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The Brasilia Consensus, a Model for Latin America

October 8, 2012 by

Global Analyst Online / IPS

Estrella Gutiérrez

CARACAS, Oct 07 (IPS) – Following the extreme neoliberalism of the Washington Consensus, which gave rise to a lost decade in social terms, Latin America is experimenting more successfully with a home-grown formula: the Brasilia Consensus, which combines the market economy and social inclusion.Michael Shifter, president of the Washington-based Inter-American Dialogue think tank, coined the term "Brasilia Consensus" in contrast with the Washington Consensus. It is also called "Lulaism" after former Brazilian president Luiz Inácio Lula da Silva, or "the Brazilian model." And it has a growing following in Latin America among governments of both left and right.

"The Brazilian model has had a very positive impact as an example of how things can be done differently, by promoting growth without relinquishing social equity," José Rivera, the permanent secretary of the Latin American and Caribbean Economic System (SELA), told IPS.

He said Latin America and the Caribbean "should share the regional aspiration of integration and be united in the common goal of reducing asymmetries and making progress in repaying major outstanding social debts."

Rivera said there were "positive examples, especially home-grown ones, of governments that deal efficiently with the unpaid social debts in the region, where one out of three Latin Americans live in poverty and nearly 90 million people survive on less than a dollar a day."

In an interview with IPS, Shifter said the features of the Brasilia Consensus "remain intact and valid," although Lula left office in January 2011 and the international and regional contexts have worsened.

"The model has not changed, with its three central concepts: economic growth, social equity and democratic governance," he said.

Its validity is confirmed by its spread as a governance guide for many countries in the region, whatever the political ideology of their presidents. This contrasts with the decline of other, more radical, proposals led by Venezuelan President Hugo Chávez in the first decade of this century.

The Brazilian model takes the opposing view to the package of measures imposed by Washington-based international financial institutions and power brokers on Latin America during the foreign debt crisis that broke out in the early 1980s, and during the 1990s.

The 10-point Washington Consensus, summarising neoliberal ideology, enforced harsh adjustments to eliminate the fiscal deficit, including the redirection of spending, financial and monetary liberalisation, tax hikes, opening of markets and investments, and massive privatisation, in order to repay debt and establish a new basis for economic growth.

In practice, far from generating growth, the reforms fuelled regional deindustrialisation and caused GDP to fall for nearly a decade, marked by financial crises, several of which were of global scope.

But the worst aspect was its impact on people. During the so-called lost decade, all forms of social spending were cut, especially in education, health, housing and aid for the most vulnerable sectors, while labour conditions also worsened.

As a result, poverty and extreme poverty increased, shanty towns grew in the cities, and the informal economy and informal labour expanded, among other negative impacts.

During his eight years in power (2003-2011) Lula established a different model, based on macroeconomic and fiscal stability, an autonomous monetary authority and free exchange rates, added to aggressive industrial and domestic production policies.

Another priority of the Brazilian model is social inclusion, with wage raises, formal job creation and high spending on policies to eradicate hunger, reduce poverty, improve education and health and redistribute income across society.

The guiding principle is democracy, along with the extension of human rights, incentives for citizen participation and organisation from the grassroots up.

Shifter said Lula’s successor, President Dilma Rousseff, "decided to keep a lower global profile than Lula, but the Brasilia Consensus model has not been affected." She has "a different leadership style and other priorities," he said.

Rousseff has implemented different policies to stimulate the economy and cushion the effect of the economic recession in the countries of the industrialised North, especially Europe. She has also taken care to reinforce social programmes in this unfavourable new scenario.

A recent statement by Rousseff underscores her position. "What I want, and what I fight for, is for Brazil to become the sixth social power," she said, now that her country has become the sixth largest economy in the world and is heading for fifth position.

Among the Latin American countries whose governments take the Brasilia Consensus as their guide, with variations, Shifter mentioned Chile, Colombia, El Salvador and Uruguay. Other administrations adopt certain elements, while he described Argentina and Paraguay – until its president Fernando Lugo was ousted in June – as "hybrids" between Lulaism and Chavism.

He particularly mentioned the case of Peruvian President Ollanta Humala, who chose Lulaism over Chávez’s Bolivarian model, initiating the latter’s regional decline.

He also found it remarkable that Henrique Capriles, the opposition candidate in Venezuela’s elections on Sunday Oct. 7, "stressed that Lula was his model, which his platform confirmed.”

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Americas, Economy, Featured, Society Tagged With: , , , , ,

Co-ops Offer Ray of Hope for Youth Facing Bleak Job Market

October 8, 2012 by

Global Analyst Online / IPS

Beatrice Paez

TORONTO, Canada, Oct 08 (IPS) – Youth worldwide are facing limited job prospects in the traditional channels of employment, and in the midst of the job crunch, cooperatives are seeking ways to connect with this untapped pool of talent.It begins with reserving a seat for young, future cooperative leaders this Oct. 8 to 12 at the International Summit of Cooperatives in Quebec City. About 150 youth from across the globe have been invited to represent their respective cooperative organisations.

It’s an opportunity for them to network with their peers and learn from their cooperative elders, said Stephanie Guico, the coordinator of the Future Leaders programe at the conference. While there will be special panels and events designed around them, the young leaders, from the ages 20-35, will be expected to bring their own contributions.

“I hope they’re going to bring a youth voice, innovative ideas, new perspectives. I hope they won’t censor themselves,” Guico told IPS. “There’s a lot to be gained from listening to youth who are more in touch with integration into the virtual area and ways of collaborating and communicating that are new.”

“I think there’s a generation now that has grown up with a certain type of cooperation through social media,” said Charles Gould, executive director of the International Cooperative Association, a non-governmental organisation that strives to shape global policy on behalf of cooperatives.

“It ought to make them more receptive to the cooperative model but they haven’t heard about it as a business model,” he told IPS.

No one knows more about creating connections through social media to answer a need than social entrepreneur Dev Aujla, who will be addressing the young leaders.

Aujla, founder of DreamNow, a charitable organisation in the business of turning ideas into social goods, collaborated with Rolling Stone Magazine’s “climate hero” Billy Parrish, a climate change activist, to write a book.

Parrish and Aujla’s paths crossed online, as Facebook friends who had never met but who shared similar principles, and dedicated their lives to mobilising youth to address their community’s issues. Their book “Making Good” serves as a game plan for youth interested in pursuing careers as social entrepreneurs.

The non-linear career path often comes with the territory if you become a social entrepreneur, and while it can be daunting, it is becoming an attractive option for those wanting a job that pays well enough and is rooted in serving the community, said Aujla.

And for those interested, the cooperative model can provide a base of support, because it doesn’t require a lot of a capital, and he said, with cooperatives “you can take any industry you can imagine and reinvent in a way that does good.”

The cooperative model speaks in the language that today’s generation has been reared on, through exposure to the dialogue on climate change and other environmental issues, “this whole generation knows they want to do something good and are just being turned on the idea,” adds Aujla.

But while youth have more access to information to educate themselves on the issues of today, the cooperative model isn’t all that familiar because it’s not always included in academic curriculum, said Guico, who completed a Bachelor’s Degree in International Development.

Social media can aid the cooperative movement in its efforts to connect with youth, but more education about how they can offer an alternative route for employment is needed.

“Realistically, it’s going to take a different presentation of the model and a better explanation of it,” said Gould.

It took doing her own research and meeting the right people for Guico to find her way into the cooperative movement. The same goes for others around her. “Most people stumbled upon the movement, which said something about how good the cooperative movement is doing at promoting itself and communicating its identity.”

Part of the issue Guico finds is that cooperatives operate in a more discreet manner than corporations. “We would have to impose ourselves before there’s a perception of our importance,” she said.

Another reason cooperatives are not on the minds of many youth is that schools do not delve deeply, if at all into what the model offers, Guico notes. “Most educational institutions are geared towards the capitalist model, anything that it is too complex, they tend to simplify or minimise it.”

Without the decision to explore cooperatives on her own, Guico might have continued to presume that cooperatives are only in the trade of making crafts and operating as small-scale agricultural enterprises, as she was led to believe.

In Canada, St. Mary’s University in Halifax offers a Master’s programme designed around the cooperative enterprise. The university is sponsoring Imagine 2012, a joint event of the summit, on cooperative economics that precedes it.

But the online programme, which gathers people from around the world, is targeted at cooperators entrenched in the movement. Most students have been working in the industry for 15 to 20 years and are seeking to learn new management tools and connect with other industry leaders.

“If people were only learning about it in the ways that are more typical to how (we’re) learning, I think our sector would be much further ahead,” said Karen Miner, the managing director of the Cooperative and Credit Union Management programme at St. Mary’s.

“We would be much better educated about the sector and even on ourselves. We have a large number of managers of co-ops that come from the traditional business background, myself included,” Miner told IPS.

Laure Waridel, an ecosociologist who will also be speaking to youth at the summit, also finds that not enough value is given to the social economy in university courses, particularly in management.

Waridel, who taught a course at McGill University in Montreal, sought to incorporate some lessons on social entrepreneurship in her lectures by inviting guest speakers working in the social economy to her lectures.

The cooperative model, which prides itself in embracing democratic and participatory values, where youth can help influence and shape the future of cooperatives, has a lot of room for growth and new members, Waridel said.

“The message to future leaders is that we need to prepare a transition for another economy,” she told IPS. “It’s very clear that the dominant model in which we are now is unsustainable.”

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Americas, Economy, Featured Tagged With: ,

A Migration Story Comes Full Circle

October 8, 2012 by

Global Analyst Online / IPS

K. S. Harikrishnan

THIRUVANANTHAPURAM, India, Oct 08 (IPS) – For the first time in over four decades, the number of people migrating out of the southern Indian state of Kerala, home to 33.3 million people, is on the decline.A comprehensive study conducted by the Centre for Development Studies (CDS) in Thiruvananthapuram on international migration from Kerala revealed that growth in migration levels will reach zero by 2015.

The report said that the number of Kerala migrants living abroad in 2008 was 2.19 million and 2.28 million in 2011.

Back in the 1970s, a loss of jobs in agriculture, lack of productive ventures and widespread education among the middle class led to an exodus of residents from Kerala, 90 percent of whom headed straight for the Gulf region in search of better jobs and higher wages.

The United Arab Emirates (UAE) quickly became the most popular destination, absorbing 40 percent of Kerala’s job seekers, while Saudi Arabia plays host to 25 percent of the migrants.

But now, higher wages at home have begun to stem the outflow of human capital from Kerala. The average wage for unskilled workers increased from 150 rupees (three dollars) to 450 rupees (nine dollars) per day during the first decade of this century, making Kerala an attractive and competitive labour market.

B. Soman, an engineer in the petroleum sector in Oman, said that even unskilled workers already settled in the Gulf are now opting to go back home in search of better salaries.

John Mathew, a 35-year-old driver working in Kerala’s Pathanamthitta district, who recently returned from Qatar where he had spent the last seven years driving taxis, told IPS that comparatively low wages in the Gulf made a strong case for coming back home.

“Now I earn at least ten dollars a day. It is a decent wage, and my family is happy,” said Mathew.

In addition, Kerala has achieved a level of human development comparable with many advanced countries, including the highest life expectancy rates in the country – 75 years for men and 78 years for women.

Ironically, it was remittances from the Gulf that first began to improve the quality of life in Kerala and created a consumer culture in the state.

The purchase of land and construction of houses received priority among expatriate Keralites, followed by the purchase of vehicles, jewellery and imported electronic items.

Banks say the state received remittances totalling 500 billion rupees in 2011 compared with 432 billion rupees in 2008.

Dr. Sreelekha Nair, junior fellow at the Centre for Women’s Development Studies in New Delhi, told IPS, “While migration to the Gulf was dominated by unskilled workers, recent years witnessed a relative increase in the migration of highly skilled personnel to the Gulf.

“Flexible changes in ownership and business rules, at least in some Gulf countries, resulted in a rise in the number of entrepreneurs. This also boosted the flow of remittances to Kerala,” she added.

According to the Associated Chamber of Commerce and Industry of India, remittances from non-resident Indians in the current fiscal year are likely to exceed 75 billion dollars, up from 66 billion in the 2011-2012 period.

Dr. S. Irudaya Rajan, professor at CDS and an expert in international migration, told IPS that structural changes in the state’s population – namely a steadily ageing population coupled with low birthrates – also contributed to this decreasing emigration trend.

Due to a contraction in the supply of young labourers, and a higher standard of living enabled by remittances, wages for construction and manual jobs are relatively high in Kerala compared to other Indian states, making the former an attractive destination for internal migrants, Soman told IPS.

Internal migrants come largely from West Bengal, Orissa, and Assam and take jobs as domestic workers, farm labourers, masons, and shop helpers, among others.

They say economic hardships, caste-based exploitation, a crumbling agricultural sector and dwindling investment in rural infrastructure in their home states propel them towards Kerala in search of decent livelihoods.

Kalka Das, a mason from Murshidabad in West Bengal, told IPS that unskilled workers like him barely earned enough to survive.

“The prices of commodities are increasing day by day and people are constantly in search of decent wages. Today, Kerala is the Gulf (of India) for internal migrants,” he added.

Ram Gopal, a domestic worker hailing from Assam, told IPS that even though migrant workers in Kerala do experience some exploitation, “we at least get better work and a little bit more money".

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Asia, Economy, Report, Society Tagged With: , ,

Helsinki Boycotts Tax Havens

October 8, 2012 by

Global Analyst Online / IPS

Linus Atarah

HELSINKI, Oct 06 (IPS) – The City of Helsinki added its voice to a growing global call against corporate tax evasion with the passage of a new responsibility strategy that leaves no room for unethical business practices.Last week, 85 city councillors from Finland’s capital voted to sever business ties with companies operating in, or having links to, tax havens.

The resolution – which passed 78-4 in the City Council, the country’s highest decision-making body in charge of local affairs – acknowledged that tax evasion undermines the capacity of municipalities to provide social services.

The council also recognised that tax havens deprive developing countries of vital tax revenues and denies them the opportunity to benefit fully from world trade.

Tax havens are either territories or countries whose authorities allow businesses or individuals to deposit their wealth at very low tax rates or, in some cases, pay no taxes at all.

The London-based Tax Justice Network has identified 10 of the most attractive tax havens around the world, including Bahrain, the Cayman Islands, Jersey, Singapore and Switzerland.

Tax havens are quickly becoming an election issue here, as the country prepares to head to the polls for municipal elections in three weeks. Minister of Finance, Jutta Urpilainen of the Social Democratic Party, flagged the topic during a parliamentary discussion Thursday by supporting the proposal that municipalities boycott companies operating in tax havens.

Protecting the welfare state

The recent decision means Helsinki will no longer provide procurement contracts to companies whose operations are located in tax havens.

With a budget of about four billion euros, Helsinki is Finland’s biggest consumer of goods and services but it must now be more wary of who it chooses to do business with by demanding that companies reveal where they operate.

Taxes from enterprises are the primary source of income for Finnish municipalities, enabling them to provide public services such as education, health, housing and care for the elderly.

“Companies operating through tax havens pose a lethal threat to the welfare state in Finland and in all countries, especially in developing countries,” according to the resolution’s author, Thomas Wallgren, a Social Democratic councillor who has been leading the charge against tax havens.

“They also distort fair competition between companies, thereby threatening the survival of local and national small and medium-sized companies,” Wallgren told IPS.

He cited the example of Accra Breweries in Ghana, owned by South Africa’s SAB Miller. For five consecutive years, this multi-billion-dollar company paid no taxes at all to the Ghanaian government, while people who sold empty bottles on the streets paid, and continue to pay, value-added tax and municipal tax.

Implementation of the city council’s resolution may still run up against obstacles, according to legal experts here, who say the issue is compounded by the fact that European Union competition laws do not allow companies to be denied public procurement contracts on the basis of their location in tax havens.

Murky estimates

“The amount of money in tax havens is a big question mark,” Matti Kohonen, a researcher with the Tax Justice Network, told IPS. “We live in a world of high financial secrecy, which is a direct cause of the financial crisis. We don’t know where the money is and that is a very serious problem,” Kohonen said.

He estimates that global financial transactions that are either illicit, or involve some element of criminality or tax evasion, are in the order of one trillion dollars annually, about one-tenth of the United States’ gross domestic product (GDP).

The lost revenue stemming from these actions is somewhere close to 100 billion dollars, the amount the United Nations says is required to fulfil the Millennium Development Goals.

The Tax Justice Networks also estimates that 21 to 36 trillion dollars, about two to three times the GDP of the U.S., are hidden in tax havens.

Transfer pricing

According to Kohonen, another common method for avoiding taxes is through transfer pricing, a price-setting mechanism for selling goods or services between different departments of the same company or between a parent company and its subsidiary.

An estimate released two years ago by the Organisation for Economic Co-operation and Development (OECD), which sets the tax rules for transfer pricing, says this practice constitutes 70 percent of world trade.

This year the Finnish Tax Administration reported that the government loses 320 million euros of tax revenue annually due to price manipulations in transfer pricing. But Kohonen says that may only be the “tip of the iceberg” because most firms operating in tax havens are shrouded in secrecy.

Rather than have global transfer rules decided by the OECD, Kohonen believes it would be far more democratic for the U.N. to determine these regulations.

“It is a scandal that we have rules that govern world trade but no rules for the world of taxation apart from the rich countries’ lobby group, which is the OECD. We need multilateral rules or some other rules on how to tax multinationals,” he stressed.

Global movement

Helsinki’s initiative is not an isolated case but part of a global campaign to galvanise a groundswell of public support that could in turn create sufficient political will to take action against tax havens.

“The whole point of the campaign is to put additional pressure on national authorities, stock exchange regulators and on the European Union to have more stringent requirements for multinational companies,” Kohonen told IPS.

He says Helsinki’s initiative comes hard on the heels of similar measures taken in two Swedish cities, Malmö and Kalmar, as well as the municipality of Ulstein in Norway, all in an attempt to rein in the activities of tax evading companies.

Eight regions in France, including its wealthiest region, Île-de-France, have recently declared themselves ‘tax haven free zones’.

In spite of the legal obstacles impeding the implementation of Helsinki’s city council decision, Wallgren said many other Finnish municipalities have been encouraged by the momentum and are following suit. The decision is “catching on like wild fire” around cities and municipalities, he said.

“The fight against the tax havens will be a long one but because it is also a fight for the survival of the welfare state it is worth fighting,” he added.

Kohonen likened the current movement in Finland to the Jubilee Debt Campaign of 1990, which forced developed countries to reduce poor countries’ debt.

“Once it becomes the focus of millions of people around the globe, politicians can no longer avoid the problem,” he said.

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Economy, Europe, Report Tagged With: , , ,

Small Farmers in West Africa Need Support – Despite Good Rains

October 5, 2012 by

Global Analyst Online / IPS

Brahima Ouedraogo

OUAGADOUGOU, Oct 05 (IPS) – Despite an abundance of rain, promising good harvests for the current growing season, small-scale farmers and non-governmental organisations are calling for support to smallholders to be maintained with a view to eradicating food insecurity in Africa’s Sahel region.The Permanent Interstate Committee for drought control in the Sahel forecasts that between 57 and 64 million tonnes of grain will be harvested in West Africa in 2012-2013, representing an increase of between five and 17 percent over the previous season.

"According to some studies, around 30 percent of cereal production is lost during and after harvest due to inappropriate harvesting techniques, threshing and storage; so you can understand that we’re only cautiously optimistic (there will be enough food for all)," said Roland Béranger Béréhoudougou, the regional head of disaster response and humanitarian assistance for the NGO Plan International.

But ROPPA, the West African Network of Smallholder Organisations and Producers, and the international charity Oxfam say the region is still facing its third major food crisis in less than a decade.

To avoid the next drought becoming a humanitarian emergency, they say, donors and governments must support investment in the productive capacities of small producers and build up reserve stocks of food. This will enable a swift response to future crises and help communities to manage volatility.

Oxfam noted that even in a year when harvests are good, 20 percent of the population suffers from malnutrition and hunger while 230,000 children across the Sahel die from causes linked to hunger.

In addition, the instability in Mali – where a transitional government is struggling to come to grips with the capture of the northern part of the country by Islamist groups – threatens to provoke a sharp drop in production of rice in the north, by as much as one- third, while half of all livestock could be lost in some regions, the group said.

"We’re in crisis every other year," said Issiaka Ouandaogo, head of humanitarian affairs at Oxfam’s office in Burkina Faso. "So even when we have a good year, 20 percent of the population in the Sahel still faces food insecurity. We need to help small producers boost their resilience. That means access to seeds and agricultural inputs must be the focus."

The successive failed harvests have left some rural households heavily indebted, so part of a good harvest now will go directly to repaying loans, often agreed at punishing rates of interest, Béréhoudougou told IPS.

In some villages in Niger’s western region of Tillaberi, smallholders who owe money to local merchants have pre-sold their millet crop for the equivalent of 14 dollars a bag – sometimes even less – while the real price of a bag of millet in the period immediately following the harvest is between 20 and 30 dollars, according to Béréhoudougou.

"The price of millet can rise to as much as 36,000 CFA (72 dollars) during the lean period (just before the next year’s harvest)," he said.

"We need to put an end to the hellish cycle of debt for rural households with a variety of actions such as cash transfers, cash-for-work programmes, micro-finance and cereal banks," said Béréhoudougou.

"There’s support for farmers in Burkina Faso," said Bassiaka Dao, president of the Burkinabè Peasant Confederation, "but it doesn’t match the needs of producers on the ground. Farmers need to be educated on the management of improved seed and subsidised fertiliser.”

According to Dao, 80 percent of small producers don’t enjoy this type of support from the government. Every year, he told IPS, the distribution of fertiliser and seed is announced, but then nothing is delivered, or farmers get too little – just one or two bags of fertiliser for the whole season.

In the west of Burkina Faso, Oxfam has put 20,000 dollars into a fund for small loans to allow farmers to buy these vital inputs for themselves. Their needs are modest, Dao told IPS: 40-60 dollars for a farmer working one hectare, perhaps

According to Dao, since it was set up in 2010, Oxfam’s rolling fund has helped 120 producers in that part of the country. The rate of repayment has been excellent: this year, 184 farmers will get loans from the fund, which has grown to 46,000 dollars.

"The fund’s beneficiaries are today producing 2,000 tonnes of grain between them. Some have bought livestock and escaped poverty," said Dao, who wants to see a credit system adapted to the revenue of small farmers. "None of the formal banks or micro-finance institutions match up to our needs in terms of credit."

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Africa, Economy, Report Tagged With: , ,

Cooperatives Champion Balance Between People and Profit

October 5, 2012 by

Global Analyst Online / IPS

Kitty Stapp

TORONTO, Canada, Oct 05 (IPS) – The banner year for the global cooperative movement is winding down into its last months, but its leaders have echoed a resounding message: cooperatives, a values-based business model, can usher a transition to a more socially responsible economy.This message will be at core of the International Summit of Cooperatives, a gathering of more than 2,000 participants active in the cooperative movement, to take place in Québec City from Oct. 8 to 12.

With 2012 designated by the U.N. as the International Year of Cooperatives, Monique Leroux, the CEO of Desjardins, the largest cooperative financial group in Canada, thought it was time to bring her dream of launching a summit into action.

“We want to use the summit as an opportunity to make sure the world in general, and governments have a better understanding of the cooperative movement,” said Leroux. “We need to do a better job in promoting who we are.”

Desjardins partnered with the International Alliance of Cooperatives, a non-governmental organisation that advocates on behalf cooperatives, to create a venue where new networks and solutions to propel the movement forward can be forged.

The shift to a new paradigm for the economy is now underway, and the time is ripe for cooperatives to demonstrate their value because there is an upswell of disenchantment with the economy as it stands, said Charles Gould, the executive director of IAC.

Cooperatives tend to arise in response to an unaddressed need in the community. The six core values that underpin the cooperative model – self-help, democracy, equality, equity and solidarity – guide the way decisions are reached, Gould added.

The values bear the implication that the interests of the communities served will be factored into any business calculation. In the face of the financial crisis, the cooperative model proved its resilience, because by design the board is accountable to all its members, said Leroux. The one-member, one vote rule means that the interests of the largest shareholders do not trump the rest.

“It’s a more sustainable model, it doesn’t take unknown risks because it’s not trying to maximise profit,” said Gould.

“We believe that by 2020, by the end of this decade, it’s conceivable that the cooperative can be the fastest growing form of enterprise in the world,” he told IPS. “We’ve been asking cooperatives and our members what would have to change for that to happen.”

Gould identified several areas that will help build momentum for the movement, and bolster its profile as a viable alternative to the classic setup of a corporation.

For one, cooperatives need new forms of capital to grow that are aligned with their values and design. The summit marks an opportunity for Desjardins and its partners to share their innovations in creating new financial products, credit services designed to reflect the context of the community served, said France Michaud, the communications supervisor at Developpement International Desjardins (DID).

Aside from raising capital, cooperatives also have to do a better job at promoting and invoking their identity, making the model and the values it stands for known to the public, Gould noted. Brands like Ocean Spray and Sunkist are household names but are not always tagged as examples of cooperatives.

There are several misleading perceptions about cooperatives that downplay their importance in the economy, said Stephanie Guico, the programme coordinator of the Future Leaders Program at the summit. One is the view that they belong to the past, another that they are mainly poor people’s organisations.

Poverty alleviation is central to the mandate of many cooperatives, but people often don’t realise they are businesses concerned about their sustainability, Guico added.

For the cooperative model to thrive, the legislative and regulatory landscape has to adjust itself. “There are many countries where the general business regime is designed around the corporate construct, because it has been such a dominant model,” Gould told IPS. “We have to make sure we’re not subject to restrictions that were imposed to prevent problems other business forms are subject to.”

Gould noted that the governments of China and Iran are expressing interest in the cooperative model, and that these countries are on his list to watch for growth. “Some of these countries recognise the need to diversify from state-owned enterprises and see how the global economy has changed,” he said. “But don’t want to move to capitalist models…and are intrigued that the cooperative model could be a way of getting people to step up in a self-help way.”

In Quebec, the groundwork for an alternative economy is being sown through a collection of seemingly small efforts led by members of the global cooperative movement, said Laure Waridel, an eco-sociologist, who has been invited to speak at the summit.

She cited one local organic farm as an example, because it has opted to subsist with the help of its customers, who are willing to pay an advance for its share of the harvest.

Waridel, also recognised as a pioneer who helped bring the fair trade movement to Canada, has been studying the efforts of people in the countryside of Québec to create a sustainable livelihood.

“What I’m interested in is to find the connecting dots between many initiatives in Québec that are seen as marginal,” she told IPS. “You put them together, you see that there is a proposal for another economy.”

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Economy, Featured Tagged With: ,

Spanish Police Crack Down on Protesters Surrounding the Parliament

September 27, 2012 by

The Real News
September 26, 2012

Anti-austerity rage intensified in Madrid, as protesters surrounded the parliament Tuesday night in a sign of mounting frustration towards the right-wing government.

Read more on The Real News

 


Filed Under: Economy, Europe, Politics, Society, Video Tagged With: , , , , ,

Major Extractives Firms No Longer Ignoring Community Consent

September 27, 2012 by

Global Analyst Online / IPS

Carey L. Biron

WASHINGTON, Sep 27 (IPS) – New research from Oxfam, an international aid agency, finds that some of the largest multinational oil and mining companies are increasingly incorporating principles of community consent into their day-to-day operations.Oxfam’s researchers looked at 28 of the world’s largest extractives companies and combed through their publicly available commitments to addressing the issue of community rights. They used the information to come up with a ranking – the Community Consent Index – that, coupled with a similar report from 2009, can now be used as baseline data.

The report does not rate the implementation of these policies, however, and its selection does not include any companies that have not specifically and publicly set out policies or positions on community engagement. Rather, Oxfam says that the index is supposed to incite and inform dialogue going forward.

“Community consent has been a very slippery concept over the years, and having a (preliminary) framework … is a really important start,” Raymond C. Offenheiser, president of Oxfam America, said in unveiling the new paper here in Washington on Wednesday.

“In order for oil and mining companies to survive in the coming decades, they need to transform themselves from primarily resource extractors to development partners. Companies that fail to implement the policies will be at a competitive disadvantage.”

Over the past three decades, the turnaround in the industry’s view on community engagement – at least insofar as the top players are concerned – has indeed been striking.

It was only in the early 1980s that the World Bank began discussing environmental impact, assessment of which is now required on virtually all foreign- or donor-funded projects in the world. Recent years have also seen international covenants on the rights of indigenous peoples over their traditional lands.

“Where are we today?” Offenheiser asks. “Admittedly, controversies still exist. But now we talk about ‘host communities’ rather than ‘drilling sites’, about a ‘shared-value approach’ that assumes that there is a connection between communities and companies. These would not have been on the agenda 30 years ago.”

In that time, local communities and civil society activists have become increasingly vocal and empowered in asserting their rights. In turn, this has both led to and been backed up by a raft of new international conventions as well as policies within international financial institutions, most notably the International Finance Corporation, the private-sector arm of the World Bank.

In recent weeks, both the United States and the European Union have also moved forward on legislation that will vastly increase transparency regulations in the extractive industries, specifically with an eye to how those industries affect communities on the ground.

“That said, it’s important to recognise that advancing this discussion is more critical than ever – I think we’re living in a moment of urgency,” Offenheiser cautions. “Due to the current explosion in the demand for natural resources … companies are extending their reach into remote and sensitive areas. This issue has to be raised by civil society organisations, business and government in ways that it hasn’t been in the past.”

How dopey?

“Why are companies doing this, and why are investors interested in us doing this?” Chris Anderson, with the mining giant Rio Tinto, one of the companies included in the new report, asked at a panel discussion on Wednesday.

“The simple answer is we’re not going to have any business otherwise. If you don’t adequately consult with a community and they don’t want an aspect of your project, you just don’t have a project and therefore you may not have a business.”

Among upper-level management in the sector, Anderson says that the realisation that communities “can become full, proper partners in the development of these projects” has set in only within the past decade. Now, however, he says “We’ll think back in five or 10 years, on the company side, and think, ‘How dopey could we be?’”

While lauding the new report, he also warns that Oxfam’s selection of companies has “skewed” its findings.

“You’re not looking at the worst actors, and there are plenty still around,” Anderson says. “We need to raise the bar … we’ve come a long way, but we have a long way to go to operationalise the notion of consent.”

Indeed, while Oxfam’s findings highlight optimistic trends overall, even such “skewed” results show that the discussion is still in its early phase.

Of the 28 companies, Oxfam’s researchers found that two-thirds have incorporated provisions of community consent, social license or broad community support into their development activities. Thirteen have either directly or indirectly (by agreeing to comply with various international agreements) said they would operate under the directives of free and prior informed consent (commonly referred to as FPIC).

All but two of the 28 companies reference the Universal Declaration on Human Rights in their public websites and annual reports, and all but five publicly commit to the rights of indigenous people. While about half of the companies commit to minimising involuntary resettlement, fewer have actual policies on resettlement and just two have made those policies publicly available.

“It’s clear that companies are now paying attention to the impact on communities – it’s standard practice now for the vast majority to have a human rights policy,” one of the report’s authors, Marianne Voss, said at the discussion on Wednesday.

Still, she reports, some companies are using “qualifiers that weaken the weight of their commitments”. Others say they will apply the principles of free and informed consent only where local law requires it or where governments have implemented it.

Nonetheless, she and others suggest, the direction of the discussion seems to be moving in one direction.

“Raised marks indicate that international investment can play a vital role in poverty reduction and development and, if done correctly, can be a good partnership between communities and business,” she says.

“While few extractive companies currently go as far as explicitly committing to FPIC, they’re going to be under increasing pressure to adopt them in the future. The growth of the minerals sector in developing countries and the fact that they’re going into more sensitive areas is going to broaden the demand moving forward.”

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Economy, Environment, Politics, Report Tagged With: , , , , , ,

U.S.: Consumer Protection Agency Takes on "Financial Tricks and Traps"

September 27, 2012 by

Global Analyst Online / IPS

Matthew Cardinale

ATLANTA, Georgia, Sep 27 (IPS) – In the wake of the epidemic of home foreclosures, banking scandals and resulting massive financial regulation overhaul two years ago known as the Dodd-Frank legislation, the U.S. government created a new federal agency to protect consumers from being taken advantage of by banks and other institutions.

Known as the Consumer Financial Protection Bureau (CFPB), it’s operated for a year now, with mixed results, according to civil society groups that follow the issue.

“Obviously, the agency’s been stifled somewhat by Congress," Jamie Court, president of the non-profit California-based group Consumer Watchdog, told IPS. "Given the scrutiny they face, and the budget limitations, they’ve done a good job of starting to break new ground on mortgage regulations and financial services regulations, disclosure for consumers."

Republicans, particularly in the U.S. House of Representatives, have been vehemently opposed to the CFPB.

“It’s a very tough job in this political and budgetary climate. They’ve done a good job of letting the public know their doors are open. The question is, how responsive they are to petitions from the public, and how much can they do as quickly as possible?” Court said.

“They have a good staff that understands consumer protection. The real fate of the agency will be determined by the (November U.S. presidential) election. The election is really a mandate for this agency to go forward or not,” he said.

Republican nominee Mitt Romney opposes the CFPB, while President Barack Obama, the Democratic nominee, supports it.

The CFPB is “pretty much what Obama got for the consumer out of financial reform, which was too little. It’s the first time we have a federal agency that’s there to protect consumer, not the bank, not the investor,” Court said.

Over the past weekend, the agency announced its second enforcement action in conjunction with the Federal Deposit Insurance Corporation (FDIC), ordering Discover Bank to refund approximately 200 million dollars to more than 3.5 million consumers and pay a 14-million-dollar civil penalty.

At issue were “deceptive telemarketing and sales tactics used by Discover to mislead consumers into paying for various credit card ‘add-on products’ – payment protection, credit score tracking, identity theft protection, and wallet protection,” according to an agency press release.

According to the CFPB, Discover Bank, one of the largest credit card issuers in the U.S., misled customers about whether there was a cost for the products, enrolled customers without their consent, and failed to tell customers about some of the eligibility requirements associated with payment protection benefits.

In a similar case of "deceptive marketing tactics", on Jul. 18, the agency announced its first enforcement action, requiring Capital One Bank to refund approximately 140 million dollars to two million customers and pay an additional 25-million-dollar civil penalty.

On Aug. 10, the agency proposed two new rules that will protect families who take out mortgages for their homes. These proposed rules are currently subject to a public comment period before final action will be taken.

The agency has also been collecting hundreds of comments from U.S. consumers regarding various complaints each week, and is encouraging consumers to submit complaints to the agency, including on its website.

“They’re being judicious in what they’re setting out to do. They’re not being a lightening rod for controversy – they’re doing sensible things on a sensible timeline. We’re very pleased by their agenda,” Linda Sherry, director of national priorities for Consumer Action, a San Francisco-based national consumer education and advocacy group, told IPS.

One of the benefits of the CFPB is that it gives U.S. consumers a single place to seek help with complaints regarding banking products and other financial products, Sherry said.

Previously, there were “too many cooks in the kitchen", she said.

“This brings everything under the same roof. It’s easier for consumers to know who to go to for help. Beforehand, there were seven different agencies engaged in regulating the banking system,” she said.

Those agencies included the Board of Governors of the Federal Reserve, U.S. Department of Housing and Urban Development, FDIC, Federal Trade Commission (FTC), National Credit Union Administration, Office of the Comptroller of the Currency (OCC), and Office of Thrift Supervision.

The FTC, for example, would look for trends in the credit industry and credit reporting industry, sometimes bringing legal actions in conjunction with the U.S. Department of Justice. However, they would not respond to individual complaints.

“As far as banking complaints, any banks that were national banks were (previously only) regulated by the OCC. They had robust consumer complaint unit. However, what would come back to us many times, they (a consumer) would submit a complaint, it would be sent for review and it would come back,” Sherry said.

“The OCC would write a letter saying, ‘The bank doesn’t see there’s a problem. We can’t do anything,’” she said.

“Financial services are key to a person’s well-being, livelihood, and prosperity. We want to keep people from being ripped off. That’s why we’re very pleased to have a new national consumer watchdog on the beat,” she said.

Court believes that the CFPB should be acting more aggressively.

“It also has to start banning certain types of products because they’re dangerous. There are some obscene interest rates on credit cards being charged, also payday lending, a lot of toxic financial products. They’re going to be asked to deal with these by petition,” Court said.

“The real test of the agency will be what it does when presented with toxic products,” Court said.

Court applauded the recent enforcement actions against Citibank and Discover Bank. “It’s a great example. An agency can step in and get 200 million dollars back to consumers’ pockets. Before that you had to file a class action lawsuit,” he said.

Meanwhile, Elizabeth Warren, a Harvard Law School professor who came up with the idea for the agency, and who worked with interest groups and the U.S. Congress to bring the agency into fruition, also praised the Discover Bank action.

“I’m proud the Consumer Financial Protection Bureau is standing up for working families by holding major credit card companies accountable for deceptive practices,” Warren, who is currently the Democratic nominee for a U.S. Senate seat in Massachusetts, said in a statement sent to IPS.

“The new consumer agency is a strong advocate for hardworking men and women here in Massachusetts and across the country. The CFPB has been hard at work reducing the fine print in credit card agreements and assisting with consumer complaints… These actions will help protect families from financial tricks and traps and create a level playing field,” Warren said.

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Americas, Economy, Featured, Politics, Society Tagged With: , , , ,

Arab Spring Teaches Food Security

September 27, 2012 by

Global Analyst Online / IPS

Isaiah Esipisu, Terna Gyuse

ARUSHA, Tanzania, Sep 27 (IPS) – African leaders should take note of the lessons learned from the Arab Spring and realise that ensuring good governance and food security will avoid crises on the continent, says Kofi Annan, chairman of the Africa Green Revolution Alliance.The former United Nations Secretary General said that food shortage was one of the triggers of the protests in North African and Middle-Eastern countries that lead to the ousting of Tanzania President Zine El Abidine Ben Ali in January 2011 and Egypt’s President Hosni Mubarak in February that same year.

Annan was speaking at the African Green Revolution Forum (AGRF) being held in Arusha, Tanzania from Sep. 26 to 28. One of the forum outcomes is to develop concrete action plans for growing Africa’s agricultural sector and to promote food security on the continent.

“These are people who wanted to have a real say, on how they are governed, and by whom. They also wanted to play a role in their own political system,

“I think that if African leaders were to pay attention and understand that democratic systems have to work in Africa, we have to accept democratic rotation periodically and listen to the people and the civil society. With this we may avoid crises that we have witnessed in Africa. Remember, it is not just food, it is about food and political systems,” said Annan.

Several hundred delegates – representing African governments, U.N. and donor agencies, and transnational agribusiness companies like Yara and Cargill – have gathered in Arusha, Tanzania, to discuss the transformation of Africa’s agriculture. Even some of Africa’s farmers are present.

Agricultural and economic analysts at the forum told IPS that food security in Africa can be assured only if countries work and trade together without restrictions.

“The East African region has a huge potential for agricultural development. The only enabling environment to ensure that there is food security, is to harmonise policy issues in order to avoid bans on exportation of agricultural goods, and to avoid imposition of unaffordable levies,” Anne Mbaabu, the director for the Market Access Programme at AGRA, told IPS.

“We also need to harmonise grades and standards so that they are the same in all the five countries that form the East African Community (EAC). Yet, this will only succeed after putting in place proper infrastructure in terms of ports, roads and railway lines,” she said.

Tanzanian Minister for Agriculture, Food Security and Cooperatives Christopher Chiza, echoed her sentiments.

“It is important to note that with security concerns, it is not easy for neighbouring countries to trade easily even if your neighbour is in a deep food crisis,” he said referring to the situation in Somalia, which made it difficult for humanitarian organisations to deliver food aid during the recent famine that hit the Horn of Africa region.

However, Chiza noted that there are still bottlenecks that the EAC must deal with before opening borders for uncontrolled import and export markets in the region.

“Political environments in our countries are an existing trade barrier. We need a fair amount of trust. One of the things many people are talking of is nationalisation of land and other agricultural resources in Tanzania. We should make it easy for people to invest in our countries without problems. There is also need for a common currency within the region, and many other complicated issues that must be sorted out within member countries before we finally unite,” he said.

The focus of the forum, said Annan, is to push on past a tipping point in scaling up the transformation of African agriculture.

"In the past, African governments did not focus on agriculture, but today it presents an opportunity to feed, employ and create global food security," he said, adding that the goal is to support African smallholders’ transition from subsistence farming to running their farms as businesses, producing a surplus for sale.

Africa has the majority of the world’s viable but uncultivated land. And the land that is being farmed is under-utilised. The key to securing the rural livelihoods, strengthening food security, and Africa taking up its proper place in the global food system includes investments in rural infrastructure, expanding the adoption of better seed, fertiliser and techniques by Africa’s farmers, large and small.

"This is what we need," Annan said. "To make sure farmers are well-organised and given the knowledge and support to play their full part in transformation."

Annan addressed journalists alongside Melinda Gates, whose Bill & Melinda Gates Foundation is one of AGRA’s major supporters.

Gates said her foundation’s agriculture strategy always starts with thinking of farmers’ goals, and how to make investments to support these.

"Smallholder farmers are incredible engineers," said Gates. "They have the difficult task of running smallholder farms."

She spoke about the way in which farmers she has met across Africa prioritise things like education and nutrition for their children, carefully assessing their options to try to create a surplus despite the challenges.

“Farmers need to be connected to larger market and not put their produce on market when price is low so that they can earn better incomes,” she said.

In order to ensure farmers are able to take advantage of changes in the countryside, AGRA and others are encouraging small-scale farmers to form collectives and associations to amplify their voices and efforts.

"Agriculture offers us the real opportunity not only to feed ourselves, but also to create employment opportunities for young people and make living in rural areas comfortable," said Annan.

All rights reserved, IPS – Inter Press Service, 2012.

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


Filed Under: Africa, Economy, Environment, Report Tagged With: , , ,
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