Tag: Economy & Trade

Cattle Turn Into New Currency Amid Inflation in Zimbabwe — Global Issues

Forty-year-old Admire Gumbo has invested in cattle back home in Zimbabwe’s rural Mwenezi district. The picture shows Gumbo’s cattle in Mwenezi. Credit: Jeffrey Moyo/ IPS.
  • by Jeffrey Moyo (mberengwa)
  • Inter Press Service

MBERENGWA, Nov 25 (IPS) – In 2007 as inflation walloped the Zimbabwean currency, rendering it valueless, then 54-year-old Langton Musaigwa of Mataruse village west of Zimbabwe in Mberengwa district switched to cattle as his currency.

He wasn’t alone; scores of other villagers in his locality followed suit.

In no time, cattle became a new currency as the Zimbabwean dollar went down the drain, pounded by inflation.

“We had no choice. It appeared cattle was the only money we could stare at and not the real Zimbabwean bank notes, which were now losing value every day as prices skyrocketed,” Musaigwa told IPS.

Many villagers like Musaigwa, pummeled by inflation then, found the panacea in their livestock like cattle.

The cattle, said Musaigwa, could be traded by villagers for any valuable goods or services.

One such villager whose life was saved by her cattle is 67-year-old Neliswa Mupepeti hailing from the same village as Musaigwa.

“I fell sick very seriously and was no longer able to walk on my own. I had to use one of my cows to pay a local school headmaster to transport me using his car to Zvishavane to get medical treatment in 2008,” she (Mupepeti) told IPS.

Then, Zimbabwe’s inflation peaked at 231 percent.

Zvishavane is a Zimbabwean mining town located in the country’s Midlands Province, south of the country.

Fourteen years later, inflation has resurfaced in the southern African country, and cattle have again turned into a currency as people evade the worthless local currency.

But from 2009 to 2013, during the country’s unity government that followed the disputed 2008 elections, Zimbabwe enjoyed some currency stability because authorities allowed the use of the USD and many other regional currencies.

Many Mberengwa villagers, like Musaigwa and Mupepeti, had been visited by inflation before, and they know the survival tricks.

“We have just had to return to using cattle as our money. I can tell you I have recently managed to buy a cart and a bicycle using just one cow here because villagers can’t accept the local currency. Many don’t have the popular USD, and cattle have become the readily available currency,” said Musaigwa.

Zimbabwe’s inflation currently stands out at 257 percent, according to the Zimbabwe National Statistics Agency, with the local currency ever falling against international currencies like the USD.

As cattle turn into currency, just a single cow in Zimbabwe ordinarily costs about 400 US dollars.

In order to store the value of their worth, many Zimbabweans who can at least access US dollars, like Mwenezi district’s 67-year-old Tinago Muchahwikwa, whose children working abroad send him money for personal upkeep, have had to buy more cattle.

“Money, either USD or any other currency – tends to lose value at any time, but cattle, for as long as they are well-fed and regularly treated for any diseases, remain with their value, and one can trade them off when a need arises,” Muchahwikwa told IPS.

For Muchahwikwa, cattle are the currency he can rather trust than any money, worse the Zimbabwean dollar, he said.

Even for 40-year-old Admire Gumbo, a Zimbabwean based in Cape Town in South Africa, investment in cattle has become the way to go back in his village home in Mwenezi as Zimbabwe contends with an inflation-ravaged currency.

“Back home, the money I send is buying cattle because when I settle back home, I don’t want to suffer. As my herd of cattle increases, that also means the increase of my own worth in terms of money,” Gumbo told IPS.

A worker at a grape farm in Cape Town, Gumbo bragged about owning a herd of 15 cows that he had bought back home.

As many like Gumbo surmount inflation in Zimbabwe using cattle, the UN’s Food and Agriculture Organization (FAO), has been on record saying livestock accounts for 35 percent to 38 percent of this Southern African country’s Gross Domestic Product (GDP).

Faced with a collapsing Zimbabwean dollar, cattle seem to have become a more stable currency than the local currency for many, like Gumbo.

“I have made sure my mother buys cattle for me and not keep the money when I send cash to her because of the risks faced by the local currency back home, which has kept losing value, meaning even if one changes money from Rands to Zimbabwean dollars, it won’t make any sense as the manipulated exchange rate there would still mean one remains with nothing meaningful,” said Gumbo.

For agricultural experts, with inflation ravaging Zimbabwe’s currency, cattle have become the alternative currency.

“Inflation has meant that many people now abhor the local currency and rather prefer foreign currencies like the USD, but many have no access to the USD, and cattle have become the readily available currency,” Steven Nyagonda, a retired agricultural extension officer in rural Mwenezi, told IPS.

To Nyagonda, as long as cattle are well-fed, it means they gain more weight and, therefore, more value if one wants to trade them off.

Pummeled by inflation here, even urban dwellers like 51-year-old Kaitano Muzungu are having to hoard things like solar panels, which they trade off with cattle in the villages while they shun the worthless local currency.

“When I get the cattle on trading off my solar panels in the villages, I feed the cattle in order to increase their weight so that I sell them to butcheries in the city in Harare in USD to business people here, save the profits and keep ordering solar panels to keep trading in the villages where I get cattle currency,” Muzungu told IPS.

With cattle currency gaining traction across Zimbabwe, entrepreneurial Zimbabweans have formed cattle banks, where investment in cattle has become a sensation.

According to Ted Edwards, who is the chief executive officer of Silverback Asset Managers, one emerging cattle bank in Zimbabwe, they have established a unit trust investment vehicle where Zimbabweans can invest in cattle using the local currency.

In this model, when a cow produces offspring, the value of that calf is added to the client’s portfolio, meaning a rise in worth for a particular cattle investor.

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the Power of Connections and their Consequences — Global Issues

  • Opinion by Simon Commander, Saul Estrin (london)
  • Inter Press Service

LONDON, Nov 24 (IPS) – In our recent book, “The Connections World: The Future of Asia”, published by Cambridge University Press in October 2022, we argue that mutually beneficial links between dynastic business houses and political elites have been important drivers behind Asia’s extraordinary renaissance. Yet, these close ties now threaten future economic growth.

That is because the ubiquitous Asian corporate structures of Business Groups systematically work with politicians in Asia to create excessive market power and overall concentration. They have proven remarkably adept at entrenching themselves.

Although, by concentrating resources in relatively few hands, this was quite an effective engine of growth in the past half century, the limitation of competition and brake on innovation threatens future progress.

The pervasive and highly resilient networks of connections running between businesses and politicians have provided a common backbone to Asian development and have cut across political systems. We characterize these networks as the Connections World.

That world comprises a web of interactions between businesses and politicians/political parties that are highly transactional and commonly contain significant degrees of reciprocity.

Thus, politicians look to firms to make campaign or personal contributions; pay bribes; provide jobs for family or associates whilst also providing reciprocal favours, such as creating jobs in regions or at moments that are politically advantageous.

At the same time, businesses look to politicians for protection from foreign or domestic competition; to supply subsidies, loans and/or public sector contracts. All parties benefit from these interactions, creating a stable political economy equilibrium.

These arrangements have served Asia well over the past half century, with Asia’s share of the world economy rising from 9% in the 1970s to nearly 40% now. However, the connections world will provide a less supportive foundation for growth in the future for a variety of reasons. Neither politicians nor business groups have sufficient interest in stimulating competition, whether through the entry of domestic or foreign multinational as competitors.

Moreover, because Asian business groups are often highly diversified, with the control of the oligarch or dynasty enhanced by cross-holdings and ownership pyramids, their economic consequences must be measured not only by the traditional measures of market power, but also by overall levels of concentration as, for example, indicated by the share of total revenues for the largest five firms relative to GDP.

To put this in context, while the market concentration ratio (CR5) of the largest US firms, mainly in tech sectors, is often high, the five-firm overall concentration ratio is only around 3%. The comparable figures across Asia in 2018 are much higher, as can be seen in Figure 1. The CR5 in South Korea exceeds 30% and even in very large economies – India and China – it exceeds 10%.

The findings are even starker when we consider the largest ten firms (CR10). In the US, this is only around 4% but in South Korea exceeds 40% and in India and China exceeds 15%.

Looking forward, the consequences of the connections world will be far less propitious, not least because growth will have to rely increasingly on innovation. The existing networks are, for the most part, ill-suited to promote innovation which thrives on an open ecosystem of science universities and business parks, capital funders, lawyers and entrepreneurs and a healthy willingness to risk and lose.

Moreover, the connections world crowds out new entrants, soaks up capital and skilled workers and managers and suppresses the competitive environment so essential for the trial-and-error process at the heart of much successful innovation. Even when the business groups themselves are innovative, there is relatively little innovation going on in the wider economy.

What should be the policies and other measures that could address the shortcomings of the connections world? Central to the policy menu for loosening the grip of entrenched business will have to be measures designed to induce the transformation of business groups into more transparent and better governed businesses, while also radically weakening the links between politicians and business.

This will not happen naturally because the mutual benefits from market entrenchment and political connections outweigh any gains to the current players from reform. The required policies will need to include changes to corporate governance that undercut pyramidal ownership structures, mergers and cross-holdings, that impose inheritance taxes and shift to new types of – and targets for – competition policy.

Some of those policies were successfully introduced in the USA under Roosevelt. More recently, Israel has adopted criteria in competition policy for overall, as well as specific market, concentration levels, while South Korea has placed high inheritance taxes at the heart of their raft of policies to weaken the vice-like grip of their gigantic business groups.

At the same time, measures need to be adopted aimed at limiting the discretionary scope and incentives for politicians to leverage their connections for personal or family benefit. Although hard to achieve, incremental improvements, such as through audited registers of interests, can start to affect behaviour.

In short, although many commentators have already declared the 21st century to be Asia’s, that is far from predetermined. Unless the sorts of policies that we propose are introduced to roll back the tentacles of the connections world, many Asian economies will in fact find themselves unfavourably placed to exploit their potential in the coming decades.

Simon Commander is Managing Partner of Altura Partners. He is also Visiting Professor of Economics at IE Business School in Madrid.
Saul ESTRIN is Professor of Managerial Economics at LSE and previously Professor of Economics and Associate Dean at London Business School.

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Open Veins of Africa Bleeding Heavily — Global Issues

  • Opinion by Jomo Kwame Sundaram, Ndongo Samba Sylla (dakar and kuala lumpur)
  • Inter Press Service

DAKAR and KUALA LUMPUR, Nov 22 (IPS) – The ongoing plunder of Africa’s natural resources drained by capital flight is holding it back yet again. More African nations face protracted recessions amid mounting debt distress, rubbing salt into deep wounds from the past.

With much less foreign exchange, tax revenue, and policy space to face external shocks, many African governments believe they have little choice but to spend less, or borrow more in foreign currencies.

Ndongo Samba Sylla

Most Africans are struggling to cope with food and energy crises, inflation, higher interest rates, adverse climate events, less health and social provisioning. Unrest is mounting due to deteriorating conditions despite some commodity price increases.

Economic haemorrhage

After ‘lost decades’ from the late 1970s, Africa became one of the world’s fastest growing regions early in the 21st century. Debt relief, a commodity boom and other factors seemed to support the deceptive ‘Africa rising’ narrative.

But instead of long overdue economic transformation, Africa has seen jobless growth, rising economic inequalities and more resource transfers abroad. Capital flight – involving looted resources laundered via foreign banks – has been bleeding the continent.

According to the High Level Panel on Illicit Financial Flows from Africa, the continent was losing over $50 billion annually. This was mainly due to ‘trade mis-invoicing’ – under-invoicing exports and over-invoicing imports – and fraudulent commercial arrangements.

Transnational corporations (TNCs) and criminal networks account for much of this African economic surplus drain. Resource-rich countries are more vulnerable to plunder, especially where capital accounts have been liberalized.

Jomo Kwame Sundaram

Externally imposed structural adjustment programs (SAPs), after the early 1980s’ sovereign debt crises, have forced African economies to be even more open – at great economic cost. SAPs have made them more (food) import-dependent while increasing their vulnerability to commodity price shocks and global liquidity flows.

Leonce Ndikumana and his colleagues estimate over 55% of capital flight – defined as illegally acquired or transferred assets – from Africa is from oil-rich nations, with Nigeria alone losing $467 billion during 1970-2018.

Over the same period, Angola lost $103 billion. Its poverty rate rose from 34% to 52% over the past decade, as the poor more than doubled from 7.5 to 16 million.

Oil proceeds have been embezzled by TNCs and Angola’s elite. Abusing her influence, the former president’s daughter, Isabel dos Santos acquired massive wealth. A report found over 400 companies in her business empire, including many in tax havens.

From 1970 to 2018, Côte d’Ivoire lost $55 billion to capital flight. Growing 40% of the world’s cocoa, it gets only 5–7% of global cocoa profits, with farmers getting little. Most cocoa income goes to TNCs, politicians and their collaborators.

Mining giant South Africa (SA) has lost $329 billion to capital flight over the last five decades. Mis-invoicing, other modes of embezzling public resources, and tax evasion augment private wealth hidden in offshore financial centres and tax havens.

Fiscal austerity has slowed job growth and poverty reduction in ‘the most unequal country in the world’. In SA, the richest 10% own over half the nation’s wealth, while the poorest 10% have under 1%!

Resource theft and debt

With this pattern of plunder, resource-rich African countries – that could have accelerated development during the commodity boom – now face debt distress, depreciating currencies and imported inflation, as interest rates are pushed up.

Zambia’s default on its foreign debt obligations in late 2020 has made headlines. But foreign capture of most Zambian copper export proceeds is not acknowledged.

During 2000-2020, total foreign direct investment income from Zambia was twice total debt servicing for external government and government-guaranteed loans. In 2021, the deficit in the ‘primary income’ account (mainly returns to capital) of Zambia’s balance of payments was 12.5% of GDP.

As interest payments on public external debt came to ‘only’ 3.5% of GDP, most of this deficit (9% of GDP) was due to profit and dividend remittances, as well as interest payments on private external debt.

For the IMF, World Bank and ‘creditor nations’, debt ‘restructuring’ is conditional on continuing such plunder! African countries’ worsening foreign indebtedness is partly due to lack of control over export earnings controlled by TNCs, with African elite support.

Resource pillage, involving capital flight, inevitably leads to external debt distress. Invariably, the IMF demands government austerity and opening African economies to TNC interests. Thus, we come full circle, and indeed, it is vicious!

Africa’s wealth plunder dates back to colonial times, and even before, with the Atlantic trade of enslaved Africans. Now, this is enabled by transnational interests crafting international rules, loopholes and all.

Such enablers include various bankers, accountants, lawyers, investment managers, auditors and other wheeler dealers. Thus, the origins of the wealth of ‘high net-worth individuals’, corporations and politicians are disguised, and its transfer abroad ‘laundered’.

What can be done?

Capital flight is not mainly due to ‘normal’ portfolio choices by African investors. Hence, raising returns to investment, e.g., with higher interest rates, is unlikely to stem it. Worse, such policy measures discourage needed domestic investments.

Besides enforcing efficient capital controls, strengthening the capabilities of specialized national agencies – such as customs, financial supervision and anti-corruption bodies – is important.

African governments need stronger rules, legal frameworks and institutions to curb corruption and ensure more effective natural resource management, e.g., by revising bilateral investment treaties and investment codes, besides renegotiating oil, gas, mining and infrastructure contracts.

Records of all investments in extractive industries, tax payments by all involved, and public prosecution should be open, transparent and accountable. Punishment of economic crimes should be strictly enforced with deterrent penalties.

The broader public – especially civil society organizations, local authorities and impacted communities – must also know who and what are involved in extractive industries.

Only an informed public who knows how much is extracted and exported, by whom, what revenue governments get, and their social and environmental effects, can keep corporations and governments in check.

Improving international trade and finance transparency is essential. This requires ending banking secrecy and better regulation of TNCs to curb trade mis-invoicing and transfer pricing, still enabling resource theft and pillage.

OECD rhetoric has long blamed capital flight on offshore tax havens on remote tropical islands. But those in rich countries – such as the UK, US, Switzerland, Netherlands, Singapore and others – are the biggest culprits.

Stopping haemorrhage of African resource plunder by denying refuge for illicit transfers should be a rich country obligation. Automatic exchange of tax-related information should become truly universal to stop trade mis-invoicing, transfer pricing abuses and hiding stolen wealth abroad.

Unitary taxation of transnational corporations can help end tax abuses, including evasion and avoidance. But the OECD’s Inclusive Framework proposals favour their own governments and corporate interests.

Africa is not inherently ‘poor’. Rather, it has been impoverished by fraud and pillage leading to resource transfers abroad. An earnest effort to end this requires recognizing all responsibilities and culpabilities, national and international.

Africa’s veins have been slit open. The centuries-long bleeding must stop.

Dr Ndongo Samba Sylla is a Senegalese development economist working at the Rosa Luxemburg Foundation in Dakar. He authored The Fair Trade Scandal. Marketing Poverty to Benefit the Rich and co-authored Africa’s Last Colonial Currency: The CFA Franc Story. He also edited Economic and Monetary Sovereignty for 21st century Africa, Revolutionary Movements in Africa and Imperialism and the Political Economy of Global South’s Debt. He tweets at @nssylla

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A Looming Debt Crisis is Threatening Global Health Security. It is time to Drop the Debt — Global Issues

  • Opinion by Jaime Atienza, Charles Birungi (geneva)
  • Inter Press Service

GENEVA, Nov 21 (IPS) – In this moment of profound challenge in international relations, it was understandable that the conclusion of the G20 meeting left leaders feeling relieved that the meeting took place without a breakdown. Leaders were justifiably proud too of important steps forward they made including the launch of the new pandemics fund.

But G20 leaders did not manage to resolve the fiscal crisis that threatens many low-and middle-income countries, and which risks undermining global health security because it is driving countries to slash investments in essential health services.

As the world approaches the end of 2022, no resolution mechanism to properly resolve the debt crisis has been established by either the IMF or the G20. In 24 months, the “G20 common framework” has delivered a debt relief agreement for just one country, Chad.

UNAIDS report “A pandemic triad” shows how growing debt burdens across developing countries are impairing their ability to fight and end AIDS and COVID, and their readiness for future pandemics. Half of the low-income countries in Africa are already in debt distress or at high risk of being so.

Across the world, the 73 countries which are eligible for the Debt Service Suspension Initiative have been recorded as spending on average four times as much on debt servicing as they have been able to invest in the health of their people. Only 43 of those countries have seen even a temporary suspension – totalling less than 10% the money they continued to pay back.

Two thirds of people living with HIV are in countries that received absolutely no support from the Debt Service Suspension Initiative at all during the critical 2020-2021 period. The seven Debt Service Suspension Initiative eligible countries with the largest population of people living with HIV – Kenya, Malawi, Mozambique, Uganda, Tanzania and Zambia – saw their public debt levels grow from 29% in 2011 to 74% in 2020.

According to the World Bank, “interest payments will constrain the capacity of low-income countries to spend on health, on average by 7%, and in lower middle-income countries by 10%, in 2027.”

110 out of 177 countries will see a drop or stagnation in their health spending capacity and are not set to be able to achieve pre-COVID spending levels by 2027.

During the COVID-19 pandemic, deficits increased worldwide, and debt accumulated much faster than they did in the early years of other recessions including the Great Depression and the Global Financial Crisis. The scale is comparable only to the twentieth century’s two world wars.

Government expenditure cuts are expected to take place across 139 countries in the coming years. In the case of the 73 countries that were eligible to the Debt Service Suspension Initiative, primary expenditures are expected to decline an average of 2.8% of GDP between 2020 and 2026.

This comes at a moment when economic forecasts have been downgraded by the IMF for a fourth time in a year. Austerity will mean dangerous reductions in health expenditure. To even restrain the damage will require a systemic reprioritization of public resources towards health systems.

There is a direct correlation between deepening fiscal problems and worsening health outcomes.

The COVID-19 crisis is dragging on. The impacts of the war in Ukraine on the global economy are making things worse. The HIV response is in danger, with the promise to end AIDS by 2030 under threat.

The world is not prepared today for the pandemics of to come. The international response to resolve the health financing crisis is nowhere close enough. Even as developing countries struggle with the debt crisis, the Ukraine war has led several donors to cut aid.

But there is a way out. With bold action, the health and development financing crisis can be overcome. Barbados Prime Minister Mia Mottley’s Bridgetown Agenda for action on debt, expansion of multilateral finance and effective SDR reallocation sets out the order of magnitude of response required.

There is an urgent need for debt cancellation for countries in fiscal distress, and for an effective and fast mechanism to deal with debt restructuring at scale. Health and education must be central considerations in debt negotiations.

Vital too is an expansion of the use of existing Special Drawing Rights (SDRs) from high income countries for investments in lower income countries of at least twice the 100 billion committed.

The G20 leaders’ work has not ended in Bali. The consequences of an unresolved debt crisis, and the lack of additional resources, would be disastrous for lives, livelihoods and health security. We don’t have time. No one is safe until everyone is safe.

Jaime Atienza is the Director of Equitable Financing at UNAIDS. Charles Birungi is the Senior HIV Economics, Finance and Policy Advisor.

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G20 Summit, a Missed Opportunity to Tackle Global Cost of Living Crisis — Global Issues

  • Opinion by Matti Kohonen (london)
  • Inter Press Service

The G20 summit motto was “Recovering Together, Recovering Stronger” yet the Joint Declaration failed to deliver any alternatives to the wave of austerity engulfing the world. It ignored the option of raising enough tax revenues from large corporations, taxing the wealthy and tacking illicit financial flows and tax abuses which alone accounts for over US$200 billion of tax revenue lost per year due to profit shifting in the global South.

For one, the summit blocked any progress towards the negotiations of a UN Tax Convention that would address the issues of corporate tax abuses and illicit financial flows, as denounced in an open letter from the Asian People’s Movement on Debt and Development (APMDD).

In an open letter denouncing this inaction to tackle corporate tax abuses and IFFs, delivered to embassies of Indonesia, India and Brazil, Lidy Nacpil from the Asian People’s Movement on Debt and Development (APMDD) said that the summit blocked “any progress towards the negotiations of a UN Tax Convention that would address the issues of corporate tax abuses and illicit financial flows,” but there was no reaction.

Making matters worse, the Organisation for Economic Co-operation and Development (OECD) failed to deliver on mandates to publish country-by-country reporting before the summit. This would have allowed to monitor the performance of mechanisms to prevent for example multinational companies shifting profits to tax havens and avoid paying taxes.

The data was only published on 17 November, a day after the summit, which was too late to hold the G20 leaders accountable. According to Alex Cobham, Director at the Tax Justice Network, “without the transparency data, neither the Tax Justice Network nor any other independent research can evaluate how much each government is losing to multinationals’ corporate tax abuse, or any progress made to curb tax losses in recent years.”

But that is not everything since the summit did not confront the hidden offshore wealth and kleptocracy problem. Maira Martini from Transparency International said that the G20 members “in recent years have dragged their feet, unable to agree on key measures and failing to implement even those to which they had already committed. In the meantime, the corrupt have consolidated wealth and power, allowing them to attack everything from sustainable development to global security to democracy.”

In an open letter released ahead of the Bali summit, Transparency International representatives from across G20 countries called on their governments to take immediate action against cross-border corruption. The Joint Declaration stated its support towards implementing Financial Action Task Force (FATF) recommendations for improved financial transparency, but does not say that beneficial ownership registries should be public, a critical element to enable stakeholders and the authorities to uncover hidden assets.

Also the declaration included regional efforts related to signing of the Asia Initiative Declaration in July 2022 on tax and financial transparency in Asia. However, it did not specify whether this initiative would create a stronger standard than the current OECD transparency standard, or simply implement an OECD standard in the Asian regional context.

Positively, the Bali Joint Declaration made a link between increased beneficial ownership information and tackling natural resource crimes, but offered no specific proposals to address this issue. Indonesia loses an estimated US$4 billion in Illicit Financial Flows (IFFs) each year due to illegal, unregulated and underreported (IUU) fishing alone, while Africa loses an estimated US$11.5 billion to this illicit activity. It would be vital that beneficial ownership information on all vessels and fishing companies is collected on a public registry, to hold those responsible for illicit fishing activities accountable.

Between 75 and 95 million people are expected to be thrown into extreme poverty this year as a result of the pandemic and the effects of rising inflation and the war in Ukraine, according to the UN. Many other are struggling to make a living and feed themselves as governments around the world are resorting to painful austerity measures.

The G20 had an opportunity to offer solutions to these crises and a lifeline to struggling nations. Unfortunately for all of us, they have failed.

Matti Kohonen is executive director, Financial Transparency Coalition.

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A History Lesson about War and Greed — Global Issues

  • Opinion by Jan Lundius (stockholm)
  • Inter Press Service

STOCKHOLM, Nov 16 (IPS) – The past is never dead. It’s not even past.
                                         William FaulknerLike most armed conflicts the Ukrainian war intends to establish hegemony over a certain area, in rivalry with other usurpers. Russian propaganda pinpoints the US and EU as Russia’s main adversaries, while Ukraine is portrayed as a pawn in these nations’ international yearnings. Such a scenario is not new.

The Great Game was a political and diplomatic confrontation between British – and Russian Empires, which continued for most of the 19th and parts of the 20th centuries. Britain’s role was eventually taken over by the US. The Great Game mainly affected Mesopotamia (Iraq), Persia (Iran), and Afghanistan, though it had, and still has, repercussions on a wide range of neighboring territories.

Britain originally feared that the Russian Empire’s ultimate goal was to dominate Central Asia and reach the Indian Ocean through Persia, thus threatening Britain’s Asian trade links and its domination of India.

Britain posed as the World’s first free society, declaring its adherence to Christian values, respect for private property, and democratic institutions. Claims bolstered by an advanced industry, fueled by steam power and iron, as well as an ever increasing use of oil. English leaders assumed their nation had a God-given task to spread “civilization” and that such a worthy cause permitted them to exploit the earth’s natural resources, as well as the world’s labor force. Similarly to the Brits, the Russians, the Yankees, and the French considered themselves to be “civilizing forces”.

The quest for dominion was carried out in a traditional manner – pitching internal fractions against each other and let them do most of the fighting. Nevertheless, this strategy eventually led to direct clashes between “world powers”. Britain strived to convince the Russian army that it did not have a chance against the British war machine. The UK, France and Italy felt threatened by a growing influence of Germany and the Austro-Hungarian and Russian Empires. Accordingly, these nations supported an increasingly weakened Ottoman Empire, intending it to remain a buffer zone blocking Russia’s expanding war fleet from the Mediterranean Sea and the Indian Ocean.

As part of this policy, Britain and France provided arms and money to anti-Russian insurgents in Chechnya, thus contributing to an enduring tradition of Chechen terrorism against Russia. After a minor scuffle between the Russian – and Ottoman Empires, Russia occupied the Principate of Wallachia (Romania), prompting France and Great Britain to attack Crimea with a huge military force.

The Crimean War (1853-56) proved that the Tsar’s army was no match for the allied forces. Russia was humiliated and its expansion towards the European mainland and meddling in Persia and Afghanistan were halted. Instead people living on the steppes of Central Asia and Siberia continued to be subdued and forced to join the Russian Tsardom.

    The Crimean disaster had exposed the shortcomings of every institution in Russia – not just the corruption and incompetence of the military command, the technological backwardness of the army and navy, or the inadequate roads and lack of railways that accounted for the chronic problems of supply, but the poor condition and illiteracy of the serfs who made up the armed forces, the inability of the serf economy to sustain a state of war against industrial powers, and the failures of autocracy itself.

The meddling of imperialists in other nations’ affairs was gradually worsened by efforts to secure fossil fuels for their own benefit. Refined petrol was originally used to fuel kerosene lamps and became increasingly important when street lighting was introduced. After 1857, oil wells drilled in Wallachia became very profitable, inspiring a search for new oilfields in the east. In 1873, the Swede Robert Nobel established an oil refinery in Azerbaijan, adding Russia’s first pipeline system, pumping stations, storage depots, and railway tank cars. At the same time, Calouste Gulbenkian assisted the Ottoman government to establish the oil industry in Mesopotamia. Gulbenkian eventually became the world’s wealthiest man.

Profit from these endeavors increased through assembly-line mass production of motor vehicles, introduced by Henry Ford in 1914. However, the main reason for gaining control of oil was belligerent. The English First Lord of the Admiralty, Winston Churchill, realized that if the British navy was fuelled by oil, instead of coal, it would be irresistible: “We must become the owners or at any rate the controllers at the source of at least a proportion of the supply of natural oil which we require.” In 1914, Churchill feared that this could be too late – the Germans were already on their way to conquer the Middle Eastern oil fields. Together with the Ottomans they were finishing the Berlin-Baghdad railway line, which would it make possible for the German army to transport troops to the Persian Gulf and onwards to Persian oilfields.

Germany and its allied Ottoman Empire lost World War I and the Berlin-Baghdad railway never reached the Persian Gulf. In accordance with the so-called Sykes-Picot Agreement Arab territories of the former Ottoman Empire were divided into French and British “spheres of influence”. In 1929, the newly formed Iraq Petroleum Company (IPC), a joint endeavor of British, French and American oil interests, brokered by Gulbenkian, received a 75-year concession to exploit crude oil reserves in Iraq and Persia, and eventually in what would become the United Emirates.

Access to oil continued to be a major factor in World War II. The German invasion of USSR included the goal to capture the Baku oilfields, which had been nationalized during the Bolshevik Revolution. However, the German Army was defeated before it reached the oil fields.

The Germans had pursued a relatively benign policy towards the USSR’s Muslim population of Caucasus and neighboring areas. This was after the war taken as an excuse for Stalin’s treatment of “treacherous ethnic elements”. Forced internal migration had begun already before the war and eventually affected at least 6 million people. Among them 1.8 million kulaks, mainly from Ukraine, who were deported from 1930 to 1931, one million peasants and ethnic minorities were driven from Caucasus between 1932 to 1939, and from 1940 to 1952, a further 3.5 million ethnic minorities were resettled.

Nearly 8,000 Crimean Tatars died during these deportations, while tens of thousands perished subsequently due to the harsh exile conditions. The Crimean Tatar deportations resulted in the abandonment of 80,000 households and 360,000 acres of land. From 1967 to 1978, some 15,000 Tatars succeeded in returning legally to Crimea, less than 2 percent of the pre-war Tatar population. This remission was followed by a ban on further Tatar settlements.

In 1944, almost all Chechens were deported to the Kazakh and Kirgiz Soviet republics. Accordingly, the Russian presence in Caucasus and Ukraine increased and so was Russian control of these areas’ natural resources, including wheat, coal, oil and gas.

After World War I, Britain had first tried to halt the Bolshevik penetration of Iran and did in 1921 support a coup d’état placing the UK-friendly general Reza Shah as leader of the nation. When Britain and USSR eventually became allies against Nazi Germany they did together attack Iran and replaced Reza Shah with his son Mohammad Reza Pahlavi. Reza Shah had become “far too Nazi-friendly.”

Following a 1950 election, Mohammad Mosaddegh became president of Iran. He was committed to nationalize the Anglo-Iranian Oil Company, AIOC (successor of the IPC mentioned above). In a joint effort the Secret Intelligence Services of the UK and the US, MI6 and CIA, organized and paid for a “popular” uprising against Mosaddegh, though it backfired and their co-conspirator, Mohammad Reza Pahlavi, fled the country. However, he did after a brief exile return and this time a coup d’état was successful. The deposed Mosaddegh was arrested and condemned to life in internal exile.

Mosaddegh’s internally popular effort to remove oil revenues from foreign claws inspired other Middle East leaders to oppose Britain and France. In 1956, the Egyptian president Nasser nationalized the Suez Canal Company, primarily owned by British and French shareholders. An ensuing invasion by Israel, followed by UK and France, aimed at regaining control of the Canal, ended in a humiliating withdrawal by the three invaders, signifying the end of UK’s role as one of the world’s major powers. The same year, USSR was emboldened to invade Hungary, quenching a popular uprising.

In 1960, the Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad. This was a turning point toward national sovereignty over natural resources. The US Iranian protégé, Mohammad Reza Pahlavi, eventually came to play a leading role in OPEC where he promoted increased prices, proclaiming that the West’s “wealth based on cheap oil is finished.” The US was losing its ability to influence Iranian foreign and economic policy and discretely began to support the religous extremist Khomeini, who initially claimed that American presence was necessary as a counterbalance to Soviet influence. However, after coming to power in 1979 Khomeini revealed himself as a fierce opponent to the US. The US and some European governments thus ended up supporting the brutal Saddam Hussein’s war on Iran. The Iraqui leader, heavily financed by Arab Gulf states, suddenly became a ”defender of the Arab world against a revolutionary Iran.” The war ended in a stalemate,with approximately 500,000 killed.

Ukraine is one last example of how a country has ended up in a siutaion where a superpower use its military force to impose its will upon it, while implying that other nations have similar intentions. Times are constantly changing and hopefully Russia will realise, like the UK once did, that it cannot maintain its might and strength through armed invasions, but instead have to rely on diplomacy and peaceful negotiations.

Russia seems to be stuck in a time capsule where foreign greed and meddling in other nations’ internal affairs resulted in ruthless wars and immense human suffering. As the German philosopher Hegel stated in 1832:

    What experience and history teach is this — that people and governments never have learned anything from history, or acted on principles deduced from it.

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COP27 Fiddling as World Warms — Global Issues

  • Opinion by Jomo Kwame Sundaram, Hezri A Adnan (kuala lumpur, malaysia)
  • Inter Press Service

KUALA LUMPUR, Malaysia, Nov 15 (IPS) – The latest annual climate conference has begun in the face of a worsening climate crisis and further retreats by rich nations following the energy crisis induced by NATO sanctions after the Russian invasion of Ukraine.

Copping out again
The 27th Conference of the Parties (COP 27) to the United Nations Framework Convention on Climate Change (UNFCCC) is now meeting in Sharm-el-Sheikh, Egypt, from 6 to 18 November 2022.

Hezri A Adnan

COP27 takes place amidst worsening poverty, hunger and war, and higher prices, exacerbating many interlinked climate, environmental and socio-economic crises.

The looming world economic recession is likely to be deeper than in 2008. The likely spiral into stagflation will make addressing the climate crisis even more difficult.

Invoking the Ukraine war as pretext, governments and corporations are rushing to increase fossil fuel production to offset the deepening energy crisis.

Resources which should be deployed for climate adaptation and mitigation have been diverted for war, fossil fuel extraction and use, including resumption of shale gas ‘fracking’ as well as coal mining and burning.

War causes huge social and economic damage to people, society and the environment. The wars in Ukraine, Yemen and elsewhere impose high costs on all, disrupting energy and food supplies, and raising prices sharply.

Russia’s Ukraine incursion has provided a convenient smokescreen for a hasty return to fossil fuels, as military-industrial processes alone account for 6% of all greenhouse gases.

The future is already here

All these have worsened crises facing the world’s environment and economy. The most optimistic Intergovernmental Panel on Climate Change (IPCC) scenario expects the 1.5°C rise above pre-industrial levels threshold for climate catastrophe to be breached by 2040.

Jomo Kwame Sundaram

Crossing it, the world faces risks of far more severe climate change effects on people and ecosystems, especially in the tropics and sub-tropical zone.

But the future is already upon us. Accelerating warming is already causing worse extreme weather events, ravaging economies, communities and ecosystems.

Recent floods in Pakistan displaced 33 million people. Wildfires, extreme heat, ice melt, drought, and extreme weather phenomena are already evident on many continents, causing disasters worldwide.

In 2021, the sea level rose to a record high, and is expected to continue rising. UN reports estimate women and children are 14 times more likely than adult men to die during climate disasters.

Popular sentiment is shifting, even in the US, where ‘climate scepticism’ is strongest. Devastation threatened by Hurricane Ida in 2021 not only revived painful memories of Katrina in 2005, but also heightened awareness of warming-related extreme weather events.

Stronger climate action needed

In international negotiations, rich nations have evaded historical responsibility for ‘climate debt’ by only focusing on current emissions. Hence, there is no recognition of a duty to compensate those most adversely impacted in the global South.

Last year’s COP26 Glasgow Climate Pact was hailed for its call to ‘phase-out’ coal. This has now been quickly abandoned by Europe with the war. And for developing countries, Glasgow failed to deliver any significant progress on climate finance.

At COP27, the Egyptian presidency has proposed an additional ‘loss and damage’ finance facility to compensate for irreparable damage due to climate impacts.

After failing to even meet its modest climate finance promises of 2009, the rich North is dithering, pleading for further talks until 2024 to work out financing details.

Meanwhile, the G7 has muddied the waters by counter-offering its Global Shield Against Climate Risks – a disaster insurance scheme.

Get priorities right

What the world needs, instead, are rapidly promoted and implemented measures as part of a more rapid, just, internationally funded transition for the global South. This should:

  • replace fossil fuels with renewable energy, including by subsidizing renewable energy generation for energy-deficient poor populations.
  • promote energy-saving and efficiency measures to reduce its use and greenhouse gas emissions by at least 70% (from 1990) by 2030.
  • implement a massive global public works programme, creating ‘green jobs’ to replace employment in ‘unsustainable’ industries.
  • develop needed sustainable technologies, e.g., to replace corporate agricultural practices with ‘agroecological’ farming methods, investment and technology.

Another world is possible

Another world is possible. A massive social and political transformation is needed. But the relentless pursuit of private profit has always been at the expense of people and nature.

Greed cannot be expected to become the basis for a just solution to climate change, let alone environmental degradation, world poverty, hunger and gross inequalities.

The COP27 conference is now taking place in Sharm-al-Sheikh, an isolated, heavily policed tourist resort. Only one major road goes in and out, as if designed to keep out civil society and drown out voices from the global South.

The luxury hotels there are charging rates that have put COP27 beyond the means of many, especially climate justice activists from poorer countries. The rich and powerful arrived in over 400 private jets, making a mockery of decarbonization rhetoric.

Thus, the COP process is increasingly seen as exclusive. Without making real progress on the most important issues, it is increasingly seen as slow, irrelevant and ineffective.

Generating inadequate agreements at best, the illusion of progress thus created is dangerously misleading at worst.

By generating great expectations and false hopes, but actually delivering little, it is failing the world, even when it painstakingly achieves difficult compromises which fall short of what is needed.

Multilateralism at risk

Multilateral platforms, such as the UNFCCC, have long been expected to engage governments to cooperate in developing, implementing and enforcing solutions. With the erosion of multilateralism since the end of the Cold War, these are increasingly being bypassed.

Instead, self-appointed private interests, with means, pretend to speak for world civil society. Strapped for resources, multilateral platforms and other organizations are under pressure to forge partnerships and other forms of collaboration with them.

Thus, inadequate ostensible private solutions increasingly dominate policy discourses. Widespread fiscal deficits have generated interest in them due to the illusory prospect of private funding.

Private interests have thus gained considerable influence. Thus, the new spinmeisters of Davos and others have gained influence, offering seductively attractive, but ultimately false, often misleading and typically biased solutions.

Meanwhile, global warming has gone from bad to worse. UN Member States must stiffen the backs of multilateral organizations to do what is right and urgently needed, rather than simply going with the flow, typically of cash.

Hezri A Adnan is an environmental policy analyst and Fellow of the Academy of Sciences, Malaysia. He is author of The Sustainability Shift: Reshaping Malaysia’s Future.

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Market Lords, Much More than a War, Behind World’s Food Crisis — Global Issues

In each of the three global food crises studied, financial speculation has caused steep increases in prices, making food inaccessible to hundreds of millions of people. Credit: Bigstock
  • by Baher Kamal (madrid)
  • Inter Press Service

MADRID, Nov 11 (IPS) – While grain exports continue to regularly flow to world’s markets since the July 2022 Turkey-brokered agreement between Russia and Ukraine to resume cereals and fertilisers shipments from both countries, food prices are still skyrocketing everywhere. How come?

The handiest answer by establishment politicians and media is that it’s all about the Russian invasion of Ukraine last February.

Another argument they use is that it is Russia who interrupted its gas and oil exports, omitting the fact that it is West US-led sanctions that have drastically cut this flow to mostly European markets, causing a steady rise in energy costs, food transportation, etcetera.

Nonetheless, such answers clearly ignore other structural causes: the dominant markets’ shocking speculations.

“It is true that the Russian invasion against Ukraine disrupted global markets, and that prices are skyrocketing. But that also tells us that markets are part of the problem,” last April warned Michael Fakhri, the UN Special Rapporteur on the Right to Food, 2022.

Political failure

In his report to the United Nations Security Council, the Special Rapporteur stated that hunger and famine, like conflicts, are always the result of “political failures.”

Specifically, explains Michael Fakhri, “Markets are amplifying shocks and not absorbing them… food prices are soaring not because of a problem with supply and demand as such; it is because of price speculation in commodity futures markets.”

Blocking the solutions

The current food crisis is caused by “international failures,” he said, while providing two points in conclusion:

– For over two years, people and civil society organisations around the world have been raising the alarm about the food crisis. For over two years, they have been calling for an international coordinated response to the food crisis.

– And yet Member States have refused to mobilise the Rome-based agencies and other UN organisations to respond to the food crisis in a coordinated way.

According to Michael Fakhri, some Member States and civil society organisations tried to get the CFS to pass a resolution last October in order for it to be the place to enable global policy coordination around the food crisis.

“And yet some powerful countries – some members of the P5 – actively blocked that initiative. This undermined the world’s ability to respond to the food crisis.”

Food “nationalism”

Meanwhile, in a 7 November 2022 dossier by Focus on the Global South, Shalmali Guttal warned that a perfect storm is brewing in the global food system, pushing food prices to record high levels, and expanding hunger.

“As international institutions struggle to respond, some governments have resorted to knee-jerk ‘food nationalism’ by placing export bans to preserve their own food supplies and stabilise prices….”

In its dossier, researchers from Focus on the Global South write about various aspects of the current crisis, its causes, and how it is impacting countries in Asia.

Corporations fuelling the crisis

These include regional analysis, case studies from Sri Lanka, Philippines and India, “the role of corporations in fuelling the crisis and the flawed responses of international institutions such as the World Trade Organisation (WTO), the Bretton Woods Institutions and United Nations agencies.”

The recently released State of Food Insecurity and Nutrition in the World 2022 (SOFI 2022) report presents a sobering picture of the failure of global efforts to end hunger, malnutrition and food insecurity. According to SOFI 21, “even before the Covid-19 pandemic struck in 2020, world hunger levels were abysmally high.”

Markets concentration and speculation

In their recent analysis: A food crisis not of their making, CP Chandrasekhar and Jayati Ghosh, said:

Governments, and multilateral and international agencies are by and large apportioning the lion’s share of the blame for the current world food crisis to global supply shortages arising from the war on Ukraine, ignoring the persisting impacts in low- and middle-income countries of “the market forces of concentration and speculation, of globally determined macroeconomic processes, and the collapse of livelihood opportunities affecting these countries in the post-Covid world.”

World food system dominated by markets

Central to recurring food price volatility, food crises and the entrenchment of hunger and food insecurity are “market structures, regulations, and trade and finance arrangements that bolster a global corporate-dominated industrial food system, and enable market concentration and financial speculation in commodity markets.”

Excessive speculation

Furthermore, an analysis by the International Panel of Experts on Sustainable Food Systems (IPES-Food) indicates that the kind of “excessive speculation” seen in 2007-2008 that triggered food price spikes may be back.

“Multilevel market concentration and financial speculation on commodity markets have played pivotal roles in past and the present food crises and present grave threats to the realisation of the Right to Food.”

In addition, a historical examination of food crises over the past 50 years by professor Jennifer Clapp shows that the global industrial food system has been rendered more prone to price volatility and more susceptible to crises because of three interrelated manifestations of corporate concentration:

– First, the global industrial food system relies on a small number of staple grains produced using highly industrialised farming methods, making the system susceptible to events that affect just a handful of crops and to rising costs of industrial farm inputs.

– Second, a small number of countries specialise in the production of staple grains for export, on which many other countries depend, including many of the poorest and most food-insecure countries.

– And third, the global grain trade is dominated by a small number of firms in highly financialized commodity markets that are prone to volatility (IPES-Food 2022; FAO 2022; OECD and FAO 2020).”

Mega corporations

On this, Jennifer Clapp, professor and Canada Research Chair, School of Environment, Resources and Sustainability, explains that “a small number of corporations exercise a high degree of influence over the global industrial food system, powered by mergers and acquisitions of one another to form giant mega-corporations, which enable further concentration horizontally and vertically, as well as influence over policy-making and governance nationally and globally.”

According to Clapp, “four grain trading corporations– Archer-Daniels Midland, Bunge, Cargill and Dreyfus, called the ‘ABCD’– control 70-90 % of the grain trade.”

As “cross-sectoral value chain managers” these grain trading giants are able to compile large amounts of market data, but are under no obligation to disclose this information and can hold stocks until prices have peaked, explains the expert.

“And in each of the three global food crises studied, financial speculation has caused steep increases in prices, making food inaccessible to hundreds of millions of people.”

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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Towards a New Approach to Development Cooperation? — Global Issues

  • Opinion by A.H. Monjurul Kabir (new york)
  • Inter Press Service

NEW YORK, Nov 10 (IPS) – We are living in a world where both our bilateral and multilateral achievements, consensuses on human rights and social justice, and our resolve to public good are being tested like never before.

Now, more than ever, we need to bring to life the values and principles of the UN Charter in every corner of the world. Due to the powers vested in its Charter and its unique international character, the UN can act on the issues confronting humanity, including:

    • Maintain international peace and security
    • Protect human rights
    • Deliver humanitarian aid
    • Promote sustainable development
    • Uphold international law

Given my own personal trajectory in human rights advocacy and development cooperation, let me focus on aspects of sustainable development and consider whether we need to change and adopt any new approach to it to end extreme poverty, reduce inequalities, and rescue the Sustainable Development Goals (SDGs) from exclusionary practices.

Development or Sustainable Development must be inclusive: In fact, inclusion at the heart of Development Cooperation. Inclusive development is the concept that every person, regardless of their identity, is instrumental in transforming their societies.

Development processes that are inclusive yield better outcomes for the communities that embark upon them. The UN was created to promote the rights and inclusion of marginalized and underrepresented populations in the development process and leads the UN’s response to addressing the needs and demands of those in in adversity and youth.

Therefore, the UN implements activities that combat stigma and discrimination, promote empowerment and inclusion of marginalized or underrepresented groups, and improve the lives of populations in high-risk situations.

It is important that we also adopt this in institutional and management settings: For example, UN Asia Network for Diversity and Inclusion (UN-ANDI) recently conducted its first survey on Racism and Racial Discrimination in five languages.

The survey was intended to capture data reflecting the Asian perspective in the UN system. It is planning to issue a report on the survey’s findings to support and address many critical issues of racism and racial discrimination. There are other networks who are addressing different elements of intersectionality including but not limited to, gender, disability, ethnicity, identity etc.

So, the world and its challenges have become much more intersectional, which calls for a robust and intersectional approach to development cooperation.

Intersectional Approach: An intersectionality lens allows us to see how social policy may affect people differently, depending on their specific set of ‘locations,’ and what unintended consequences particular policies may have on their individual lives.

By listening to the most marginalized and/or disadvantaged groups of a community, development organizations can help combat oppression at all levels of society and rebuild communities from the ground up.

Take the example of Persons with Disabilities. They are not a homogenous group, and this should be reflected in our policy advocacy and communications by considering intersectionality—the intersection of disability together with other factors, such as gender, age, race, ethnicity, sexual orientation, refugee, migrant or asylum seeker status.

For example, a person with disability also has a gender identity, may come from an Indigenous group and be young, old, a migrant or live in poverty.

At the UN System, it is time to adopt an intersectional approach in our development cooperation, policy advocacy, programming, operational support, planning and budgeting. An intersectional approach considers the historical, social, and political context and recognizes the unique experience of the individual based on the intersection of all relevant grounds.

This approach allows the experience of discrimination, based on the confluence of grounds involved, to be acknowledged and remedied. Using an intersectionality lens to approach our development practice means moving beyond the use of singular categories to understand people and groups and embracing the notion of inseparable and interconnected sets of social ‘locations’ that change through time, vary across places, and act together to shape an individual’s life experience and actions.

This would go a long way to contribute to the SDGs’ Leave No One Behind principle (LNOB). The new approach calls for invigorating existing practices, making them more innovative, effective, and efficient.

Innovation: We need to think of innovative approaches and instruments to attract and channel new resources to finance our developmental aspirations, as outlined in the 2030 SDGs now more than ever.

Reliable and well-administered development financial institutions with a well-defined mandate and sound governance framework will continue to be an important vehicle to accelerate inclusive economic and social development.

They can create new channels to crowd-in the private sector. Moreover, they can play a catalytical role by generating new knowledge, convening stakeholders, and providing technical assistance to build capacity in the private and public sectors. Mutual collaboration between and across public and private sector is critical to harness the full potential of innovation and innovative approaches.

Let us not forget new media’s growing impact on both inclusive participation leveraging innovative practices.

New Media: New media, including mobile and social media, could help demystify international institutions and encourage participation. The new media is also critical to widen the breadth of accessibility for persons with disabilities or those who live in rural and/or remote, hard to reach areas.

Alongside this, there could be more regular interactions by the leadership of intergovernmental organisations with multi-stakeholders including civil society, organisations of persons with disabilities, and the media, and the creation of accessible databases of statistical and other information and knowledge on their work.

Notwithstanding the Ukraine war, work at the UN continues. The world body can and should continue to play a constructive role in both development cooperation, crisis management, peace building, and post-conflict stabilization. It should continue to focus on crises from Afghanistan to Mali and Ukraine itself.

However, it must explore new and innovative and intersectional ways to support inclusive development, climate justice and resilience, peacekeeping, and other global and regional key priorities.

Otherwise, the SDGs will not be even near to their desired destination in 2030 or beyond.

Dr. A.H. Monjurul Kabir, currently Global Policy and UN System Coordination Adviser and Team Leader for Gender Equality, Disability Inclusion, and Intersectionality at UN Women HQ in New York, is a political scientist and senior policy and legal analyst on global issues and Asia-Pacific trends.

For policy and academic purposes, he can be contacted at [email protected] and followed on twitter at mkabir2011

This article is from a blog based on a speech delivered by the author, in his personal capacity, at an event commemorating the UN’s 77th anniversary organized by UN-ANDI– a New York-based global network of like-minded Asian staff members of the UN system who strive to promote a more diverse and inclusive culture and mindset within the UN.

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Inconvenient Truth of Our Times — Global Issues

  • Opinion by Jomo Kwame Sundaram, Hezri A Adnan (kuala lumpur, malaysia)
  • Inter Press Service

KUALA LUMPUR, Malaysia, Nov 08 (IPS) – Ahead of the first United Nations environmental summit in Stockholm in 1972, a group of scientists prepared The Limits to Growth report for the Club of Rome. It showed planet Earth’s finite natural resources cannot support ever-growing human consumption.

Limits used integrated computer modelling to investigate twelve planetary scenarios of economic growth and their long-term consequences for the environment and natural resources.

Hezri A Adnan

Emphasizing material limits to growth, it triggered a major debate. Authored by Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III, Limits is arguably even more influential today.

Within limits

Limits considered population, food production, industrialization, pollution and non-renewable resource use trends from 1900 to 2100.

It conceded, “Any human activity that does not require a large flow of irreplaceable resources or produce severe environmental degradation might continue to grow indefinitely”.

Most projected scenarios saw growth ending this century. Ominously, Limits warned of likely ecological and societal collapses if anthropocene challenges are not adequately addressed soon enough.

Failure would mean less food and energy supplies, more pollution, and lower living standards, even triggering population collapses.

But Limits was never meant to be a definitive forecast, and should not be judged as such. Instead, it sought to highlight major resource threats due to growing human consumption.

Off-limits?

Gaya Herrington showed three of Limits’ four major scenarios anticipated subsequent trends. Two lead to major collapses by mid-century. She concluded, “humanity is on a path to having limits to growth imposed on itself rather than consciously choosing its own.”

Limits stressed the urgent need for radical transformation to achieve ‘sustainable development’. The ‘international community’ embraced this, in principle, at the 1992 Earth Summit in Rio de Janeiro, two decades after Stockholm.

With accelerating resource depletion – as current demographic, industrial, pollution and food trends continue – the planet’s growth limits will be reached within the next half-century. The Earth’s ‘carrying capacity’ is unavoidably shrinking.

Jomo Kwame Sundaram

For Limits, only a “transition from growth to…a desirable, sustainable state of global equilibrium” can save the environment and humanity.

The report maintained it was still possible to create conditions for a much more sustainable future while meeting everyone’s basic material needs. As Gandhi said, “The world has enough for everyone’s need, but not enough for everyone’s greed.”

No other environmental work then, or since, has so directly challenged mainstream growth beliefs. Unsurprisingly, it attracted strong opposition.

The 1972 study was long dismissed by many as neo-Malthusian prophecy of doom, underestimating the potential for human adaptation through technological progress.

Many other criticisms have been made. Limits was faulted for focusing too much on resource limits, but not enough on environmental damage. Economists have criticized it for not explicitly incorporating either prices or socioeconomic dynamics.

Beyond limits

In Beyond the Limits (1993), the two Meadows and Randers argued that resource use had exceeded the world environment’s carrying capacity.

Using climate change data, they highlighted the likelihood of collapse, going well beyond the earlier focus on the rapid carbon dioxide build-up in the atmosphere.

In another sequel, Limits to Growth: The 30-Year Update (2004), they elaborated their original argument with new data, calling for stronger actions to avoid unsustainable excess.

Dennis Meadows stresses other studies confirm and elaborate Limits’ concerns. Various growth trends peak around 2020, suggesting likely slowdowns thereafter, culminating in environmental and economic collapse by mid-century.

Limits’ early 1970s’ computer modelling has been overtaken by enhanced simulation capabilities. Many earlier recommendations need revision, but the main fears have been reaffirmed.

Limitless?

Two key Limits’ arguments deserve reiteration. First, its critique of technological hubris, which has deterred more serious concern about the threats, thus undermining environmental, economic and other mitigation efforts.

As Limits argued, environmental crisis and collapse are due to socioeconomic, technological and environmental transformations for wealth accumulation, now threatening Earth’s resources and ecology.

Conventional profit-prioritizing systems and technologies have changed, e.g., with resource efficiency innovation. Such efforts help postpone the inevitable, but cannot extend the planet’s natural limits.

Of course, innovative new technologies are needed to address old and new problems. But these have to be deployed to enhance sustainability, rather than profit.

The Limits’ critique is ultimately of ‘growth’ in contemporary society. It goes much further than recent debates over measuring growth, recognizing greater output typically involves more resource use.

While not necessarily increasing exponentially, growth cannot be unlimited, due to its inherent resource and ecological requirements, even with materials-saving innovations.

This Earth for all

Thankfully, Limits’ fourth scenario – involving significant, but realistic transformations – allows widespread increases in human wellbeing within the planet’s resource boundaries.

This scenario has inspired Earth for All – the Club of Rome’s Transformational Economics Commission’s 2022 report – which more than updates Limits after half a century. Its subtitle – A Survival Guide for Humanity – emphasizes the threat’s urgency, scale and scope.

It argues that ensuring the wellbeing of all is still possible, but requires urgent fundamental changes. Major efforts are needed to eradicate poverty, reduce inequality, empower women, and transform food and energy systems.

The comprehensive report proposes specific strategies. All five need significant investments, including much public spending. This requires more progressive taxation, especially of wealth. Curbing wasteful consumption is also necessary.

More liquidity – e.g., via ‘monetary financing’ and International Monetary Fund issue of more special drawing rights – and addressing government debt burdens can ensure more policy and fiscal space for developing country governments.

Many food systems are broken. They currently involve unhealthy and unsustainable production and consumption, generating much waste. All this must be reformed accordingly.

Market regulation for the public good is crucial. Better regulation – of markets for goods (especially food) and services, even technology, finance, labour and land – is necessary to better conserve the environment.

Limited choice

The report includes a modeling exercise for two scenarios. ‘Too Little Too Late’ is the current trajectory, offering too few needed changes.

With growing inequalities, social trust erodes, as people and countries compete more intensely for resources. Without sufficient ‘collective action’, planetary boundaries will be crossed. For the most vulnerable, prospects are grim.

In the second ‘Giant Leap’ scenario, the five needed shifts are achieved, improving wellbeing all around. Everybody can live with dignity, health and security. Ecological deterioration is sufficiently reversed, as institutions serve the common good and ensure justice for all.

Broad-based sustainable gains in wellbeing need pro-active governance reshaping societies and markets. This needs sufficient political will and popular pressure for needed reforms.

But as the world moves ever closer to many limits, the scenario looming is terrifying: ecosystem destruction, gross inequalities and vulnerabilities, social and political tensions.

While regimes tend to bend to public pressure, if only to survive, existing discourses and mobilization are not conducive to generating the popular political demands needed for the changes.

Adnan A Hezri is an environmental policy analyst and Fellow of the Academy of Sciences, Malaysia. He is author of The Sustainability Shift: Reshaping Malaysia’s Future.

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