NGOs Oppose Nearly 100-Billion-Dollar Pledge to IMF

May 30, 2009

By Danielle Kurtzleben, Inter Press Service, May 29, 2009

WASHINGTON, May 29 (IPS) – A broad coalition of civil society groups, as well as some U.S. lawmakers, is fighting what they call a “blank cheque” from the U.S. to expand funding for the International Monetary Fund (IMF).

On May 22, the Senate passed a 91.3 billion-dollar-wartime spending bill that included 108 billion dollars for the Washington-based Fund. The bill will now have to be reconciled in a conference committee between the Senate and the House of Representatives whose own version omitted any IMF funding. 

The funding was the U.S. part of a larger package agreed by the G20 leaders at their April meeting in London, where they pledged to provide 1.1 trillion dollars in additional funding to the IMF. 

The goal is to boost lending to cash-strapped developing countries during the current economic crisis, which has drastically reduced the flow of private investment to emerging markets and the earnings of many poor countries that depend on their commodity exports. 

Opponents of the funding are concerned about the conditions the IMF usually imposes upon low-income countries when they accept these funds, conditions which, according to many NGOs, actually do more harm than good, particularly for the most vulnerable sectors of the recipients’ populations. 

Typically, the IMF requires recipient countries to reduce their budget deficits and increase interest rates, both of which can produce the opposite effect of the economic stimulus the funds are meant to provide. As a result, countries have been forced to cut essential social programmes, like unemployment insurance and other safety-net mechanisms. 

“It makes no sense to provide money intended to support global stimulus spending to the IMF when the IMF is demanding developing countries employ recessionary policies,” says Robert Weissman, director of Essential Action, a non-profit organisation that advocates, among other things, change in what it considers to be harmful IMF and World Bank practices. 

“The point of giving these crisis loans is to help countries avert those kind of contractionary policies, not to demand them as a condition on the loans,” according to Weissman. “So the conditionality undermines the logical purposes of giving the loans.” 

Mark Weisbrot, co-director of the Centre for Economic and Policy Research (CEPR), also notes that U.S. lawmakers may not understand the broader implications of IMF policy. “A lot of them are looking at it in straight power terms. They’re not looking at it as ‘Does the IMF do good or harm?’ but rather, ‘This is a potentially powerful organisation.’” 

Still, there is a push in Congress to amend the bill so that the requested funds can be used to ensure that more vulnerable groups in low-income countries will benefit. Rep. Maxine Waters of California has circulated a letter opposing the funding and currently has over 33 signatures from fellow House members. 

The letter calls for Congress to attach its own conditions to Washington’s commitment to provide the funding committed to the IMF: ensuring that the IMF’s new loans are stimulatory and not contractionary; using some of the planned IMF gold sales to finance the rescue packages for at least five billion dollars in debt relief and/or grants to the poorest countries; requiring parliamentary approval in the recipient countries before loans are extended; and boosting the transparency of the borrowing countries’ dialogue with the IMF so as to better inform local publics about the conditions under which the loans are to be extended. 

Above all, the letter requests that U.S. leadership work “to ensure that the [IMF] becomes more transparent and accountable to all member countries, including the poorest.” 

In recent months, the IMF has been touting policy changes to more efficiently supply assistance to needy countries with only a minimum of conditions. What conditions it would apply, IMF officials promised in March, would be to help any loan-seeking country “to overcome the problems that led it to seek financial aid in the first place.” 

The IMF has introduced the Flexible Credit Line (FCL), a new facility that has fewer restrictions on it. However, only select countries that meet certain conditions – for example, eligible countries must have low inflation, “the absence of bank solvency problems,” and minimal public debt – can qualify for FCL, according to the activists. 

They complained that the IMF’s executive board, which is dominated by the western powers, may also be guided by political or strategic considerations. Paradoxically, this means that the countries most in need of freer funding may be the least likely to qualify for them. 

The IMF has so far approved Mexico, Colombia, and Poland for FCL loans. 

JoAnn Carter, executive director of RESULTS, an advocacy group concerned with ending hunger, called the FCL and other IMF lending policy changes “more rhetoric than reality.” She said that since the IMF implemented reform of its lending restrictions, “There still have been very austere conditions imposed upon some of these countries.” 

Asia Russell, international policy director of Health GAP, a group that works for broader provision of AIDS and HIV medicines worldwide, concurred: “The proof is really in the pudding. Despite declarations from [IMF] headquarters in Washington, the same sort of policies are being used – contractionary policies, slashing deficits.” 

For now, groups mainly await the results of the conference committee’s deliberation and hope that lawmakers see the issue from their point of view. 

“We’re astonished, really, that the Senate could pass this measure,” said Russell. “Now, it’s important for Congress to take its oversight role seriously, instead of putting blind faith in the IMF.”


G20 found responsible for most abuses

May 29, 2009

AlJazeera, May 27, 2009

Human rights abuses are being encouraged by the global recession, says Amnesty International. The rights group believes that as world leaders focus on reviving the economy, they are neglecting deadly conflicts and social rights. 

And the G20 member nations are being singled out for blame.

Al Jazeera’s Nazinine Moshiri reports.


Walden Bello: Steps to a Post-Capitalist System

May 28, 2009

eon, April 2009

Political economist, planetary activist and author Walden Bello, in an interview with EON producer Mary Beth Brangan, gives his commentary on events at the April, 2009 G-20 Summit and ASEAN meeting. He lays out his vision of a ‘post-captialist system of economic democracy,’ thinking outside the boxes of the failed neo-liberal and neo-conservative paradigms that have created the current global economic, ecological and climatic crisis.


Govt seems to be undermining Tipaimukh danger

May 28, 2009

Editorial, NewAge, May 28, 2009

THE Awami League-led government, it increasingly seems, has somehow been convinced by its New Delhi counterparts that there is benefit for Bangladesh to be had from the construction of the Tipaimukh Dam/s on the river Barak. Ever since the Indian high commissioner disclosed late last week India’s plan to go ahead with the construction of the dam, at least three members of the cabinet said Dhaka would not oppose the project if it benefits Bangladesh. The commerce minister, Faruk Khan, as usual, came up with by far the strongest hint that the government may have been already convinced that dam could after all benefit, and not harm, Bangladesh, when he told journalists on Tuesday that ‘those who are talking too much against construction of the dam are talking without knowing anything…’ He did say the government ‘will soon send a delegation comprising experts and parliamentarians to see what is going on there and how it will benefit Bangladesh.’ That is, however, hardly reassuring.
   

It would indeed be interesting to know who the commerce minister was accusing of ‘talking too much… without knowing anything’; after all, the individuals who have been at the forefront of the ever-intensifying wave of opposition to the Tipaimukh project are mostly experts with years of experience under their belts. Interestingly still, many of them are Indians. They are unanimous in their conclusion that the Tipaimukh Dam/s would wreak an environmental disaster of an unimaginable magnitude and adversely affect millions of people on either side of the Bangladesh-India border who rely on the Meghna river system for their livelihood. Needless to say, their conclusions are based on an ever-growing pile of scientific evidence.
   

The benefit that the government may be envisaging, i.e. import of electricity generated from the dam, could turn out to be a chimera. In an article published in New Age on May 21, Dr Solbam Ibotombi, who teaches earth sciences at Manipur University and is a staunch critic of the Tipaimukh project, writes that ‘the dam was originally conceived to contain the floodwater in the Cachar plain of Assam but, later on, emphasis has been placed on hydroelectric power generation, having an installation capacity of 1,500MW but only firm generation capacity of 412MW.’ If so is the case, what percentage of the 412MW of electricity the government expects to import from India, which is no less electricity-starved than Bangladesh, and at what cost? As argued by Ibotombi and other Indian experts, the cost involved here is not just the cost of electricity but the irreparable economic and environmental damage that the project is likely to cause.
   

When there is a growing body of scientific evidence as well as strong opposition within India against the Tipaimukh project, the argument put forth by the commerce minister and some of his colleagues, i.e. there may be benefit in the project for Bangladesh, can hardly be construed as being a product of naivety and inadequate knowledge. In fact, given the Indian government’s perceived predilection for the Awami League, it could very well be construed as the government’s willingness to submit to Delhi’s plans. Here, the credibility of the government is not at stake alone, the livelihood of millions of people in India and Bangladesh is as well. The ministers in question would surely have done a great service to the country and to themselves if they took the pains to gather the details of the dam project and also go through the scientific evidences that point at the potential economic and environmental damage that the Tipaimukh project would cause. If they had, they might have thought twice before suggesting that Bangladesh is likely to benefit from the project and that the critics of the project are ‘talking too much… without knowing anything’.


A case of global proportions: Alaska village files suit against energy giants

May 27, 2009

AlJazeera, May 26, 2009

People & Power visits Alaska where Native American villagers have brought a law suit against energy giants, alleging one of the largest conspiracies in the world.

Download: Kivalina villager’s complaint for damages (PDF)


Pesticides Violate Human Rights

May 27, 2009

eon3, May 26, 2009

Professor of Medical Ethics and author THOMAS KERNS shows how the Universal Declaration of Human Rights and its two related internationally adopted documents – the Convention on Civil and Political Rights and the Convention on Economic, Social and Cultural Rights – can form an effective context for environmental activist campaigns. He outlines three strategies for organizers to follow and points to the effectiveness or California’s Stop the Spray movement as a model. 

Prof. Kerns is the author of ENVIRONMENTALLY INDUCED ILLNESSES: Ethics, Risk Assessmennt and Human Rights. His college level philosophy course, Environment and Human Rights is on-line. 

He is the founder of the EHRA – Environment and Human Rights Advisory, a consulting service for environmental organizations and government agencies.


No easing of people’s agonies as water crisis persists

May 26, 2009

front3-b

A man fills drinking water into containers kept in a queue at Basabo in Dhaka on Sunday as water crisis takes a serious turn in the capital. 
New Age photo


Civil society wants substance, not procedural delays at UN conf on crisis

May 25, 2009

A statement calling upon governments not to take procedural arguments as an excuse to further delaying the substantive negotiations on the urgently needed global policy responses to the current crisis is being circulated to negotiators at the UN. 

Statement on the negotiations about the outcome of the UN Conference on the World Financial and Economic Crisis and its Impact on Development 

Choike.org May 15, 2009 

Download: Draft outcome document for the June UN Conference on the crisis

1. We are facing a global systemic crisis, which originated in the rich countries of the North, their unsustainable consumption and production patterns and the irresponsible economic behavior of their dominant social actors. The crisis affects billions of people all over the world, pushing many millions of them into unemployment and poverty, and violating their economic, social and cultural rights. 

2. The response of the G20 was not sufficient to address the root causes of these multiple crises of food, climate, financial markets and sustainable development. 

3. The global crisis needs a global response involving all societies that are affected by crisis. Therefore, the United Nations is the only legitimate forum through which the crisis can be resolved. This is the reason why we highly welcomed the decision of governments in Doha to hold a UN Conference on the world economic and financial crisis and its impact on development. 

4. Since the Doha Conference it has taken diplomats in New York more than 16 weeks to agree on the modalities of the “Crisis Conference“. They are responsible for the delay, they are responsible for the lack of time for the substantive negotiations on the outcome of the conference. 

5. Civil Society Organizations and Networks produced comprehensive statements listing their recommendations and demands on how to address the current crisis, starting with the “Civil Society Benchmark Paper” in the run-up to the Doha Conference 2008. 

6. Many of our demands are reflected in the recommendations presented by the “Stiglitz Commission” in March 2009. For this reason we regard these recommendations as a good basis on which to build a new global economic and financial system . 

7. Many of our positions are also reflected in the first draft outcome document presented by the President of the General Assembly (PGA) on 8 May 2009. We understand that the recommendations in this document contain short-term measures that have to be implemented immediately as a response to the current crisis, such as the sufficient funding for a global stimulus package, and long-term measures, such as the establishment of a new Global Reserve System or the proposal for a Global Tax Authority. We agree that the UN conference in June has to come up with immediate responses to the crisis and simultaneously decide on an intergovernmental time-bound process towards the long-term reforms. 

8. In contrast, the draft document by the Co-Facilitators, dated 6 May 2009 neither specifies the necessary short-term actions nor does it contain concrete commitments for longer-term structural reform measures. It mainly reconfirms – by recycling already agreed language – decisions taken at the Doha Conference and the G20 Summits. The policy recommendations in this document lack any sense of urgency. The recommendations on institutional reforms (para. 47) are interesting but, according to the Co-Facilitators, they only “might be considered”. Such a diplomatic phrase makes any recommendation completely useless. If governments agreed on such an outcome document, they would further weaken the UN as the global forum for economic policy coordination and decision making and would completely fail to find meaningful answers to the current crisis. 

9. We understand that under the current time pressure it will be difficult for governments to agree on a comprehensive set of radical reform measures as outlined in the draft of the PGA. But, a consensus on many concrete reform proposals that are on the table can still be reached. Among the decisions that are of high priority and could be taken at the UN Conference without any further delay are the following: 

- The initiative to establish a Global Panel on Systemic Risks in the World Economy, following the model of the Intergovernmental Panel on Climate Change, bringing together academics, civil society and policy makers. 

- The decision to upgrade the Committee of Experts on International Cooperation on Tax Matters to an intergovernmental Commission on Tax Matters as a functional commission of ECOSOC by the end of 2009. 

- The political commitment to introduce an internationally coordinated Financial Transaction Tax in order to mobilize additional resources for a short-term Global Stimulus Fund and the longer-term implementation of the Internationally Agreed Development Goals, including the MDGs. 

- The establishment of a Global Economic Coordination Council within the UN system. 

- The decision to review the Agreement between the UN and the Bretton-Woods-Institutions (BWIs) in order to enhance coordination and policy coherence by integrating the BWIs as specialized agencies completely into the UN system. 

10. We call upon governments not to take procedural arguments as an excuse to further delaying the substantive negotiations on the urgently needed global policy responses to the current crisis. 

Signatures 
Jens Martens and James Paul, Global Policy Forum 
Roberto Bissio, Social Watch 
Beverly Keene, Jubilee South 
Andrea Baranes and Antonio Tricarico, Campagna per la Reforma della Banca Mondiale 
Mirjana Dokmanovic, Women and Development Europe (WIDE) 
Gigi Francisco, Development Alternatives wirh Women for a New Era (DAWN) 
Patricia Blankson Akakpo, Network for Women’s Rights in Ghana (NETRIGHT) and ABANTU for Development (ROWA) 
Josep Xercavins i Valls 
Philo Morris, Medical Mission Sisters 
Aldo Caliari, Center of Concern 
Rudy De Meyer, 11.11.11 
Verena Winkler and Simon Stocker, Eurostep 
Eva Friedlander, IWAC, the International Women’s Anthropology Conference 
Luke Fletcher, Jubilee Australia 
Anne Jellema, Action Aid 
Mark Herkenrath, Alliance Sud, Switzerland 
Klaus Schilder, terre des hommes Germany 
Magaly Pineda, CIPAF, Rep.Dominicana 
Feminist Task Force of the Global Call to Action against Poverty 
Arjun Karki, LDC Watch 
Sarba Khadka, South Asia Alliance for Poverty Eradication-SAAPE 
Mana Dahal Rural Reconstruction Nepal-RRN 
Edward Oyugi, Social Development Network, Nairobi, Kenya 
Oksana Kisselyova, Liberal Society Institute, Ukraine 
Cartas A. Kapele, Children Education Society (CHESO), DAR ES SALAAM – TANZANIA 
Fernanda Carvalho, IBASE – Brazilian Institute for Social and Economic Analysis 
European Network on Debt and Development (EURODAD) 
ATTAC Hungary 
Milan Smrz, Czech section of Eurosolar 
Joseph M. Sammut, Social Watch, Malta 
Christine Andela – COSADER (Collectif des ONG pour la Sécurité Alimentaire et le Développement Rural) – Cameroun 
Marta Benavides – Instituto Internacional de Cooperación entre Pueblos (IICP) – El Salvador 
GCAP – Sudan 
Jubilee Debt Campaign (UK) 
Tom Kucharz, Ecologistas en Acción (Spain) 
Transnational Institute 
Institute for Policy Studies, Global Economy Project 
Dr. Hassan Abdel Ati – National Civic Forum – Sudan 
Malgorzata Tarasiewicz – Network of East-West Women, NEWW-Polska 
AWID (Association for Women¹s Rights in Development) 
Rede Brasil sobre Instituições Financeiras Multilaterais 
Marek Hrubec, Centre of Global Studies, Czech Republic 
Zelená Pro Planetu, Czech Republic 
Henri Valot, Policy Advisor CIVICUS: World Alliance for Citizen Participation 
Professor Aijaz Qureshi: Social Watch Pakistan- IDF 
Zulfiqar Halepoto- Sindh Democratic Forum (SDF) and Social Watch Pakistan 
Nazeer Memon- Sindh Agriculture Forum 
Abrar Kazi – SDF- water expert and technocrat 
Rural Reconstruction Nepal (RRN) 
Public Finance Monitoring Center 
Women’s Working Group on Financing for Development 
Egyptian Association For Community Participation Enhancement (EACPE) 
CARDET, Cyprus 
National Social Watch Coalition – India 
Action for Economic Reforms 
Philippine Rural Reconstruction Movement (PRRM) 
Arab NGO Network for Development (ANND) 
Ziad Abdel Samad 
Mariama Williams, Integrated Policy Research Institute (IPRI) 
Yves Conze, Integrated Policy Research Institute (IPRI) 
Carla Bakboord, MSc Cultural Anthropologist, Executive Director Equality & Equity for Gender&Social Development, Suriname 
El Amel Association For Social Development in Algeria 
Women for Change 
Genoveva Tisheva- Bulgarian Gender Research Foundation 
Development Network of Indigenous Voluntary Associations (DENIVA), J.B. Kwesiga 
Network of Ugandan Researchers and Research Users (NURRU), David Obot 
Tomas Tozicka – Jubilee Czech 
Hanaa Edwar, Iraqi AlAmal Association 
David Obot (NURRU), Kampala-Uganda 
J.B.Kwesiga (DENIVA), Uganda 
Hamarneh, Vanda, Syria 
Consumers Association of Penang 
Friends of the Earth, Malaysia 
KOPIN (Koperazzjoni Internazzjonali) Malta 
Instituto Latinoamericano de Servicios legales Alternativos (ILSA) – Colombia 
Klaus Heidel, Werkstatt Ökonomie e.V., spokesperson Social Watch Deutschland/Forum Weltsozialgipfel (Social Watch Germany) 
International Gender and Trade Network (IGTN). 
Rene Suša, Humanitas, Society for human rights and supportive action, Slovenia 
Africa Development Interchange Network (ADIN) 
Sanayee Development Organization (SDO). Kabul, Afghanistan 
UK Coalition Against Poverty. Eileen Devaney 
Baudouin Schombe, Coordonnateur National Reprontic 
Bretton Woods Project (UK) 
FOCO – Foro Ciudadano de Participación por la Justicia y los Derechos Humanos 
DECIDAMOS, Campaña por la Expresión Ciudadana, Paraguay 
Social watch Mocambique 
Jiri Silny, Ecumencial Academy Prague, Czech Republic 
Vagn Berthelsen, Secretary General of IBIS 
Sisters of Mercy (of the Americas) 
Marta Scarpato, Consultora sindical, Italia 
Mayalu Matos Silva, Brazil 
Carlos Martinez Garcia, Presidente de ATTAC España 
Martín Pascual, Fundación Cenda, Chile 
CIDEP, Asociación Intersectorial para el Desarrollo Económico y el Progreso Social (El Salvador)I 
Reseau Marocain pour le Droit a la Sante, Dr Aziz RHALI. Maroc 
Antonio J. González Plessmann, Activista venezolano de Derechos Humanos 
WEDO (Women’s Environment and Development Organization) 
Red de Control Ciudadano, Costa Rica 
Secours-Catholique/Caritas France 
Instituto de Estudos Sócioeconômicos – INESC, Brasil 
Lunaria, Italy 
War on Want 
Carlos Martinez Garcia, Presidente de ATTAC España 
Socio Economic Rights Initiaitive/Social Watch Nigeria 
Global Economy Program 
Coordinación de ONG y cooperativas – CONGCOOP 
Uganda Coalition for Sustainable Development 
SLUG – The Norwegian Coalition for Debt Cancellation 
African Women’s Development and Communication Network/FEMNET Africa 
K.U.L.U.-Women and Development, Denmark 
Plataforma 2015 y más, España 
Third World Network 
CAP 
SAM 
Red Latinoamericana sobre Deuda, Desarrollo y Derechos – LATINDADD 
Women Headed Households Empowerment (PEKKA)

Further Resources: 

UN Conference on the World Financial and Economic Crisis and its Impact on Development

Official Website of the Conference

Breaking News: UN postpones summit over crisis

UN General Assembly postponed the celebration of the UN Conference on the World Financial and Economic Crisis and its Impact on Development, to happen in late June, sources reported Friday. According to UN spokesperson Spanish Enrique Yeves, recently many delegations asked the President of the Assembly Miguel D Escoto to postpone the already scheduled date of the encounter, since it coincided with other several international events. He also stressed the delegations to participate are still involved in the negotiations on the project of the event, convened by D Escoto, so that the crisis can be intensively debated by the 192 UN member countries. The Summit, previously scheduled for Jun.1-3, will take place on June 24-26, as it stated a missive sent to UN countries member, from the Head of Cabinet of the President of General Assembly Norman Miranda


Will China Save the World from Depression?

May 24, 2009

Walden Bello*, Foreign Policy in Focus, May 19, 2009

Will China be the “growth pole” that will snatch the world from the jaws of depression?

This question has become a favorite topic as the heroic American middle class consumer, weighed down by massive debt, ceases to be the key stimulus for global production.

Although China’s GDP growth rate fell to 6.1% in the first quarter — the lowest in almost a decade — optimists see “shoots of recovery” in a 30% surge in urban fixed-asset investment and a jump in industrial output in March. These indicators are proof, some say, that China’s stimulus program of $586 billion — which, in relation to GDP, is much larger proportionally than the Obama administration’s $787 billion package–is working.

Countryside as Launching Pad for Recovery?

 With China’s export-oriented urban coastal areas suffering from the collapse of global demand, many inside and outside China are pinning their hopes for global recovery on the Chinese countryside. A significant portion of Beijing’s stimulus package is destined for infrastructure and social spending in the rural areas. The government is allocating 20 billion yuan ($3 billion) in subsidies to help rural residents buy televisions, refrigerators, and other electrical appliances.

But with export demand down, will this strategy of propping up rural demand work as an engine for the country’s massive industrial machine? 

There are grounds for skepticism. For one, even when export demand was high, 75% of China’s industries were already plagued with overcapacity. Before the crisis, for instance, the automobile industry’s installed capacity was projected to turn out 100% more vehicles than could be absorbed by a growing market. In the last few years, overcapacity problems have resulted in the halving of the annual profit growth rate for all major enterprises.

There is another, greater problem with the strategy of making rural demand a substitute for export markets. Even if Beijing throws in another hundred billion dollars, the stimulus package is not likely to counteract in any significant way the depressive impact of a 25-year policy of sacrificing the countryside for export-oriented urban-based industrial growth. The implications for the global economy are considerable.

Subordinating Agriculture to Industry

Ironically, China’s ascent during the last 30 years began with the rural reforms Deng Xiaoping initiated in 1978. The peasants wanted an end to the Mao-era communes, and Deng and his reformers obliged them by introducing the “household-contract responsibility system.” Under this scheme, each household received a piece of land to farm. The household was allowed to retain what was left over of the produce after selling to the state a fixed proportion at a state-determined price, or by simply paying a tax in cash. The rest it could consume or sell on the market. These were the halcyon years of the peasantry. Rural income grew by over 15% a year on average, and rural poverty declined from 33% to 11% of the population.

This golden age of the peasantry came to an end, however, when the government adopted a strategy of coast-based, export-oriented industrialization premised on rapid integration into the global capitalist economy. This strategy, which was launched at the 12th National Party Congress in 1984, essentially built the urban industrial economy on “the shoulders of peasants,” as rural specialists Chen Guidi and Wu Chantao put it. The government pursued primitive capital accumulation mainly through policies that cut heavily into the peasant surplus.

The consequences of this urban-oriented industrial development strategy were stark. Peasant income, which had grown by 15.2% a year from 1978 to 1984, dropped to 2.8% a year from 1986 to 1991. Some recovery occurred in the early 1990s, but stagnation of rural income marked the latter part of the decade. In contrast, urban income, already higher than that of peasants in the mid-1980s, was on average six times the income of peasants by 2000.

The stagnation of rural income was caused by policies promoting rising costs of industrial inputs into agriculture, falling prices for agricultural products, and increased taxes, all of which combined to transfer income from the countryside to the city. But the main mechanism for the extraction of surplus from the peasantry was taxation. By 1991, central state agencies levied taxes on peasants for 149 agricultural products, but this proved to be but part of a much bigger bite, as the lower levels of government began to levy their own taxes, fees, and charges. Currently, the various tiers of rural government impose a total of 269 types of tax, along with all sorts of often arbitrarily imposed administrative charges.

Taxes and fees are not supposed to exceed 5% of a farmer’s income, but the actual amount is often much greater. Some Ministry of Agriculture surveys have reported that the peasant tax burden is 15% — three times the official national limit.

Expanded taxation would perhaps have been bearable had peasants experienced returns such as improved public health and education and more agricultural infrastructure. In the absence of such tangible benefits, the peasants saw their incomes as subsidizing what Chen and Wu describe as the “monstrous growth of the bureaucracy and the metastasizing number of officials” who seemed to have no other function than to extract more and more from them.

Aside from being subjected to higher input prices, lower prices for their goods, and more intensive taxation, peasants have borne the brunt of the urban-industrial focus of economic strategy in other ways. According to one report, “40 million peasants have been forced off their land to make way for roads, airports, dams, factories, and other public and private investments, with an additional two million to be displaced each year.”  Other researchers cite a much higher figure of 70 million households, meaning that, calculating 4.5 persons per household, by 2004, land grabs have displaced as many as 315 million people.

Impact of Trade Liberalization

China’s commitment to eliminate agricultural quotas and reduce tariffs, made when it joined the World Trade Organization in 2001, may yet dwarf the impact of all the previous changes experienced by peasants. The cost of admission for China is proving to be huge and disproportionate. The government slashed the average agricultural tariff from 54 to 15.3%, compared with the world average of 62%, prompting the commerce minister to boast (or complain): “Not a single member in the WTO history has made such a huge cut [in tariffs] in such a short period of time.”

The WTO deal reflects China’s current priorities. If the government has chosen to put at risk large sections of its agriculture, such as soybeans and cotton, it has done so to open up or keep open global markets for its industrial exports. The social consequences of this trade-off are still to be fully felt, but the immediate effects have been alarming. In 2004, after years of being a net food exporter, China registered a deficit in its agricultural trade. Cotton imports skyrocketed from 11,300 tons in 2001 to 1.98 million tons in 2004, a 175-fold increase. Chinese sugarcane, soybean, and most of all, cotton farmers were devastated. In 2005, according to Oxfam Hong Kong, imports of cheap U.S. cotton resulted in a loss of $208 million in income for Chinese peasants, along with 720,000 jobs. Trade liberalization is also likely to have contributed to the dramatic slowdown in poverty reduction between 2000 and 2004.

Loosening the Property Regime

In the past few years, the priority placed on a capitalist transformation of the countryside to support export-oriented industrialization has moved the party to promote not only agricultural trade liberalization but a loosening of a semi-socialist property regime that favors peasants and small farmers. This involves easing public controls over land in order to move toward a full-fledged private property regime. The idea is to allow the sale of land rights (the creation of a land market) so that the most “efficient” producers can expand their holdings. In the euphemistic words of a U.S. Department of Agriculture publication, “China is strengthening farmers’ rights — although stopping short of allowing full ownership of land — so farmers can rent land, consolidate their holdings, and achieve efficiencies in size and scale.”

This liberalization of land rights included the passage of the Agricultural Lease Law in 2003, which curtailed the village authorities’ ability to reallocate land and gave farmers the right to inherit and sell leaseholds for arable land for 30 years. With the buying and selling of rights to use land, the government essentially reestablished private property in land in China. In talking about “family farms” and “large-scale farmers,” the Chinese Communist Party was, in fact, endorsing a capitalist development path to supplant one that had been based on small-scale peasant agriculture. As one partisan of the new policy argued, “The reform would create both an economy of scale — raising efficiency and lowering agricultural production costs — but also resolve the problem of idle land left by migrants to the cities.”

Despite the Party’s assurance that it was institutionalizing the peasants’ rights to land, many feared that the new policy would legalize the process of illegal land grabbing that had been occurring on a wide scale. This would, they warned, “create a few landlords and many landless farmers who will have no means of living.” Given the turbulent transformation of the countryside by the full-scale unleashing of capitalist relations of production in other countries, these fears were not misplaced.

In sum, simply allocating money to boost rural demand is unlikely to counteract the powerful economic and social structures created by subordinating the development of the countryside to export-oriented industrialization. These policies have contributed to greater inequality between urban and rural incomes and stalled the reduction of poverty in the rural areas. To enable the rural areas of China to serve as the launching pad for national and global recovery would entail a fundamental policy shift, and the government would have to go against the interests, both local and foreign, that have congealed around the strategy of foreign-capital-dependent, export-oriented industrialization.

Beijing has talked a lot about a “New Deal” for the countryside over the last few years. But there are few signs that it has the political will to adopt policies that would translate its rhetoric into reality. So don’t expect Beijing to save the global economy any time soon.

*Walden Bello is a member of the Philippine House of Representatives, president of the Freedom from Debt Coalition, a senior analyst of the Bangkok-based Focus on the Global South, and a columnist withForeign Policy In Focus. The issues touched on in this commentary are discussed in greater depth in the author’s book The Food Wars, published by Verso, which will be available by July 2009.


Tipaimukh Dam/Cachar Plain Irrigation Project: Complicated int’l disaster scenario for Bangladesh

May 23, 2009

Dr Debabrata Roy Laifungbam 
and Dr Soibam Ibotombi

NewAge, May 23, 2009

THE scenario and consequences of a Tipaimukh Dam-break has not been thoroughly studied. NEEPCO has yet to complete a basic scientifically-sound environment impact assessment even though it is geared up to start construction after having opened international bidding for engineering, procurement and construction. Such a study has to be conducted by international as well as national dam-safety experts as the impacts of a dam-break will have both severe upstream and downstream effects.


However, the downstream effects of a Tipaimukh Dam-break have been studied by the government of Bangladesh since 1992-94. In the Flood Action Plan 6 as part of the North Eastern Regional Water Management Plan of Bangladesh, the scenario of a dam failure at the Tipaimukh Dam project was investigated by international hydraulic and environmental experts in the context of a comprehensive flood action plan for Sylhet district.
   

India is also planning a major Cachar plain irrigation project downstream of the dam. Bangladesh already knew a fact that we in Manipur do not know still. Surprisingly, for the people of Manipur, the Tipaimukh project is not the only project at the drawing board on the Barak River. This means that water released from the dam reservoir will be further diverted for the irrigation project planned in Cachar district, contrary to NEEPCO’s recent claims.
   

FAP 6 had a future-without-plan component that looks at a dam-break scenario with minimally adequate project description available through the Joint Rivers Commission (Indo-Bangladesh). Bangladesh has pending issues with the government of India with regard to the dam that includes the effects of flow regulation. Regulation of the Barak’s flow by the Tipaimukh Dam would provide India with the opportunity to irrigate the Cachar Plain; this India proposes to do.
   

Since the Cachar plain irrigation plan involves the loss of water, it is a matter of great concern to Bangladesh, particularly its northeastern region as no statement is available as to how much water India intends to take from this scheme. For the purposes of the FAP 6 study it was assumed that the total depth of irrigation water to be applied is 1 M and that the water is diverted on a continuous basis during the six dry months (November through April).
   

According to the Bangladesh study, the risk that the Tipaimukh Dam poses for Bangladesh is extremely significant for the Meghna river system (including the Surma and Kushiyara rivers of Sylhet). The study recognises that the region is known to be vulnerable to earthquakes. These events, though relatively rare, are extreme in intensity, and can reverse existing morphologic trends and even induce re-configuration of the drainage system.
   

The likelihood that during 1991-2015 the region would experience an earthquake of magnitude 7.6 (similar to the July 8, 1918 event with its epicentre at Srimangal of magnitude 7.6, return period of 30 to 50 years) is between 40 and 60 per cent; of magnitude 8.7 (similar to the June 12, 1897 event with its epicentre at the Shillong plateau with magnitude 8.7, the largest on record, return period of 300 to 1,000 years) is perhaps 2 to 5 per cent, assuming the events are random and can be described with a simple binomial probability model.
   

On past evidence, river channels and sedimentation patterns in the northeast region may be subject to major disruptions following a severe seismic event. During past earthquakes, instances of ground liquefaction, landslide, rapid subsidence, collapse of river banks, and changes to river courses have been documented (District Gazetteer, 1917). The effects of earthquakes along the Brahmaputra river were described in 1899:
   

‘Strong ground shaking triggers liquefaction of river cross-sections in a few seconds; underwater slopes slide towards the stream axis, the bottom of the river heaves, and the banks become lowered; water immediately starts to rise and overflows the banks and adjacent zones where infilling of the channels takes place. Natural sills form, causing temporary lakes to develop; channels gradually re-open by scouring where currents are strong enough, and consequently water levels decrease.
   

‘Where channels remain blocked, streams desert their old channels to form new ones; and in subsequent years, the huge amounts of sediment poured into the river as a result of the earthquake gradually moves downstream. Sediment transport is higher than previously and siltation conditions are therefore modified.’
   

Earthquakes are believed to have also induced landslide and slope failures in headwater catchments in the Shillong plateau, which could greatly increase the amount of sediment supplied to the region for long periods of time. Joglekar (1971) described apparent impacts of major earthquakes on the upper Brahmaputra in Assam, India. After the severe earthquakes of 1947 and 1950, the bed level near Dibrugarh rose substantially. Between 1947 and 1951, low water levels rose by as much as three to four metres; thereafter they were steady.
   
   

Dam failure
   

THIS risk is, however, a significant issue relating to future environmental management of the northeast region water system of Bangladesh.
   

A dam-break is a catastrophic failure of a dam which results in the sudden draining of the reservoir and a severe flood wave that causes destruction and in many cases death downstream. While such failures are rare and are not planned they have happened to dams, large and small, from time to time. The International Commission on Large Dams has identified 164 major dam failures in the period from 1900 to 1965.
   

With respect to the safety of the proposed Tipaimukh Dam, hydraulic and environmental specialists opine that well-designed and constructed rockfill dams are perhaps the safest type for large heights (Tipaimukh would be among the largest of such dams in the world), but local circumstances may be much more important in this respect than dam type.
   

Two examples illustrate the types of failures that have been reported. The most famous, the Teton Dam in the United States was a 90m high earth-fill dam which failed in 1.25 hours. The flood wave which was released had a peak discharge of 65,000m3 s-1 at the dam and a height of 20m high in the downstream canyon. The Huaccoto Dam in Peru was 170m high, similar to the Tipaimukh Dam; it failed over 48 hours due to a natural landslide in the reservoir.
   

Generally, a flood wave travels downstream at a rate in the order of 10km hr-1 although velocities as high as 30km hr-1 have been reported near failure sites. From these wave velocities, it would appear that the initial flood wave could travel the 200km distance from Tipaimukh Dam site to the eastern limit of Bangladesh within 24 hours having a height of perhaps 5m. Peak flooding would occur some 24 to 48 hours later. High inflows would persist for ten days or longer and the flooded area would likely take several weeks to drain.
   

The Tipaimukh reservoir is huge (15,000Mm3) compared with experience reported in the literature. In the event of a significant unplanned discharge, the river system in Bangladesh would respond (drain) rather slowly, as characterised by the outflow rate relative to the floodplain storage volume), such that most of the water released would remain ponded over the northeast region for some time. Assuming a release volume of 10Mm3 and a ponded area of 100km2, the depth of flooding would be an average of 1.0 m above the normal flood level.
   

There will be first an imperative need for Bangladesh and India to cooperate in formulating and implementing risk management measures if the Tipaimukh Dam as presently designed should be constructed. A wide range of risk management measures are normally undertaken, including regular inspections by independent engineering teams, instrumentation and plans for warning downstream populations of deteriorating conditions of a dam, evacuation plans, and so on. As and when India’s plans proceed, there will be a clear need for Bangladesh to avail itself of expert technical assistance from dam safety specialists experienced with very large dam/reservoir systems and trans-border risk management.
   

For illustrative purposes only, the Bangladesh study modelled flood waves for a test case of an instantaneous failure, 50m wide extending to 100m below the crest of the dam. Discharge and water level hydrographs were presented for three locations: at the exit from the mountain valley (km 80), at Silchar (in the middle of the Cachar plain, km 140) and at Amalshid (km 200).
   

It was forecast that substantial attenuation of the flood wave would occur upstream of Amalshid and that the flood wave at Amalshid would be a long-duration event. Depending on the breech geometry and peak discharge, the flood peak would occur at Amalshid approximately 2 to 3 days after the dam break had occurred and flooding would continue for ten days or more. The flood levels at Amalshid would rise to approximately 25m PWD (peak water discharge), which is at approximately 8m above the floodplain level. This flood level depends on the boundary assumptions made and could vary depending on floodplain conveyance.
   
   

Socioeconomic aspects: ‘An electric bulb from every tree’
   

AS PER the technical report of NEEPCO (1998), the dam will have a firm generation of 401.25MW only implying that 401.25MW of power only will be generated regularly, and this is the best scenario. And again as per the past Central Government formula, the government of Manipur will get only 12 per cent of 401.25MW, i.e. 40-43MW free (sharing with Mizoram where 90 per cent is claimed by Manipur state but this is subject to the government of India set norms which has changed from time to time; it has been revised since).
   

In order to get this 40-43MW of power, the state will be losing around 293.56Km2 under submergence of reservoir water which includes 4760ha of gardens, 2053ha of rice cultivable land, 178.21Km2 of total 7251.36Km2 of forest land besides affecting a numbers of villages (15+90). Let us introspect as well as retrospect the case of the Tipaimukh dam in comparison with the Loktak hydroelectric project and analyse the possible implications in the next 50 years hence especially for the natural resources that will be deprived of the state.


When the Loktak project was initiated in the late 1960s – the tall claims made by the authority/government were: thousands of hectares of cultivable land will be generated by draining water of Loktak lake to Leimatak river, price of 1 unit of power will be only 5 paise, the installed capacity of 105MW is 10 times more than the power what the state requires and there will be no power problem for the next 50 years or so, etc.
   

Now, it is over 20 years of commissioning of the project – thousands of cultivable land have been submerged under the lake (reservoir) water contrary to what they claimed, 50-70 paise was price of 1 unit of power at the time of commission, power supply is at its worst nowadays and likely to worsen, which every citizen knows; and rehabilitation and compensation issues are yet to be settled at the Gauhati High Court.
   

And besides, a range of grave environmental and ecological problems especially of the Loktak Lake threatens this internationally important wetland’s very existence along with the Keibul Lamjao National Park, with ecological damage to the entire Imphal Valley and the catchment areas. The State gets about 6-10MW of free power intermittently from the Loktak Hydro Project. The question is whether it is sufficient to compensate the economic, natural resources and environmental loss which the State bears presently?
   

Now let us examine the possible implications of the Tipaimukh project in a similar manner. As pointed out above, the 293.56Km2 of submerged area consists of 5760ha and 2053ha of garden and cultivable lands respectively. These figures, the authors believe, are far underestimated because at present, less than 50 per cent of arable and cultivable lands in the Barak river beds are utilized due to thin population of the region, which will be possibly utilized in the next 50 years due to population increase. So approximately a total of about 15,626ha (11520ha + 4106ha) of cultivable land will be lost.
   

Again, although 178.21Km2 of the total forest area will be permanently submerged under water, practically the natural resources of a much larger forest area will be unavailable permanently to the State. Net present value levy for forest land conversion to non-forestry use as per the Supreme Court directives would also make the project economically unviable, as claimed by NEEPCO on January 28, 2006 (Tipaimukh Multipurpose project tariff increases by 67 paisa/unit on this account of NPV) in its submission to the Supreme Court’s expert committee.
   

Compensatory afforestation programmes will take over large tracts of other categories of forested lands besides Reserve Forests as well, but most of these programmes will never be implemented. After completion of the project, the project authority will claim that depletion of forest and other natural resources in the nearby catchment area will increase siltation in the reservoir leading to the reduction in storage capacity of the reservoir. This, in turn, will reduce the generation capability of the power plant and so on.
   

The same was true in the case Loktak project where the lake water level is to be maintained as a reservoir in order to generate electricity, submerging thousands of cultivable land contrary to what the authority claimed in the beginning. So the question that can be raised is whether it will be a wise policy, in the long run, to surrender such a huge natural resources just for 40-43MW of free power. This is a huge question, no doubt, to ponder upon.
   

Discussion and conclusion
   Structural and tectonic setting, plate kinematics and interaction as well as seismic potential of Manipur state and the serious implications for the entire region’s existing geomorphologic trends and even induce re-configuration of the drainage system amount to scientific and technical objections to the construction of a huge dam of the magnitude proposed in case of the Tipaimukh dam. Because, such a outmoded design dam may have the potential risk of a great disaster, killing hundreds and thousands of lives, and causing generational incalculable losses to future economic options, livelihoods and cultures.
   

So, the government must rethink about the construction of such a huge dam. Instead, it is advisable to construct relatively smaller projects with improved modern designs in order to scale down the magnitude of possible disaster since earthquake prediction and prevention is beyond human capability. It would be wiser and economically more sustainable to consider smaller dams or run-of-the-river schemes with an objective to reduce human induced disaster, and save the river.

Construction of smaller projects not only will tone down the magnitude of the possible human induced disaster but also will provide balanced sustainable development avenues for various regions of the State as well as minimise the environmental and ecological instability. In the meantime, the government of Manipur also should reassess all the power projects especially in terms of its operational efficiency and potentiality instead of simply waiting for a mere 40-43MW free power from Tipaimukh project which could last as long as 20-25 years.
   

For instance, the expected maximum head (difference between reservoir water level and power generation unit) is about 160m in the case of Tipaimukh project while in the case of Loktak Lake the head is about 269m which is approximately 100m more than that of the proposed Tipaimukh project. But such a tremendous head is wasted just to generate a variable 40-80MW of power only. This is nothing but sheer wasting of huge natural resources by severely underutilizing the immense potential. So, the potential of the installed Loktak project should be fully harnessed by Manipur after reassessing and renovating with an objective of enhancing its efficacy and benefit to the State while the project exists.
   

In conclusion, let us not waste and surrender our huge natural resources just for 40-43MW of power, and let us introspect, learn through mistakes of the past and rectify ourselves than repeating it. Because a wrong decision of ours will cost heavily on our future generation who will, otherwise, never forgive us. Let us remember popular Native American proverb which says, ‘The frog does not drink up the pond in which he lives.’


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