OECD States of Fragility Report – Meeting Post-2015 Ambitions

This afternoon, in New York, the OECD is launching its States of Fragility 2015 report which explores how new sustainable development goals and targets (SDGs) can be implemented in countries and communities that lack the political stability and institutions to support inclusive growth, or that are affected by very high levels of violence.

The report was written with colleagues at New York University’s Center on International Cooperation and is part of a broader effort to switch the focus from what should be part of the post-2015 development agenda, towards how the new agenda can be delivered.

It argues that we have no hope of delivering the SDGs in large parts of the world, unless we get serious about tackling fragility.

Robust global growth, and more equitable patterns of distribution, have the potential to lead to rapid and continued further reductions in all forms of poverty, but this would mean that those left behind would increasingly live in fragile situations. Continue reading

If foreign policy doesn’t feature in this election a global powerhouse risks losing its voice

In a piece for Real Clear World I argue that

The chances of Britain making it through to May 7 without facing at least one unexpected international event with serious implications for our national interests are slim indeed. Both David Cameron and Ed Miliband should be planning to give over at least a day between now and polling to lay out how they intend to shape world events and not just react to them. Even if they remain unpersuaded that the electorate is hungry for answers now, it is difficult to see how they could claim a later mandate for tough decisions if they don’t hint at their direction of travel on ISIS, Russia, China, the Transatlantic relationship, Syria, reform of the European Union, and prospects for this year’s critical summits on sustainable development and climate change.

You can read the whole piece here and see all the other world election coverage they are gathering together here.

What’s mined is yours

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They call it an “indaba” – a word in several African languages for a gathering where a community gets together to resolve the problems that affect them all. But it is no community meeting – it is the world’s largest meeting of the mining industry, where the rich and powerful from across the world gather in a plush Cape Town conference centre to determine where will be mined and who will get the money. It is a meeting, in its own words, “dedicated to the capitalisation and development of mining interests in Africa,” at which “a powerful group … make the vital relationships to sustain their investment interests”. In the front rooms the delegates are entertained by Goldman Sachs, Dambisa Moyo and Tony Blair. In the back rooms mining corporations meet to cut secret deals with friendly governments and pressure any governments who have started making trouble.

Through the huge glass windows the delegates can see protests. But they don’t get to hear what the protesters have to say. They dismiss them as anti-mining, anti-progress. It is easy to complain, argue the mining indaba attendees, but would you really want an end to all mining?

No, say campaigners, who gathered in much less comfortable surroundings a few miles for an “alternative indaba”. When I get to hear the stories of some of the participants of the alternative indaba I get to understand that theirs is not a case “against mining” but for accountability. The problem they highlight is not the existence of mining but a harmful imbalance of power that renders mining corporations a law unto themselves. Here’s what I heard from activists from across Africa:

“The sharing agreements on mining deals in our country are secret. So we the public don’t know what our national wealth has been sold for. After pressure, permission was given to MPs to view these long and complicated agreements in a specific room for a set period of time without taking notes, so we’re starting to get a picture but we can’t get final confirmation. From what we’re seeing it looks like a really bad deal indeed – which is why it is secret in the first place.”

“Our laws require that a set percentage of the proceeds must go to the community, yet we find places where the mining company has now finished and left, the environment has been trashed, and the community’s share was never provided.”

“Many of our officials and ministers and their family members are private shareholders or on the pay of the mining corporations, officially or unofficially, so when we challenge the corporations we are challenging the government.”

“The fines for mining companies who break the laws are so low that the mining corporations happily factor them in as a cost of business.”

“When we revealed illegal water pollution by a diamond mine, it was not the mining corporation who were arrested, but us.”

“Our government is finally standing up to mining corporations and demanding they pay their fair share of tax. But neighbouring governments have shown absolutely no solidarity. The AU has to work much more closely together. We cannot have a race to the bottom.”

“When you start to engage the mining corporations you hope to change them, but if you are not careful they can end up changing you. After we criticised a mining corporation they invited us for a tour so, they said, we could see that they were not as we had said. At the end of the tour they tried to present us with gems ‘as a souvenir gift’. We told them we were not allowed to accept hospitality. The message was clear.”

Campaigners are asking governments to hold mining corporations to account for: open, transparent, agreements so citizens know what is happening with their national wealth; paying their fair share of taxes; free, prior and informed consent, so that acquiring communities’ land requires that communities agree; paying fair wages, protecting workers’ health and safety and respecting workers’ rights to organise; and obeying environmental laws. And they are demanding that mining corporations stop their lobbying for a lowering of these basic standards.

That’s not a charter for the end of mining. It’s a proposal that would ensure that mining really did benefit the people from under whose feet the wealth is taken.

Extreme inequality of wealth has fostered an extreme inequality of power. The widening gap and imbalance of power between the richest and the rest is warping the rules and policies that affect all of us in society, creating a vicious circle of ever growing and harmful undue influence. The mining industry’s new Scramble for Africa is making this worse.

The current imbalance of power means that governments, who should be overseeing corporations and protecting citizens, are instead protecting corporations and overseeing citizens. What should bring prosperity is bring instead bringing misery, and legitimate challenge to the mining industry is being met not with answers but with brute force, the violence of the entitled 1%.

The proposal put forward by the mining industry’s critics is not an end to mining but an insistence on real democracy. They are saying that what’s mined is yours. Which is exactly why the mining industry is so determined to keep them down.

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Who’s going to pay for the SDGs?

In July, Addis Ababa will host a crucial summit on financing for development. If September’s summit on sustainable development goals (SDGs) in New York is when governments will decide what they want to achieve on poverty and sustainability by 2030, Addis is where they must set out how they will do so.

There’s much to do, with a bewildering array of potential issues on the table – aid, trade, tax, the private sector, climate, sustainability and technology transfer are all possible focus areas – and too little clarity on what success would look like on each. Politicians are not yet feeling pressure to make serious offers.

Yet, if Addis disappoints, the fallout could be extensive. Prospects for achieving the SDGs – such as ending poverty by 2030 – would dim significantly. Frustration among developing countries could feed in to the September summit and the December climate summit, threatening a cascading failure that could damage prospects for international cooperation on defining global issues for a decade.

How can we avoid this scenario and ensure that Addis is a landmark?

First, there needs to be a clearer narrative on what the summit is for, that focuses on three or four core areas. At least one of these needs to be about politicalimpact, with a big story that leads the next day’s news agenda. In practice, this probably has to be about aid – even though it now accounts for only around a 10th of development finance.

Timetables for countries to give 0.7% of national income to aid are unlikely to work, given past promises: in 2005, 16 countries pledged to meet 0.7% by 2015, but only five have delivered. A pledge to give at least half of all aid to least developed countries, on the other hand, may cut more ice – but the politics look tough.

Other contenders could include a major push on addressing the “financing gap” faced by many middle-income countries, through scaling up official financing other than aid. And a strong focus on financing highly effective cash transfer schemes in lower income countries would go a long way towards ending poverty.

The Addis outcome could also help key “work in progress” agendas with longer term development impact.

One area where there’s plenty of buzz is the contribution the private sector can make – for instance, through scaling up foreign direct investment (the single biggest source of development finance), new public-private partnerships, or in key sectors like infrastructure. Less clear, though, is exactly how Addis may contribute.

Instead, a better candidate may be international tax cooperation – the most important thing that rich countries can do to help developing countries mobilise their own resources.

One step would be to spend more aid on developing countries’ tax administration efforts – an area with breathtaking rates of return. Faster progress on recovery of stolen assets from abroad is another priority for many developing countries, as is access to the automatic exchange of tax information that G8 and G20 countries have already agreed among themselves.

Above all, Addis could help close tax loopholes that allow multinational companies to report profits in tax havens – rather than where their workforces, assets or sales are. Country by country reporting requirements would be one important step; a unitary tax system would be even better.

Addis could put emerging issues on the development map by including these in the outcome document – even if the time is not yet ripe for agreeing concrete actions. It could put down a marker on the need to do more to tackle inequality, echoing the SDGs’ emphasis on the issue. Or, it could flag up the potential wins that would result from fair shares for developing countries in any future global emissions budget.

Most of all, Addis needs more agenda-setters to help its Norwegian and Guyananco-facilitators, and Ethiopian hosts, to champion its potential. UN secretary general Ban Ki-moon and World Bank president Jim Yong Kim could both do more. Germany and Turkey, hosts of this year’s G7 and G20 summits, could be key players too.

Addis needs more voices to make the moral case for why countries need to raise their game. Civil society has a crucial role here. And it may be that Pope Francis emerges as a leader, given his commitment to justice – and the fact that a papal encyclical on climate and development is expected soon.

Perhaps most of all, the summit will depend on commitments from finance ministers to attend (as IMF head Christine Lagarde has already done). They, far more than development ministers, have the power to unlock real progress.

Joburg’s Unfinished Journey

In Joburg’s old Prison Number 4 stands a flogging frame. Here political prisoners would be instructed to step on to it and be beaten with leather, wood, or metal. Colin, who is showing me around, steps on to it and assumes the position of the prisoner. “Take a photo, take a photo,” he says. It feels mawkish and shameful. “Take a photo. This is our history.” It is not a story of victimhood, he insists, but of survival, defiance, and victory. In the tiny isolation cells the prisoners wrote “A luta continua” – the struggle continues. And now the old prison is the site of the country’s Constitutional Court. On the same land where rights were most violated, they are now guaranteed. And in the court building, a special corner window provides a view of the old prison, to remind everyone from where the country has come.

For all the criticism made of the new South Africa, the word miracle is still justified. When twenty years ago I went from England to live in a black township, white South Africans overwhelmingly thought I was mad. Now white South Africans go on day trips to Soweto, to pay homage at the former house of Nelson Mandela, shop in Soweto’s markets and dine on pap and tripe while joining in freedom songs played by African bands. In a recent public attitudes survey, only 53% of white South Africans agreed that Apartheid had been a crime against humanity – but that’s a massive increase on twenty years ago, and many white South Africans are genuinely determined to live differently from their parents.

And there have been real improvements for black South Africans. Seeing in Soweto a new university campus, new gyms and car dealerships, new clubs and cafes, new houses and new modern public transport reveals a place of progress and aspiration for a substantial number of its residents – not a place only to aspire to escape from.

But millions remain trapped in poverty, and the entry of a minority of black South Africans into the white-dominated middle class has not uplifted the majority. Indeed, economic inequality – the gap between rich and poor – is now even greater than it was at freedom in 1994. In Sandton, Joburg’s centre of commerce and home for the wealthy, people complain about “loadshedding”, when the electricity cuts out for a couple of hours and people turn to generators. In an informal settlement in Soweto I meet Gladys who lives without any electric supply at all. There had been an electricity line that went over the settlement which some families, too poor to pay, had made unauthorised connections to. In response, the authorities cut the whole line. So Gladys cooks with a gas container and lights her shack with paraffin. Her energy costs per unit are higher than those of the rich. She earns money cleaning houses in the suburbs, but most days there is no work to be found.

Returning to the other South Africa, I go to meet a friend in a fancy rooftop bar. Twenty years ago, everyone in the bar would have been white. Now the crowd is a mix of black and white, but no single table is mixed except for ours, and both of us are foreigners. Not even wealth unites this room full of South Africa’s glamorous and successful. “Ah look,” I say hopefully as two white men walk across the room with a champagne bottle to sit with two black women, “finally some integration happening”. “I think you’re being a bit too hopeful there,” replies my friend. The men’s approach was uninvited, and their attempt to impress the women with their willingness to spend on champagne rapidly escalates into bullying of the (all black) wait staff. “Quickly, man, glasses, now!” Then, when a glass is poured too quickly and some bubbles overflow “What the fuck are you doing, man, for fuck’s sake!” and later, as a male waiter apologises, one of the men smacks (taps? hits?) him on the backside. My mind casts back to the flogging frame. Oscar, the waiter, ignores it. At last the men leave.

I ask Oscar how he managed to stay calm under such provocation. “It’s nothing,” he says, “I’m used to it.”

A luta continua.

Is US-led campaign against IS making much progress?

The recent defeat of Islamic State (IS) forces in the Syrian border town of Kobane has been greeted by the US-led coalition fighting the group as a significant victory.

But the killings of two Japanese civilians and a Jordanian pilot held prisoner by IS suggest it shows no sign of backing down in the face of five months of American-led airstrikes in Syria and Iraq.

So how much progress has the military offensive against IS made?

The defeat of IS at Kobane was achieved by a combination of Syrian and Iraqi Kurdish fighters on the ground supported by more than 700 air strikes which have flattened much of the town.

This success supports the view of many analysts that to defeat Islamic State, air strikes alone are not enough and ground forces are essential if the organisation’s territorial gains are to be rolled back.

The size of the challenge this presents is made stark by the assessment of informed observers that contrary to what President Obama told Congress in his State of the Union speech last month, since the campaign against IS began last August, the Islamist fighters have in fact doubled the amount of territory they control, especially in eastern Syria.

IS has also succeeded in gained allies beyond Syria and Iraq. In the past few weeks, Islamists in Egypt and Libya, who have affiliated themselves to Islamic State, have carried out large scale attacks. The group is also reported to be establishing links with the Pakistani Taliban.

Following the taking of Kobane, the US-led coalition, which includes the air forces of several western and Arab states, as well as the Iraqi army and Kurdish Peshmerga fighters, is turning its sights on the Iraqi city of Mosul.

It was the fall of Mosul to IS last June that galvanised Washington to intervene again in the region following the withdrawal of American forces from Iraq at the end of 2011.

If Mosul can be recaptured, it would represent a much bigger blow to IS than Kobane, which it had never fully controlled. But Mosul is a much tougher proposition.

IS has consolidated its control of the city – Iraq’s second largest – and the remaining population is largely Sunni Arab, many of whom may prefer the rule, however harsh, of IS to the return of rule by the Shia-dominated government in Baghdad, despite the efforts of the new Iraqi Prime Minister, Haidar al Abadi, to reach out to disaffected Shias.

It is also unclear whether the Iraqi army, which collapsed in the face of the IS offensive last summer, is yet in a fit state to launch a large-scale ground offensive against Mosul.

The Americans and other western countries, including Britain, have been training and rearming Iraqi forces, but the corruption that is blamed for their cave-in to IS will take time to root out, if indeed it can be.

The lack of an ally with powerful enough ground forces is even more acute in Syria. Continue reading

Who will defend tax dodging?

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2015 has started off as a tough year for tax dodgers. In Zambia, the new President appears to have confirmed the fears that multinational mining corporations expressed during the election campaign, by saying he expects companies to pay their tax. At the African Union meeting in Addis Ababa, the continent’s Heads of State have unanimously accepted in full the recommendations of the High Level Panel on Illicit Financial Flows headed by Thabo Mbeki – and Mbeki has been outspoken in declaring multinational corporations as the big offenders. In Luxembourg, leaks exposing tax avoidance have created new pressure on the government and have even forced European Commission President Juncker, former PM of the country, to pledge European action to tackle it. In Britain the head of the National Crime Agency has declared war on the “hundreds of billions of pounds of criminal money laundered through UK banks.” A UK NGO coalition campaign for action against tax dodging has been welcomed by leaders across the political spectrum. In the US, President Obama has promised to tackle “corporate deserters” and to close the loopholes that enable the rich to avoid paying their fair share of tax.  And newspaper stories of companies from Google to Glencore have created a worldwide drumbeat of shame.

With this new public and political mainstream, most corporations are going out of their way to distance themselves from the label of “tax dodger”. They stress their respect for the law, their recognition of the importance of taxation – they talk about their diligence and their contribution. Their social license to operate seems to demand that they promise that they are on the side of the public on this one.

So will no one defend the tax dodgers?

In this context, the Adam Smith Institute’s outspoken support for tax avoidance is a valuable reminder that we do have an opponent, that progress on tackling tax avoidance is difficult not only, or even primarily, because it is technically complex, but because some people think tax avoidance is just fine. In the words of the Adam Smith Institute, which once played a very influential role on economic policy, “advising people on how to avoid certain corporate taxes in poorer African countries” shows “public spiritedness” and is “a bloody good idea”. “If you’ve advised people to dodge that corporate taxation,” they add, “you’ve just raised the wages of some of the poorest people in the world.”  With all due respect to the Adam Smith Institute for not hiding their teeth on this one, and with somewhat less respect for their mis-remembering of the historical Adam Smith, they are not our prime opponent.

Our prime opponents are much sneakier, much cleverer, than the outspoken ideologues who publicly declare tax dodging is good. The people we have to fear operate not in the light but in the shadows. They say that they support reforms to tackle tax dodging, just not the ones we propose, or they say they support the ones we propose, and then flood Washington, Brussels, London and the world’s poorest countries with lobbyists hired to undermine progress. Of course most of what the big corporations do to avoid tax is legal. They spend a fortune on lobbying to ensure it stays that way.

We’ve won the argument on tax. But that’s just phase one in the long struggle for tax justice. Our opponents are hugely rich, frightening powerful and totally unscrupulous, and are not used to losing. Goliath has been shamed, but he’s still massive.

We have not reached the end of the war on tax dodging. We’ve not even reached the beginning of the end. But thanks to the tenacity of activists across the world, we have, at least, reached the end of the beginning.

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