Monday, May 11, 2015


The Economic Model is Defunct: We Need to Ditch It
by Andrew Simms in The Guardian

What is development? To many conventional economists it has been China, though not without irony. Its export-led development model and advantage in all economic sectors created its superpower status, and left it accounting for the vast majority of those lifted out of poverty globally.
But there’s a problem with the model. “Beijing is not a liveable city,” said the city’s mayor, Wang Anshun, recently. The price of rapid industrialisation and urbanisation has been pollution: air not fit to breathe, and visitor numbers declining – a sort of anti-development. It’s a crisis echoed in India where recent research estimated pollution caused the collective loss of 2.1bn life years.
Knowing it has a problem, India announced a plan to double coal taxes to pay for clean, renewable energy alternatives. In China premier Li Keqiang announced a lower economic growth target, a much harder line on environmental safeguardsand a reduced dependence on energy intensive manufacturing for export. China plans to reduce energy use per unit of GDP by 3.1% in 2015 and has a longer-term ambition for the middle of the century to cap coal use at half of total energy consumption.
But lower growth still means growth at 7%. At that rate, the Chinese economy, already the world’s second largest, will double in size in 10 years. To underline an obvious but often overlooked fact, in terms of climate change, it doesn’t matter how much you improve the energy intensity of your economy if the economy itself grows by a higher factor. Emissions still rise. This is the current picture globally.
Relative efficiency improvements by some nations, such as the UK can also flatter to deceive, because they don’t account for how economies that become more service-driven tend to export their emissions along with their manufacturing.
China is relatively resource poor. To fuel its extraordinary growth and exports, since the early 1970s it has needed more natural resources than its own ecosystems can provide.
Per person, China’s ecological footprint is more than double what its own land, fisheries and forests can provide.Carbon emissions are a big part of that footprint too, even though a significant proportion are accounted for by producing goods ultimately consumed elsewhere. And here’s the challenge. Tens of millions in China still live below the absolute poverty line of $1.25 a day, and the nation has relied on a model of export-led resource intensive development to tackle that. Something which itself relies on a model of the world’s existing wealthy and over-consuming people buying still more of their exports.
That, in turn, puts more pressure on the land and forests of Africa, other parts of Asia and Latin America, as China scours the world for resources. Take China out of the global poverty reduction equation, however, and you’re left with substantially less progress. Now, the costs of China’s approach, both at home and abroad, are forcing a rethink. But the whole world is part of the model pointing to the need for systemic change.
Later this year the world will agree to a new set of global goals on sustainable development to replace the millennium development goals (MDGs).
Among many other goals these will include commitments to end poverty in all its forms everywhere, prevent dangerous climate change, and to promote sustained and sustainable economic growth. But, with the current economic models, are these goals remotely compatible? A new paper in the journal World Economic Review shows the global economy on a wildly unequal trajectory that makes this not just unlikely, but absurd. Updating and further developing our joint research of 2006, David Woodward reveals how the share of the world’s poorest in economic growth shrank over three decades from 1980.
Those living below $1.25 and $2 per day have been getting an ever smaller slice of a growing cake. That means, paradoxically, the world’s already wealthy must consume disproportionately more to raise the incomes of the poorest.
As a result, ending poverty under the current model is slow, inefficient and runs into practical, planetary problems. The scale of the global economy is already pushing us into ecological overshoot.
Woodward calculates that because of the gap between rich and poor, on current trends, to get everyone in the world to at least the fairly miserable, $1.25 per day absolute poverty line, would still take another 100 years. It would also require a global economy about 10 times the size of the overburdening one we have already. Worldwide, average per capita income would need to be $100,000.
For meaningful progress – getting everyone on to $5 per day, which is more in keeping with meeting basic needs – would take two centuries and require GDP per person of $1m. It’s why Woodward called his paper ‘Incrementum ad Absurdum,’and why he comments, understatedly, We cannot realistically hope to achieve this through existing instruments of development policy.”
To assume such a course of action is viable requires both magical thinking and being in denial about how the economy is still allowed to operate. Just last month alone the boss of oil company BP took a 25% pay rise while company salaries werefrozen, and the chief of Barclays bank took £5.5m in pay while the bank was in the process of cutting 19,000 jobs. Economic decisions ranging from airport expansion to tropical deforestation are justified for their contribution to development – however self-serving on the part of the developer. 
But it is becoming fashionable to argue that the climate debate should not be loaded with the broader ambitions of progressive politics, to get a better deal for the poor and the marginalised. But what if these two issues are genuinely hard-wired? The world is signing-up to end all poverty. The physics of planetary boundaries means in global aggregate terms we need to consume less. So, to stay the right side of environmental thresholds, a radical shift in distribution to favour the poorest becomes the only way to reconcile the twin challenges of halting catastrophic climatic upheaval and ‘ending poverty’.
While the citizens of New Delhi and Beijing choke through smogs to get to work each day, we now have to peer through the veils of defunct development models to find a different, better collective future.

Saturday, May 9, 2015

No NGO Presence at PACER Meeting a Concern


No NGO contribution to PACER-Plus talks 'concerning'

Updated at 3:00 pm today


The Fiji-based NGO, Diverse Voices and Action for Equality, or DIVA, says civil society groups not being allowed to have a voice in the PACER-Plus negotiations this week is of concern.
This round of negotiations on the regional free trade agreement, being held in Port Vila in Vanuatu, are expected to wrap up today.
The political advisor for DIVA, Noelene Nabulivou, says the agreement will impinge on Pacific governments to regulate fiscal, trade, aid and development policy, and will impact the lives of Pacific people.
She says it is worrying that the private sector has been allowed to attend the talks, but civil society groups have not.
"The ongoing issue is how do you ensure that the most diverse Pacific Islanders possible, the most diverse Australians and New Zealanders have access to this negotiating text. Because if there really was nothing for us to worry about, then we would be in the consulting room, we would be you know, working through the negotiating text."
Ms Nabulivou a plan to wrap up negotiations of the regional free trade agreement PACER-Plus by the end of this year is too rushed.
She says this year is already a big year for the Pacific, with the sustainable development goals and a new climate change agreement being set.
"The post-2015 development agenda is just being finalised only in September, UNFCCC and the climate change negotiations only end in December and that affects everything globally, not just here in the Pacific. So why is there a need for us to wrap this up so quickly? Whose interests does that serve? And we're not convinced that Pacific governments themselves are convinced this is the best way to go."

Friday, May 8, 2015

PM on Role of Australia and New Zealand

Fiji will continue to participate in all Pacific Islands Forum activities except the Forum Leaders’ meeting.
Prime Minister Voreqe Bainimarama said this yesterday “to set the record straight” because there appeared to be confusion about Fiji’s position.
Mr Bainimarama said: “We will continue to participate in all Forum activities at the public service, technical and ministerial levels. The PIF Secretariat will, of course, continue to be headquartered in Fiji. But as Head of Government, I will not participate in any Forum Leaders’ Meeting until the issue of the undue influence of Australia and New Zealand and our divergence of views is addressed.”
Mr Bainimarama made the comments when he opened a meeting of development partners at the Novotel Suva Lami Bay to decide on a draft agreement to institutionalise the Pacific Islands Development Forum.
He said: “Australia and New Zealand are not island nations. And we believe that they are more development partners such as the European Union, China, India, South Korea, Indonesia and the rest,” he said.
“This is not some ill-considered position based on resentment against Australia and New Zealand for their punitive attitude towards our reform programme that produced the first genuine democracy in Fijian history. This is not me ‘mouthing off’, as the New Zealand Prime Minister so condescendingly put it.
“But as things stand, we do not see Fiji’s interests reflected in the stance being taken by Australia and New Zealand. And especially on the biggest threat to our security we have ever faced collectively as Pacific Islanders – the rising sea levels caused by climate change.
“In common with the European Union and a host of other countries, Fiji wants the global community to commit to binding cuts in carbon emissions to reduce the current rate of global warming.
“The scientists say these cuts are vital to prevent the sea level rises that in the near future threaten the very existence of Kiribati, Tuvalu and the Marshall Islands. Plus vast tracts of land in other coastal island nations.
“Yet rather than join us at the forefront of the international campaign to cut carbon emissions, Australia in particular is dragging its feet.
“So much so that even major carbon emitters are complaining about Australia’s refusal to meet its international obligations.
“Rather than side with us, Australia in particular is siding with what I call the coalition of the selfish.
“Those industrialised nations which are putting the welfare of their carbon polluting industries and their workers before our welfare and survival as Pacific Islanders.
“We now find ourselves in common cause not with our closest neighbours and traditional friends – those who sit with us in the PIF – but with others such as the member countries of the European Union who also heavily invest in the long-term welfare of our people but stand with us on the issue of climate change.”
He said the Europeans had proved to be “our true allies” in this most basic of struggles. He said Australia and New Zealand had been put to the test on climate change and been found wanting. So it should be no surprise that Fiji had formed the view that at the very least, their position as full members of our island nation Forum needed to be questioned, re-examined and redefined, he said.
“They simply do not represent our interests as we face this critical matter of survival,” he said.

“I want to make it clear once again that we are not putting forward the PIDF as a competitor for any existing organisation.
“What we are doing is providing a space for everyone to have their opinions heard, which has not been the case with the Pacific Islands Forum. Though I’m pleased to note that the PIF appears to be following our example.
“I am not here to force Fiji’s view on anyone. It is for the region as a whole to decide its future and the adequacy of the existing regional framework.
“But as Fiji sees it, we needed to create a piece of regional furniture that we are all comfortable sitting in and we have. An organisation for Pacific Islanders by Pacific Islanders. Free from undue outside influence and existing only to pursue the interests of Pacific Islanders, whoever they are or wherever they live.
He said PIDF was not in the business of “creating fat cat bureaucracies that waste our precious tax dollars”.
“That is not the Pacific way. Our mantra must always be to do more for less, to create an organisation that is lean and efficient and that because of its integrity, enjoys the confidence and support of our development partners.”
“I know I don’t have to lecture you on this point. Because so many of you have always operated with scarce resources and know that this is no impediment to being effective. My own mantra in Fiji is that Government exists to deliver and to serve. And I urge you all to embrace the same values in the PIDF.
“And I want to stress that none of this affects our bilateral relations with the Australians and New Zealanders, who we continue to regard as friends despite our grave disappointment at their stance on climate change.”

Comment. My own view is that ANZ should remain part of the PIF but only in the role of advisors and observers.  Their opinions should be sought but they should not be able to vote on any major issue. --Croz