation of donors’ commitment to achieve their respective Official Development Assistance pledges can only be believed if followed by concrete allocations to development budgets.
  
  
• A balanced and development-friendly system for international monetary stability remains elusive. The current monetary system disproportionately affects the currencies of non-reserve currency countries. The preliminary recommendation of the Expert (Stiglitz) Commission of the UN General Assembly President on reforms of the international monetary and financial system to adopt a new Global Reserve System, and the call by China to review the current monetary system based on a single reserve currency, is not reflected in the communiqué.
  

In conclusion, the G20 with its limited membership and interests is not the forum that can provide the global response to the financial crisis. Instead, the G20 should feed this outcome into the broader process to prepare the June UN Conference on the financial and economic crisis and its impact on development. Through such a dialogue, the G20 can ensure that its commitments and further policy orientations are informed by the needs and interests of this larger group of states that have as much if not a greater stake in ensuring that a new global order is carved out of the present crisis.

See CIDSE’s new policy paper, "From Collapse to Opportunity: Development Perspectives on the Global Financial Crisis" (April 2009), full G20 analysis and the Christian Aid response to the G20.

See also Euforic's newsfeed on the financial crisis

EU strategy on tackling the crisis in poor countries offers no new money

Concord press release

CONCORD, the European Confederation of Development NGOs welcomes the release of the European Commission’s Spring Package on supporting developing countries to tackle the impact of the financial crisis, but has expressed deep concerns about the genuine levels of commitment being shown by European governments to keep their promises to the poor.

Today’s announcement reveals that there is no fresh money available for developing countries. The Commission has acknowledged in its communication today that US$20 billion more in aid is needed to meet the commitments. Meanwhile, it signals that Italy has abandoned its aid commitments and Germany and France are off-track on meeting theirs.

The strategy details how Europe will provide money upfront from its aid budget, but offers no new funds to tackle the crisis. This comes in the face of a raft of recent aid cuts to European governments’ 2009 aid budgets (Ireland, Italy, Latvia, Estonia). CONCORD warns that these cuts, combined with insufficient rises show that EU member states are not taking seriously the needs of developing countries mired in a crisis not of their own making.

Recent figures have suggested that the impact of the crisis will affect developing countries to the tune of $300bn in 2009, meaning that despite a small rise in aid volumes from Europe in 2008, developing countries will essentially lose out even more than before.

“Less than one week after the G20, the EU has produced a strategy that fails to address the underlying flaws in the system that we know fuel poverty in developing countries.” says Ester Asin-Martinez of CONCORD “Whilst we welcome the EU’s efforts to be the first to act on international development after the G20, this falls far short of what is needed.”

CONCORD calls on European governments to:

• Step up their efforts to deal with the impact of the crisis on developing countries by providing new money without the harmful economic strings attached that have played such a prominent role in leading to the current financial crisis
• Use their leadership role to take steps to reform the flaws in the international financial and economic system
• Provide timetables to show how they will actually deliver the aid they have promised
• Halt any further cuts to 2009 aid budgets
• Implement commitments on aid effectiveness agreed last year at the OECD DAC High Level Forum on Aid Effectiveness

In May, CONCORD will release its fourth annual AidWatch report, looking at the genuine aid provided by European governments. For more information on this report, please contact jasmine.burnley@concordeurope.org


See Euforic's newsfeeds on Concord

$32 billion less remittances for developing countries, but.....

Speaking at a conference on the impact of the global economic crisis on remittances (organized by COS Utrecht, AfroEuro Foundation, OxfamNovib and the ICMPD), Dr Manuel Orozco, of the Inter American Dialogue (Georgetown university) explained that annual remittances from the EU and the US to developing countries will decline by $32 billion. Participants at the 19 March conference heard that the crisis may reduce remittances. They also heard that it has made many re-examine how they can make more effective use of the money transferred. Ways to reduce transfer costs, ensure payments are sensibly used and raising financial literacy were all discussed.

Ten lessons emerged from the presentations and discussions:

1) Remittances are critical to different extents in different developing countries: They contribute around 25% of GDP in Sierra Leone and Suriname.

2) Changes in prosperity in the EU already impact heavily on remittances from the UK, Spain and Italy. The EU as a whole makes up 1/6th of global remittance flows.

3) More migrants shift to the grey economy as countries tighten their regulation and as anti-immigration sentiment rises.

4) Decline in remittances is felt in three areas: asset building, poverty reduction and the multiplying effect of local purchases by recipients.

5) The loss of incomes in developing countries can cause migratory pressures, but some speakers stressed that the global crisis could deter migration as prospects are reduced in the developed world.


6) Remittances and capital flows from the EU represent 10% of foreign aid. They are substantial comprising direct remittances, nostalgic trade (purchase of items from origin country), donations and investments.

7) Different effects of the crisis, such as the impact of mortgage costs, often has a smaller impact on migrants. The crisis may be an opportunity for migrants to re-examine remittances and ensure the recipients use them wisely, by controlling the way the payment is made.

8) Approaches to alleviate situation focus on financial literacy. E.g. the inter-american dialogue worked with a project using $80,000 to reach 25000 people, with a financial literacy program convincing 5000 people to mobilize 1000$ deposits into microfinance institutions.

9) Some remittances go further because of devaluation, Seychelles currency has fallen 52% Ukraine by 34% and South Africa by 27%.

10) Efforts to reduce the cost of transactions have ranged from negotiations with banks, the introduction of deregulation to encourage competition and allow new intermediaries, and the use of new technologies such as mobile phones for micro payments and websites such as geldnaarhuis.nl to compare options.

See some blips interviews recorded during this event:

• Chukwu-Emeka Chikezie, Afford UK
• Pedro de Lima, European Investment Bank
• Leila Rispens-Noel, INAFI International
  

by Chris Addison

See also the Brussels Briefings and accompanying reader or subscribe to the euforic feed or email alert on migration.

The financial crisis: consequences for developing countries and options for development policy

A written statement (pdf in German) of WEED for a public hearing on the financial crisis of the German Parliamentary Committee for Development Cooperation and Policy sheds light on the consequences of the global crisis and the options for development policy. According to the author, the hypothesis that the financial crisis will not affect development countries resulted to be wrong.

Already in 2008 stock markets in emerging economies faced average losses of 40% (i.e. South Africa 30,3%, Brazil 43%, China 65,6%, Russia 70,9%). Countries like the Ukraine or Pakistan had to ask for IMF support to avoid bankruptcy. Growth expectations also dropped dramatically. While development countries' economies grew 7.2 points in 2007 and 6,9 points in 2008, the average prognosis for 2009 is 4,6 points. Pessimistic scenarios even speak of growth rates of 0,1 for Africa and -0,2 for the Caribbean. Nonetheless this might only be some of the first consequences of the global crisis with other effects to follow at a later stage.

Different countries face different challenges. Countries like Brazil, which have a relatively strong economy and a big domestic market, have a stronger standing than countries with smaller markets and less diversified economies. Also economic effects of the financial crisis can have different influences on economies. The decreasing demand on raw materials for example caused by the economic breakdown will give countries which need to import these materials the chance to buy at cheaper rates. On the other hand raw material exporters will suffer under the low prices. Nonetheless many development countries belong to the second group of countries.

The paper speaks of two ways of infections, one through effects of the financial crisis on the real economy of a country and the second through the involvement in the same financial speculations that caused the crisis at the beginning. However, only some of the emerging economies were actually involved in direct financial speculations. Most effects are caused by the effects of the financial breakdown on the real economy.

Since the biggest world economies face recession this will lead to a demand reduction and negative trade growth for the first time since 1982. Additionally the UN estimates a decrease of foreign investment in the South of 10%. Both will lead to unfavorable financial situations and an increase of debts in the mid-term. Besides these rather direct effects, developing countries face specific indirect effects like the decrease of remittances and a possible decrease of ODA. Although ODA reduction did not happen so far there is the fear that necessary increases of financial funds to reach the MDGs will not take place.

Also the rapid growth in food prices was largely caused by financial speculations. This was denied when the prices spiked in 2007/2008. By then other causes were made responsible, like a global raise in demand, underinvestment in agriculture or the production of bio-fuels. However, when the prices recovered to a normal level in summer 2008 these reasons became less valuable since they only affect the markets in a long term thus could not be the cause of such rapid changes.

According to the report the price curve shows the typical pattern of a speculative bubble. When the real estate crisis started, financial investors simply started to look for investment alternatives and moved to the commodity markets, and speculated with oil and agriculture products. This bubble blasted when even trading in the commodity market became too risky in summer 2008.

The report says that also the German Federal Bank was involved in agricultural speculations. According to the UN this kind of speculation resulted in a 8% raise of extreme poverty in Sub-Sahara Africa and erased the success in the reduction of poverty between 1990-2004.

The WEED statement stresses the opportunities for a global financial system reform which need severe acting by the current global governance system. According to the paper the G20 is a appropriate institutional framework to lead such process. Additionally the participation of civil society and labor organizations needs to be institutionalized. The plans for stronger regulation and monitoring need strong financial and legal backup.

by Martin Behrens

For more on the financial crisis see the Euforic newsfeed on finance and development.

Concord Briefing on the impact of the Financial Crisis

The world economy is well into its worst crisis of a century. This is a crisis of the prevailing political and economic model of development focused so unilaterally on economic growth. This requires a deep questioning of some of the fundamental paradigms which have again been brought to the light by the crisis: the model of economic welfare through economic growth and unequal distribution of wealth and the overshoot of natural resources, both the renewable and the non-renewable.

This is a critical moment for global social and economic development. CONCORD is asking the European Union to take decisive action, not just to arrest the descent but to address the basic problems of distorted development that underpin these crises in the first place. There are some appropriate short-term responses, but that these must be accompanied by a search for fundamental changes in our economic and development models.

Briefing document (doc-file)

See also Euforic's newsfeeds on EU cooperation, on the Financial Crisis and on Concord

Global Perspectives on current climate, economic and security crises

The February 2009 issue of the magazine 'Global Perspectives' provides a first analysis on the newly established International Renewable Energy Agency (IRENA). The agency, which currently has 76 member states from industrialized and developing countries, representing 2,5 billion people, aims to accelerate and coordinate the introduction of renewable energy production. It wants to offer member states practical advice to reach their individual renewable energy targets.

On environmental policy, Yvo de Boer (Executive Secretary, UN Framework Convention on Climate Change) looks ahead to the upcoming Copenhagen summit in December 2009.

Regarding the global financial crisis, Inge Kaul (Herti School of Governance) calls for support to an appeal by a group of economists aiming to enhance coordination among the Euro-zone economies in the light of the global financial crisis. The journalist Eric Walberg looks at new ideas and solutions for the financial and economic breakdown. He also comments on the push to more global financial regulation in Europe and the US to tackle the crisis.

On the security crisis in Gaza, Baher Kamal Youssef presents his views on the background of the Gaza War and the involvement of the different interest groups. Gunilla Carlsson (Swedish Development Minister) and Karen Abu Zayd (UNRWA) call on us not to forget the children suffering under the ongoing conflict in Gaza; they offer a 10-step programme to overcome the humanitarian crisis.

Global Perspectives is a bi-lingual (English/German) joint production by IPS Inter Press Service Europe and the Global Cooperation Council, published by Globalom Media. The monthly editions on various themes of international cooperation and development are dowloadable for free.

See also the Euforic newsfeed on IPS Europe.

by Martin Behrens

A Word from Concord on the Governmental cuts in development aid

Source: Concord Flash, nr. 57, January 2009

On 3rd February, the Irish government slashed Official Development Assistance to developing countries by 95 million Euros or more than or 10% of its overall budget for 2009, barely 2 months after the UN Doha Summit on the financing of Development aid.

This was a shock since Ireland is usually considered as a progressive European development donor. The Irish aid cuts will mean that poor countries such as Malawi, which has one of the highest HIV prevalence rates in the world, could well see the suspension of funding to vital basic services such as education and health.

At a time when the financial crisis and global recession is hitting the poorest and most vulnerable hardest, this cut will have huge implications for the many developing countries receiving vital aid from the Irish government.

This represents the latest in a round of aid cuts from European donors. It signals a dangerous trend which threatens the Millennium Development Goals' commitments so vital to alleviating poverty in poor countries. Last December Italy announced aid cuts of 56%, and Latvia, which recently became a donor of development aid, released a statement last month announcing a 100% cut to its aid budget.

Jasmine Burnley, coordinator of CONCORD’s AidWatch initiative said “Europe is the world's biggest and most progressive aid donor with an aim to provide 80% of the world’s aid, some 67 billion euros, by 2010.”

“However we are seeing massive reduction of these targets. Cuts by Italy, Latvia and now Ireland have come as a triple whammy to developing countries. The decline in support from EU donors threatens efforts to tackle global poverty and inequality in the world.” she added.

CONCORD acknowledges that in this time of crisis, European governments face difficult choices, but cutting to aid to poor countries is not the answer. “If we want economic growth with global stability, we need to work towards a fair and just world" says Hans Zomer of Dóchas, the Irish national platform of development NGOs, "Ireland needs to invest in developing countries, not turn its back on the poor when times get tough”

CONCORD calls for European governments to join it in urging the Irish government to reverse this cut, and honour their own aid promises.

Contacts at CONCORD: Jasmine Burnley, CONCORD, +32 2 743 87 64

See also Euforic's newsfeeds on EU cooperation, and on Concord

Europe, developing countries and the financial crisis: response from different actors

Source: EU News, Issue 1, February 2008

The global financial crisis that erupted in 2008 will have dramatic economic, social, environmental and political consequences for all countries during 2009 and beyond. The developing world has been marginalized in many of the discussions to date, though it is directly affected. An important first step was taken with the G-20 Washington summit in November 2008 which acknowledged the need to include Southern countries in the reform of global governance.

Such a reorganization of the global system of governance raises the question on the role which Human Rights will play in the future. Social Watch – an international NGO that monitors poverty eradication and gender equality – emphasizes Human Rights as the solution in its “Social Watch Report 2008 - Rights is the answer” launched on 7th of January 2009 at the European Parliament, in the presence of Luisa Morgantini, Vice-President of the European Parliament. There concern was expressed about the risk that donors may reduce support for development and poverty eradication in view of the economic crisis. Others argued that an increase in spending on the efforts to improve Human Rights, gender equality and decent work will, in the long run, help in dealing with the crisis.

The consequences of the financial crisis for developing countries constituted one of the topics discussed on 30 January at the Informal Meeting of EU Development Ministers held in Prague, 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 fulfil their obligations in the area of development aid, from the perspective of quantity as well as quality (effectiveness of aid). 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 IFIs. Particularly disappointing however is the reluctance on the side of the UK and a few other member states to undertake any action in favour of combating tax evasion and better regulate and control tax havens. It is 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 G-20. 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.

European civil society organises itself in response to the global financial crisis
The next G-20 meeting will take place in London on 2 April 2009. This will be the first high level summit on this issue with the new US president and opportunities for change are now higher. Strong measures must urgently be taken by world leaders not only to deal with the symptoms but also address the causes of the crisis. In preparation of the G20 summit, Eurodad and a number of other European networks and European trade unions launched a process to organise joint strategies and mobilisation efforts. This process started in Paris during the second week of January, with a cross network meeting gathering more than 130 CSO representatives from across Europe, including APRODEV. Main topics analysed during the meeting were: causes; major social and environmental consequences; challenges of the crisis, together with opportunities for change; the financial system; and the trade and regulatory framework. A specific focus has been given on Europe’s responsibilities and responses, and CSOs.

The declaration adopted in Paris and other information is available on the Eurodad website.

See also Euforic's newsfeeds on the financial crisis, CIDSE and APRODEV