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[Globalisation]

August 29, 2002

The Lesotho Highlands Water Project is Africa's biggest ever infrastructure project.

It diverts water from the Orange Water Basin to the region around Joburg and already earns the tiny country of Lesotho 15% of its GDP.

Tomorrow, Daily Summit has an article reporting on the social impact of this project. But for tonight, another seemingly inevitable effect of large development expenditure: corruption.

It's a long and murky story. Here are the bare bones.

With billions of dollars at stake, some of the world's biggest construction companies decide to employ middlemen to help win them contracts.

This is how it goes.

The company transfers money to the middleman. The middleman takes a cut and transfers the rest of the money to a Mr Masupha Sole, who happens to be… the person responsible for awarding the contract.

After many years driving flash cars, Mr Sole ends up in court - and is sent down for 18 years.

And then the prosecutions against the companies start, with the following expected to face charges: Acres International (Canadian); Coyne et Bellier, Sogreah, Spie Batignolles and Dumez International (French); ABB, Lahmeyer International, Spie Batignolles and Ed Zueblin (German); ABB (Swedish); Universal Development Corporation and Electro Power Corporation (Panamanian); Associated Consultants and Project Managers (Lesotho), Sir Alexander Gibb and Partners, and Kier International (British) and Impregilo (Italian), and Lesotho Highlands Project Contractors (German).

Verdicts in the first case (against Acres International) are expected on September 13.

On top of this, there's embarrassment for the World Bank, one of the project's major funders. For a start, it stands accused of keeping Mr Sole in his job, even after the Lesotho government wanted him removed.

And more seriously, its investigation of the case seems to have been less than rigorous. Companies involved in corruption are supposed to be banned from receiving future bank contracts.

But the word is the Bank decided to ban the middlemen - not the principals.

Different sides draw different morals from this story. Campaigners see further proof that big business and big governments cannot be trusted. Development-sceptics are confirmed in their view that it is impossible to spend large quanties of aid wisely....

David Steven | 01:55 AM South African time (utc/gmt +2) | |

August 26, 2002

It's all the rage here at the summit to compare the world today with South Africa in the darkest years of apartheid.

Now, President Mbeki has got in on the act.

"Out of Johannesburg and out of Africa must emerge something new that takes the world forward, away from the entrenchment of global apartheid, to the realization of the goals of sustainable development," he told delegates at tonight's opening ceremony.

"Our common and decisive victory against domestic apartheid confirms that you, the peoples of the world, have both a responsibility and a possibility to achieve a decisive victory against global apartheid."

David Steven | 12:20 AM South African time (utc/gmt +2) | |

August 14, 2002

Getting better? Getting worse? Part 5 Worse, according to Sunday Times.

"Ten years later, however, there are few physical benefits from all those bold principles and briefing papers. Some countries, such as Britain, have succeeded in cutting greenhouse gas emissions — but most have not. America, the biggest greenhouse gas producer, has seen its emissions increase by nearly 20%.

The number of species of plants, animals and fish that have been wiped from the face of the earth has also surged.

As for tackling poverty — another Rio priority — the lack of progress has been even more notable. Half the world’s six billion people live on less than £1.50 a day: one billion have no clean water and 2.4 billion lack access to basic sanitation. And in many areas the situation is getting worse. In sub-Saharan Africa, for example, the number of people living in poverty has grown from 220m in 1990 to 300m in 1998."

David Steven | 10:13 AM South African time (utc/gmt +2) | |

August 13, 2002

Hot off the press a report which says it “highlights the disturbing toll of current patterns of development on global living standards and the Earth's natural resources.”

"Global Challenge, Global Opportunity highlights the choice we face between two futures," says Nitin Desai, who will chair the World Summit. "If we do nothing to change our current indiscriminate patterns of development, we will compromise the long-term security of the Earth and its people.”

Key issues, according to the report, are water shortages, rising sea levels, species loss, the destruction of forests, and air pollution. The report also highlights the need for more productive farming and action to improve the health of the poor.

Although there is some good news on a “small scale” – even these gains are now in danger, the report adds.

"We now have unequivocal evidence that the goals of human progress and environmental protection are co-dependent," Mr. Desai noted. "Governments, corporations and civil society must come to Johannesburg with a commitment to improve people's lives on a sustainable basis.”

"Success in achieving the target on child mortality linked to diarrhoeal diseases, and the unprecedented increase in development funding agreed in Monterrey earlier this year, show what UN Summits can achieve. Sustainable development is starting to take root in some parts of the world, but it needs to be accelerated rapidly if we are to build a future free of the poverty and instability that will come if we continue our present management of natural resources.”

Jane Frewer | 05:00 PM South African time (utc/gmt +2) | |


IMF research chief and chess grandmaster, Kenneth Rogoff has been speaking to the Economist.

He has some provocative ideas. For example:

More migration: "Isolationists in industrialised countries should stop and look at their populations' advancing age structure. As the dependency ratio explodes later this century, who is going to provide goods and services for all the retirees? There are many elements to a solution, not least allowing expanded immigration from the developing world, with its much younger population."

More 3rd world debt: "One desirable element has to be for the industrialised countries to save abroad by running large current-account surpluses vis-à-vis the developing world. These cumulated surpluses, while facilitating much-needed investment in poorer countries right now, could later be drawn down as the baby-boomers stop working... Right now, the system cannot easily tolerate such giant debt accumulation. We have to make it work better."

Fewer currencies: "I believe that at some point later this century, there will be consolidation, ending perhaps in two or three core currencies, with a scattered periphery of floaters. Getting there, and managing macroeconomic policy with less exchange-rate flexibility, is one of the major political and economic challenges of the next era of globalisation."

He is also pessimistic about Africa's prospects. Countries need macroeconomic stability, he argues. But Africa relies on the export of commodities, which suffer "extraordinary price volatility" and international, which is "extremely unpredictable." Shielding the economy is an understandable temptation, but this stops it adjusting, while encouraging inefficiency and corruption.

"Many parts of Africa have made great progress in lowering inflation, liberalising markets, and resuming growth. The IMF has helped," he says. "Still, the challenges ahead are formidable, and require further rethinking of standard macroeconomic prescriptions."

David Steven | 04:25 PM South African time (utc/gmt +2) | |

August 11, 2002

A never-ending New York Times Magazine article has ruffled feathers.

Author Jack Hitt is, by turns, jarringly cynical and mock naive as he visits Cambodia to describe the work of WildAid, a charity that "provides direct protection to wildlife in danger".

"To put it mildly, it won't be easy for this poacher to tell his boss that he just lost an $800 chain saw," he writes at one point. "Maybe both of them will find some other illegal trade less harmful to this habitat: drugs, Angkor Wat artifacts, teenagers."

At another: "Throughout the raids, I see that puzzled look on many faces. I wonder if an earlier generation of my countrymen in this neighborhood hadn't seen the same expression, too. Of course, the consequences of WildAid's interventions are slightly different: getting your moped seized for 10 days is not quite like getting napalmed. Still, there are moments (like punishing a lady for having a turtle while abandoning child prostitutes) that history's repetition here seems especially farcical."

Blogger, Instapundit, is not impressed. For him, the subtext of the piece is clear: "military style operations are fine when you are protecting animals and tropical hardwoods... no matter what hardship it might produce for locals just trying to eke out a living. But don't get distracted by trying to help, you know, actual people."

But WildAid is unhappy too. They think the piece is sensationalist and ignores the worthwhile work they do providing local communities with alternative sources of income (memo to PR: what did you expect?).

"We are first and foremost a wildlife conservation organization, with our scope limited by our charter, modest budget and in many instance by law (our Mobile Unit’s remit is strictly limited by Cambodian law)," they say. "We have found that, with the few hundred thousand dollars a year we have to spend in Cambodia, helping a country to conserve one of its great national assets as a future resource while providing employment to several dozen people is the best use of our abilities."

The emphasis, in all poor countries, has to be on the word "resource".

"Africa can't afford the luxury of preserving animals for the sake of it. Or preserving them simply for rich people's enjoyment," George Hulme of the Chiredzi River Conservancy once said. "The local population has to benefit."

Lyson Masango, a teacher at the Mahenye School in Zimbabwe, makes a similar point: "The people thought wildlife was for white people. Now they realise it’s also for us, because they see the benefits come back. It used to come back as a cost. Now it comes back as a benefit."

Postscript: How did Ritt's editor let him get away with using the word "unmaintenanced" to describe a road?

David Steven | 08:28 PM South African time (utc/gmt +2) | |

August 9, 2002

Getting worse? Getting better? Part 3. Worse, thinks UNEP (for context, see parts 1 and 2):

"The environment is still at the periphery of socio-economic development. Poverty and excessive consumption... continue to put enormous pressure on the environment. The unfortunate result is that sustainable development remains largely theoretical for the majority of the world's population of more than 6 000 million people. The level of awareness and action has not been commensurate with the state of the global environment today; it continues to deteriorate."

From Global Environment Outlook 3 - which aims to be the key background reading for Joburg (446 pages - but lots of pictures)...

David Steven | 07:51 PM South African time (utc/gmt +2) | |

August 8, 2002

Getting worse? Getting better? Part 2. Calling for the rich to consume less, Thabo Mbeki today argued that the world had been on a downward track since the Rio Earth Summit.

"Since 1990, every year, 10-million more people have joined the ranks of the poor," he said. "More than 1-billion fellow human beings remain undernourished. No fewer than 1,5-billion people live in water-scarce areas. Every year fish stocks decline by about 660,000 tons. Rising oceans increasingly threaten island states. In some parts of Africa the desert is advancing by 10km a year. The gap between rich and poor continues to widen at a faster pace. Even as you read this, millions in southern Africa face death from famine, despite the existence of huge food stocks elsewhere in the world."

The World Bank disagrees (or pdf)on at least one of these indicators - poverty.

In the 1990s, it says, "the proportion of people living on less than $1 a day fell from 29 percent to 23 percent. By 1999 there were 125 million fewer people living in extreme poverty, continuing a downward trend that began in the early 1980s."

So Mbeki thinks 100 million more people became poor in the 1990s; the Bank that 125 million were lifted out of poverty.

The Daily Summit has three questions:

1. Is Mbeki or the World Bank right?
2. Why do they disagree when they have access to the same information?
3. What chance does the summit have for agreeing about the future, if the protagonists can't even agree about the past?

See also: Part 1.

David Steven | 09:18 PM South African time (utc/gmt +2) | |


32 donors, have just given the Global Environment Facility US$2.92 billion.

The money will continue to be spent on biodiversity, climate change, oceans, and the replacement of ozone depleting chemicals. Projects in two new areas - persistent organic pollutants and desertification, will now also be funded.

The Bush administration's pledge of $500 million to the Global Environmental Facility will go to support the organization's work to promote clean and efficient energy, biodiversity programs and water cleanup efforts.

The US is one of the countries chipping in with a $500 million commitment - but it's holding the fund to performance targets and may refuse to release all the money.

Other slightly surprising sources of money are Mexico, the Cote d'Ivoire, Slovenia, and Turkey.

David Steven | 10:50 AM South African time (utc/gmt +2) | |

August 6, 2002

Are things getting worse? Or better?

As Daily Summit reported at the weekend, Anthony Browne is one who believes that environmental indicators are on the up. "The frightening future for environment groups is not that the end of the world is nigh," he writes, "but that the end of environmentalism is nigh."

CorpWatch, however, takes the opposite view.

"Being the bearer of bad news is an occupational hazard for environmentalists and it is a role that is easy for the public to tire of," it admits. "Nevertheless, it is a fact that in the decade between Earth Summits I and II, environmental destruction in much of the world accelerated. Forests dwindled, fisheries declined, and deserts encroached on ever more agricultural land. Potentially hazardous genetic pollution from biotech agriculture contaminated food crops, and clean, fresh water became increasingly scarce. With the 1990s becoming the warmest decade on record, the threat of global climate change loomed ever larger on the horizon, pointing toward a future of sea-level rises and the devastation of entire coastal populations, increasingly severe and frequent storms, environmental refugees, droughts, floods and disease."

Optimists and pessimists. Cassandras and Panglossians. It's a major - and seldom acknowledged - ideological gulf.

But who's right? For the moment, at least, Daily Summit is going to duck the question. But we'll be gathering together some views on either side over the next couple of weeks...

David Steven | 10:27 PM South African time (utc/gmt +2) | |


Trade not aid says Mohammed Valli Moosa, South African Minister for Environmental Affairs and Tourism.

"The donor recipient paradigm in which the rich give handouts to the poor does nothing for real economic development and is therefore not a sustainable poverty eradication strategy," he argues.

"By allowing poor countries to sell their agricultural products in rich countries one of the biggest obstacles to poverty will be eradicated.

"While aid is important and must be expanded, far more important is for rich countries to do business with poor countries or at least to allow producers in poor countries a fair opportunity to compete with producers in rich countries"

David Steven | 08:02 PM South African time (utc/gmt +2) | |


 

[sidelights]

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Lloyd Anderson
Director of Science, The British Council
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