TOKYO, Oct 13 – Civil society activists are not  surprised that there has been a reversal in some countries in progress towards meeting the Millennium Development Goals (MDGs), because they say it was based on flawed premises to begin with.

Many poor countries are facing a challenge in meeting the goals on poverty, nutrition, health and education because of falling incomes due to inflation, the global recession and climate change. All three causes are linked to neo-liberal values and marketisation that have driven growth and globalisation, they say.

The roots of the crisis are all interlinked: Unsustainable growth based on petro-based economies led to global warming, which resulted in the increased frequency of droughts. This reduced food production, so countries tried to reduce their carbon footprints by turning to bio-fuels which in turn put additional inflationary pressure, and volatility in food prices hit vulnerable populations in poor countries hardest. This meant parents send their children to work in the fields instead of sending them to school. Which, in turn, resulted in countries regressing in efforts to meet their primary-school enrollment MDG targets.

Speakers at a seminar on ‘From MDG1 to Inclusive Economy’, organised at the sidelines of the World Bank-IMF meeting in Tokyo this week, felt that international development organisations have finally seen that the growth models they were pushing were not sustainable, but still don’t dare to make a paradigm shift.

China has often been cited as a country that has been the most successful in world history in reducing poverty. In fact, China has already met most of its MDG targets, including over-achieving the goal to reduce extreme poverty by slashing it from 85 million to 35 million between 2000 to 2009.

While admitting that progress has been made, activists say, the Chinese model masks a widening gap between the rich and poor, huge out-migration from rural areas, a big problem with water and air pollution, glacier retreat in Tibet because of the impact of China’s growth on the global climate. China’s e-waste is exported around the world, and its demand for wildlife products has decimated national parks and oceans. Arable land is decreasing, and the use of chemical fertilisers has destroyed existing farms.

Lau Kin Chi is a professor at Hong Kong’s Lingnan University, and the author of books, including ‘China Reflected’. She said: “China may have reduced poverty, but its development model has increased inequality and exacerbated environmental problems.”

“Inclusive growth” is a term being used in World Bank-IMF documents, and activists fear it will become a buzzword like “green growth”. The jargon doesn’t mean anything until economic justice, sustainability and the environment are taken into account.

“China’s growth model produces poverty. We need to redefine what we mean by growth and progress,” Ki Chi said.

To be sure, at a stock-taking of the MDG targets at a Saturday panel discussion, the World Bank’s new president Jim Yong Kim said that a post-2015 goal had to take into account inclusive and equitable development.

India and China took different roads to spur economic growth, and they are also taking different paths to poverty eradication. While China has increased outlays for social welfare, environmental cleanup and promoting green technology, it still faces huge social problems with managing the expectations of its disenfranchised.

The Indian government has been even slower in addressing equitable growth, and today is numerically the world’s poorest country. There are 2 million NGOs in India and they were all doing piecemeal work, but lately they have taken a collective rights-based approach to work with parliament to legislate the right to health, education, jobs.

The most successful example of this is the National Rural Employment Guarantee Act (NREGA) which, since it went into effect in 2006, has improved the purchasing power of rural people, a third of them women. It has cut down on rural-urban migration by creating jobs in conservation, water supply, forestry all over the vast country and benefited 80 million households.

“India has shown that social movements can force a national parliament to act to look at poverty reduction holistically,” explained Vinod Raina, of the All India People’s Science Network. Combined with right to health and education, it provides income, decreases inequality and people can keeping living in their own areas keeping their ties to the land. Such holistic programmes will have far-reaching impact on India meeting MDG targets.

Japanese civil society activist Masaaki Ohashi of the Japan NGO Centre for International Cooperation (JANIC) summed it all up: “In the 1970s, the Rome Report showed us the limits to growth. We are now seeing it happen all over the planet through climate change, and proof that poverty comes from excess.”

*Dateline Earth is a column written by Kunda Dixit, editor and publisher of ‘The Nepali Times’, during this TerraViva edition.

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TOKYO, Oct 13 (TerraViva) – After a decade of progress, it had seemed that the world was on target to meet many of the Millennium Development Goals (MDGs) that were set in 2000 to halve extreme poverty and hunger, boost health and literacy in 15 years.

But the global finance and food crisis have threatened to reverse gains.

For the first time in many years, hunger worldwide is increasing instead of decreasing – mainly because of the widespread drought this summer and the increasing use of farmlands for the production of biofuels. Food prices have soared to all-time highs, affecting vulnerable populations in poor countries the most.

And all this is coinciding with the global economic crisis, which has affected aid flows and investment in developing countries, undermining their capacity to cope with the crisis of inflation, food security and development.

With three years to go before the target date, the United Nations is now trying to come up with new goals for beyond 2015 that will draw lessons from the current MDG campaign, and look at the new challenges that have come up since 2000.

In September, the UN set up a High-level Panel post-2015 Task Team that UNDP Administrator Helen Clark says will look at the new development landscape and look at new areas not tackled in the current goals, like equality, inclusiveness, sustainability, conflict and climate change.

Clark was speaking at a panel at the World Bank-IMF Annual Meetings in Tokyo this week with the World Bank President Jim Yong Kim, Homi Kharas of the Brookings Institution, who is the lead author of the High-level Panel, and its other members, including Liberian President Ellen Johnson Sirleaf and Gunilla Carlsson, Sweden’s Foreign Minister.

Most panelists agreed that the world had changed dramatically since 2000. It had become much more interconnected, and the new goals should not just be goals for developing countries but for the whole world. The global financial crisis was worsening inequality, global climate change was affecting food security, and there was a danger that there would be a reversal of even the MDG goals that had been attained so far.

The High-level Panel has its work cut out to be able to present its report to the UN Secretary-General by end-May 2013. And its main challenge will be to ensure that new post-MDG goals, whatever they are, also have the ability to absorb global financial, climate and natural shocks. This would mean that poor countries should not just be trying to lift their populations out of poverty, but also develop “shock absorbers” and social stabilisers to deal with them.

World Bank President Kim weighed in with his own priorities for the post-MDG plan: to look beyond just GDP growth, pay more attention to equity and inclusion, and give special attention to fragile and conflict states.  While the 2015 target called for halving extreme poverty, Kim is now on a campaign to put international development organisations to agree to an ambitious campaign to eradicate extreme poverty altogether by 2030.

However, to really go to the heart of the reasons why some countries have lagged behind on meeting MDG targets and not others, some basic questions need to be asked not, just about what areas they lag behind in, but also why.

One key issue is that while targets are global, meeting them is a local matter that hinges on governance, leadership, accountability and transparency. These are generally beyond the purview of the United Nations, international creditors or aid agencies.

Sometimes, countries make progress despite conflict and political disarray. Nepal, for example, has met most of its MDG targets ahead of schedule, more than halving maternal and child mortality, doubling female literacy and reducing extreme poverty despite a 10-year conflict, bad governance, endemic corruption and government mismanagement.

The MDGs have worked because they have packaged development goals neatly into targets that are easy to explain and monitor. They have also galvanised the UN, governments and donors to row in the same direction.

However, while MDGs quantify progress, they don’t answer questions about the structural international and domestic factors that keep countries poor.

Not many of donor countries that once pledged to set aside 0.7 percent of their GDP for ODA have met their target, for instance. Also, there has been a net outflow of resources from poor countries to rich. Most developing countries pay more in debt servicing and imports to advanced countries than they receive in aid or remittances. As someone said, trying to achieve MDGs in a situation like this is like trying to go up in a down escalator.

The Tokyo meetings this week were a venue for the new World Bank President to give himself and his Bank the challenge to eradicate poverty in the next 15 years after 2015. In numerous speeches he made here, he kept asking “what will it take” to achieve that goal, and his staff distributed black t-shirts that said ‘End Poverty’ and the Bank even has a twitter hashtag, #whatwillittake.

Said Kim: “It is time to move from dreaming of a world free of poverty to achieving it. It is time to bend the arc of history.”

In the final analysis, whatever the global goals, it will ultimately come down to improving local governance through accountable leadership. That is the way all countries that have made progress have done so. Maybe the hashtag should be: #whyisittakingsolong? (END)

TOKYO, Oct 12 – If anyone still needs proof that the epicenter of the world economy has shifted away from the Atlantic to the Pacific, the Annual Meetings of the World Bank and the International Monetary Fund (IMF) in Tokyo this week provided ample evidence.

Both Bretton Woods institutions have been part of a post-World War II trans-Atlantic project. The IMF was created to hold up the gold standard, tie it to a global exchange rate system linked to the US dollar, and to step in with “advice” and short-term loans whenever a macro-economic crisis hit.

The World Bank (which includes the International Bank for Reconstruction and Development and the International Development Agency) was originally supposed to lend to countries for post-war reconstruction, and later turned to lift countries out of poverty and to invest in infrastructure.

But as the role of the United States as a global military and economic power wanes, as Europe slides, and as the Pacific Rim countries become the engine of growth and sit on piles of cash, there is pressure on the IMF and the World Bank to change with the times.

In the past, the IMF has stepped in to rescue developing countries in the throes of economic crisis, as in 1974 to bail out Mexico from an oil price shock and Asian economies hit by crisis 15 years ago. But the IMF often became the bad guy as its rescue packages came with onerous conditionalities and mandatory austerity measures.

Today, instead of being entirely a short-term lender of last resort to emerging and developing economies, the IMF is now riding in as the knight in shining armour to save Europe. In the past year, the proportion of IMF lending to Europe has gone from zero to 56 percent.

The IMF is now being criticised not for its conditionalities, but for not giving enough priority to developing countries. The IMF’s Christine Lagarde’s speech at the conference in Tokyo on Thursday, in which she urged Europeans not to be too harsh on their ailing neighbours, drew a sharp rebuke from none other than the Germans.

There is also bitterness among Asian, African and Latin American countries that remember the strict austerity conditions imposed on them when they sought IMF bailouts in the past, and the kids-gloves treatment that Europe is getting in contrast. China, which is now the third largest contributor of cash to the IMF, is particularly unhappy that poor countries are being asked to help rich countries.

In a speech to the plenary session of the IMF-WB Annual Meetings Friday, Lagarde said that the globalised economy was so interconnected that the Euro slowdown was affecting Asian growth, too, so that rescuing Europe was important for Asian growth as well.

Despite this, there is a strong feeling among Asian delegates to the Fund and Bank meetings in Tokyo this week that the governance of the World Bank and the IMF, which has been monopolised by the US and France respectively for the past six decades, should be replaced by a fairer system that reflects new global economic realities.

Such sentiments are no longer restricted to rhetoric. The BRICS countries (Brazil, Russia, India, China and South Africa) agreed in New Delhi in March to set up their own parallel world bank to use their reserves to help poorer countries in their periphery. The BRICS Bank may still take time to take off, but the point has been made.

Much more dramatic has been the rise of new Chinese state-controlled lenders like the China Development Bank (CDB) and the Export-Import Bank of China. The CDB’s portfolio is now crossing 900 billion U.S. dollars, more than double that of the World Bank itself. China Ex-Im Bank has been entering even into private deals and recently lent 10 billion dollars to the Brazilian state oil company.

For many in developing parts of Africa, Latin America and Asia, this “Great Wall of Cash” is already an alternative to the World Bank and IMF.

Besides, the World Bank is already also competing with the regional focus and the starkly different priorities of regional multilateral lenders like the Asian Development Bank, the African Development Bank and the Inter-American Development Bank.

And the fun part for borrowing countries is that these loans do not come with any strict conditionalities. There are no cumbersome anti-corruption guidelines, there are no sensitive questions about governance and transparency, and the disbursement for infrastructure projects is quick.

To be sure, the recent flare-up in territorial tensions between Japan and China on the one hand and with Korea on the other has led to questions about whether the Asia-Pacific powers can work together. China’s retaliation by its high-profile targeting of Japanese products has seriously hit bilateral trade, and may affect Japan’s macro-economic recovery. China itself has pulled back on some of its aggressive forays into lending as the global slowdown hits home.

Still, the long-term question for the World Bank and the IMF will be how to respond to the shift in the epicenter of global growth from the Atlantic to the Pacific. There was glimmer of recognition of this shift in Tokyo this week, but their preoccupation with Europe showed that old habits die hard.

Will the Bank and the Fund come to terms the tectonic shift, adjust priorities and change standard operating procedures accordingly, or will they keep on looking at the world through their traditional trans-Atlantic perspective?

*Dateline Earth is a column written by Kunda Dixit, editor and publisher of ‘The Nepali Times’ during this TerraViva edition.

TOKYO, Oct 11 (TerraViva) – The world may be in economic crisis, Asian growth may be stumbling, and Japan may be suffering a slowdown, but you wouldn’t be able to tell in glittering Tokyo this week as it hosts the Annual Meetings of the World Bank and the IMF.

There is a sense of normalcy in the streets outside, as if all is well with the world and it is business as usual. But inside the conference venue at the Tokyo International Forum, there is a pall of gloom as it debates the impact of the European crisis, the slow recovery in the US, the absence of China from the meeting, even questions about whether globalisation has been the panacea that the ‘Washington Consensus’ always said it was.

The Annual Meetings of the World Bank and the IMF are held in Washington every two years, but every alternative year they take place in a developing country. Bangkok, Istanbul, New Delhi have all had their turns. But in recent years as anti-globalisation protests have become more organised and vigorous, the conferences have been located in places like Dubai and Singapore, which have banned all street protests. This year’s meeting was supposed to take place in Egypt, but due to the volatile political situation it was shifted to Tokyo.

The streets around the conference venue in Tokyo have a heavy, but discreet, security presence with busloads of police parked along the fringes of Hibiya Park. But for those who have come to associate water cannons and tear gas with World Bank-IMF meetings, this one so far doesn’t have them.

The World Bank has returned to Tokyo after 48 years. The last time the city hosted the meeting was in 1964, the year Japan also hosted the Olympics. The country was in the process of rebuilding, and 20 years after the end of the war it was on track to recovery and had regained confidence in itself. Much of that restoration was carried out with the help of the World Bank.

In the early years, the Bank was involved in infrastructure and energy. Its first loan in 1953 was to build thermal and hydroelectric power plants below 100 megawatts, the kind of energy projects that the Bank is now involved in in poor developing countries. It was a World Bank loan that helped build the first Bullet Train line, and it forced Japanese engineers to scale down the project so that the trains would run at 200 mph instead of 250 mph. Bank consultants also wanted the trains to carry freight at night to make them feasible, which the Japanese rejected. The World Bank
loaned money for the Toyota assembly line and for the first intercity expressways in 1960, which was later expanded to one of the most modern road networks in the world.

The World Bank then invested in Japanese bonds and tapped Japan’s economic growth to generate cash to reinvest in other developing countries in Asia, like China, Indonesia and Thailand. As World Bank President Jim Yong Kim reminded his audience here on Thursday, 60 years later, Japan has turned from a borrower to being the third biggest donor to the World Bank.

This week, as 22,000 delegates from 188 countries gather in Tokyo to look at the global economic slowdown, it has also turned attention to how catalytic lending can work in averting crisis and building prosperity.

But there is a sense that Japan is also coming full circle as it struggles with second-generation problems of an ageing population, recession and a future fiscal emergency.

*Dateline Earth is a column written by Kunda Dixit, editor and publisher of ‘The Nepali Times’ during this TerraViva edition.

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