The World Bank‘s policies for land privatization and concentration, have paved the way for corporations from Wall Street to Singapore to take upwards of 80 million hectares of land from rural communities across the world in the past few years, according to a press release from National Family Farm Coalition.
Giulia Franchi from the Italian-based Campaign for the Reform of the World Bank (Campagna per la Riforma della Banca Mondiale) said during a teleconference with reporters that the principles the bank is promoting, (RAI), is an attempt to justify and support transnational corporations’ attempts to grab farmland.
“It’s an attempt to make it look like a responsible deal, as something that can be done in a transparent way with the support of the local community, and something that will improve local communities. But there’s no way the expropriation of people’s land, however it’s done, can be a responsible deal.”
Franchi said corporations are using diversified financial vehicles such as pension funds, commercial banks, and investment banks, as well as foreign governments, to acquire millions of hectares of land worldwide for producing food and agrifuels for international export.
“This is all being done with the backing of international financial institutions, and most of all, of the World Bank.”
Franchi said the World Bank for decades has been promoting land concentration and privatization policies.
“It has been promoting land titling programs in many countries in the world, which has transformed customary and traditional land rights into titles which can be marketed, traded, and sold.”
As the World Bank presents the global takeover of farmland as the promotion of responsible agriculture, Via Campesina and its international allies are calling upon the bank to comply with the Extra Territorial Human Rights Obligations of States.
“The bank cannot continue to act in full impunity as it has up to now,” Franchi said.
Bob St. Peter directs Food For Maine’s Future and is a board member of the National Family Farm Coalition. He describes himself as a small-scale family farmer. He said he and his family rent, borrow, and lease about 4 acres of land for largely subsistence and small, direct-market production.
“Coming at this as a new farmer in the United States, and looking out to what’s about to happen over the next 20 years, there is set to be a very large transfer of productive farm land in this country. The older generation of farmers are set to retire and we have not been developing the farmers that are going to be able to replace them.”
St. Peter said many farmers are in debt and likely will sell their land and equipment to have some money as they retire and some money to leave to their children.
“We’re in the position now of having to stave off what is likely to be a very significant rush for farm land in this country. Those of us who would like to farm the land”are not in the position to purchase it at the prices that the older generation is going to need to get themselves out of debt to secure their retirement. There aren’t enough land trust or philanthropic dollars to make up the difference. So, what is likely to happen is there will be investment groups–and we’re starting to see this already—speculators as well as corporations purchasing these farm lands.”
St. Peter said this is going to exacerbate problems related to industrialized agriculture. He calls for not only low interest loans, but a transfer of wealth of some kind so new farmers have access to land without repeating the cycle of chronic debt where they have to depend on corporations just to stay in business.
“We don’t have a plan for that yet, but if we don’t stave off the farmland grab that is happening in other parts of the world, we’re likely to see that happen here.”
St. Peter calls for local food enthusiasts to look into the systemic issues involved with their cause.
“There’s been this change in the food industry. There’s been this political economy established to favor corporate agribusiness and that model has been replicated around the world. So the small-scale farmer —in Maine I am literally competing in my local community with cheap imported food from all over the world, produced in conditions we don’t generally support.”
He said people who are only focused on their local food system would be well served by looking deeper and wider.
“(They should look at) how the global food industry manipulates markets and uses international financial institutions and trade organizations to basically pit us against each other and undercut and undermine all of us. There’s a situation in Mexico, for example, of people being displaced from their land because of dumping. It also happens in our country, in our local communities. That’s why we have a local food movement in the first place. It’s because that’s been taken from us and we need to put it back. But we can’t do that without understanding both the solidarity aspects and the way the political economy works.”
Rafael Alegria, coordinator for Via Campesina for Central America said during the tele-press-conference that in Honduras and other countries in the region the re-concentration of the control of land under the auspices of the government, the transnational corporations, and the World Bank, has displaced small producers and family farmers.
“The situation in the countryside in Honduras, Guatemala, Nicaragua, El Salvador is similar. It’s very grave poverty in the countryside but this does not only affect the countryside but also the urban areas.”
Alegria said the US used free trade agreements to dump many tons of rice on the Honduran market, making it impossible for local producers to sell at a reasonable price. (See Oxfam briefing paper, A Raw Deal For Rice Under DR-CAFTA)
He said this is causing serious agrarian and rural conflicts in Honduras.
“In the region of Bajo Aguan on the Atlantic coast of Honduras, large numbers of campesinos have been hurt and killed in conflicts with a large land owner named Miguel Facusse, who owns agribusiness firm Quimicas Dinant. This company has been in the sites of the World Bank. The World Bank has been trying to give them $30 million in loans. He and Reynaldo Canales—these two men in private industry—have taken over almost all of the arable land. They have displaced thousands of small producers and family farmers and replaced their diverse cultivation methods with monocultures of African palm for export.”
Facusse makes his fortunes by producing palm oil used for snack foods.
Alegria said, “We’ve been able to document that Mexican corporations and private interests from other neighboring countries, as well as the United States, have taken over large tracts of land in Honduras. That’s why on the April 17th Via Campesina decided to do an international struggle to highlight the problem of land grabbing.”
He said that on that date campesinos and small family farmers in Honduras decided to do a land reclamation.
“They reclaimed 12,500 hectares of publicly own land that is now being taken over by private corporations and private interests. But the government and private interests have been actively evicting farmers and farm workers from these land reclamations, and today (April 23) there was a predawn attack by private guards from the sugar company.”
As a result of the attack, the leader of Movimiento Campesino de San Manuel (MOCSAN) is hanging between life in death in a hospital in San Pedro Sula , said Alegria.
“The minister of agrarian reform and the minister of security and the Honduran president Porfirio Lobo Sosa refused to talk with Via Campesina and the Honduran campesino movement. So, we declare that those government representatives are responsible for all of the bloodshed.”
Alegria said Via Campesina in Central America denounces the media campaign to defame his leadership and the leadership of all of the local and regional campesino movements in Honduras.
“We demand the World Bank stop promoting land grabbing being done by private interest. We call on the World Bank to support comprehensive land reform strategies like the one we put forward before the legislature of Honduras in October 2011.”
Alegria said there has been no legislative progress. He asked that food sovereignty activists around the world increase their solidarity with campesinos in Central America and all those who are struggling in Honduras. He said in the 1970s the Catholic Church was in solidarity with peasants fighting for land reform, but that more recently they have not received any kind of support from the official churches, either the Catholic, the Evangelical, or Protestant.
“We’ve only received support from the very small community-based churches from the Protestant and Evangelical side.”
Alegria said the land reclamations threaten monopoly capitalist’s interests in the northern areas of Honduras. He said powerful people in the banking industry and large landowners on the northern coast of Honduras have ties to the owners of the country’s newspapers , such as Diario del Tiempo.
“Those high level business interests and the owners of the main newspapers, Diario La Prensa and The Herald and Tiempo, they all work together. Their interests are entwined. This media campaign is one where they attempt to defame my character, painting me as if I were a terrorist. This is try to undermine my credibility with the people. They are very conservative business leaders who are really only interested in making profits and increasing their wealth but they don’t see the dire poverty of the family farmers, the campesinos, and farm workers in Honduras.”
He said large corporations want to control not only their land but also their forests, mining industry, and water.
“It’s really grave for our country. The large-scale foreign investment interests are pressuring the government and the government’s response is to put up for public auction all of our natural resources for sale to the highest bidder in order to cover both our internal and external debt. The external debt for a small country like Honduras is already is more than $4 billion and the internal debt is $50 billion.”
There’s no shortage of food, no shortage of wealth to solve social crises. The problem is a system that enriches a few and starves multitudes.
We hear day in day out about the massive poverty and hunger that exists in the world. NGO’s and various non-profits have been around for decades appealing for assistance in feeding the world’s poor. In the third world, water is as precious as gold. Sewage and water sources run parallel in the streets due to the lack of modern infrastructure systems.
More often than not, the experts in the universities and think tanks of the 1% drag the age-old Malthusian explanation out of the closet. There is simply an overpopulation problem. It is the poor that are to blame, if only they’d have fewer children.
But as I have pointed out in previous blogs, it is not too many people that are the problem. It is not the lack of medical knowledge or technical expertise that leads to staggering infant and adult death rates in some parts of the world. It is the lack of social infrastructure and the capital needed to provide it.
The world produces enough food to feed everyone according to Hunger Notes —17% more calories today than it did 30 years ago. But food is a commodity and its production does not take place if the end product cannot be bought and the value added during the production process realized. The capitalist class would call this lack of demand. But in the world of the market, if you can’t pay you can’t play. No money for food, then you starve.
This is the absurdity of capitalism that Marx wrote about, that we starve amid plenty. He wrote in 1848:
“It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce.”
Unicef estimates that between 2000 and 2010 92 million children died form hunger and diseases, “…many of the illnesses and conditions that children suffer are easily preventable, technically.” says Global Issues, in other words, they are really what we might refer to as “man made” deaths. They are in actuality, market induced deaths. Almost 2 million children a year die form diarrhea due to lack of safe drinking water, another market induced crisis with which even the UN seems to agree:
“We reject this [Malthusian perspective that global water problems are a problem of scarcity and population growth]. The availability of water is a concern for some countries. But the scarcity at the heart of the global water crisis is rooted in power, poverty and inequality, not in physical availability.” (2006 UN Human Development Report, p.2)
The cost of bringing people safe water is negligible when compared to the concentration of wealth. “The world’s billionaires — just 497 people (approximately 0.000008% of the world’s population) — were worth $3.5 trillion (over 7% of world GDP).” According to the World Bank. The world’s richest, Business Week claims, have a collective net worth of $2.8 trillion.
Anyway you measure it, there is plenty of money in the world. These characters spend half their time hiding this wealth to protect it, form ex-wives, estranged children and the rest of us. But how do they get it?
Russian billionaire Dmitry Rybolovlev, who is squabbling with his wife over a $9 billion nest egg and who has his cash stashed all over the world, made most of his money (including $500 million in art, $36 million in Jewelry and an $80 million yacht) “…from the sale of two potash fertilizer companies for a combined $8 billion…” Business Week adds.
But how did he come to own these huge operations; and in such a short period? It’s quite simple really and one of the reasons Gorbachev was so popular with the B movie actor and US president Ronald Reagan and the global 1%. Gorbachev was a former leading Stalinist bureaucrat. He was General Secretary of the Communist Party of the Soviet Union during the period when one of the most repressive totalitarian regimes in history began to draw its last breath and collapse under its own bureaucratic weight.
Gorbachev and his old buddies including many former KGB thugs like Putin who reached the ranks of Lieutenant Colonel, wasn’t about to go down with the sinking ship. What happened in a nutshell, and why we see so many prominent Russian millionaires and billionaires is that the old KGB and moribund party men appropriated the collective and collectivized wealth of the Soviet and Russian people.
The US capitalist class welcomed the plunder and their former KGB credentials were a thing of the past as long as capitalism could flourish. That’s where Rybolovlev and other Russians like him got their wealth.
No doubt readers are getting a bit bored with it but there is a need to hammer it home to counter the propaganda of the world’s bourgeois that there is not enough money to feed, clothe, house and provide humanity with a decent and productive life. I am talking about the claim by the Tax Justice Network that wealthy individuals, (we’re not talking corporations here) stashed as much as $32 trillion in offshore accounts in 2010 in order to avoid taxes. This amounts to the combined GDP of the U S and Japan. “Fewer than 100,000 people own $9.8 trillion of offshore assets,” BW claims. This exists as more than 9 million people die worldwide each year because of hunger and malnutrition; 5 million of them are children.
This situation is not something that cannot change. It is not an insoluble dilemma. It is not the fault of the victims, of “human greed” in the abstract or of “natural disasters” or the by-product of supernatural squabbling between a benign god and his disgruntled fallen angel.
It is a very simple; the Russian billionaires for example attained their rapid billionaire status simply through the transfer of the collective wealth of society to individuals including the means for generating that wealth.
We solve the problem by transferring collective wealth, and more importantly, the means by which it is created, the ownership of the means of production, distribution and exchange, from private individuals to the collective.
Through this process, we can emerge from the depths of depravity to the apex of civilization. True freedom.
Rather than solving Europe’s crisis, EU institutions are allowing corporate elites to further enrich themselves through a fire sale of state assets.
The text and infographics below are excerpted from a new working paper, Privatising Europe: Using the Crisis to Entrench Neoliberalism, which was just released by the Transnational Institute in Amsterdam:
The European Union is currently undergoing the biggest economic crisis since its foundation 20 years ago. Economic growth is collapsing: the eurozone economy contracted by 0.6% in the fourth quarter last year and this slump is set to continue. The euro crisis was incorrectly blamed on government spending, and the subsequent imposition of cuts and increased borrowing has resulted in growing national debts and rising unemployment. Government debts in crisis countries have predictably soared: the highest ratios of debt to GDP in the third quarter of 2012 were recorded in Greece (153%), Italy (127%), Portugal (120%) and Ireland (117%).
Europe’s member states have responded by implementing severe austerity programmes, making harsh cuts to crucial public services and welfare benefits. The measures mirror the controversial structural adjustment policies forced onto developing countries during the 1980s and 1990s, which discredited the International Monetary Fund (IMF) and World Bank. The results, like their antecedents in the South, have punished the poorest the hardest, while the richest Europeans – including the banking elite that caused the financial crisis – have emerged unscathed or even richer than before.
Behind the immoral and adverse effects of unnecessary cuts though lies a much more systematic attempt by the European Commission and Central Bank (backed by the IMF) to deepen deregulation of Europe’s economy and privatise public assets. The dark irony is that an economic crisis that many proclaimed as the ‘death of neoliberalism’ has instead been used to entrench neoliberalism. This has been particularly evident in the EU’s crisis countries such as Greece and Portugal, but is true of all EU countries and is even embedded in the latest measures adopted by the European Commission and European Central Bank.
This working paper gives a broad and still incomplete overview of what can best be described as a great ‘fire sale’ of public services and national assets across Europe. Coupled with deregulation and austerity measures, it is proving a disaster for citizens. Nevertheless, there have been clear winners from these policies. Private companies have been able to scoop up public assets in a crisis at low prices and banks involved in reckless lending have been paid back at citizens’ expense.
Encouragingly though, there have been victories in the battle to protect and improve Europe’s public services which serve as beacons of hope. There is even a counter-trend of remunicipalisation taking place in Europe as people have become aware of the cost and downsides of privatising public services, particularly water. As public awareness grows that the European Commission far from solving the crisis is using it to entrench the same failed neoliberal policies, these counter-movements and growing popular resistance can work together to halt the corporate takeover of Europe.
For years, “vulture funds” have preyed on struggling nations by purchasing their debt for a pittance. Could an upcoming U.S. court decision put an end to the extortion of poor countries?
Last October, soldiers from the West African nation of Ghana boarded an Argentine naval ship called the Libertad. They overtook the crew and brought the ship to port in the town of Tema. This was not an act of piracy, at least not in the sense we normally understand it. The detaining of the Libertad took place after hedge fund NML Capital convinced a Ghanaian court that the ship, which was sailing in Ghanaian jurisdiction, should be held ransom for a debt the hedge funds claimed Argentina owed them.
The saga began in 2001, when Argentina was thrown into economic crisis and defaulted on its loans. Hedge funds swooped in and bought Argentine debt for almost nothing and circled until the country was in recovery to collect the debt in full.
The case is set to be decided in the coming days in the U.S. 2nd Circuit Court, the jurisdiction in which the original loans were contracted. The decision will impact whether certain hedge funds commonly known as “vulture funds”—funds that buy a struggling country’s debt for pennies on the dollar and then sue for the full amount when a country is in recovery—will continue to extort poor countries.
The long 2nd Circuit Court proceedings between Argentina and hedge funds NML Capital and Aurelius has propelled the international debt crisis into the spotlight. It’s been called the “debt trial of the century,” and the proceedings could have the most far-reaching impacts on global poverty in our lifetime.
The U.S. 2nd Circuit Court is the case’s last stop before the U.S. Supreme Court, and if the vulture funds win, it will mean these funds will be allowed to more aggressively target poor countries in financial recovery. Argentina would possibly default. But if Argentina wins, it will be much harder for these types of hedge funds to exploit poor countries in the future, destabilize emerging economies, and target assets that should be improving the lives of the world’s most vulnerable people.
Because the U.S. government acknowledges that this behavior hurts legitimate investors and poor people, the Obama Administration filed a friend-of-the-court brief that argued that a ruling against Argentina could make it much harder for poor countries or countries in financial recovery to access credit and restructure debts. The International Monetary Fund and the World Bank are similarly critical of vulture funds.
How they work
Vulture funds create an international version of a situation that often takes place on the individual level: You lose your job and you can’t pay your debts. You file for bankruptcy and restructure your debts, but the owners of your hospital debt and credit card debt refuse to negotiate. Instead, these debts are sold for almost nothing to collection agencies when it could have been resolved directly with you. The collection agencies hover while you are trying to get back on your feet. When they find out a relative gave you 200 hundred dollars to take your daughter to the dentist, the collection agencies seize the money.
The equivalent impacts on a poor country just getting on the other side of a financial crisis are devastating. In 1999, a vulture fund called Donegal International bought a debt owed by Zambia for a knock-down price of $3.3 million. Most of Zambia’s debt was canceled and the country began saving $40 million a year when they stopped repaying loans to the World Bank and International Monetary Fund. After Zambia received this debt relief, Donegal sued the African nation for $55 million and in April 2007, the court ruled that Zambia must pay $15.4 million—roughly 65 percent of the debt relief that was specifically directed for development projects. A huge profit for the vulture fund and a theft from the poorest Zambians.
Typically, vulture funds refuse to negotiate with countries who are indebted to them. They often make 400 percent profits with their legal proceedings, which often take place in New York or London courts where previous contracts on the loans were signed. “These funds are among the very worst actors in our international financial system,” notes Dr. Collins Magalasi, executive director of the Zimbabwe-based African Forum and Network on Debt and Development. “They are aggressive, selfish, and greedy. In fact, they are so egregious that most legitimate investors won’t stand in the same room with them.”
And those running the funds continue to lobby for even greater powers.
Last June, the organization I work for, Jubilee USA Network, along with our partners at American Jewish World Service, put enough pressure on New York legislative bodies to stop proposed legislation that would allow vulture funds to sue a struggling country, even after a court had rejected their claims.
Then in November, Argentina’s case was brought to the U.S. District Court, which ruled in favor of the hedge funds. Argentina was ordered to pay $1.3 billion to NML Capital and other creditors it represented. When Argentina appealed, the 2nd U.S. Circuit Court of Appeals froze the payout to hear new arguments from both sides.
In February, the federal appeals court heard the arguments and ultimately asked Argentina to outline a payment plan. The plan the country laid out would essentially give the holdout creditors the same deal as 92 percent of the creditors that had previously restructured after Argentina’s default. It still offered a significant profit to the “vulture” funds.
The hedge funds rejected this plan; now we wait for the U.S. 2nd Circuit Court to issue a final ruling.
Last October, the Libertad was returned to Argentine waters by Ghana. We hope to see a similar outcome in the case of NML Capital LTD, v. The Republic of Argentina. The legal outcome will either offer more devastation or greater protections for the world’s poorest and most vulnerable people.
Nothing changes — whatever familiar measures are announced after every food scandal, once the politicians, manufacturers and retailers have made their claims and counterclaims, and after we’ve gone through the ritual demands for transparency, traceability and labelling. What we really need to do is widen our focus from the contents of “beef” lasagne to the intersecting routes of the current global agricultural system.
It has been developed with the single goal of large-scale production for export, with centres of specialisation to maximise profits. In emerging countries, greater wealth has led to an increase in demand for meat, and therefore a need for agricultural land to feed livestock. In China, meat consumption per person has increased 55% in 10 years (1). To feed its battery hens, China has to import soya grown in Latin America; to grow food for human and animal consumption, it has started to grab land in Africa. Raw ingredients are grown in one continent, bought by another, and exported to a third, just like the global supply chains of manufacturing industry.
For several decades, the food industry has persisted with an approach that has damaged small farmers, biodiversity, soil, water resources, and the health of producers and sometimes consumers, without managing to feed the planet — in 2011 a billion people did not have enough to eat. The meat industry exemplifies the problem. It accounts for less than 2% of global GDP but produces 18% of greenhouse gas emissions and uses huge amounts of natural resources, land and agricultural produce. Should cereals be grown to feed people or to fatten livestock? It takes at least seven kilograms of grain to produce one kilogram of beef, four for a kilogram of pork and two for a kilogram of chicken.
Pasture takes up 68% of all agricultural land (and 25% of it is already exhausted and infertile), while growing fodder takes up 35% of arable land: so in all, livestock requires 78% of all agricultural land. This dedication of land to the production of poor quality meat (plus further land demands for biofuels) directly affects the poorest. The UN Food and Agriculture Organisation’s 2006 annual report says: “Feed production as well as imports have increased. Total feed imports have surged … giving rise to fears that the expansion of China’s livestock industry could lead to price hikes and global shortages of grains, as has been predicted many times in the past.” We know what happened next: food riots in 2008 in Ivory Coast, Cameroon, Indonesia and the Philippines, caused by the unprecedented rise in the cost of raw materials on the international market.
Pushing millions into poverty
Early in the financial crisis, political leaders should have banned speculation on basic foodstuffs, but didn’t. Despite a reduction in the real cost of cereal production, prices kept going up (2). In February 2011 The World Bank warned: “Global food prices are rising to dangerous levels and threaten tens of millions … The price hike is already pushing millions of people into poverty, and putting stress on the most vulnerable, who spend more than half of their income on food” (3).
Most cattle are grazed, and while a small herd of black and white Pie Noir cows chewing the cud in the shade of cider apple trees in the Breton countryside might not be a problem, environmental damage increases as herd density rises. In South America over the past few years, overgrazing has left the soil sterile and saturated with animal manure. Producers easily resort to illegal logging to clear fresh land, especially in Brazil, which is the world’s biggest producer and exporter of beef and leather, supplying 30% of the global market. It exports primarily to Russia and the EU. A 2009 Greenpeace report revealed that Brazil’s 200 million head of cattle were responsible for 80% of the deforestation of the Amazon (4) — 10m hectares of forest destroyed in 10 years, to the detriment of small farmers and native peoples. For 40 years Survival International has condemned the killing of indigenous people by ranchers in Brazil’s forests.
The Amazonian rainforest is being destroyed primarily to produce biofuel and cattle feed. According to the peasant movement Via Campesina: “Soybean monocultures … now occupy a quarter of all agricultural lands in Paraguay and … have grown at a rate of 320,000 hectares a year in Brazil since 1995. In Argentina, where soybeans occupy around half the agricultural land … 5.6 million hectares of non-agricultural land was converted to soya production between 1996-2006. The devastating impacts that such farms have had on people and the environment in Latin America are well documented and acknowledged” (5).
Cereals and oil-producing plants, cultivated and harvested in Latin America with the help of chemicals, are transported across the Atlantic to the huge silos of agribusiness multinationals in Europe, ready to be turned into concentrated feed for millions of battery-farmed pigs and chickens around the world — in 2005 they consumed 1,250m tons.
Factory farms supply processors and supermarkets internationally. The industry tries to minimise costs by “rationalising” the production and distribution chain, reducing the workforce, automating tasks, standardising products and mechanically recovering meat slurry for cheap processed meals. The system is there to meet the demands of agribusiness and the big supermarkets.
Processed food makers produce sausages as if they were assembling a car from components; and in a way, the animals they use have become artificial, the product of agricultural research, selectively bred to accelerate muscle development and boost reproductive performance, their vital organs reduced to the point where they are not able to function properly. They are extremely vulnerable to illness, and producers try to remedy this by heating the buildings in which they are raised, although this is often not enough to avoid infections, so they are given antibiotics. The liquid manure they produce, a dangerous mix of nitrogen and phosphorus, is disposed of by spreading on land that is already oversaturated. In Brittany, cyanobacteria pollution of groundwater, rivers and shores caused by the pig industry, is now endemic.
Traditional farming takes account of how much feed is available locally. Pastureland is nurtured, grass regrowth protected from too many hooves, and animal waste prevented from affecting soil and water quality. Animals are reared in symbiosis with cereal and vegetable crops: green waste with peas, lupins and field beans makes a balanced and healthy fodder, straw provides bedding for the animals, and manure fertilises the soil, completing the cycle. A new generation of farmers who want to produce local healthy food that does not damage the planet have been inspired by traditional practices; they have studied, tested, improved and modernised them, and some have moved into agroforestry, as recommended by the Food and Agriculture Organisation, in which trees shelter crops from the wind and sun and contribute to soil fertility, while tree roots keep water at the base of the plants.
Translated by Stephanie Irvine.
Agnès Stienne is a graphic designer.
(1) “The State of Food and Agriculture”, FAO, Rome, 2009.
(2) See Jean Ziegler, “Speculating on hunger”, Le Monde diplomatique, English edition, February 2012.
(3) “Rising food prices have driven an estimated 44 million people into poverty”, The World Bank press release, Washington, 15 February 2011.
(4) “Slaughtering the Amazon”, Greenpeace International, 1 June 2009.
(5) “The World Bank funding land grabbing in South America”, open letter from Via Campesina, 7 July 2011.
This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.
World Bank refuses to review support for logging in tropical rainforests despite criticism from its own independent evaluators
The World Bank Board of Directors has blocked a call by independent evaluators to review the outcomes of the Bank’s support for industrial-scale logging in tropical rainforests. The evaluators concluded in a report published last Friday that such operations have not been effective in reducing poverty, the World Bank’s core mandate, or achieving sustainability. Despite these findings, the Board voted unanimously against a recommendation that the Bank review the effectiveness of its support for tropical forest logging.
“The very survival of tropical forests and the way of life of people who live in them is under threat, and the World Bank is in denial about its contribution to the problem,” said Rick Jacobsen of Global Witness. “As a public institution tasked with reducing poverty, the World Bank should take very seriously its own evaluators’ finding that its approach is not helping vulnerable forest communities. It’s time for the Bank to stop defending destructive logging practices in the name of development benefits that never materialize.”
“After 10 years of World Bank-led reforms in the DRC, roughly 150,000 km2 of rainforest remain in the hands of poorly regulated international logging companies, while communities are once again being left behind,” said Susanne Breitkopf of Greenpeace International. The reform process in the DRC has been marred with irregularities and widely criticized; meanwhile, a law that would support community management of forests has been stalled for years, and the Bank is financing a forest zoning process that is likely to earmark huge areas of rainforest for industrial logging.
While the Bank fiercely rejected the evaluators’ criticism of its support for industrial-scale logging in the tropics, it accepted seven other recommendations made in the report. Two of these focused on the need to provide more support for forest-dependent communities to allow them to directly manage their own forest resources. The Bank has not yet indicated how it plans to implement these recommendations. Breitkopf remains skeptical: “In order to reduce poverty and deforestation, the Bank needs to put land rights and community forest management at front and center of its projects, rather than making them cosmetic add-ons.”
Rick Jacobsen, Team Leader, International Forest Policy, Global Witness
+1 415 699 9504, firstname.lastname@example.org
Susanne Breitkopf, Senior Political Advisor, Greenpeace International
+1 202 390 5586, email@example.com
Notes to editors:
The Committee of the Development Effectiveness (CODE) of the World Bank Board of Executive Directors was responsible for the decision and currently includes the Executive Directors of Germany, India, Japan, Mexico, Russia, Sweden, United Kingdom and Zambia.
The World Bank’s Independent Evaluation Group (IEG) is responsible for carrying out independent evaluations of World Bank operations and reports directly to the Committee on Development Effectiveness (CODE) of the World Bank Board of Directors. The IEG evaluation and responses from World Bank management and CODE are available here: http://ieg.worldbankgroup.org/content/ieg/en/home.html
In late 2010, an Independent Forest Monitor financed by the European Development Fund was appointed by the government of the Democratic Republic of Congo to monitor the quality of law enforcement in the country. The Monitor’s first field reports were published in January 2013 and are available in French at the following website: http://www.observation-rdc.info/Rapports.html#7
The Bank has been instrumental in putting into place policies in many tropical countries that result in widespread logging of tropical rainforests. Yet according to a growing body of evidence, industrial-scale logging contributes to tropical deforestation while doing little to improve the lives of forest-dependent communities and indigenous peoples. Corruption and lack of government oversight further aggravate the problem. In the countries of Africa’s Congo Basin, home to the world’s second largest rainforest next to the Amazon, law enforcement in the logging sector is ineffective and corruption and cronyism are widespread. Recent reports from a government-appointed independent observer in the Democratic Republic of Congo, for example, found that many international logging companies are carrying out illegal activities.
For the past 35 years, the world’s largest financial institutions and most Western governments have worked to strip away all obstacles to the free flow of money from country to country,” and the results have been disastrous, the New Economics Foundation reports.
“Neoliberalism has come to dominate economic policy in the modern world,” the foundation says in a short film on the subject. “As the wisdom goes, removing restrictions on the flow of capital will ensure that investment naturally makes its way from rich countries to poorer ones. But this doesn’t seem to be happening.”
Economist columnist Philip Coggan says in the film that “We’ve had 40 years of money being freely available, of no real restrictions on exchange rates in the developed world to move. The result of all that has been a whole series of asset bubbles and a huge expansion of debt relative to GDP. It’s very hard to see how that’s sustainable.
“How to put the genie back in the bottle?” he asks. “One answer would be to have capital controls,” ways to monitor and regulate the flow of money in and out of economies. Critics in the business and especially at the top level of the global financial community say such regulation would reduce investment in countries that need it by inhibiting competition. (This same class of people tells us that competition is the most important factor in the health of an economy.)
But Peter Chowla, a coordinator of global finance watchdog Bretton Woods Project who also appears in the film, says that “[t]heories which predict that you might have some costs from regulating capital flows actually don’t bear any relation to reality as we experience it.”
Examples of the harmful effects of unregulated money flows are numerous. “A classic example perhaps was Thailand in the 1990s,” reports Coggan. “They had this huge bubble and boom. As money went into the economy, it all went into building new office blocks and other speculative property investments. And then all the money went out again. So it was as if you had this massive storm which went all through the sewers at one moment. A lot of stuff flowed out of the sewers as a result, not all of which … smelling very pleasant and Thailand went through a very deep recession after they were forced to devalue their currency in the late 1990s.”
Chowla says, “I think the evidence has been that countries that have done this haven’t experienced any drop in the kind of investment that they want. On the contrary actually, as you put in these kind of regulations, you make your economy more stable, you make things more predictable, you make your exchange rate more stable, and then investors actually have a better prospect for investing in the longer term.
“We should also remember that this is not the way it always is,” he says. “This is not the natural state of affairs. In the past we actually had quite strict rules about where money could move and how. Originally, back in 1945, the IMF actually believed very strongly in using capital controls and they believe that for the first 30 years of their existence.”
Examples of the benefits of regulating capital flows are also numerous. “Brazil … has implemented a financial transaction tax, otherwise known as a ‘Robin Hood’ tax,” the New Economics Foundation’s Lydia Prieg notes in the film. “And this is explicitly to try to penalize and thus reduce speculation. Other examples include countries like China, which have enjoyed extraordinary levels of growth recently. China has strict limitations on what non-residents can invest in with regards to shares and bonds. And then you’ve got countries like India which effectively banned foreign investment in Indian banks.
“Joseph Stiglitz … a Nobel Prize-winning economist and the former chief economist at the World Bank, did lots of studies into the Asian financial crisis,” she continues. “And he found that countries that implemented capital controls … had much shorter and much shallower downturns than countries that didn’t.”
—Posted by Alexander Reed Kelly.
The giant American retailer, which also has stores in Brazil, Argentina, Chile and several Central American countries, has been accused of systematically paying bribes in Mexico that total more than $24 million over the course of several years. The bribes were used to get permission to build in places where it is illegal to do so.
There is ample evidence that Walmart was not forced to pay bribes to do business, but rather that the company actively encouraged corruption in the country by establishing an aggressive policy of offering bribes to Mexican officials who broke the laws and regulations of the country.
The case is being investigated in the United States and Mexico, and the company is facing several lawsuits from pension funds that have invested in the company’s stock. The eventual sentences and fines could have a major impact not just on Walmart but also on Mexico – the company is Mexico’s largest private employer, with 2,275 stores and 221,000 employees.
An internal investigation by Walmart of its 27 international subsidiaries seems to have revealed evidence of bribes by Walmart in Brazil as well as China and India.
Walmart is not unique. British bank HSBC helped launder money for Mexican drug cartels for years. And people still remember the case of IBM in Argentina 15 years ago, when IBM paid officials at the state-owned Banco Nacion a total of $37 million in exchange for a contract to renovate the bank’s computer systems.
All of these cases – and hundreds of others with less publicity – hurt not only the companies involved but also the image of the region. The last Transparency International report only ranked three Latin American countries – Chile, Uruguay and Costa Rica – above the world average for corruption. All of the other countries are perceived as having high corruption problems, and Venezuela is one of the worst of in the world, ranked 165 out of 176 countries.
Subverting the system
The development of a country depends on governments that establish and enforce rules and regulations that are the same for everyone, as well as a free-market system where all of the competitors play by the rules. When you can get an advantage by paying bribes, that system is subverted. And when the person who gets that advantage is Walmart, the victims are numerous, starting with their direct local competitors and including other potential international investors, who might think twice about investing in the market.
When a giant like HSBC is laundering drug money, it distorts the financial markets and subverts the democratic system.
The United States has taken a step in the right direction by legally punishing companies that commit bribery abroad. The situation would be even better if all countries adopted similar legislation.
The so-called multi-Latinos, the select club of Latin American multinationals, have the task of being agents of change, and should explicitly state a commitment to fight corruption in their statutes. These statutes should also include ethical standards to abide by when doing business throughout Latin America.
Latin American governments should establish an agreement to standardize corruption laws and penalties.
International development banks, like the World Bank and the Interamerican Development Bank, have taken a step in the right direction. Since a couple of years ago, any company that is guilty of corruption is barred from participating in projects financed by either bank.
The task sounds complicated and difficult, but it is worth it. Many studies have found a clear relationship between corruption, poverty and under-development – equal to the distortions produced in the way resources are distributed. It is obvious that corruption hurts countries where it takes place, and we need political will, both on the part of governments and business people, to get rid of this scourge.
The Vatican today stunned the world by declaring the European Union to be a saint, effectively immediately.
Vatican spokesman Hermann Sisler declared: “More than any individual person in recent history, living or dead, the European Union has spread the message of peace, hope, and charity through the world. And besides, they really need the money.”
For the first time ever, the EU’s sainthood also comes with a 10 million euro prize.
“Saint EU” is the first international organization to advance to sainthood. The Church waived the rule that prevents the process of canonization from beginning until five years after a candidate’s death.
The EU is not technically dead yet, according to most political experts.
The surprise announcement comes soon after the European Union being named for the Nobel Peace Prize.
“We are proud to officially declare the European Union to be a saint,” Sisler continued. “With its size and potential for good will, Saint EU dwarfs the power of any one person, such as Mother Theresa, to do good deeds.”
“In the modern world, international organizations alone possess the power, connections and resources to undertake meaningful projects for the common good of humanity. Compared to that, individuals just can’t make a real difference in our globalized world.”
But Sisler denied rumors that the IMF and the World Bank were also being considered for sainthood.
“Not at this time. But the UN and WTO are serious candidates for the near future,” stated Sisler.
EU critics thought the award ridiculous.
Nigel Herring of the UK stated: “This is crazy. Just like the EU Nobel Peace Prize. Sainthood is supposed to go to individuals. Dead people. The European Union is not only not a person; it’s not even a country.”
“And it’s not really the case that EU has somehow kept the peace in Western Europe since World War II. It’s really been NATO. With American troops on the ground in Germany, the Germans have not been able to invade France or partition Poland for a fifth time or whatever. (Though the “Ode to Joy,” the EU national anthem, seems like suitable music for such undertakings.)”
“And those expansionist Belgians have been kept in check as well, except for the fact that they somehow ended up with the capital city of Europe. Very suspicious.”
“But in the end, the EU’s attempts to keep the euro going may prove to be quite divisive. I fear how the end game for the euro could play out,” said Herring.
“It might have made sense to give the prize to the European Coal and Steel Community in the 1950s for tying these economies together after the war, but the EU has inherited a situation conducive to peace in Western Europe. It’s not like there were wars that the EU prevented,” concluded Herring.
Vatican spokesman Sisler concluded: “We have long believed that the twelve stars on Saint EU’s flag represent a halo as seen from above. Now our belief has been realized.”
1 Recall The Bailout, 2 Remove The Corrupt Politicians, 3 Pay NO Taxes Until 1&2 Are Completed!! Follow Iceland!! « Political Vel Craft
Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.
Iceland Continues To Grow Using ‘Startups’ By Replacing ‘Banks’: Iceland Refused To Bailout Rothschild’s Corrupt Banking Cabal.
Executives At Collapsed Iceland Bank Jailed For Fraud.
Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population.
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” – Thomas Jefferson
The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates.
Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn. Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.
“Europe can learn from Iceland”
Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges. That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.
History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance. – James Madison
A giant tanker ship carrying 150,000 cubic metres of gas left Norway earlier this month for Japan. The vessel, Ob River, is taking a short cut that will trim several thousand kilometres off the trip. Its historic voyage would, just a decade ago would have been inconceivable even in high summer. The Ob River is travelling through the remnants of the once-frozen Arctic ocean – in the depths of winter.
While 17,000 politicians, NGOs and policymakers gather this week in Doha for the 18th annual talking shop of the United Nations Framework Convention on Climate Change (UNFCCC), back in the real world, temperatures are rising, ice is melting relentlessly and the planet is quickly slipping into a new, chaotic climatic era that scientific studies have been warning about for decades.
Three separate major reports this month, from the World Bank, PricewaterhouseCoopers (PwC) and the European Environment Agency all point to the same stark conclusion: the climate crisis is rapidly turning into an planetary emergency that is fast moving beyond humanity’s ability to contain, let alone reverse, it.
“This isn’t about shock tactics, it’s simple maths”, according to Leo Johnson of PwC. “One thing is clear: businesses, governments and communities across the world need to plan for a (dangerously) warming world – not just 2C, but 4C, and, at our current rates, 6C.”
Even at 2C over pre-industrial levels, the world is likely to have stepped into the abyss of irreversible climate disruption. As that approaches 4-6C, “we are passing through the gates of hell” in the words of one senior scientist. The World Bank Report warned that India would lose half its grain crops and Africa a third of its arable land at just 2C global average temperature increase.
Drought and famines will quickly spread into what are today some of the world’s most important food-producing regions – northern China, the US mid-west, much of the Middle East, as well as India and Pakistan are all facing collapse in water supplies within 10-20 years.
PwC calculates that, to have a 50:50 chance of avoiding the 2C climate ‘red line’, annual carbon emissions reductions of 5.1 per cent will have to be achieved, year on year from now until 2050. In reality, emissions are heading in the opposite direction, currently growing at over 2.5 per cent annually. Not since World War Two have global emissions ever actually declined by this level, and even then, it was for five, not 40 years.
“The new data provides further evidence that the door to a 2C trajectory is about to close”, Fatih Birol, chief economist with the International Energy agency said recently. John Steinbruner, lead author of a study for the US Central Intelligence Agency commented: “climate extremes are going to be more frequent…we’re also saying it could get a whole lot worse”.
The US military, not renowned for environmental alarmism, is now bracing for the collapse of multiple states, as floods, famine and disease triggers involuntary mass migration across international borders, on a scale that will rapidly overwhelm any capacity to respond. Ironically, publication of this CIA study was delayed by 10 days as Hurricane Sandy shut down the US Federal government last month.
“We’re on track for a 4C warmer world marked by extreme heat-waves, declining global food stocks, loss of ecosystems and biodiversity, and life-threatening sea level rise,” according to the World Bank report entitled ‘Turn Down the Heat’. A 4C rise this century is “a doomsday scenario”, World Bank president, Jim Yong Kim acknowledged glumly.
The UN conference in Doha comes just weeks after the expiry of the 1997 Kyoto Protocol, which has had only marginal impact in curbing global emissions. There is nothing on the table at Doha that will have any material impact on staving off calamity. The host country, Qatar, is the perfect metaphor for the paradox of progress, as it depends for its wealth on vast reserves of climate-destroying fossil fuels. Scientists estimate that 80 per cent of all known fossil fuel reserves (worth some $20 trillion) must remain in the ground if disaster is to be averted.
We now have no choice but to forego the easy wealth that comes from burning this vast carbon store and instead switch on a massive scale to low-carbon sources, such as renewables and nuclear power, as well as drastic improvements in energy efficiency. Like it or not, this also means the effective winding down of consumption-based capitalism and big drops in living standards.
Once we finally grasp that the consequences of ‘business as usual’ are unimaginably grim, political and economic changes that today seem unthinkable may soon be inevitable. The global slave trade went, in a matter of years, from an indispensable pillar of the world economy to being morally repulsive. To have a future, humanity’s relationships with fossil energy may very soon have to undergo a similar transformation.
John Gibbons is an environmental writer and commentator.
He is on Twitter: @think_or_swim
In an introduction, World Bank president Dr. Jim Yong Kim writes that he hopes the report “shocks us into action.” The impacts of 4-degree warming cited in the report include:
By the end of the century, sea-levels will rise by one meter or more as the ice sheets in Greenland and the West Antarctic.
Ocean acidity will increase 150 percent.
Agricultural production will decrease in many areas.
Water resources will be strained.
Major ecosystems like coral reefs and the Amazon rainforest will be destroyed.
Of course an average of 4 degrees warming across the globe doesn’t look the same everywhere. Some areas are wetter. Some are drier. Some will actually be 6 degrees warmer. Some get cyclones. Some get floods. All together, the report finds that it will be very bad, particular for the poorest and most vulnerable communities.
Here’s why the World Bank cares:
It seems clear that climate change in a 4°C world could seriously undermine poverty alleviation in many regions. This is supported by past observations of the negative effects of climate change on economic growth in developing countries. While developed countries have been and are projected to be adversely affected by impacts resulting from climate change, adaptive capacities in developing regions are weaker. The burden of climate change in the future will very likely be borne differentially by those in regions already highly vulnerable to climate change and variability. Given that it remains uncertain whether adaptation and further progress toward development goals will be possible at this level of climate change, the projected 4°C warming simply must not be allowed to occur—the heat must be turned down. Only early, cooperative, international actions can make that happen.
The report comes just ahead of the 18th Conference of the Parties to the United Nations Framework Convention on Climate Change, which begins on Nov. 26. Three years ago, leaders agreed to limit global warming to 2 degrees as part of a non-binding political accord. But that plan is really just on paper; the science shows that the world is on path to churn right past 2 degrees and hit 4 degrees by 2100. Nations don’t seem likely to take the much-more aggressive measures necessary to hit that target any time soon.