Dear Friends,

At the suggestion of Isabel, I am sending you below link to papers and presentations of the 6th BRICS Academic recently made available online by IPEA, the host institution of last year’s forum.

The BRICS Academic Forum, is an annual event preceding the BRICS Summit in the host country. This two days event was hosted by IPEA last year under framework of the 6th BRICS Summit held in Brazil (Fortaleza-CE). The forum had three main objectives: (1) to deepen collaboration in respect of research of mutual interest; (2) to establish networks between such communities; and (3) to provide the BRICS leaders with a research resource in respect of issues under discussion at the Summit. The aim was, therefore, to encourage academic exchange, strengthen dialogue with civil society, as well as provide policy advice.  The next forum will be held in Russia in 2015.

The Institute for Applied Economic Research (IPEA), is a public foundation affiliated to the Secretariat of Strategic Affairs (SAE) of the Presidency of the Republic of Brazil. IPEA is the country's official think tank at the BRICS Think Tanks Forum and , an exemplar developing country government led think tank.

6th BRICS Academic Forum  - Towards a long-term strategy for BRICS - Recommendations by the BRICS Think Tanks Council
http://www.ipea.gov.br/forumbrics/en/papers-and-presentations.html

with best regards,
Adriano


Adriano José Timossi
Senior Programme Officer
17-19 Chemin du Champ d'Anier
1209 Petit Saconnex, Geneva
Tel: +41 22 791 80 50
Fax: +41 22 798 85 31
E-mail: [email protected]
Website: http://www.southcentre.int

Dear members of Recovery with a Human Face, 

Please see the attached Commitment to Equity (CEQ) Policy Assessment of Guatemala. Please feel free to distribute this paper. For more information about the CEQ please visit our website: http://www.commitmentoequity.org

Should you have any questions, please contact my assistant, Samantha Greenspun: [email protected]. ​

Best,
Nora Lustig 

Nora Lustig 
Samuel Z. Stone Professor of Latin American Economics, Tulane University
Nonresident Fellow Center for Global Development and Inter-American Dialogue
Director, Commitment to Equity Project
http://www.commitmentoequity.org
http://www.noralustig.org

Dear all, 

first congratulations to our colleague Yanis Varoufakis for becoming the next finance minister of Greece. We should all offer our support which I think he would badly need given the scale and scope of challenges Greece still faces.  Meanwhile here is my piece on why Europe should celebrate a Syriza win. 

Sony Kapoor
Managing Director, Re-Define, an International Think Tank 
Special Adviser on Green Finance, UN Environment Programme
Strategy Adviser, Systemic Risk Centre, London School of Economics & Political Science
Download our Report on the Norwegian Sovereign Wealth Fund "Investing for the Future"
Download our Blueprint for "Building a Green Financial System"
Download a complimentary copy of our book "The Financial Crisis - Causes and Cures"

Telephone: +44-7721690808 (UK) Email: [email protected] Assistant: [email protected]

Greece election democracy Eurozone EU ECB Troika debt Europe [1]

I was present at the outset when, after a brief consideration of restructuring Greece’s debt, EU authorities decided against it, mostly because that would have inflicted losses on large German and French banks and would have an uncertain impact on the markets. I was present when, much belatedly, reality finally forced the hand of the EU authorities, but pressure from banks holding Greek debt forced them not to go for deep haircuts. I was also present when after that failed first deal a second deeper round of restructuring was eventually carried out, but this time thwarted both by the banking sector and the Greman government not wanting Greece to get an “easy deal”. 

In all three cases many sensible people and I pushed for a much deeper clean restructuring that would actually allow Greece to make a fresh start but we, together with the IMF, were thwarted by the EU’s powerful financial sector, as well as Eurozone politics. In the end, Greece has had to pay the price [2]. 

Yes, Greece’s governments had been irresponsible. Yes, it is not a mature democracy and is riddled with corruption. Yes, it lost competitiveness over the years. But much of this was known to the EU authorities who willingly overlooked Greece’s structural problems. The point is, that no matter what the problems or on whose shoulders the responsibility for these rests, the Eurozone’s approach to Greek debt had made things worse. 

The excessive austerity that was imposed on Greece as a condition for the bailout made the debt problem worse, not better, by shrinking Greek GDP by a quarter, even as Greece cut down essential services to finance the build up of a primary surplus. The bailout package was not just financially unsustainable, but also economically wrong-headed, politically tone-deaf and socially callous. It has turned what was an aspiring first world country with third world institutions into a third world country with third world institutions. It has led to enormous personal suffering, triggered the rise of neo-Nazi movements, lain waste to productive capacity and created a cohort of the unemployed and the unemployable - a lost generation. 

It has stretched Greece’s social fabric to a breaking point and perverted the democratic rights of citizens by vetoing their political choices. What is remarkable is not that Greeks have voted for Syriza, a new anti-establishment party that vows to get a better deal for Greek people, take on the powerful Greek oligarchy and stand up to Germany and the Eurozone. What is remarkable is that it took so long for them to do so. 

I do not know Syriza well. I definitely do not know what they will do in government. I do not know all of their policies and disagree with some I do know about. But what I do know is that whatever Syriza may mean for the Greek economy, its election victory today is a victory for democracy. It also represents a rejection by Greek people of the two parties ND and Pasok that are responsible for the mess Greece finds itself in. 

Of course, Syriza will not be able to deliver on most of its promises. Which modern political party can? But it is important that it tries. Domestically, there are few things as important as taking on entrenched interests both of the bureaucracy as well as the oligarchy. Not being beholden to them from before, it can. Internationally, Syriza had promised to get a better deal for the Greek people by lightening their debt burden. In private, the IMF, the European Commission and the markets all agree that Greek debt is unsustainable and needs to be written down. Syriza presents the best hope of tackling this elephant in the room and forcing this conversation at the European level. I know several Troika officials who were privately hoping for a Syriza victory so that they can finally stop pretending that 2 + 2 = 5. 

Taken together, the steady moderation in Syriza’s tone and a gradual loosening of the Eurozone’s excessive austerity also augur well for a sensible loosening of fiscal policy not just in Greece, but in the whole of the Eurozone. Greece should be able to nudge the European conversation in this direction. The ECB’s belated QE [3] should also help with a much needed looser monetary stance. While Draghi spoke of the need for governments to be fiscally responsible, he has privately and at Jackson Hole called for a looser fiscal stance as being necessary to help get the Eurozone back on its feet. 

Take these together and Europe has a new opportunity for a fresh approach to tackling the Eurocrisis. One that is democratically more legitimate, socially more acceptable and economically more sensible. 

Whether it takes this chance or not depends in part on what Syriza does with its new found power, but mostly on how Germany and the rest of the Eurozone respond. But the very fact that we at least have this new possibility is enough reason to celebrate a Syriza's victory today. Let’s hope they do not let us and the Greek people down.

Sony Kapoor is Managing Director of Re-Define and a Senior Visiting Fellow at the London School of Economics.

Dear colleagues,

In a time when in Paris Marine Le Pen is “Ante Portas”, when xenophobic populists are marching through the streets of Dresden, when in London the UKIP sets the tone for an ever more Anti-European hysteria, and when in Helsinki the Finnish government becomes the most ardent proponent of more austerity for Greece, for no other reason but the fear of a success of the “real Finns” at the next ballot box, the Greek people have given a clear signal, voting against more austerity and for the European values of democracy, the welfare state, tolerance and inclusive societies. 

They have rejected the ruling by European and international technocrats. They have said no to their national oligarchic establishment that has led the country to the current situation. But they also resisted the Siren calls of Golden Dawn. They have given their confidence to an untested party, with no experience in government, a party that has presented an electoral programme proposing better governance, more democracy, greater social justice and an end of austerity policies that have destroyed the economy and created unprecedented hardship while the public debt (and the private one) continued to increase. The Greek voters have sent a clear message to the rest of Europe: they want to be part of Europe, they can’t bear more austerity; they need a sustainable solution to their debt problem; they want to be a respected partner in the European Union and play an active role in the common search for a Greek and European recovery. 

Europe should not see the victory of Syriza as a threat. Instead, it should be seen as a clear signal from the people and as an opportunity for Europe as a whole to reconsider its crisis response, which has already lead the continent into what may become a decade of deflationary stagnation, even with the last intervention of the ECB. There is no easy solution to the deep crisis in Europe but one thing is certain: to continue with policies that do not work, because they concentrate exclusively on fiscal prudence, is the opposite of what must be done, in giving priority to growth, investment, employment and redistributive policies. 

Anyone guided by realism will recognise that Greece cannot at the same time serve its tremendous debt burden and recover economically and socially. Insisting on servicing the debt, without a strong economic recovery might be popular in some European capitals but it will just not work. Debts that cannot be paid remain un-payable even if creditors continue to insist that it should be paid. 

The debt crises in Germany in the last century offer great lessons in this respect. After World War I, the victorious powers insisted that Germany should pay reparations independently of its economic performance. The results are well known: Hyperinflation in the twenties, brutal austerity in the early thirties resulting in the rise of Hitler who immediately stopped servicing any foreign debt when he came to power. After World War II, the Allies recognised that Germany had to become prosperous first and should pay afterwards. That reasoning lies behind one of the most generous debt restructuring agreements in history in 1953, when more than 50 % of the German debt was written off, repayment was stretched out over more than half a century and debt payments were made conditional on the existence of a trade surplus. The last payment of debt from World War I was actually made as late as in 2010 and payments at no time exceeded 5% of German export earnings. 

In many European countries the public debate on the debt crisis is also framed in moral terms. Many claim that Greece had cheated when entering the Eurozone, that they are free-riding on hard-working Northern Europeans, that they need to be taught a lesson in order to learn financial responsibility, etc. The judgements should not be about “Crime and Punishment” but about economic viability and a better future. If debt restructuring had been guided by any moral reasoning in 1953 it would have certainly been extremely difficult to make the case for German debt relief. But it was economically, politically and socially the right thing to do and it paid off not only for Germany but for Europe as a whole. 

Greece's 317 billion Euro debt today is in absolute terms 13 billion less than five years ago but due to the economic collapse it nevertheless rose from 113 to 175 % of GDP. Any assumption that this debt can be served without growth is illusionary. This must be recognised by all those interested in a solution and be the realistic starting point for renegotiating the debt. 

As long as capitalism exists there has not been a boom that did not end in a crisis and not a crisis that wasn’t followed by a recovery. Policies should reduce the severity of the crisis and increase the speed of the recovery. Austerity has failed on both accounts but nevertheless it looks that, by a number of indicators, the crisis in Greece has finally bottomed out and, with the right policies of debt restructuring and of productive public investment, there is a reasonable chance for a strong recovery. Bringing down unemployment and increasing revenues has to be a priority over debt repayment. The required economic growth will not come from any rapid rise in private sector investment as long as the risk of unsustainable debt and default remains. Therefore the solution to the Greek problem should start with a solution to the debt situation, a strong public investment programme leading to the creation of more and better jobs. Researchers from the Levy Economics Institute in New York who, in cooperation with the Labour Institute of the General Confederation of Greek Workers, regularly publish a strategic analysis of the Greek economy have calculated the economic impact of a moderate public investment programme of 6.6 billion Euro per annum funded by the EU complimented by a debt moratorium until the country returns to the real GDP level of 2010. While this would certainly not solve Greece’s problems over night, it would set Greece on a much higher growth path than continuing the current policies (see  Dimitri Papadimitriou (2014, p 8)[1]

Debt restructuring and public investment alone will not solve the Greek problem but there will be no solution without it. Improving the public administration, creating an efficient and fair tax system, fighting corruption, curtailing oligarchic power, rationalising pension systems, improving access to credit, improving the functioning of education, health and social protection systems and creating the conditions for job creation are some of the important elements in a comprehensive recovery strategy. However, some of these structural changes take time and have more long-term effects, while others can boost recovery more quickly. A government of new faces is better positioned to implement such a programme. These structural reforms have bigger chances of success if done in parallel with economic recovery, job creation and growth and not during a continued depression. 

New faces have also a better chance to re-energize the society and to put an end to vested interests that so far remain largely untouched. Strengthening institutions, including those that are responsible for social dialogue and collective bargaining, and improving the participation of citizens are essential for (re)-building trust in the state and political decision making. The mistake of dismantling the industrial relations and collective bargaining system must be quickly and seriously addressed in order to achieve better labour market conditions, more quality and equality in employment and a fairer income distribution. 

The challenges Greece is facing are more extreme than in any other European country but they are not unique. Throughout southern Europe the policies of fiscal austerity, no public investment and wage repression have led to a deflationary stagnation with unacceptable levels of unemployment and an increase in inequalities. Pumping billions of Euros at close to zero interest rates into the private banking sector has failed to trigger private real investment and has not reached the real economy. It was more successful in raising asset prices than employment levels. As millions of people are unemployed and many governments can borrow at historically low interest rates, the case for large scale investment in public infrastructure and networks, in education, research and development at a European level is compelling. 

European and international institutions have argued for six years that there is no alternative to austerity and that the Greek people will pay dearly if they abandon the policy prescription of the Troika. In the spirit of Franklin Roosevelt, the Greek people decided that “We have nothing to fear but fear itself” and put more trust into an alternative, sometimes expressing contradictory ideas, rather than to continue with the trotted path of failure. They have raised expectations and deserve the credit of the doubt and the support from those interested in a change of policies in Europe. 

The Greek people must be thanked for putting the need for changing the course of economic policies firmly on the European agenda. The stakes are high. A failure in Greece will be seen as vindication of austerity as the only option. It will have negative repercussions for any progressive alternative throughout Europe. Those convinced that Europe needs to change cannot sit on the fence, but need to engage in support of the new winds of reform. 

Maria Helena dos Santos André
Director of the ILO Bureau for Workers' Activities and a former Minister of Labour of Portugal.

Published at the Global Labour Column (writing in personal capacity).
http://column.global-labour-university.org/2015/01/thank-you-greece.html

[1] Dimitri Papadimitriou, 2014, Is Greece heading for a recovery Strategic. IN: Strategic Analysis of Levy Economics Institute of Bard College; available at http://www.levyinstitute.org/pubs/sa_gr_dec_14.pdf    

Dear colleagues,

Thank you for the many interesting and valuable contributions circulated here.

I attach an article that may be of interest.

Best regards,

Dr Margot E Salomon
Director, Centre for the Study of Human Rights (Acting)
Associate Professor, Law Department
Director, Laboratory for Advanced Research on the Global Economy at the Centre for the Study of Human Rights
London School of Economics
Houghton Street
London WC2A 2AE               
direct tel: +44 (0)20 7955 6922
fax: +44 (0)20 7955 6934
Click here for the Lab

 Of Austerity, Human Rights and International Institutions

Abstract: Austerity measures in many European countries have led to the violation of social rights and widespread socio-economic malaise. In the case of countries subjected to conditionality imposed by external institutions for the receipt of loans, the resultant harms have highlighted responsibility gaps across a range of international institutions. Two recent legal developments come together to expose these gaps: Greece's argument in a series of cases under the European Social Charter that it was not responsible for the impact on the right to social security brought about by austerity measures since it was only giving effect to its other international obligations as agreed with the European Commission, the European Central Bank and the International Monetary Fund (the Troika), and the concern to emerge from the Pringle case before the European Court of Justice that European Union institutions could do outside of the EU that which they could not do within the EU – disregard the Charter of Fundamental Rights in the exercise of their tasks. That the Commission and ECB were in time answerable to international organisations set up to provide financial support adds an additional layer of responsibility to consider. Taking Greece as a case study and drawing on EU law, international human rights law, and the law on the international responsibility of states and of international organisations, this article looks to what we can expect in legal terms and as a matter of contemporary societal expectation when it comes to having international institutions respect human rights

Excellent letter, Stephany and everyone who worked on that letter!

Folks who are following Greece might also be interested in this paper published yesterday by CEPR on the Greek situation.


Cheers, Deborah 

Deborah James
Director of International Programs
Center for Economic and Policy Research (CEPR)
1611 Connecticut Avenue, NW Suite 400
Washington, DC 20009

Dear friends,

At the suggestion of Isabel, am sending you the attached Financial Times letter published today on Providing space for alternative pro-growth policies in Greece. It was signed by Joe Stiglitz and Chris Pissarides, both Nobel Prize winners, and a group of well-known economists.

I hope you find it of interest to post on your important website.

Best and many thanks

Stephany

--

Professor Stephany Griffith-Jones
Financial Markets Director
Initiative for Policy Dialogue
Columbia University
Websites: www.stephanygj.net   and www.policydialogue.org
Twitter: @stephanygj

Dear colleagues,

I would like to share a new report from ActionAid ‘Close the gap! The cost of inequality in women’s work’, which is being published today: www.actionaid.org.uk/closegendergap

The briefing highlights the massive injustice suffered by working women in developing countries and shows how the global economic system relies on women's paid and unpaid work.  In economic terms, ActionAid estimates the cost to women of inequalities in pay and access to jobs is a staggering US$9 trillion each year.

All over the world, women’s work contributes to growth, sustainable development, and the health and wellbeing of society. Yet by virtually every measure women remain more economically excluded than men. Women’s work is undervalued and for the most part invisible.

This is first and foremost a scandalous violation of the rights of billions of women. But gender inequality in work not only has consequences for women; the functioning of the economy relies on women's work. Women’s labour – in and outside the home – is vital to sustainable development, and for the wellbeing of society.

The briefing calls on governments, international institutions and businesses to take action to create the conditions that are needed to give women in developing countries the chances that they deserve in and at work. Steps include ensuring that women can access safe, decent work opportunities and the essential caring work they do is recognised, shared and better supported.

In 2015, the time is ripe for change as we determine the UN sustainable development goals and celebrate the 20th anniversary of the Beijing Platform for Action. Let us ensure the achievement of women's economic equality is high on the agenda.

We would welcome any comments or questions on the report and its findings, and encourage you to circulate it widely from Friday onwards – please note that it is strictly embargoed until then.

We would also be very grateful if you could show your support for this issue by tweeting using some if the suggested tweets below:

• @ActionAidUK: Gender inequality in work costs women in poor countries $9 trillion annually. Time to #closegendergap [report link]
• The world must act now to close the $9 trillion economic gap for women in poor countries #closegendergap @ActionAidUK [report link]
• What is women’s work worth? Time to end economic #inequality and #closegendergap now [report link]

All the best,

Nuria

Nuria Molina
Director of Policy, Advocacy and Campaigns
ActionAid UK
33 Bowling Green Lane,
London EC1R 0BJ,
United Kingdom
Phone: +44 20 3122 0605
Skype: nuriamolinagallart
[email protected]
www.actionaid.org.uk

Dear Friends,

This may be of some interest :
http://www.southcentre.int/research-paper-60-january-2015/
Best wishes,

Yilmaz

Yılmaz Akyüz
Chief Economist
The South Centre

South Centre Research Paper No. 60: Internationalization of Finance and Changing Vulnerabilities in Emerging and Developing Economies, by Yılmaz Akyüz.

After a series of crises with severe economic and social consequences in the 1990s and early 2000s, emerging and developing economies (EDEs) have become even more closely integrated into what is widely recognized as an inherently unstable international financial system. Both policies in these countries and a highly accommodating global financial environment have played a role. Not only have their traditional cross-border linkages been deepened and external balance sheets expanded rapidly, but also foreign presence in their domestic credit, bond, equity and property markets has reached unprecedented levels. New channels have thus emerged for the transmission of financial shocks from global boom-bust cycles. Almost all EDEs are now vulnerable irrespective of their balance-of-payments, external debt, net foreign assets and international reserve positions although these play an important role in the way such shocks could impinge on them. Stability of domestic banking and asset markets is susceptible even in countries with strong external positions. Those heavily dependent on foreign capital are prone to liquidity and solvency crises as well as domestic financial turmoil. The new practices adopted in recent years including more flexible exchange rate regimes, accumulation of large stocks of international reserves or borrowing in local currency would not provide much of a buffer against severe external shocks such as those that may result from the normalization of monetary policy in the US. And the multilateral system is still lacking adequate mechanisms for an orderly and equitable resolution of external financial instability and crises in EDEs.

Dear colleagues,

Since the announcement that elections will be held in Greece on 25 January 2015, the prospect that they be won by SYRIZA has been presented as a menace to international public opinion and in particular, as a threat to the Eurozone. Yet those who are sounding the alarm are fully aware that SYRIZA has announced that it has no intention of suspending debt repayments once elected, and wishes to remain in the Eurozone. On the other hand SYRIZA is committed to putting an end to the unjust and antisocial measures implemented by previous governments and the Troika.

This campaign against the supposed dangers of SYRIZA is aimed at intimidating Greek voters into renouncing their right to change. It is also intended, in the event of a SYRIZA victory, to cause part of European public opinion to reject the Greek Coalition of the Radical Left in order to avoid Podemos winning the autumn 2015 Spanish elections in its wake. Other surprises could be in store from countries such as Cyprus, Portugal and Slovenia if their citizens considered that it would be worth trying to replace disastrous ultraconservative policies by left-wing measures. European leaders and the large private corporations that support them are aware that the majority of the Eurozone population has a negative opinion of the policies that have been implemented in recent years, and would be ready to vote for change. A SYRIZA victory would represent a major threat to the mainstream parties, whether conservative or “socialist”, fearing that the contamination could spread to Spain.

The debt that Greece is expected to pay is equivalent to 175% of annual national wealth, and is an intolerable burden for the Greek people.

What would happen if a SYRIZA government decided to apply, to the letter, Article 7 of a regulation adopted by the European Union in May 2013 “on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability”, concerning countries subject to a structural adjustment plan, including in particular Greece, Portugal and Cyprus.

Paragraph 9 of Article 7 maintains that States subject to structural adjustment should carry out a complete order of public debt in order to explain why indebtedness increased so sharply and to identify any irregularities. Here is the text in full: “A Member State subject to a macroeconomic adjustment programme shall carry out a comprehensive audit of its public finances in order, inter alia, to assess the reasons that led to the building up of excessive levels of debt as well as to track any possible irregularity”. |1|

The Greek government, under Antonis Samaras refrained from applying this regulation so as to hide from the Greek population, the real reasons for the increase in debt, and the irregularities linked to it. In November 2012, the Greek parliament, dominated by a right wing majority, rejected a SYRIZA motion for the creation of a parliamentary commission to investigate the debt, by 167 to 119 with zero abstentions.

It is clear that should SYRIZA win the elections, the government that would then be set up could well decide to apply the letter of European law and create a parliamentary debt audit commission (with citizen participation) to analyse the process that led Greece into excessive indebtedness, to track probable irregularities, and to identify the illegitimate, illegal, odious … parts of the debt.
Citizen participation is fundamental to a rigorous and independent audit process. Article 8 of the above-mentioned regulation recommends that: “A Member State shall seek the views of social partners as well as relevant civil society organisations when preparing its draft macroeconomic adjustment programmes, with a view to contributing to building consensus over its content.” One more reason for active citizen collaboration in the audit process.

Here are some key points that could be revealed by carrying out an audit.

Greek debt, which was at 113% of GDP in 2009 before the onset of the Greek crisis and the intervention by the Troika, which now holds 4/5 of total debt, reached 175% of GDP in 2014. We therefore see that the Troika intervention was followed by a very considerable increase in Greek debt.

Between 2010 and 2012, the loans that the Troika granted to Greece were very largely used to repay its most important creditors at that time, mainly the private banks of the principal European economies, starting with the French and German banks. |2| In 2009, some 80% of Greek public debt was held by the private banks of seven EU countries. Fifty percent was held by French and German banks alone.

An audit of Greek debt will show that European private banks greatly increased their loans to Greece between the end of 2005 and 2009 (rising by more than €60 billion, from €80 billion to €140 billion) without taking into account Greece’s real repayment capacities. The banks acted recklessly, reassured in their conviction that the European authorities would come to their aid if there was a problem.

As previously mentioned, an audit will show that the so-called bail-out of Greece set up by the European institutions with assistance from the IMF, has in fact enabled the banks of some European countries with a decisive influence on European institutions to continue collecting debt repayments while at the same time transferring the risk to the Member States through the Troika. It is not Greece that has been saved, but a handful of big private banks mainly based in the strongest countries of the EU.

Private European banks were thus replaced by the Troika as Greece’s main creditor as from late 2010.

The audit will analyse the legality and legitimacy of the bail-out process. Is it in conformity with European treaties (especially Article 125, which prohibits EU countries from taking on the financial engagements of another EU country)? Did it comply with normal EU decision making procedure? Did the public lenders in 2010 (the 14 EU countries that granted Greece €53 billion of loans, the IMF, the ECB, the European Commission etc.) respect the principal of the free will of the borrower, Greece, or did they profit from Greece’s distress in the face of aggressive speculation to impose agreements that were against its own interests? Did these creditors impose one-sided conditions such as excessive interest rates on the loans? |3| Did the 14 member States that each granted Greece a bilateral loan respect their own laws and constitutions, as well as those of Greece?
Another purpose is to audit the actions of the IMF. We know that several members of the IMF Executive Board (the Brazilian, the Swiss, the Argentine, the Indian, the Iranian, the Chinese, and the Egyptian member) had expressed considerable reservations regarding the loan granted by the IMF, pointing out, among other things, that Greece would not be able to repay it due to the policies that were being imposed on the country |4|. Did the Greek government, in collusion with the Managing Director of the IMF at the time, request that its statistics department falsify the exact data in order to issue such a negative report on the country’s financial health that the IMF would be justified in launching a bail-out plan? Several highly-place Greek civil servants say so.

Did the ECB seriously overstep its prerogatives in requiring the Greek Parliament to pass legislation concerning the right to strike, health care, the right of association, education, and the regulation of wage levels?

In March 2012, the Troika organized a restructuring of the Greek debt that was presented at the time as a success. We should recall that George Papandreou, the Prime Minister, had announced in early November 2011, just before a meeting of the G20, that in February 2012 he would call a referendum on the restructuring of Greece’s debt prepared by the Troika. Under pressure from the Troika, that referendum never took place and the Greek people were denied their right to express their opinion of the new debts. The mainstream media relayed the narrative which said that the restructuring would reduce Greece’s debt by 50%. In reality, Greece’s debt is greater in 2015 than in 2011, the year before the so-called 50% cancellation. The audit will show that this restructuring operation, which was in fact a huge confidence trick, was linked to an extension of policies that run counter to the interests of Greece and its population.

The audit must also evaluate whether the strict conditions imposed on Greece by the Troika in exchange for the loans it received are a fundamental violation of a series of treaties and conventions with which the public authorities on the side of both the creditors and the borrower, Greece, are required to comply. The professor of law Andreas Fischer-Lescano, commissioned by the Vienna Chamber of Labour, |5| has irrefutably demonstrated that the Troika’s programs are illegal under European and international law. The measures defined in the adjustment programs that have been imposed on Greece and the concrete policies that are their direct consequence violate a series of fundamental rights - such as the right to health care, to education, housing, social security, to a fair wage, and also freedom of association and collective bargaining. All these rights are protected by many laws at international and European level, such as the Charter of Fundamental Rights of the European Union, the European Convention on Human Rights, the European Social Charter, the two UN Human Rights Covenants, the Charter of the UN, the UN Convention on the Rights of the Child, the UN Convention on the Rights of Persons with Disabilities, and also the conventions of the International Labour Organisation (ILO), which have the status of basic legal principles. The list of articles violated by the Memoranda imposed on Greece, meticulously drawn up by professor Fischer-Lescano, is impressive and the entities who make up the Troika or were put in place by it (the European Stability Mechanism, for example) are legally liable for those violations.

The audit will need to verify whether, as provided for in Regulation (EU) No. 472/2013 of the European Parliament and the Council of 21 May, 2013, mentioned above, “The draft macroeconomic adjustment programme… fully observe[s] Article 152 TFEU and Article 28 of the Charter of Fundamental Rights of the European Union.” The audit must also verify whether the following passage of the Regulation is adhered to: “The budgetary consolidation efforts set out in the macroeconomic adjustment programme shall take into account the need to ensure sufficient means for fundamental policies, such as education and health care.” It must also be determined whether the following fundamental principle of the Regulation has been applied: “Article 9 of the Treaty on the Functioning of the European Union (TFEU) provides that, in defining and implementing its policies and activities, the Union is to take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.” The above provisions need to be taken into consideration in the light of the assessment report published in April 2014 by the EU on the implementation of the second structural adjustment program, in which the authors express satisfaction at the elimination of 20% of all jobs in Greece’s public sector |6|. In an inset entitled “Success stories of the Economic Adjustment Programme,” we learn that labour-market reforms have served as the pretext for a reduction in the legal minimum wage and that 150,000 jobs have been eliminated in the public administration (“Decrease in general government employment by 150,000”, p. 10).

The audit should show clearly that the measures dictated by the creditors are in fact manifestly regressive in terms of fundamental human rights and a clear violation of a series of treaties. Considerable irregularities can be identified. Consequently, the commission in charge of the audit will be able to give a reasoned opinion as to the illegality, the illegitimacy, and even the nullity of the debt contracted by Greece with the Troika

Best regards,

Éric Toussaint
Senior Lecturer at the University of Liège,
President of CADTM Belgium (Committee for the Abolition of Third-World Debt)

Read more: www.cadtm.org/   notes:

|1| ttp://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013R0472

|2| C. Lapavitsas, A. Kaltenbrunner, G. Lambrinidis, D. Lindo, J. Meadway, J. Michell, J.P. Painceira, E. Pires, J. Powell, A. Stenfors, N. Teles : “The eurozone between austerity and default”, September 2010. http://www.researchonmoneyandfinanc...
See also Eric Toussaint, “Greece-Germany: who owes who? (Part 2) Creditors are protected, the people of Greece sacrificed”, published 6 November 2012, http://cadtm.org/Greece-Germany-who...

|3| The interest rates imposed in 2010-201 were between 4 % and 5.5 %. In 2012 they were, after protests (including from the Irish government who was also asked to pay high interest in 2010), reined in to 1 %. Lowering the rate was tacit acknowledgement, by the 14 States, that the interest rates were too high.

|4| See the revelations made by the Wall Street Journal: http://blogs.wsj.com/economics/2013... Also see: http://greece.greekreporter.com/201...

|5| See his report “Human Rights in Times of Austerity Policy”, published 17 February, 2014, available at http://www.etui.org/content/downloa...).pdf.

|6| European Commission, Directorate-General for Economic and Financial Affairs, The Second Economic Adjustment Programme for Greece, Fourth Review – April 2014, p. 3, See http://ec.europa.eu/economy_finance.... The report contains 304 pages.

 

Dear colleagues

This Guardian article is the result of an IPD FEPS conference held at Brookings about policy alternatives for Europe, to restore investment, growth and employment. It was signed by an eminent group of economists, of different schools of economic thought
http://www.theguardian.com/business/2014/dec/01/eurozone-time-running-out

Best regards.

Professor Stephany Griffith-Jones
Financial Markets Director
Initiative for Policy Dialogue
Columbia University

Dear Colleagues and Kindred Spirits,

It is a very rare privilege, and in its way humbling, to be able to test a policy that one has advocated over many years. It is also a responsibility, since one must do whatever one can to be objective and allow for the possibility that it will fail.

Starting in 2010, the opportunity to test the idea of a basic income as a development policy became feasible in India. Working with SEWA and others, we developed a project to launch what turned out to be three pilots, the first one being a small-scale 'substitution' project in west Delhi, in which households were given a choice of staying with rations under the PDS or taking a monthly basic income of equivalent value. This pilot was made possible through a grant from UNDP.

The second was launched in eight villages of Madhya Pradesh, where nearly 6,000 men, women and children received a monthly basic income individually, in cash, unconditionally and universally, for 18 months, with the money for the children being paid to the mother or a surrogate. The outcomes were compared over time and with the experience in the same period of everybody in 12 otherwise similar villages.

The third was a small pilot in two tribal villages. In one, every man, woman and child received a basic income; in the other nobody did.

The second and third pilots were made possible through the generous support of UNICEF New Delhi. The methodology for the largest pilot could be described as mongrel randomised control trial. We ruled out comparing the impact of an unconditional cash transfer scheme with a conditional one on the grounds that conditionality is inherently non-moral. We also ruled out the standard RCT practice of providing individuals and households randomly, on the pragmatic grounds that there would be spoiling effects if next door neighbours did not have the basic income. So, the random sampling was at the village level. 

A unique feature of the largest pilot was that it tested for the impact of the basic income and the independent effect of the presence of a collective body that could protect and enhance the interests of vulnerable households and individuals in villages.

In short, this project has given real meaning to the provision of an economic floor. The main results have been summarised in a book just published (flyer attached) and in a long technical report that will be made available through UNICEF New Delhi. Other articles will follow.

The key claims are these:

1. A basic income of the sort tested in this project is feasible and affordable, particularly if substituted for just part of the costly, inefficient and corrupt Public Distribution System and/or the similarly riddled MGNREGS.

2. The emancipatory value of the basic income is greater than the monetary value.

3. The presence of an intermediary collective body does make a positive difference on several types of outcome, particularly in the economic sphere.

4. A basic income results in increased economic activity and work.

5. The groups who benefit most in various respects, notably health and nutrition, are the most vulnerable and disadvantaged.

6. Even a short-term basic income has longer-term positive effects, helping to break cultural and social barriers and liberating individuals, most notably in overcoming debt bondage.

Our methodology and the analysis we have done are not ideal. There is much more work to be done. However, the combination of three rounds of extensive evaluation surveys, detailed case studies and secondary data analysis provide what we hope is a coherent narrative of a promising development tool that should be tested and expanded in many other places.

A formal launch of the book was made in Delhi in early December. A second launch will take place in Bloomsbury's London offices at 18.30 on January 27. Anybody in the vicinity would be welcome to come to that. Further details can be supplied.

A Happy New Year to all of you.

Guy Standing            

Dr Guy Standing,
Fellow of the Academy of Social Sciences
Professor in Development Studies, School of Oriental and African Studies,
University of London.
Co-President, Basic Income Earth Network (BIEN)
www.basicincome.org
Email: [email protected]
Website: www.guystanding.com
Latest book: A Precariat Charter: From Denizens to Citizens (Bloomsbury Academic, 2014)
The Precariat on Facebook Indian basic income pilot video

Dear colleagues,

Botswana is a poster country for the Bretton Woods institutions (BWIs); it is hailed for its remarkable macroeconomic stability by authors such as Acemoglu and Robinson (e.g., Why Nations Fail: The Origins of Power, Prosperity and Poverty). Its high growth for more than two decades has been attributed to “good policies” that ensured macroeconomic stability characterized by low single-digit inflation and budget surplus. However, they fail to see what happened to Botswana’s social sector. According to the African Development Outlook 2014, “With a Gini coefficient of 0.61, Botswana portrays a relatively unequal distribution of wealth. The incidence of poverty is also high, with 18.4% of the population living below the poverty line. Other challenges include a high unemployment rate of 17.8%, and relatively low Human Development Index (HDI) ranking and score mainly due to the high HIV/AIDS prevalence of 23.4% that drags down life expectancy.” As a matter of fact, Botswana is the 3rd most unequal society in the world and its life expectancy declined by more than 16 years from 63.45 years (1988) to 46.99 years (2012). One wonders what value fiscal surplus has when the government is supposed to strengthen its public health system and ensure that its citizens have adequate access to essential medicines. Botswana’s budget surplus reached an all time high of 11.20% of GDP in 2007; went in to deficit during 2009-2011 in the wake of global financial and economic crisis; but turned into surplus again since 2012). It is clear that Botswana achieved macroeconomic stability at great social and human cost.

In fact, countries after countries, especially in Africa, were advised by BWIs to restrain public expenditure as a central element of the “one-size-fits-all” structural adjustment programme (SAP). Many countries even refused to use grant money offered from the Global Fund to Fight for Aids, Tuberculosis and Malaria (GFATM) because that would violate the expenditure ceiling imposed by IMF’s SAP. It was argued that large aid flows would cause so-called Dutch disease and joepardize macroeconomic stability. UNDP, which argued for a larger fiscal space (including foreign aid) to achieve MDGs, was baffled by the Dutch disease argument and refusal by countries to receive assistance from GFATM. In 2005, the UNDP through Terry McKinley hired me to evaluate the argument. The result was my paper (with Terry), “Gearing Macroeconomic Policies to Manage Large Inflows of ODA: The Implications for HIV/AIDS Programmes” (http://www.ipc-undp.org/pub/IPCWorkingPaper17.pdf).

After extensive review of literature, the paper contended that the evidence of Dutch disease due to large aid flows is not conclusive. It argued that because of the daunting scale of this epidemic, funds need to be disbursed urgently in order to contain its spread. The paper showed how macroeconomic policies can be managed to accommodate a large inflow of foreign aid to combat the HIV/AIDS epidemic and still maintain macroeconomic stability. It requires departure from “one-size-fits-all” mental and policy framework to carefully coordinate fiscal, monetary and exchange rate policies. Such coordination should enable governments to both ‘spend’ aid in order to finance larger government programmes and ‘absorb’ aid in order to import more real resources.

Often, governments that receive foreign aid neither ‘spend’ nor ‘absorb’ it fully, defeating the basic purpose of development assistance. Because governments fear inflation, they are reluctant to finance a significant increase in spending on HIV/AIDS programmes even when the funding is available. Central banks are reluctant to sell the foreign currency they receive from HIV/AID related aid because they fear that such an action might appreciate the domestic currency. However, if aid-induced spending on HIV/AIDS programmes minimizes the adverse impact of the epidemic on human capabilities, not only would it combat a grave human development crisis but also it could safeguard long-term economic growth. Instead of adhering to restrictive macroeconomic policies, governments could target their increased spending on productivity enhancing public investment and central banks could amplify the flow of low cost credit to stimulate private investment. If the real exchange rate does begin to appreciate, the central bank can implement means to manage its fluctuations in order to maintain competitiveness. Moreover, if a significant proportion of HIV/AIDS funds is used to directly finance the import of drugs and medical equipment that are not produced domestically (which is often the case), there is likely to be even less impact on inflation or appreciation of the exchange rate.

Anisuzzaman Chowdhury, PhD
Director
Statistics Division
United Nations ESCAP
Rajdamnern Nok Avenue
Bangkok 10200, Thailand
Tel: (662) 288-1486; 
Fax:(662) 288-1082
Email: [email protected]

A 2006 UNDP report that I supervised on Zambian macro policies demonstrated how IMF & WB conditionalities restricted the health ministry from coping with AIDS. I give the link below.
http://jweeks.org/2006%20Zambia%20Country%20Study.pdf

In a 2007 journal article I document how WB-demand closures to hospitals and rural medical centers led to a rise in disease and a fall in life expectancy in Moldova.
http://jweeks.org/2011%20Moldova.pdf

In neither case did the IMF or WB feel inclined to comment or respond.

John Weeks
Professor Emeritus of the School of Oriental and African Studies
University of London

Dear Richard, Alex, et al:

The Lancet commentary piece was very interesting and I was glad to see it. I also wrote a piece on how IMF policies have hurt the Ebola countries' health systems in ForeignPolicy.com in late October, which may be of interest to you.

http://foreignpolicy.com/2014/10/30/west-africas-financial-immune-deficiency/

In his message below, Alex Kentikelenis offered a very good critique of the Chris Blattman Washington Post article that challenged the Lancet piece. You may also be interested to know that shortly after the Blattman article was published, another reply article was also published in the Washington Post: “5 things you should read before saying the IMF is blameless in the 2014 Ebola outbreak”.

http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/01/05/5-things-you-should-read-before-saying-the-imf-is-blameless-in-the-2014-ebola-outbreak/

Regarding the response to The Lancet piece by the IMF’s Sanjeev Gupta, please note that the IMF only talks about recurrent expenditures in their reply to these criticisms. But if you don't clearly distinguish between recurrent expenditure (what gets the most attention) and long-term capital expenditures - also called long-term public investment as a percent of GDP (which is rarely mentioned but arguably far more important for building the underlying health infrastructure over time), then its easy for the IMF to dodge and deflect the criticism and get off the hook. The IMF can just count on the readers being confused and not knowing the difference between these two types of expenditure, then point to a few recent years of relative increases in recurrent health expenditure in a few countries - and then claim their policies are therefore not hurting health spending. This is a huge problem that I've seen again and again over the years whenever critics raise this issue and the IMF replies.

The IMF must be made to answer for how its fiscal and monetary policies impacted on the long-term drop-off in public investment as a percent of GDP seen in many countries over many years – that’s the real issue (not recent levels of recurrent health spending).

Sincerely,
Rick Rowden

Rick Rowden is the author of The Deadly Ideas of Neoliberalism: How the IMF has Undermined Public Health and the Fight against AIDS (Zed Books, 2009). He is currently a doctoral candidate in Economic Studies and Planning at Jawaharlal Nehru University, New Delhi.

Dear Alex,

Blattman repeats arguments repeatedly used by the IMF since the early 1980s, when structural adjustment policies were promoted by both the IMF and The World Bank, usually working in tandem. Many evaluations have been undertaken on the disastrous long term effects, especially on people and vulnerable groups like children and the disadvantaged. UNDP's Human Development Report put it succinctly: it is illogical to think of balancing an economy by unbalancing people's lives. Ebola shows how the whole world is threatened and pays the costs and consequences for such narrow and short- sighted thinking.

Prof Sir Richard Jolly
Institute of Development Studies
University of Sussex

Dear colleagues,

What is the legacy of decades of IMF programs for the health systems of the three Ebola-stricken West African countries? In a recent article for the Lancet Global Health, we examined the IMF’s own archival documents — loan agreements with Sierra Leone, Guinea, and Liberia — and identified three ways consecutive lending programs contributed to weak health systems: overall fiscal constraints, reductions in public sector employment, and the premature decentralization of health policy. 

Responding to our article, Chris Blattman disagreed. His general point was that the IMF is irrelevant in discussions of health policy in poor countries. We wish we could agree. However, a large body of research demonstrates the many and varied effects of IMF programs on a range of social indicators, including health (more recently, on tuberculosis, HIV, poverty and inequality, and environmental pollution). In particular, Blattman raised a number of specific objections to which we respond below.

First, Blattman argues that the main reason behind weak health systems is the lack of state capacity resulting from years of civil war. We fully agree, and we never denied that civil wars and poorly functioning states were not key reasons for weak health systems in these countries. Our argument, however, is that the policies promoted by the IMF exacerbated problems of state capacity.

Second, Blattman argues that these countries were ‘awash with more outside money than ever before.’ Yet, even if development assistance for health may have poured into these countries in recent years, that is not to mean that it would actually translate to additional government health spending. Indeed, evidence suggests that so-called health aid displacement is greater among IMF borrowers. In addition, notwithstanding recent aid trends, the impact of the IMF has manifested itself over many years. Since 1990, Guinea and Liberia have been under IMF tutelage for about two decades, and Sierra Leone for seven years. The legacy of austerity measures and structural reforms is cumulative and easily missed if only examining the most recent period.

Third, Blattman asserts that these governments were not interested in investing in building up their health systems because they had spending priorities related to averting violent conflict. This view assumes that these countries are unwilling or incapable of pursuing an agenda broader than narrow law-and-order priorities. This claim involves an analytical challenge and overlooks the actual experience of countries. Analytically, the issue is how to establish ‘government intent.’ If we consider declarations of governments and rising public health spending trends (from extremely low initial levels), then the governments of these three nations were committed to strengthening health policy. Indeed, as evidenced in their Poverty Reduction Strategies, governments wanted to spend even more. Further, country policies document the intention to build up health policy. For instance, Sierra Leone launched its ambitious and lauded Free Healthcare Initiative in 2010 that provided access to services to pregnant women, new mothers, and children.

Finally, Blattman criticizes us for ‘assum[ing] the IMF had any real influence over health policy and spending.’ By ‘real influence’, Blattman — presumably — means direct influence. We are in agreement with him, that this type of influence is likely very limited. Health ministry officials do not routinely meet IMF missions to discuss the conditions of bailouts. However, this is a very limiting way to understand power. Indeed, the effects of the IMF — as we demonstrated in our paper — are mostly indirect, but still very ‘real.’ Bailout programs by the IMF stipulate extensive conditions for public spending and, until very recently, on the number or remuneration of public sector employees. Health policy can thus be subject to collateral damage, despite rhetoric of the IMF to the contrary. For example, as the Guinean authorities reported to the IMF in 2013, ‘unfortunately, because of the reduction in spending, including on domestic investment, it was not possible to respect the indicative targets for spending in priority sectors.’ This kind of IMF influence — one step removed from those affected — arguably is all the more dangerous, as it precludes direct negotiations and influencing.

To conclude, we understand the IMF as exercising a powerful influence over borrowing countries’ policy making. In addition to serving as a de facto lender of last resort, it catalyzes aid from the donor community and its symbolic capital can legitimize domestic actors. Consequently, the organization is often able to influence the domestic balance of power, sometimes in decisive ways. To suggest that the IMF had no influence whatsoever on health system development (or other social policies) in three of the very poorest countries in the world, while they were under IMF-supported programs for extended periods of time, strikes us as completely implausible.

In his critique, Blattman accuses us for ‘doing research from afar’ and not understanding ‘how weak states actually work.’ As our response suggests, the arguments by Blattman — despite having been developed in geographical proximity to the IMF — fail to consider ‘how the IMF actually works.’ The IMF’s acronym is occasionally interpreted as ‘It’s Mostly Fiscal.’ Pretending that fiscal effects and structural reforms have little to do with health or social policy areas is problematic. If anything, this can lead to complacency about the very tangible effects that the IMF has for the policies of its borrowers. More evidence-based debates are essential, rather than simply assuming the IMF away. 

This article was published at the Washington Post. 

Best regards,
Alex Kentikelenis

========

Alexander E. Kentikelenis
Research Associate
Department of Sociology
University of Cambridge
King's College 562
Cambridge, CB2 1ST
+44 (0)759 3212319
www.kentikelenis.net

Dear friends,

2014 was quite a year.  With an elusive global recovery and inequalities becoming more and more apparent, the fight for social justice is needed more than ever.

In 2014, the UN Open Working Group proposed a set of 17 sustainable development goals (SDGs), including social protection floors for all. But - will these goals and targets be meaningful and adequately financed to redress inequalities and transform societies? 

2015 promises to be another roaring year with the finalization of the post-2015 development agenda at the UN Summits in Addis Ababa (July) and in New York (September), as well as the continuing policy debate (struggle!) to promote global socio-economic recovery. Key international gatherings to watch include the IMF and Bank Meetings in Washington (April) and Lima (October), and the G20 now under Turkish presidency. 

Countering these meetings, civil society will fight for alternative policy agendas at the World Social Forum in Tunis (March), and other parallel events to official international gatherings. At the country level, social dialogue remains the main avenue to ensure national recovery and inclusive development, and when policy-makers do not listen, citizens will likely continue the increasing trend in protests and demonstrations.

The inequality and recovery debates have positioned social protection, decent work and progressive taxation at the forefront of the development agenda.  Raising household income is essential to reduce inequality and to promote demand/economic recovery. However, in 2014 we saw worrisome trends in the two main factors affecting household income, wages and social protection. Wage growth has been falling over the last decades, combined with low employment as a result of “jobless growth.” And, while narrowly-targeted safety nets have been expanding, overall social protection and household welfare have not, due to recent reforms to social security and health systems, elimination of subsidies, cuts/caps on the number of health and social workers, fees for social services, and increases in indirect taxation, among other adjustment or fiscal consolidation measures, now affecting 120 nations, including 86 developing countries in 2015.

Three Nobel Laureates have started the year with strong op-eds on inequality, Joseph Stiglitz, Amartya Sen and Paul Krugman – the latter wrote “the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen the valley of despond.” Krugman is concerned with the stagnation of the working and middle classes, and the rise of radical parties/groups; he blames politicians who seem unable “to challenge elite priorities, in particular the obsession with budget deficits, for fear of being considered irresponsible. And that leaves the field open for unconventional leaders… who are willing to address the anger and despair of ordinary citizens.”

Global recovery and inclusive development require a policy shift to increase public investments, to have expansionary macroeconomic policies, to generate jobs and to raise household income - with adequate wages and universal social protection systems (not charitable safety nets  - but for health for all, pensions for all, support for all unemployed, and so forth). Some countries are considering monetary and fiscal stimulus policies (eg. Japan announced a $29 billion package, welfare and wage increases), some are disputing debt (eg Argentina, Greece), some countries are expanding social protection to achieve universal coverage (eg China, India, Mexico). Will other governments follow in 2015? Or will policy-makers continue to deepen orthodox fiscal, labour reforms and other “jobless growth” policies,  accompanied of a few targeted safety-nets?

2015 promises to be another year of living dangerously. We cannot delay any more: It is time to act on the social deficits. We must address the disturbing inequalities of our world – a world where the top 1% of the population has the same as the poorest 3.5 billion. Policy-makers must tackle this unfair and dysfunctional trend, and realize that a real world recovery means a recovery for all, not simply the recovery of a few economic indicators, wealthy persons and stock markets.

We in Geneva are working hard to promote social protection for all – and we are looking forward to your contributions to this e-discussion.

Please forward this message to people that may be interested to subscribe to this e-discussion. 

Thanks and warm wishes to all for this new year 2015,
Isabel

Isabel Ortiz
Director Social Protection Department
International Labour Organization
4 Route des Morillons
CH-1211 Geneva 22 Switzerland
Visit: http://www.social-protection.org/

Dear colleagues and friends,

On New Year’s Day, one tends to look ahead. Everyone hopes that 2015 will be a less painful year than 2014 with its horrifying trends in poverty, disparities, climate-change induced tragedies, and man-made misdirected fiscal austerity. As anyone who is subscribed to this list-serve knows all too well, at least 2.2 billion people are affected by multidimensional poverty (UNDP HDR 2014), and probably one billion by hunger. Income, wealth and health inequities are spiraling. There are currently over 40 million internal or cross-border refugees, a larger number than ever before. The planet is suffering from perhaps irreversible climate change and biodiversity loss. To address these challenges, the SDG negotiations resume later this month. The idea on the table is to adopt a universally applicable, human rights based development agenda. This would require radical policy shifts at all levels. 

What are the political opportunities?

One potential opportunity is the European Year of Development which begins today.  One of its aims is to tackle counter-productive European policies which often have negative effects for poor people. This is to be achieved by  direct involvement, critical thinking and active interest of EU citizens and stakeholders in development cooperation http://www.concordeurope.org/component/k2/item/393-eyd2015 .This European effort, initiated by CSOs,  could possibly serve to push for a development agenda that is truly transformative. But one worries:  some of the worst austerity agendas and policies have come out of the EU and its member states. Germany as one example is flaunting a zero-debt fiscal budget, while refugees sleep in tents and overcrowded barracks, while crèches are severely understaffed, teachers overstretched, and public transportation systems lack maintenance and upgrading. As the economic rift widens between the economically lucky and those without decent work and incomes, the social contract is threatened by new forms of racism. – From this follows that those of us who are European need to pressurise our governments to make sure that the European year of development pursues a progressive, inclusive agenda.

Recently, the UN published a Synthesis Report  by the Secretary-General - “The Road to Dignity” - http://www.un.org/ga/search/view_doc.asp?symbol=A/69/700&Lang=E to accompany the SDG negotiations. Much awaited as an opportunity to introduce a radical vision, the report was a big disappointment http://www.networkideas.org/news/dec2014/Transformative_Agenda.pdf. Inequity, gender inequality, unequal power relations, unsustainable production and consumption are downplayed in the Report. See for example: http://www.womenmajorgroup.org/wp-content/uploads/2014/12/WMGResponsetoSGSynthesisReport_18Dec.pdf; http://www.oxfam.org/en/pressroom/reactions/oxfam-reaction-release-un-secretary-general-post-2015-synthesis-report.  It does not address the concept of global value chains which could explain  immiserising trade, nor does it mention the concept of the care economy so relevant for gender equity and empowerment. There are no discussions of the policies that would be necessary to move towards political, economic, social and climate justice. This is surprising because convincing, progressive  policy advice would be available right at the centre of the UN secretariat. Just one example of many: the 2nd International Decade for the Eradication of Poverty outlined comprehensive and interconnected, evidence-based policy responses for full employment, decent work, equality and climate management in a 2013 study http://www.un.org/ga/search/view_doc.asp?symbol=A/68/183.  The UN needs support to become a daring,  influential, progressive voice in the SDG process.

 In short, opportunities are available. But there is a need to take the EU by its Year of Development promise, and to urge the UN to use its wealth of knowledge. 2015 needs to become the beginning of an era committed to human rights and  social, economic, political and climate justice.

With best wishes for a transformative 2015,

Gabriele Köhler
UNRISD senior research associate
www.gabrielekoehler.net
Munich, 1 January 2015