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Entries tagged "World Bank"Page Previous 1 • 2 • 3 • 4 Next
October 9, 2012 · By Janet Redman
Civil society to World Bank president Dr. Jim Kim, "add your voice to the choir of support for an FTT"
Today, the Institute for Policy Studies sent the newly appointed World Bank president Dr. Jim Kim a letter signed by 58 organizations from around the world urging him to champion financial transaction taxes (FTT) – a tiny tax on stocks, bonds, currency and other derivatives trades - as an innovative way to raise much-needed money to address climate change, health and other development priorities in poorer countries. The groups – including WWF, Greenpeace, Oxfam, AFL-CIO, World AIDS Campaign, United Methodist Church, and the Main Street Alliance – come from a broad cross-section of civil society and show a growing consensus that it's time for developed countries to get serious about meeting their promises on climate and development finance.
The letter was sent in anticipation of the World Bank's annual meeting in Tokyo later this week, where high-level finance ministry officials from developed and developing countries will assemble to discuss poverty eradication, sustainable development and the world economic outlook.
In the letter, groups urged Dr. Kim to "[p]romote FTT as a source of innovative finance for developing countries’ efforts to address climate change. Such revenues are needed for the Green Climate Fund and … it would be helpful to promote FTT as a source of climate finance in the context of studies and reports mandated by international bodies such as the G20 and the UN."
In conjunction with the Bank meetings the Leading Group on Innovative Financing for Development will hold a symposium highlighting the role of FTT on meeting the funding gap for climate and development left by the global economic crisis. Two of the countries featured in the event – France and Germany – are part of an eleven-country 'coalition of the willing' that announced their commitment to implement an FTT today at the European Union Finance Ministers Meeting (ECOFIN). The letter to Kim emphasized that "[a]t this key moment in their decision-making, it is particularly important to urge European leaders to allocate part of FTT revenue to development and climate."
Now that countries have taken this leap forward, the World Bank's leader should make his own bold move and support an FTT.
Note: Besides the four biggest economies in the Eurozone – France, Germany, Italy and Spain – Austria, Belgium, Estonia, Greece, Portugal, Slovakia and Slovenia have pledged to implement a financial transaction tax at ECOFIN. This "coalition of the willing" approach will still need to be given the green light by EU heads of state, but the political momentum is clearly strong.
Dr. Jim Yong Kim
The World Bank
1818 H Street, NW
Washington, DC 20433
October 9, 2012
Re: Financial transaction taxes as a source of innovative finance
Dear Dr. Kim:
We, the undersigned 58 organizations, congratulate you on your position as World Bank President. We are hopeful that with your impressive track record, you will bring fresh thinking to this important financial institution.
We are writing now to encourage you to use your prominent position of influence to become a vocal champion of innovative ways to ensure sufficient resources are available to tackle the most pressing problems faced by the world’s poorest and most vulnerable people.
Given the budget constraints facing many of the largest donor countries, it is widely accepted that new sources of financing are needed. Our organizations are part of a growing international campaign to promote one of the most promising forms of innovative finance – small taxes on trades of stock, derivatives, currencies, and other financial instruments.
We have long advocated that such financial transaction taxes (FTTs) are a practical way to generate revenue to fill domestic and international financing gaps, discourage the type of short- term financial speculation that has little social value but poses high risks to the economy, and serve as a predictable and sustainable source financing for health, climate, development, education, and job creation. In a recent paper, the UN Department of Economic and Social Affairs concluded that “financial and currency transaction taxes are technically feasible and economically sensible. They could readily provide the means of meeting global development financing needs.”
Over the past two years, we have been encouraged by significant shifts in the debate, with influential leaders such as Bill Gates, UNAIDS Executive Director Michel Sidibé, Bishop Desmond Tutu, Kofi Annan, and Pope Benedict XVI coming out in support. Now is a critical time to add your voice to the call.
A group of at least 11 European governments appears on track to forge an EU agreement to implement a FTT by the end of 2012. However, with the exception of France, they have made no clear commitment yet on how the resources would be allocated. Your support could help ensure that a substantial portion of the revenue goes to meet the needs of the world’s poorest people, rather than simply paying down deficits.
1. Raise FTT in the context of your work to publicize the new World Development Report focusing on jobs. As governments look for sources of financing for job-creation strategies, FTT should be promoted as one potential source.
2. Promote the FTT as part of a plan to achieve internationally agreed global health, education and other development goals. For example, with the prospect of ending AIDS closer than ever, FTT revenues could help achieve Millennium Development Goal #6, aimed at reversing the spread of HIV/AIDS and ensuring universal access to treatment and help fully fund implementation of the 2011 Political Declaration on HIV/AIDS.
3. Promote FTT as a source of innovative finance for developing countries’ efforts to address climate change. Such revenues are needed for the Green Climate Fund and other funds of the UN Framework Convention on Climate Change, including the Adaptation Fund, Least Developed Countries Fund, and the Special Climate Change Fund. Further, it would be helpful to promote FTT as a source of climate finance in the context of studies and reports mandated by international bodies such as the G20 and the UN.
4. Bring these messages to the general public and world leaders. At this key moment in their decision-making, it is particularly important to urge European leaders to allocate part of FTT revenue to development and climate. We also recommend that you publish an open letter on this theme in major newspapers.
5. Meet with civil society and independent experts on this timely issue. We would be very pleased to organize a briefing that would include participation by leading experts in the field. Over the past several years, many of our organizations have been involved in similar briefings with the International Monetary Fund, the Gates Foundation, the European Commission, and national governments. We would appreciate the opportunity to share research and analysis of the feasibility and potential benefits of this means of generating additional finance.
We look forward to hearing from you. Sincerely,
Alliance for a Just Society, USA
Australian Council of Trade Unions (ACTU)
Balance Promoción para el Desarrollo y Juventud, Mexico
Campaign for the Welfare State, Norway
Canadian HIV/AIDS Legal Network
Center for Economic and Social Rights, USA
Chicago Political Economy Group, USA
Coalition 15%, Cameroon
Comisiones Obreras (CCOO), Spain
Confederazione Generale Italiana del Lavoro (Ialian Geneneral Confederation on Labour)
CPATH (Center for Policy Analysis on Trade and Health), USA
Ecologistas en Acción, Spain
Europeans for Financial Reform
Friends of the Earth U.S. Gender Action, USA
Global Health Advocates France Global South Initiative, Nepal
Halifax Initiative, Canada
Health GAP, USA
IG Bauen-Agrar-Umwelt (Trade Union for Building, Forestry, Agriculture and the Environment), Germany
INPUD (International Network of People who Use Drugs), United Kingdom
Institute for Policy Studies, Global Economy Project, USA
Interagency Coalition on AIDS and Development (ICAD), Canada
International Civil Society Support International HIV/AIDS Alliance
International NGO Forum on Indonesian Development (INFID)
International Trade Union Confederation
Kampagne: Steuer gegen Armut (Tax Against Poverty Campaign), Germany
KOO-Koordinierungsstelle der Österreichischen Bischofskonferenz f.internationale Entwicklung und Mission, Austria
Main Street Alliance, USA
Maryknoll Office for Global Concerns, USA
National Union of Public and General Employees, Canada
NSW Nurses and Midwives' Association, Australia
Public Services International
Réseau Accès aux Médicaments Essentiels (RAME), Burkina Faso
Robin Hood Tax Campaign, United Kingdom
Stamp Out Poverty, United Kingdom
Trades Union Congress, Great Britain
Treatment Action Group, USA
UBUNTU - World Forum of Civil Society Networks
Unión Sindical Obrera (USO), Spain
United Methodist Church, General Board of Church and Society, USA
Wealth for the Common Good, USA
Women in Europe and Central Asia Regions plus (WECARe+), Germany
World AIDS Campaign International, South Africa and Kenya
World Democratic Governance project Association
World Federalist Movement Japan
June 7, 2012 · By Sarah Anderson
A Canadian mining company has cleared a major legal hurdle in their quest to exploit gold in El Salvador. In a celebratory press release, the firm, Pacific Rim, quoted lawyers from two Washington, DC law firms that are representing it in the case.
I guess having one legal powerhouse behind you just isn't enough when a major pot of gold is at stake. And so far, the investment appears to be paying off.
Pacific Rim is suing the government of El Salvador, demanding more than $77 million in compensation over the government's denial of a permit for a gold mining project. The government acted in response to strong public concerns that the project could contaminate a river that is the drinking water source for more than half the country.
The World Bank tribunal hearing the case, in a classic cowardly maneuver, put the word out late Friday that they planned to advance the case past the jurisdictional phase and start hearing arguments about the merits.
The Pacific Rim release quotes one "extremely pleased" lawyer from Weil, Gotshal & Manges and another from Crowell & Moring who called the ruling a "great development." The continuation of the case makes for more billable hours. According to the Wall Street Journal, lawyers at Weil, Gotshal & Manges make as much as $1,045 per hour. GDP per capita in El Salvador: $3,426.
What's remarkable is that Pacific Rim was able to hire these two law firms despite having no current income stream. They are essentially a corporate shell whose main asset is a lawsuit on which investors are willing to gamble. So they might lose a few million. But if the legal blackmail works and El Salvador allows the mining project to go ahead, the skyrocketing price of gold will produce a handsome return. Pacific Rim's release notes that "the Company has received encouraging feedback from potential sources of non-equity financing" to pay for the final phase of the lawsuit.
The response to the tribunal ruling in El Salvador is not so happy. A diverse coalition of faith, environmental, and community groups fought against Pacific Rim's mining plans because they don't want their children drinking the poisoned water that often gets left behind when foreign corporations come hunting for gold. Polls show the majority of the country is opposed to the project and two successive Presidents from different parties have been on their side.
So how did this domestic policy issue wind up before an international tribunal? Pacific Rim based its legal claim on alleged violations of two laws -- the U.S. trade agreement with Central America and a national Salvadoran investment law adopted in 1999. Both of these allow private foreign investors to bypass domestic courts and bring claims for compensation to international tribunals, such as the International Center for Settlement of Investment Disputes, housed at the World Bank.
The tribunal decided that the company did not have the right to sue under the trade agreement because they are a Canadian company and Canada is not a part of that treaty. But they will hear arguments about whether El Salvador breached its obligations under its domestic laws. It's not uncommon for cases like this to drag on for years, costing both sides millions of dollars in legal fees.
At a rally in front of Pacific Rim's Vancouver headquarters on June 2, Salvadoran activist Vidalina Morales asked for international solidarity in demanding that Pacific Rim drop the suit. She said the broad-based coalition that has come together around the issue, the National Roundtable on Metallic Mining, is now even more determined to obtain their ultimate goal, which is a ban on all mining in the country in the environmentally fragile country.
Unfortunately, the international regime for handling investment disputes doesn't pay much heed to the will of the people.
March 22, 2012 · By John Cavanagh
The World Bank presidency fight is getting really interesting. There may be two developing country candidates in addition to Jeffrey Sachs and the U.S. candidate. Jose Antonio Ocampo (from Colombia and also now at Columbia University) has a lot going for him. IPSer Sarah Anderson has worked with him on capital controls and trade agreements and he is terrific on that issue. Looks like he'll become the Latin America candidate, with Brazil in the lead.
The other possible candidate is Nigeria's Ngozi Okonjo-Iweala; she is more traditional and a lot less interesting. The U.S. has until tomorrow to name their candidate. Rob Weissman and others have done a great job at knocking down Larry Summers possible candidacy. Here is our latest on the Sachs' candidacy in the Nation. Thanks to several of you for participating in this debate.
Yesterday morning, I was leafletting outside the World Bank because a Canadian mining firm has brought a case against El Salvador in the Bank's International Center for the Settlement of Investment Disputes. A number of us have been leafletting to tell the Bank not to interfere with El Salvador's decision to stop issuing gold mining permits.
As I was leafletting World Bank employees, I used my growing "friendship" with some of the them to ask who they want to be their next World Bank president. I spoke with 7-8 in more depth. Every single one told me that they don't want an American. (And, I realized as I spoke to them that I haven't met one American who works there. This really is a colonial outfit: a largely developing world workforce and an American president.) The don't like Zoellick and no one I spoke to wants Sachs.
March 20, 2012 · By Robin Broad and John Cavanagh
Thanks to The Nation for creating the forum for this important dialogue on the World Bank presidency and also to Jeffrey Sachs for participating. Progressives should not expect that we will always march together to one song; we should savor the venues like this where we can debate as allies. We appreciate the many comments that have been posted and others that were sent to us privately.
We will use our limited “rebuttal” space to respond to two key issues.
Some progressives are urging us all to be more “strategic,” to support Sachs for World Bank president because he is better than possible Obama pick Larry Summers. We agree that Summers would be a terrible choice to head the Bank and, indeed, have joined tens of thousands to sign a petition to the Obama administration opposing his candidacy. However, the deadline for governments to announce their candidates is not until March 23. By then, several governments will nominate Sachs. The United States will announce a candidate. And, other governments may nominate someone else. After that point, it will be important for progressives around the world to debate who, if anyone, deserves our support. Before the 23rd, we believe that one productive strategic role for progressives is to critique the traditional presumption that Americans will support the European choice for the IMF head and Europeans will back the U.S. choice at the Bank, virtually assuring that the rich countries get their way. We commend the Bretton Woods Project for their open letter arguing for a reformed selection process.
So too do we think it strategic for progressives to put forward the best candidates from across the globe, candidates with the qualifications to run a large organization and with the vision, humility, sensibility, and ability to listen to the 99 percent -- all necessary to transform the Bank. Since we wrote our initial piece, dozens of people have sent us such names: Nobel laureate Amartya Sen, former UNDP head Gus Speth, urban poor advocate Sheela Patel, Greenpeace International chair Kumi Naidoo, UN Special Rapporteur on the Right to Food Olivier de Schutter, former Brazilian president Lula, and ActionAid International head Joanna Kerr, among others. Any could be a great leader of the Bank, but people and governments hesitate to put "best" names forward so long as the U.S.-European grip on the selection process continues. If U.S. progressives spent as much time promoting a "best" candidate as they are backing Sachs, that person might take-off as a candidate. Such a "best-person" list also presses those who are running to prove they match such high credentials, not that they are better than the worst.
Our second rebuttal issue has to do with the development record of Jeffrey Sachs. Knowledgeable commentators below have added their reflections on Sachs’s role in "shock therapy" and its impacts, particularly in Bolivia. In terms of Sachs’s current work, we note that nobody supporting Sachs has demonstrated that the Millennium Villages represent a "sustainable" future; whatever the pesticide costs per person, fossil-fuel dependent agriculture is not the way forward. We have spent time on the ground with sustainable farmers and "farmer scientists" who are restoring the soil, cutting costs, and raising yields without chemicals. In the era of climate catastrophe, they are the future of agriculture. Millennium Villages and the World Bank should be on board to accelerate the transition to post-chemical, sustainable farming that is good for farmers, consumers, the land, and the climate. Agribusiness firms and fertilizer corporations will fight this transition every step of the way; we need a World Bank president who will stand up to them.
March 15, 2012 · By Robin Broad and John Cavanagh
Now here is what sounds like a New York Times headline to celebrate: “Dire Poverty Falls Despite Global Slump, Report Finds.” That report would be a 6-page World Bank briefing note, the press release for which is titled: “New Estimates Reveal Drop in Extreme Poverty 2005-2010.” Echoes The Economist: “For the first time ever, the number of poor people is declining everywhere.”
If it were only that easy. Let us dig into what the World Bank’s new briefing note really tells us and ask two questions: Do the statistics really show a fall in extreme poverty across the world? And, what policies lie behind the changing poverty figures?
What the figures tell us and do not tell us:
- The figures do not tell us anything about the impact of the recession: The actual data cover 1981-2008; figures ending in 2008 cannot possibly tell us anything about the impact of a recession that started in the United States in late 2008. The briefing note alludes to “preliminary estimates” for 2010; based on these, the Bank makes the bold assertion that the Millennium Development Goal of halving poverty (defined as $1.25/day) from its 1990 level was achieved in 2010. But, preliminary estimates are, well, just preliminary estimates. These are extrapolated from significantly smaller samples. Hence, the data cannot back up the Bank’s confident claim because, again, the real data end in 2008. We have been following World Bank projections and estimates for decades now and have found them highly unreliable – and typically over-optimistic.
- If one sticks to the 1981-2008 period, China is the key: Between 1981 and 2008, the entire drop in the number of people living in “extreme poverty,” that is those who live below $1.25 a day, is accounted for by China — where the number of extreme poor fell by 662 million. Over this period, the number of people living below $1.25 a day outside China actually rose by 13 million, and hovered around 1.1 billion people throughout this period. More people fell into poverty in South Asia over this period (interesting, given India’s rapid growth over the past decade) and in sub-Saharan Africa. Hence, a more accurate headline would have read: “Numbers in poverty plunge in China over past three decades from 1981-2008, while rising marginally in the rest of the world.”
- To extend this last point: As we have argued elsewhere (pdf), in countries such as South Africa, where government services are generous, $1.25 a day goes further than, say, in Haiti. Furthermore, as nations grow rapidly, as have China and India over the past decade and a half, the amount of money needed for people in the cash economy to maintain a decent standard of living also rises. As for those who subsist in rural areas on less than $1.25 a day, many consume much of what they produce. Many live in self-built homes and depend on traditional medicines. While their poverty may be “extreme” by the Bank’s monetary measure, their quality of life may be much better than that of their urban counterparts, even though their incomes are often smaller.
Related to this, our experience living with poor families in rural areas suggests that it has been the opening of their natural resources to global agribusiness, factory fishing fleets, and corporate interests that often leads to real poverty. Millions have been pushed off their land over the past few generations into urban slums where they live in squalor, although they may bring home a few dollars a day. In sum, the statistics upon which most poverty elimination strategies are based are extremely misleading, and often steer experts toward the wrong solutions.
This raises the other question of what policies are behind the figures:
- Neoliberalism and poverty: What is behind the data that shows those in poverty outside China increasing in most regions from 1981 to 2005? This period coincided with the heyday of corporate-friendly neoliberal policies in most countries. So the data could be read as a confirmation of what critics of neoliberalism have been saying: the wave of market fundamentalism contributed to increases in the numbers of people in poverty. That data also reveals that in one region, sub-Saharan Africa, the percent of people living below the poverty threshold also rose over this period. We hardly need to point out that in the one country where poverty plunged – China – leaders did not pursue blind neoliberalism, but instead combined state direction of much of the economy with market-openings in selected sectors.
- How about the subsequent period from 2005 to 2008, a time range during which the data reveal poverty numbers and rates falling in all regions of the world? As opposed to 1981-2005, this was a period of spreading cracks in the neoliberal Washington Consensus. It was also a period of rising of commodity prices and rising of balance of payments surpluses in many Southern countries. As a result, many Southern countries were able to repay the IMF and World Bank and wean themselves from World Bank and IMF loans and neoliberal conditionality.
Hence, the new World Bank poverty figures may tell a very different story from what has been suggested elsewhere: The numbers in poverty outside China rose during the heyday of neoliberal policies, and began to fall as the grip of those policies was loosened after 2005.
Robin Broad is Professor of International Development, School of International Service, American University. John Cavanagh is director of the Institute for Policy Studies. They are authors of Development Redefined: How the Market Met Its Match. This post originally appeared in the Triple Crisis blog.