Opinion by Jomo Kwame Sundaram (kuala lumpur, malaysia)
Inter Press Service
KUALA LUMPUR, Malaysia, Oct 04 (IPS) – Ajay Banga was anointed World Bank president for promoting financial inclusion. Thanks to its success and interest rate hikes, more poor people are drowning in debt as consumer prices rise.
Meritocratic leadership?
Since the International Monetary Fund (IMF) and World Bank were set up by the United Nations Conference at Bretton Woods in 1944, the US president’s nominee has been automatically appointed Bank president. By convention then, the Bank president is a US citizen, while the IMF head is European.
Jomo Kwame Sundaram
The official IMF historian noted US authorities believed “the Bank would have to be headed by a US citizen in order to win the confidence of the banking community, and that it would be impracticable to appoint US citizens to head both the Bank and the Fund.”
Banga went to the World Bank in Washington, DC from the business world. He had spent his entire career in transnational corporations, moving from Nestlé in India to Citigroup’s microfinance division, and then Mastercard. In 2020, he became chair of the International Chamber of Commerce, founded in 1919.
For over a decade, he was chief executive officer (CEO) of Mastercard, which he denies is a credit card company. He gave shareholders a cumulative total return of 1,581% – almost five times the S&P500 market average! By 2020, it was the 21st most valuable corporation in the world, having risen from 256th when he took over.
Like most US appointees to head the Bank, Banga had no experience or earlier interest in development finance. Now, he is obliged to pursue US interests and agendas. He has already announced he will rely on the private sector for funds and ideas.
South African laboratory
Long the world’s most unequal society, South Africa (SA) became a laboratory for financial experimentation from the 1990s, from commercial microcredit to mass collateralization of welfare payments.
Leading microcredit authority Milford Bateman has shown how the SA microcredit business enriched a small white elite while economically dividing and undermining poor urban and rural black communities.
In the 1990s, male senior managers of SA financial institutions abused ‘seniority’ for their own private short-term financial gains to defraud customers, shareholders, governments and the general public.
Usurious debt promotionBateman, Patrick Bond, Lena Lavinas and Erin Torkelson have shown how Banga’s SA ‘financial inclusion’ initiative involved ‘predatory financing’. As CEO, he mobilized MasterCard to promote and profit from it.
Over a decade ago, Banga pioneered a major ‘fintech’ (financial technology) partnership with Net1, a data services firm in SA. Later, in 2016, the World Bank Group’s International Finance Corporation (IFC) bought 22%, its single largest share.
The IFC bought into Net1 to extend ‘tested’ financial services to the poor. Although Net1 was already known to be very problematic, the IFC was keen to promote private fintech platforms regardless of their consequences for the poor.
Of SA’s 60 million people, over 40% receive small monthly grants for unemployment relief, child support, retirement pensions and disability. With Mastercard’s ‘cashless’ electronic payment services appreciated for convenience and efficiency, Banga admitted, “If these guys use their card, I’m going to make money”.
Once card expenses exceed grant income, Net1 charges ‘service fees’, including a usurious 5% monthly interest rate! By 2015-17, it was earning more from financial inclusion than from distributing government grants. Thus, Net1’s shadow banking system remained unregulated.
Net1 lost its contract after bad publicity about its actual impact on the SA poor. Later, it was found to be sabotaging the state-owned post office (PO) asked to take over. Long under-funded and struggling to manage, the SAPO may soon lose the contract to another private fintech provider.
Welfare payments as debt collateral
While its digital payment services delivered monthly payments to all welfare recipients, these transfer streams effectively guaranteed credit extended. Thus, despite usurious credit terms, it faced little risk of default.
This de-risking strategy turned government welfare benefit payment commitments into debt collateral. Thus, regular cash transfers monetizing poverty relief and mitigating deprivation also served to service usurious debt.
Despite dubious evidence, World Bank staff claimed billions would escape poverty through greater access to digitalized microfinance services – small loans, savings opportunities, money transfer payments and technology, debit orders, etc. – run by ‘profit-seeking’ fintech platforms.
Much better access to such services had been enabled over a decade earlier by endorsing and celebrating microfinance and increasingly widespread credit/debit card access. But even ex-cheerleaders now agree microfinance has not reduced poverty.
Previously celebrated early fintech platforms have become quite problematic, and are now widely seen as exploitive of users. Even the Paypal CEO admits financial inclusion is essentially a buzzword for incorporating more into the financial system.
Innovation for exploitation
Two ostensible development programmes – cash transfers and financial inclusion – were very profitably integrated by Banga in SA. The public-private partnership between the government cash transfer programme and the private fintech payment-cum-credit services has become a usurious techno-financial monopoly.
Cash transfers and other services are increasingly delivered using financial inclusion technologies. With such technologies disbursing cash transfers, government-funded poverty relief programmes have been used to expand such credit facilities.
This link has enabled offering credit to cash transferees. As Erin Torkelson has shown, the Net1’s involvement in the SA cash transfer programme enabled a financial monopoly based on proprietary technology.
Government-funded cash transfers have thus provide security for more borrowing by the poor, virtually eliminating risk for the creditor. As all risk is borne by the borrowers, technologies bundling cash transfer payments with easy credit facilities ensure they cannot default.
Such bundling ensured the poor could not default, while encouraging recipients to borrow. By making the monthly government grants serve as collateral for credit, the programmes have ensured nearly risk-free profit for usurious creditors while deepening the indebtedness of the poor.
The Mbeubeus dumpsite in Dakar, Senegal, where Practical Action, an international organisation is helping the communities phase out open burning of waste. Credit: Practical Action.
by Robert Kibet (nairobi)
Inter Press Service
NAIROBI, Oct 02 (IPS) – With the African continent recycling less than 11 percent of its waste, COP28 provided leaders on the African continent to consider integrated waste systems that include informal waste workers.
Akinyi Walender, Africa Director at Practical Action, an innovative international development group, says the informal waste workers are rarely involved. She was speaking recently at the inaugural Africa Climate Summit.
“For us to tackle the issue of waste, we really have to look at how we can have a more integrated system in place, which means we need to bring everybody along,” she told a session on open burning of waste on the sideline of the summit.
Coming ahead of the upcoming Cop28 summit, Wandeler says it provided an opportunity for the African continent to think concretely about what it wants to achieve on climate issues.
“The situation on climate is so dire that we do need to really act. We should already begin to look at opportunities within the continent and make those good while we wait for the funding that is supposed to come on adaptation,” Walender told IPS in an interview.
Over 90 percent of waste generated in Africa is disposed of at uncontrolled dumpsites and landfills, often with associated open burning. Nineteen of the world’s 50 biggest dumpsites are located in Africa, all in Sub-Saharan Africa.
The African Union set an ambitious target for African cities to recycle at least half of their waste by 2023, but many are still far from achieving this.
According to the UN Environment Programme, the goal can be met and even surpassed with a shift of organic waste to composting and bioenergy recovery, along with the refurbishment, repair, reuse, and recycling of the waste.
In 2016, Sub-Saharan Africa alone generated around nine percent of global waste or 180 million tonnes, of which about two-thirds is dropped in landfills and open dump sites, left to pollute the nearby environment and global climate. This is projected to quadruple by 2050.
Last year, environment ministers from 54 African countries met in Dakar, Senegal, at the 18th session of the African Ministerial Conference on the Environment (AMCEN), committing to achieve a 60 percent reduction of open waste burning by 2030 and fully phase out open burning of waste by 2040.
It is an ambitious target, which Walender says, “With the much wider UN 2030 Agenda on the Sustainable Development Goals (SDGs) in place, many countries have so much that they need to grapple with”.
Akinyi Walender, the Director of Practical Action Africa, speaking during a session on open burning of waste at the sideline of the recent Africa Climate Summit in Nairobi. Credit: Robert Kibet/IPS
“We have many policies in place, but most are hardly implemented. The whole topic on open burning of waste and its 2040 timeline is very short. Many have yet to even put in place those policies that govern the open burning of waste. I feel that this timeline is actually very short,” Walender told IPS in an interview.
Sam Dindi, director for training and community mobilization at Mazingira Yetu, a Kenyan-based environment organization, says if countries embrace a green and circular economy in which waste is reused, it has the potential to create job opportunities for the youth.
“Open burning of waste is a quick way of addressing a problem, but again, it brings an even bigger problem that we may not be able to solve both as a country and as a continent,” he told IPS in an interview.
Last year, Kenya passed the Solid Waste Management Act 2022, dubbed Sustainable Solid Waste Management Act 2022, which requires the closure of all open dumpsites and transit to landfills, a controlled form of dumpsite.
“Kenya is making progress. Last year, Kenya passed the Solid Waste Management Act 2022, which transforms how we manage waste from the previous linear economy and promotes a circular economy in which waste is given a new lease of life. It is either upcycled or recycled,” says Dindi.
According to Dindi, the implementation of the policies in place remains a barrier to the efforts of various stakeholders.
“Implementation of the policies is where the rubber meets the road. This is where we lack the political goodwill because perhaps implementing these policies is perceived to affect some businesses, policymakers, or other interested parties,” Dindi told IPS.
Dumping of waste, according to stakeholders who spoke at the session, agreed that the open burning of waste heavily impacts the impoverished and marginalized communities.
A 2021 report by Practical Action dubbed Managing Our Waste indicates that nearly two billion people on the planet live without any form of waste collection, with Sub-Saharan Africa experiencing some of the lowest waste collection coverage.
The report recommends monitoring waste management as a people-centred service, integrating the voice of those most affected and improving informal waste workers’ lives and working conditions.
“At all levels, waste policies need to focus not only on environmental benefits but also on improving the lives of the poorest communities and workers. Their voices need to be heard in all key decision-making processes,” reads the report.
In Senegal, Practical Action is working with local communities and government agencies to reduce the open burning of waste at two major dumping sites, namely, the infamous Mbeubeus site in Dakar and a second one in Thiès.
“While it is generally seen as a responsibility of the local government, the community and the private sector need to be involved. If you look at the whole circular economy, there is the ability to reuse, recycle the waste, and reorient it in terms of packaging,” Walender told IPS.
Mohammad Subhan Dar decided to abandon farming forever as changes in climate affected his traditional crops, but a project introducing lavender farming saved his farm. Credit: Umer Asif/IPS
by Umar Manzoor Shah (bijbehara, india)
Inter Press Service
BIJBEHARA, INDIA, Sep 29 (IPS) – Creating resilience is crucial to climate change justice. In Bijbehara, a hamlet south of Kashmir’s capital, Srinagar, lavender farming has meant farmers grappling with unseasonal rains, prolonged heat waves, and severe water scarcity have found a new means of survival.
Mohammad Subhan Dar diligently tends to some bright purple plants on a four-acre farm in Bijbehara, a hamlet south of Kashmir’s capital, Srinagar. As you draw nearer, you’ll be mesmerized by the sight of sprawling lavender fields, where about 10 to 15 farmers, including Dar, prepare for a promising harvest.
Smiles grace the faces of these hardworking individuals as the harvest season draws near.
However, this hasn’t always been the case. The farmers in this village were deeply troubled by the significant shifts in weather patterns. Unseasonal rains, prolonged heat waves, and severe water scarcity have become constant sources of concern for them.
Kashmir Valley – a northern Indian state bordering Pakistan – has agriculture as its primary source of livelihood. Farmers comprise 80 percent of the state’s population, and agriculture and horticulture are the backbone of the state’s economy. The unique climate in the foothills of the Himalayas allows for the growing of exotic fruits and vegetables not usually found in India.
According to government records, an estimated 60 percent of Kashmir’s agriculture is dependent on rainwater for irrigation. However, during the past few years, Kashmir Valley has witnessed the worst-ever dry seasons. Meteorological Department shows that instead of an average of 622 mm of snow, the mountain ranges in Valley during the past three years witnessed a mere 172 mm – indicating a problematic change in the weather pattern. This has directly affected the region’s agriculture sector, with farmers incurring devastating losses.
Farmers cooperate and now benefit from lavender which is a valuable source of essential oils that find their way into soaps, cosmetics, fragrances, air fresheners and medicinal items. Credit: Umer Asif/IPS
Mohammad Subhan Dar is one such farmer who, in 2018, decided to abandon farming forever.
“My huge chunk of land gave me no income. It was like working round the year and getting nothing in the end. While we sowed the paddies, hoping for profitable yields, the dry weather would leave us wrecked. We would not be able even to get basic costs mitigated, let alone earn anything out of it,” Dar told IPS.
Around this time, the government’s Department of Agriculture asked farmers if they could switch to alternate farming methods that could provide them profitable harvests owing to indications of climate change in the region. Lavender farming was provided as a viable alternative.
Lavender is a valuable source for extracting essential oils, which finds its way into creating various products, including soap, cosmetics, fragrances, air fresheners, and medicinal items. Notably, lavender plants are not particularly water-thirsty and tend to resist pests and other crop-damaging creatures. A single lavender plant can start being harvested after just two years from planting, continues to bloom for up to fifteen years, and demands minimal maintenance.
An estimated 1,000 farming families are engaged in lavender cultivation across more than 200 acres in various regions of Jammu and Kashmir. Credit: Umer Asif/IPS
Lavender farming was initiated as part of the ‘Aroma Mission,’ a collaborative effort between the Council of Scientific and Industrial Research and the Indian Institute of Integrative Medicine under the Ministry of Science and Technology.
Following the successful completion of Phase I, CSIR has embarked on Phase II, a larger endeavour that aims to involve more than 45,000 skilled individuals and benefit over 75,000 families. According to officials, the climate in Jammu and Kashmir is exceptionally well-suited for lavender cultivation, given its ability to thrive in cold temperatures and moderate summer conditions.
The Kashmir region within the Union Territory of Jammu and Kashmir is widely recognized as a significant centre for medicinal plants. Lavender holds excellent promise as a therapeutic and aromatic herb that can positively impact India’s economic and healthcare prospects. The lavender produced in Kashmir has garnered attention from both domestic and international markets. Research findings have indicated that lavender farming can be lucrative for farmers, provided there is sustained demand and well-organized farmer activities.
Dar says he had a chunk of land adjacent to his paddy field, and other villagers had pockets of cultivable lands there.
Lavender is resilient and doesn’t need lots of water; it is also resistant to pests and has a 15-year lifespan. Credit: Umer Asif/IPS
“We joined hands, got training from the government, and began the cultivation of lavender. It needs meagre care, and climate change doesn’t affect its production in any manner. It was a win-win situation for us. The hopes were high from the very beginning. As we slowly ventured into it, we found its importance,” Dar says.
Another farmer, Imtiyaz Ahmad, says the profit from Lavender farming is far greater than rice cultivation and that the farmers are a little worried about losses if the weather remains bad.
“There is nothing like dry weather or heavy rainfalls here that could affect the lavender cultivation. The research done at the government level has revealed how suitable this place is for lavender crops. Farmers in large numbers are switching to lavender cultivation and abandoning the traditional methods that used to provide them nothing except anxiety and losses,” Ahmad said.
Farmers claim that selling at least one litre of its oil fetches them Rs 30,000 (500 USD). The farmers say that lavender grown over one hectare of land gives them a minimum of 50 litres of lavender oil.
As per the government estimates, over 1,000 farming families are currently engaged in lavender cultivation across more than 200 acres in various regions of Jammu and Kashmir. Each of these farmers has provided employment opportunities to at least five additional individuals, resulting in the mission already benefiting over 6,000 families.
“Farmers in the districts of Anantnag, Pulwama, Budgam, Ganderbal, and Kupwara have begun to shift away from traditional crops and are increasingly embracing lavender cultivation,” a senior government official told IPS.
Dar believes that it has secured his future.
“It proved to be the best alternative to traditional farming in times of the drastic changes occurring at a frantic pace in Kashmir.”
Transport barges navigate one of the branches of the Paraná River in Argentina’s Santa Fe province. The Paraná, the second longest river in South America, has been turned into a major waterway through which a large part of Paraguay’s and Argentina’s agricultural exports are shipped out of the region. CREDIT: Fundación Humedales
by Daniel Gutman (buenos aires)
Inter Press Service
BUENOS AIRES, Sep 29 (IPS) – In addition to being a majestic river – the second longest in South America after the Amazon – the Paraná River is the waterway through which a large part of the area’s primary goods are exported. Today, its economic importance has sparked an unexpected diplomatic conflict between Argentina and the countries with which it shares the basin.
Argentina’s decision to charge tolls to vessels on its stretch of the river led to a formal complaint from Paraguay, Brazil, Uruguay and Bolivia, which argue that the river corridor agreement signed by the five countries in 1994 stipulated that no taxes or tariffs could be imposed without the approval of all parties.
The Paraguay-Paraná Waterway River Transport Agreement created an Intergovernmental Committee as the political body that would ensure its operation and maintain it as a motor for the development of the Southern Common Market (Mercosur), established by Argentina, Brazil, Paraguay and Uruguay in 1991 and later joined by Bolivia.
Tension reached unprecedented levels with Paraguay, a landlocked country that owns a gigantic fleet of ships that carry millions of tons of soybeans and beef, the engines of its economy, to the Atlantic Ocean and often return with fuels, essential to supply a nation that produces no oil or gas.
“What is happening is very serious. Paraguay has invested three billion dollars in the last 10 years and has 2,500 transport barges, one of the largest fleets in the world,” Andrea Guadalupe, vice-president in Argentina of the Mercosur-Southeast Asia Chamber of Commerce, which groups export companies from different countries, told IPS.
“It is not wrong for Argentina to charge a toll, because it carries out dredging and beaconing works that allow large ships to pass through the Paraná. But what is wrong is that it has not consulted the other countries and has taken a unilateral decision,” she argued.
Paraguayan Pesident Santiago Peña announced that he would resort to international arbitration, saying that his country’s sovereignty was at stake, and stating: “Paraguay has no future without the free navigability of the rivers.”
Although Peña denied that it was a reprisal, Paraguay announced this September that it would keep half of the electricity from the Yacyretá power plant located on the border between the two countries, on the Paraná River, which has an installed capacity of 3,200 megawatts.
Traditionally, although it is entitled to 40 percent, Paraguay has kept only 15 percent of Yacyretá’s energy and ceded the remaining 85 percent to Argentina, a country with a population of 46 million inhabitants, six times larger than Paraguay’s, which means it obviously consumes more energy.
The Rio de la Plata, seen from Buenos Aires, is at the mouth of the Paraná River and leads to the Atlantic Ocean, allowing the transportation to the export markets of a large part of the agricultural products of one of the most productive areas of South America. CREDIT: Daniel Gutman / IPS
Argentina says it invests between 20 million and 25 million dollars a year in dredging work on the Paraná, which in recent years has become more necessary due to a persistent drop in the water level, which has forced barges to carry less cargo and has increased the companies’ logistical costs.
“The situation is affecting the relationship between two countries that are brothers. Argentina’s attitude is not in line with the agreements, and Paraguay is a landlocked country that needs the river to connect with the world,” Héctor Cristaldo, president of the Union of Production Chambers (UGP), which groups Paraguayan agricultural business chambers, told IPS.
Cristaldo said the main impact for Paraguay is in the supply of fuels used for agriculture and livestock and also for land transportation. “Paraguay has no trains; everything moves on wheels,” he said.
The toll crisis escalated into open friction in early September, when a Paraguayan flagged barge heading north with 30 million liters of fuel was held up for several days by Argentine authorities who released it when it agreed to pay some 27,000 dollars in tolls.
The rate for vessels put into effect in January 2023 is 1.47 dollars per ton transported. It was set by the General Administration of Ports (AGP), the government agency that controls the Argentine section of the waterway.
The new toll drew a statement from the governments of Paraguay, Brazil, Bolivia and Uruguay, which expressed “special concern because it is a restriction on the freedom of transit” and asked Argentina to collaborate “to facilitate commercial transport, favoring the development and efficiency of navigation.”
Paraguayan President Santiago Peña (L) is greeted by his Argentine counterpart Alberto Fernández on Aug. 15, when he took office in Asunción. Relations between the two countries later deteriorated over navigation rights in the Paraná River basin. CREDIT: Presidency of Argentina
From Mato Grosso to the sea
The Paraná River, together with its tributary, the Paraguay River, form a waterway stretching almost 3,500 kilometers from Mato Grosso in west-central Brazil to its mouth in the Río de la Plata, which in turn flows into the Atlantic. The basin covers almost 20 percent of South America’s territory, and has an enormous biodiversity and a remarkable productive capacity.
The lower section, from the central Argentine city of Rosario to the mouth of the river, has been dredged to allow trans-oceanic vessels to pass through, carrying millions of tons of agricultural products for export each year. In total, some 100 million tons of goods are transported through the waterway every year.
The work began in 1995, when Argentina granted its section under concession to a consortium formed by the Belgian maritime infrastructure giant Jan de Nul and the Argentine Grupo Emepa, to be in charge of dredging and signaling. Thus, the river was deepened from its natural 22 feet to 34 feet from Rosario – the country’s main agro-industrial center – to the mouth.
Further north, the waterway is only 12 feet deep, which only allows the navigation of barges, with which Paraguay and Bolivia export a major part of their soybean production, which is transferred to larger ships in Rosario.
The following year, the Argentine Ministry of Agriculture authorized the cultivation of transgenic soybeans, which would lead to a major expansion of the agricultural frontier and great pressure from agribusiness to deepen the dredging of the Paraná, which crosses the most productive area of Argentina, so that larger ships could enter.
Map of the Paraguay-Parana waterway. CREDIT: Afip
Low cost transportation
“The Paraná was transformed into a waterway that began to fulfill a function analogous to the one played by the railroad until the first third of the 20th century: to facilitate the expansion of the productive frontier and to be a low-cost transit route,” wrote geographer Álvaro Álvarez, vice-director of the Geographic Research Center of the public Universidad Nacional del Centro.
Álvarez maintains that the Paraná today is “a key infrastructure in the insertion of the region as a supplier of commodities into the international economy, a process through which industrial agriculture, mega-mining and hydrocarbon exploitation have been degrading ecosystems for decades, expelling populations from territories and affecting the health of communities.”
One of the main questions about the waterway is that there are no studies of the environmental impact generated by the modification of the river and the constant traffic of large vessels.
“The State presented a 30-year-old environmental impact study in the file. Since then there has been and there continues to be removal of thousands of tons of sediment from the riverbed, which in many areas is contaminated with agro-toxins from industrial agriculture, and it is not known how that impacts the contamination and the dynamics of the river,” Lucas Micheloud, a member of the Association, told IPS.
“It is not a matter of adapting the river to the size of the ships, but of the ships adapting to the river,” said Ariel Ocantos, a graduate in International Relations and member of the Ecologist Workshop of Rosario, one of the environmental organizations demanding greater citizen participation in the interventions carried out in the Paraná River.
“We made several requests for information to the government because we want to know if they are conducting environmental impact studies. There is very little information and we are demanding citizen participation, which is absolutely necessary,” he said.
LIMA, Sep 28 (IPS) – Nearly 700,000 people have migrated internally in Peru due to the effects of climate change. This mass displacement is a clear problem in this South American country, one of the most vulnerable to the global climate crisis due to its biodiversity, geography and 28 different types of climates.
“We recognize migration due to climate change as a very tangible issue that needs to be addressed,” Pablo Peña, a geographer who is coordinator of the Emergency and Humanitarian Assistance Unit of the International Organization for Migration (IOM) in Peru, told IPS.
In an interview with IPS at the UN agency’s headquarters in Lima, Peña reported that according to the international Internal Displacement Monitoring Center, the number of people displaced within Peru’s borders by disasters between 2008 and 2022 is estimated at 659,000, most of them floods related to climate disturbances.
In this Andean country of 33 million inhabitants, there is a lack of specific and centralized data to determine the characteristics of migration caused by environmental and climate change factors.
Peña said that through a specific project, the IOM has collaborated with the Peruvian government in drafting an action plan aimed at preventing and addressing climate-related forced migration, on the basis of which a pilot project will begin in October to systematize information from different sources on displacement in order to incorporate the environmental and climate component.
“We aim to be able to define climate migrants and incorporate them into all regulations,” said the expert. The project, which includes gender, rights and intergenerational approaches, is being worked on with the Ministries of the Environment and of Women and Vulnerable Populations.
He added that this type of migration is multidimensional. “People can say that they left their homes in the Andes highlands because they had nothing to eat due to the loss of their crops, and that could be interpreted, superficially, as forming part of economic migration because they have no means of livelihood. But that cause can be associated with climatic variables,” Peña said.
Pablo Peña, coordinator of the Emergency and Humanitarian Assistance Unit of the International Organization for Migration (IOM) in Peru, stands in front of the headquarters of this United Nations agency in Lima. He highlights the need to address the situation of internal migration driven by the impacts of climate change. CREDIT: Mariela Jara / IPS
The Central Reserve Bank, in charge of preserving monetary stability and managing international reserves, lowered in its September monthly report Peru’s economic growth projection to 0.9 percent for this year, partly due to the varied impacts of climate change on agriculture and fishing.
This would affect efforts to reduce the poverty rate, which stands at around 30 percent in the country, where seven out of every 10 workers work in the informal sector, and would drive up migration of the population in search of food and livelihoods.
“The World Bank estimates that by 2050 there will be more than 10 million climate migrants in Latin America,” said Peña.
The same multilateral institution, in its June publication Peru Strategic Actions Toward Water Security, points out that people without economic problems are 10 times more resistant than those living in poverty to climatic impacts such as floods and droughts, which are increasing at the national level.
The country is currently experiencing the Coastal El Niño climate phenomenon, which in March caused floods in northern cities and droughts in the south. The official National Service of Meteorology and Hydrology warned that in January 2024 it could converge with the El Niño Southern Oscillation (ENSO) global phenomenon, accentuating its impacts.
El Niño usually occurs in December, causing the sea temperature to rise and altering the rainfall pattern, which increases in the north of the country and decreases in the south.
The manager of Natural Resources of the Piura regional government, Juan Aguilar, described the vulnerability to climate change of this northern coastal region of Peru at a September meeting organized by the IOM in Lima. The official explained that the El Niño climate phenomenon has become more intense and frequent due to the effects of climate change, which aggravates its impacts on the population, such as severe flooding this year. CREDIT: Mariela Jara / IPS
Reluctance to migrate to safer areas
Piura, a northern coastal department with an estimated population of just over two million inhabitants, has been hit by every El Niño episode, including this year’s, which left more than 46,000 homes damaged, even in areas that had been rebuilt.
Juan Aguilar, manager of Natural Resources of the Piura regional government, maintains that the high vulnerability to ENSO is worsening with climate change and is affecting the population, communication routes and staple crops.
At an IOM workshop on Sept. 5 in Lima, the official stressed that Piura is caught up in both floods and droughts, in a complex context for the implementation of spending on prevention, adaptation and mitigation.
Aguilar spoke to IPS about the situation of people who, despite having lost their homes for climatic reasons, choose not to migrate, in what he considers to be a majority trend.
“People are not willing overall to move to safer areas, even during El Niño 2017 when there were initiatives to relocate them to other places; they prefer to wait for the phenomenon to pass and return to their homes,” he added.
View of the Rimac River as it passes through the municipality of Lurigancho-Chosica, in the Peruvian province of Lima. In this town, many families are still living in housing in areas at high risk, which is exacerbated during the rainy season that begins in December and has intensified due to climate change and the increased recurrence of the El Niño climate phenomenon. CREDIT: Mariela Jara / IPS
He explained that this attitude is due to the fact that they see the climatic events as recurrent. “They say, I already experienced this in such and such a year, and there is a resignation in the sense of saying that we are in a highly vulnerable area, it is what we have to live with, God and nature have put us in these conditions,” Aguilar said.
He acknowledged that with regard to this question, public policies have not made much progress. “For example after 2017 a law was passed to identify non-mitigable risk zones, and that has not been enforced despite the fact that it would help us to implement plans to relocate local residents to safer areas,” he added.
The regional official pointed out that “we do not have an experience in which the State says ‘I have already identified this area, there is so much housing available here for those who want to relocate’ , because the social cost would be so high.”
“We have not seen this, and the populace has the feeling that if they are going to start somewhere else, the place they abandon will be taken by someone else, and they say: ‘what is the point of me moving, if the others will be left here’,” Aguilar said.
Paulina Vílchez, 72, has always lived in the Peruvian municipality of Lurigancho-Chosica. Despite the fear every year that the Rimac River might flood and that mudslides could occur in one of the 21 ravines in the area, she has never thought of moving away. “I’m not going to go to an empty plot to start all over again, that’s why I’ve stayed. I leave everything in the hands of God,” she said. CREDIT: Mariela Jara / IPS
The fear of starting over
Some 40 km from the Peruvian capital, in Lurigancho-Chosica, one of the 43 municipalities of the province of Lima, the local population is getting nervous about the start of the rainy season in December, which threatens mudslides in some of its 21 ravines. The most notorious due to their catastrophic impact occurred in 1987, 2017, 2018 and March of this year.
Landslides, known in Peru by the Quechua indigenous term “huaycos”, have been part of the country’s history, due to the combination of the special characteristics of the rugged geography of the Andes highlands and the ENSO phenomenon.
In an IPS tour of the Chosica area of Pedregal, one of the areas vulnerable to landslides and mudslides due to the rains, there was concern in the municipality about the risks they face, but also a distrust of moving to a safer place to start over.
“I came here to Pedregal as a child when this was all fields where cotton and sugar cane were planted. I have been here for more than sixty years and we have progressed, we no longer live in shacks,” said 72-year-old Paulina Vílchez, who lives in a nicely painted two-story house built of cement and brick.
On the first floor she set up a bodega, which she manages herself, where she sells food and other products. She did not marry or have children, but she helped raise two nieces, with whom she still lives in a house that is the fruit of her parents’ and then her own efforts and which represents decades of hard work.
Vílchez admits that she would like to move to a place where she could be free of the fear that builds up every year. But she said it would have to be a house with the same conditions as the one she has managed to build with so much effort. “I’m not going to go to an empty plot to start all over again, that’s why I’ve stayed. I leave everything in the hands of God,” she told IPS.
Maribel Zavaleta’s home in the Peruvian municipality of Chosica is built of wood, near the Rimac River and just a meter from the train tracks. She arrived there in 1989, relocated after a mud, water and rock slide two years earlier in another part of the town. She constantly worries that another catastrophe will happen again, and says she would relocate if she were guaranteed safer land and materials to build a new house. CREDIT: Mariela Jara / IPS
Very close to the Rimac River and next to the railway tracks that shake her little wooden house each time the train passes by lives Maribel Zavaleta, 50, born in Chosica, and her family of two daughters, a son, and three granddaughters.
“I came here in 1989 with my mom, she was a survivor of the 1987 huayco, and we lived in tents until we were relocated here. But it’s not safe; in 2017 the river overflowed and the house was completely flooded,” she told IPS.
Zavaleta started her own family at the age of 21, but is now separated from her husband. Her eldest son lives with his girlfriend on the same property, and her older daughter, who works and helps support the household, has given her three granddaughters. The youngest of her daughters is 13 and attends a local municipal school.
“I work as a cleaner and what I earn is only enough to cover our basic needs,” she said. She added that if she were relocated again it would have to be to a plot of land with a title deed and materials to build her house, which is now made of wood and has a tin roof, while her plot of land is fenced off with metal sheets.
“I can’t afford to improve my little house or leave here. I would like the authorities to at least work to prevent the river from overflowing while we are here,” she said, pointing to the rocks left by the 2017 landslide that have not been removed.
BANGKOK, Thailand, Sep 27 (IPS) – Many nations are engaged in ambitious urban planning endeavors and the creation of new capital cities. Nusantara, Indonesia, is the latest in a series of modern cities that have sprung up across Asia.
The government aims to create a model capital city based on the principles of liveability and green urban development on the island of Borneo.
Indonesia seeks to relocate its capital due to flooding, land subsidence, overpopulation and congestion in Jakarta, located on the island of Java, where 60 per cent of the country’s population of close to 280 million lives.
Nusantara will also play a role in rebalancing the country’s economy, and redistributing economic growth outside Java. But how can the government get such a complex endeavor right?
In this article, we explore how planners of Nusantara are leveraging a UN-supported mechanism, called the Voluntary Local Review (VLR), to promote sustainability and uphold human rights. VLRs are typically performed by authorities of existing subnational administrative areas such as provinces and cities.
Nusantara will be the first VLR for a new city ever undertaken – in order for authorities to integrate sustainability actions and key principles such as leaving no one behind already during the development stage.
Valuable lessons from other new Asian cities
• Malaysia’s sustainable approach: Putrajaya, just south of Kuala Lumpur, was designed as an intelligent garden city. Its planning emphasizes green and sustainable development. Rather than separating indigenous residents from their traditional land, it incorporated existing Malay villages into the plan. The lesson here is that new capital cities should prioritize local land rights and sustainability through green infrastructure. Such initiatives contribute to a better quality of life and environmental preservation. • Republic of Korea’s phased development: Sejong City’s incremental approach to its development as an administrative capital is a testament to the advantages of not rushing construction and drawing from lessons learned throughout the process. It was created to decentralize economic and political power away from Seoul. It also showcases the importance of designing new capital cities with resilience to climate change in mind, given the increasing threats of extreme weather events. • Kazakhstan’s sustained investments: Astana’s development and transformation as a capital city involved substantial investment in infrastructure, including the futuristic Norman Foster-designed Khan Shatyr Entertainment Center and the Bayterek Tower. One key lesson is that comprehensive urban planning, including spatial integration of transportation, housing, green spaces and public services, are crucial. Astana’s transformation into a thriving city of 1.3 million demonstrates the importance of having a clear, long-term vision.
Credit: Asian Development Bank
Seven key takeaways for Nusantara’s way forward
Nusantara is learning from these examples by leveraging sustainability in its master planning and closely working with ESCAP, the UN Country Team in Indonesia and the Asian Development Bank to prepare a baseline VLR report as a tool for fostering inclusive, sustainable and rights-based development.
1. Transparency and accountability: The VLR promotes transparency by providing detailed information about the progress and challenges faced in implementing the new capital. This transparency can help build trust among stakeholders, including the public, investors and government agencies. The VLR can demonstrate how the new capital’s development aligns with global goals. 2. Assessment of progress: The VLR can evaluate the sustainability of the new capital, including its expected environmental impact and efforts to promote sustainable practices. Nusantara aims to be a “sustainable forest city” with 25 per cent built up urban area, 65 per cent tropical forest through reforestation and 10 per cent parks and food production areas. The plan aims to conserve much of Nusantara’s tropical forest, allowing the city to be a net carbon sequestration sink before 2030 along with the goal to be a carbon neutral city by 2045. 3. Data-driven decision making: By collecting and presenting data on the new capital’s development in one place, the VLR can facilitate integrated data-driven decision-making. It can help policymakers identify trends and make informed choices regarding resource allocation and policy adjustments. In this process, the VLR requires municipal government departments to effectively work together and break down silos. 4. Stakeholder engagement: Indigenous communities live on the site, including approximately 800 families of the Balik people. The VLR can highlight the importance of involving local communities in the planning and implementation process. It can document community feedback and demonstrate how their input has been considered and make recommendations for institutionalizing stakeholder engagement processes. 5. Attracting investment: The cost estimate for Nusantara is $33 billion (Rp466 trillion), with the state budget only able to cover up to 19 per cent of the cost. Investors often look for transparent and well-documented information when considering investments. A VLR can serve as a tool to attract both domestic and international investors by showcasing the potential and progress of the new capital. 6. International collaboration: Sharing a VLR report with international organizations and other countries can open avenues for benchmarking, collaboration and support. This can include financial aid, technical assistance, and knowledge exchange. 7. Risk mitigation: Identifying risks and challenges in the VLR allows for proactive mitigation strategies. This can help prevent delays and cost overruns in the development process.
While significant attention is focused on Nusantara, it’s clear that relocating administrative functions may not address all social and environmental problems in Jakarta, especially for those most vulnerable.
The development of Nusantara has the potential to help Jakarta address its longstanding problems by relieving population pressure, improving infrastructure and setting an example for sustainable urban development. However, the success of this endeavor will depend on careful planning, infrastructure investment, and effective governance.
Omar Sidique is Economic Affairs Officer, UN Economic and Social Commissions for Asia and the Pacific; Diani Sadiawati is Special Staff to the Head, Nusantara Capital City Authority, Government of Indonesia; and Diandra Pratami is Development Coordination Officer, UN Resident Coordinator’s Office, Indonesia
Opinion by Jomo Kwame Sundaram (kuala lumpur, malaysia)
Inter Press Service
KUALA LUMPUR, Malaysia, Sep 27 (IPS) – In recent years, public-private partnerships (PPPs) have spread rapidly. While usually profitable for the private partners, PPPs have generally not served the longer-term public interest.
PPPs as miracle all-purpose solution
As Eurodad has shown, PPP financing has grown in recent years, particularly in the Sustainable Development Goals (SDGs) funding discourses. Adopted by the UN in September 2015, the SDGs endorsed PPP financing.
Jomo Kwame Sundaram
Earlier, the mid-2015 Third UN Conference on Financing for Development in Addis Ababa had failed to ensure adequate financing. This was mainly due to rich nations opposing a UN-led international tax cooperation initiative.
Instead, PPPs were strongly endorsed in the 2015 Addis Ababa Action Agenda. Weeks later, SDG17 referred to PPPs as ‘means of implementation’. This all sought to “encourage and promote effective public, public-private and civil society partnerships”.
PPPs have been promoted as a means to finance and deliver infrastructure, social services and, increasingly, climate-related projects. Advocates claimed PPPs would also help overcome other problems besides funding. PPPs, they claimed, would help improve project selection, planning, implementation and maintenance.
PPP promotion
Some advocates even claim only the private sector can deliver high-quality investment and efficiency in infrastructure and social service delivery. Private financing reduces budget-constrained governments’ need to raise funds upfront to finance, develop and manage projects.
Increased private financing supposedly also overcomes public sector incapacity to deliver high-quality infrastructure and public services. Undoubtedly, many government capacities have been diminished by decades of structural adjustment, austerity and less public finance.
This has been worsened by rich countries’ unmet commitments to contribute 0.7% of national income as official development assistance (ODA) on concessional terms. The global North has also been unwilling to effectively stem illicit financial outflows, e.g., due to tax dodging.
PPP promotion has involved many means, media and institutions, including ‘donor’ agencies, multilateral development banks (MDBs), UN agencies, international consultants, transnational accounting firms, and the World Economic Forum (WEF).
The World Bank has long promoted private financial investments in development, as well as ‘blended finance’ and PPPs more recently. In 2022, the influential WEF even proclaimed PPPs as essential for pandemic recovery.
Promoting private finance
Such promotion of private finance has implications far beyond the actually modest amount of funds raised through ‘blended finance’ and PPPs. Almost every project so funded is touted as proof that private finance should be privileged, including by guaranteeing returns using public finance.
The World Bank and other MDBs are devoting considerable effort to advise governments on the use of PPPs. By contrast, they have not put comparable efforts into improving the quality and effectiveness of publicly financed infrastructure and social services.
Over the years, the World Bank Group has produced different tools – including model language for PPP contracts, which favour private sector interests – often to the detriment of the public partner, ultimately governments in need of financing.
Regional development banks – such as the Asian Development Bank, the African Development Bank and the Inter-American Development Bank – have strategic frameworks, networks and dedicated offices to support countries implementing PPPs.
National PPP promotion
PPP advocacy has led to changes in laws, regulatory frameworks and policy environments at international, national and local levels. Developing countries have also started including PPPs – to scale up infrastructure and public service provision – in national development plans.
Many developing countries have enacted laws enabling PPPs and set up ‘PPP Units’ to implement PPP projects. The World Bank, International Monetary Fund (IMF) and regional development banks work closely with private partners to provide policy guidance advising governments on how to best enable PPPs.
All this has transformed policy formulation for public service provision to attract private investors – an agenda Daniela Gabor dubs the ‘Wall Street Consensus’. This implies “an elaborate effort to reorganize development interventions around partnerships with global finance”.
PPPs have not delivered
But actual experiences have not confirmed this favourable impression promoted by PPP advocates. Instead, PPPs have become a major cause for concern. Reliable data on international PPP trends are hard to find. Also, different PPP definitions and terminology have confused reporting.
The World Bank’s Private Participation in Infrastructure Projects Database reports on economic infrastructure – such as for energy, transport, water and sewerage – in 137 low- and middle-income countries.
The Covid-19 pandemic undoubtedly disrupted PPP planning, preparation and procurement. But even the World Bank admits that delays and cancellations were not only due to Covid-19 as the pandemic exposed projects already in trouble for other reasons.
Nonetheless, PPPs’ financial impacts to date have been small, as the public sector continues to dominate. But little private investment – including PPPs – goes to low-income countries. Most such projects are concentrated in a few countries.
PPPs tend to be found in countries with large and developed markets allowing faster cost recovery and more secure revenues. This implies market ‘cherry-picking’ – a selection bias – with private investments going to more affluent urban areas rather than to the needy.
The major setbacks to both the SDGs and climate progress in the last decade are not only due to financing. But they are more than enough to underscore that recent reliance on blended finance and PPPs has worsened, rather than helped the situation. The empire of private finance has no clothes!
The state-owned Petróleos Mexicanos (Pemex) oil company is completing its seventh refinery on a 600-hectare site at Dos Bocas in the municipality of Paraíso, in the southeastern state of Tabasco. The plant will process some 290,000 barrels of fuels per day when it reaches full capacity. CREDIT: Erik Contreras-Gerardo Morales / IPS
But the monument lacks another element that has been vital to the region: oil, which has damaged the other three symbols through pollution. Marine animals have been affected by the oil and the mangroves have almost been cut down in a territory that had ample reserves of crude oil.
Despite the fading bonanza, the Mexican government decided to build the Olmeca refinery in the industrial port of Dos Bocas, in Paraíso, to refine some 290,000 barrels per day of oil from the Gulf of Mexico and thus reduce gasoline imports.
It will be the seventh installation of the National Refining System in the country, in a port area that already has a crude oil shipping and export center of the state-owned oil giant Petróleos Mexicanos (Pemex), which controls the exploitation, refining, distribution and commercialization of hydrocarbons in the country.
Construction of the new infrastructure on an area of 600 hectares began in 2019, and although it was officially opened in 2022, the work has not been completed and it is expected to be fully operational in 2024.
But the plant has already provided revenue for the local economy, in the form of rents, transportation and food. However, there are also fears about its impact on a city of more than 96,000 inhabitants.
Genaro, a cab driver who preferred not to give his last name and is married with three children, said there is a sensation of risk. “We know what has happened in other places where there are refineries, with all the pollution. Besides, accidents occur,” he told IPS.
Near the plant is the Lázaro Cárdenas neighborhood, home to hundreds of people and named after the president who nationalized the oil and electric industry in 1936.
There is an uneasy feeling among the local population. Irasema Lozano, a 36-year-old teacher who is a married mother of two, is one of the residents who is apprehensive about “the newcomer” to the city.
“Look around, there are houses, schools, stores. The government says it is a modern plant and that there is no danger, but we don’t feel safe with this huge plant,” she said.
Cab driver Genaro owns a house in the area, which he rents out. But he is now seriously thinking of selling it.
Construction of the plant has altered the life of the sprawling city around Dos Bocas. The “orange people”, referring to the color of the uniforms worn by everyone who works at the facility, are a permanent reminder of the changes as they move around town.
Talking about oil in Tabasco is a delicate matter, since the state is used to living with the exploitation of a light, low-sulfur, cheap and easy-to-extract hydrocarbon. It is also the home state of President Andrés Manuel López Obrador, a staunch defender of fossil fuels.
Pemex has financed the Olmeca megaproject with public funds, through its subsidiary Pemex Transformación Industrial. Its subsidiary PTI Infraestructura y Desarrollo has overseen construction.
The project has already had a high cost overrun, as the initial investment was estimated at seven billion dollars, a figure that has climbed to 18 billion dollars, according to the latest available data.
On this occasion, PTI ID has not turned to the international market to finance the work, according to the response to a public information access request from IPS.
The Olmeca refinery has a cost overrun, escalating from a planned initial investment of seven billion dollars to 18 billion dollars. The Mexican government expects the plant, located in Dos Bocas, in the southeastern municipality of Paraíso, to be fully operational by 2024. CREDIT: Erik Contreras-Gerardo Morales / IPS
The support of international banks
Traditionally, Pemex has depended on financial flows from international private banks. Between 2016 and 2022, 17 institutions gave nearly 61.5 billion dollars to the state-owned oil company, according to annual reports under the heading of “Banking on Climate Chaos” produced by a group of NGOs.
The British bank HSBC was the main financial backer of Pemex during this period, contributing 7.6 billion dollars, followed by the U.S.-based Citi (6.9 billion) and JP Morgan Chase (6.0 billion).
Pemex’s data gives a broader picture, as it shows more players in its lending field. Through direct loans, bond issuance, revolving credits (with automatic renewals) and project financing, 16 financial institutions have granted it 78.9 billion dollars since 2015.
In doing so, the international markets allow Pemex to obtain money for its operations and development, but in exchange they have turned it into the oil company with the highest debt in the world, some 100 billion dollars, which poses a great threat to Pemex and, by extension, to the country.
The main mechanism used is the insurance coverage or underwriting of Pemex’s financial operations by charging a commission.
Maaike Beenes, leader of banking and climate campaigns at the non-governmental BankTrack, told IPS that the large flow of financing means that banks feel confident that Pemex can repay the debt.
“Apparently it is because they think there are guarantees because it is a state-owned company. There is a lot of financing for the expansion of fossil fuel activities,” she said from the Dutch city of Amsterdam.
In 2020, Mexico was the 13th largest oil producer in the world and 19th largest gas producer. In terms of proven crude oil reserves, it ranked 20th and 41st respectively, according to Pemex data.
Two flares burn gas in the Nuevo Torno Largo neighborhood, in the municipality of Paraíso, in the vicinity of the Olmeca refinery. The southeastern state of Tabasco, on the coast of the Gulf of Mexico, has suffered the effects of pollution generated by oil production for more than 50 years through spills, contaminating gases, and water, air and soil pollution. CREDIT: Erik Contreras-Gerardo Morales / IPS
Fueling the crisis
By raising Pemex’s debt rating, the international banks risk their own voluntary climate targets for greenhouse gas (GHG) emission reductions, since the Mexican company’s GHG emission reduction targets are low.
For example, HSBC aims to achieve zero net emissions – where neutralized emissions equal those released into the atmosphere – in its operations and supply chain by 2030 and in its financing portfolio by 2050.
The bank says it is working with its clients to help them reduce their emissions. Its energy policy states that it will not finance new oil and gas fields.
But HSBC’s net zero goal has some gaps. According to the international Net Zero Tracker platform, its strategy lacks a detailed plan to achieve it, and has no reference on equity investment and no specification on formal accountability for monitoring progress, even though it covers Scope 1 (A1), 2 and 3 emissions.
A1 emissions come directly from sources under the polluter’s control, A2 emissions are indirect emissions from purchased energy, and A3 emissions are those originating in the final use of energy, not covered in A1 and A2, according to the Greenhouse Gas Protocol standard, the most widely used in the world.
By 2022, Citi committed to achieving a 29 percent absolute reduction in emissions for the power sector and a 63 percent reduction in the intensity of its portfolio pollution for the electricity sector by 2030, addressing A1, A2 and A3 levels.
In this regard, Net Zero Tracker says the bank does not have a complete detailed plan for these decreases and makes no reference to investment in fossil fuel companies.
Another major player, JP Morgan Chase, has a target of a 69 percent reduction in the carbon intensity of power generation, which accounts for most of the sector’s climate impact, by 2030.
In the oil and gas segment, the company aims for a 35 percent decrease in operational carbon intensity, as well as a 15 percent drop in end-use energy carbon intensity for the same year.
But its net zero targets are in doubt, as Net Zero Tracker points out that they have shortcomings, such as a complete detailed plan, and no reference to equity investment and only partial coverage of A3.
Louis-Maxence Delaporte, fossil-free finance campaigner at the non-governmental Reclaim Finance, said that international financing for companies like Pemex is problematic as it is not aligned with the 2015 Paris climate change agreement, which sets out to keep global warming below 1.5°C.
“By not meeting these targets there is only greenwashing, like net zero. Their commitments are not credible. It is said there is no room for new fossil fuel projects, but the banks continue to support oil companies, like Pemex,” she told IPS from Paris.
“In Mexico there are perverse incentives because the country depends on extractive activities. There is a vicious circle, as these activities demand a greater share of the public budget and the banks channel money into them,” she told IPS from London.
A photo taken at the entrance to the Olmeca refinery, which the Mexican government expects to start up by the end of the year and to be fully operational in 2024. The plant is located next to the Lázaro Cárdenas neighborhood which is home to hundreds of people, in the Paraíso municipality of the southeastern state of Tabasco. CREDIT: Emilio Godoy / IPS
Dirty money
Pollution from Pemex’s activities has grown since 2018, a reality to which its financiers turn a blind eye.
In 2019, the Mexican oil company released 48 million tons of carbon dioxide (CO2) equivalent into the atmosphere, an increase of 3.3 percent, compared to 2018 levels, according to the report that Pemex sent to the Securities and Exchange Commission, a requirement for the company to sell bonds in the U.S. market.
In 2020, that pollution increased to 54 million tons, a rise of 12.5 percent, and the following year, to 70.5 million, an increase of 7.1 percent.
The main drivers of these increases have been the expansion of exploration, production and refining activities, plus drilling and flaring.
As of October 2022, Pemex was not in compliance with the 10-point framework of Climate Action + 100, a platform dedicated to measuring companies’ approach to the Paris Agreement goals. These aspects are related to short- and long-term reduction targets (2025 and 2050), decarbonization strategy and climate policies.
Therefore, the oil company, the eighth-largest global polluter as of 2017, according to the ranking of the non-governmental U.S. Climate Accountability Institute, is in breach of the Paris Agreement, adopted in 2015 and in force since 2021.
This also makes Mexico a country in non-compliance, as Pemex accounts for 10 percent of its GHG emissions.
Pemex has projected the reduction of pollution from its oil and gas production and extraction from 22.9 tons per 1000 barrels of crude oil equivalent in 2021 to 21.5 in 2025. For oil refining, the target is 39.6 tons per 1000 barrels in 2035, compared to just under 45.2 tons in 2021.
Delaporte criticized these targets as weak and insufficient, as they address only exploration and production (A1) emissions and leave out A2 and A3, the latter being the most polluting.
The Olmeca refinery is located in a coastal area of southeastern Mexico prone to flooding and exposed to rising sea levels due to increasing temperatures, one of the consequences of burning fossil fuels. CREDIT: Erik Contreras-Gerardo Morales / IPS
The national buttress
Another facet of the financial movement is related to national development banks, which have been pushing fossil fuel expansion without respecting their own social and environmental safeguards.
Since 2019, Bancomext has delivered 895 million dollars to the oil and gas industry, including Pemex, although the specific amount that went to the company itself is not public knowledge.
Banobras has been a great support for the oil company. In 2021, it provided over 1.1 billion dollars for the total acquisition of the Deer Park refinery in the U.S. state of Texas, of which Pemex already owned half and Shell the other 50 percent.
In addition, the bank shelled out 299 million dollars for the renovation of the Miguel Hidalgo refinery in the central state of Hidalgo.
Nafin lent Pemex 200 million dollars to upgrade the plant in 2021.
One phenomenon is the participation of the National Infrastructure Fund (Fonadin), which until now had never financed the fossil fuel sector. Last year, the fund contributed 346 million dollars for the renovation of diesel and gasoline processing technology at the Hidalgo refinery and at the Antonio M. Amor refinery, located in the central state of Guanajuato.
The latest operation involves 2.5 billion dollars in financing for the acquisition of the 13 production plants owned in the country by the Spanish company Iberdrola, 12 gas plants and one wind farm, in what has been described as part of “a new nationalization process.”
This maneuver also shows that international banks are still interested in financing fossil fuels, as the Spanish banks BBVA and Santander, as well as the U.S. Bank of America, have expressed a willingness to provide financing for the already agreed acquisition.
Climate activists stress that Mexican development banks have had social and environmental standards in place since 2017, but argue that they have been reluctant to apply them when it comes to Pemex.
Banobras has no safeguards assessments with respect to oil and gas projects, according to responses to information requests submitted by IPS. The same applied to Nafin, which did not carry them out in 2022 and 2023. The bank conducted one in 2021, classified as a bank secret. Bancomext also keeps information on this matter classified.
In the municipality of Paraíso, when the refinery begins to fully operate sometime in 2024, the pace will slow down, contrary to what the government wants. “We hope it will be profitable because it has cost a lot. And we hope nothing serious happens,” said Lozano, the teacher.
Beenes said Mexican and foreign banks should respect the Paris Agreement and abandon fossil fuels.
“State-owned banks can offer guarantees or insurance for credits. That is worrying, it is a problem for the transition. We are asking them to support the transition with specific investment conditions. It is in their best interest to stay away from fossil fuels, because they run the risk of having stranded assets in their portfolios,” she said.
The expert believes that banks are aware of the need for change, but the question is how fast they can do it.
Delaporte said development banks should finance green and non-oil companies.
“The change must be global, including commercial banks, development banks and hedge funds. Shareholders should ask Pemex not to build more facilities. If it refuses, they should divest and put the money into renewable companies,” she said.
Guzman, for her part, warned that if the current trend continues, it will be difficult for Mexico not only to meet its own climate targets, but also its contribution to the overall goal of keeping the global climate increase down to 1.5 degrees Celsius.
“There is talk of the need to continue mobilizing financing through national development banks for climate change. They should take advantage of this to allow the channeling and mobilization of funds” for the energy transition, she said.
NAIROBI, Kenya, Sep 20 (IPS) – Despite the dominance of the “Big Three” cereal crops and a steady rise in meat consumption, an overlooked food sector is projected to become ever more central to Africa’s food security and rural economic growth between now and 2050.
Over the next three decades, the remarkable yet humble yam, sweetpotato, cassava and other roots are forecast to create $140 billion in additional market value. This compares to $41 billion for rice, millet and maize, and $70 billion for meat. Meanwhile, banana and plantain are set to add another $50 billion to this balance sheet.
These hardy, locally suited and cost-effective crops are already staple ingredients across the entire continent, accounting for more than 40 per cent of total food production. Their importance is only growing as farmers, particularly female ones, face more challenging growing conditions and weather extremes.
Yet, despite their affordability and resilience, the starring role of roots, tubers and bananas in Africa’s climate-smart food systems of the future is not guaranteed and relies on the kind of united but agile approach on display at the first Africa Climate Summit recently held in Nairobi, Kenya.
When it comes to adapting to the already inevitable impacts of climate change, root crops can naturally withstand heat and drought better than cereals, legumes and vegetables. Cassava, in particular, is an unusual example of a food crop that may even benefit from rising temperatures, with research suggesting increases in climate suitability of up to 17.5 per cent.
Credit: CIP 2023
However, for Africa to get the full benefit of these environmental superfoods, the continent needs coordinated efforts to optimise, scale up and mainstream these robust and valuable crops.
More and novel, de-risking investment models into genetic improvement research programmes and inclusive governance systems would be one place to start. Although root crops are traditionally difficult to breed, recent scientific breakthroughs have made it possible to produce varieties that are even more drought tolerant, heat resistant and tolerant of increased salinity.
Genomics-assisted breeding has further accelerated this progress, which is fundamental for delivering next generation varieties that are both climate-smart and more nutritious. Hardier and more nutritional root crops would benefit populations in both rural areas where they are grown, and urban areas, where it can be more challenging to supply fresh, healthy and perishable produce.
Developing Africa’s capacity to use agricultural science and research to improve the qualities of root crops according to regional and local differences also requires greater scientific cooperation. A regional roots, tubers and bananas partnership is leading the way, encompassing national research programs, CGIAR crop research centers and international science partners.
Climate variability across Africa means the impact on roots and related crops will differ country by country. For instance, some evidence suggests future climates may impact potato production in Malawi, Tanzania, and Uganda, but would favour potato systems in Burundi and Rwanda.
The continent would therefore benefit from more integrated and cross-border breeding programmes that pool resources and brain power for efficiency, while simultaneously creating the capacity needed to respond to the specific needs of different contexts.
Finally, and equally relevant, the latest and most suitable varieties must get to the farmers who need them through efficient and accessible seed delivery systems.
In Africa, improved varieties of most crops have an adoption ceiling of about 40 per cent, which means the majority of farmers are using seeds and planting material that have not been optimised for today’s conditions. The average age of a variety in farmers’ fields is often 10 years or more, leaving farmers and food supply chains missing out on a decade of ever-increasing agricultural advancements.
Finding and developing the most effective ways to reach farmers, whether through informal channels, cooperatives, government initiatives or non-profits, is vital to accelerate the adoption of new, climate-smart varieties.
The recent Africa Climate Summit demonstrated the power of a unified voice to address the common challenges facing the entire continent. Yet it also recognised the country-level nuances inherent in dealing with an emergency like the climate crisis.
When it comes to climate-proofing food security, local staple crops such as roots and tubers offer the greatest potential, and with more investment and collaboration, they can become multi-purpose solutions that meet Africa’s needs. The Green Revolution that transformed global cereal production is yet to happen for roots, tubers, and bananas. Harnessing advancements in science, environmental lessons, and regional political leadership, the moment is at hand for these crops to put Africa on a track for a food-secure future. Hugo Campos, roots, tubers and bananas breeding lead at CGIAR, the world’s largest publicly funded agriculture research organisation
Alfalfa farmer Dionisio Antiquera stands in front of one of the wastewater treatment ponds at the modernized plant in Cerrillos de Tamaya, a rural community in the Coquimbo region of northern Chile. The thousands of liters captured from the sewers are converted into clear liquid ready for reuse in local small-scale agriculture. CREDIT : Orlando Milesi / IPS
by Orlando Milesi (coquimbo, chile)
Inter Press Service
COQUIMBO, Chile, Sep 18 (IPS) – The reuse of treated wastewater in vulnerable rural areas of Chile’s arid north is emerging as a new resource for the inhabitants of this long, narrow South American country.
The Coquimbo region, just south of the Atacama Desert, one of the driest in the world, is suffering from a severe drought that has lasted 15 years.
According to data from the Meteorological Directorate, a regional station located in the Andes Mountains measured 30.3 millimeters (mm) of rain per square meter this year as of Sept. 10, compared to 213 mm in all of 2022.
At another station, in the coastal area, during the same period in 2023, rainfall stood at 10.5 mm compared to the usual level of 83.2 mm.
Faced with this persistent level of drought, vulnerable rural localities in Coquimbo, mostly dedicated to small-scale agriculture, are emerging as a new example of solutions that can be replicated in the country to alleviate water shortages.
The aim is to not waste the water that runs down the drains but to accumulate it in tanks, treat it and then use it to irrigate everything from alfalfa fields to native plants and trees in parks and streets in the localities involved. It is a response to drought and the expansion of the desert.
“We were able to implement five wastewater treatment projects and reuse 9.5 liters per second, which is, according to a comparative value, the consumption of 2,700 people for a year or the water used to irrigate 60 hectares of olive trees,” said Gerardo Díaz, sustainability manager of the non-governmental Fundación Chile.
These five projects, promoted by the Fundación Chile as part of its Water Scenarios 2030 initiative, are financed by the regional government of Coquimbo, which contributed the equivalent of 312,000 dollars. Of this total, 73 percent is dedicated to enabling reuse systems, for which plants in need of upgrading but not reconstruction have been selected.
The common objective of these projects, which together benefit some 6,500 people, is the reuse of wastewater for productive purposes, the replacement of drinking water or the recharge of aquifers.
Díaz told IPS that the amount of reuse obtained is significant because previously this water was discharged into a stream, canal or river where it was perhaps captured downstream.
The Huatulame treatment plant in the rural municipality of Monte Patria in northern Chile is being completely repaired with the support of the local municipality. Waterproof plastic sheeting and rocks have been installed, and in the final stage sawdust and earthworms will be incorporated before receiving wastewater from local households for reuse. CREDIT: Orlando Milesi / IPS
A successful pilot experience
In Coquimbo, which has a regional population of some 780,000 people, there are 71 water treatment plants, most of which use activated sludge and almost all of which are linked to the Rural Drinking Water Program (APR) of the state Hydraulic Works Directorate.
Activated sludge systems are biological wastewater treatment processes using microorganisms, which are very sensitive in their operation and maintenance and rural sectors do not have the capacity to maintain them.
“Most of these treatment plants are not operating or are operating inefficiently,” Diaz acknowledged.
But one of the plants, once reconditioned, has served as a model for others since 2018. Its creation allowed Dionisio Antiquera, a 52-year-old agricultural technician, to save his alfalfa crop.
“We have had a water deficit for years. This recycled water really helps us grow our crops on our eight hectares of land,” he said in the middle of his alfalfa field in Cerrillos de Tamaya, one of the Coquimbo municipalities that IPS toured for several days to observe five wastewater reuse projects.
Raúl Ángel Flores stands in his nursery, where the plants and trees are irrigated with recycled water from the Punta Azul project in the town of Villa Puclaro, in Chile’s Coquimbo region. All profits from the town’s wastewater treatment are reinvested in its maintenance. CREDIT: Orlando Milesi / IPS
He explained that using just reused water he was able to produce six normal alfalfa harvests per year with a yield per hectare of 100 25-kg bales.
“That’s 4500 to 4800 bales in the annual production season,” he said proudly.
These bales are easily sold in the region because they are cheaper than those of other farmers.
The water he uses comes from an APR plant that has 1065 users, 650 of whom provide water, including Antiquera.
On one side of his alfalfa field is a plant that accumulates the sludge that is dehydrated in pools and drying courts, and on the other side, the water is chlorinated and runs into another pond in its natural state.
“This water works well for alfalfa. It is hard water that has about 1400 parts per million of salt. Then it goes through a reverse osmosis process that removes the salt and the water is suitable for human consumption,” the farmer explained.
In Chile, treated wastewater is not considered fresh water or water that can be used directly by people, and its reuse is only indirect.
Antiquera sold half a hectare to the government to install the plant and in exchange uses the water obtained and contributes 20 percent to the local APR.
He recently extended his alfalfa field to another seven hectares, thanks to his success with treated water.
Deysy Cortés, president of a rural drinking water system in Huatulame, stands in front of the dry riverbed of the town of the same name. Today there is no water in the river, where local residents swam and summer vacationers camped on its banks 15 years ago. CREDIT: Orlando Milesi / IPS
Flowers and trees also benefit
In Villa Puclaro, in the Coquimbo municipality of Vicuña, Raúl Ángel Flores, 55, has an ornamental plant nursery.
“I’ve done really well. My nursery has grown with just reuse water….. I have more than 40,000 ornamental, fruit, native and cactus plants. I deliver to retailers in Vicuña and Coquimbo,” a port city in the region, he told IPS.
The nursery is 850 square meters in size, and has an accumulation pond and pumps to pump the water. He has now rented a 2,500-meter plot of land to expand it.
Flores explained to IPS that he manages the nursery together with his wife, Carolina Cáceres, and despite the fact that they have two daughters and a senior citizen in their care, “we make a living just selling the plants…I even hired an assistant,” he added.
In the southern hemisphere summer he uses between 4,000 and 5,000 liters of water a day for irrigation.
“I have water to spare. Here it could be reused for anything,” he said.
Joining the project made it possible for Flores to make efficient use of water with a business model that in this case incorporates a fee for the water to the plant management, which is equivalent to 62 cents per cubic meter used.
Arnoldo Olivares operates the water treatment and recycling plant in Plan de Hornos, northern Chile. The plant’s infrastructure and operation have been upgraded, and it can now deliver water to rural residents to irrigate trees and plants, instead of using potable water. CREDIT: Orlando Milesi / IPS
Eliminating odors, and creating new gardens
In the community of Huatulame, in the municipality of Monte Patria, Fundación Chile built an artificial surface wetland to put an end to the bad odors caused by effluents from a deficient waste-eater earthworm vermifilter treatment plant.
“This wetland has brought us peace because the odors have been eliminated. For the past year people have been able to walk along the banks of the old riverbed,” Deysy Cortés, 72, president of the APR, told IPS.
The municipality of Monte Patria is financing the repair of the plant with the equivalent of 100,000 dollars.
“The sprinklers will be changed, the filtering system will be replaced, and sawdust and worms will be added. It will be up and running in a couple of months,” explained agronomist Jorge Núñez, a consultant for Fundación Chile.
As in other renovated plants, safe infiltration of wastewater is ensured while the project simultaneously promotes the protection of nearby wells to provide water to the villagers.
The Huatulame treatment plant in the rural municipality of Monte Patria in northern Chile is being completely repaired with the support of the local municipality. Waterproof plastic sheeting and boulders have been installed, and in the final stage sawdust and earthworms will be incorporated before receiving wastewater from local households for reuse. CREDIT: Orlando Milesi / IPS
Cortés warned of serious difficulties if no more rain falls in the rest of 2023, despite the relief provided by the plant for irrigation.
“I foresee a very difficult future if it doesn’t rain. We will go back to what we experienced in 2019 when in every house there were bottles filled with water and a little jug to bathe once a week,” she said.
During a recent crisis, the local APR paid 2500 dollars to bring in water from four 20,000-liter tanker trucks.
In Plan de Hornos, a town in the municipality of Illapel, irrigation technology was installed using reused water instead of drinking water to create a green space for the community to enjoy.
The project included water taps in people’s homes for residents to water trees and flowers.
Arnoldo Olivares, 59, is in charge of the plant, which has 160 members.
“I run both systems,” he told IPS. “I pour drinking water into the pond. After passing through the houses, the water goes into the drainage system, where there is a procedure to reclaim and treat it.”
“This water was lost before, and now we reuse it to irrigate the saplings. We used to work manually, now it is automated. It’s a tremendous change, we’re really happy,” he said.
Antiquera the alfalfa farmer is happy with his success in Cerrillos de Tamaya, but warns that in his area 150 to 160 mm of rainfall per year is normal and so far only 25 mm have fallen in 2023.
“The water crisis forces us to find alternatives and to be 100 percent efficient. Not a drop of water can be wasted. They have forecast very high temperatures for the upcoming (southern hemisphere) summer, which means that plants will require more water in order to thrive,” he said.
Díaz, the sustainability manager of Fundación Chile, said the Coquimbo projects are fully replicable in other water-stressed areas of Chile if a collaborative model is used.
He noted that “in Chile there is no law for the reuse of treated wastewater. There is only a gray water law that was passed years ago, but there are no regulations to implement it.”
He explained, however, that due to the drought, “rural localities today are already reusing wastewater or gray water. This is going to happen, with or without us, with or without a law. The need for water is so great that the communities are accepting the use of treated wastewater.”
The governor of Coquimbo, Krist Naranjo, argued that “a broader vision is needed to value water resources that are essential for life, especially in the context of global climate change.”
“We’re working on different initiatives with different executors, but the essential thing is to value the reuse of graywater recycling,” she told IPS from La Serena, the regional capital.
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