Archive for December, 2011

Turning a camel into a thoroughbred

December 9, 2011

It’s tempting fate to say anything is a done deal at the UN climate negotiations, but as this year’s talks in Durban (Conference of the Parties or COP 17) draw to a close, the signs are looking good for the new Green Climate Fund.

 In Cancun last year, developed countries promised $100 billion in new funds to help poorer countries cope with the impacts of a changing climate and build low carbon development paths. They also promised the new Fund to channel a significant amount of the money.

A committee has been working throughout this year to design the Fund and its Chair, South African Planning Minister Trevor Manuel, presented their recommendations to the COP last week. The Green Climate Fund is a must for poorer countries and is supported by most parties. Host South Africa has invested political capital in launching the Fund at Durban and worked hard to make sure its draft governance mechanism is adopted, with a clear timetable for implementation in 2012.

There are still real concerns over how the Fund will work and whether it will deliver for countries at the forefront of climate change. Talk here is of a “balanced” or “middle ground” governance instrument - for which read a fragile and imperfect compromise that leaves substantive issues for the new Board to sort out next year. A negotiator from Singapore put it more colourfully: if you design a horse by committee, you end up with a camel but you hope it can still gallop.
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The UK must do more to fight corruption

December 9, 2011

It has been estimated that corruption causes up to $1 trillion each year to flow out from developing countries into the rich world. This deprives the countries most in need of valuable revenue and has devastating impacts on their citizens’ quality of life. 

Today is International Anti-Corruption Day and CAFOD have joined with likeminded NGOs through BOND’s anti-corruption working group. We are calling on the UK government to do more to tackle the role that UK banks and companies play in fuelling and facilitating the corruption which can undermine development overseas.

CAFOD has welcomed steps taken by the UK government to date, particularly the implementation of the Bribery Act 2010 and calls on the Government to continue following through with the necessary steps to:

  • Ensure there are sufficient dedicated resources available to enforce the Bribery Act
  • Enforce UK anti-money laundering laws
  • Extend the UN Convention Against Corruption and UK Bribery Act to all Crown Dependencies and Overseas Territories.
  • Produce a transparent cross-government anti-corruption strategy under the responsibility of UK Anti-Corruption Champion, Rt Hon Ken Clarke MP. 

A number of other recommendations are made in our full report, such as improving enforcement of know-your-customer rules by banks and other service providers including accountancy firms so that they do not mistakenly handle corrupt money and also the need to better publicise protection promised to whistleblowers to ensure that much more corrupt behaviour comes to light and can be challenged.

Japan’s Post-2015 idea: the “Pact for Global Wellbeing”

December 8, 2011

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Discussions about what should happen after the Millennium Development Goals are becoming two-a-penny, but concrete proposals about what exactly should come after 2015 are still relatively thin on the ground.

Some say that this is no bad thing - arguing that it is premature to look at specific goals before proper reflection has been done on what the fundamental purpose of a new framework should be; and we have interrogated the assumption that it should be replaced by goals (rather than some other instrument).

 This is eminently sensible in theory, but is it likely – or even desirable – that a policy issue as complex as post-2015 could be negotiated in such a methodical, sequential manner?  The post-2015 arena is arguably the ultimate forum in which to illustrate that policy-making is a realm of complexity rather than predictable, linear causality.  The political, technical and strategic challenges of this agenda must all proceed simultaneously – and those seeking a strong and legitimate successor to the MDGs must work iteratively between all three.

And so it was fascinating to meet with officials from the Japanese International Cooperation Bureau and Ministry of Foreign Affairs the other week to hear about an idea that they have put on the table.  Japan has been one of the first governments to show interest in the post-2015 agenda, hosting a small meeting in June on the issue despite the devastating Tsunami just months earlier.

Following up from that meeting, Japanese officials have developed a proposal for discussion – the Post MDGs “Pact for Global Wellbeing” (see picture).

They described to me how the Pact for Global Wellbeing had been written to take on board Beyond 2015’s essential must-haves.  “Human Security”, they explained, was an effort to incorporate rights-based approaches whilst avoiding the legalistic language which many governments object to.  “Inclusive Growth” incorporated the need to address issues of inequality within countries; whilst “Shared Growth” would ensure that growth would benefit not only low income countries but emerging economies and private sector organisations (particularly small businesses, I was reassured).  As a pact for global wellbeing – it would be a framework for all countries, not just ‘low income’ ones.  

I’m not sure if they cracked it just yet though.  The 1-page proposal has a lot of components and is difficult to interpret as a coherent whole.  There is a worrying arrow joining “ODA 0.7% of GNI” to “Growth”, which seems to suggest firstly that all aid is about creating growth; and secondly that the only input for creating growth is aid.  There isn’t much in the proposal to show how the Pact for Global Wellbeing would lever fundamental policy changes at a national and international level.   

But it’s helpful to get something on the table – it gives others something concrete to work with, and if approached in the right spirit will enable the ‘trial and error’ which will be essential in such a process.  More fundamentally, it demonstrates that major international governments like Japan are starting to think seriously about the debate and prepared to invest resources in moving it forward.  Given the current lack of political leadership around post-MDG planning – with the UN General Assembly only recently discussing the issue for the first time - this is a welcome impetus.  

So what do you think of the Pact for Global Wellbeing?  Any predictions for its fortunes?  Will this proposal be built on and developed or quietly ignored?   

 

Social protection and small businesses – missing the obvious

December 1, 2011

Social protection has risen rapidly up the policy agenda and rightly so, the benefits of “just giving money to the poor” are important.

For example, it helps to mitigate risks which prevent poor people making the most out of their livelihoods and it helps to overcome shocks with otherwise cause them to suffer long-term impacts from short term shocks. Small business owners that CAFOD interviewed to inform its “Think Small” report informed us that they undertook several different kinds of activities because the market was not always good for any one of them (undermining their efficiency and profitability). We know from economic crises that short term shocks can cause losses in health or education that affect economic prospects long-term (as well as human ones). Having something to fall back on can stop these barriers to successful livelihoods for the poorest.

A lack of demand – simply having no one to sell to – was also a barrier to small business owners who didn’t have the skills, connections or capital to sell except locally. Injecting cash into the local economy through social protection helps here too.

Boosting inclusive growth is cited as a key objective in the renewed interest in social protection by policy makers – so why are the needs of small businesses run by poor men and women so little evident in new proposed strategies of the World Bank or G20 discussions?

Most social protection schemes do not help these poor entrepreneurs – because they are in the informal sector which is poorly served by government safety nets and schemes. This despite the fact that these enterprises make up the majority of employment opportunities for poor men and women, as well as provide a de facto safety net for the majority who are not reached by government schemes.

This should be a critical area of review for the World Bank, G20 and other donors as well as national governments.

However, it is also important that the renewed interest in social protection as a means to boost inclusive growth, does not detract from social assistance programmes, such as pensions or benefits to other vulnerable groups. These can help small businesses if they are spent locally, especially if payments are systematic, sufficient and over the longer term.

Analysing the impacts of social protection on local markets and poor people’s livelihoods is important and under-researched. There is too little monitoring of who money goes to or how, let alone how it is affecting the local economy. As well as direclty helping poor entrepreneurs to have the confidence to invest and manage risk directly, we also need to better understand how who we give money to and what instruments are used affect their economic prospects and design interventions bearing this in mind.


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