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Entries tagged "World Bank"Page Previous 1 • 2 • 3 Next
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.
January 10, 2012 · By Matias Ramos
Massive protests have broken out in Nigeria following the government's announcement that long-standing oil subsidies will be terminated. Reuters has reported that tens of thousands have taken to the streets, and that confrontations with police have left at least five dead.
Thousands gathered outside the labour union headquarters in Lagos and marched to the marina that runs along its wide lagoon. The roads of the normally heaving commercial hub, notorious for its traffic jams, were largely empty.
Oil workers were also on strike and the offices of international companies such as Shell and Exxon Mobil were shut. But Shell and the state oil company said output was unaffected.
Subsidies on imports of motor fuel were scrapped on Jan 1., leaving countless Nigerians without the only welfare program they depend on. With the change, Nigerians will be paying one dollar per liter in a country where most people make less than two dollars per day. People from all walks of life, including novelist Chinua Achebe, have lent support to the nascent movement to oppose this gutting of the Nigerian safety net.
A small, but high-energy crowd demonstrated at the World Bank to stand in solidarity with Nigeria, and to say no to the policies proposed by global institutions like the World Bank and the International Monetary Fund. Here's a video (catch IPS'er Emira Woods leading the chants at the 0:58 mark):
The government argues that the subsidy program is riddled with corruption, and that this step is necessary to curtail government spending. The rhetoric is eerily familiar. All over the world, states once held the power to create a safety net for their citizens. In today's political environment, corporations are able to flex their muscle to impede on government taking that role from Wisconsin and El Salvador, to Lagos.