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Articles and Documents
2012 |2011 | 2010 | 2009 | 2008 |2007 | 2006 | Archived Articles
2012
“Extreme poverty and climate-related disasters are taking the lives of over 40,000 people every single day and severely affecting many millions of others. At the same time, dramatic cutbacks in public spending on social welfare and essential services are making it increasingly difficult for many families to meet their basic needs, even in the richest nations.” This report by Share the World’s Resources lists out 10 policy recommendations on how to best mobilize the world’s financial resources and overcome barriers to progress. (Share the World's Resources)
An overwhelming majority of states in the ILO has welcomed calls for a social safety net fund in the LDCs. The fund is expected to help setup a precautionary mechanism, as it is more economical to act preventatively than attempt to remedy ad-hoc situations as they arise. To win support from the fund, states will be required to design and implement structures that accept social protection as a globally recognized human right. However, the fund could also be used as a bargaining tool by wealthy states to negotiate deals with resource rich LDCs in return for sponsoring social protection schemes. The fund, which is still in infant stages, will no doubt have many obstacles to overcome. Who will undertake the oversight of such an operation- existing institutions or a new independent body- is only one of many questions. (Guardian)
UN secretary general Ban Ki-moon has appointed Unilever’s CEO Paul Polman to a UN panel on the post-2015 development agenda. As more businesses realize they can benefit from “development,” the UN has been reaching out to the private sector’s resource and technical capacity. However, “just because there’s a business case for development doesn’t necessarily mean there is a development case for business”— development by consumer-driven capitalism is not sustainable, does not reach the poorest of the poor, and could be tokenism for profit-driven businesses. (Guardian)
Two recent studies show that microfinance has turned into a multi-billion-dollar business, dragging the poor into speculative market dynamics and generating a dependency on international financing and actors. Banks and funds use microcredit—operated through local partners— to charge exorbitant interest rates of up to 200 percent. The aggressive collection practices have driven the poor to prostitution, child labor, suicide, and nationwide revolts. The reports criticize the general lack of strategy, vision, accountability, and regulation in the microfinance industry, which is no longer a self-reliant development process but rather a profit making scheme for global private finance companies. (IPS)
While global HIV/AIDS funding is stagnant, the number of treatments is rising. Several African countries have increased their domestic HIV/AIDS investment, which exceeded international investment for the first time ever in 2011. As an alternative to donor support, many governments favor innovating financing mechanisms such as income tax, a levy on the use of mobile phones, and a “sin tax” on alcohol and tobacco to fund the HIV/AIDS programs. (Plus News)
The microfinance market in Kyrgyzstan is overheating. The poor rural population and the absence of an efficient regulatory requirement in Kyrgyzstan have rapidly increased the number of small scale lenders that aggressively attract clients and charge high interest rates. Microfinance institutions are often driven by commercial interest rather than development goals. The rising indebtedness suggests the possibility of a sudden burst of the credit bubble. (EurasiaNet)
Islam requires Muslims to give 2.5 percent of their wealth to the poor every year. This represents a big potential in aid funding, but much of the money is mismanaged. In search for sustainable forms of aid, some organizations are trying to promote a broader perspective in Muslim giving rather than narrow conceptions of charity.(IRIN)
In the speech Bill Gates gave in January’s World Economic Forum, he told Davos that the world economic crisis was no excuse to cut aid. This Guardian article critically examines Gates ”philanthropy” arguing that the poor are not begging for charity, but demanding justice. When a plutocrat’s money comes from externalizing corporate costs to taxpayers, one should not pat Gates on the back and thank him for his generous donation, but rather ask whether the billions in his possession are really his own to redistribute in the first place. (Guardian)
The Working Party on Aid Effectiveness, an OECD Forum working towards the implementation of MDG 8 to “form a global partnership for development,” has focused on how to promote greater involvement of the private sector in the financing for development process. The private sector’s role in financing development has, however, been a source of contentious and heated debate. This article of the European Network on Debt and Development outlines five key reservations civil society organizations, which to a large extent have been shut out from the negotiation process, have about the increasing role the private sector plays in shaping the international development agenda. (Eurodad)
2011
Global Financial Integrity’s (GFI) latest study on illicit financial outflows from developing countries, reports an $8.44 trillion loss over the last decade (2000-2009). Despite efforts to contain illegal capital flows, an estimated drop from $1.55 trillion in 2008 to $903 billion in 2009 is clearly not due to improved global governance, but rather due to the global economic crisis. This is partly indicated by the significant shift from trade mispricing to other methods of concealing theft, corruption and tax evasion. At this time of crisis, outflows of capital from the developing world are particularly scandalous. (Global Financial Integrity)
Bill Gates’ long-awaited speech to the G20 leaders in Cannes was “something of a shopping list” of different options to finance future development. There was, however, a glaring omission from Gates' list: capital flight. Due to capital flight, developing countries lose billions of dollars every year—$700bn in sub-Saharan Africa alone in the past 40 years. Gates’ simple formula of “money available for development = domestic resources + inflows - outflows” omits a key part of the equation and hints at the prevailing political reluctance to tackle structural issues. (Guardian)
After the decolonization process of the 1960s, the objective of policy makers working in development cooperation was not merely to eradicate poverty, but to bridge the gap between the global North and the global South. The efforts made since, however, were unsuccessful in doing so. According to Francine Mestrum from Global Social Justice, a universal social protection system ought to be established to tackle prevailing inequality. This requires putting in place national and international redistributive systems, combating capital flight, solving the debt problem and implementing innovative sources of financing. The time has come to look for better systems not of aid, but of solidarity. (Global Social Justice)
The latest study by the European Network on Debt and Development (Eurodad) suggests that the effectiveness of aid depends on whether recipient countries can implement financed projects by purchasing goods and services from local companies. The vast majority of current aid however, is tied, which means that only foreign firms can receive aid-funded contracts. Local companies are either formally excluded or are unable to compete with powerful international firms. Eurodad’s findings call for a radical reform in current procurement practices, proposing a form of “smart procurement” in which contracts are exclusively awarded to firms based in the recipient countries.
Since its revolution in 1959, Cuba has eradicated extreme poverty and improved citizen’s health and literacy. While it is not an “economic powerhouse,” it has succeeded in moving "from misery to poverty with dignity," unlike many of its Latin American neighbors, making it an interesting developmental model. However, the author of this article says Cuba must pursue “wealth creation” to expand jobs and strengthen the economy, and applauds Raul Castro’s decision to encourage small business. While the Cuban developmental model should evolve, “wealth creation” may introduce excessive foreign investment and increase inequality in the region. (Guardian)
Since 2002, Turkey’s remarkable economic growth has led many people to call it the “Eurasian tiger.” Growth began under an International Monetary Fund-supported economic program and Turkey’s ability to resist dangers of the global recession remains impressive. However, there are growing concerns that Turkey’s growth “is not sustainable.” A large borrowing rate, skyrocketing deficit, and a 9% annual growth rate are signs of danger. While the Turkish government is taking actions to shore up its economy, such as reducing consumer lending, markets are becoming increasingly nervous. The example of Turkey proves that even developmental successes are not immune to global uncertainties. (Voice of America News)
India’s recently released data reveals an increased annual compound employment rate of only 0.82% for the period from July 2009-June 2010, even though GPD has risen rapidly. As the author of this article writes, these numbers essentially point to “jobless growth in the Indian economic boom.” However, they also reveal labor market and employment patterns that are important for policy makers. Men’s work has declined, most likely due to a decline in small-scale activities given the growth of the corporate sector of the economy. Job creation has mostly been concentrated in casual, irregular work, which is fragile and leaves workers less protected. A positive reason for the reduced labor force is the increasing number of young people pursuing education. However, India needs to develop a plan to increase all forms of employment, even small-scale activities, or its increasingly educated youth will have difficulty when entering job markets over the next few years. (Guardian)
The current state of the global economy poses an unsolvable paradox to the traditional neoliberal doctrine of development. While economic modernization based on Western models has long become unattainable for developing nations, wealthy countries are proving to be less and less willing to assist poorer nations in their road towards “development.” To overcome this paradox, Francine Mestrum of “Global Social Justice” calls for a new paradigm based on self-steered development and global solidarity. The international community ought to establish an international insurance system which enables developing countries to decide by themselves “what they want to produce, import or export.” Innovative sources of financing such as the financial transaction tax and the ecological taxes make the provision of an universal protection system a real possibility. (Global Social Justice)
This GDAE working paper examines the impact of Bilateral Investment Treaty arbitrations on developing countries. It criticizes the widely accepted views of scholar Susan Franck, who writes the BIT arbitration system is favorable to developing nations. Instead, the paper argues that developing nations are actually subject to a disproportionate number of arbitration claims and pay more in relative terms than developed nations do.
Microfinance has grown rapidly, but this article questions its impact on development. Microfinance may create mini-businesses, but it does little for real development. Ultimately, the emphasis on microfinance may simply be based on “populist appeal”. Microfinance may be much less beneficial than commonly assumed. (IPS)
In 2010, the European Union fell short of its development aid targets by 15 billion euros. A study by the Concord coalition of advocacy organizations predicts that the situation is likely to get worse rather than improve in the coming years, due in part to state practices that inflate aid budgets and the economic crises faced by Greece, Ireland and Portugal. An ongoing shortfall in aid threatens the sustainability of NGO activities and may mean development targets are not met. (IPS)
Microfinance defines poverty as the lack of access to credit and capital. This conception depoliticizes poverty and systematically overshadows its primary causes. Failing to recognize poverty as the structural exclusion from power is microfinance’s major flaw. Not mere financial inclusion but “an overhaul of systems of stark socio-economic inequality” is required to eradicate poverty. (Foreign Policy in Focus)
Microfinance, once hailed as a panacea to ending global poverty, is coming under increasing scrutiny because of usurious rates that microfinance institutions (MFIs) charge their impoverished clients. Recent accounts of borrower suicides in the Indian state of Andhra Pradesh, and allegations of coercive techniques employed by MFI workers to recover loans, have called attention to the darker side of this industry. Many borrowers live under the internationally recognized poverty threshold of $1.25 or less a day. Increased oversight and regulation of MFIs is necessary to prevent exploitation of the poor by private interests. (
istockanalyst)
2010
The wealthiest one per cent today has more than twenty per cent of the global income. One way to balance this inequality is to tax the rich. Steeply graduated income taxes would make public debt manageable. Instead of deep cuts in the public sector, the additional public revenues could help to improve education, healthcare and public transit - something that benefits all society. Transnational corporate profit might decline and local production for local consumption would expand. The taxation of the richest means investing in the livelihood of the poorest. (Dissident Voice)
The Global Environment Facility is the economic instrument of the UN environment conventions. But is a multilateral financial institution for the environment necessary? Does financing for the environment work? Many applaud the billions of dollars allocated for promoting sustainable technologies and new production models. However, Zoe Young, author and critic of a global climate fund, insists on good standards for all investments and responsible allocation of all public money. (TierrAmérica)
2009
The German Minister for Economic Cooperation and Development, Dirk Neibel, has asked for a cut of 531 million euros from the country's international development budget. Neibel thinks Germany should better spend the money for its own school teachers' salaries. The Social Democratic Party along with the German federation of NGOs opposes this new policy and reminds Germany its promises to allocate 0,51 percent of the country's GDP to development aid.
(IPS)
This article critiques the current international development framework. It describes the national, international, and systemic challenges of financing for development, and specifically development to reduce gender inequality. Author Carmen de la Cruz points out the changing attitudes toward development aid since the 1990s and the growing gap between rhetoric and action in today's globalized world. (WIDE: Globalising Gender Inequality and Social Justice)
In this presentation at a conference on global development finance, the author criticizes development aid as being part of a system that generates deepening inequality and dependence across and within countries. The author uses Venezuela as an example of a new and improved approach to development, where the Bolivarian Alternative for the Americas (ALBA) promotes regional integration and political cooperation to help member countries develop without becoming dependent on donors in the North. (Pambazuka)
Gender equality is central to development results. The 52nd Session of the Commission on the Status of Women, held in February-March 2008, focused on financing for gender equality. This report of the UN Development Fund for Women (UNIFEM) and UN Non-Governmental Liaison Service (NGLS) is the result of these discussions. It focuses on financing and addresses the link between gender equality and macroeconomic policies. (2008)
2007
Responding to pressure from the Norwegian government, the World Bank has agreed to publish a report on offshore financial centers as part of the Bank's anti-corruption work. Preceding the World Bank decision, the TaxJusticeNetwork and other NGOs had actively campaigned Norway and other members of the Leading Group on Solidarity Levies to Fund Development? to address the problem of tax evasion and offshore centers. The NGOs pointed out that every year, countries loose "hundreds of billions of dollars?" through tax evasion and rich countries bear at least as much [of] the responsibility? as poor countries do. (TaxJusticeNetwork)
The African Union plans to set up an African Investment Bank and is gathering support from African nations which will be the main subsidizers of this institution. Maxwell Mkwezalamba, the AU's Commissioner for Economic Affairs said that the continent requires US$250 billion in the next ten years to double its economy and trade by 2015 and lift thousands of people out of poverty. He also stated that rich countries have not lived up to their promises in terms of economic aid. (Reuters)
UN Secretary General Ban Ki-Moon argues that whereas the first stage of globalization benefited mainly rich countries, the second and current stage the Age of Mobility? of people, also brings riches to the poor. In 2006, migrants sent US$264 billion triple all international aid combined? in remittances to their home countries. Still, Ban argues, migration has so far mostly benefited richer countries and generated worries about brain drain in poorer ones.? (Washington Times)
In this article, Global Policy Forum's Jens Martens summarizes the events leading up to the 2008 Second Global Conference on Financing for Development. He further speculates on possible issues on the agenda, such as financing the Millennium Development Goals, reforming international aid, and introducing international solidarity levies? for development. The challenge, however, will be for governments to agree on new initiatives beyond the minimal consensus' of the first financing for development conference. (World Economy and Development)
This report marks the halfway point between the introduction of the Millennium Development Goals (MDGs) and their 2015 target date. The United Nations report shows that a few countries have made significant progress in some key areas. However, the worlds governments have a long way to go. The UN urges governments to exercise strong leadership and to scale up public investment to reach the goals. The UN also emphasizes that rich countries must make resources available to poor countries in a predictable way, allowing them to plan ahead to make the MDGs achievable.
Three more countries joined the eight-country coalition supporting the International Finance Facility for Immunizations (IFFIm). The financial securities of these governments allow the IFFIm to borrow money from the financial markets to increase funds for immunization and development of new vaccines. Although this initiative, launched by the Global Alliance for Vaccinations and Immunizations (GAVI), does not raise additional funds, it enables the organization to improve poor peoples health immediately. Nevertheless, NGOs raise concerns about future lack of funds, once GAVI has to repay the borrowed money. (Reuters)
With France and Chile implementing air-ticket taxes in 2006, the Friedrich Ebert Foundation provides an overview of the Paris conference outcome. Apart from the air-ticket tax, the report also analyzes other initiatives to raise additional money for development. A group of rich countries will set up an International Finance Facility (IFF) to frontload aid for immunization. But, unlike taxes on currency trade and carbon emissions, the IFF initiative will not increase development funds in the long term, nor will it have any positive spill-over on the international financial system or the environment.
By attacking global challenges such as malnutrition, global warming and financial crises before they actually occur, political leaders could unlock US$ 7 trillion. A UN Development Programme (UNDP) proposal encourages governments to internationally implement six specific financial tools to raise resources for development, including investments in vaccines and trade of pollution permits.(Independent)
This Oxfam and WaterAid report argues that public provision of health and education services play a most important role in ending global poverty. Poor country governments must commit to bigger and better investments in health and education. Rich countries, for their part, must support these initiatives and increase both quantity and quality of aid, fully cancel debt for all poor countries that need it and stop demanding budget cuts in and privatization of public services through the international financial institutions.
In this annual Social Watch publication, NGOs from all over the world report from their individual countries on progress and government action on social development. In addition to 42 national reports, the publication contains thematic reports mainly looking at development financing, including debt relief, international aid, domestic resources and global taxes. Rather than providing any particularly original or revolutionary? ideas, the report offers common sense? responses arguing for example that taxes should be paid by all, and that those who have more and earn more should pay more.?
