JAPAN: Anti-Nuke Policy to Bring Severe Economic Fallout

June 21, 2011 by

Global Geopolitics & Political Economy / IPS

By Suvendrini Kakuchi

TOKYO, Jun 21, 2011 (IPS) – Three months after the devastating Mar. 11 earthquake that caused an accident at the Fukushima power plant, energy experts warn of economic fallout if nuclear energy is snuffed out too quickly, much to the dismay of an increasingly angry and frustrated public.

"The horror of the Fukushima nuclear accident cannot be denied. But the future of nuclear energy must be weighed wisely if Japan is to remain an economic power," said Professor Takao Kashiwagi, an engineer at the prestigious Tokyo Institute of Technology. Japan has pushed the expansion of nuclear power as crucial for its economy but is currently faced with the difficult test of building a new energy policy that can appease growing anti-nuclear public sentiment without adverse effects to industry.

Kashiwagi, who is also a member of the government’s New Energy Committee, clarified his point by referring to Japan’s overwhelming dependence on nuclear energy. Almost 30 percent of the country’s power needs are covered by nuclear energy, he said.

"Rather than turn our back on the reality of our dependence on nuclear energy," Kashiwagi argued, "it is time to develop technology that will fortify the safety aspects of nuclear plants. The best option for Japan is to work internationally towards this goal."

The International Atomic Energy Agency (IAEA) supported that option in a long awaited report released Jun. 1 that rapped the current emergency measures in Fukushima, while calling for universal safety regulations in nuclear plants.

Anti-nuclear activist Professor Reiichi Suzuki who launched a new committee with representatives of business and academia in Fukushima said, however, that there is widening support to stop nuclear power plants in the area.

"Our focus is to keep on the burner the terrifying truth that nuclear power does not have merits. It is not only unsafe, but also a financial burden on people for subsidies that have to be paid back and also allows rich companies to control our natural resources," he pointed out.

Still, the Fukushima calamity raised the spectre of power cuts from the closure of reactors, that has alarmed the manufacturing industry. Expected business losses and huge financial compensation payments have dealt a blow to the Japanese economy, whose growth in 2011 is expected to fall to less than one percent.

Economists say power shortages will force more Japanese companies to relocate to foreign countries, ushering in higher unemployment and further squeezing public funds.

International relations analyst Takeshi Inoguchi said economic alarm bells have turned the limelight onto the difficult issue of guaranteeing the safety of nuclear power. The government has promised increasing alternative energy to 20 percent of national needs as well as a transparent nuclear power policy, as shown by its acceptance of IAEA inspections this month.

"The horror of nuclear contamination in Fukushima has pressured Tokyo to humbly accept its past mistakes and promise a better era of safety. People expect these changes," he said.

Indeed, despite national polls in May that indicate an overwhelming high of 70 percent against nuclear power, there are signs that the initial defiance, while not receding, is being tempered slightly.

A significant case in point is the re-election on Jun. 8 of Shingo Mimura as the governor of Aomori prefecture that is home to one active nuclear power plant and four more under construction.

Mimura, who was backed by the conservative Liberal Democratic Party that spearheaded Japan’s nuclear power expansion, defeated opponents who wanted to freeze construction of the nuclear plants.

He promised higher safety standards while visiting the local nuclear reactors himself. The strategy seems to have paid off.

Older Aomori residents quoted in the Japanese media spoke of the huge pressure they felt when they voted. "I am scared and I don’t like it. But everyone’s livelihood depends on the nuclear plant," Junji Takeyama, an 80-year-old man, told Asahi Newspaper last week. His son and grandson work for electric power companies.

Nearly half the population in most municipalities in Aomori, which host nuclear reactors, is dependent on the Tohoku Electric Power Company. People are either workers, labourers in construction sites of nuclear related facilities, or shopkeepers providing services.

Subsidies over the past three decades for municipalities with reactors and fuel reprocessing plants are reported to be around 2.8 billion dollars that pay for new roads, schools and other state-of-the-art infrastructure.

Proponents of nuclear energy point out that this system allowed the government to supply stable energy resources and support economic growth in post-war Japan based on high tech manufacturing and sophisticated transportation networks.

The Fukushima tragedy struck when Japan was planning to add to its 54 nuclear reactors to increase nuclear energy to 50 percent of national power consumption.

Suzuki and Kashiwagi agree Fukushima has certainly forced Japan to abandon its former nuclear ambitions.

"How we proceed with nuclear power represents a commitment to ending the old system completely or accepting piecemeal changes. The fight is just beginning," Suzuki said.

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SRI LANKA: Peace Dividend Skips Remote Villages

May 29, 2011 by

Global Geopolitics & Political Economy / IPS

By Amantha Perera

UNNICHCHAI, Sri Lanka, May 28, 2011 (IPS) – The road to Unnichchai in eastern Sri Lanka makes for a nerve-wracking journey trying to avoid large crater-like potholes, squeezing across narrow bridges, and passing by a patchwork landscape of paddy fields – both abandoned and cultivated – with not a building in sight.

The road looks like a remnant from the time when getting here involved a bit more than a rough ride. This remote village in Batticaloa District was once a hive of activity for the separatist Liberation Tigers of Tamil Eelam (LTTE) who fought a bloody war for two and half decades, demanding a separate state for Sri Lanka’s Tamil minority.

At the height of the war, development projects stayed away due to security fears. There was some effort to get a few projects going between 2002 and 2004, when the Sri Lankan government was negotiating with the Tamil Tigers, but nothing much came out of that.

The Tigers lost the war in May 2009, but lost their hold on eastern villages like Unnichchai two years before that, in mid-2007. Since then, development in general has been fast-tracked on the island, though it seems to have bypassed Unnichchai.

The road that connects Batticaloa, the main town in the district, with central Sri Lanka is newly paved; there are new water projects, power projects and employment opportunities as the country breaks out of the shackles of war.

"We expect that the range of investments made in these provinces (the former war zone in the north and east) will result in a growth rate of around 13 percent per annum in these provinces, from 2011 onwards for the next five years," Central Bank Governor Ajith Nivard Cabraal said during a recent lecture promoting fiscal inclusiveness of the region.

On paper, Unnichchai’s dark days should be long over. But in reality, the shackles of war are still very much here, rusted into the skin of the village, making it hard for it to break out.

Kajayanthi Nishanthi, a 23-year-old mother of one, calls Unnichchai her home. She says she could do very well if growth rates reach half the level projected by government officials. "Life is hard, life is still very hard," she told IPS.

Her family survives on whatever her husband makes by fishing in the Unnichchai tank, an artificial lake.

She fled the fighting in March 2007 and returned later that same year. Her house was in terrible need of repair and has remained in that state for almost four years now. "Where is the money? The fish can only be sold in the village, there are no new jobs, no transport to take the fish to town," she laments, "so how can we think of improvement?"

To make matters worse, assistance provided to the East by international humanitarian agencies has dropped in the last two years. The U.N. Office for the Coordination of Humanitarian Affairs (OCHA), the U.N. Refugee Agency (UNHCR), the International Committee of the Red Cross (ICRC) and the World Food Programme (WFP) are among the large agencies that have pulled out of the East since 2009.

Nishanthi, who left school before sitting for her grade 10 exam, says that if permanent jobs or assistance for self-employment were available, the pull-out of humanitarian groups would not have been felt so hard. "At least when they were here, we got some assistance; now we have nothing."

She told IPS that villages like hers that bore a terrible cost during the war need special attention. "Over 20 years of development was held back, we cannot catch up without help."

There is help. The government is spending millions in the former conflict zone to pull it out of the two and half decade old rut, as are donors. Central Bank Governor Cabraal said that in the last two years, over 2.1 billion rupees (about 19 million dollars) had been disbursed as loans in the eastern province alone. The province recorded an impressive growth rate of above 14 percent last year.

But such development still seems to be stuck in the main towns like Batticaloa that straddle the busy highways or is directed at important economic hubs like fishing harbours. Interior villages like Unnichchai are being left out.

In Unnichchai, there is none of the nervous anticipation for the fruits of peace, felt for two years now in places like the capital Colombo, 330 km away. This remote village is still praying for simple facilities, like a bus that arrives on a regular schedule and does not break down halfway through a 27-km journey in the middle of an abandoned paddy field.

Even when development does arrive, most of the villagers are too poor to benefit. A new water pumping station at the tank brought electricity to the doorstep of the village. But only a few can afford it.

Sinnathambi Mailvanagam, a 61-year-old grandfather who lives in the nearby village of Mullamallai, feels that their villages are left behind in the rapid development drive because there is hardly any industry or economic activity here. "There is some farmland, but what else?" says Mailvanagam, who lives in a small compound with 12 other members of his extended family.

"The best resource we have is the water (from the tank), but that too is now pumped out (to supply Batticaloa)," Mailvanagam told IPS.

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JAPAN: Difficult Shift From Aid Donor to Recipient

April 13, 2011 by

Global Geopolitics & Political Economy / IPS

By Suvendrini Kakuchi

TOKYO, Apr 13, 2011 (IPS) – April has traditionally being the time for ‘hanami’ or cherry blossom festivals here when millions of Japanese hold parties under the pink flowering trees in parks and streets lit up gaily by lanterns.

But, one month after the earthquake and tsunami of Mar. 11 which left almost 30,000 people dead or missing, a widespread donation drive has supplanted the festive hanami spirit in Tokyo and other major cities.

"The terrible Tohoku disaster has galvanised the nation to launch a nation- wide charity movement," Kyoichi Kobayashi, a social critic and author here, told IPS. "The drive is an entirely new experience for the people who have gotten used to an affluent lifestyle that marks Japan’s post-war economic might."

Indeed, from Hokkaido, Japan’s north island, to Okinawa, the southern tip in the archipelago, hundreds of local volunteer groups, companies and organisations have launched frantic aid projects or are working as volunteers to help the stricken populations in the disaster zones.

For example, the international movie festival held annually in Okinawa by Yoshimoto Kogyou, a leading entertainment company, turned from its original purpose of boosting the Okinawan economy into a charity for Tohoku instead.

Governor Shintaro Ishihara, the governor of Tokyo, the nation’s capital and lynchpin of the local economy, has asked people to voluntarily refrain from hanami parties to show their solidarity with the pain of Tohoku. "This is not an era in which people at this time of year may drink viewing cherry blossoms, even during day time."

Such unusual steps, according to Kobayashi, are a clear example of how Japan, after decades of being a country that gives charity given its rich economy, is now trying to cope with being a country that needs help.

The massive destruction including the ongoing nuclear radiation emergency, explained Kobayashi, has exposed and turned into a bitter lesson, the lack of preparation in the country despite its vulnerability to earthquakes.

"The chaos we witness in Tohoku – thousands of people still stuck in evacuation centres and the lack of food and water – is sobering," Kobayashi said. Japan has gone "in a few seconds" from a country that was – till recently – the world’s top aid donor, "to becoming a recipient itself."

Indeed, the emerging new mood in Japan is a scenario best described by the country’s leader himself. Prime Minister Naoto Kan, published a message in newspapers worldwide Monday. He wrote of ‘Kizuna’, or bonds of friendship, shown by more than 130 countries and regions after the disaster and pledged that Japan will "recover from their own efforts and with the help of the global community." Japan will "come back even stronger… to repay you," Kan said.

International relations expert, Takeshi Inoguchi explains that outpourings of financial donations from countries like Rwanda and Sri Lanka – who are struggling to overcome domestic hurdles of their own – have been welcomed in Japan. "The Japanese view such generosity as important signs of encouragement during their bereavement and are very grateful," Inoguchi said.

Bilateral donations covering 117 countries were offered through the Japanese Red Cross and totalled more than 33 million dollars (Yen 2.8 billion) according to figures released here.

Inoguchi also pointed out that, apart from warm international expressions of support and armies of volunteers entering Tohoku, there are other encouraging developments arising form the dire situation.

A case in point is China’s support and help. Prior to the quake, Sino-Japanese relations were tense due to territorial issues, but leaders in Beijing have been at the forefront of the aid effort in Japan.

The Asahi Newspaper noted Tuesday that China reacted "calmly" to the discharge of radioactive material from the damaged Fukushima nuclear power plant into the sea so close to its borders.

China’s reaction comes in sharp contrast to the vociferous name calling that went on in September 2010 after a Chinese skipper was arrested, and later released, by Japan after he rammed into a Japanese navy patrol vessel close to the Senkaku Islands, which are claimed by both countries.

Help is also coming from Russia with which bilateral relations have been tense since November when Russian leader, Dimitry Medvedev, visited the Northern Territories, which are occupied by Russia but claimed by Japan.

Russia has sent 161 workers and also announced an energy support measure at a time when Japan is facing black outs.

Meanwhile, Mokoto Torri, a Tokyo resident who decided to abandon hanami celebrations this year, told IPS "the disaster is terrible". But, pointing dejectedly at the long line of trees, in full pink bloom, lining the streets, he said, "I wonder whether I am doing the right thing after all."

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Developing Nations Alone Cannot Drive Global Recovery

December 3, 2010 by

Global Geopolitics & Political Economy / IDN

By Richard Johnson

IDN-InDepth NewsAnalysis 

GENEVA (IDN) – Developing countries continue to drive the global recovery but are not in a position to make up for slowdown in the advanced countries. Consequently, 2011 does not hold out much hope for the world economy, says a new report by the United Nations.

The UN report, titled ‘World Economic Situation and Prospects 2011′ (WESP), finds that because of the slowdown in the advanced countries and the phasing out of stimulus measures, output growth in the developing countries is expected to shrink to 6 per cent during 2011-2012, down from 7 per cent in 2010,

Painting a gloomy picture of the performance of the global economy next year, WESP projects worldwide growth to be a meagre 3.1 per cent, followed by 3.5 per cent in 2012. These rates are insufficient to spur the recovery of the jobs that were lost during the financial crisis.

"We are not out of the woods yet and still major risks are looming," says Rob Vos, the Director of the Development Policy and Analysis Division of the UN Department of Economic and Social Affairs (DESA), who led the team of UN economists that prepared the report.

"The road to recovery — we expect to be long and bumpy still. The speed of the recovery as we have seen starting in the middle of 2009 has started to decelerate in the middle of this year particularly owing to weaknesses in the major developed economies, but we also expect that to drag down the growth in developing countries," Vos told a news conference at UN Headquarters in New York on December 1.

The lack of employment continues to put a damper on economic recovery, according to the report prepared by the (DESA), the UN Conference on Trade and Development (UNCTAD) and the five UN economic commissions.

The report says that serious risks to the global economy include waning cooperative spirit among major economies, which has weakened the effectiveness of responses to the crisis. It notes that uncoordinated monetary responses have become a source of turbulence and uncertainty in financial markets.

The United States has been on a recovery trajectory, yet the pace of that rebound has been the weakest in the country’s post-recession experience, says to the report. At 2.6 per cent in 2010, growth in the U.S. is expected to decline to 2.2 per cent in 2011 before improving slightly to 2.8 per cent in 2012.

That sluggish pace of growth is unlikely to make much of a dent in unemployment rates, and recovering the jobs lost in the U.S. during the crisis would take at least another four years.

Prospects for Europe and Japan are even dimmer, the report notes. Assuming continued, albeit moderate, recovery in Germany, the gross domestic product (GDP) growth in the Euro area is forecast to virtually stagnate at 1.3 per cent in 2011 and 1.9 per cent in 2012.

According to the report, Japan’s initially strong rebound, fuelled by net export growth, started to falter in the course of 2010 as a result of persistent deflation and elevated public debt. The Asian country’s economy is expected to grow by a meagre 1.1 per cent in 2011 and 1.4 per cent in 2012.

Among the economies in transition, GDP (gross domestic product) of the Commonwealth of Independent States (CIS) — comprising the former Soviet Union — and Georgia rebounded by about 4 per cent on average in 2010, up from the deep contraction of more than 7 per cent in 2009. In 2011 and 2012, the pace of recovery in South-Eastern Europe is expected to be rather subdued.

CHINA AND INDIA LEADING

Though developing countries in Asia, led by China and India, continue to show the strongest growth performance, it is expected to moderate to around 7 per cent in 2011 and 2012, according to the report.

Growth in Latin America is projected to remain relatively strong at around 4 per cent, though less robust than the GDP (gross domestic product) growth of 5.6 per cent estimated for 2010. Brazil, the engine of regional growth, continues with strong domestic demand to boost export growth of neighbouring countries. The sub-region also benefits from strengthened economic ties with the emerging economies in Asia, says the report.

In the Middle East and other countries in Western Asia, recovery is also expected to decline from 5.5 per cent in 2010 to 4.7 per cent in 2011 and 4.4 per cent in 2012. The average annual output growth will be lower than the pre-crisis rate.

"Recovery has been solid in most of Africa, where the rebound is expected to continue at about 5 per cent per year in 2011 and 2012, but this is well below potential, and conditions vary across the region," the report points out.

"The economies in East Africa are showing strong growth, but several of the poorest countries, especially those in the Sahel region, have suffered from droughts and conditions of insecurity, which is causing hunger and hampering the recovery of their economies," it adds.

The report offers some suggestions that might lead to sustainable recovery. These include providing additional fiscal stimulus and redesigning the stimulus and other economic policies to lend a stronger orientation towards measures that directly support job growth, reduce income inequality and strengthen sustainable production capacity on the supply side.

Other options include finding greater synergy between fiscal and monetary stimulus, while counteracting damaging international spill-over effects in the form of increased currency tensions and volatile short-term capital flows; ensure that sufficient and stable development finance is made available for developing countries; and finding ways for credible and effective policy coordination among major economies.

The findings of the new report do not come as a surprise: "The recovery from the current economic downturn is fragile," speakers at a UN event in Geneva said on September 16, warning that a second downturn may occur if countries do not coordinate their responses, if economic stimulus plans are phased out too quickly and if unemployment is not reduced."

Efforts to rejuvenate the banking and financial sector to stimulate the broader economy have not had the desired result, Supachai Panitchpakdi, UNCTAD Secretary-General said. Banks are turning healthy profits, he said, but mostly through trading. The institutions are not lending to businesses that might use funds to expand production or hire more workers.

Supachai was addressing this year’s high-level segment, focusing on the theme ‘Towards sustainable recovery’ of UNCTAD’s Trade and Development Board, which guides UNCTAD’s activities from year to year.

Many of the jobs being created in developing countries are in the informal sector and provide neither the long-term security nor higher wages than can stimulate domestic demand and economic growth, he added.

Supachai cautioned that no major import market has emerged to replace the United States, and that a lack of coordination — including at the Group of 20 (G20) level — threatens economic recovery. (IDN-InDepthNews/02.12.2010)

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Filed Under: Development, Economic Crisis, Economy, Featured Tagged With:

Global Recovery Suffering from Currency Chaos

October 30, 2010 by

Global Geopolitics & Political Economy / IDN

IDN-InDepth NewsViewpoint 
 
GENEVA (IDN) – The past few weeks have seen the emergence of global currency chaos, which is a new threat to prospects for economic recovery.

In fact the situation is being depicted by the media and even by some political leaders as a ‘currency war’ between countries.

The general idea being conveyed by this term is that some major countries are taking measures to lower the value of their currency in order to gain a trade advantage. If the value of a country’s currency is lower, then the prices of its exports are cheaper when purchased by other countries, and the demand for the exports therefore goes up.

On the other hand, the prices of imports will become higher in the country, thus discouraging local people from buying the imports.

The result is that the country will get higher exports and lower imports, thus boosting local production and improving the balance of trade.

The problem is that other countries which suffer from this action may "retaliate" by also lowering the value of their currencies, or by blocking the cheaper imports through higher tariffs or outright bans.

Thus, a situation of "competitive devaluation" may arise, as it did in the 1930s, which can contribute to a contraction of world trade and a recession.

The present situation is quite complex and involves at least three inter-related issues.

First, the United States is accusing China of keeping the yuan at an artificially low level, which it claims is causing its huge trade deficit with China. A U.S. Congress bill is asking for extra tariffs to be placed on Chinese products.

China claims such a measure would be against the WTO’s rules, and that a sudden sharp appreciation of the yuan would be disastrous for its export industries, nor would it solve the problem of the U.S. trade deficit.

Japan, whose yen has appreciated sharply against the dollar, intervened on the currency market on September 15, 2010 by selling 2 trillion yen in order to drive its value down.

Japan has criticized South Korea for taking the same intervention measure to curb the appreciation of the won.

Second, there are clear signs that the United States is preparing to lower the value of its dollar, through a new round of "quantitative easing", in which the Federal Reserve will spend probably hundreds of billions of dollars to buy up government bonds and other debts.

This will increase liquidity in the market, which would reduce long-term interest rates (and thus contribute to a recovery).

But this would also have two other effects. It would weaken the U.S. dollar further (thus opening the U.S. to the accusation it is also engaging in competitive depreciation).

And the new liquidity would also add to a surge in capital flowing out from the U.S. (where returns to investment are very low) to developing countries.

In the past, such surges of ‘hot money’ would have been welcomed by the recipient countries. But many developing countries have now learnt, the hard way, that sudden and large capital inflows can lead to serious problems, such as:

- The capital inflow will lead to excess money in the country receiving it, thus increasing the pressure on consumer prices, while fuelling "asset bubbles" or sharp rises in the prices of houses, other property and the stock market. These bubbles will sooner or later burst, causing a lot of damage.

- The large inflow of foreign funds will build up pressures for the recipient country’s currency to rise (against other currencies) significantly. Either the financial authorities would have to intervene in the market by buying up the excess foreign funds (which is known as ‘sterilisation’) and thus build up foreign reserves, or allow the currency to appreciate and this would have an adverse effect on the country’s exports.

Experience (including of the Asian crisis of 1997-99) shows that sudden capital inflows can also turn into equally sudden capital outflows when global conditions change. This can cause economic disorder, including sharp currency depreciation, loan servicing problems and balance of payments difficulties.

At the International Monetary Fund annual meeting in Washington (October 8-10), there was a conflict of views between the United States (which accused China of deliberately suppressing the value of its yuan and not allowing it to appreciate more) and China (which accused the U.S. of planning quantitative easing and increasing liquidity to deliberately devalue its currency).

Meanwhile, even serious Western analysts and newspapers have recognised the threat posed to developing countries by large inflows of capital coming from the developed countries in search of higher yield.

In an editorial on October 15, 2010 entitled ‘The Next Bubble’, the International Herald Tribune warns that Wall Street is snapping up the assets of emerging economies. Describing the problems caused by huge inflows of capital, it asked the developing counties to "pay close attention" and to "consider capital controls to slow inflows."

This is the third recent development: some developing countries have introduced capital controls to slow down the huge inflows of foreign capital. The Institute of International Finance estimates that a massive US$825 billion will flow to developing countries this year, an increase of 42% over last year.

Brazil has doubled the tax on foreigners buying local bonds, while Thailand recently imposed a 15% withholding tax on interest and capital gains earned by foreign investors on Thai bonds and South Korea has warned of new limits on forwards, while banks are asked not to lend in foreign currency.

Finally, there are fears that if the currency chaos or currency war is not solved soon, the world faces a threat of trade protectionism, whether it takes the old form of an extra tariff, or a new form of competitive currency depreciation.

Moreover the quantitative easing that the U.S. is now planning may exacerbate the speculative flows of funds in search of profits, and this can be destabilising to the recipient countries and the global economy overall.

*Martin Khor is the Executive Director of the South Centre based in Geneva. He can be contacted at: director@southcentre.org The South Centre paper can also be accessed at the South Centre website www.southcentre.org (IDN-InDepthNews/31.10.2010)

2010 IDN-InDepthNews | Analysis That Matters

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PAKISTAN: After the Bitterness of the Floods Comes ‘Sweet Water’

October 21, 2010 by

Global Geopolitics & Political Economy / IPS

By Zofeen Ebrahim

KETI BUNDER, Pakistan, Oct 21, 2010 (IPS) – Pakistan’s recent catastrophic floods has had many alternately worried and depressed, but the indigenous community that calls the mudflats between the creeks of the Indus delta home has been having a decidedly far different reaction.

Flashing a smile that reveals a mouth stained red from years of chewing ‘ghutka’ (a concoction of tobacco, betel nut and flavourings), 70-something Ayub Dablo says: "With so much sweet water, our land will become green again."

Dablo lives with his extended family in Trippin, a small village on the mudflats of Hajamro Creek in the Indus delta, just where the 3,200-km long Indus River meets the Arabian Sea. Around the village here in Sindh province, which has about 50 people, a large swathe of fertile soil stands barren.

After an unprecedented spate of torrential rains in late July, floods inundated a fifth of Pakistan, affecting 18 million people. But as the government continues to scramble to help the hundreds of thousands of people who remain homeless because of the floods, the mood here is all sunshine.

Trippin villager Ismail Janyaro’s leathery face breaks into a hundred lines as he beams at visitors. "God has finally heard us," he says, waving an arm at the parched land around him. "We’ve been waiting for this spurt of fresh water for over a decade now."

His words are echoed by Tahir Qureshi, senior advisor of the Coastal Ecosystem, Coastal and Marine Programme run by the International Union for Conservation of Nature (IUCN). "No doubt the floods have brought much misery along the Indus," says Qureshi, "but as an environmentalist, I find it a blessing in disguise." Now, he says, the riverine agriculture and the fisheries will thrive.

Bakhshal Lashari, director of the Institute of Irrigation and Drainage Engineering at Mehran University of Engineering, in Jamshoro, Sindh, also says that these floods will benefit the delta for at least two or three years. "The recharge of groundwater near the coastal area will not allow the sea to move upward," he says.

Fisher Mohammad Hassan Khaskehli swears that if the river waters the delta uninterrupted, Pakistan would never have to import grain.

The Indus delta, home to the sixth largest mangrove forest in the world, spans some 600,000 hectares along the coast of Sindh province. It has 17 major creeks and innumerable minor ones, as well as mudflats. It has been declared a Ramsar Site – a wetland habitat with species of international importance – and has a wildlife sanctuary.

According to the Ministry of Environment, mangroves here used to cover a total of 26,000 square kilometres. But natural causes and human exploitation reduced freshwater supply to the area, in turn resulting in the depletion of the mangrove areas to just 2,600 sq km.

Seeing the swollen Indus, Janyaro, 74, is reminded of the old days and recalls, "The delta was once very fertile and lush. There were acres of banana plantations, red rice paddies, olive trees, coconut trees."

That was also a time when migratory birds like the red cranes, swans, and geese came to the delta in droves, says veteran journalist Iqbal Khwaja, who has roots in Sindh. He says that the degradation of mangrove forests, loss of fresh water supply, and the change in climatic pattern not only disturbed the nesting and breeding patterns of birds, but also resulted in the birds changing their routes completely.

Optimism, however, has come to the delta since the recent floods. Says Mohammad Ali Shah, head of the non-government organisation Pakistan Fisherfolk Forum: "The delta’s sagging ecology has been revived. Since the early 1990s, the water coming from the Indus to this part of the country was a mere trickle or sometimes not even that. The recent deluge has recharged the aquifers and replenished the fish stock."

Still, he cautions that while this one-time injection of fresh water will keep the delta in good health for some time, what is needed really is "a constant supply of fresh water".

Engineer Lashari also says that to control seawater ingress, a minimum supply of river water is a must.

Over the years, manmade irrigation networks (of which the Indus Basin has one of the largest in the world) and hydropower dams had drained the Indus, allowing little water to reach the sea. This resulted in the sea intruding inwards. According to Qureshi, the sea has come "54 kilometres upstream along the main course of the Indus into Sindh."

Delta people like Dablo themselves know that a continuous flow of sweet water into the Arabian Sea is needed to breathe life back into the delta. Or as Dablo puts it, "When the sweet and salty water mix, it gives sustenance to the delta."

There are many benefits of fresh river water flowing into the sea, explains IUCN’s Qureshi. For example, he says, "it maintains the salinity level in the sea, and gives a boost to the marine food web".

"Flood water also brings with it huge quantities of sediment rich in nutrients," adds Lashari. "This silt not only pushes the seawater back, but also increases the fertility of the soil so important for sea organisms."

Khwaja observes, though, that with the recent floods, the topography and geography of the creeks have also changed markedly. He comments, "This may mean some (human) settlements may have to be relocated."

All rights reserved, IPS – Inter Press Service, 2010.

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Haiti’s 1.3 Million Camp Dwellers Waiting in Vain

October 16, 2010 by

Global Geopolitics & Political Economy / IPS

By Correspondents*

GRAND GOÂVE, Oct 15, 2010 (IPS/Haiti Grassroots Watch) – Rosie Benjamin is just one of over 1.3 million people living in Haiti’s 1,354 squalid refugee camps. She and 1,200 others are jammed into 300 tents and plastic tarp-shacks on a soccer field in Grand Goâve.

Like about 70 percent of Haiti’s refugee camps, the residents here are on their own. Apart from water deliveries, they get nothing from the government and the massive humanitarian apparatus on the ground. No food. No jobs. And no news about their future.

"We went to City Hall, we didn’t learn anything. We went to Terre des Hommes, nothing," Banjamin said. "So far we haven’t gotten anything. Nothing. We are sitting here and we have no idea what anyone is thinking."

Benjamin and her neighbours live on money from relatives overseas, share what food they have, and every now and then a non-governmental organisation (NGO) drops off some bulgar wheat and vegetable oil, but that’s about it. Some of the children – many of whom will likely not go to school this year – even have orange-tinted hair.

Asked about that obvious sign of malnutrition and other conditions, Deborah Hyde, a member of the U.N. "Shelter Cluster" – a U.N.-mandated management team tasked with trying to coordinate the NGOs working on the shelter issue – said that in March, most food distributions stopped because, she said, the Haitian government requested that the NGOs cease the handouts.

Besides, she added, "[M]alnutrition is unfortunately something that has been here since the 1980s."

Hyde said that she felt some camp residents actually had a place to live, or could find one. Instead, they stay because, she said, "to be perfectly frank, are afraid they will miss a [food or aid] distribution."

But Benjamin and her neighbours say nothing could be further from the truth. Some camp residents are homeowners but they do not have the means to destroy their hulk of a home, truck away the rubble, and rebuild. Others are renters. Benjamin, like almost two-thirds of Haiti’s homeless, rented her home. That means that she can’t move her family back home until her landlord makes repairs.

Benjamin said nobody is in her camp by choice. And no wonder – recent reports document increasing expulsions, gang activity and sexual exploitation, unsanitary conditions and putrid, inadequate latrines.

And so, despite the massive flow of donations – from citizens and governments – to humanitarian agencies, nine months after the catastrophic earthquake which killed some 300,000 people and devastated the capital and other major cities, most of Haiti’s "internally displaced people" are exactly where they were on Jan. 13: crammed into cardboard, canvas and plastic shantytowns, exposed to hot sun and to the frequent downpours and storms of Haiti’s infamous "rainy season".

Last month, a storm touched down in the capital Port-au- Prince, killing six people and destroying 8,000 tents.

The apparent stagnation of resettlement efforts has led camp residents like Benjamin to assume there is no plan for the internal refugees.

But there is.

A three-week investigation by a new "reconstruction watch" effort, Ayiti Kale Je/Haiti Grassroots Watch, unearthed one. Unfortunately for Benjamin and her neighbours, however, it is a plan that is unlikely to succeed.

Crafted by U.N. agencies and the NGOs, the plan has three options:

• Return homeless to their neighbourhoods of origin, but into better-built and better-zoned houses;

• Convince some to move to the countryside;

• Put the rest in new housing developments on new land.

On paper – Haiti Grassroots Watch obtained the Oct. 5 draft of the "Strategy of Return and Resettlement", translated from French – the plan seems sound. Put families into safe "transitional shelters" or T-Shelters – wooden or plastic houses – while more permanent, earthquake-safe structures go up in properly planned rebuilt or new neighbourhoods.

But there are many challenges, including the fact that so far, the government hasn’t officially bought into it.

Shelter Cluster Coordinator Gehard Tauscher said the lack of coordination and participation at the national level is a real roadblock, noting he wished "all layers of the government would come together and speak with one voice."

"I wish they would lock up all of the people in a nice place for a weekend – the U.N., the agency people and the national government – and not let them out until they make decisions," he said.

There are so many other obstacles, almost every step of the plan appears difficult, if not nearly impossible, to implement.

Take the T-Shelters, for example. First of all, there are over 300,000 families who need safe shelters. The agencies and NGOs are planning to build only 135,000. What about the other 165,000 families? And where will the shelters be put?

That’s not an insurmountable challenge. NGOs can try to negotiate leases for families like Benjamin’s. But but who will pay the lease?

That leads to another – Haiti’s "land problem".

Haiti’s land tenure system is "a bordello… a complete disorder that has been going on for 200 years," according to Bernard Etheart, director of the National Institute of Agrarian Reform.

Ever since Haiti’s independence, dictators have stolen, sold or given land to their families and allies. Many "owners" do not have titles to prove their ownership, while some parcels have two or three "owners", all with "legal" papers.

Added to the land issue is another roadblock – quite literally. There are an estimated 20 to 30 million cubic tonnes of rubble around the capital and Haiti’s smaller affected cities that experts say will take years to clear.

In its three-article series, Haiti Grassroots Watch ran through the plan and pointed out the challenges, concluding that the problem of Haiti’s 1.3 million homeless can’t be dealt with until the underlying structural issues are tackled.

Dr. Paul Farmer, the U.N. Deputy Special Envoy for Haiti and also co-founder of Partners in Health, put it this way: "[W]hat happened on Jan. 12 is aptly described as an ‘acute- on-chronic’ event."

Sanon Renel of FRAKKA, the Front for Reflection and Action on the Housing Issue, a coalition of camp committees and human rights groups that advocates for the right to housing, echoed Farmer.

"The NGOs don’t have a solution to the country’s problems. We need more than a short-term solution. We need another kind of state – a state that serves the majority," he said.

In the meantime, camp dwellers are getting impatient. Benjamin’s neighbour, 21-year-old Marie Lucie Martel, said she was tired of seeing the NGOs "making tonnes of money, driving expensive rental cars".

"I have a message for the government and all the NGOs. If they don’t take care of us, we will revolt. They won’t be able to drive down this highway. They will call us violent – they will call us all kinds of names. But we are being forced to do this, because ‘hungry dogs don’t play around’," she warned.

*Read the complete series, see accompanying videos and listen to audio podcasts at Haiti Grassroots Watch – http://www.haitigrassrootswatch.org. Ayiti Kale Je (Haiti Eyes Peeled, in Creole), Haiti Grassroots Watch in English and Haïti Veedor (Haiti Watcher in Spanish), is a collaboration of two well-known Haitian grassroots media organisations, Groupe Medialternatif/Alterpresse (http://www.alterpresse.org/) and the Society for the Animation of Social Communication (SAKS – http://www.saks- haiti.org/), along with two networks – the network of women community radio broadcasters (REFRAKA) and the Association of Haitian Community Media (AMEKA), which is comprised of community radio stations located throughout the country.

All rights reserved, IPS – Inter Press Service, 2010.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Human Rights, Latin America, Politics, Poverty, Report Tagged With: , , ,

Funding Lags to Aid Pakistan’s Millions of Displaced

August 17, 2010 by

Global Geopolitics & Political Economy / IPS

By Megan Iacobini de Fazio

UNITED NATIONS, Aug 16, 2010 (IPS) – U.N. Secretary-General Ban Ki-moon returned from Pakistan Monday calling the floods there the worst disaster he has ever witnessed and urging the world community to speed up assistance to the Pakistani people.

Ban, who made a helicopter flight over four districts in Punjab, one of the most populated and badly affected areas, described the scenes as "heart wrenching", and said he would never forget the destruction and suffering in the flood-hit areas.

He announced a further 10 million dollars from the U.N.’s central emergency response fund, making a total of 27 million dollars dispersed so far.

Last week, the U.N. launched an appeal to donor nations for 459.7 million dollars, but by Friday had only raised 20 percent of that. However, there are now reports that the donations have reached 35 percent of the required sum.

Nick Reader, a spokesperson for the United Nations Office for the Coordination of Humanitarian Affairs (OCHA), put the sudden increase down to Ban’s day-long visit to Pakistan this past weekend, which "helped raise awareness".

"As more images continue to emerge, people are understanding how serious the crisis is," Reader told IPS, adding that OCHA’s "assessment of needs is getting more sophisticated".

Nick Clegg, the UK’s deputy prime minister, has called the international response to the floods "absolutely pitiful".

He noted that the scale of the disaster is such that the public is struggling to understand just how great the need for aid is, and that that may be why donations are low compared to the 2005 Pakistan earthquake, the January Haiti earthquake or the 2004 Indian Ocean Tsunami.

Other reasons may include the slow pace of floods, compared to more sudden and "dramatic" earthquakes and tsunamis, and the relatively low death toll of 1,600.

Britain is currently at the top of the donor list, having given around 26 million dollars in relief, closely followed by Australia, the U.S., Canada and Saudi Arabia.

There has been some criticism over India’s hesitancy in coming to Pakistan’s aid, prompting claims that a political spat may be at the root of the belated and small pledge of five million dollars, which is only a tiny fraction of India’s 500-million-dollar aid budget for the year.

Critics claim that Pakistan was quick to help India after the 2001 Gujarat earthquake, which killed 25,000 people.

The floods, which started in the northwest mountainous provinces and have affected 20 million people, have now spread to the southern provinces of Sindh and neighboring Balochistan.

John Holmes, under-secretary-general for humanitarian affairs and U.N. emergency relief coordinator, said last week that critical priorities include shelter, food assistance, clean water and emergency medical supplies.

The U.N. High Commissioner for Refugees (UNHCR) says it has purchased around 69,000 tents, but supplies are dwindling because of the massive shelter requirements in hard-hit areas.

Some truckloads were unable to reach their destinations because of floods and landslides, so agencies such as the World Food Programme (WFP) are using donkeys to reach isolated areas like Balochistan and Khyber Pakhtunkhwa provinces.

It is also important for emergency medical supplies to reach all affected areas, as the lack of clean water and adequate sanitation has massively increased the risk of diarrhea and skin diseases.

Reader told IPS that "the spread of water-borne diseases is one of the U.N.’s main concerns." These include typhoid, cholera, hepatitis A and B.

The fears were confirmed by the discovery of the first cases of cholera in the Swat Valley last week.

Stagnant water is also an ideal breeding ground for mosquitoes, which spread malaria and dengue fever.

"The World Health Organisation (WHO) is assisting the government in supplying medicines and vaccines," Reader told IPS, adding that they are currently "ready to deal with up to 1.5 million cases of disease".

Another concern is that terrorist and militant groups may be operating amongst the victims, offering food and shelter, to gain a foothold in the affected areas.

The warning comes from the U.N. special envoy for assistance to Pakistan, Jean-Maurice Ripert, who claimed that the terror group Jamaat-ud-Dawa may be "taking advantage of the circumstances to score points".

When asked if the activities of these groups are of any immediate concern, Reader answered that the immediate focus is "on giving assistance to those who needed it", and that OCHA "is working with a lot of good local NGO’s, with which it has worked in past crisis".

However, many locals affected by the floods are reportedly unhappy with the government’s late response to the crises, sparking clashes and protests, especially in southern regions.

Without adequate donations by rich countries and a more prompt response by the Pakistani government, the floods risk having not only immediate and tragic consequences, but also severe long-term consequences on the country’s already fragile economy.

All rights reserved, IPS – Inter Press Service, 2010.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Environment, Finance, Report Tagged With: , , ,

Double-Dip Recessions and the Strange Tale of Final Demand

August 4, 2010 by

Republished on Global Geopolitics & Political Economy
Originally Published on The Guardian Unlimited, August 2, 2010

Read the article in its original form on the Guardian website

By Dean Baker

The 2.4 percent GDP growth figure reported for the second quarter caused many economists to once again be surprised about the state of the economy. It seems that most had expected a higher number. Some had expected a much higher number. It is not clear what these economists use to form their expectations about growth, but it doesn’t seem that they have been paying much attention to the economy. For those following the economy, a weak 2nd quarter growth number was hardly a surprise.

As a basic way to assess growth economists often separate out final demand growth from GDP growth. The difference between GDP growth and final demand growth is simply inventory accumulation. If the rate of inventory accumulation accelerates then GDP growth will exceed final demand growth. If the rate of inventory accumulation slows, then GDP growth will be less than the rate of final demand growth. If there is no change in the rate at which inventories are accumulating, then GDP growth will be equal to final demand growth.

The economy has been going through a classic inventory cycle in the last five quarters. Inventories had been shrinking rapidly in the 2nd quarter of 2009. This is standard in a recession as firms look to dump a backlog of unsold goods. Inventories shrank less rapidly in the 3rd quarter, which means they added to growth. Inventories started growing again in the 4th quarter, and growing rapidly in the first two quarters of 2010. Inventories added considerably to growth in these quarters, making GDP growth considerably more rapid and erratic than the growth of final demand.

The growth in final demand over the last four quarters has been very even and slow. It has averaged 1.2 percent over this period with a peak growth rate of 2.1 percent in the 4th quarter of 2009. Growth was just 1.3 percent in the most recent quarter.

The numbers of final demand should be of great interest since it is unlikely that inventories will provide any substantial boost to growth in future quarters. The second quarter rate of inventory accumulation was already quite fast, so future inventory figures are as likely to come in lower as higher. This means that GDP growth over the next few quarters is likely to be close to the rate of growth of final demand.

This should have policymakers very worried. There is no obvious reason that final demand growth will increase from the 2nd quarter rate and several important factors that will push it lower.

The most obvious factor depressing growth will be the cutbacks by state and local governments that are trying to cope with huge budget shortfalls. A second factor is the winding down of the stimulus. Stimulus spending will stay near peak levels in the 3rd quarter, but will start to wind down in the 4th quarter of 2010 and the first quarter of 2011.

Perhaps the biggest factor depressing growth will again be the housing market. A flurry of sales of homes due to the expiring tax credit helped boost GDP in the second quarter. While the sale price of an existing is not counted in GDP, the fees associated with the sale are counted. The uptick in sales in the second quarter added 0.5 percentage points to GDP. The drop in sales will subtract at least this much from GDP in the 3rd quarter.

More importantly, house prices are falling again, possibly at a rapid pace. This will convince homeowners that the bubble is not coming back and likely lead to a further decline in consumption. (The deficit hawks’ pledges to cut Social Security and Medicare may also lead to lower consumption since they may convince people of the need to save more for retirement.)
In short, we are looking at a situation where the trend GDP growth rate going into the second half of 2010 is around 1.5 percent, with several factors likely to push it lower. This is a context in which the economy is likely to generate few if any jobs and almost certainly not enough jobs to bring down the rate of unemployment rate.

Getting the economy growing at a more rapid pace will require another round of stimulus from the government. This will require overcoming a massive amount of superstition, as well as pure political obstructionism. However, the first step is recognizing that the economy is not on a healthy recovery path and that something needs to be done. The second quarter GDP report should be enormously helpful in convincing people that everything is not all right.

cc

This work by Dean Baker, Global Geopolitics & Political Economy, also published by CEPR, is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of False Profits: Recovering from the Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media’s coverage of economic issues.


Filed Under: Economic Crisis, Economic Policy, Economy, Featured, United States Tagged With: , , ,

HAITI: Six Months On, Shelter Still a Main Priority

July 12, 2010 by

Global Geopolitics & Political Economy / IPS

By Matthew O. Berger

WASHINGTON, Jul 12, 2010 (IPS) – Six months ago Monday, an earthquake rocked the western hemisphere’s poorest country, driving it deeper into poverty and burying it under its nascent infrastructure.

The 7.0 quake killed 230,000 people and its after-effects – hunger, contaminated water, escalating prices, lack of shelter and sanitation – are still devastating those who survived. Meanwhile, the worst hurricane season in years is gearing up.

In Washington, the anniversary was used to call attention to the work that has been done and that which remains to be completed.

"We have gotten past the immediate crisis and we are beginning to look towards the long term. And we are in that challenging space between transitioning from the immediate crisis to the long term. That is always challenging in these types of circumstances," said Cheryl Mills, counsellor and chief of staff of U.S. Secretary of State Hillary Clinton.

Mills pointed to the ongoing problem of moving people to more permanent shelters. Though the international community has pledged enough shelters to house 600,000 people, the problem is finding the land to build them on.

She told reporters at the U.S. State Department Monday that the international community is committed to getting people from the tents they are in now to transitional shelters "where they can exist comfortably for three to five years before moving into long-term housing". These shelter issues, she said, will be "one of the bigger challenges over the next several months".

During those months, however, hurricanes could threaten much of the recovery progress that has already been made. The U.S.’s Climate Predication Centre said last Thursday that La Niña conditions appear to be developing, which would mean ideal conditions for hurricanes to develop in the Atlantic and Caribbean and the potential for serious impacts on island countries like Haiti.

The season had already been predicted to be "active to extremely active" by the National Oceanic and Atmospheric Administration back in May.

Haiti was devastated by four hurricanes in 2008. If and when a hurricane hits both the high winds and the rain washing down the country’s deforested hills would pose serious threats to the population.

Those hurricanes helped bring a flood of aid and recovery money to Haiti in 2008 and 2009.

And in March of this year, foreign governments meeting at U.N. headquarters pledged 5.3 billion dollars to the Haitian government for earthquake relief. But it is reported that only 10 percent of that amount has made it to the country so far.

Former U.S. President Bill Clinton and Haitian Prime Minister Jean-Max Bellerive, co-chairs of the Interim Haiti Reconstruction Commission, acknowledge this fact and hope the rest of the money comes soon.

"Without reliable schedules for disbursement, the commission is unable to plan, finance projects or respond quickly to immediate needs," they wrote in a New York Times op-ed on Friday.

They say Haiti is lucky to have not already been hit with another natural disaster and that the process for releasing the pledged money should be streamlined.

But they recognise some progress has been made.

"Has the reconstruction process been as quick and as far- reaching as many of us had hoped? No, not when so many Haitians remain homeless, hungry and unemployed. Has progress been made? Unequivocally, yes. But we must – all of us involved in Haiti’s recovery – do better," they say.

Mills finds a bright spot in the fact that there has not been any significant outbreak of disease, but she noted that much work remains to be done to ensure the health of the population – not just due to the earthquake but due to the poor health conditions that already existed when the disaster struck.

"The health metrics are actually better in Haiti than they were before the earthquake. That is not necessarily a statement of how great things are, but a statement of some of the challenges [that] places [like] Haiti began [with]," she said.

The World Health Organisation has said that 90 percent of people in Port-au-Prince affected by the earthquake now have access to health services, compared to 56 percent of Haitians before the disaster, and UNICEF says it has immunised over 275,000 children against potentially deadly diseases

Rajiv Shah, administrator of the U.S. Agency for International Development, also spoke of the goal of helping "Haiti build back better". As one example, he cited efforts with the Haitian government to train local workers in improving construction techniques so that rebuilt walls are two to three times stronger than they were before the quake.

But for all the advances, clear problems still remain. Rubble and debris, not to mention garbage and sewage, still litter the streets, according to reports.

"We know that we’re facing real, important challenges; the issues of how you remove 25 million cubic meters of debris, which is probably more than 20 times that existed in other tragedies such as the World Trade Center, in an environment that is congested and where infrastructure was challenging to begin with, is a tremendous challenge," said Shah.

All rights reserved, IPS – Inter Press Service, 2010.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Latin America, Politics, Poverty, Report Tagged With: , , , ,
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