Focus Magazine, Issue 87, Spring 2011

FOCUS

ACTION FOR GLOBAL JUSTICE Issue 87/ Spring 2011 ISSN 1649-7368

INSIDE Action - Campaign for Trade Justice / The New Scramble for Africa / The Pros and Cons of Charity Gifts / The importance of South-South Trade / Trading up in Haiti / Made in Africa on the Rise / Comhlamh Development Forum /

Photo: Iriaini workers harvesting tea in Kenya

{ Welcome } Credits & Contact details Focus magazine, established in 1978, now published three times a year, is Ireland’s leading magazine on global development issues. It is published by Comhlámh, Development Workers in Global Solidarity, Ireland, which works to promote global development through education and action. The views expressed in individual articles are those of the author and do not necessarily reflect the views of Comhlámh, Irish Aid or our other funders.

We have tried to contact all relevant photographers to seek their permission to use photographs. We apologise to those we have been unable to trace.

The publication of Focus Action is grant aided by the Development Education unit of Irish Aid Honorary Patron, Mary Robinson. © Copyright Comhlámh 2011

We Need You – Get Involved Focus is produced by an editorial collective of volunteers, with the support of the Comhlámh office in Dublin. New volunteers are always welcome. Please contact Comhlámh if you are interested in any aspect of the production of this magazine. No prior experience is necessary.

Editorial team Editorial: Fleachta Phelan, Janet Horner, Caroline S. Connolly, Ruth Powell, Deirdre Kelly, Grainne O’Neill, Mary Brady, Thomas Englebert, Maren Graser, Miren Mailen Samper, Helen Lane, Ida Haughland, Jodie Neary.

Photography: Conall O’Caoimh Illustration: Alice Fitzgerald and Thomas Geoghegan Design: Alice Fitzgerald (www.alicefitzgerald.com) Printed by Tralee Print www.traleeprinting.com

Code of Conduct on Images and Messages Comhlámh is signatory to the Dóchas Code of Conduct on Images and Messages (for full document see http://www.comhlamh.org/ resources-library.html or contact us for a copy of the Dóchas flyer). Feedback on this issue is most welcome – email: info@comhlamh.org

Correspondence Comhlámh, 2nd Floor, Ballast House Aston Quay, Dublin 2 Ph 01 4783490 E-mail: info@comhlamh.org

Printed on recycled paper

The views expressed herein are those of Comhlámh and can in no way be taken to reflect the official opinion of Irish Aid.

Charity alone will never change the world

Join Comhlámh: take action for global justice In a world that seems so unfair, don't you wish that Ireland would stand up for justice? Yet there have been moments to be proud of when Ireland helped make a difference:

You can join in campaigns  

  

against apartheid for the freedom of East Timor for debt cancellation

But these breakthroughs only happen because people - like you - demand change and make justice matter.

For 35 years, Comhlámh (Irish for 'solidarity' and pronounced 'co-law-ve') has been educating and campaiging for global justice in solidarity with the developing world.

Our members challenge the root causes of injustice and inequality - globally and locally.

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

for Trade Justice against racism for aid that makes a difference

Comhlámh can also offer advice on overseas volunteering.

Sign up for membership at www.comhlamh.org Join our activist network at www.myspace.com/comhlamh

{ Focus Action }

Action: Campaign for Trade Justice Raw Materials – Raw Deal Many developing countries are rich in raw materials, such as copper, gold and diamonds. These raw materials are extremely valuable, and if sustainably managed, could be used to generate income, protect the environment, and develop industry. The income raised could pay for education, healthcare, and other social services; and the industries created could bring new jobs and increased income for millions of people. For years developing countries have exported raw materials unprocessed, making very little money out of their abundant natural resources. Now, many of them want to do it differently.

The EU’s new trade policy on raw materials, however, will prevent developing countries from exercising control over their natural resources. In a drive to secure cheap access to raw materials, the EU’s new policy wants to stop developing countries putting taxes on the export of raw materials and regulating foreign investment. Taxing raw material exports ensures that developing countries make money out of their natural resources, and investment regulation can help develop new industries and protect labour and environmental rights.

Developing countries should be allowed to use both measures.

Comhlámh, as part of a coalition of trade justice organisations across Europe, is campaigning for fair trading rules that allow developing countries to regulate access to their natural resources, and make their own economic choices, for the benefit of their people and the planet.

Join Campaigners across Europe – Write to your MEP Trade Justice campaigners across Europe are writing to their MEPs on the topic of raw materials.

We are calling for the European Commission to: • Withdraw demands from all trade negotiations that would prevent poor countries using export taxes to protect their raw materials and raise revenue • Transform its position on investment to allow developing countries to regulate foreign investment and companies in the public interest • Call for an international process to address how to manage raw materials in a fair and sustainable way and promote responsible consumption Join Campaigners across Europe and take action now!

We have lots of campaign postcards to help you write to your MEP. If you’d like to support our work and help put a responsible approach to raw materials at the heart of EU trade and investment policy, just email Alfred@comhlamh.org, and let us know how many postcards you would like us to send you.

Find out more at www.comhlamh.org/Campaign-EUs-TradePolicy Find out who your MEPs are by visiting: www.europarl.ie/ view/en/irish_meps

Bloom is:

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{ Raw Materials }

The EU’s New Scramble for Africa

Alfred Hickey M’Sichili explores the EU’s new trade policy on raw materials and its impact on developing countries.

T

he EU’s new trade and investment policies will lock African countries into a cycle of poverty by denying them the right to manage their natural resources. The New Resource Grab, a report commissioned by Comhlámh in alliance with other European trade justice organizations, shows that the EU’s new policy on raw materials will deliver a crushing blow to development in poor countries.

Many countries of the Global South are rich in raw materials, such as copper, gold and diamonds, as well as the hi-tech metals which are used to create laptops, mobile phones. These raw materials are extremely valuable, and if sustainably managed, could be used to generate income, protect the environment, and develop industry. The income raised could pay for education, healthcare, and other social services; the industries created could bring new jobs and increase income for millions of people. For years countries of the South have exported raw materials unprocessed, making very little money out of their abundant natural resources. Now, many of them want to do it differently.

The EU’s new trade policy, however, is set to undermine these efforts. In a drive to secure cheap access to raw materials for European industry, the EU drew up a set of proposals in 2008 (recently updated) known as the Raw Materials Initiative (RMI). This new policy looks at worst like a new resource grab, revealing Europe’s growing anxiety about increased global competition for natural resources. In one of the main proposals of the RMI, the EU wants to stop developing countries taxing exports of raw materials and regulating foreign investment.

However, taxing raw material exports ensures that African countries make money out of their natural resources, and investment regulation can help develop new industries and protect labour and environmental rights.

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For years countries of the South have exported raw materials unprocessed, making very little money out of their abundant natural resources.

Now, many of them want to do it differently.

Export taxes, especially on raw materials, can be used to capture the value of a country’s natural resources for its people. Countries of the Global South use export taxes to raise much needed government revenue, which could fund various development programmes from education to infrastructure development. As a source of revenue, export taxes are particularly crucial to these countries, given their limited tax base. In most African countries, for example, the export of raw materials accounts for over 70% of their entire exports, thus completely dominating their economies. Restricting their use of export taxes will severely deplete government coffers and inhibit developing countries’ ability to implement much needed development and poverty eradication programmes.

Most importantly, however, levying such taxes helps impoverished countries to develop manufacturing companies and processing industries by providing an incentive to keep raw materials in a country.

For example, Botswana, one of the most dynamic of African economies, has successfully developed a local diamond and semi-precious stone processing industry, helped in part by the restrictions it imposes on the export of unprocessed diamonds and semi-precious stones. The

{ Raw Materials }

Zambian government, eager to emulate the success of its neighbour, recently introduced taxes on the export of copper in an effort to encourage the establishment of a local copper processing industry.

This diversification of the economy is a pivotal development objective of all resource-rich developing countries. It allows them to escape the trap of underdevelopment that over-reliance on the export of primary or unprocessed raw materials locks them into. Without the use of export taxes, not only will most of the profits resulting from the extraction and export of a country’s raw materials flow into the private hands of foreign corporations, but the development prospects of many poor countries will also be severely hampered.

The same can be said of the new rules on investment being pushed by the EU. The EU is seeking to limit the ability of developing countries to regulate foreign investment in the extractive industries so as to make it easier for EU companies to invest in these sectors. The regulation of foreign investment has long been recognised as a legitimate policy tool for development. Indeed the most economically successful countries, including most EU member states, have often restricted foreign investment to promote industrialization. Some countries banned foreign investment in certain sectors, such as energy and transportation, while others imposed limits on foreign ownership.

While it is true that developing countries need foreign investment to develop their economies, it is important that they are able to regulate such investment, in order to maximize the development

benefits derived from it. Regulation of foreign investment can also help minimize the potential negative impact on the environment and human rights that often accompany foreign investment in the extractive industries. Countries of the Global South, therefore, should have the right to use policy instruments, such as export taxes and investment regulation, which have proved successful for developed economies. To deny them such a right would be equivalent to consigning developing countries and millions of the world’s poor to continued poverty and destitution.

ComhlĂĄmh believes that as Europe tries to secure access to the raw materials that power its industrial economy, it should not repeat the awful mistakes of the past when its economic success was born at the expense of a plundered world. Instead, Europe should place a responsible approach at the heart of its trade and investment policy, and promote and practice fair global trade rules that allow developing countries the right to make their own economic choices for the benefit of their people and the planet.

To read the policy report, see - http://www.comhlamh.org/CampaignEUs-Trade-Policy.html To read the Raw Materials Initiative, see - http://ec.europa.eu/ enterprise/policies/raw-materials/index_en.htm

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{ Trade }

10 reasons to shout louder about unfair trade!

Deirdre Kelly reminds us of the importance of tackling global trade injustice.

‘Before you finish eating breakfast this morning you’ve depended on more than half the world.’ (Martin Luther King Jr.) The half of the world we depend on to get our breakfast – tea, coffee, orange juice, bananas, sugar – is the poor half. This dependence is not just for breakfast however, it extends to clothes, raw materials for our computers and mobile phones and the cheap labour that puts these things together. If we’re so dependent on the poor half of the world for everything we use, how is it that we’re the rich ones? Unfair trade is one of the reasons.

1. Trade is worth more than aid: trade has the potential to lift

millions of people out of poverty. The value of trade is worth more to poor countries than development aid. However, poor countries lose more through unfair trade deals than they receive in aid.

2. Unfair trade deals are brought about by unfair

negotiations: where there is a power imbalance between rich and poor countries. Rich countries have been known to threaten to cut aid to poor countries if they vote against trade deals.

3. Nobody else is doing it: unfortunately trade is one of the least

popular development topics. Lots of organisations work on issues like HIV & Aids, climate change or children’s rights, but fewer organisations take on trade as a topic. This is a real reason for you to shout louder about it!

4. Unfair trade prevents poor countries adding value to

their exports: for a jar of coffee that costs €2.50 here, the coffee producer in the Global South earns only 17 cents. The profits go to those who process the beans into a finished product. To make real profits from their raw materials poor countries need to develop processing industries. However, unfair trade deals prevent them from supporting their emerging industries. This means they get stuck in the poverty trap of exporting raw materials to rich countries who then process them into something more valuable.

5. Global trade rules are hypocritical and cause unfair

competition: Although poor countries are not allowed to subsidise their industries, their markets are open to some EU goods which have been subsidised. This makes the competition unfair and can cause local industries to go out of business.

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6. Unfair deals are being signed in your name: the EU

negotiates trade deals with the rest of the world as a bloc. TDs and MEPs throughout Europe have been elected by us, so the deals they sign which exploit other countries have our names on them.

7. Corporate interests are shouting the loudest: there are

15,000 corporate lobbyists in Brussels shouting loudly about their interests, while there are only a handful of NGOs working there to support fair trade.

8. Unfair trade costs poor governments valuable revenue: through free trade deals all countries, rich and poor, are required to reduce and eventually remove taxes on goods coming into their country. For rich countries this tax is worth about 5% of their overall tax revenue, but for poor countries it is worth up to 40%.

By lowering these taxes poor countries lose valuable income which could fund essential services such as education and healthcare for their people.

9. Unfair trade agreements leave no policy space: when

rich countries were developing they had the space to decide how to develop their economies and could develop policies to suit their situation. For poor countries, (unfair) trade deals lock them into particular policies which will determine their future development.

They are not being allowed the space to decide for themselves which policies they want to pursue.

. We’re all part of the game: we are all inextricably involved in 10.

the trade game because we buy things, pay tax, vote, exchange our labour for money etc. We can’t escape it, so the only thing we can do is try to make the rules of the game fair so trade can be used as a tool to promote development.

What can you do? It’s over to you...

Acting for trade justice can range from using your consumer power to buy ethically made and sustainable products, using your voice to raise concerns about the impact of Ireland’s trade policies with your political representatives to debating, learning more about and campaigning on the issues. For those who want to get more active, Comhlámh’s Trade Justice Group is always looking for new members!

{ Trade }

Trade Glossary Some of the words used in discussions on trade are a bit tricky!

Janet Horner and Deirdre Kelly explain a few of the key terms.

Civil society: All civic and social organisations and movements that participate in a society, separate from the institutions of a government.

Duty-free goods: Goods that are bought or sold between countries with no additional import or export tax.

Economic Partnership Agreements (EPAs): Trade Deals being negotiated between European Union countries and 76 African, Caribbean and Pacific countries to promote a free trade ‘partnership’.

To see why Comhlámh believe these agreements are unfair and bad for development check out: http://www.comhlamh.org/find-out-moreand-act-now-on-epas.html. To read the other side of the argument see here http://ec.europa.eu/trade/wider-agenda/development/economicpartnerships/ Foreign Direct Investment (FDI): Money invested by a private company from one country into another country.

Free trade: A trade model where goods and services can be traded across all borders and with no barriers. This is the trade model that is supported by many Western governments, although not always implemented by them. For example, the US advocates the free trade model but subsidises its cotton farmers to the disadvantage of other cotton producing countries.

Global South: A term used to describe the intangible geographic, political and economic world region also known as the developing world, the third world, underdeveloped countries.

Import tarriffs: A tax on imported goods which raises the price of that good therefore making it less competitive than local products in the country it is moving into.

International Monetary Fund (IMF): Set up as a partner organisation to the World Bank to encourage cooperation between governments in monetary policies. The fund demands that countries receiving financial aid adjust their economic policies according to the IMF’s free trade model.

Open market/ Open economy: An economic system resulting from following the free trade model.

Privatisation: Transferring control of state-run institutions and industries to private ownership. Examples of frequently privatised services include health services, transportation, water, energy.

Protectionism: An economic policy designed to ‘protect’ domestic businesses and industries by imposing barriers such as taxes and quotas on imported goods so as to limit their competitiveness with domestic goods. This policy is in opposition to free trade.

Structural Adjustment Programmes (SAPs): Policies to be implemented by developing countries who receive financial assistance from the IMF or World Bank. The policies often impose a free trade model including privatisation, deregulation and a reduction of trade barriers.

Subsidies: Financial assistance given (normally by the government) to domestic businesses and industries to help their products compete with imports. These subsidies can keep the cost of production low or allow the businesses involved to sell their products at an artificially low price.

For example, in Italy tomato production is heavily subsidised by the Italian government allowing farmers to produce more than can be sold in Italy. The excess tomatoes are exported and can be sold at artificially cheap prices in countries such as Ghana, where local tomato farmers cannot compete.

World Bank: Originally known as the International Bank for Reconstruction and Development, the World Bank was set up after World War II to help with the reconstruction of European economies devastated by the war. In later years, it took on the role of providing loans to countries of the South for economic development. It is a sister organisation to the IMF. Both organisations are based in Washington.

World Trade Organisation (WTO): International trading organisation with 153 member countries. It is the key forum where multilateral trade rules (those involving multiple countries) are negotiated and trade disputes are adjudicated.

Want to know more? Check out Comhlámh’s websites for more info about trade: http://www.comhlamh.org/campaigns.html http://www.volunteeringoptions.org/VolunteeringDevelopment/ WhatisDevelopment/DebtandTrade/tabid/82/Default.aspx

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{ Charity Gifts }

Do charity gifts get your goat?

Maren Graser ponders the growing popularity of charity Christmas gifts.

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o there I was, thinking the Christmas present dilemma is finally sorted. Years of campaigning for a gift-less Christmas had amounted to nothing, and as I was never heartless enough to pull it off without a familywide consensus, I am still part of the majority of this country, rummaging aimlessly through shops when D-day gets closer.

Last Christmas, I bought a charity gift. Not only was it a godsend for me; it also went down well on the receiving end. But what about the actual receiving end? Those who the hypothetical goats (not for one minute did I believe I am paying money towards an actual goat) are intended for?

My bubble got burst only recently when an advertising insert for charity gifts in this magazine prompted a discussion about these gifts among members of the Focus team. Some were positive about the trend towards charity gifts, but others were quite critical. ‘Patronising’ I heard.

‘Feel-good purchases to appease a lazy consumer’s conscience’ and other points along those lines.

While I don’t think there is anything wrong with appeasing a lazy consumer’s conscience (who may not become much more of an activist otherwise anyway), it prompted me to look further into this topic.

It was difficult to find material that takes a critical stand towards these presents. This comes as no surprise as most people would agree that it is a much better decision giving your money to charity rather than getting presents for your loved ones, which in turn may end up in charity shops themselves (the presents that is!). If you try to quantify how much good these charity gifts do, you will find that they have become a very important source of income for charitable organisations.

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Some raise up to €4m this way. Lastly, they are also an easy option for people like me, who resent the consumption madness before Christmas, but feel they can’t turn up empty-handed either.

In my search for counter arguments, I only came across an old article criticising these gifts on the basis of two films that explored what people in Ghana made of the support they got from one particular NGO -not the gifts specifically. Yet, the article ridiculed the gifts by asking the reader would they like a goat for Christmas. As if people were actually getting grasscutters, hoes, etc. specifically for Christmas, which in their countries might not even be such a big occasion for exchanging gifts. Quite an unlikely claim, I thought. But then again, there are still organisations flying livestock over to Africa and, who knows, along with exporting animals they might want to export our consumptionladen version of Christmas, too!

David Dalton, CEO at Plan Ireland, confirmed my assumption that the money raised through these gifts goes towards their work throughout the year. But it is allocated to the project the buyer wanted to support, e.g. their cholera prevention or education programme.

So far, so good. If I just find an NGO I want to support, surely there can’t be anything wrong with that particular charity gift then? Maybe not, but Matthias Fiedler, director of the Irish Development Education Association (IDEA), raised a very important aspect. As he points out, there is often a common denominator of the gifts development NGOs have in store: They all promote the charity, or should I say the ‘sympathy approach’. The notion that poor Africa needs our help.

The way charity gifts are being promoted might perhaps do more harm than good. It reinforces the simplistic idea of Africa as a rural

{ Charity Gifts }

and underdeveloped continent, dependent on our kindness. Does that make you want to do business with an African country? Or prompt you to look for a stylish leather briefcase made in Africa? Probably not.

Arguably, when buying these gifts you’re not making a private donation, but you’re bringing the topic of global poverty into the conversation with your family and friends, which at first glance is a good thing. Just keep in mind that while thinking “A few bob for this NGO won’t go amiss, we all know that Africa goes far beyond subsistence farming and high infant mortality rates”, you might actually be reinforcing stereotypes in the person who gets your nonpresent.

“I would rather see a campaign promoting ethical consumerism”, says Matthias. “And more initiatives to give customers in developed countries a range of ethically-made products to choose from.” He feels that for many people, those charity gifts might just be a cheap way out.

A shirt picked up in a department store combined with a charity gift probably can be more expensive than a shirt where every step of the production process was completed under decent working conditions.

Sure, the NGO would go without in that case, but if we all made such choices...

In many cases, these choices can be expensive and, at the very least, take more time and effort than just going to the closest shopping centre. In this light, Matthias has a point when saying that charity gifts feel a bit like buying yourself free, - you can save yourself the effort of making ethical choices every day and instead give a charity some extra support for Christmas.

The way charity gifts are being promoted might perhaps do more harm than good. It reinforces the simplistic idea of Africa as a rural and underdeveloped continent, dependent on our kindness.

This is assuming, however, that all buyers of charity gifts don’t put any thought into what they consume throughout the year. And that the less thoughtful consumers would contemplate their choices more, did they not have this opportunity to make up for unethical consumer behaviour in their everyday lives. This is a scenario I find quite unlikely. If this is the one thing they do for a better world, I’m quite glad charity gifts are a visible option for people.

It is not a question of either-or: Charity gifts could go very well with an awareness campaign that educates people about the power they have as consumers to support people in poorer countries to lift themselves out of poverty. These gifts can also be adapted to promote a different image of developing countries. Gifts with which you fund business skills training are already available. They might just need to be promoted more than the ubiquitous goat.

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{ South-South Trade }

The Importance of South-South Trade

Thomas Englebert explores the increasing prioritisation of South-South trade by developing countries.

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outh-South trade: the issue In 2007, the Democratic Republic of Congo (DRC) made a deal with China: a €6.3 billion investment was to be spent by China to build infrastructure and foster the mining sector in the DRC. For the work, two Chinese companies were chosen (China Railway Engineering Corporation and Synohydro Corporation). They were engaged to build, among other things, 31 hospitals and 4 universities. In exchange, DRC gave China access to 10 million tons of copper, 200 000 tons of cobalt, and 372 tons of gold.

This deal is one example of the increase of South-South trade, and the complexities involved among many of the emerging trend towards South- South trade, and the complexities involved. South- South trade refers to trade between countries from the Global South (also called developing countries). These countries have more similar economies and therefore are often more suited to trade with each other than with Western countries. Such trade could be more economically and politically beneficial to them than trade with richer countries.

Indeed, the economic growth of the Global South has been linked to trade, which has usually relied on the growth of developed countries to whom Southern countries predominantly export their goods.

As some developing countries are currently experiencing a marked increase in growth rates (and thus an increased need for raw materials etc.), trading with them will be more and more economically attractive for other countries from the Global South. South-South trade could also help countries reduce their dependence on access to the markets of developed countries. Thus, it might strengthen countries from the Global South in their political, financial and economic negotiations with the Global North, as they gain more economic independence from the wealthiest countries in the world.

The evolution of South-South trade In the last decade, South- South trade increased in value from $222 billion in 1995, to $562 billion in 2004. For Africa, total trade with non-African developing countries increased from $34 billion in 1995 to $283 billion in 2008. Also, South- South investment has increased significantly in recent years. Foreign direct investment from developing countries to other developing countries grew from $14 billion in 1995 to $47 billion in 2003. In Africa, Foreign Direct Investment from India increased by 837% between 2000 and 2007.

Numerous factors have contributed to these changing trade patterns. The opening of markets in developing countries has facilitated an increase in trade. A multiplication of regional trade agreements and a diminution in transport costs have also contributed. More

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important, there has been significant growth in a number of small but economically strong countries in East Asia, like Malaysia and Thailand, which has strengthened the demand for goods. Finally, in the past decades, countries of the South have become convinced that there is a need to focus on trade amongst themselves rather than prioritising trade with the rich countries of the Global North. As Mark Halle, from the International Institute for Sustainable Development (IISD), has noted ‘‘the principal reason for promoting it [South-South trade] tends to be politically motivated - to replace inequitable market relationships between the North and South with fairer ones between Southern countries”.

But even if trade between countries from the Global South has increased, it has a long way to go before it reaches the level of trade of developed countries. South Centre, a Southern think tank points out, that “as the economies of the industrialized countries of the North continue to dominate the global economy, accounting for 55.7% of global output and for about three quarters of world trade”. Nevertheless, South- South trade has increased substantially during the last decade, and continues to grow.

Political leaders are aware of the changing global dynamics, and see opportunities. Rob Davies, Trade and Industry Minister for South Africa, said in June 2010: “We now see a huge number of possibilities from South-South trade and a lot of our effort is being deployed there. […]. We do now have alternatives and that is we can diversify and there are other poles of growth, and that will be one of the real consequences of this situation [the current economic situation]”. UNCTAD SecretaryGeneral Supachai Panitchpakdi (a former head of the World Trade Organisation (WTO) and deputy Thai prime minister) noted that the financial crisis had shaken the economic foundations of the Global North and was threatening to shatter the growth and development aspirations of the Global South. “The timing, therefore, is right to explore how greater South-South cooperation can help developing countries to cope with the crisis”.

Toward more intense political collaboration?

As well as more trade collaboration, greater political cooperation is occurring between countries from the Global South. The G-3 (Brazil, South Africa and India) are challenging the domination of international institutions such as the WTO by the wealthiest nations. These three emerging powers are changing the global power dynamic by taking independent positions, investing in other countries and making ambitious trade deals, sometimes in competition with developed countries.

{ South-South Trade }

Another interesting Southern coalition is ALBA (Bolivarian Alternative for the Americas). Like the G-3, it aims to challenge the domination of the rich countries. The members of this coalition (Antigua and Barbuda, Cuba, Bolivia, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines and Venezuela) have agreed guiding principles that go against the current economic model. Led by oil-rich Venezuela, the coalition is based on guiding principles of complementarity, solidarity and state sovereignty. The central aim is to achieve development, with a focus on human rights, and an increase of state intervention mostly in the energy sector, for example by nationalising various companies. Trade between members is fostered, with recognition of the strengths and weaknesses of each country, and recognition of the complementarity of each. For example Cuban doctors are “exchanged” for Venezuelan oil.

These initiatives, among others, try to challenge the Northern domination of the globe – politically and economically. In 1999, at WTO negotiations in Seattle, countries from the Global South were denied participation in the decision-making process. Since then they have been challenging the domination of Northern countries in international institutions and in setting the rules and terms of global trade. The Global South is demanding more “policy space”, i.e. the ability to make their own decisions, and trying to enact different economic and trading policies.

Conclusion: Can South-South trade contribute to development in the Global South?

Trade within the Global South is not a magic bullet. If some poor countries change the destination of their goods but continue to be locked into the role of exporters of raw materials, never progressing to develop industries and thus earning more from their trade, little will change. If the G-3 challenges the current system just to become more dominant themselves, without any fairer rules, things will not improve in poorer countries. Another problem is that there are big differences in the level of development among countries of the Global South.

If it is to bring real change, as well as addressing global economic power dynamics, South-South trade needs to address other structural problems, such as weak infrastructure and industrial capacity. Many African leaders have acknowledged the opportunities that Chinese investment represents for their countries, and find the straightforward approach of the Chinese, who are less inclined to use development rhetoric, refreshing. However, concern has also been raised about China’s commitment to labour and environmental standards, and that China might abuse its economic power to secure unfair deals, thus reproducing the structural problems without addressing them.

“The principal reason for promoting South-South trade tends to be politically motivated - to replace inequitable market relationships between the North and South with fairer ones between Southern countries” South- South trade could help to reduce the dependence of the Global South on the Global North. Reducing economic dependence on Northern economies, in the context of the current economic climate, might help the Global South to foster development and pursue trade policies that better suit their stage of economic development. And reducing political dependence, as they gain a stronger negotiation power through having more trading options and possibilities, could help the Global South to ensure trade deals that respect their sovereignty and policy space. The possibilities of South-South trade are many, and it will be fascinating to see how global trading patterns change in the decades to come as countries of the South explore alternatives to the current global trading paradigm.

Read more: “Enhancing South-South Trade”, South Centre: http://www. southcentre.org/index.php?option=com_content&view=article&id= 331%3Aenhancing-south-south-trade&catid=60%3Athe-south-andglobal-governance&lang=en UNCTAD: http://www.unctad.org/templates/Page. asp?intItemID=3821&lang=1 “Much needed to make South-South trade work”, Tralac: http:// www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_ id=1694&news_id=62989&cat_id=0 “Cautionary notes sounded as South-South trade booms”, Trade Africa : http://www.tradeafricablog.com/2010/07/cautionary-notes-sounded-assouth-south.html

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Trading up in Haiti

{ Haiti }

More than a year since the earthquake in Haiti, Helen Lane explores the role of trade in the country’s recovery.

H

aiti was in the media spotlight in 2010 due to the devastating earthquake which killed over 112,000 people.

Even before the disaster, it was the poorest country in the Americas. While there are always multiple reasons for why a country is poor, the ability (or inability) to trade is nearly always a significant factor. This article looks at Haiti again but with a focus on the role of trade in the road to recovery.

Thirty years ago Haiti was producing most of its own food. But now it is a net importer of food including many staples.

Background Over 90% of the population in Haiti live on less than $2 a day.

Agriculture and textiles are the main trading commodities, and since the 1980s Haiti has increasingly opened up its markets to its main trading partners (the US, the Netherlands, China and Brazil) and it is one of the most open economies in the world. As a condition to ensuring credit from the IMF, World Bank and other international financial institutions, the country embarked upon a series of structural adjustments, including the reduction of import tariffs (taxes on imported goods) and the privatisation of state-owned enterprises.

The US is Haiti’s most important trading partner, receiving around 70% of all exports in 2009. However, its policies towards Haiti have not always been advantageous for the Haitian people. In the 1990s, along with the EU, it pushed Haiti to open up its markets and reduce tariffs.

The tariff on rice went from 50% in the 1980s down to 3% in 1994, resulting in a huge drop in domestically-produced rice which could not compete with (sometimes heavily subsidised) rice imported from other countries. Former US President Bill Clinton has apologised for the negative effects of this policy: “It may have been good for some of my farmers in Arkansas but it has not worked. It was a mistake”.

Thirty years ago Haiti was producing most of its own food. But now it is a net importer of food, including many staples, and it has a trade deficit which has increased annually. This is a common global pattern; many poor countries that once were food self-sufficient have become dependent on food imports and their domestic farmers are unable to compete with produce coming from across the globe.

On December 10th 2009, roughly a month before the earthquake,

Haiti followed in the footsteps of other Caribbean countries by signing up to the Caribbean Economic Partnership Agreement (EPA), a free trade deal with the EU. The country has yet to ratify the trade agreement, which has been strongly criticised by Haitian and international civil society organisations, which argue that domestic agricultural production and service sectors will be unable to compete with European multinationals. Even without the EPA, however, the earthquake of January 2010 meant that local food production was swamped by food aid from outside.

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How has the earthquake affected trade?

One of the main effects of the earthquake on Haiti’s trading was a drop in production in the agricultural and textile sectors. Haiti’s clothing industry increased in 2009 by 22%, but the earthquake has meant an interruption in manufacturing. The production of local staples, such as maize and beans, also decreased directly after the quake, leading to increased food prices. Although some food aid has been sourced locally, the majority is imported. There was undoubtedly a need for some externally sourced food in order to meet the demand after the earthquake; domestic production has been decreasing since the 1980s and in 2009 90% of all rice was imported. The surge in food aid caused a reduction in food prices which meant people were able to eat, but it had a negative impact on Haitian farmers, who earn money selling food to the cities and who comprise the majority of the population.

Where does trade fit in?

Few would disagree that a comprehensive and coherent trade policy

{ Haiti }

which does not undermine aid is vital. An Oxfam report published in October 2010 emphasised that support for Haiti’s poor famers and and an improvement in Haiti’s infrastructure is needed, as well as full duty free access to US markets. While US lawmakers expanded Haiti’s duty free access after the earthquake, they have not gone far enough, according to Philippe Mathieu, Oxfam’s Country Director in Haiti.

“Currently, US rice subsidies and in-kind food aid undercut Haitian farmers at the same time as the US government is investing in Haitian agricultural development. The international community must abandon these conflicting trade and aid polices in order to support the growth of Haiti’s fragile rural economy,” said Mathieu.

And what of the signed EPA, which has yet to be ratified by Haiti?

Any analysis of its impact would be hypothetical at this stage but there are mixed feelings from other Caribbean countries which have ratified it. While some have predicted that signing up to the agreement would be disastrous for the countries involved, the CAPRI, the Caribbean Policy and Research Institute, has argued that the economic effects on the four countries (Jamaica, Guyana, Trinidad and Tobago, and St. Lucia) they studied would be minimal. However, as the implementation of the trade agreement has been minimal it is not surprising that to date there has been very little tangible impact. Regardless, it is hard to see how a reciprocal trade regime, where all countries are supposedly

“equal” regardless of their financial standing, could benefit Haiti.

Oxfam and other organisations have called for support for domestic industry and agriculture, full access to US markets (without the burden of reciprocity), the strengthening of women’s role in production and marketing, strengthening of the voice of rural farmers, improvements in healthcare and schools and enhancement of the capacity of local government to deliver services. Camille Chalmers of The Haitian Platform to Advocate for Alternative Development (PAPDA) has also highlighted the failure of the Haitian government to engage in serious consultation with civil society groups, in spite of the wealth of knowledge, experience and local expertise within them. He noted that “This earthquake has presented an unprecedented opportunity to change social structures that prioritise the needs of the wealthy over the poor, the urban minority over the rural majority, the state over civil society and foreign investments over national priorities”.

If the rebuilding of Haiti is to be sustainable, trade must work for the benefit of the people, and that will require the government to consult with and listen to Haiti’s social movements and civil society platforms. A trade agreement with the EU, US, and other global trading powers that is fair rather than “equal” would then no doubt be high on the agenda.

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{ Made in Africa }

‘Made in Africa’ on the rise

Photo: Workers of the Lulu Life collective, Sudan, crushing shea nuts

Photo: In the Chocolaterie Robert factory, Madagascar

How African is your coffee? Maren Graser looks at some of the challenges faced by African producers trying to get their products to European markets.

H

ave you bought anything recently that was made in Africa?

You will probably have to think hard. Honey maybe, or the coffee you buy. But a closer look at the label reveals that they are most likely produced somewhere in Europe.

In a world where money rules decision making, it doesn’t matter which country needs the jobs more or that chocolate might taste better if it’s made where the cocoa grows. The deciding factor is cost of production and up to now Africa has not been able to compete in that regard.

Being part of the least developed continent means that everything apart from labour costs a fortune. You might have to get your packaging materials from abroad, or even generate your own electricity. If a machine breaks, it takes much longer to get spare parts and you might have to stop production. Claudio Corallo recalls the most recent obstacle for his factory in São Tomé e Príncipe: “We couldn’t make chocolate for six weeks, because there simply was no sugar in the country. But all our workers still had to get paid.”

The reasons for these expensive production costs are obviously complex (including the legacy of colonialism, the unfairness of global trade rules, etc.) and outside the scope of this article. The result is that Africa still exports mainly basic commodities and raw materials, which are then processed elsewhere. There are many stages between harvesting crops or minerals and placing a finished product onto the shelves, each of which makes the product more valuable and pays the wages of people involved in this value chain.

Lulu Life shea butter products, which are available in an Irish health food chain, illustrate the advantages of adding value locally. In Sudan the Lulu Life women’s cooperative provides jobs to over 400 women -on a part-time basis to share the work among as many women as possible.

Elprida Gamba, one of the members says: “With this work, the women in our village have been bringing a lot more money into the family than the husbands, so much that the husbands now come to beg the group to employ their women.”

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The co-operative manufactures shea butter soaps, creams, body scrubs and lip balms. By selling the shea butter in individual tubs, the co-operative makes seven times more than if they sold the same product in bulk. You do the math, how much would they earn, if they dropped yet another step down the value chain and exported unprocessed shea nuts – to be turned into butter only in the importer’s country. That would mean a lot less money and work for women like Elprida Gamba and their families.

Taking into account the multiplier effect on other businesses that produce packaging or that would generally profit from more disposable income in the community, it becomes clear that the more stages of value addition that are completed in Africa, the more revenue is generated for the country in question. Conall O’Caoimh, founder of Value Added in Africa (VAA), believes “it is those finished products that are the key for Africa to trade its way out of poverty.”

And he finds more and more products on his research trips that could easily sell in Ireland. Yet, it might take a while until consumers in Ireland will notice that change. Festus Musyoki, production manager at Life Works, told me about the difficulties African producers face when attempting to access European markets: “It is hard to get interest.

We would need to be at fairs and exhibitions in Europe, which we can’t afford at this time. Sending e-mails is not enough.”

Mr Msyoki places high hopes on contacts with organisations like Value Added in Africa, which assists African producers to find buyers in Ireland and the rest of Europe. In making the link between Irish and African companies, Value Added in Africa not only wants to facilitate the access to additional income sources for producers, but also bring goods into Irish shops that may help people to associate Africa with quality work rather than just with the images of poverty they see on TV. Maren Graser is volunteering with Value Added in Africa. Have a look at www.valueaddedinafrica.org to read about their work and find out where you can buy products ethically made in Africa.

{ News }

Paradox of Plenty;

the new scramble for natural resources

Comhlámh’s Development Forum, 9th April 2011 Join us to hear Claude Kabemba, the Director of Southern Africa Resource Watch, speak about the New Scramble for Africa. Learn about our campaign to get the EU to think sustainable and put the interests of poor countries over those of big business. Find out how you can make a difference by getting active on this important issue. Meet lots of like-minded people, share stories, participate in workshops and help us to plan to change the world!

The Development Forum will take place on the 9th April 2011 at Charleville Castle, Tullamore. Members and participants can stay overnight in Tullamore (preferential rates being arranged at local hotels by Comhlámh) and get together for an adventure on Sunday morning Online booking for the Forum available at: http://www.comhlamh.org/comhlamhs-agm-and-developmentforum.html Contact: admin@comhlamh.org Venue: Charleville Castle, Tullamore http://charlevillecastle.ie/ Development Forum Fee: €10 including lunch.

Comhlámh

One-to-One Advisory Session

Thinking of volunteering?

Finding it hard to make a decision?

Want to know more about the options available?

20 minute appointments are available with Comhlámh staff to talk through options for volunteering for global development.

Next Sessions: Thursday, March 24th, Thursday, May 5th Where: Irish Aid Volunteering Centre, O’Connell Street.

Booking: To book an appointment, please contact Stephanie on 01-4783490 or volops@comhlamh.org. Booking is essen tial.

EU Trade Policy &

The New Resource Grab Join Comhlámh’s upcoming spring speaker tour Speaker: Claude Kabemba, Director of the Southern Africa Resource Watch Wednesday 6th April: The Metropole Hotel, Cork – 7pm Thursday 7th April: ACSONI, 9 Lower Crescent, Belfast – 7pm Saturday 9th April: Charleville Castle, Tullamore – 12pm For more information contact Alfred Hickey M’Sichili, Trade policy & campaigns officer: Alfred@comhlamh.org; Tel: +353-1-4783490

Participants at Development Forum 2009

Information Evening: Volunteering in Developing Countries Thinking about volunteering overseas?

As part of its Volunteering Options & Development Worker Programme, Comhlámh is holding an information evening for people who are thinking about volunteering overseas in developing countries. This short, informal event offers the opportunity to hear more about the issues you need to consider before making a decision about volunteering. It also provides an opportunity to hear firsthand about the experiences of a person who volunteered abroad and to ask any questions you might have about your options.

There is no charge for this event, but please register your interest by emailing Stephanie (volops@comhlamh.org) or calling 01 4783490 Date: 7 April 2011.

Time: 18.00 – 19:30 Venue: Irish Aid Volunteering and Information Centre, O’Connell Street

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Interested in volunteering in a developing country?

Working for a Better World: a Guide to Volunteering in Overseas Development Available in shops now!

You can also order copies from the Volunteering Options website www.volunteeringoptions.org