China on Brink of Becoming World's Leading Greenhouse Gas Emitter

Sources: China About to Pass US as World's Top Generator of Greenhouse Gases, China: Rampant Growth Spurs Emissions

A recent report from Beijing authorities revealed that China will probably replace the United States by 2008 as the biggest source of greenhouse gas emissions in the world. The International Energy Agency, based in Paris, also released information showing that China's rate of greenhouse gas emissions has been increasing at a rate much greater than all other industrialized nations. China's National Bureau of Statistics showed that China's fossil fuel consumption increased by more than 9% in 2006, compared to the U.S.'s increase of 1.2% that same year. China's total greenhouse gas emissions were about 42% of that of the U.S. in 2001. The increased rates of emissions took China's total to almost 97% of the U.S.'s total in 2006.

Analysts are concerned about what consequences China's economic growth and increased energy consumption will have on the environment and global warming issues. Evidence suggests that local Chinese officials are prioritizing economic development over environmental protection. However, the national government of China are introducing incentives to local officials based on economic success as well as enivironmental protection. President Bush had refused to sign onto the Kyoto Protocol because it bound only industrialized nations to reduce their greenhouse gas emissions, and left fast-developing countries such as China exempt.

Question: How can China balance economic growth with environmental concerns? What policies should the government implement to strike such a balance?

North Korea and South Korea Talk

Sources: Voice of America ; Associated Press

On Saturday, South and North Korea wrapped up economic discussions regarding food aid, cross border trains, and other joint projects. South Korea had offered to resume talks in February after the North Koreans agreed to begin closing its nuclear facilities. However, since North Korea missed the April 14th deadline to begin disarming, the talks were put into question. South Korea, at the opening session, called on North Korea to honor its agreement to disarm. This resulted in the North Korean contingent storming out of the talks.

Talks resumed Friday after Thursday’s walkout, and several major economic issues were addressed. North Korea has proposed to set up a branch of its bank in Kaesong, which is a border city and also houses a joint industrial complex. Furthermore, the two states also agreed to run test trains across the border, which would be first time trains have crossed the DMZ in over 50 years. The two sides are close on agreements to exchange raw materials for clothes, shoes, and soap, for the right to develop mineral resources in the north.

However, the most important development from the talks was the North Korean request for 400,000 tons of rice aid. South Korea had resumed much of its aid shipments in February after the talks, but withheld food shipments to put pressure on the North Koreans to disarm. At the moment of this posting, however, South Korea, while accepting in principle to accept NK’s request, is still pushing for a joint statement that forces North Korea to discuss disarmament. North Korea, however, argues that these current economic talks have nothing to do with the nuclear agreement.

Question: How long can North Korea, as a state, survive on aid from other nations—and, what would be the economic impact of the two Koreas eventually unified?

Higher Incidence of Infection and Disease in Iraq Attributable to Water Shortage, Contamination, and Medical Waste

Sources: Insecurity and Lack of Funds Prevent Cleansing of Polluted Sites; Medical Waste a Growing Health Hazard; Doctors Warn of Summer Dehydration among Children and the Elderly; Children Suffer Bad Water Diseases

Severe water shortages are leading Iraqis to use contaminated river water for all of their needs. Like its sewage and electrical infrastructure, Iraq’s water networks fell into disrepair under draconian economic sanctions imposed on Iraq from 1990 until 2003. Following the collapse of Saddam Hussein’s regime, looters stripped equipment from water treatment and pumping stations. Now into the fourth year of war, the remaining water networks and sewage systems have been destroyed and municipal water full of contaminants has exposed Iraqis—young children in particular—to waterborne diseases.

Soon after the U.S.-led invasion, UNICEF tanker trucks were deployed to the most devastated areas of Baghdad and Basra to bring safe drinking water. In 2006, UNICEF delivered 400 million litres of potable water to families, schools, and hospitals. Last month, however, the water service came to a sudden halt due to lack of funding. UNICEF representatives explain that water tankers are generally used as only a short-term solution in the aftermath of an emergency. Nothing can be done to reverse the water shortage because continuing violence, ongoing electrical outages, attacks on engineering works, and lack of investment in the water sector all hamper efforts to repair water infrastructure. As the hot summer months begin in Iraq, doctors warn of higher rates of diarrhea, dehydration, cholera, and bacterial infections.

Without access to potable water, more families are turning to contaminated river water. Back in February, one month before UNICEF tanker trucks stopped supplying water, NGOs Coordination Committee in Iraq reported that 60% of the population in the areas surrounding Anbar and Bagdhad used river water for domestic use, 32% of the nation’s population had access to drinking water, and 19% had access to a good sewage system. With electrical shortages in most key areas of Iraq, dirty water cannot be pumped out of rivers, lakes, and other water systems, nor can it be treated. In Bagdhad’s Sadr City, doctors report that gastro-enteritis, brucellosis, hepatitis, and typhoid fever are common among children in the area due to bad drinking water. Ordinary citizens, living with violence, displacement, and poverty, are pushed closer to desperation by the lack of potable water. Young children, many of whom are malnourished, and the elderly are particularly vulnerable to diarrhea, dehydration, and skin disorders caused by low water consumption. No official figures are available on the number of deaths caused by dehydration among children and the elderly.

In addition to dirty water, up to 400 polluted sites in Iraq threaten the health of the population. The United Nations Environment Program (UNEP) has helped clan two dangerous sites on the outskirts of Baghdad: al-Qadissiya metal plating facility and al-Suwaira pesticides warehouse. Many dangerously exposed sites in need of clean up are dangerously close to fighting, and those involved in identifying and cleaning them have been targeted by armed groups. Garbage collectors have also been targeted because of their religious sect; fifteen have been killed in recent months while collecting garbage in Baghdad. The combination of inadequate funding and increased insecurity has led to ever dwindling garbage pick-up.

Hospitals, forced to operate on small electric generators, lack fuel for burning their waste. But with the breakdown in refuse disposal, bio-hazardous waste lays around for weeks. Children scavenge through the garbage in search of items, like used syringes, to sell on the market so that they may eat. Dozens of children have ended up in emergency rooms with symptoms of infectious diseases contracted from sewers, waste dumps, and hospital waste. Exposed petrochemicals sites and sulfur mines are other sources of pollution and health concerns, as is radiation in areas where nuclear research had been conducted in the past.

The long-term health consequences aren’t fully understood. But, according to specialists, the number of cancer cases has radically increased over the past five years. One oncologist at the Cancer Radiation Hospital in Baghdad says that his hospital went from treating 4000 patients per year to 9000. The Ministry of Health reports that 52% of all Iraqi cancer patients are children under the age of 5.

For Discussion: Should foreign and international environmental organizations organize toxic clean-ups in the middle of a war? Given the instability of the new government and the ongoing fighting, what are possible “solutions” for bringing potable water to civilians?

Half the World's Population Urban Dwellers, 1 Billion in Slums

Sources: The Arrival of Homo Urbanus; UN Habitat Fund to Finance Slum Housing; Proper Policies Key to Upgrading Slums; Health, Environment Threatened by Future Urban Growth; Sustainable Urbanisation Key to Fighting Urban Poverty; UN-HABITAT

The 21st Session of the governing council of the United Nations Human Settlements Program (UN-Habitat) met this week in Nairobi, the Kenyan capital. Kenya is home to one of the world’s largest slums, Kibera, with over 750,000 inhabitants Delegates to the meeting, entitled “Sustainable Urbanisation: Local Action for Urban Poverty Reduction,” contributed reports on the impact of unplanned and chaotic urbanization on the rule of law, the environment, disease, gender inequality, poverty, as well as the private sector’s role in developing and financing solutions.

This year marks the first time in history that more than half of the world’s population lives in urban areas, “mostly in low-income urban settlements in developing countries,” according to Zoe Chafe of Worldwatch International. Executive Director of UN-Habitat, Anna Tibaijuka coined the term homo urbanus to describe the swell of slum dwellers, whose worldwide population of one billion is projected to double in the next thirteen years. Slums are characterized by “shelter deprivations,” a term which denotes lack of water, lack of sanitation, overcrowding, non-durable housing, and a lack of security of tenure. Worldwatch International’s report, “Our Urban Future,” found that 1.6 million people in slums die annually due to lack of clean water and sanitation, while 800,000 people die from urban pollution.

The UN-Habitat Advisory Group on Forced Evictions (AGFE) reported this week that, over the past three years in particular, illegal arbitrary evictions have become a common practice in both developed and developing countries. AGFE found that the lack of comprehensive planning for urban development and environmental policies as well as inappropriate regulatory frameworks governing land use, occupancy, and ownership have contributed to the trend of massive-scale evictions in at least 60 countries.

Ninety-five percent of urban growth in the next twenty years will be absorbed by developing nations. Some developing countries are set to triple their entire urban areas within thirty years, yet they already face cash shortages that prevent them from providing adequate basic services and facilities. Weak and poorly financed local governments have been unable to secure and distribute sufficient supplies of clean water to residents and manage solid waste disposal. Tibaijuka notes that despite their poverty, slum dwellers must pay four to 100 times more for water than affluent people. In Kenya, slum dwellers buy expensive water from water trucks; there have been cases in which the water was obtained from contaminated sources and resulted in cholera and typhoid. These shortfalls compound many of the problems the UN’s Millennium Development Goals have singled out, such as maternal mortality, child mortality, and the spread of illness such as diarrhea, malaria and HIV/AIDS. Girls in slum areas are four time more at risk of contracting HIV. The growth of slums also widens the gender education gap. In Uganda, for instance, 74% of women between the ages of 15 and 24 cite lack of money as the reason for dropping out of school.

Presentations at this week’s session in Nairobi emphasized the role micro-finance could play in slum upgrading and prevention. With the emergence of micro-finance institutions, more urban households are able to borrow money for shelter development. Currently, slum dwellings in Africa are often built on public land for which the slumlord holds not title deeds and therefore no legal claim to the land. The slumlords quickly put up makeshift shacks that lack any water supply or sanitation facility and are able to recoup their costs within nine months. UN-Habitat plans to establish a revolving fund to enable slum dwellers to build their own houses. An independent account will provide loans to low-income groups. As each loan is repaid, the money becomes available for further loans. Community-based organizations and municipalities will be able to borrow money for low-income housing and infrastructure projects. By providing revolving credit to the urban poor, the UN-Habitat fund will fill in a gap: while multinational financial institutions loan money directly to central governments, smaller institutions like commercial banks do not loan money to the poor because the latter do not have security of tenure or a legal address based on home ownership.

For Discussion: One expert has argued that international aid is unable to improve cities and that slums are a manifestation of poor policies. How is human settlement shaped by economic forces? By unjust land-use policy? By war and other conflict? Are slums a manifestation of no policy?

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U.S. considers patent reform legislation

Sources: Techworld (UK) ; Information Week (US)

The United States Congress is currently considering patent reform legislation. The so-called Patent Reform Act, which has been introduced in both the Senate and the House, has been welcomed both by the information technology (IT) industry as well as other nations. The changes would result in greater uniformity between United States patent laws and the patent laws of other countries. Three major changes in the current law include:

***Patents would be awarded to the party who files first, as opposed to the party that is the “first to invent.” Currently the United States is the only nation in the world to use the “first to invent” system.

***Damages available in infringement lawsuits would be limited.

***Introduction of a new process for questioning the validity of patents that have already been granted.

The biotech industry, while conceding that reforms to the law may be needed, expressed misgivings about the proposed statute. They assert that the proposed changes could hamper research and development, particularly in the pharmaceutical sector. Small inventors voiced similar concerns.

For discussion:

Is international finance and development driving a movement towards international uniformity in laws (as the proposed patent reform legislation would bring the U.S. into the same system used by the rest of the world)?

Will Canadian Leadership Backpedal on Kyoto Protocol Commitments?

Sources: National Telegraph (Canada), Canadian Press

The 1997 Kyoto Protocol is an international treaty regarding the reduction of greenhouse gas emissions. The Protocol gives legal power to the 1994 United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC enjoys almost universal acceptance by United Nations member-states with 189 countries having ratified the Convention. The Kyoto Protocol has been ratified by 171 countries.

In North America, both Canada and Mexico have ratified both the Convention and the Protocol. The United States continues to resist ratifying the Protocol in spite of pressure from both its citizens and other industrialized nations that have committed to the decreases set forth in the treaty. However, as target dates approach for greenhouse gas reductions and member-states struggle with how to meet their commitments under the Protocol, officials of at least one ratifying nation—Canada--have expressed concerns about the potential effect of environmental commitments under the Protocol on the national economy.

Canada’s Environment Minister John Baird, relying on a study produced by economist Don Drummond, recently announced that complying with the obligations of the Kyoto Protocol would result in massive unemployment, decreased production, and increased energy prices, driving Canada into a recession.

Sponsors of legislation that has been proposed to implement the Protocol countered the study, asserting that it amounts to fear-mongering and fails to account for the positive economic effects of controlling greenhouse gases. Baird has invited the sponsors to prove these assertions by producing their own economic assessment of the legislation.

For discussion:

Must countries “choose” between healthy environments and a healthy economy? Is there another way? Might a healthy environment be “good” for the economy?

World Bank Report Reveals Reform Progress in Trade, Business Environment and Governance in MENA Region

Source: World Bank
2007 MENA Economic Developments and Prospects Report

The World Bank Middle East and North Africa (MENA) region launched a new report that looks into economic trends and prospects for the region. This is an advanced edition and the final report will be released in May 2007.

This is the third of an annual series of reports. The theme for this year's publication is labor markets and employment, a critical area for the MENA region as a result of its strong labor force growth and large share of young population.

High economic growth has been accompanied by strong job creation and declining unemployment in recent years. But for this performance to be sustainable it needs to be supported by deeper structural reforms in countries of the Middle East and North Africa region.

According to the report, the GDP growth reached 6.3% for the region in 2006 – up from an average of 3.6% a year during the 1990s. This is the fourth year in a row of robust growth performance, driven by high oil prices, economic recovery in Europe and reforms that are broadly going in the right direction. As a result, many jobs have been generated, primarily by the private sector as public employment slows down.

"Countries in the MENA region need to remove the remaining barriers that hinder the business environment for the private sector in order to maintain growth, increase private investment and generate more jobs" said Daniela Gressani, World Bank Vice President for the MENA region.

Indicators reveal that employment grew at 4.5% per annum in 2000-05, the strongest rate of job creation among developing regions. However, the report indicates that productivity remains a concern and women are still less successful than men in finding jobs. "Too many jobs are still being created in sectors with low or declining productivity" said Carlos Silva-Jáuregui, Lead Economist and principal author of the report.

Question: What can be done in the MENA region to establish the structural reforms required to balance growth with labor productivity and job creation?

IMF Expects Liberia's Economy to Grow Over Next 5 Years

Source: Liberia's Economy to Grow by 11% BBC News

Liberia’s economy is projected to grow by 11% a year on average over the next five years, according to the International Monetary Fund (IMF). Reconstruction projects and foreign investment will provide a much needed boost to Liberia’s economy, as will revival in the country’s mining, forestry, and agriculture.

The West African nation was hurt by years of civil war, and running water and electricity are still scarce. Liberia was once the world’s fifth largest iron ore exporter and home to the world’s largest rubber plantation.

The IMF said that to aid recovery Liberia must cut its debts of almost $4 billion.

Liberia’s gross domestic product (GDP) growth grew by an estimated 7.8% last year with a similar growth rate expected for 2007.

President Ellen Johnson-Sirleaf is a former World Bank economist who took over the task of rebuilding Liberia. Analysts say that once the country has managed to reduce the money it owes, it can make further inroads by qualifying for international debt relief.

Liberia was founded by black slaves who were freed from the U.S. in 1847.

Washington has supported the nation's efforts to clear the $1.5 billion it owes to the IMF and the World Bank. Earlier this year the Bush Administration waived the $391 million bilateral debt Liberia owed to the United States. In addition, the Bush administration committed $200 million in the next year to help Liberia.

Question: What else can be done to address Liberia's debt burden and the critical needs of Liberia's people?

EU’s Aggressive New Strategy to Gain Market Access

Source: Brussels toughens market access strategy - FT.com

The EU is promising a more aggressive approach to increase market access in countries such as China, Russia, India, the US, Brazil, Switzerland, and Norway. The EU’s goal is to support domestic economic growth by ensuring fair access to foreign markets. In particular, the new approach will focus on reducing “behind-the-border” non-tariff barriers to access, such as regulatory restrictions that effectively preclude EU businesses from entering the country. To achieve this goal, the EU is proposing a decentralized approach that will rely on the businesses and governments who operate on the ground. In addition, the EU will establish “market access teams”—observers in targeted markets who will identify existing and potential obstacles to trade.

Greater market access is a long-standing demand of EU business. Many remain skeptical whether the EU has the political fortitude to implement its rhetoric in practice. Past efforts have run out of steam before making significant inroads into foreign markets.

Questions:

Will the EU be willing to make enough accommodations in its own non-tariff barriers to garner legitimate concessions from target countries? How should target countries respond to EU requests to modify regulatory regimes that have legitimate domestic purposes but incidentally impact foreign access to the market?

Wolfowitz Stays Strong Amid Controversy

Sources:
World Bank President Vows to Say in Post, Despite Criticism
World Bank Divided on Wolfowitz's Future
World Bank Meeting—Policy board tries to stay focused despite Wolfowitz

During the past couple of weeks, those questioning U.S. President Bush’s decision to nominate Paul Wolfowitz as President of the World Bank may have seen some of their fears realized. Controversy has surrounded Wolfowitz’s involvement in securing a nearly $200,000 per year job at the World Bank for a female with whom he is romantically involved. Wolfowitz admitted that mistakes were made in promoting his partner to her current position and he later apologized, asking for “some understanding” from the global community.

However, Wolfowitz has not received much understanding. His questionable actions have caused many World Bank staff members and advocacy groups to call for his resignation. Currently, the 24-member executive board holds the fate of World Bank’s tenth President, as they review the Wolfowitz’s role in his partner’s promotion and contemplate what, if any, remedies need to be taken. Amid the controversy and talks of his resignation, Wolfowitz has vowed to remain World Bank President and has denied all resignation reports.

Many fear that this turmoil will cast a fog over the World Bank’s anti-poverty goals, especially with the results from last weekend’s IMF/World Bank Spring Meeting being publicized this week.

Questions: Do you think the World Bank executive board will sanction Wolfowitz? Should they? Or, should Wolfowitz take it upon himself to resign?

Millions of Iraqis Forced to Flee the War, Many Turned Away or Denied

Sources: Christian Science Monitor, Human Rights Watch, International Herald Tribune, Reuters

A two-day conference organized by the U.N. Refugee Agency and the U.N. High Commissioner for Refugees (UNHCR) convened today in Geneva to address the plight of the 4 million Iraqi refugees who have been displaced by the ongoing conflict in their country, set into motion by the 2003 United States invasion of Iraq. This is the first global attempt to address the Iraqi refugee crisis. More than 450 representatives from 60 countries, as well as the Red Cross and many humanitarian workers, attending the Geneva conference hope to raise international awareness of the humanitarian crisis, particularly among donors and aid agencies.

Of the 4 million refugees, 1.9 million have been displaced to other regions of Iraq, including three Kurdish provinces in the north governed by the Arbil-based Kurdistan Regional Government. By the end of this year, the United Nations estimates that a total of 2.7 million Iraqis will have been displaced within Iraq or the newly autonomous Kurdish provinces. Of the 2 million or so Iraqi refugees who have escaped the country, most have settled in neighboring Syria (1.2 million) or Jordan (500,000 to 700,000). According to the UNHCR, approximately 120,000 refugees have fled to Egypt, 54,000 to Iran, 40,000 to Lebanon, and 10,000 to Turkey. Thus far, these countries have shouldered most of the financial burden of absorbing refugees, but as these host communities run out of resources, they increasingly close doors to asylum seekers. Efforts by the UNHCR to resettle registered refugees in these two countries haven’t even begun to scratch the surface: From the onset of the war until September of 2006, the UNHCR had found host countries for only 404 refugees. Still, the UNHCR says that it hopes to find 20,000 resettlement spots this year.

While international media report on the war’s political and military developments, very little attention has been paid to the humanitarian dimension of the war. Up to 50,000 Iraqis flee their homes every month to escape the fighting, the lack of security, and the general breakdown of society. Internally displaced refugees continue to be victims of sectarian violence, while Iraqis who have fled to other countries lack social support networks, means of subsistence, and protection from police and other forms of abuse. Many refugees are held in camps at the borders where there is insufficient protection from fighting. In addition to the stress and depression caused by rootlessness and war, refugees face serious medical and hunger problems, unemployment, discrimination, and poverty. Refugees have been barred from taking up employment and attending school; even schools organized by refugees within camps have been forcibly closed down. Employers of refugees are subject to fines and imprisonment, and police in various countries conduct frequent sweeps of public areas, workplaces, and areas of high Iraqi refugee concentration to get rid of “illegal” workers who are dropped off at the border with Iraq. U.N. reports indicate that Iraqis in Syria have been forced into exploitative jobs. Turkish police have conducted raids and deported refugees. Iraqi women in autonomous Kurdish provinces are subject to sexual abuse in exchange for low-paying jobs; if they resist the sexual abuse, the Arab Iraqi women fear they will be expelled. Indeed, the Kurdistan Regional Government places onerous conditions on Iraqis wishing to enter areas that a few years ago were considered part of Iraq. Arab Iraqis must first find a Kurdish sponsor and upon arrival, must immediately register with the Directorate of Residence, to which they must regularly report their employment and living status—information kept on file.

Conceding that much more money is needed, the U.N. High Commissioner for Refugees requested a modest $60 million for humanitarian operations. A briefing paper published this week by Human Rights Watch, entitled Iraq: From a Flood to a Trickle, by comparison, emphasized the denial of asylum to Iraqis over the apportionment of aid.

According to the refugee-policy director at Human Rights Watch, Jordan and Egypt have effectively closed off escape routes used by Iraqi refugees. Early this year, the Egyptian government modified the procedure by which Iraqis could obtain entry visas; now, Iraqis must have a face-to-face interview at the Egyptian consulate before a visa will be issued. Egypt has no consulate in Iraq; thus, an asylum seeker would need to make his or her way to Amman, Jordan, or Damascus, Syria in order to go through the interview screening process at the Egyptian consulates in these cities. Jordan and other countries have also recently adopted new policies, like expensive passport and visa requirements or entry and residency permits, to prevent Iraqis from entering their countries and effectively strip many refugees of their legal status. In contrast to its practice at the beginning of the war, Jordan now denies entry to asylum seekers coming by land and air, even those who have permits; as a result, families are sometimes broken up.

Thousands of Palestinians men who worked in Iraq and remitted their salaries back to the Occupied Palestinian Territories, to their families, have tried to leave Iraq in response to the escalation in kidnappings and murders of Palestinians by the Shi’a militias in Iraq. These Palestinians have encountered the same restrictive measures facing Iraqi refugees and are now held in refugee camps in a “no man’s land” along Syria’s border with Iraq. The Syrian government refused to admit Palestinians into the country; instead, it holds about 1200 Palestinian asylum seekers in three camps to which the Syrian government has denied access to humanitarian organizations. Saudi Arabia, for its part, is constructing a US$ 7 billion high-tech fence to keep out Iraqi asylum seekers.

Quite troubling, too, is the increased use of religious affiliation as a criterion to determine whether asylum seekers may gain access to a country and the scope of their rights once asylum is granted. Shi’a Muslims, for example, have routinely been denied entry to Jordan on this basis. Non-Kurd Iraqi Muslim refugees in the Kurdish provinces are forbidden from purchasing property and receive no financial assistance, while Christian refugees receive a cash grant from the Minister of Finance.

Many of these restrictive measures violate international customary law, like the principle of nonrefoulement, or prohibition on the forcible return of refugees to a place where they face the risk of persecution, torture, or other serious threats to their lives because of ongoing armed conflict and indiscriminate violence. Human rights groups, like Amnesty International, have called on the United States and the United Kingdom, both of which have failed to address the refugee crisis or take part in a solution, to set up resettlement programs, especially for the most vulnerable Iraqi refugees who are often in need of medical care. The U.S. government has said it would be willing to allow approximately 3000 Iraqis into the country.

To read the Human Rights Watch Briefing Paper, Iraq: From a Flood to a Trickle, Neighboring States Stop Iraqis Fleeing War and Persecution (April 2007), go to: http://hrw.org/backgrounder/refugees/iraq0407/iraq0407.pdf

For Discussion:

To what extent do the U.S. and U.K., as invaders and instigators of the war, have a responsibility to assist refugees? What role should signatories of the 1951 Geneva Convention Relating to the Status of Refugees and the 1967 Protocol Relating to the Status of Refugees be playing? To what extent do neighboring Arab countries have a legitimate argument (e.g., national security, economic) for turning away refugees? Is there a solution?

Growing Humanitarian Crisis Resulting From Boycott of Palestinian Territories

Source: Oxfam International

In response to Hamas’s April 2006 parliamentary victory, international donors, including the United States, Canada, and the European Union, suspended aid to the Palestinian Authority, the nominal authority (established in 1994 under the Oslo peace agreements) of the Occupied Palestinian Territories—marking the first use of sanctions against an occupied people. The boycott followed closely behind the Israeli government’s decision to hold on to tax and custom revenues it collects on behalf of the Palestinian Authority. One year later, a briefing note published by Oxfam International reports that according to the U.N. Relief and Works Agency, the number of Palestinians living in deep poverty (defined as living on less than 50 cents per day) has doubled to over one million since the beginning of the boycott.

Although the boycott was aimed at pressuring Hamas to recognize the state of Israel, renounce violence, and honor previous political agreements and peace accords, the deterioration of essential services and previously unknown levels of factional violence attributable to economic sanctions against the Palestinians have caused some countries to reconsider the financial boycott. Following Palestinian Finance Minister Salam Fayyad’s visit with European Union leaders this week, when he stated that the newly formed National Unity Government would need US$ 1.35 billion in international aid to avert a crisis this year, Norway publicized its decision to resume aid—approximately US$ 100 million—to the Palestinian Authority some time this year. According to Oxfam, France, Ireland, Spain, Russia, and Sweden will likely recommence direct aid programs, though no definite plans have been set. Meanwhile, the Netherlands, Britain, and Germany continue to support the boycott.

The Palestinian Authority is the primary service provider for the Occupied Palestinian Territories; it is currently responsible for 416 primary health clinics, 22 hospitals, 1600 schools, and welfare payments to about 250,000 people. In 2005, prior to Hamas’s parliamentary win, total expenditure for the Palestinian Authority was US$ 1.92 billion. US$ 814 million in tax and customs revenue (collected by Israel on behalf of the Palestinian Authority), in addition to US$ 849 million in international aid and humanitarian assistance, represented approximately 60% of the core income for the Palestinian Authority which has been lost due to sanctions.

Eight months into the boycott, the rate of poverty among the 161,000 people (who in turn support one million dependents) employed by the Palestinian Authority had risen to 71%. Among the general population in Gaza, household income has fallen by more than half, while 21% of household income has stopped completely. As incomes have fallen, small businesses and shops have gone bankrupt and staple items are no longer available. Schools and health facilities have been forced to close, drop-out rates for students have risen, medicines and medical care are either unavailable or inaccessible. The Oxfam report suggests that the boycott has had a more devastating effect on the economy than Israeli restrictions on Palestinians between the years 1999 and 2004.

The Oxfam report is highly critical of the sanctions. It argues that “international aid should be provided impartially on the basis of need, not as a political tool to change the policies of a government or to oust it.” The report also notes that the political objectives on which economic aid has been conditioned (e.g., that Hamas recognize the state of Israel) are unrelated to the effective use of the aid. In addition to poverty, the boycott has led to violence between Palestinians: 80,000 security workers have stormed buildings in more than 64 attacks, demanding their salaries, and more than 243 Palestinian civilians have died as a result of internal fighting.

For Discussion:

If the Occupied Palestinian Territories become a “failed state” due to the economic meltdown and humanitarian crisis, what will be the next step in Israeli-Palestinian relations and the so-called road to peace? Is it ever legitimate to impose economic sanctions on a civilian population in order to pressure political organizations in power? If Palestinians had not voted Hamas into power in the parliament, would the argument against sanctions be stronger? Should the democratic election be a factor in the distribution of aid?

Space Race Asia!

Sources: San Luis Obispo Tribune (AP) ; Ft. Wayne Journal-Gazette

Asia has turned the clock back to the Cold War...at least for the time being and at least for the Space Race. What formerly was merely a status symbol during the U.S. vs. U.S.S.R. race to the moon has now become a matter of national security. Countries such as North Korea, China, Japan, Taiwan, South Korea, India, etc. have raced to remain on pace.

Currently, it appears that China is ahead in Space Race Asia, as it is the only Asian state to put astronauts into orbit. Japan looks as if it is closest to China’s pace, as it now has satellites in orbit to monitor any place on Earth, spending nearly $500 million per year on spy satellites. Japan, along with India and China have the capacity to launch their own rockets, but India, South Korea, and Malaysia all currently have operational satellites in orbit. South Korea is also close to being able to launch their own satellites, as the $277 million rocket launch site is projected to be ready next year. India is hoping to launch its moon mission this year, and spends nearly $700 million on its space program. Even North Korea has claimed to have launched a ballistic satellite, although the claim has not been verified.

China, however, is the clear-cut leader in Space Race Asia. China spends $1.2 billion, and is ready to launch a third manned mission next year. It has demonstrated its space prowess as it has knocked a satellite out of orbit. Furthermore, it is preparing to launch a satellite that will make a lunar orbit. Most importantly, China’s program has made a direct challenge to U.S. space superiority by demonstrating its capacity for anti-satellite missiles. Air Force Col. Tom Ehrhard (ret.) stated that that this is a “new and dangerous phase of Chinese foreign policy...[challenging] the internationally recognized sanctity and neutrality of the ‘commons,’ those areas like international waters, airspace, cyberspace, and space itself.” China, however, claims that she is committed to the demilitarization of space, submitting U.N. resolutions that outlaw anti-satellite and space weaponry. The U.S. has blocked such resolutions, but China has invited the U.S. back to the negotiating table.

Questions
1) Should the U.S. be involved in discussions with China to demilitarize space, given that the Chinese already have anti-satellite weaponry?
2) What are the potential ramifications of Space Race Asia on poorer/developing states such as North Korea and India? In other words, who is bearing the burden of India’s $700 million (and increasing) space budget?

Russian Licenses for US Adoption Agencies Expire

Source: Russia halts adoptions by Americans - IHT.com

The last valid licenses of the approximately fifty U.S. adoption agencies working in Russia have now expired, and Russia currently is not accepting new license applications. In 2006, Russia was the third most common source of foreign adoptions in the US as Americans adopted more than 3700 Russian children.

The expiration of the agency licenses coincides with a Russian effort to overhaul its adoption laws. The changes are driven by two On one hand, notorious cases of neglect, abuse, and death of Russian children adopted into American families is one motivating factor for the restructuring. On the other hand, the changes are part of a broader movement to restructure the international adoption market. For example, the top two countries for American adoptions, China and Guatemala, are also updating their adoption regulations.

Observers attribute the current lapse in Russian licensing to bureaucratic delay and expect Russia to begin approving new licenses under revised guidelines in the coming months.

Questions:

How should governments approach foreign adoption agencies? What types of guidelines or limitations should they enforce? How, if at all, should cross-border adoptions be treated differently than domestic adoptions?

Standardizing Production Lets Charity Sell 130,000 Homes for US$530 or Less to Ecuador’s Poor

Source: IDB America

Hogar de Cristo, a Catholic social services organization originally founded in Chile in 1944 by the late Father Alberto Hurtado, S.J. to provide affordable housing to the poor, has standardized its entire operation in Ecuador to produce cost-effective and remarkable results. Inspired by manufacturing business models, the managers at Hogar de Cristo implemented a variety of changes to their production process in order to reduce overhead, use materials more efficiently and reduce waste, and more recently, experiment with alternative materials. Today, the charity is selling an average of 50 houses per day in the city of Guayaquíl and its environs, but the demand exceeds the supply.

Located on Ecuador’s Pacific coast, Guayaquíl is a city of 2 million inhabitants, 40% of whom live below the poverty line. Hogar de Cristo serves a self-defined market: people who live on less than one dollar a day. The charity’s director, Father Rober Costa, S.J., says that the enterprise’s goal is “the development of the whole person, the family, and the community.” He explains, “We start by putting a roof over people’s heads, but our ultimate purpose is to strengthen families by helping to meet their material, physical, educational, and spiritual needs.” In addition to houses, Hogar de Cristo also offers services including health care, microcredit, education, and business assistance. Since 2002, Hogar de Cristo’s microcredit program has lent almost US$ 7 million to around 8000 women, with a loan repayment rate of 97%. The services are provided for free or for modest fees that recoup only partial costs. Likewise, the full production cost of one US$530 house is US$700. Although the US$530 price tag—which translates into US$14 monthly payments interest-free over three years—is based on Hogar de Cristo’s estimate of what the poorest of the poor can afford to spend on housing, the charity never turns clients away for financial reasons and will reduce the price further, even to zero, if necessary. Local and international donations help make up for the lost revenue. Approximately 45% of applicants pay the standard US$530 price, while the rest receive larger subsidies.

According to Hogar de Cristo’s chief of production, less than 4% of materials are wasted. The one-room houses are basic bamboo structures with zinc roofs. Bamboo is the cheapest building material in Ecuador’s coastal region and it is both durable and fast-growing. The charity now works exclusively with suppliers who deliver materials pre-cut to standard lengths, thereby standardizing the production process and reducing costs. Metal templates on an assembly platform in the charity’s warehouse, which employs 60 workers, align pieces of wood and bamboo which are then put together with compressed-air nail guns.

Although the slums of Guayaquíl are enveloped in Hogar de Cristo houses, some Ecuadorians consider the structures, with their lack of glass windows, electricity, or plumbing, to be inadequate and undignified. Father Costa concedes that he is not proud of these living conditions, but explains that facilitating home ownership is the best way to help people out of poverty. He reports a discernable pattern of development within five to seven years of a home purchase: Families begin with cosmetic changes to the home, such as painting it and planting flowers. Next, they wall-in the ceiling-high posts that hold up the house, thereby doubling their living space. Gradually, they replace the bamboo with masonry, pour a concrete floor on the ground level, and add electricity and plumbing. As owners improve their homes, they pressure the municipal government to develop infrastructure by paving roads and extending electricity, water, and sanitation services. For example, Hogar de Cristo sold hundreds of houses to the people of Guasmo, once a shanty-town right outside Guayaquíl, and almost all have subsequently been turned into solid concrete block and brick homes, the streets have been paved, and the city has installed basic services.

In reaction to the sharp depletion of Ecuador’s coastal forests, Hogar de Cristo has begun to produce a slightly larger steel-frame house. Because steel is considerably more expensive than bamboo, the production cost for this model is US$1400, a price only 10% of potential customers can afford to pay. Only 167 steel-frame houses have been sold. Last year, Hogar de Cristo received a US$ 500,000 loan from the Inter-American Development Bank’s Social Entrepreneurship Program. This money will be used to expand the steel-frame house and microcredit programs as well as its loan management and debt collection activities.

For Discussion: Are development dollars better spent in projects implemented by charitable organizations based in the community they serve? Are they better spent when projects are not managed by intermediaries?

German Bundestag Says No to Indigenous Rights

IPS News

Last week, Germany’s Bundestag (Parliament) refused to sign on to Convention 169, officially entitled The Convention Concerning Indigenous and Tribal Peoples in Independent Countries.

The Convention, which was adopted at the seventy-sixth session (June, 1989) of the International Labour Organization (ILO) in Geneva, Switzerland, sought to revise The Indigenous and Tribal Peoples Convention of 1957 with an eye toward removing its assimilationist orientation. In conjunction with its mandate that governments shall guarantee equal legal, socio-economic, and political footing for indigenous peoples, the 1989 human rights instrument also prescribes that governments must do so in a manner that guarantees respect for the integrity of indigenous cultural identity, customs, values, and traditional institutions. Article 7, paragraph 1, for instance, states that “The peoples concerned shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use, and to exercise control, to the extent possible, over their own economic, social and cultural development. In addition, they shall participate in the formulation, implementation and evaluation of plans and programs for national and regional development which may affect them directly.” According to the ILO, an estimated 350 million indigenous people around the globe are marginalized in most aspects of daily living.

Although most members of the German Bundestag agree on the need for protection of indigenous people’s rights, entrenched corporate interests fueled their opposition to the Convention. Many indigenous and tribal people inhabit areas rich in natural resources that international private companies exploit. The Convention instructs governments to protect natural resources in lands inhabited by indigenous populations. According to Article 15, the rights of indigenous peoples include their right to “participate in the use, management, and conservation” of natural resources pertaining to their lands. Accordingly, governments that retain ownership of mineral, sub-surface, or other natural resources are supposed to consult with indigenous people before undertaking any programs for the exploitation of these resources. In addition, indigenous peoples should “receive fair compensation for any damages which they may sustain as a result of such activities.”

It is not surprising, then, that of the mere 18 countries which have ratified the Convention, most are developing nations from Latin America. Norway, the Netherlands, and Spain are the only European countries to approve the Convention. Even among those nations that have ratified the Convention, “there is still an implementation gap between the norms and the practice, between the formal recognition and the actual situation of indigenous peoples,” explains Rodolfo Stavenhagen, a United Nations special rapporteur on human rights of indigenous people. An ILO report argues in support of the Convention by pointing to the increased population pressure on traditional tribal lands and the draining of natural resources resulting from globalization. As a result, indigenous peoples confront growing poverty, health problems, and discrimination.

In Latin America, indigenous people have invoked the Convention to protest the exploitation of gold, gas, and oil. But the Convention may not carry much authority. For instance, despite Mayan protest, the Guatemalan government—a signatory to the Convention—granted rights to the Canadian company Glamis to exploit the San Marcos gold mines, located on traditional Mayan lands. The failure to abide by the Convention’s principles has been a source of conflict between Mayan peasants and the Guatemalan government since 2003.

Reporting on Latin America, Stavenhagen told the United Nations Human Rights Council last month in Geneva that “the gradual deterioration of the indigenous habitat and the impact of extractive activities on the environment and on indigenous peoples’ rights are matters of special concern, especially in the Amazon, the northern border areas, and the Pacific coast.”

The Convention is available at:
http://www.ilo.org/ilolex/english/convdisp1.htm

For Discussion:

Why would a government ratify the Convention but fail to abide by it?
How could the gap between the recognition of indigenous people and actual practice in implementing the Convention be bridged?

Cuban Exports Rose in 2006

Source: La Prensa Latina (Spanish only)

Yesterday Cuban Foreign Trade Minister Raul de la Nuez announced that the island nation’s exports had increased by 35% in 2006. This marks the greatest increase for Cuban exports in twenty years, and has been attributed to the high price of nickel—a resource that is plentiful in Cuba—on the international market and the export of pharmaceuticals.

Nonetheless, de la Nuez also emphasized the difficulties of doing business in Cuba, especially with regard to the underutilization of existing production capacity and the scarceness of packing materials, the majority of which are imported into the nation. He also stressed the importance of diversifying markets and augmenting existing sectors. For instance, he called for increases in exports from the service sector, emphasized that they should be higher aggregate value services.

For discussion:

Is it time for the U.S. to life its longstanding embargo against Cuba?

EU Looks to Regulate Cell Phone Roaming Charges

Source: EU backs mobile roaming fee cut - BBC.com

The EU has scrutinized roaming charges imposed by cell phone operators in Europe since 2000 but is now finally taking action. The European Commission proposed a reduction by as much as 70%. A committee vote in the European Parliament this week bolstered the proposal. The full Parliament will vote on the issue in the coming weeks, and the European Commission wants the reduction to go into effect by summer.

Cell phone companies justify the roaming charges as a recovery of the costs of routing calls through rival networks. European officials counter that the companies make an annual profit of $11 billion from roaming charges and cite examples where companies charge sixty times more per-minute for a cross-boarder roaming call than for a domestic call. Lobbyists for the cell phone companies insist that the legislation is unnecessary because of a competition-driven decrease in roaming charges, and they warn that price caps will cause the companies to lose money in some areas.

Questions:

Should roaming charges be left to market forces rather than government regulation? If regulation is desirable, are there alternatives to price caps that would be less intrusive?

General would send Turkish troops to Iraq

Source: Turkish General calls for troops in Iraq

In a statement that is sure to be a source of controversy amongst already tense Turkish and Kurdish officials, the country’s top general called for Turkish troops to move across the Iraqi borders in order to combat rebels from the Kurdish Workers party, or PKK. Turkey accuses the regional government of Northern Iraq of harboring these rebels, but the latter denies such involvement.

No political decision has yet been made on the matter, and the US is apprehensive of such a move as it could potentially destabilize an already troubled region. US officials, while believing that the general’s calls are related more to internal political rhetoric (as the Turkish presidential election is fast approaching), they also believe there is a chance of Turkey moving into northern Iraq in the near future. Further, the EU has also warned against such an incursion, though Turkey is not likely to pay much heed to the EU given the trouble its experiencing in trying to obtain membership.

Meanwhile, PKK forces continue to operate in southern Turkey, and their operations are largely responsible for this controversy. However, regional governments in northern Iraq have warned Turkey that if it interferes in Iraq, the former would interfere in Turkey. Turkish officials remain concerned that the Kurds will form an independent state, despite US assurances of the opposite. Indeed, Turkish officials believe the US is responsible for the Kurds newfound capacity to become an independent state.

Question:

What can this new turn of events mean for Turkey’s already questionable relations with the EU?

Critics question whether the IMF should continue to exist

IMF Confidence Crisis
Foreign Policy in Focus
Soren Ambrose
April 12, 2007

In the days leading up to its semi-annual meeting in Washington D.C., the IMF is facing a confidence crisis – many openly question whether it should continue to exist. The IMF has been long accused of imposing suffocating conditions with its loans, which prompted both Brazil and Argentina to pay off their loans early in 2005. In recent years, more countries such as Serbia, Indonesia and the Philippines have followed suit. Thus, many of the countries that used to be the IMF's largest borrowers no longer borrow from it. Not surprisingly, the Fund is expected to post its first loss in decades of approximately $100 million this year.

Recently, IMF’s Managing Director Rodrigo Rato announced a new goal of the bank – convening talks amongst the major economic powers with an aim to reduce imbalances that have adversely affect the global economy such as China’s alleged currency undervaluation. However, since his announcement, the IMF has been able to accomplish little in this regard. Meanwhile, a recent report authored by its internal watchdog raised questions about the IMF’s philosophy and practice over the last 30 years, while another report (authored by a former Brazilian Finance Minister) stated that the IMF should discontinue making loans to low-income countries because such a responsibility is more adeptly handled by the World Bank.

Questions
1. Does the IMF have a role to play as of the present time?
2. Is it advisable to ‘merge’ the IMF with the World Bank to create a more streamlined, efficient organization or are there any advantages to having 2 multilateral financial institutions?

Japan and China Grow Closer

Sources: AP, UPI, Edge Daily

Chinese Premier Wen Jiabao “heralded” warmer ties with Japan this week, as he visited Japan. This is the first visit to Japan by a Chinese prime minister in over seven years, continuing the recent détente between the two Asian powers. This is notable, because despite the harsh rhetoric leveled at Japan from China, China is Japan’s number one trading partner. This visit has defrosted some of the tensions between the two states, as Premier Wen’s warm personality has won some fans in Japan.

There are still several deep divides between the two states. There are still disputes over territorial waters, the status of Taiwan, and, most strikingly, the Japanese shrine honoring the war heroes (or criminals, depending on which side of the debate you are on). This is the most divisive issue between the two states, and Premier Wen held back little when he urged Japan to take responsibility for World War II war crimes. This division was made worse with former Prime Minister Koizumi’s visits to the shrines. Wen also discussed the growing economic ties between Japan and China, and despite the conflicting claims of oil and gas reserves, Wen encouraged both states to jointy develop the areas.

Japanese and Chinese companies heeded Premier Wen’s advice, as energy companies from both states agreed to potentially develop the projects together. Nippon Oil Corp and the Chinese National Petroleum Corp (CNPC) signed a long term cooperation accord, although few specifics were mentioned. However, this is expected to expand trade of crude oil, oil products, and liquefied petroleum gas (LPG).

Question: Could a Sino-Japanese axis possibly lead to something along the lines of the old ECC or the modern EU?

Colombia Withdraws from World Cup Race

Sources: Bloomberg News, Colombia Quits Race for 2014 World Cup; International Herald Tribune, FIFA Inspectors Reject Proposed Chilean Stadiums for World Cup Qualifiers; South African Football Association, No Financial Worries About 2010 World Cup Says Mbeki.

Colombia withdrew its bid to host the 2014 Federation Internationale de Football Association (FIFA) World Cup on April 11, leaving Brazil as the only South American nation with an outstanding bid. President Uribe had vowed to provide the financial resources necessary to fund the event, but the Colombian Football Association ultimately decided against proceeding with the bid. Many involved in the decision expressed concern over the government’s ability to develop the infrastructure necessary to stage the event successfully.

According to FIFA regulations, Colombia would have been required to update its existing stadium facilities and build additional stadiums. Currently, it only has two stadiums that accommodate over forty-thousand spectators. Updates and construction can be very expensive. For example, the South African government, whose country is set to host the World Cup in 2010, has budgeted over $770 million for stadium, public-transportation, and airport renovations.

Colombia has heard these concerns before; both financial and security considerations caused the nation to withdraw its World Cup bid in 1986. FIFA has announced that the 2014 match will be held in South America, but other South American nations are likely to face the same problems as Colombia. In fact, Chile recently proposed using two of its larger stadiums in the qualifying matches for the 2010 South African World Cup, but FIFA rejected both of those venues, believing that the quality of the fields was too poor.

Questions:

(1) Beyond the financial realm, what are some of the benefits to hosting the World Cup for developing countries? What are some of the drawbacks?

(2) Should governments in developing countries invest the nations’ financial resources in hosting world-wide sporting events? What are some alternative sources of funding? Are those more desirable?

British Charities in the Middle East Harmed by UK Foreign Policy

Source: UK foreign policy hits relief, says Oxfam - FT.com

Oxfam, Save the Children UK, and other British charities warn that UK’s foreign policy is hampering their efforts to provide disaster relief and reconstruction assistance in developing countries. In particular, aid programs in Lebanon and Iraq find it increasingly difficult to gain the trust of the local people who fail to distinguish between the British government’s policies and charities that happen to be based in the UK and that receive a significant portion of their funding from the British government.

Since the Iraq war began in 2003, Oxfam has provided over £800,000 of assistance in Iraq. However, they are unable to work in some provinces, in part, due to the presence of British troops. Save the Children UK, active in Lebanon since 1949, has experienced increased hostility there since the UK failed to call for a ceasefire during the latest Israeli-Lebanon conflict.

Questions:

Should multinational charities refuse funding from national governments to avoid the misperception that they are an extension of the government? Would such charities have a better reception in the developing world if they moved their headquarters to a more neutral location, such as Switzerland? Should British charities continue their efforts to reach out to skeptical or even hostile communities because these communities are in greatest need? Should the charities continue to provide aid for the sake of improving public relations by demonstrating the “goodwill” of the British people?

India - a developmental success

India an inspiration to Africa: World Bank
India Daily
April 12, 2007

At a Round Table for a select group of media persons ahead of the World Bank’s and IMF’s weekend Spring Meeting, World Bank President Paul Wolfowitz stated that India “has been making wonderful progress in the last fifteen years or so.” While he admitted that India had the world’s largest number of poor people, he opined that India is in a transition phase and the country is making noticeable progress. He stated that countries such as India and China were fast becoming examples of developmental success and represent what African countries should strive toward. Wolfowitz claimed that India’s success in this regard was due partially to International Developmental Assistance (IDA), and he urged the developed world to continue providing financial assistance to the IDA program.

Wolfowitz also mentioned that the Bank’s 2007 World Development Report would focus on agriculture and strongly emphasize investment in rural development as a major way of fighting poverty. Citing to his own recent visit to India, he stated that India’s robust economic performance was due at least in part to its poor farmers being advanced micro-credit loans.

Questions
1. What can African nations learn from Asian successes India and China? How much of India’s recent success has been through the efforts of multilateral institutions such as the World Bank and the IMF?

Wolfowitz accused of corruption

For Wolfowitz, Slings and Arrows
Krissah Williams, Washington Post
April 12, 2007

Paul Wolfowitz’s tenure as World Bank President which was contentious to begin with given his involvement with the U.S.-led Iraq war, has been lately marred by further controversies, which are raising questions about his ability to lead the Bank. It was recently brought to light that a woman whom Wolfowitz is romantically involved with, Shaha Riza, received unusually large pay raises. Additionally, he has been subjected to blistering criticism on an internal electronic board. World Bank staffers, posting anonymously accused Wolfowitz of being a hypocrite – at a time when he is focusing on eliminating corruption in the developing world, the way he manages the World Bank itself has been corrupt given the pay raises received by Riza. Finally, sensitive board minutes regarding China were recently leaked to the press.

Notably, Wolfowitz’s 5 year term continues until 2010, and none of the Bank’s executive directors have publicly withdrawn support. Thus, his job does not seem to be in immediate danger. He has responded to these criticisms by creating a special committee to evaluate the pay raises given to Riza. He also reiterated his priorities regarding the developing world – dealing with environmental problems, rooting out governmental corruption and fighting poverty. However, many believe that the recent controversies could adversely affect Wolfowitz’ ability to raise funds from developed countries.

Questions
1. Should Wolfowitz remain World Bank President? What qualities must a World Bank President have?
2.How should the World Bank best respond to the criticisms leveled against its President?

Report: Canadian economy stifled by chronically low productivity

Sources: Toronto Star, Boston College International and Comparative Law Review

A report issued by the Canadian think tank Centre for the Study of Living Standards asserts that Canada will lag economically and ultimately suffer a lowered or stagnant standard of living if it does not make changes to increase productivity.

The report notes that Canada’s business output grew an average of only 1.1% per year between 2000 and 2006, or only a third as much as the United States over the same period. It also points to the fact that between 1973 and 2006, Canada was the third lowest-producing member country in the Organization for Economic Cooperation and Development (OECD).

Among the recommendations set fort in the report were:

*** to increase competitiveness through deregulation;

*** to weaken current unemployment health benefits for temporary and unemployed workers; and

*** to remove “institutional rigidities” such as inter-province trade and labor movement restrictions.

The last of these recommendations is perhaps the most interesting from a comparative standpoint. The Constitutions of both Canada and the United States have commerce clauses—language that among other things encourages free trade among the political entities—provinces and states, respectively—that make up each country.

While jurisprudence in the United States has found that the bulk of the power with respect to this issue lies with the federal government, Canadian case law has found the opposite: as a result, the provinces have been empowered to exercise more control over trade amongst themselves which has in turn led to some barriers to trade—and productivity—that may be constraining economic progress in Canada.

For discussion:

Does Canada’s interpretation of its Constitution with respect to province versus national government powers to regulate inter-province commerce need to be revisited?

Click here for a comparative analysis of commerce clauses found in United States, Canadian, and Australian constitutions.

Mexico to discuss trade agreement with Japan

Source: La Jornada (Spanish only)

Mexico’s Secretary of the Economy, Eduardo Sojo, traveled to Japan this week to discuss the bilateral trade agreement between the two nations. Specifically, Sojo will be addressing reported trade deficits on the Mexican side.

While Mexican officials have lauded the fact that trade between the two countries has grown 41% in the two years since the agreement went into effect, there is concern about the current trade deficit, which amounts to $12 billion.

Trade between Mexico and Japan is almost entirely focused on two sectors: automotive and agricultural products. In Japan, Secretary Sojo will seek to attract investments in Mexico as well as increase exports from Mexico of agricultural and food products.

Japan is Mexico’s fourth largest trading partner, after the United States, European Union, and China.

For discussion:

What do you think is the cause of Mexico’s trade deficit with Japan?

Do you think Secretary Sojo’s reported solution will alleviate the problem?

Romania Looks to China to Fill Labor Needs

Source: Romania's economy threatened by worker shortage - IHT.com

Romania’s admission to the EU last January 1 intensified a wave of emigration from Romania to other Western European nations. Most leave Romania to seek employment—legally or illegally—for higher wages, albeit lower wages than their Western European counterparts. The exodus has created a labor shortage in Romania, where foreign investment has sparked economic growth, but factories are unable to attract enough labor.

To solve the labor shortages, Romanian businesses are importing Chinese workers en masse. Although this solution creates additional expenses for Romanian businesses, such as the cost of providing room and board, it enables Romanian factories to keep costs competitive. At the same time, the system benefits the Chinese workers, as well. The Chinese workers agree that the working conditions and pay are better in the Romanian factories than in their homeland. In fact, labor is in such demand that one textile factory pays its Chinese workers twice the legal minimum wage.

Questions:

Should Romania make greater efforts to entice its labor force to stay in the country, such as raising the minimum wage? What are the possible social or economic ramifications of importing foreign labor to fill industrial jobs?

IPCC Report Underlines Risks to African Economy from Greenhouse Gases

Sources:
UNEP Press Release – Climate Proofing Africa Key Challenge for the Continent
UNEP Press Release – IPCC Outlines Strategies for Responding to the Impacts of Human-Caused Climate Change

According to a press release released by the United Nations Environment Programme (UNEP), Africa requires urgent assistance to adapt to climate change and action by industrialized countries to cut greenhouse gas emissions if the Continent and its people are to thrive in the 21st Century.

A regional report by the Intergovernmental Panel on Climate Change (IPCC) predicts that the continued increase in greenhouse gases will later this century put up to 1.8 billion more people in Africa at risk of water stress.

Achim Steiner, Executive Director of the UNEP which co-founded the IPCC, said: “The report underlines the enormous costs facing Africa as a result of unchecked climate change – costs which are wholly unacceptable for the 800 million people alive today and for the generations to come. It is the Continent with the least responsibility for the climate change and yet is perversely the Continent with the most at risk if greenhouse gases are not cut.”

According to the report, even a small temperature rise could lead to falls in water flows equal to one large dam being lost annually. African tourism, mostly based on nature, will be significantly impacted with 25-40 percent of the animal species in sub-Saharan Africa to become endangered. Arid and semi-arid lands are likely to increase by up to eight percent with important ramifications for livelihoods, poverty eradication, and meeting and maintaining the Millennium Development Goals. Sea level rise, especially along the east African coast, will increase flooding at a cost of up to 10 percent of the GDP. The report predicts that wheat may disappear from Africa by the 2080s.

The IPCC finds that early action to improve seasonal climate forecasts, food security, freshwater supplies, disaster and emergency response, famine early-warning systems and insurance coverage can minimize the damage from future climate change while generating many immediate practical benefits.

The IPCC also emphasizes that adaptation – in developed but especially vulnerable developing countries – is also needed to cope with the climate change already underway. “‘Climate proofing’ infrastructure and agriculture to health care services and communities will require investment but equally intelligent planning so that it is central to decision-making rather than on the periphery.”

Question: Is there anything else that developing countries should do to minimize the damage from future climate change to Africa?

Additional World Bank Funds to Afghanistan

Source:
Afghanistan: World Bank Provides Further Grant Support to Help Improve Irrigation Infrastructure

Today, the World Bank approved an additional grant to the Afghanistan Emergency Irrigation Rehabilitation Project. This additional grant will add $25 million to the initial grant of $40 million, which was approved on December 23, 2004. This money is to provide Afghan farmers with adequate water supplies through the development of traditional irrigation systems throughout the country. The long-term effect of this project is “to increase agricultural productivity and farm income, improve food security and livelihoods, and reduce vulnerability of farmers to droughts.”

The additional funding approved today will ensure that 635 water irrigation systems will be completed. These irrigation systems will help Afghanistan become better suited for a successful farming industry. Due to its rough terrain, mountains, deserts, and arid climate, Afghanistan historically has been an “unforgiving place for agriculture.” According to Nihal Fernando, Senior Rural Development Specialist and Project Team Leader, these irrigation systems will vastly improve the Afghan farming, which is essential for reducing poverty and ensuring economic growth in the country.

Since the project’s inception in 2004, new irrigations systems have been in place for nearly 54,000 ha (135,000 acres) of farmland.

Questions: Do you think the World Bank made a wise decision in approving another $25 million to this project? Besides farming, what other industries could promote economic growth and reduce poverty in Afghanistan?

U.S. Brings Cases to WTO Against China's Piracy Practices

Sources: China Slams US Over New WTO Complaints, US Reports China to WTO Over Copyright Policy, US Filing Copyright Enforcement Case Against China

The U.S. will bring two cases to the World Trade Organization (WTO) against China regarding intellectual property rights and copyright piracy. The complaints are based on China's well-known practice of allowing pirated copies of DVDs of Hollywood movies and U.S. books and music to be sold for as little as $1 per copy in shops throughout China. China's piracy and counterfeiting of U.S. and other foreign products has been causing controversy for a long time now. U.S. officials claim that China's lack of protection of intellectual property rights has resulted in billions of dollars of loss to U.S. companies. The purpose of the complaints is to get China to strengthen its enforcement of copyright and trademark laws.

The rampant practice of piracy in China is due to the government's blocking foreign companies from accessing its markets. The second complaint of the U.S. will seek to bring down China's strict trade barriers which are keeping legitimate U.S. products out of the country. China's officials responded to the news of the cases against its piracy practices with threats that the cases would likely damage bilateral ties with the U.S.


Question: Is the U.S. right to challenge China's policies in controlling its media?

Global economy on the rise despite sluggish growth in the United States

Sources: London Free Press, Chicago Tribune, New York Times

Today the International Monetary Fund (IMF) reported that the global economy was on the rise in spite of slower growth posted for the world’s largest economy and importing country—the United States.

The IMF further asserted that the United States’ economic slowdown has thus far had little effect on other economies because of the fact that U.S. economic troubles have been centered on the domestic housing market crash.

The IMF also noted that as of yet there has been little spillover from the troubled housing market into other areas of the U.S. economy, but that it is foreseeable that consumer spending and investment could be adversely impacted if the residential housing market does not improve, thus potentially implicated economies in exporting countries around the globe.
In the United States, concerns are growing as market watchers begin to change their economic forecast from a “soft landing” for the troubled domestic residential housing market to a housing-led recession for the United States that will—and some assert already is—spilling into other economic sectors.

In addition to the mixed signals on Wall Street—numbers for companies like U.S. Steel indicate a healthy economy while homebuilders’ stocks paint a very different picture—is the effect on state revenues, important because these political entities are more involved in major investments for infrastructure.

Reports that the nationwide housing slump has reduced state revenues are tempered, asserting that while states have seen decreases in taxes from real estate sales and transfers, as well as decreases in the purchase of associated items. At this point, state governments assert that the problem is not serious as the rest of the economy is fairly strong. That could change if there is spillover from housing to other market sectors.

FOR DISCUSSION:

1. Is or was the housing crash avoidable?

2. Do large economies like the United States have a responsibility to the global economy?

3. How are other major economies (e.g., China, a growing economic power on the global scene that is facing a housing bubble akin to that experienced by the U.S.) dealing with burgeoning domestic economic issues that could spillover into the global economy?

US Delegation Visits North Korea

Sources: Reuters, AP

A US delegation began a four-day visit to the hermitic North Korean state. Bill Richardson, a Democratic presidential candidate from New Mexico (also current NM governor and former US ambassador to the United Nations), leads the Bush administration-endorsed visit. This visit coincides with the impending deadline in the recent nuclear disarmament agreement. This delegation was sent in the hopes of improving the US-North Korea relationship, as protocol is considered very important in North Korea. NK likes to be viewed as a major power, and the visit, which includes a former ambassador, former veterans affairs secretary, and other top advisors could go a long way in improving US-NK relations. This trip, however, is not officially part of the six-way talks, but Richardson has requested a meeting with Kim Jong-il. The visit will also oversee the transfer of the remains of US soldiers who died in the Korean War.

An agreement was reached on February 13th, in the hopes to achieve NK disarmament, but the agreement has been put to the test due to the delayed money transfer from frozen funds based in Macau (although, on Friday, the State Department announced that the obstacles holding up the money transfers have been resolved, clearing the way for the transfer). There is worry that NK will not shut down its main nuclear reactor by the April 14 deadline as a response to the non-release of frozen money. This week, furthermore, North Korean leaders have made statements, which question whether NK is truly genuine about shutting down its nuclear reactors.

Question: What additional steps, short of war, are possible to ensure NK disarms?