Category Archives: Economic Justice

Enterprising answers to development

Tomato vendor, African market

A few good sources exploring the themes of social entrepreneurship and microcredit.

Beyond Good Intentions reproduces an article from the International Trade Forum on innovative approaches to reduce poverty through trade, which are bringing business, NGOs, government and aid agencies together. Examples include Bespoke Experience, a social enterprise creating high-end tourism lodges in Mozambique, and using its profits to enable communities to work their way out of poverty.

NOW and PBS review the debate on microcredit, and whether it’s really pro-poor or simply exploiting the most vulnerable, with a focus on Compartamos, the Mexican non-profit turned for-profit microfinance institution at the centre of a fierce debate. It contains an excellent interview on the subject with Muhammad Yunus, the world-renowned founder of the Grameen Bank and father of microcredit, who also wrote another good piece on Social Business Entrepreneurs here.

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Revision thoughts 1.0

 Coverbook - Schumacher's Small is Beautiful

As I enter the final, inhuman and degrading phase of this academic year, a.k.a. revision, I have decided to start posting some thoughts, quotes, memorable ideas that I hope I will take with me into the exam rooms and possibly into my future life (assuming I will have one). These will sometimes be followed by my crucial follow-up insight [in italics], for the benefit of humanity and posterity at large.

So here goes… First, some thougths on the global political economy:

1. Gerschenkron distanced himself from deterministic visions of prerequisite, explaining that – even if present in England or Germany – each country had its own path to follow. There is no such a thing as a ‘stage scheme’ of development. [which means, in the network society and information economy, we need to focus on new paths and strategies of development to lift countries out of poverty]

2. There should be more emphasis on internal rather than external integration of developing countries’ economies: dense linkages between sectors, high local demand for local products, generated by high levels of wages for workers to become consumers. Export demand should not be the main source of economic growth: rather, a socially and sectorally integrated economic structure (Robert Wade). [which I read as: let’s concentrate on creating aggregate demand, increasing consumers’ purchase power, building local entrepreneurialism, and the big investments will follow]

3. The liberal market was created at some huge human cost. [to me: if we can achieve similar results without having to go through the same levels of human suffering, environmental destruction, social disintegration, political upheaval, all the better. Keep it small, which as known is beautiful]

4. The organization and functioning of monetary and financial systems are rarely influenced by narrow economic logic of maximising efficiency. They also reflect various political rationales relating to the pursuit of power, ideas, and interests (John Ravenhill). [which means: it’s pointless to attack the capitalist system without addressing first the roots of its political and ideological power – the concept of competitive maximisation of profit at the heart of the American political system]

More pearls to follow soon, stay tuned!

Africa – March 2007 Round-Up

 Hluhluwe Park, South Africa - C  www.mmuspratt.com

These are the articles, posts and news-items that have caught my eye in relation to Africa over the last month. My main sources are Africa Unchained, Sociolingo, BlogAfricaMy Heart’s in Accra and Timbuktu Chronicles, amongst others…

African Update paints a portrait of the Mugame regime, backed by video evidence, before predicting its demise, while Stephen Chan gives a good analysis of the current situation in Zimbabwe on Open Democracy. A good, informed read, like most of Stephen’s stuff.

Issa G. Shivji, Professor of Law at the University of Dar es Salaam, discusses on Pambazuka News the changing nature of the development discourse in Africa over the last few decades.

Afrol News writes a really interesting article on Ethiopia’s continuing economic boom, which – unlike that of other African economic miracles like Angola or Botswana – is not attributable to oil or natural resources, but to ‘hard work, economic reform and investments in its people and infrastructure’. While IMF officials were quick to state that this ‘mainly comes as a result of implementing economic policies prescribed by the Fund’, the article rightly points out that it’s down to Ethiopia’s willingness to ‘invest in key sectors that empower the poor masses, mainly in education, infrastructure and agriculture’. A good example of this comes via Sociolingo: in the outskirts of Addis, Azmeraw Zeleke is turning burnt-out shells into cylinders used in coffee machines!

Again afrol News discusses the heavy price air-borne African exports are beginning to pay because of Europe’s increasingly populist green policies. Also at stake is the increasingly important tourist industry, at a time when more and more African countries are relying on tourism to earn much needed foreign reserves.

Henry Ekwuruke from TakingITGlobal argues on his blog that ‘funding is not a necessity for invention’. In fact, he says, ‘the need to adequately fund research without unfairly compromising invention and innovation, this is why money is such a complicated component of any scientific and technological development’.

Ethan Zuckerman writes on My Heart’s in Accra about the awe-inspiring talk given at the TED conference by former Nigerian finance minister Dr Ngozi Okonjo-Iweala: Africa, she says, has its fair share of problems, but it’s Open For Business, and the signs of an African Renaissance are beginning to be visible.

Akwe Amosu on Foreign Policy in Focus gives a good and in-depth overview of the China-in-Africa issue, and of the governance issue that lies at its heart.

Sociolingo writes about the 50th anniversary of Ghana’s independence, and reviews the comments and articles that have been generated across the web.

Timbuktu Chronicles reports on the imminent advent of solar-powered cellphones, which promise 20-25 minutes of talk time for a 40 minute charge in the sunshine. This phone could revolutionize the way Africans communicate and do business in an environment with unreliable electricity supplies.

The UNDP published (back in February, in fact) a highly critical policy brief on the impact on the MDGs of privitizing basic utilities in Sub-Saharan Africa (PDF): Privatisation has failed on several counts. Contrary to expectations, private investors have shied away from investing in such utilities in the region. So it has been costly for governments to motivate them to invest. Moreover, the focus of investors on cost recovery has not promoted social objectives, such as reducing poverty and promoting equity. Thus, current realities dictate refocusing on building up the capacity of the public sector. It continues to dominate the provision of water and electricity, and will do so for the foreseeable future. But a dramatic scaling up of both external and domestic resources will be needed to finance more extensive public investment in these sectors.

And finally, Kathleen starts getting excited about the PICTURE Africa project, which aims to learn how ICTs are affecting poverty in East Africa. Nice!

Trading in lawsuits

trading pays... lawyers! 

Alan Beattie writes on the Financial Times about how lawsuits are coming to dictate the terms of trade [via Patrick]

Some years ago, American catfish farmers got cross when cheap Vietnamese catfish started flooding the US market. Their expensive lawyers forced the Vietnamese to stop calling their catfish catfish, on the grounds it was a different family to, though in the same Siluriformes order as, American catfish. The Vietnamese relabelled their exports as basa or tra (meaning, in Vietnamese, “catfish”). Sales continued to thrive.

Undeterred, the US catfish farmers’ lawyers changed their strategy, successfully securing import duties on Vietnamese catfish on the grounds that they were being “dumped”, or sold at unfairly low prices, in the American catfish market. To do so, they needed to prove that Vietnamese catfish were a “like product” to American catfish, having previously spent many thousands of dollars in fees to establish that Vietnamese catfish were not, in fact, catfish.

As far as their critics are concerned, that tells you pretty much all you need to know about what happens when trade lawyers get out of control. As the so-called Doha round of World Trade Organisation global trade talks sputters, more and more of the work of trade relations has shifted away from negotiation and towards litigation and arbitration. To its defenders, this trend represents rule and reason constraining power politics. To its critics, it means runaway jurists subverting democracy.

Read the full article here.

Oxfam vs. Donegal ‘Vulture Fund’ International: 1-0

Vulture - XVI century copperplate engraving 

From the Oxfam website:

In October 2006, Oxfam came across a commercial company trying to scavenge $55 million from Zambia, one of the poorest countries in the world…

And got to the bottom of the story

In 1999, ‘Vulture Fund’ Donegal International bought up $15 million of Zambia’s debt at a knock-down price of $3.3million (just one month before Zambia qualified for debt cancellation).

In February 2007, they attempted to sue Zambia for the full cost of the original debt, plus penalty payments, plus interest – a staggering $55 million.

Then we shouted about it

We broke the story with ‘Newsnight’, on the eve of the High Court judgement … ran an exclusive with the Financial Times …and we turned up outside the Court with a live vulture, just to drive the message home!

Inside the courtroom, the judge said that although he was legally bound to award the core debt, it would be considerably less than Michael Sheehan, the man behind Donegal – who he said had been ‘deliberately evasive and even dishonest’ – was asking for.

And so did our supporters

More than 24,664 actions have already been taken to stop Donegal International scavenging $55 million from Zambia.

Supporters have been sending emails to Mr Sheehan asking him to give the money back; and calling on Gordon Brown to push for legislation to stop vulture funds. More people are adding their voices to this campaign every day.

Then the British government responded

The Treasury issued a statement condemning vulture funds, calling Sheehan’s action ‘socially irresponsible’.

Very soon, it made headlines in America

Donegal is registered in the British Virgin Islands, but Mr. Sheehan is an American citizen. The US media were onto the story fast.

Where it was raised with President Bush

After seeing the story US Congressman John Conyers, chair of the Judiciary Committee, raised it directly with President Bush.

Who said he’d do something about it

We want President Bush to put the brakes on Sheehan, and to send a strong message to all other Vulture Funds that they must stop scavenging on the poorest people in the world.

And now it’s just possible…

Back in the UK, the court re-convenes in March to decide how much to award Sheehan.

…that this kind of thing will STOP.

There is still more to do, please send a strong message to all Vulture Funds that they must stop scavenging on the poorest people in the world.

What links YouTube with Yogurt?

Istanbul the Eastern Capital

The answer is of course Turkey, where yogurt was invented and YouTube recently banned… Read on:

Saving the world with a cup of yogurt – Nobel Peace Prize winner Muhammad Yunus, the father of microcredit, has a new idea. It’s called social business enterprise, and the first step is a yogurt factory in Bangladesh. [via Pam]

Turkish court bans YouTube access – Access to the popular video-sharing website YouTube has been suspended in Turkey following a court order. The ban was imposed after prosecutors told the court that clips insulting former Turkish leader Mustafa Kemal Ataturk had appeared on the site. According to Turkish media, there has been a “virtual war” between Greek and Turkish users of the site, with both sides posting insulting videos. [via Ebed]

ASAQ – The $1 Future of Malaria Treatment

 

Sources: MSF, DNDi, Le Monde, La Repubblica.

On 1 March a revolutionary pharmaceutical product to treat malaria will be launched on the world markets. Why revolutionary? Because it is patent-free, it is not subject to intellectual property (IP) regimes, it is not-for-profit and anyone will be able to copy its formula. It’s called ASAQ and it is the result of an agreement between Drugs for Neglected Diseases Initiative (DNDi) – a not-for-profit research organisation created in 2003 by Médecins Sans Frontières – and the French pharmaceutical company Sanofi-Aventis.

This is the first product manufactured by DNDi, and it represents MSF’s response to PhRMA, the powerful lobbying arm of the largest US pharmaceutical research and biotechnology companies. The objective is to develop affordable cures for those ‘forgotten’ diseases that are not lucrative enough for the profit-making drug companies. Malaria is one of them. It is an infectious disease affecting some of the most vulnerable regions of the planet, where people do not have the economic resources to buy medicines at market value. Since the drug companies do not see profitable opportunities there, they have no incentive to develop life-saving medicines.

DNDi’s objective is to coordinate research into pharmaceutical products that can be developed and sold in developing countries at low cost, without IP restrictions. The launch of ASAQ – the first not-for-profit antimalarial drug – marks an entirely new way of conceptualising pharmaceutical products, similar to the way open source changed the way the software industry operates. No one owns the thinking behind a product, so anyone can take it, use it, improve it or – like in this case – save lives.

Update 02/03/07: See some further explanatory remarks by Jean-René Kiechel and Bernard Pecoul of DNDi on the Public Library of Science blog. The story has now been picked up by the NY Times, AP and Reuters.