Food Security Why Cuba Became a Pioneer in Urban

DEVELOPMENT AND COOPERATION D+C

Entwicklung und Zusammenarbeit E+Z

International Journal

ISSN 2366-7257 D +C Monthly e-Paper November 2018

IPCC ODA Food security To stem climate The landscape of Why Cuba became change, immediate development finance a pioneer in action is needed is changing fast urban agriculture

Unequal opportunities Title: Village school in Zambia. Photo: picture-alliance/IMAGEBroker D+C November 2018 In German in E+Z Entwicklung und Zusammenarbeit. Both language versions Focus at www.DandC.eu Unequal opportunities Monitor Non-extreme poverty Reassessing development cooperation | The SDGs and the private sector | Fragile Not only extreme poverty is painful, relative pov- statehood is an obstacle to SDG achievement | Illegal drugs | Funding for the water erty means misery too. Mona Naggar, a Beirut- sector | Nowadays: Honour killings in India | Imprint 4 based journalist, witnesses the problems every day. In India, masses of people have escaped extreme poverty, but inequality is becoming an ever greater challenge, as our correspondent Roli Debate Mahajan reports. pages 22, 24 Comments on the latest report of the Intergovernmental Panel on Climate Change, this year’s Nobel Peace laureates, upcoming elections in the Democratic Republic of the Congo and youth protests in Honduras 11 Poverty targeting Measures in support of specific marginalised groups are often considered to be promising. Experience with “poverty targeting” is mixed Tribune however. Development consultant James G. Ben- Ulrich Post nett elaborates on various methods of poverty Why private-sector money is becoming more important, whereas official targeting. Frank Bliss, a social anthropologist, development assistance is losing relevance 16 assess a successful fund that is designed to give Cambodia’s poorest access to health care. Katherine Cashman Pages 25, 27 Cuba is a pioneer in urban agriculture 19 Governmental safety nets Focus: Unequal opportunities Social-protection and welfare schemes serve to Mona Naggar prevent poverty and boost social cohesion. According to Marcus Loewe of the German Devel- Fears of social descent in Lebanon 22 opment Institute they are also a driver of economic growth. In its most recent World Develop- Roli Mahajan ment Report, the World Bank makes important Extreme poverty is going down in India, but inequality is getting worse 24 proposals on how to organise social protection and boost human-capital development. James G. Bennett Pages 29, 30 The pros and cons of poverty targeting 25

Frank Bliss Reform failure A governmental fund facilitates health care for Cambodia’s poorest people 27 The World Bank has considerably weakened its social and environmental standards. According to Interview with Markus Loewe Korinna Horta, a development scholar, marginal- Why social protection is a driver of economic development 29 ised communities will bear the brunt of increasing environmental damages. Page 32 Korinna Horta To the detriment of minorities, the World Bank has weakened its social and environmental standards 32 Education makes a difference Upward mobility depends on access to good schools. Education can also reduce gender Katja Dombrowski inequality. Governments must ensure that all Good education helps to escape poverty 34 people can benefit from high-quality schools. The issue was discussed at the annual conference of Interview with Frank Masanta Jr. the Poverty Reduction, Equity and Growth Net- Ways to improve the opportunities of children in Zambia’s marginalised work (PEGNet) in Cotonou in September. In Zam- neighbourhoods 36 bia, education activist Frank Masanta Jr. is running the Sun-spring Charity School. As he states Sabine Balk and Rebecca Renz in our interview, a large share of the young gen- Relevant reading on human-made poverty and the institutional reasons for a eration is systematically marginalised in his nation’s economic success or failure 38 country. Pages 34, 36

D+C e-Paper November 2018 our view Why we need the SDGs Debate

Fighting poverty requires a multi-faceted agenda. It is important to ensure that everyone gets enough food every day, but more is at stake. A family’s income must allow all members a life in dignity. Moreover, all adult persons should be empowered to take their lives into their own hands. Poverty reduction thus means to provide everyone with opportunities, and particularly those who so far lack them. Social inclusion depends on broad majorities seeing prospects of advancement. Where that is not the case, inequality will breed frustration. How to achieve opportunities for everyone is a much debated issue. According to market orthodoxy, government interventions in economic interaction only cause harm. Nonetheless, historical experience shows that long term devel- Ending shame of war crimes opment has always led to markets being stabilised by – and supplemented For their efforts to fight sexualised violence in war, Nadia Murad and Denis Mukwege will get the with – government-managed social protection. Related programmes ensure Nobel Peace Prize this year. Mahwish Gul, a Pakis a minimum level of sustenance and, to some degree, even guarantee people’s tani student, hopes that the award will change social status. Prudent regulation lets markets flourish and also gives scope to public opinion. What victims need is support and environmental protection. In any case, all advanced nations have some kind acknowledgement of their suffering. Shame does of welfare state. Typically, the pillars include: not help. PAGE 12 ●● universal access to health care, ●● tuition-free schools, ●● pensions and unemployment benefits, which tend to be linked to formal employment, plus ●● some kind of basic welfare for everyone. Tribune It is true of course, that the welfare state is comparatively weak in the USA, but that does not prove my argument wrong. Indeed, opportunities are far from equal in the USA, where life expectancy is lower than in EU member countries. On average, moreover, rich Americans live longer than their poor compatriots. Child mortality too is higher in the USA than in other prosperous nations. The reason is that many families from marginalised communities lack health insurance and thus do not have access to health care. Social inclusion and eradicating poverty are high on the UN’s 2030 Agenda, which spells out the Sustainable Development Goals (SDGs). Pro- gress is being made in many countries’ health and education sectors, and cash transfers are reducing need. Nonetheless, absolute and relative poverty still cause concern, and inequality is increasing almost everywhere. That is true of poor and rich nations alike. One reason is that market-fundamentalist ideol- ogy has largely discredited social protection. All too often, only market-gener- ated results are deemed acceptable. Margaret Thatcher in Britain and Ronald Reagan in the USA started the trend of cutting social benefits and deregulat- The changing world of development ing markets in the 1980s. Their examples were copied elsewhere, so social disparities have become more pronounced throughout the advanced economies. finance In theory, markets solve every problem. In real life, that is not so. Oth- Official development assistance (ODA) is becom- erwise, we would not need the SDGs. The informal sector is unregulated, ing less relevant while private-sector investments only ruled by supply and demand. This sector keeps masses of people stuck are becoming more important. Ulrich Post of Welthungerhilfe, a non-governmental develop- in poverty. The truth is that markets only provide opportunities according ment agency based in Bonn, assesses the trend. to purchasing power. If everyone is to get a fair chance in life, governments PAGE 16 must regulate economies competently. The World Bank’s most recent World Development Report offers valuable advice (see box on p. 31) on the issue. Im- plementing its proposals will help to achieve the SDGs. Urban agriculture Cuba has become a pioneer in city-based food You’ll find all contributions production thanks to reforms implemented in the of our focus section plus Hans Dembowski 1990s. The approach makes sense in terms of both related ones on is editor in chief of D+C Development food security and environment protection. As our website – they’ll be and Cooperation / E+Z Entwicklung und Katherine Cashman of UN Habitat elaborates, compiled in next month’s Zusammenarbeit. change was necessary after the collapse of the

briefing section. [email protected] sb Mike Theiler/picture-alliance/newscom; Ph otos: Soviet Union. PAGE 19

D+C e-Paper November 2018 Monitor: conferences And studies

Mauretanian landscape: African countries are exposed to climate risks, and the African Risk Capacity (ARC) contributes to managing them.

International relations it generates new knowledge. The students base their master’s theses on empirical research, tackling diverse aspects of occupa- Reconsidering development tional health from informal employment to mental issues and workplace violence. The curriculum obviously makes cooperation sense, but it may soon become financially unviable in some of the countries concerned, including Chile. The reason is that Latin American countries are moving up the The world is changing fast and becoming from different countries run joint masters income scale, and some will soon “gradu- ever more complex. The aid system must programmes, as Manuel Parra knows. He is ate” from official development assistance adapt. Some challenges arise within the aid a Chilean scholar currently working for Lud- (ODA) in the sense of no longer being eli- system, but overarching global trends matter wig Maximilian University in Munich. To gible for donor funding. Stefan Bienefeld too. At Germany’s Federal Ministry for Eco- boost occupational health, the University’s of the German Academic Exchange Service nomic Cooperation and Development (BMZ), Center for International Health is cooperat- (Deutscher Akademischer Austauschdienst the Sustainable Development Goals (SDGs) ing with several Latin American institutions – DAAD) points out that this will affect the and the principles of aid effectiveness serve of higher learning. The target group of their cooperation of German universities with as paradigms. joint masters programme consists of profes- partner institutions in those countries. sionals, who, thanks to blended learning, So far, the DAAD has provided fund- By Hans Dembowski can study in their home country, supervised ing to all colleges involved, relying on sup- by local tutors. port from Germany’s Federal Ministry for Development cooperation can be done in As Parra reports, this programme Economic Cooperation and Development many different ways. One particularly so- does not only serve capacity building in the (BMZ). That will stop once a country grad-

phisticated approach is to have colleges health sector. Another strong point is that uates from ODA, as Germany will expect Giovannini/LineairPh oto: Peter

D+C e-Paper November 2018 4 Monitor: conferences And studies

partner governments to fund their own aca- of transplanting the western model is not fast and points out that emerging markets demic institutions, Bienefeld told a confer- legitimate, but that support for universal like India, Russia and China are competing ence on “Rethinking development coopera- principles such as human rights and elected to create billionaires while masses of people tion” at the German Development Institute governments is highly relevant. still lack safe access to food. Jha argues that (Deutsches Institut für Entwicklungspolitik The point is that people around the key aspects of capitalism must be regulated, – DIE) in Bonn in September. world want to be governed according to but that is not happening. The world of aid is changing fast in these principles. Pro-democracy move- In a similar vein, Aram Ziai of Kassel other ways as well, argues Stephan Klinge- ments have proved that in many countries, University argues that aid is not the real biel, who heads the DIE department for in- even though leaders with authoritarian issue: “Let’s not send money, but ensure ternational cooperation. Some challenges tendencies deny it. It bears repetition in that money is not extracted.” He wants to arise within the aid system. For example, this context, that populist politicians tend see measures against tax evasion, for exam- South-South cooperation is becoming ever to rise to power without actually convinc- ple. More generally speaking, he demands more important, Klingebiel says. Evidence ing the majority of the voters. Modi’s coali- that global structures be shaped in ways that includes the growing clout of the Asian In- tion of parties gained more than half of the prevent poverty and exploitation. Market- frastructure Investment Bank and the New seats in parliament with not even 40 % of orthodox globalisation is not doing that. Development Bank, two recently founded the votes, for example. Rodrigo Duterte be- Ariane Hildebrandt, a BMZ officer, ac- multilateral institutions which are dominat- came president of the Philippines with 38 % knowledges serious global challenges and ed by emerging-market governments and of the votes. US President Donald Trump her ministry’s desire to shape the global based in China. only prevailed in the Electoral Collage due agenda. At the same time, she notes that At the same time, Klingebiel regrets to quirks of the election law after his oppo- ODA resources are quite limited. She says that the aid-effectiveness agenda has been nent, Hillary Clinton, won almost 3 million that the Sustainable Development Goals losing momentum. It took off in 2005 with more votes than he did. Populist leaders and the aid-effectiveness agenda are the the multilateral Paris Declaration on Aid are prone to use public office in ways that paradigms that guide her ministry. Both Effectiveness, emphasising issues like do- manipulate the constitutional order and re- are valid, she insists, so there is no need to nor harmonisation, the policy ownership of duce their opponents’ chances of ever gain- change them. developing countries and mutual account- ing power. The more they do so, the more Hildebrandt emphasises that the BMZ ability of all partners. The idea was that the they forsake whatever democratic legiti- has established the independent evaluation established donor community of the OECD macy they have. institute DEval in order to learn from past (Organisation for Economic Co-operation Democracy, of course, is about more experience (see D+C/E+Z e-Paper 2017/07, and Development) would avoid fragmenta- than choosing top leaders. The ambition p. 16). Moreover, it is eager to take prom- tion and gear aid to boosting government must be to involve people in decision-mak- ising new approaches. One example that capacities and improving governance in ing at all levels of public life. Development Hildebrandt mentions is the Partnership for developing countries (see D+C/E+Z e-Paper agencies can contribute to make that hap- Sustainable Textiles, a multi-stakeholder al- 2017/02, p. 17). The issue remains important pen in innovative ways. liance her ministry launched to fight exploi- and deserves attention according to the DIE For example, Welthungerhilfe, a Ger- tation in the garments industry (see D+C/ scholar. man NGO, has been involved in facilitating E+Z 2015/12, p. 40). Another aspect is the Other challenges, however, arise out- new legislation on land ownership in Libe- BMZ’s leading role in introducing climate- side the aid system. Klingebiel points out ria. In cooperation with local partners, it risk insurance schemes such as the African that the multilateral system is under attack involved various stakeholders in a compre- Risk Capacity (ARC – see D+C/E+Z e-Paper and that populist nationalism is rising in hensive and inclusive debate. As Welthun- 2018/07, p. 23). many places. Migration and masses fleeing gerhilfe’s Constanze von Oppeln reports, The ARC is run by the African Union from crisis countries are fuelling this trend. the result was not predetermined. Rather, and allows African governments to buy Klingebiel warns that the established narra- the entire process was geared to Liberians insurance against climate hazards. When tives around ODA no longer suffice. defining rules that suit their nation’s need. disasters strike, they thus have emergency The new legislation is now in force and will funds at their disposal immediately. The Democracy promotion hopefully put a check on issues like land ARC was launched on the basis of a long- grabbing. term, interest-free credit provided by Ger- One pertinent question is whether democra- many and Britain. In Hildebrandt’s eyes, cy promotion is still legitimate. When it was The big picture this approach deserves praise for several raised in a working group during the con- reasons, including that it respects the na- ference, an Indian participant immediately Praveen Jha from Jawaharlal Nehru Univer- tional ownership of partner countries, and stated that support for democracy was most sity in Delhi appreciates that “development is a response to the urgent global problem of welcome south of Himalayas, given that cooperation has become stronger”. None- climate change. the right-wing government of Prime Minis- theless, he doubts that it “makes sense in At the same time, the BMZ is aware of ter Narendra Modi is undermining demo- the big picture”. In his eyes, financial capital climate change requiring reforms in Germa- cratic norms. The discussion fast showed has become too powerful internationally. ny too. Hildebrandt says it aspires to become that democracy promotion in the sense He bemoans that inequality is increasing the country’s first climate neutral ministry.

D+C e-Paper November 2018 5 Monitor: conferences And studies

Finance The World Bank chose them because they either “dedicate at least one fifth of their activities to sustainable products” or because The SDGs and the private sector they are “recognised leaders in their industries” in regard to social and environmental sustainability. The bond is used to fund projects The 2030 Agenda gives the private sector ●● support the SDG agenda in ways that in health care, education, drinking-water a significant role for achieving the Sustain respect and uphold planetary boundaries as infrastructure, renewable energy and re- able Development Goals (SDGs). Many cor- well as human rights, lated matters. Harmful industries, moreo- porations have pledged their support. ●● thoroughly assess what the SDGs ver, are explicitly excluded. This applies to A recent study done on behalf of several mean for their core business strategy, and nuclear power, weapons, alcohol, gambling, leading German civil-society organisations ●● implement SDG action plans with adult entertainment and palm oil. (CSOs) analyses how businesses are con- clear timetables and indicators. The CSO authors deplore that there tributing to SDG-related action. It assesses The role of CSOs, in the eyes of the is no way to evaluate the effectiveness and what can be done to better align business authors, is to serve as watch dogs. They relevance of SDG bonds yet, and they doubt activities with the SDGs. must push governments and UN institution that bonds will play a very important role. towards SDG implementation. The report spells out specific downsides. By Sabine Balk Bonds are a “special form of debt”, and these Bonds as solution inherently risky financial instruments can Private-sector engagement is growing in the be subject to speculation. SDG context. Many companies have a sustain- One of the crucial questions discussed in the Another part of the study assesses the ability strategy or a Corporate Social Respon- paper is how to finance the SDGs. It is esti- role of tobacco corporations. This industry sibility (CSR) branch. However, the impact is mated that implementing the agenda might adopted SDG rhetoric early on in spite of the hard to measure, as the study with the title “Highjacking the SDGs?” points out. It was published by several CSOs, including the two The Dhaka based faith-based agencies Misereor and Brot für textile company die Welt as well as the German NGO Forum on Zaber & Zubair Environment and Development, and it was Fabrics has co-founded by the Federal Ministry for Eco- committed to nomic Cooperation and Development (BMZ). achieving the SDGs The CSO activists worry about the and has set up power of financially potent players and what a waste-water they ultimately want to achieve. Private treatment plant of its businesses, by definition, maximise profits, own. and human rights violations and excessive exploitation of resources can increase profits. CSOs are also concerned about governments assigning core functions of state agencies to private companies, particularly in the social sector. The study recommends policymakers cost $ 5 to 7 trillion in developing countries. health hazards its products cause. The re- should: One option the study discusses is to issue port shows how such rhetoric serves the in- ●● draw up binding national plans for the bonds in order to raise money on capital dustry’s broad strategy to circumvent regu- implementation of the 2030 Agenda, markets. lation. The CSOs argue that sugar and other ●● guarantee accountability, transparen- Various kinds of so called green bonds harmful industries similarly prove that cor- cy and effectiveness where private funding serve to finance climate protection and oth- porate engagement in SDG matters has seri- is involved, er environmental measures. In March 2017, ous limits. In their view, the agenda needs ●● not rely on voluntary sustainabil- the World Bank issued SDG bonds in order safeguards against corporate interference. ity strategies, but introduce regulations like to raise money for SDG-related projects. due diligence along entire supply chains, So far, European investors have bought Link and bonds worth € 163 million. Those who buy Abshagen, M.-L., et al., 2018: Highjacking the ●● enact legislation for fair and effective bonds are promised a rate of return, which SDGs? The private sector and the sustainable tax collection. is linked to the performance of specific pri- development goals. As for businesses, the study recom- vate-sector companies. These 50 companies https://www.globalpolicy.org/images/pdfs/

mends that they should: are listed in the Solactive SDGs World Index. GPFEurope/Hijacking_the_SDGs.pdf Ph oto: sb

D+C e-Paper November 2018 6 Monitor: conferences And studies

SDGs as the OECD authors point out. In fragile contexts, moreover, other sources of financing such as remittances, foreign direct investment Fragile statehood deserves special and domestic resources are less available too. According to the report, ODA is too focused on only a handful of places and attention not properly aligned to the needs of fragile states and regions. Therefore, the authors want more money to be spent on conflict prevention and peacebuilding. In 2016, only In order to achieve the 2030 Agenda for Sus- ing fragile statehood might even rise to 3.3 two percent of total ODA to fragile contexts tainable Development, official development billion. went to conflict prevention, and only 10 % assistance (ODA) must focus more on fragile Gender disparities are particularly wide served peacebuilding. Another point the re- states and regions. People living in such in fragile states, while quality education is port emphasises is the need to deliver hope places are particularly in need, as a recent rare. Most refugees come from troubled coun- to people suffering fragile statehood. The report of the Organisation of Economic Co- tries, which, nonetheless, host more displaced goal is not only to keep people alive, but to operation and Development (OECD) reveals. people than other countries do. ODA matters boost justice, equality, sustainability and The UN aspiration is that no one must be left immensely in fragile states, the authors em- the quality of life in general. behind. phasise. In 2016, 65 % of the total funding went there. However, a large share is used for hu- Link By Katja Dombrowski manitarian assistance, so it does not address OECD, 2018: States of fragility 2018. OECD the drivers of fragility (see focus section Dis- Publishing, Paris. Fragile states fail to perform basic govern- asters and aid in D+C/E+Z e-Paper 2018/06), https://doi.org/10.1787/9789264302075-en ance functions in areas like security, rule of law and social services. They are less likely to achieve the Sustainable Development OECD fragility framework 2018. Goals (SDGs) than fully operational states. Therefore, fragility is a major hurdle to SDG implementation, and more efforts are needed to address it properly. According to the OECD report “States of fragility 2018”, the international community must strive harder “to better understand, anticipate and respond to both the drivers and consequences of fragility”. The report acknowledges, however, that some fragile states have made important strides towards achieving sustainable development. According to the report, fragility is at the core of most human suffering, including terrorism, other kinds of violence, displace- ment or hunger. Fragility is also getting worse. Currently, about 1.8 billion people live in the 58 fragile contexts the OECD identified. Most are in sub-Saharan Africa. Fifteen countries are considered extremely fragile, and nine countries were in active armed conflict in 2016. The OECD’s multi- dimensional fragility framework is designed to capture how coping capacities relate to risks in five dimensions (see illustration). Without action, the number of people living in such places is projected to grow to 2.3 billion, so more than 80 % of the world’s poorest people would be affected by 2030. That is the target year for achieving the

SDGs. By 2050, the number of people suffer- Illustration: OECD

D+C e-Paper November 2018 7 Monitor: conferences And studies

Organised crime with addiction have been reduced considerably. ●● Licensed specialty stores and pharma- Paradigm change cies can sell softer drugs, and the amounts customers are allowed to buy can be limited. Such principles guide the way that Uruguay allows the marketing of cannabis products. In its latest annual report, the Global Com- ing countries’ drug economy providing live- ●● Measures like price controls, advice mission on Drug Policy (GCDP) expresses lihoods to masses of people, concerning health and safety, and prohibit- itself in favour of regulation instead of pro- ●● how organised crime can be disem- ing the sale to underage persons are mean- hibition and criminalisation. It argues that powered, and ingful. the war on drugs has failed, and that better ●● what kind of contributions inter Regulations should be introduced step policies are needed to protect people from national cooperation should make. by step, according to the GCDP, and the im- harm.

By Eleonore von Bothmer

More than 250 million people around the world consume illegal drugs, and, according to GCDP, the international approach of prohibition and punishment has not made a dent in their demand. Rather, experience shows that drug users turn to the illegal black market if they cannot satisfy their cravings by legal means. This is one of the messages in this year’s annual report. The commission is independent and chaired by Ruth Dreyfuss, the former president of Switzerland. Her predecessor was Fernando Henrique Cardoso, the former president of Brazil. The GCDP was launched in 2011 by several prominent persons from politics, business and the arts. The GCDP declares the restrictive paradigm that has been prevalent for 60 years to be dysfunctional and states that dreams of a drug-free world are counterpro- ductive. Its point is that organised crime benefits from drugs being illegal (see D+C/ E+Z e-Paper 2018/10, p. 8). What is needed instead is a responsible approach that con- forms with human dignity. According to the GCDP that means regulation. Regulated cannabis products on display in a shop in Montevideo. The crucial question is: who should be in control of dangerous substances – state agencies or crime gangs? The GCDP Among other things, the report sug- pacts must be monitored. Public debate is insists that regulation means responsible gests that UN Secretary-General António necessary, and the Commission wants to management rather than indiscriminate Guterres assumes a leading role promoting drive it in a direction that pays attention to legalisation. It wants governments to assume reforms internationally. Tangible examples factual evidence as well as to the people who responsibility the way they do in regard to of sensible regulatory tools include the fol- are directly affected by drug policies. food, pharmaceuticals, vehicles and many lowing: other consumer products. The report’s four ●● The most dangerous substances Link sections deal with the following questions: can be distributed as prescription drugs, Global Commission on Drug Policy, 2018: ●● how to control drugs through regula- with medical staff prescribing them to ad- Regulation – the responsible control of drugs. tion, dicts. Switzerland is taking this approach http://www.globalcommissionondrugs.org/ ●● what challenges are likely to arise in to heroin supply, and as a result, both the reports/regulation-the-responsible-control-of-

this context, with an emphasis on develop- crime and the health issues that go along drugs/ Ph oto: Ruben Giménez Viera/picture-alliance/Pacific Press

D+C e-Paper November 2018 8 MONITOR: CONFERENCES AND STUDIES

BLENDED FINANCE tor. The network is funded by the Canadian government. Funds must not only be made avail- Innovative funding models able in sufficient amounts, they must also be used efficiently. Good management is essential, but cannot be taken for granted in the water sector, as Susanne Dorasil of An additional $ 2 trillion (editor´s note: In profits more predictable. According to an Germany’s Federal Ministry for Economic a previous version there was a wrong num- OECD study, however, less than two percent Cooperation and Development (BMZ) em- ber) are needed to achieve the UN Sustain- of blended finance were applied to water phasised at a conference organised by GIZ able Development Goals (SDGs) relating to and sanitation in recent years. and the OECD in Frankfurt in October. In water and sanitation. One way to tap sources There are some promising examples, many developing countries, water utili- of funding is called “blended finance”. It however. One is the Philippine Water Re- ties are unable to cover their costs, and means to use public funds to mobilise pri- volving Fund. Local financial institutions that makes them unattractive to inves- vate-sector investments. So far, this pay into the fund, and Philippine water tors. approach has not been taken much in the utilities can borrow from it to expand their William Muhairwe, the former direc- water sector. service network or make other important tor of Uganda’s national water utility, points investments. The financial institutions get out that good governance is essential. A GIZ By Regina Rossmann and Linda Engel guarantees from Philippine government in- study has confirmed his view. The point is stitutions as well as the USAID, the bilateral that the best deals on blending finance are Member countries of the Organisation for agency. The guarantees are managed by the useless if the money is not used responsibly. Economic Co-operation and Development Development Bank of the Philippines (DBP). The conference spelled out basic (OECD) are spending less and less of their Moreover, JICA, the Japanese agency, is policy recommendations. They can help to official development assistance (ODA) on supporting the fund with a concessionary make better use of blended finance in the water and sanitation. However, 2.1 billion loan. The constellation reduces risks for lo- future: people still have no access to safe drinking cal financial institutions and thus mobilises ●● Donors should support the develop- water, and over 4 billion people lack access additional funding. ment of national capital markets in order to to toilets. Nonetheless, Chris Clubb from the reduce the dependence of the water sector Actors in the water sector are therefore Convergence network says that convention- on foreign-currency financing. looking for new and innovative ways to ac- al ODA will still make up the lion’s share of ●● One focus of ODA should be to im- quire desperately needed funding. The po- funding devoted to achieving development prove investment conditions, for instance tential of blended finance is being discussed goals in the water sector in the future. Con- by strengthening institutions and policy frequently. The approach reduces the risks vergence has about 300 members interna- frameworks. that private investors run, and thus makes tionally, and most are from the private sec- ●● Development programmes should link capacity development more closely with investment, because an appropriate institutional environment is needed if the ex- pansion of infrastructure is to lead to long- term improvements in water and sanitation services. ●● Donors should make more use of guarantees to leverage private-sector investments for development goals. ●● Donors, non-governmental organisations and private-sector institutions should share experiences and define best practices. ●● Donors and financial institutions should make the allocation of funds more transparent and better track sustainability. Financing the water sector remains on the agenda of the OECD and the BMZ.

LINK Conference website: http://www.oecd.org/water/conferenceclosing- Many places lack the money to finance water infrastructure: a girl collecting drinking water in thefinancinggapforwaterinlinewithsdgambition- oto: Ton Koene/Lineair oto: Ton

Ethiopia. stheroleofblendedfinance.htm Ph

D+C e-Paper November 2018 9 nowadays D+C correspondents write about daily life in developing countries

To date, Dalits face discrimination Killed by the in-laws when it comes to opportunities and social ImprINT interactions. Considering the importance D+C Development and Cooperation that Indian society places on marriages, Vol. 45, 2018 A couple of years ago, a young man in inter-caste marriages are always difficult. D+C is the identical twin of the German edition E+Z Internet: www.DandC.eu Southern India was brutally hacked to But if one of the parties involved is Dalit, D 12 107 ISSN 0721-2178 death on a crowded road in full public the consequences can be as violent as an D+C Development and Cooperation is funded by Germany´s Federal view. His murderers were a gang of men “honour killing”. This act refers to the Ministry for Economic Cooperation and Development and commis- including his wife’s father. According to murder of a person by a family member sioned by ENGAGEMENT GLOBAL. D+C does not serve as a governmental mouthpiece. Our mission is to provide a credible forum the police, the victim was murdered for motivated by a belief that the victim had of debate, involving governments, civil society, the private sector and marrying a woman from a higher Hindu brought “shame” to the family. academia at an international level. D+C is the identical twin of E+Z Entwicklung und Zusammenarbeit, the German edition. caste. His young widow is now a well- In 2006, a Supreme Court judg- known activist against honour killings ment called honour killings “barbaric” ENGAGEMENT GLOBAL gGmbH and India’s caste system. and “wholly illegal.” Nonetheless, they Service für Entwicklungsinitiativen Tulpenfeld 7 In India, falling in love with the are becoming more common. According D-53113 Bonn wrong person can be deadly. 22-year-old to the National Crime Record Bureau Phone: +49 (0) 2 28 2 07 17-0 Fax: +49 (0) 2 28 2 07 17-150 V. Shankar, a young Dalit man, learned (NCRB), there were 251 such murders in www.engagement-global.de this fact at the cost of his life. The cou- 2015 – almost 10 times more than the 28 Advisory board: ple, Kausalya and Shankar, were both registered in 2014. Figures for 2016 have Thomas Loster, Prof. Dr. Katharina Michaelowa, studying engineering at a college. They not been published yet. Prof. Dr. Dirk Messner, Petra Pinzler, Hugh Williamson married in July 2015 against the wishes Indian feminists like Brinda Karat Publisher: of Kausalya’s parents. Just after the wed- and Kavita Krishnan demand better laws. FAZIT Communication GmbH Executive directors: Peter Hintereder and Hannes Ludwig ding, they lodged a complaint at the local In their eyes, legislation should protect police station stating that they feared for “self-choice partnerships” and fight “at- Address of the publisher and editorial office: Frankenallee 71–81, D-60327 Frankfurt am Main, Germany their lives. Eight months later, Shankar tempts to control women’s sexuality”. was murdered. Survivors like Kausalya are leaders This is also the legally relevant address of all indicated as responsible or entitled to represent them in this imprint. Lives of countless Indian young men in the fight. She suffered horrific head in- and young women have been destroyed juries, lost her husband and had sporadic Editorial team: Dr. Hans Dembowski (chief), Sabine Balk, Katja Dombrowski, because they have dared to love across phases of depression. However, she also Sheila Mysorekar, Eva-Maria Verfürth, Dagmar Wolf (assistant) divides defined by caste and community. stood firmly in court, pointing fingers Phone: +49 (0) 69 75 01-43 66 Fax: +49 (0) 69 75 01-48 55 The caste system is among the world’s at her family for the crime. Six of the 11 [email protected] oldest forms of social stratification. It accused – including her father – were Art direction: Sebastian Schöpsdau divides people belonging to the Hindu sentenced to death. Her case is very well Layout: Jan Walter Hofmann Translators: Malcom Bell, Claire Davis religion into four main categories, which known in India. She has become an icon are further divided into about 3,000 castes in the campaign against the repressive Disclaimer according to § 5,2 Hessian Law on the Freedom and Rights of the Press: The shareholders of the company are and 25,000 sub-castes, each based on caste system. Frankfurter Allgemeine Zeitung GmbH (40 %) and their specific occupation. The Dalits or Frankfurter Societät GmbH (60 %). so-called “untouchables” were the lowest Roli Mahajan Advertising and subscription service: rung of this caste system. After India’s is a freelance journalist and FAZIT Communication GmbH c/o InTime Media Services GmbH independence, in the new constitution of photographer. She lives in PO Box 1363 1949, the caste system was officially abol- Delhi, India. D-82034 Deisenhofen, Germany Phone: +49 (0) 89 8 58 53-8 32 ished, but it still marks social life. [email protected] Fax: +49 (0) 89 8 58 53-6 28 32 [email protected]

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D+C e-Paper November 2018 10 Debate: opinions

Global warming Norway, by comparison, introduced a con- gestion charge in Oslo many years ago and is now vigorously promoting e-mobility. Only Technological revolution and electric cars are allowed into the city free of charge. The result is a win-win situation: air quality improves and greenhouse gas emis- prudent policymaking sions are reduced. Carbon pricing is another example of prudent policy. Over the past 12 months, the price in the European emissions trading The international community must act fast to to become carbon neutral by around 2050. system increased from seven to 20 euros per limit global warming to 1.5 degree Celsius, Thereafter, negative emissions are required, metric ton CO2, which is still too low. A price the Intergovernmental Panel on Climate which means net removal of CO2 from the of around 50 euros would create incentives

Change argues in a recently published spe- atmosphere. That requires a technological for strongly reducing CO2-emissions. More- cial report. Distinguished climate researcher revolution – and governments could make over, in the long run we have to remove CO2 Mojib Latif explains where the need for action it happen if they created the right business from the atmosphere. If captured it could is most urgent. environment. At the moment, however, that be used, for example, to produce renewable looks highly unlikely. natural gas or synthetic fuels. By Mojib Latif In international climate policy, there Researchers are currently looking at often is a gap between aspirations and real- a range of geo-engineering methods. These The authors of the IPCC report point out ity. The structural change we need to limit are technological options for slowing global that the Earth’s average surface temperature global warming to well below two degree warming. Injecting sulphur dioxide into the has risen by one degree Celsius since meas- Celsius, as agreed upon in the Paris Climate atmosphere is one example, using iron or urements began in 1850. They believe the 1.5 Agreement, depends on political will and phosphorus to fertilise the oceans is another. degree Celsius target is still possible from long-term thinking. Countries must stick The risks of such methods are incalculable, a scientific perspective, but it will require to – and achieve – their climate goals. Ger- however, and so are the financial require- unprecedented changes in sectors like in- many and Europe are about to lose their ments. Given that none of the technologies dustry, transportation, energy and agricul- leadership role. Germany is set to miss its will be ready for deployment at a large scale ture. Global emissions of greenhouse gases, emissions reduction target of 40 % by 2020 anytime soon, reducing greenhouse gas especially carbon dioxide (CO2), will need relative to 1990 levels. Countries like Poland emissions remains the top priority. to rapidly fall in the coming years. Depress- plan to keep their energy system for many Unless decisive political action is tak- ingly, the trend is currently moving in the years, which heavily relies on coal. en, climate change will enhance inequality opposite direction. Since the early 1990s, Germany ranks among the world’s ten between countries. Poor countries cannot

CO2 emissions have skyrocketed and risen largest CO2 emitters, with transport issues afford adaptation. For them, rising tem- by 60 %. compounding problems in the energy sec- peratures would have more adverse conse- I believe the 1.5 degree Celsius tar- tor. Transportation is the only sector with quences than for the industrialised coun- get is no longer attainable. Policymakers still increasing greenhouse gas emissions. tries which have caused climate change in and industry are acting too slowly. But at The wrong incentives were set, encouraging the first place. least the two degree Celsius target could the use of bigger cars. Too little was invested Yes, China currently accounts for still be achieved. It would require industry in public transport, including rail services. nearly 30 % of global CO2-emissions, but Europe and the USA have a historical responsibility. In terms of cumulative emis- Charging an electric sions – total historical emissions – they are car: it will take responsible for half of the greenhouse gas a transformation of build-up in the atmosphere. An important transport worldwide step forward would be if a number of in- to meet climate dustrialised countries set a good example targets. by showing that healthy economic growth is possible without harming the environment.

Mojib Latif is a climate researcher at the Helmholtz Centre for Ocean Research Kiel and president of the Club of Rome Germany.

[email protected] Franke Ph oto: picture-alliance/Andreas

D+C e-Paper November 2018 11 Debate: opinions

Nobel Peace Prize women who have been raped by armed re- bels. He has treated thousands of women in a country once characterised as “rape capital End the shame of sexualised of the world”. Denis Mukwege founded the Panzi Hospital in 1991 in the capital of South Kivu war crimes Province in the Democratic Republic of the Congo (DRC). Since its foundation, the hospital has treated 85,000 patients with complex gynaecological damage. Sixty percent of the Nadia Murad and Denis Mukwege have won the Sunni-extremist militia ISIS rounded up patients were victims of sexualised violence. this year’s Nobel Peace Prize for their strug- the Yazidi minority in Sinjar, killing 2,000 The Nobel Peace Prize has thus turned gle to end sexualised violence in war. This to 5,500 people and abducting nearly 6,000. the attention of the world to heinous war award will hopefully go a long way in creating Nadia Murad, 19, was one of them. The cries crimes. It has turned the spotlight on two re- acceptance of the victims of sexual violence from women seeing loved ones killed in gions in different continents, but telling the in society. After atrocious crimes, they need front of them, abducted and raped were no same story of the devastating price women help and support. different to those of 1258. have paid in war conflicts. Nadia Murad once dreamt of becom- “Deciding to be honest was one of the By Mahwish Gul ing a teacher. Before being abducted, she hardest decisions I have ever made and the endured the killing of her mother and six most important one,” Nadia Murad told the The destruction of Baghdad is dubbed as the of her brothers. In captivity and along with UN Security Council. The Nobel Peace Prize most mournful event in the history of Islam. thousands of other Yazidi women, Nadia to her is a shout to the world community to When the Mongol army of Hulagu Khan Murad was raped and beaten repeatedly, leave no stone unturned to bring an end to took Baghdad in February 1258, they killed day and night, by ISIS men taking turns. this suffering and pain endured by hundreds 200,000 to a million people. The estimates Nadia Murad managed to escape, and and thousands of women even in this day and vary. Severed heads in hundreds were made unlike other ISIS survivors, told the public age. The award is a recognition of Nadia Mu- into minarets all across the city. So strong her story – including many brutal details. rad’s courage in adversity, unspeakable pain was the stench of decay from the ruins that She decided that shame matters much less and misery, to have stood up and made the Hulagu had to move his camp upwind. than finally ending the use of sexual vio- world community realise of their inaction. Hulagu’s men raped women in scores, toss- lence as a weapon in war. She ventured on Agonisingly, Nadia Murad is not alone ing them from one to another as trophies. a worldwide campaign against sex crimes. in her suffering. She endured what others Those whose lives were spared were made She addressed the UN Security Council, have done in the past, symbolising their into sex slaves as souvenirs. The victors Britain’s House of Commons and the US silent cries, their hidden wounds, their un- made rape a weapon of war to intimidate the House of Representatives. speakable traumas and their shackled lives. people of the conquered city. In September 2018, Nadia Murad was This award has set a new precedent of Not so far from Baghdad in today’s awarded the Nobel Peace Prize along with global awakening to sexualised violence. It Iraq, the world was recently reminded yet Denis Mukwege for their endeavour to end recognises the importance of speaking out again of violence against women as an act the use of sexual violence in armed con- and goes against the tradition of shaming of war and triumph. History does not get flicts. Denis Mukwege is a Congolese gynae- victims. The award is an encouragement to tired of repeating itself. On 15 August 2014, cologist who specialises in the treatment of women across the globe to stand up and speak up against their perpetrators to bring them to justice. It also sheds light on the failure of Nadia Murad during the global community which all too often lets a press conference perpetrators of wartime sexual violence walk in Washington in free, without even fearing punishment. October 2018. Mahwish Gul is from Islamabad and studies development management at Ruhr University Bochum and the University of Western Cape in Cape Town. Her masters programme belongs to AGEP, the German Association of Post-Graduate Programmes with Special Relevance to Developing Countries.

[email protected] Ph oto: Mike Theiler/picture-alliance/newscom

D+C e-Paper November 2018 12 Debate: opinions

Democracy Katumbi, the former governor of the Katan- ga province, who used to be allied to Kabila, but has lived in exile since 2016. He claims A pervasive lack of trust that he was not allowed to enter the DRC at the Zambian border in early August, when he wanted to register as a candidate. Both men were considered to be likely Presidential, legislative and local elections once more, this time for logistical reasons. winners of the election, but they will not are scheduled for 23 December in the Demo- In November 2017, the National Independ- be on the ballot. This fact diminishes the cratic Republic of the Congo (DRC). They ent Electoral Commission declared it needed election’s legitimacy in the eyes of many were initially supposed to take place two more time for the enlistment of voters, the opposition groups. They also argue that the years earlier and postponed twice. Though finalisation of the electoral register, the provi- ruling party is trying to undermine the elec- President Joseph Kabila has finally accepted sion of election equipment and other matters. toral process, in particular by using state the constitutional term limit and will not The deadline for registering candi- institutions to intimidate and dismiss some stand again, the situation remains tense. dates was 8 August 2018. That very day, Ka- opposition leaders. The security forces and There is no guarantee that the elections will bila announced that Emmanuel Ramazani the Constitutional Court are under its con- be peaceful, transparent and credible. Shadary would be his camp’s presidential trol. candidate. He thus put an end to the specu- There are more concerns. To run the By Jonathan Bashi lations about a possible third term. These multiple elections properly, the country speculations had caused serious worries, must rise to huge logistical and financial The elections were initially scheduled for and related violence claimed many lives challenges. International support would December 2016, when Kabila’s second – and since December 2016. make sense to avoid delays and perhaps according to the constitution – last term On 19 September, the Electoral Com- even a further postponement. Nonethe- ended. The political manoeuvres of the mission published the final list of candi- less, the government has decided to handle president’s camp in recent years indicated dates. Of 25 applications for the presidential everything by itself and has turned down that he wanted to stand again nonetheless. elections, 21 were accepted. The other four support from MONUSCO, the United Na- Protests broke out across the country, caus- were rejected. tions Mission in Congo. The government ing several deaths. Negotiations were held, It is a serious problem that two of the claims that its stance is an expression of and on 31 December 2016, leaders from the most popular potential candidates cannot sovereignty, but opposition leaders suspect president’s camp and the opposition agreed stand. One is Jean-Pierre Bemba, the former it wants to manipulate the electoral process. on a transition period in order to prepare warlord, who served as vice president in The voting machines, which the Elec- free and fair elections. the transitional government that ruled the toral Commission plans to use, are contro- Signed under the auspices of the country from July 2003 to December 2006. versial too. The opposition believes they can Catholic Church, this “New Year’s Eve Deal” His nomination was rejected by the Consti- be abused for mass cheating. So far, how- included measures to ensure a consensual tutional Court, which found him ineligible ever, the opposition itself looks fragmented management of the country during the tran- because the International Criminal Court because it has failed to rally around a single sition period. Kabila stayed on as president, (ICC) had convicted him bribing witnesses. candidate. but a prime minister was appointed from the Bemba remains very popular in the DRC, For all these reasons, the situation re- opposition camp. Moreover, a national tran- especially since the ICC, in June, acquitted mains tense. People hope that the elections sition monitoring council was established. him in a war-crimes case this summer. will be free and fair, and many would like to Elections were supposed to be held Another potential candidate was pre- see a change of government. However, pub- in December 2017, but they were postponed vented from filing his application. Moïse lic institutions do not enjoy trust, and experience shows that violence can escalate fast in the DRC. Adding to the problems, the dev- Security forces astating civil war has never really come to clamping down on an end in the country’s east, where various protests in Kinshasa militias are still active. An Ebola outbreak in at the end of 2017. that region is currently making everything even more difficult.

Jonathan Bashi works as a law professor and consultant in international development in the Democratic Republic of the Congo.

[email protected] Photo Ph oto: John Bompengo/picture-alliance/AP

D+C e-Paper November 2018 13 Join us on Facebook!

X + www.facebook.com/development.and.cooperation Debate: opinions

Honduras “Because I live in an area with an extremely high murder rate, I live in daily fear of becoming a victim. That minimises any fear I might Protesting youth have of rallying against the authorities.” Social media and personal networks are helping to create a pluralist information environment that did not exist in previous Around 60 % of Honduras’ people are under That is why we took to the streets after the decades. Communication has become fast 30. The country’s youth have no work, no elections.” One slogan is raised at many ral- and easy, facilitating spontaneous protests. money, no security and no prospects. They lies: “JOH, you are messing with the wrong Independent internet platforms offer grass- are fighting for a better future. generation!” “JOH” is President Hernández, roots reporting. “Even if it is sometimes who is leading the country ever deeper into hard to filter news and verify its accuracy, By Rita Trautmann a crisis of poverty, violence, corruption and the internet has become an extremely im- human-rights abuses (see my article in D+C/ portant source of information for our gen- Hondurans attach great importance to edu- E+Z e-Paper 2017/04, p. 15). eration,” says Némesis. The mainstream cation, hoping to get a good job. Many peo- Those who are now in their late 20s media, which are in the hands of a small ple who had little or no education them- or early 30s were politicised by the mili- group of oligarchs, have lost their monopoly selves make every effort to secure better tary coup in 2009 and the ensuing years of among the young. educational opportunities for their children. violence, corruption and mounting human- Antonio, for example, uses social me- Public service professions – teaching, for in- rights abuse. Members of the opposition dia to inform the people around him about stance, or working in the care sector – are were targeted again and again. The past five corruption and injustice. His activities have very popular. But the hope in recent years, the years have seen frequent demonstrations attracted attention and intimidation. “The dream of secure employment, has become true by pupils and students with demands for threats of the military police scare me,” he less and less often. Nearly 40 % of the working- age people are jobless or underemployed. Many work in precarious conditions in the Students protest in informal sector and smallholder agriculture Honduras against (also note article by Korinna Horta on p. 32). the hike in public Many university graduates don’t find transport fares in jobs that match their knowledge. Young July 2018. people are unable to start a family and move out of their parents’ home. They have to accept unskilled jobs, often in export-ori- ented maquila factories in special economic zones. Others try their luck abroad. Emigrating to the United States, however, means negotiating one of the most dangerous migration routes in the world – with little chance of success. US policy is becoming increasingly restrictive. The “temporary protected status” granted to Hondurans in 1999 has been revoked by US President Donald Trump. Therefore, tens of greater security as well as protests against says, “but they won’t make me stop – I’m thousands of Hondurans will have to leave privatisation and corruption at universities just more careful now”. Honduran youth the US by 2020. and schools. The government has criminal- feel cheated, and they are not putting up Nonetheless, thousands set out in ised all participants. They were intimidated, with it any longer. mid-October, challenging both the Hondu- threatened, and some were even murdered. ran government and the US administration. After the general election in November 2017, Rita Trautmann In response, Trump threatened to cut aid young protestors again blocked the streets, is a social anthropologist. She while President Juan Orlando Hernández calling for fair elections and respect for de- worked in Honduras for the accuses the opposition of having started the mocracy. They are tired of being governed German development migrants‘ caravan. Neither leader, however, by a corrupt elite. organisation DED and has is offering anything that might inspire hope The voice of protest was particularly been active in Honduran human-rights work among the people concerned. loud in the areas north of San Pedro Sula, since 2011. Many young people want to see their Honduras’ second-largest city. In this region, [email protected] country change, says 18-year-old student maquila factories are the most important Blog: https://hondurasdelegation.blogspot.

Némesis: “We are a disaffected generation. employers. Marel from San Pedro Sula says: com/ Photo Ph oto: picture alliance/AP

D+C e-Paper November 2018 15 Tribune: in-depth analysis

Development finance were Ethiopia, Afghanistan and Turkey. In the past 15 years, ODA has increased by 240 %. The ODA of the OECD countries is Sweeping changes envisaged now supplemented by money from new donors such as China. In the future, the ODA provided by OECD countries will increase far more slow- The development-finance landscape will combined. It comprises a variety of revenue ly than in the past – if indeed there is any change dramatically in the future. Over the sources that are available to governments, increase at all. A growing number of govern- long term, the significance of classical ODA including direct and indirect taxation, roy- ments are prioritising domestic concerns (official development assistance) will wane alties from extractive industries and licence and show little interest in stepping up devel- while private investment – both domestic or fees, or bonds issued on local capital mar- opment cooperation (DC). Particularly poor foreign – will increase in scope and impor- kets. Taxes – especially those on income – countries and fragile states will continue tance. Ulrich Post of Welthungerhilfe, a Ger- are a particularly important tool for financ- to need classical DC for a number of years man non-governmental organisation, offers ing development. But they can be an elusive in order to finance public spending and an outlook. resource, especially for the world’s poorest balance-of-payment deficits. Nonetheless, countries, where tax revenues in relation to they will be urged to do more to mobilise By Ulrich Post gross domestic product have actually de- domestic resources – not least because state creased since 2012. Most countries in Sub- building goes along with significant poten- At the heart of the financing debate is the Saharan Africa are in a similar predicament. tial benefits. Donors will offer support for realisation that the volume of available improving tax systems as well as the promo- funding is not even close to what is needed Official Development Assistance tion of “fair deals” with transnational com- to fund the achievement of the Sustainable panies and the creation of social-protection Development Goals (SDGs). Therefore, the The countries of the Organisation for Eco- systems. Addis Ababa Agenda, which was adopted at nomic Co-operation and Development China has changed the “game”, giving the UN conference on Financing for Devel- (OECD) spent $ 146.6 billion on ODA last developing countries more options. China is opment in 2015, also considers other sources of finance, including domestic public funding and local or international private investment (see D+C/E+Z e-Paper 2015/07, p. 42). To achieve the SDGs, the UN estimates that around $ 6 trillion a year needs to be made available until 2030. Others reckon an estimated $ 2 trillion to 2.4 trillion a year will be needed on top of current funding. But the UN believes that it will be extremely difficult, if not impossible, to secure sufficient funding in the current international situation. Its Inter-Agency Task Force fore- casts that SDG 1 and SDG 2 will not be implemented in the least developed countries by 2030. In other words, global poverty will not be eradicated by 2030. ODA from traditional donors will play a diminishing role in SDG financing. It may even be marginalised. The signs are that major changes lie ahead: increasingly significant players include new donors, migrants making remittances, the private sector, foundations and philanthropists. The private sector needs to help finance sustainable development: textile factory in Dhaka, Bangladesh. Domestic public funding

Domestic public funding is already by far year. This was marginally less (-0.6%) than a popular donor because the money it hands the most important source of finance in de- in 2016, which was a “record” year. Thirty out is not conditional upon political reform. veloping countries. Its volume more than percent of ODA went to sub-Saharan Africa However, the development landscape and

double that of all external funding flows in 2016. The largest single ODA recipients its actors will be fragmented even more in Ph oto: sb

D+C e-Paper November 2018 16 Tribune: in-depth analysis

the years ahead. Currently, there are about instance, has launched the European Fund ed to more than 80 % of long-term financial 60 bilateral and more than 250 multilateral for Sustainable Development (EFSD). Mech- flows to developing countries since the year donors. anisms of its kind, however, will probably 2000. However, the volume of direct invest- The ministries or institutions current- only make a major difference once they are ment has been decreasing in recent years. ly responsible for development coopera- supported by local institutions in develop- There are also major regional differences tion will focus on the core issue of poverty ing countries. The relevant institutions will in direct investment: more than 70 % has reduction as well as on support for specific generally be national development banks. gone to East and South Asia, less than eight global public goods and global challenges. It They could serve as platforms for launching percent to under-financed least-developed is likely that more traditional DC spending local projects, mitigating implementation countries. will shift to other ministries. risks and facilitating the resolution of prob- Direct investment can certainly help Because of multilateralism’s present lems at the local level. to achieve the SDGs if it is channelled into weakness, bilateral cooperation is expected development-related areas (such as renew- to increase. This trend can already be ob- Private finance able energy). But the private sector has so served in Germany. There will also be more far shown little willingness to deliver on the linking of aid to donors’ national interests. The role of domestic and international pri- commitments of the Addis Agenda. It is thus The “aid-is-good-for-us narrative” will fig- vate capital has become stronger in develop- expected that government and multilateral ure more prominently in the rationale for ing countries, but is still fairly limited on the donors will do more to support productive ODA spending. whole. In addition to foreign direct invest- investment in developing countries, partic- ment, private enterprises have started to ularly in poor ones. Government guarantees Blending finance tap foreign capital markets to a substantial and insurance are options. In addition, pub- extent. This is so even in poor developing lic and political pressure on multinational ODA geared to private-sector development countries. These private, non-securitised companies will increase to assume more will increase significantly. Relevant instru- loans have become increasingly significant (financial) responsibility for improving ments include loans and guarantees from and will become even more significant in working conditions and ensuring sustain- governments, as well as the purchase of the future. able value chains. shares in the capital of companies operat- Domestic private investment is ex- Migrants’ remittances are another im- ing in ODA receiving countries. The OECD tensive, stable and growing. It currently portant private financial flow for developing terms is “blending finance”. It stands for the accounts for more than 25 % of GDP in de- countries. According to World Bank figures, strategy of mobilising additional private- veloping countries. The investment comes they totalled $ 466 billion in 2017 – a new sector money from OECD countries for busi- predominantly from the banking sector, record that is likely to be beaten in 2018. Re- ness investments in partner countries. which tends to be state owned, and from lo- mittances actually amounted to more than Whether such approaches are called cal companies that are reinvesting profits. three times the total volume of ODA last “blending”, “leveraging” or “subsidisation”, The main source of external finance is year. they are set to grow. Various donors are private capital, much of it in the form of di- However, the positive impacts of re- upgrading their mechanisms. The EU, for rect investment. Private capital has amount- mittances predominantly benefit the mi-

ticular, are forecast to rise even $ 57 billion – $ 41 billion from Climate finance and faster. In all probability, how- public coffers and just under ever, there will be a relative de- $ 15 billion from the private sector. humanitarian aid crease in ODA climate finance The volume of humanitar- in comparison to other financial ian aid is virtually impossible to flows. forecast because it fluctuates, Climate finance is a very com- nition of what exactly the term Generally speaking, cli- depending on the frequency and plex and dynamic issue. Funds means. mate finance as a whole falls scale of conflicts and natural flow through multilateral chan- It is abundantly clear, far short of expectations and catastrophes. The figure is ex- nels – both within and beyond however, that fears of climate promises. Support for climate pected to rise in the coming years the UN Framework Convention finance displacing other forms programmes largely takes the but not necessarily because of on Climate Change (UNFCCC). of official development assis- form of non-concessional loans, traditional donors. Non-OECD Increasingly, bilateral and na- tance (ODA) are groundless. The export credits, green bonds and countries, philanthropists and tional agencies are becoming growth rates are roughly the direct investment. But they are foundations will play a signifi- more important. Climate fi- same. Climate-related ODA for voluntary arrangements and cant role. In 2017, $ 15.3 billion of nance is very difficult to moni- the poorest developing coun- susceptible to implementation total ODA was humanitarian as- tor and even harder to forecast tries has increased, and funds failure. The OECD puts the cur- sistance – 6.1 % more than in the because there is no agreed defi- for climate adaptation, in par- rent level of climate finance at previous year. (up)

D+C e-Paper November 2018 17 Tribune: in-depth analysis

Waste collector in Sierra Leone: donor funding is still needed to reduce poverty.

grants and their families themselves, not pists (see D+C/E+Z focus section in e-Paper developing countries to implement strat- the economy as a whole. In many countries, 2017/12). egies to overcome their dependence on remittances account for more than ten per- primary commodities. Protectionist trade cent of national income. This is the case, for Debt and other problems policies might be an option to promote in- instance, in Tajikistan, Nepal, Liberia, Haiti, dustrial-sector growth. Jordan and the Philippines. The growing Developing countries’ debt has risen sharp- It is not terribly bold to predict that volume of money remitted makes it an in- ly in the past five years, and there is growing the SDGs will not be implemented by 2030 creasingly attractive source for financing concern over the prospect of a new debt cri- unless there is a change in current financing state projects. Ethiopia, for example, issued sis. According to the International Monetary trends, but there is every reason to doubt a diaspora bond to finance a dam, and Nige- Fund (IMF), the rise in debt particularly af- that it will be the case. For the “classical” ria launched one for infrastructure projects. fects low-income countries. IMF figures DC actors, change means having to respond Remittances will be harnessed more in the show that 18 countries are at serious risk much more effectively to SDGs require- future, not just by state agencies, but also of running into repayment difficulties – or ments and deliver results in fragile states. by private actors. It is reasonable to assume have already encountered them (see focus They will need to develop new forms of co- that national governments, in particular, section in D+C/E+Z e-Paper 2018/08). operation with the private sector and see will make greater use of remittance capital. Because of the ineffectiveness of in- their role – and indeed act – much more as Private foundations and philanthro- ternational tax cooperation, countries are accelerators and facilitators, driving efforts pists will play an increasingly important encouraged to compete with others (gener- on global warming and climate adaptation. – and influential – role. The Co-Impact ini- ally for the lowest tax rate). The result for They will also need to work a lot harder to tiative established in late 2017 seeks to co- some countries is tax base erosion (see focus get across the message that global welfare is ordinate philanthropist activity worldwide section in D+C/E+Z 2018/01). absolutely in the national interest. and make it more effective. Private founda- Global trade growth has slowed since tions often step in where governments fail the financial crisis and is currently even re- Ulrich Post – not just in developing countries but even cessive. The world trade system has a major heads the general policy when it comes to financing multilateral or- impact on developing economies. In par- division at Welthungerhilfe, ganisations such as the WHO. In the future, ticular, poorer countries are extremely a German civil-society even more attention must be paid to ensur- dependent on volatile commodity prices. organisation. ing that the definition of the public interest Apart from offering better access to their [email protected]

will not be left to super-rich philanthro- markets, advanced economies should help http://www.welthungerhilfe.de Ph oto: Carolyn Williams-Gerdes

D+C e-Paper November 2018 18 Tribune: in-depth analysis

Food security digm was industrial-scale farms run by the state and geared to producing commodities for exporting. By contrast, the new ideal Pioneering urban agriculture was to source local produce, coping without costly inputs such as fuel and fertilisers. The government changed land-use regulations and instituted market reforms in order to Cuba introduced an agricultural reform in the prosper, and the 1980s were subsequently stimulate a local economy for food. It relied 1990s and became a pioneer of urban agri- referred to as “the years of the fat cow” in on expertise it had previously not consid- culture. Change was driven by unique politi- Cuba. ered, including the traditional knowledge cal and social circumstances. In 1989, the Berlin Wall came down, of the elderly as well as scientific advice on and then the Soviet Union disintegrated in eco-friendly farming. The goal was to adapt By Katherine Cashman

Cuba had to cope with an imminent food crisis in the early 1990s. Organically grown urban agriculture was simply the most promising remedy. The communist government cooperated with grassroots organisations, providing incentives to urban people to grow and market food locally. This bottom-up approach was not typical of authoritarian rule. The reform allowed people to decide what they wanted to cultivate, and land-use management was reorganised accordingly. A free market for urban produce emerged. Local communities were empowered to make decisions regarding the formerly nationalised food economy, and administrative functions were decentralised. Since the Cuban example in the 1990s, urban gardening has taken root in many cities around the world. Every city and country has a unique system. Cuba was a front- runner, and it shows how great the potential of small-scale, organic gardening is. Throughout the 20th century, Cuba’s political economy and food system changed drastically several times. The revolution of 1959 brought the communist government to power, which centralised the state appa- ratus. All agricultural land was nationalised and farms were mechanised. In the cold-war era, the USA imposed a trade embargo on Cuba. As a result, the Urban gardening in Havana. country developed a symbiotic trading re- lationship with the Soviet-led Eastern Bloc, to which Cuba exported tropical products 1990/91. Cuba suffered an economic shock food production to the new geo-political like sugarcane, tobacco and fruits at nearly because the trade patterns changed dra- situation. Organic farming methods were twice the world market price. In exchange, matically. Cuba lost 80 % of its food trade, widely adopted, including composting, crop it got fuel, animal feed, cereals, meat and resulting in serious food shortages. On aver- rotation, soil conservation, et cetera. other products at subsidised rates. By the age, people only got two thirds of the calo- 1980s, Cuba was importing 57 % of its food ries they needed. Cubans call that time the Farming in Havana as well as 90 % of its agricultural fertilisers “special period of hunger”. and pesticides. The advantageous exchange In response, the government intro- Havana is a city of about 2 million people. It

with the Eastern Bloc allowed Cuba to duced radical reforms. The previous para- is not densely populated, and its geography Ph oto: Still Pictures/Lineair Fotoarchief

D+C e-Paper November 2018 19 Tribune: in-depth analysis

and climate proved ideal for urban garden- quotas, the collectives became the owners ing. In view of the failing economy, the Min- of their own food production. Farmers could istry of Agriculture initiated urban agricul- sell their excess produce in local markets. ture units to produce food and provide new Educational campaigns contributed employment opportunities. to the development of urban agriculture. Until the 1990s, 80 % of Cuba’s agri- The government involved academics in re- cultural land – including cattle production searching organic farming methods and in- sites – had belonged to large-scale state novations. Moreover, it invited cooperative farms. Only 20 % was under the care of members to seminars and courses so they small-scale farmers. At that time, agricul- could acquire new skills and share their own ture was marked by monocultures, heavy knowledge with others. mechanisation, irrigation and intensive use of chemicals. Workers were organised in Conclusion teams with each farmer being strictly desig- nated to one task. Havana’s agriculture revolution resulted This model became unviable after the from a food crisis. Growing food even in collapse of the Soviet Union as Cuba lost ac- the capital city was a tool of crisis manage- cess to the crucial inputs it had imported. ment, and it provided a viable solution to The government therefore switched to self- the daunting problem. In 1995, the govern- managed food production at the local scale. ment declared that the food crisis was over. In 1991, the Department of Urban Agricul- By 1996, urban agriculture provided the city ture’s motto was “production in the com- with 8,500 tons of agricultural produce, 4 munity, by the community, for the commu- million dozens of flowers, 7.5 million eggs nity”. Farmers were given the responsibility and 3,650 tons of meat. Please visit our for the entire production on one plot of land. The example of Cuba shows that urban website Remuneration became directly linked to gardening can boost food security substan- output. tially. It is not always an issue of national www.DandC.eu To distribute land to small farmers policymaking, however. Local communi- in urban areas, the Department of Urban ties can improve their fate by resorting to Agriculture collaborated with participatory home-grown produce, not least with an eye neighbourhood-level governments called to getting a fresher and more vitamin-rich “Poder Popular”. The precondition was diet. International research shows that peo- X that they produced food. In Havana alone, ple in low-income neighbourhoods tend to + the authorities allotted 25,000 gardens to lack access to fresh foods. Community-ori- families for farming purposes. Moreover, ented urban agriculture can make a differ- www.dandc.eu dozens of large “organiponicos” were estab- ence, whether it is promoted by the national lished. Organiponicos are high-yield urban government or not. market gardens, ranging in size from 200 A local farming approach, moreo- square metres to a few hectares. Five or six ver, makes people less dependent on the workers cultivate them relying on organic world market. Both traditional local knowl- methods. edge and appropriate innovations can give By discontinuing the state farms and people more control of their lives even in installing cooperative farming at the grass- our era of globalisation. roots levels, Cuba managed to turn over four-fifths of its state-owned farmland to the Katherine Cashman workers. Each subunit of the newly formed is an urban law consultant cooperatives elected a leader democratically. with UN-Habitat (United The leader’s job is to oversee the farm activ Nations Human Settlements ities. The duties included drafting produc- Program) based in Nairobi. tion plans, training the farmers in urban ag- She wrote this contribution when she was still riculture and promoting new technologies. a post-graduate student of urban management The cooperative leaders also served as repre- at Technische Universität Berlin. The masters sentatives to the Ministry of Agriculture. programme she took part in is part of AGEP, Authority over agricultural produc- the German Association of Post-Graduate tion became decentralised. Though the state Programmes pertaining to international still technically owned agricultural property development. and required farmers to meet production [email protected]

D+C e-Paper November 2018 20 Slum close to high-rise apartments in Mumbai, India. Ph oto: Mark Edwards/Lineair

Unequal opportunities A guiding principle of the UN Sustainable Development Goals (SDGs) is not to leave anyone behind. Everyone deserves opportunities in life. Essential issues include access to health care and education as well as incomes that allow for decent living. Competent institutions and prudent policymaking can make the difference. The politics of providing opportunities to everyone are difficult, however, so poverty and inequality still result in far too many people lacking any realistic outlook for social inclusion and personal advancement. Unequal opportunities

The UNDP estimates that roughly Fear of exclusion a third of Lebanese are poor and live on less than four US dollars per day and person. Around 200,000 people have to get by on less than two dollars a day and are thus extremely poor according to the World Bank Poverty is more than a lack of money, as the not support the behaviour of irresponsible definition. World Bank definition confirms. Poverty has parents or the “children’s mafia” that lurks There are marked socioeconomic dif- many dimensions and is perceived in diverse in the background? Might it not be better to ferences from one region to another. The ways. It is harder to bear in countries where hand out food? Bananas and water? What situation is particularly difficult in the north social inequality is more marked and indi- should I do? and south of the country. viduals have less chance of social advance- Some scenes in the film and situations Those who dropped out of school and ment. In Lebanon, non-extreme poverty is on the street highlight just the visible side of have no professional skills are particularly a serious problem, as Mona Naggar has dis- poverty in Beirut – the side that no one can affected by poverty, regardless of their reli- covered from living in Beirut. This essay ignore. But there are many more facets. In gious affiliation. However, groups that are summarises her own personal impressions the socially diverse district of West Beirut, disadvantaged by Lebanese law are also dis- of what poverty looks like in Lebanon. where I live, I am surrounded by people who proportionately poor. Palestinians who have struggle for survival daily, without begging lived in Lebanon for decades are denied By Mona Naggar or talking about their problems. equal access to state education. They are Um Bashir is an example. She is banned from entering certain professions I did not enjoy watching the movie “Caphar- a 40-year-old widow. Every day, she and and from owning property. They are also naüm” by Lebanese director Nadine Labaki. her unemployed son sit in a doorway selling granted only limited access to the welfare I recommend it, nonetheless. It won this newspapers. Every coin she earns is vital. system. Anyone born into a Palestinian fam- year’s Jury Prize at the Cannes Film Festival Then there is 13-year old Hammudi, ily in Lebanon has a hard start in life. and has been showing at cinemas in Leba- who works from morning till night for a car Syrian refugees stranded in the coun- non since the end of September. mechanic instead of going to school. His try with no work or residence permit simi- The film tells the story of 12-year-old parents get 20,000 Lebanese pounds (LBP) – larly live from hand to mouth. What is more, Zain, who grows up in a Beirut slum. He the equivalent of about € 12 – for his week’s many Lebanese are hostile towards them lives in a small run-down apartment with work. because, as cheap labour, they compete for his struggling, dispirited parents and nu- And there are the young men who de- job opportunities with local people. merous siblings. Every day is a fight for sur- liver crates of water to my door every few vival. The question of Zain going to school days or pack my shopping at the supermar- No safety net does not arise; he must work for a grocer, ket checkout. They all depend on the tips I who pays him in kind. give. But I am under no actual obligation to Even those who have a job and a regular in- When his sister is forced into an ar- give tips. No one would call me to account come that covers the daily expenses, includ- ranged marriage, Zain runs away from home or be outraged if I failed to do so. But there ing the children’s school fees, are not safe. and starts a life of his own. He makes friends is an unwritten law that requires me to give Because of the poorly developed welfare with a migrant worker from Ethiopia, who something. The “haves” give to the “have- system, a serious illness of in the family can takes him into her poor home. Labaki holds nots” or to those with very little. A “have” cause a sharp descent into financial ruin. up a mirror to Lebanese society. And what should always have a few dark-green thou- Not even the middle class can take good we see is an ugly, cruel, bleak world. Solidar- sand-pound notes at the ready. A thousand health care for granted in Lebanon. News- ity is rare. The state only makes its presence Lebanese pounds is worth € 0.57. papers regularly carry horrifying reports of felt when people are deported, put on trial or people in need of emergency treatment be- thrown into prison. I found the movie hard ing turned away at hospitals because their to watch because many scenes in it were all family cannot pay up front. The revelations too familiar from daily life. always prompt an outcry, but the fuss quick- Slums and beggars – children, women ly subsides. with babies, old folks at crossroads – are Poverty in Lebanon is more visible, common in Beirut and other Lebanese cit- more pervasive than in Germany or else- ies at any time. People sell flowers, paper where in western Europe. It is also more tissues, chewing gum or just sit around list- menacing, desperate, merciless. It can strike libanon Beirut lessly. “Capharnaüm” challenges us, the when least expected. It is accepted as one of viewers, to consider our attitude towards the the country’s many decades-old unsolvable poor people around us. problems. The weak Lebanese state is not Back on the street, outside the cin- held responsible. “Ma fi dawleh” (There is ema, I could not help wondering: Should I no state) is an exclamation commonly heard give this child beggar money? If I do, will I in Lebanon. Just as the state is deemed in-

D+C e-Paper November 2018 22 Unequal opportunities

Nahr al-Bared refugee camp north of Tripoli: Palestinians are badly off in Lebanon.

capable of solving the waste crisis or getting I wonder if it is because poverty is the bone, taking on multiple jobs so they can to grips with power and water shortages, it is so ubiquitous in Lebanon that people afford a good education for their children. not expected to act in support of vulnerable seem to want to distance themselves from For the young generation, the next step is people. others and send out signals that they are often to leave the country. Many are con- On the contrary, the state is seen as not poor. Is that why prestige is so impor- vinced they can only build a secure future a champion of the rich. Many politicians are tant, why exaggerated importance is at- abroad. also well-to-do business people. Responsi- tached to expensive clothes and cars, why bility for social problems is left to charita- people boast about their children going Mona Naggar ble organisations, religious organisations to a prestigious private school or study- is a journalist and media and private individuals, who get involved as ing abroad? coach. She lives in Beirut. volunteers. Each religious community looks Education is the surest road to social mona.naggar@

after its own. advancement. Parents work their fingers to googlemail.com Ph oto: Donald Bostrom/Lineair

D+C e-Paper November 2018 23 Unequal opportunities

ering the money needed for the stipulated Good progress with further room minimum calorie intake to a multi-dimensional approach. In 2009, the Tendulkar Commission overhauled the poverty esti- for improvement mation methodology (see D+C/E+Z 2010/12, p. 464). Apart from food, issues like cloth- ing, footwear, durable consumer goods, education and health have since been taken into account. The new methodology showed India is on the way to eradicating extreme mortality rates. In India, 39 children died that poverty was worse than previously es- poverty. On the other hand, social disparities per 1,000 live births in 2017 according to timated. have widened in recent decades. UNICEF. The comparative figures were 32 in Recently, the World Bank introduced Bangladesh and 34 in Nepal. another international monetary definition By Roli Mahajan of poverty for lower middle-income countries. The new benchmark is a purchasing As of May 2018, India is no longer home to power of $ 3.20 per person and day. By this the highest number of extremely poor peo- measure, Bhalla estimates that a third of ple in the world. This is a distinction that no India’s population is poor. Maybe it is time country wants, but one that has rested un- for India to reconsider once more how its easily on India’s shoulders for some decades poverty measurements compare to the now, not the least because of its huge popu- World Bank’s yardstick. lation of 1.3 billion people. The other side of this issue is inequal- According to the Brookings Institu- ity. Credit Suisse, the multinational bank, tion, Nigeria had about 87 million people in reckons that the richest one percent of extreme poverty, compared with India’s 73 Indians own 58.4 % of the nation’s wealth. million. Moreover, the researchers added, By contrast, the bottom 70 % together own “extreme poverty in Nigeria is growing by a mere seven percent. That ratio has actu- six people every minute, while poverty in ally been cut in half in eight years. It was India continues to fall”. 13.9 % in 2010. The assessment was based on data The big picture is thus that millions provided by international organisations. of people have been able to escape extreme The World Bank defines persons as extreme- poverty, but are still far from living pros- ly poor if they live on less than the purchas- perous lives. At the same time, the very ing power of $ 1.90 a day. rich have been able to expand their wealth Domestic assessments are pointing fast. in the same direction. The Indian National Economic liberalisation became Sample Survey Organisation’s most recent India’s paradigm in 1991, in the course of data are yet to be published, but economist a financial crisis (see D+C/E+Z e-Paper Surjit Bhalla, who gives advice to the In- 2018/08, p. 27). It accelerated economic dian government, has already pointed out growth but exacerbated social disparities. that the share of extremely poor people has Satellite photographs, which have been dropped from about 21 % in 2011/12 to a mere used to study inequality in India, support five percent in 2017/18. this notion. Economists contend that the The data look good, but many experts Disparities persist: rickshaw puller in Kolkata. growth strategy has led to a sharp increase doubt this is really the time to celebrate. The in inequality. They warn that countries that reason is that other important development start their development with high inequal- indicators paint a rather dismal picture. Signs of rural distress further mark the ity normally find it much harder to correct Amartya Sen, the economist who won the picture of a prospering nation. Suicide rates, it later. Nobel Prize in 1998, has pointed out that In- which are linked to over-indebtedness, are Extreme poverty is set to be eliminated dia trails all its neighbours (with the excep- intolerably high among farmers. in India, eventually. That is good news, in- tion of Pakistan) on several socio-economic Defining poverty is tricky and has al- deed, but lots more must surely be done. parameters, especially in regard to health ways been a topic of heated debate in India. and education. Citizens tend to consider government suc- Roli Mahajan Per-capita incomes are lower in Bang- cess in terms of progress made in the fight is a freelance journalist based ladesh (about $ 1,550) and Nepal (about against poverty. in Delhi. $ 840) than in India (about $ 1,949). None- In the quest for a precise measure of

theless, both countries have lower under-5 poverty, India has moved from just consid- [email protected] Ph oto: dem

D+C e-Paper November 2018 24 Unequal opportunities

fers, work-programme wages and school Costs and benefits of poverty meals), but also the costs of staff, IT services, retargeting and other matters. 3) External costs are born by the targeting target group (workfare participants’ travel expenses, stigmatisation and loss of self- esteem due to consumption of low-quality foodstuffs) and not compensated by the programme. The UN Sustainable Development Goals “The higher the method accuracy, the lower 4) Opportunity costs are equivalent (SDGs) commit all member states to “end the practicality or the higher the costs of im- to what beneficiaries forgo because of the poverty in all its forms everywhere”. In order plementation and vice versa.” targeted intervention. If poor women do not to fulfil this pledge, governments must rise to Other experts have pointed out that get subsidised pre-natal health treatment some daunting challenges. They must iden- observed variations in targeting perfor- unless they participate in nutrition training, tify those who are at risk of being left behind, mance may reflect weak programme imple- for instance, they cannot pursue income- reach out to those communities and lift them mentation rather than design flaws. They generating activities at the same time. sustainably out of poverty. In this context, also see a trade-off between the objective Cost-effectiveness is a frequently re- poverty targeting is often considered promis- of reducing current poverty (for example, curring topic in the debate on poverty tar- ing, but the experience with various methods through minimum-wage employment in geting. Actual expenditure data, however, of doing so has been quite mixed. Choosing public infrastructure programmes) and the is still quite scarce or at least not easily ac- an appropriate methodology requires careful objective of reducing future poverty through cessible. The existence of external and op- consideration of the potential costs and ben- developmental interventions (such as better portunity costs (“hidden costs”) is generally efits. schools, for example). recognised, but they are nonetheless only rarely factored into the overall cost-benefit By James G. Bennett The costs of poverty targeting assessment of targeted poverty-reduction programmes. At the same time, the expect- Many international donors today support The fixed and variable costs of poverty-tar- ed benefits tend to be treated as self evident targeted poverty-reduction programmes geting programmes matter, of course. The (improved living standards, reduced vulner- in developing countries. Germany, for instance, has funded relevant policies in countries like Cambodia and Malawi. A particularly innovative approach is a programme run by BRAC, the international non-governmental organisation (INGO) from Bangladesh. It is called “Targeting the ultra poor” and enjoys the support of international donors, including Britain and Australia. It combines targeted basic social protection with proactive support measures such as skills training, the transfer of productive assets and family coaching (see Jörn Geisselmann in D+C/E+Z e-Paper 2017/05, p. 34). There are six distinct methodologies for poverty targeting (see box next page). Assessing their pros and cons is difficult. It often makes sense to link some of them. BRAC from Bangladesh has a particulary innovative approach. Targeting accuracy is most commonly measured in terms of inclusion errors (including non-poor individuals or households relevant items may be broken down into the ability et cetera), so various potential benin the targeted population) and exclusion following four categories: efits are largely ignored. They may include: errors (excluding poor individuals or house- 1) Design costs are mostly one-off ●● leakages to non-poor individuals and holds from the targeted population). Part of costs which are incurred during prepara- households, the problem is that ensuring accuracy in- tion, development and testing of the pov- ●● mobility between poor and non-poor creases a programme’s costs. Accordingly, erty targeting system. regions or Nazaire Houssou, a scholar from Hohen 2) Operational costs include the di- ●● improved health due to better nutri-

heim University in Stuttgart, has warned: rect costs of the benefits (such as cash trans- tion and nutrition sensitisation. Screenshot: http://www.brac.net/program/targeting-ultra-poor/

D+C e-Paper November 2018 25 Unequal opportunities

Potential “hidden benefits” such as In view of these challenges, Raj M. De- constituencies are sufficiently convinced these are rarely mentioned in publications sai of the Brookings Institution has claimed that the programmes’ overall costs are justi- on poverty targeting. It is therefore safe to that the pendulum may be swinging away fied by their results. conclude that a truly robust and compre- from targeting towards more universalistic hensive methodology for doing cost-benefit social-protection approaches. He argues analyses in the field of poverty targeting has that, in advanced nations, government-run Links yet to emerge. health insurances and pension systems en- Bennett, J. G., 2017: Poverty targeting primer. For things to improve, data collection joy legitimacy because they serve the vast Concepts, methods and tools. and analysis systems must become better. majority of the people rather than only the https://www.giz.de/en/downloads/Poverty%20 They are pre-requisites for properly assess- poorest. Such universal protection systems, Targeting%20Primer_Full%20Version.pdf ing the true costs and benefits of poverty however, are typically funded with payroll Desai, R. M., 2017: Rethinking the targeting systems. The demand to boost the taxes, so they are not viable in economies universalism versus targeting debate. capacities of statistical offices has been -ex marked by huge informal sectors. Formal- https://www.brookings.edu/blog/future- pressed again and again ever since the SDGs ising the informal sector makes sense, of development/2017/05/31/rethinking-the- were adopted. course, but it is a daunting challenge in its universalism-versus-targeting-debate At the same time, UN member states own right. must rise to many other challenges if they History shows that support for – and truly are to “leave no one behind”. Many opposition to – poverty-reduction pro- James G. Bennett governments only have weak administra- grammes can shift over time in any given is a senior lecturer at the tive capacities, and that is particularly true population. Issues relating to social pro- Frankfurt School of Finance at subnational and local levels. Corruption tection in general and poverty targeting in and Management (FSFM) and is rife in many places, and patterns of dis- particular can influence election outcomes. an independent development crimination tend to be deeply entrenched. Poverty targeting can help to eradicate ex- policy advisor, researcher and trainer based in Moreover, we observe instances of poverty- treme poverty in particular, but it will only Cologne, Germany. reduction fatigue. find acceptance if decision makers and their [email protected]

India’s Mahatma Six main methodologies Gandhi National Rural Employment Guarantee targets Policymakers who want to 3) Categorical targeting low-income reach out to poor communities uses non-monetary measures households in rural can identify those groups in such as age, sex and disabil- areas: women several ways. The six most im- ity that are easy to observe and working at minimum portant categories of poverty- hard to manipulate. They are wage in Rajasthan. targeting methods are the fol- therefore likely to be accepted lowing: by both policymakers and the 1) Means testing aims to general public. identify the poor on the basis of 4) Geographical target- a monetary measure, typically ing ranks geographic areas on income or expenditure. All in- the basis of one or more pov- dividuals or household below erty measures. All inhabitants level or even the official mini- ment authority or by the com- a certain threshold are then of the selected areas are po- mum wage. Another example is munity itself. considered to be poor and eligi- tentially eligible for support. the subsidisation of low-quality In practice, it is common ble for support. This method is often used in foodstuffs which supposedly to find two or more target- 2) Proxy means testing tandem with other targeting only the poor are willing to con- ing methodologies applied in (PMT) uses non-monetary crite- methods. sume. distinct stages. For example, ria such the quality of the dwell- 5) Self-targeting pro- 6) Community-based geographical targeting can be ing, the kind of cooking fuel vides specific incentives and/ targeting puts members of done first at the national level, used in the household and/or or disincentives to poor people. the community concerned in resulting in a list of target coun- education levels. The selection A typical example is to offer charge of assessing who exactly ties or villages. Next, categori- criteria should be statistically job opportunities for unskilled is eligible for poverty-reducing cal targeting can be carried out closely correlated with available workers at wage rates that are support. The selection criteria in these places to select eligible

monetary measures of poverty. below the generally prevalent may be defined by a govern- individuals or households. (jb) Ph oto: Anand Sharma/picture-alliance/Pacific Press Agency

D+C e-Paper November 2018 26 Unequal opportunities

Free access for the poorest Cambodia

Phnom Penh In Cambodia, about one in five people is ●● A large number of Cambodians who extremely poor. They can neither afford doctors’ previously could not afford any kind of fees nor mere trips to a hospital. A new health medical care are now seeking out govern- fund is covering such expenses. Cambodia is ment health-care facilities. largely financing the scheme on its own. ●● The services being offered by these facilities have improved considerably in By Frank Bliss recent years. also help to reduce maternal mortality and ●● This improvement can, to some ex- fight malnutrition more generally. The Cambodian Health Equity Fund (HEF) tent, be attributed to health-care staff get- Before the introduction of the HEF, is providing access to free health care to ting a substantial share of the HEF pay- medical care in Cambodia was very arbitrari around 3 million people who are categorised ments (60 % of what their facility receives) ly administered. According to a report by as extremely poor. They are around a fifth in the form of personal bonuses. Depending Medicus Mundi, a Swiss non-governmental of the population. The prerequisite for this on the facility and the number of cases han- network, health-care workers used to earn care is a so-called IDPoor status with an in- dled, their income rises by up to a third, and a mere $ 10 to $ 20 a month, which in no way dividual oder family based “membership” that significantly boosts motivation. covered their living expenses. Therefore, card, which is issued as part of a compre- Expecting mothers and women with they were forced to take bribes to supple- hensive identification process. The govern- young children are particularly well served ment their regular income. Corresponding- ment wants to see significantly fewer house- by the HEF. It pays for everything from ly, the motivation of the staff and the qual- holds fall ever deeper into poverty because prenatal care and free births in qualified ity of the services provided in government of medical bills than was normal in the past. health-care facilities to comprehensive facilities tended to depend on the size of The impact of the fund, which has postpartum care, which also includes nutri- a patient’s “voluntary” financial contribu- been operational in one form or another tion counselling. Such counselling is meant tion. Those who could not come up with since 2000, is positive. A study done by the to reduce malnutrition, which is widespread money got only very low-quality health care University of Duisburg-Essen’s Institute for in Cambodia. The focus is on the children or even none at all in state-run institutions. Development and Peace (INEF) came to the (also note my article in D+C/E+Z e-Paper On the other hand, there were and still following conclusions: 2018/05, p. 21). Efforts of this kind, however, are many private health-care facilities in

Patient admission in a district hospital. Ph oto: Bliss

D+C e-Paper November 2018 27 Unequal opportunities

Cambodia. In many places, they are easier hospitals, provincial hospitals and a special- HEF pays for travelling expenses. Anyone to reach than government clinics. In rural ised hospital in Phnom Penh to which par- accompanying a patient can even get a daily areas, however, they mostly treat minor ticularly difficult cases are referred. allowance. Due to this policy, the number of injuries and more straightforward illnesses. Needy people who do not (yet) have HEF-funded patients has risen dramatically Private hospitals in urban centres certainly IDPoor status because they missed the iden- in district and provincial hospitals. have skilled staff, but the cost of high-qual tification round, which takes place every Thanks to H-EQIP and, above all, the ity care is unaffordable for poor house- three years, or who have only recently be- HEF, the equipment at the facilities, the holds. The only exception are the children’s come poor, can also get free care in state quality of the services offered and the mo- hospitals that were started by the recently hospitals. There is a special admission pro- tivation of the health-care workers has im- deceased Swiss paediatrician Beat Richner. cedure for them. In the future, this option is proved significantly. Nonetheless, much re- They provide treatment free of charge. to be used for IDPoor registration too. mains to be done. The increase in employee Though the reimbursement amounts motivation through the direct payment of larger programme that the health centres receive for HEF- bonuses is particularly relevant. In some funded patients are low, they are always at hospitals, these bonuses amount to $ 50 to For several years, the HEF has paid compre- the upper limit of the tariffs that have been $ 100 a month, and that tends to be more hensive care for the poor, and the situation defined for self-paying patients in state clin- than a third of the government salary. Yet nurses in some health centres only receive a $ 5 supplement to a basic income of $ 150 a month. In any case, the good thing is that the bonuses are shared in a spirit of fair- ness that includes everyone from cleaning staff to the director. Even small incomes get a meaningful boost. The HEF shows that even a country like Cambodia, which is one of the poorest “middle income” countries, can set up and fund a social-protection net. The next challenge is to include not only the very poor, but people who are at risk of dropping into extreme poverty. These vulnerable people make up about one third of the people. The situation is particularly urgent for those households and individuals who live right above the poverty line.

References Diagnosis by specialists in a provincial hospital. Bliss, F., Hennecke, R., 2018: Wer sind die Ärmsten im Dorf? (Who are the village’s poorest people?) AVE-Studie 9/2018. Institut has dramatically improved accordingly. ics. Services are invoiced individually. The für Entwicklung und Frieden (INEF), Universität The fund is the core component of a larger invoices are submitted monthly to an in- Duisburg-Essen. programme, the Cambodia Health Equity spection authority in Phnom Penh, which https://inef.uni-due.de/media/ave_09_wer_ and Quality Improvement Project (H-EQIP), releases them for payment. sind_die_aermsten_im_dorf.pdf which has been allotted a total of $ 174.2 Experience shows that effectiveness Bliss, F., 2018: Gesundheitsfürsorge für die million for five years, until 2021. The Cam- depends on staff getting 60 % of health cen- Ärmsten: Der „Health Equity Fund“ (HEF) in bodian government contributes most of the tres’ revenues – whether from HEF reim- Kambodscha (Health care for the poorest – money itself, and the scheme is expected to pursements or from patients who must pay the HEF in Cambodia). Institut für Entwicklung become completely self-financed by 2021. themselves. The rest mostly serves to main- und Frieden (INEF), Universität Duisburg- Until that time, Germany is also providing tain and run the facilities, supplementing Essen. financial support. their rather meagre basic allotments from The two goals are to increase the num- the state. Frank Bliss ber of health centres significantly and to is a professor of social encourage many more poor people to rely Motivated by bonuses anthropology at Hamburg on them with HEF support. Reimbursement University and an for the cost of their care will be provided ac- For poor people living in remote areas, sim- independent consultant cording to an established formula. Distinct ply making the journey to the hospital can specialising in international development.

categories are local health centres, district be unaffordable, however. Therefore, the [email protected] Ph oto: Bliss

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rising unemployment, all households main- Bismarck’s tools for nation-building tained a certain level of purchasing power, so aggregate demand did not decline even further. Economists realised that social protection served as a macro-economic stabi- liser. Social-protection policies serve to prevent poverty and reduce social disparities. Mar- But a reduction in unemployment benefits ket-orthodox leaders tend to argue that such considerably reduced unemployment in schemes are out dated, demanding that gov- Germany after 2005, and the ageing of so- ernments must not interfere in markets. Their ciety is overburdening our pensions system. ideas are fundamentally misguided, argues So don’t the market-orthodox critics of so- Markus Loewe of the German Development cial protection have a point? Institute (Deutsches Institut für Entwicklungs Well, it certainly makes sense to discuss de- politik – DIE). tails of benefit systems and adapt them to changing social circumstances from time to Markus Loewe interviewed by Hans time. That said, it is not enough to reduce Dembowski unemployment, as we see in Germany. The problem is that we now have many work- Is it true that only prosperous economies ing poor, who have accepted low-pay jobs, can afford to spend government money on but still depend on government support. social protection and welfare for the poor? Moreover, the private-sector investment No, it is not. On the contrary, social protec- schemes, which the Federal Government is tion can be a driver of economic develop- subsidising to fill the gaps that are showing ment rather than some kind of reward for Cartoon making fun of Bismarck in 1884 – the up in the government pensions system, have successful development. writing on the roof means: “Patrimony of the not worked out as planned in the past ten disenfranchised – social reform”. years. Extremely low interest rates meant In what sense? that many citizens’ invested capital has The crucial point is that poor people who do hardly increased at all. For these reasons, not enjoy any kind of social protection do That may be the lesson of some theoretical many Germans are tense and afraid of social not invest the little money they save. Most modelling, but historical experience teaches descent. Right-wing populists are benefit- of them make sure that they have some cash us something different. The German econo- ing from such feelings, and similar trends in the case of an emergency. However, they my did not suffer when Otto von Bismarck are evident in many European countries. would never risk losing that money, and introduced public social health and pension Political stability requires social protection, they want to have access to it any time. The insurance in the 1880s. On the contrary, the and markets need political stability – which savings therefore are not recycled into the policy stabilised the new-founded German is something they cannot bring about them- economy and accordingly do not result in Reich, and a long economic boom followed. selves. any interest payments. If, by contrast, peo- In a similar way, President Franklin D. ple know that an illness or losing their job Roosevelt’s “New Deal” did not plunge the Did Bismarck understand the economic will not plunge them into total economic USA into a depression. It paved the way out relevance of his reforms? despair, they are better able to run risks, of the Great Depression. “Social Security”, as He was probably more concerned with for instance, by starting a small business the American pension system is called, was politics. It is well known that he wanted or spending on their children’s education. an important element. Social protection is to keep the Social Democrats small and Without social protection, people don’t like indeed a foundation of modern economies. even outlawed the party. He hoped to slow to send their children to school for longer It matters, moreover, that private-sector down the labour movement by solving the than necessary, and they are reluctant to protection can fail spectacularly in times of problems that were making people join it. let them go to college. It seems safer to start crisis. Because of market failure, the global In this sense, his policy was not very suc- earning money as soon as possible. Accord- financial crisis erupted with the collapse of cessful. The Social Democrats kept gain- ingly, a huge potential for knowledge, skills Lehman Brothers, the investment bank, ten ing strength. But in another sense, it was and start-ups is never tapped. years ago. AIF, an American insurance giant, very successful. When the German Reich was one of the systemically relevant finan- was established in 1871, many people con- Market-orthodox leaders warn, however, cial businesses that floundered and had to sidered themselves to be Württembergers, that social protection can become a kind of be bailed out by governments. At the same Bavarians or Rhinelanders, but not Ger- hammock that encourages laziness. They time, much ridiculed welfare expenditure mans. The innovative social-protection also insist that private-sector protection – including unemployment benefits – en- systems, however, fostered a new sense of systems like health or life insurance deliver sured that people who lost their jobs did not security, and people began to identify with

better results than government agencies. drop into a void. What is more: in spite of the new order. The Reich gained legitimacy. Ph oto: picture-alliance/akg-images

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Today, we would call what Bismarck was do- systems in the places concerned, and to do income or health coverage for everyone ing “nation-building”. so fast. After violent strife, masses of peo- can contribute to fostering a new sense of ple are traumatised, terrified and full of solidarity and nationhood. Moreover, the Are there any lessons for our times? resentment. Some want revenge. A great legitimacy of the new government would Yes, and especially in regard to post- number of people suffer economic need, get a boost. conflict situations. Donor governments while the health and education systems would do well to lend generous support are overburdened. In such settings, the Are multilateral and bilateral donors doing to the establishment of social-protection introduction of a guaranteed minimum enough in this regard?

Concerning labour rela- fund social-protection systems Vast role for governments tions, the WDR points out that with payroll taxes which are short-term employment and linked to wages. Only those freelancing are becoming more who contribute money are en- The title of the World Bank’s common in technology-related titled to services. Only formal A World Bank Group Flagship Report recently published World De- WORLD DEVELOPMENT REPORT sectors and rich nations in the employment counts since only velopment Report 2019 is: “The course of digitalisation. More formal employment goes along changing nature of work.” Its over, people must keep upgrad- with payroll taxes. Instead, the demands include more govern- ing their skills and knowledge World Bank wants governments ment efforts to build human THE in order to stay able to do paid to establish universal protec- capital, universal social pro- CHANGING NATURE work. Lifelong job security with tion systems and pay special OF WORK tection and better taxation. Its a single company is becoming attention to the poor. That trade strategic approach fits both the ever rarer. Therefore, social unions resent the approach and informal sector and the digital protection must improve, the prefer the payroll model shows economy. WDR states. that their priority is to protect In its response to the The World Bank schol- people in formal employment, flagship publication, the Inter- ars worry especially about all rather than workers in general. national Trade Union Confed- those who do not benefit from It remains to be seen, of course, eration has criticised the World http://www.worldbank.org/en/ the kinds of protection that go to what extent the new strategy Bank for being excessively publication/wdr2019 along with formal employment will actually guide World Bank market-orthodox. The reason in most countries. They insist lending. is that the World Development that a minimum level of social To fulfil their respon Report (WDR) is basically in happen, remains to be seen, but protection must be available to sibilities, governments will favour of permitting whatever it is clear that technological pro- everyone, regardless of the em- need sufficient funding. The agreements employers and em gress is changing both labour ployment situation. Minimum WDR suggests they must im- ployees conclude with one an- market demand and labour basic incomes and universal prove both tax legislation and other. In truth, however, the relations. health coverage are considered tax enforcement (see D+C/ WDR is quite statist. It makes Increasingly, people will appropriate. E+Z focus section in e-Paper governments responsible for pro- need advanced cognitive skills, In a fascinating twist, the 2018/01). The World Bank schol- viding universal social protec- socio-behavioural skills and WDR points out that this ap- ars want all kinds of taxes to tion, building human capital and specific skill combinations to proach would also improve the be considered, including value generating sufficient revenues. be employable, according to fate of billions of people who added taxes, income taxes and The report’s starting point the WDR. Therefore, building are toiling away in the informal property taxes. is that technology may be erod- human capital is essential, and sector of developing countries The WDR largely shies ing job opportunities, so worries governments must act accord- and emerging markets. Their away from tackling the ques- about long-term mass unem- ingly. In the authors’ eyes, the share amounts to 50 % in Latin tion of income redistribution. ployment make sense. Accord- implications are that: America and even 70 % in Afri- It does not whole-heartedly ing to the authors, however, the ●● maternal and infant ca, as the Bank’s statistics show. promote progressive taxation worries are probably overblown. health must be guaranteed (in- The established social- that would put a greater burden While they expect simple and cluding healthy nutrition, ap- protection model of advanced on the well-off. Obviously how repetitive jobs to disappear due propriate sanitation, et cetera), economies bypasses the infor- ever, any kind of tax-funded to automation and artificial in- ●● pre-school education is mal sector and does not fit the government action that reduces telligence, they reckon that new important, and increasingly flexible labour re- poverty ultimately amounts to and more demanding ones will ●● schooling must be of high lations in digitised economies, redistribution. emerge. To what extent that will quality. according to the WDR. It is to Hans Dembowski

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No, they aren’t. The conventional wisdom, case in Britain and Scandinavian countries, contrast, payroll systems apply the same according to which the priority must be to for example. Bismarck, by contrast, funded fixed rate to all contributors. The two impli- invest in business and physical infrastruc- specialised, government-run insurance sys- cations are that: ture for things to improve again, is still quite tems with compulsory contributions that ●● non-contributory systems are more strong. The relevance of social infrastruc- were linked to a person’s wage level. This effective in terms of keeping inequality in tures is systematically being underestimat- model has been copied in France, Italy and check, but ed. And that is so in regard to all low-income the USA for example. In the USA, the contri- ●● they are harder to implement for po- countries. The mindset is changing slowly, butions are called “payroll taxes” and serve litical reasons. however. Bolivia, Lesotho, Namibia, Mau- to fund Social Security and related services. Contributory schemes often become much ritius and Botswana have introduced guar- Which approach is better: funding from the larger, redistributing much more money anteed minimum pensions for the elderly. general budget or from contributions tied to than non-contributory systems. Size mat- Experience shows that schemes of this kind wages? ters. On the other hand, it is obvious that reduce extreme poverty among senior peo- budget funding is necessary where the in- ple considerably. The old are thus less of formal sector is large. It is telling that the a burden for their families, so more time, World Bank demands that governments pro- money and care is invested in the children. vide tax-funded universal social protection. According to its latest World Development Does it make sense to target benefits so Report (summarised in box, page 30, the they only serve specific groups? Or is it bet- editor), that is needed to cover the informal ter to invest in universal benefits which are sector, and because artificial intelligence, handed out to everyone? robotics and automation are making labour Targeting looks clever, but it is hard to do in relations more informal in many business practical terms. The related administrative sectors. The point is that the stability of so- efforts are huge, and still, the typical sce cieties depends on everyone being included, nario is that middle classes ultimately ben- regardless of their employment status. It is efit just as much as the neediest people do. obvious, in any case, that the UN Sustain- Universal benefits often deliver better results able Development Goals cannot be achieved in terms of distribution. For the poorest they without prudent social-protection policies. will even amount to meaningful support if they are quite modest. Self-selection can Poverty and inequality transcend borders. work out, too. If a scheme guarantees a mini- Does that mean that we need something mum wage for physical work, for example, like international social-protection policies? only those who need the money will apply. That has often been proposed. There are basically two options: more prosperous Should benefits be conditional or uncondi- countries could subsidise social protection tional? in poorer ones, or multi-country payroll Well, it is certainly acceptable to ask able- systems could be created. Both would be po- bodied people to do something in return, but litically very hard to implement in view of benefits for children and the aged should be strong opposition. To a rather small extent, unconditional. Some countries – Mexico Namibia has introduced a minimum pension however, donor governments have already and Brazil, for example – tie a family’s ben- for the elderly: old man in Damaraland. begun to subsidise social protection in de- efits to conditions that the children must veloping countries. More should be done. go to school and be vaccinated. Such rules Social expenditure is indeed an investment should not be enforced too stringently. If Both models have upsides and downsides. in strengthening the economy and stabilis- a family loses its benefits too fast, that does The main downside of the payroll system is ing the political system. I find it exciting, not help anybody. Research, moreover, has that it only works well in the formal sector. moreover, that the World Bank is set to pro- shown that most parents have a clear under- In some African countries, however, 90 % pose something like a global universal guar- standing of what is good for their children, of the livelihoods are in the informal sector, anteed income in view of artificial intelli- so the conditions don’t really make a differ- so the people concerned cannot be easily gence, robotics and automation. ence. That said, some mothers appreciate covered by the payroll system. Programmes the conditions because they bolster their funded from the national budget can reach bargaining position in discussions about the them, however. Non-contributory systems Markus Loewe household budget. can be progressive: they charge economical- is a senior researcher at the ly potent people more, while the poorest do German Development Experts distinguish tax-funded protection not have to contribute at all – at least if di- Institute (Deutsches Institut systems from contributory ones. The first are rect taxes are the government’s main source für Entwicklungspolitik – DIE).

included in the national budget. That is the of income. Up to a certain income level, by [email protected] Ph oto: Laub/Lineair

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The Bank plans to increase its support Reform gone wrong for high-risk projects and wants to do more in politically fragile countries. In both circumstances, civil-society organisations are important watchdogs. However, they are increasingly being threatened in many places. Due to a huge capital increase, the World ple ways. Current discourse is distorted, Indeed, activists run great personal risks Bank’s annual lending is set to rise by about however. The underlying assumption of when they campaign to protect vulnerable 40 %. At first glance, that may look good private and public interests being fully minorities and the environment from the since one would expect the additional fund- aligned is nonsense. State and market are detrimental impacts of large infrastructure ing to serve the multilateral institution’s twin complementary institutions, and one can- projects such as dams, mining facilities or goals of eliminating extreme poverty and not substitute for the other. The public good highways through pristine forests. All too boosting shared prosperity. Upon closer is not best served by market forces pursuing often, environmentalists and human-rights examination, it becomes clear that World private interests. Blind faith is certainly not defenders are accused of serving “foreign Bank policy is set to entrench inequality warranted given that investors, by defini- interests” or even declared “terrorists”. The deeper, accelerate environmental destruction, want to maximise profits. When public truth is that they are fighting for the pub- tion and further contribute to the marginali- funding is used to leverage private capital, lic good and international agencies should sation of the poorest communities. only strong oversight can ensure public ac- cooperate with them. Nonetheless, the in- countability. In this context, the Bank’s di- ternational financial institutions that back By Korinna Horta luted social and environmental standards controversial projects lack effective meas- are bad news. ures for their protection. The fresh injection of capital was decided in International financial institutions April (see box next page). The bad news is (IFIs) increasingly consider the mobilisation Less than stringent Rules that it coincides with a new Environmental of private capital the key to fighting poverty. and Social Framework which results in the That stance is endorsed by the G20 and re- The new Environmental and Social Frame- weakening of the previous standards, reduc- flected in the agenda of the UN’s Sustain- work (ESF) took force on 1 October 2018. ing mechanisms of oversight and accountable Development Goals. The idea is to tap The ESF has replaced the existing manda- ability. Moreover, the new development into the billions of speculative dollars that tory environmental and social safeguards. A paradigm focuses on using public funds to float around the world in search of profit reform was indeed needed, but it has gone attract private capital. able investments. At the World Bank, this wrong. No doubt, the private sector can – and approach is called “maximising develop- The old rules did not cover some must – contribute to development in multi- ment finance”. important issues, including labour, for

Indigenous people rallying against an infrastructure project in Brasília in 2013. Ph oto: Ferreira/picture-alliance/Estado Contenudo

D+C e-Paper November 2018 32 Unequal opportunities

example. Moreover, the enforcement of there is no convincing evidence of such To date, member governments basi- the standards was unconvincing, to put it schemes really reducing poverty or cally contribute funding to multilateral mildly. These issues have not seriously been facilitating environmental sustainability. banks and then rely on those banks’ own resolved. On the upside, the ESF uses A much used ESF term is “risk-based reporting to assess their performance. That anti-discrimination language and includes management”. It means that risks are only is not enough. Cabinets and legislators must a labour standard. However, it lacks any addressed as they emerge in the course of apply greater scrutiny to find out what is reference to the International Labour Or- a project. They must no longer be identi- actually accomplished with the funds they ganizations’ core labour standards and fied in advance. In the past, environmental provide. Further marginalisation of the other international agreements that elabo- impact assessments (EIAs) had to be made poorest communities and yet more environ- rate fundamental rights. Overall, the vague available to the public before the Bank’s mental destruction are not acceptable. As new clauses are a very high price to pay for Board could approve them. That EIAs are no the World Bank needs serious oversight, it the serious weakening of the mechanisms longer mandatory before project approval must not be left on auto-pilot. that served transparency, oversight and ac- flies in the face of the recommendations To date the World Bank and its sister countability. The new rules will do little to made by the IEG as well as by the Bank’s In- institutions enjoy absolute immunity. No improve implementation. spection Panel. More generally, tools for ESF court cases can be brought against them. monitoring and reporting have not been put But in May 2018, the US Supreme Court Good Bye to environmental impact in place yet. accepted a case brought by Indian fisher- assessments Another dangerous innovation in this men and farmers against the IFC. They context is that the ESF accepts the applica- stated that $ 450 million of its money was For years, the Bank’s own Independent tion of a borrowing country’s national regu- invested in a coal-fired power plant that has Evaluation Group (IEG) demanded that lations if they are deemed to be materially destroyed vital sources of water, decimated environmental and social risks must be consistent with ESF goals. While it makes fish populations, poisoned crops and led managed more consistently across the sense, in principle, to strengthen local to increasing respiratory problems in sur- entire portfolio of the World Bank Group. capacities, this policy is reckless because rounding communities. Nonetheless, the ESF only applies to pro- the ESF does not spell out how material con- This landmark case could have far- ject finance. The large area of lending for sistency is to be assessed. This shortcom- reaching implications. But whatever its out- policy reforms, known as Development ing is dangerous. Experience shows that come may be, it is incumbent on all govern- Policy Finance (DPF), remains exempted. the governments of many countries tend to ments to hold IFIs accountable. It often affects socially and environmen- ride roughshod even over the codified rights tally sensitive sectors, such as mining, of poor people who are displaced by infra- Korinna Horta forestry or electric power. Sometimes as structure projects – especially when they be- is a resident scholar at the much as 40 % of the Bank’s annual lend- long to ethnic or religious minorities. There University of Lisbon and an ing is DPF. DPF is also often linked to is reason to fear that the ESF will ultimately independent researcher and private-public partnerships (PPPs) in in- only add up to nice rhetoric without any real writer. frastructure development, even though bite. [email protected]

Association) successfully is- rates for public infrastructure is Dangerous transformation sued its first bond. IDA is the less clear. World Bank subsidiary that According to World Bank provides loans and grants to President Jim Yong Kim, the In April 2018, World Bank Reconstruction and Develop- the poorest countries. So far, new IDA funds “will transform member governments agreed ment) and the IFC (Internation- IDA loans were always conces- the development trajectory of to inject fresh money. The capi- al Finance Corporation). The sional, which means that they the world’s poorest countries”. tal stock is increasing by more IBRD lends to middle-income carried no or only low interest We have reason to worry that than $ 60 billion. That will re- countries, and the IFC facilitates rates. By contrast, the new IDA- this transformation will result sult in an astonishing increase private-sector investments. Scale-Up Facility will hence- in only infrastructure being of almost 40 % when compared More capital means the Bank forth lend to the poorest coun- built that directly benefits cor- with the World Bank Group’s can raise even more funding on tries on market-based interest porate interests without regard annual commitments of almost international capital markets. rates as the IBRD does. The for the weakest and poorest 62 billion in 2017 . As all banks do, it borrows mon- reason, of course, is that pri- communities. The most mar- Two branches of the ey to be able to hand out credits. vate investors expect returns. ginalised, after all, cannot con- World Bank will benefit: the In the same month, IDA Whether the poorest countries tribute to servicing the loans. IBRD (International Bank for (International Development can afford to pay such interest (kh)

D+C e-Paper November 2018 33 Unequal opportunities

Young Beninese are usually poorly prepared for the labour market. Barber, tailor and upholsterer in Ouidah.

does not only depend on their school per- Education for social advancement formance. What matters too is school fees, the distance from a child’s home to the next secondary school and the family’s general economic situation. Fabian Könings from the University of Education can lead to inequality – and it can contrast, the follow-up agenda of the Sus- Jena and Jakob Schwab from the German help to overcome inequality. Good schools tainable Development Goals (SDGs), empha- Development Institute (DIE) have identified promote upward mobility and gender equal- sises the quality of education. Where gender other key factors. They examined social mo- ity. Public policy must ensure the quality of disparities are large, moreover, better oppor- bility over generations in India, Peru, Ethio- schools as well as broad-based access. tunities must be provided to girls. Gender pia and Vietnam. The researchers consid- equity was also part of the MDG agenda. ered five issues with a bearing on children’s By Katja Dombrowski Another decisive issue is whether an success in school: education system facilitates upward mobil- ●● the time they spend doing housework As a driver of growth, good education has ity or cements the status quo. If all children, and child labour, long been a focus of development policy. The regardless of their family background, get ●● their health, Millennium Development Goals (MDGs), the same opportunities, social mobility is ●● the time it takes them to get to school, which were adopted by the UN in 2000, strong. Whether children move on from pri- ●● how many siblings they have and ● prioritised increasing enrolment rates. By mary school to secondary school, however, ● their cognitive abilities. Ph oto: kd

D+C e-Paper November 2018 34 Unequal opportunities

generation included mental health prob- According to her, it has had many positive lems, a negative outlook on life and little outcomes: significantly more girls are en- self-reliance. rolled, the number of years that girls spend “Aspirations and effort play a big role,” in school has increased and fewer of them Wantchekon emphasises. He himself is dropped out. Moreover, girls are now setting Benin a perfect example of successful social mo- themselves more ambitious career goals on bility: his grandfather belonged to the first average. generation in his village to attend school, Koumassa was surprised by a side ef- Porto Novo his uncle was a railroad manager, and he fect of supporting girls: “More boys went to himself became a professor of economics at school, too.” One reason may be that fami- an elite American university. Wantchekon lies had more money at their disposal after argues that the education of grandparents the girls’ tuition fees were waived. Accord- leads to grandchildren setting themselves ing to the researcher, the fees ranged from ambitious goals and accepting risks. about € 14 to € 30 per year, depending on the region. Moreover, families also have to 61 % without formal education pay for stationary, text books et cetera. “For All of these factors are related to pov- poor families, this is a lot of money, espe- erty. The study shows that children from School-enrolment rates in Benin have in- cially if they have many children.” poor households have a 20 % lower chance creased dramatically in recent years (see At the same time, the policy has some of graduating form secondary school than Janina Meister in D+C/E+Z e-Paper 2018/07, weaknesses. The government did compen- children from middle-class households. p. 18). Most children, however, do not con- sate schools for the funding gap caused by The main reason was poor children’s lower tinue after the mandatory six years of pri- girls no longer paying tuition fees. While it cognitive abilities, which accounted for 15 % mary school. Only 16 % of Beninese boys paid reimbursements, though, it only did so of the disparity between their grades and and girls attend secondary school and only at the end of the school year and not in full. those of their middle-class peers. The ratio three percent pursue post-secondary edu- Financial bottlenecks were the result. More for child labour was 12 %. For a large number cation. Sixty-one percent of people have no students, moreover, meant larger class sizes. of siblings, it was eight percent. formal education at all. “It’s not uncommon to have 50 children in “Girls are a bit less upwardly mobile Andreas König, the country director one class,” Koumassa says. According to her, than boys,” Könings said at this year’s con- for GIZ in Benin, points out that, as else- additional teachers were not hired. Class- ference of the Poverty Reduction, Equity where in sub-Saharan Africa, the educa- room space is insufficient as well. Overall, and Growth Network (PEGNet), which took tional system of this small Francophone the quality of instruction has declined, and place in Cotonou, Benin, in October. The country is hardly linked to what kind of so has pupils’ performance. Given Benin’s authors also found that the number of chil- skills and knowledge the labour market de- fast population growth, problems are likely dren in the household only had an impact mands. Only three percent of the secondary to intensify. on girls. The revised version of the unpub- schools are vocational schools. According to Koumassa wants the government to lished study will consider child marriage König, many graduates end up working in improve its generally sensible promotion and children’s own educational aspirations. the informal sector. In his view, the greatest of girls by investing in infrastructure and challenges are the poor quality of schools teacher training. She emphasises that great- Personal aspirations and the inadequate funding for vocational er gender equality in education will have education. He believes that Benin will have a bearing on other areas, including chil- Leonard Wantchekon, a professor at Prince- a hard time of living up to the UN principle dren’s health and nutrition. Just like better ton University in the US and the director of not leaving anyone behind. education, that would also contribute to the of the African School of Economics in Be- Women and girls face particular ob- country’s sustainable development. nin, points out that other factors influence stacles. There are large gender disparities children’s social mobility apart from the in education across most of sub-Saharan Af- Katja Dombrowski economic situation of their parents. He did rica. In response, the government of Benin is a member of D+C/E+Z’s research on three generations in Benin, be- has been emphasising the education of girls editorial team. The studies ginning with the first generation to ever at- since the 1990s. It has undertaken measures discussed in her essay are tend primary school. He found examples of like awareness raising, gender-equity train- still unpublished, but the upward mobility both in the second and in ing for teachers and special competitions results were presented at the Poverty the third generation. and prizes for female pupils. Reduction, Equity and Growth Network There were also cases of downward In 2007, a programme was launched (PEGNet) conference on “Improving the quality mobility. Typical reasons were that peo- to exempt girls from paying tuition in jun- of education and learning outcomes in ple avoided financial and social risks and ior high schools (seventh to tenth grade). developing countries” in Cotonou, Benin, in therefore failed to grasp educational and Since 2010, it has been in force nationwide. October. It was organised in cooperation with employment opportunities. Other reasons Leonie Koumassa of the African School the African School of Economics (ASE). that explained lower incomes in the third of Economics has studied its impact. [email protected]

D+C e-Paper November 2018 35 Unequal opportunities

puters. The teacher/pupil ratio is still unac- Education as key to overcome ceptable. There are not enough teachers, but the student numbers are growing. A good education system starts with adequate re- inequality sources, trained and motivated teachers and classrooms and textbooks for every child.

But Zambia’s public schools don’t have these things? Zambia is a very unequal society. It was one What are the shortcomings of the state No, they don’t. When the policy of free basic of the 10 fastest growing economies in Africa schools? education was introduced, the budget did for the decade up to 2014, but the develop- Well, they do not foster the abilities of vul- not increase as it should have. As a result, ment did not translate into higher standards nerable students, such as children with dis- children and adolescents are not learning of living for ordinary citizens. The country abilities, for example. Gender disparities fundamental skills. Nearly 90 % of children ranks among the world’s 10 most unequal persist, and the quality gaps between rural between six and 14 years do not become societies. Two thirds of 17 million people live and urban areas are huge. Some children proficient in reading and math. Masses of under the poverty line. Social activist Frank do not go to school because the distance is poor children – especially girls – drop out of Masanta Jr. is promoting change by providing too far, and there is no adequate transport school. primary education to disadvantaged children infrastructure. Though the government is at the Sun-spring Charity School, a non-gov- committed to providing free basic educa- What private schools exist in Zambia and ernmental institution in a poor neighbour- tion, hidden education costs – including for who sends their kids there? hood in the Lusaka agglomeration. books and school uniforms – persist, and so There are commonly two types of private do examination fees. These costs matter in schools in Zambia: profit and non-profit. Frank Masanta Jr. interviewed by Sabine Balk

How does education relate to upward mobility? In a society with more educated people, there are more enterprises and innovation, with more individuals working to find solutions to society’s problems. Moreover, education helps poor people move up to a higher social status. Educated people suffer less discrimination and have more choices in life. In Zambia, we have compulsory subjects in the curricula of primary and secondary schools. Students are taught the basic knowledge, skills and behavioural patterns they need to surpass social barriers, climb the social ladder and have an impact on society.

How good is the government-run school system? It is not good. Zambia is not anywhere close to the top 20 countries with the best education systems. Our education curriculum is considered to be among the best in Africa, but the public-school system is undeniably bad, nonetheless. According to Brookings Institution, the Washington-based think Lessons at the Sun-spring Charity School in Lusaka, Zambia. tank, developing countries are 100 years behind developed countries in terms of educational standards. A good education system a country where the majority lives on less Non-profit schools tend to serve poor peo- requires an appropriate budget. We do not than the purchasing power of one dollar ple. They have a history of producing me- have that. Zambian parents typically prefer per head and day. Most public schools lack diocre results. The reason is that they lack

to send their children to a private school. laboratories, libraries, furniture and com- funding. Most poor people send their chil- Ph oto: Frank Masanta Jr.

D+C e-Paper November 2018 36 Unequal opportunities

dren to so called “community schools”. They cognitive abilities and become rational are private, but charge only low fees. None- thinkers. theless, some poor people cannot afford to ●● Third, we do not only focus on literacy send their children there. There are also and numeracy, but prepare our pupils for expensive, profit-making private schools, sambia lifelong learning and development pros- especially international private schools. Lusaka pects. We agree with Frederick Douglass, the They cater to the privileged few – families of African-American social reformer of the 19th politicians, business dynasties, foreign dip- century. He said: “Once you learn to read, lomats and the expat community of Indians, you will be forever free.” Whites and Chinese. Some of the expensive schools comply with both the Zambian and What challenges are you facing? international curricula, or they simply stick As many other non-profit organisation, we to the British one or that of another rich na- The children of poor parents hardly speak have some funding problems in an ever tion. English. Accordingly, our top goal is to gradu- changing donor and volunteer world. But we ally build their English skills and proficiency. are taking innovative approaches to fund How important is the English language in raising. We must be resourceful to attract school – and in professional life? How does income correlate with formal skilled and motivated teachers, without Very important. English is the gateway to education? whom we cannot provide a good education global interactions. One out of five people Income typically reflects the skills and environment – and good opportunities – to in the world speaks or at least understands knowledge a person has acquired, as well our pupils. We want to contribute to social English. In Zambia, moreover, English is as the choices he or she made. Employ- justice. We do our best to mobilise local and an official language. We have 72 languages ment opportunities and incomes depend international stakeholders to prevent that and therefore English is critical in schools on the level of education someone attains. children are left behind. and public life in general. In professional For instance, most women in Zambia have life, English is a critical skill. This language no or only little formal education, and their What has to be done by whom to reduce dominates politics and business, but also chances of finding formal employment are inequality? technology, science and the general media. small. Mostly they are stuck in the informal Inequality is a global problem. It affects I haven’t come across a website in a local sector and discriminated against. Profes- everyone, and women are generally at a dis- Zambian language. In our entrepreneurial sionals with solid formal skills, by contrast, advantage. However, governments are pri- and digital era, professionals can enter have good incomes – for instance as doctors, marily responsible for reducing inequality. a global workforce right in front of their lawyers or accountants. Those who drop out They must raise awareness, adopt policies computer and phone screens. of school before graduating from higher and allocate funds to public services. Citi- secondary school after grade 12 will encoun- zens, independent organisations and busi- To what extent does proficiency in English ter many barriers. According to reports, an nesses have a critical responsibility too, by depend on the family a person is born into extra year of schooling increases an individ- adopting a culture geared to inclusion and and the schools they are sent to? ual’s earnings by up to 10 %. equal opportunities in daily life. The Zam- Well-off families tend to be highly profi- bian government has committed to the Sus- cient in English, while poor people strug- Do careers and upward-mobility depend on tainable Development Goals, as well as to gle. Among the rich, children are exposed belonging to specific clans or families? related aspirations of the Southern African to an English world via internet, inter- Yes, family connections matter very much. Development Community (SADC). Now it national television stations, music and The rich keep getting richer, while the poor must live up to the promises. movies, and they read books. The schools are stuck in misery. Nepotism is common- they go to include English among other place. It’s a cancer eating the very fibre of Link languages, such as French, as mode of society’s wellbeing and undermining values Facebook page of Sun-spring Charity School: communication. The rich even tend to of equality. https://www.facebook.com/Sun-spring-Charity- send their children to schools in foreign School-150168021809120/ countries where they cannot even use their What are the chances for the future life for indigenous language. On the other hand, your students? Frank Masanta Jr. poor parents are keen on schools teaching Our students at Sun-spring Charity School is a community leader and English at an early age. have better future prospects: social activist in Zambia. In 2011, he started the What language do you use in Sun-spring ●● First of all, we believe in the power of Sun-spring Charity School in Charity School, the community school you human rights, of which education is a fun- Ng’ombe, a disadvantaged neighbourhood. He started? damental principle. It is central to achieving is also the head of the school. It has pre- We use English, but we start with Nyanja, all other rights and fighting poverty. school and primary school classes for more a Zambian language. It is what the local chil- ●● Second, preschool and primary edu- than 100 boys and girls. dren speak when they first come to school. cation is necessary for children to develop [email protected]

D+C e-Paper November 2018 37 Unequal opportunities

money flowed back to the advanced econo- “People have created poverty” mies in the form of debt servicing, revenues of foreign investors, corporate profits and income from stocks and bonds. Further- more, he adds, much money is drained off through capital flight, mis-invoicing and il- In his latest book, anthropologist Jason real interest in the economic health of de- legal practices. Hickel explores why development is so veloping countries because it would reduce Trade causes hardship too, according unequal around the world and suggests pos- the profits of corporations based in western to Hickel. “From the onset of colonialism sible responses. He argues that poverty is countries by limiting their access to cheap through to globalism, the main objective of “the inevitable result of ongoing plundering”, labour and resources. He provides ample the north has been to force down the cost of with a relatively small group of people in rich documentation. labour and goods bought from the south.” countries exploiting poor countries. In According to the author, the global And though global trade is technically free Hickel’s eyes, official development assis- economic system is organised in a way that today, rich countries’ bargaining position tance (ODA) is ineffective. He calls for a fair makes meaningful development nearly im- is much stronger than poor countries’ posi- world order. possible. Hickel alludes to the structural tion, so the former dictate the terms. adjustment programmes of the 1980s and The author rejects the current “devel- By Sabine Balk 1990s (see D+C/E+Z 2018/08, page 29 and opment delusion”. Receiving ODA and fol- print edition 2018/09-10, page 36). He points lowing the directives of donor nations will Born in Swaziland, anthropologist Jason out that the conditions set by the west – in- not make “underdeveloped” countries pros- Hickel was involved in development assis- cluding market liberalisation – hindered per, he argues, and notions of this kind only tance for various non-governmental organi- progress rather than promoting it: “Econo- depoliticise the issue of global inequality. sations over a number of years. His work led mies shrank, incomes collapsed, millions of Hickel dismisses the “aid paradigm” and de- him to conclude that the divide between people were dispossessed, and poverty rates mands justice for poor countries – and that rich countries and poor countries is “neither shot through the roof.” The author claims would include changing the rules that cause natural nor inevitable”, but has in fact been that the west continues to exploit its posi- poverty in the first place. He is in favour of created by human beings. tion as creditor to keep Africa from thriving. five crucial interventions: According to Hickel, developing The global north’s ODA, which 1. Debt relief: for developing countries countries are not responsible for their own amounted to roughly $ 145 billion dollars in to take control of their economies and adopt poverty. He found other reasons. Western 2017, were mere window dressing, accord- promising policy, they must be freed of the governments, he argues, have shown little ing to Hickel. He points out that much more debt burden.

Fair wages and trade could decisively reduce poverty: tea production in Kenya. oto: Ton Koene/Lineair Ph oto: Ton

D+C e-Paper November 2018 38 Unequal opportunities

2. Global democracy: major institutions 4. Just wages: Hickel calls for a global growth”. He argues that human progress of global governance, such as the World Bank system of labour standards, which would in- must no longer be equated with growing and the International Monetary Fund have to clude the introduction of a global minimum gross domestic product (GDP). In his eyes, be democratised. The countries of the global wage. this misconception is depleting the earth’s south must be allowed fair and equal repre- 5. Reclaiming the commons: mech- natural resources, and it would make more sentation, ending rich countries’ claims to anisms of plunder, like tax evasion, land sense to use alternative “measures of pro- around 60 percent of the voting power. grabbing and climate change, have to gress” such as reducing working hours and 3. Fair trade: WTO rules basically be dealt with. Land grabs could be pre- the pressure to consume. mean that all member countries have re- vented by no longer allowing investors duced tariffs proportionally. It would make to speculate on food and through land re- more sense to give poor countries a well- forms that strengthen smallholder farm- Reference specified advantage, such as by requiring ers. Hickel, J., 2017: The divide. A brief guide to richer countries provide poorer countries Another issue the author addresses global inequality and its solutions. William with free access to their markets. is what he calls the “the conundrum of Heinemann, London.

nomic and political institutions eration war in 1980, inheriting Prosperity through the right are the root cause of national a set of extractive economic failure because they impede or institutions from the colonial institutions even block economic growth power. The ruling party ZANU- entirely. In such settings, “crea- PF kept a tight grip on the tive destruction” is needed, ac- economy and stayed in control To understand the reasons of Acemoglu and Robinson cording to the authors, as only of state-run industries. New a nation’s success, it makes differentiate inclusive insti- new inclusive institutions can and innovative private-sector sense to analyse the interac- tutions from extractive ones. reverse matters and facilitate companies could not flour- tion of economics and politics. Inclusive institutions allow or- healthy development. How ish. Under ZANU-PF’s extrac- This is the approach taken by dinary people to participate in ever, extractive institutions tive and repressive regime, the economist Daron Acemoglu economic activities and thus tend to resist change and often economy eventually collapsed. and political scientist James A. create a level playing field. prove lasting. In real terms, Zimbabwe’s per- Robinson in “Why nations fail”. Good government-run schools Historical circumstances capita income in 2008 was only Poor education, inad- are an example because they determine what kind of in- half of what it was in 1980. equate health care and lacking allow young people from all stitution prevails in any giv- These and other exam- job opportunities are sympto- social strata to learn and they en society, according to the ples demonstrate how certain matic of increasing inequality serve the goal of equal opportu- authors. Moreover, peoples’ circumstances lead to either worldwide. The causes are the nities. Extractive institutions, prior experience with institu- inclusive or exclusive institu- topic of the book which was by contrast, merely serve the tions shapes what they expect tions – success or failure. In published in 2012. Acemoglu interests of the elite. of institutions in the future. the authors’ view, the success is a professor at the Massachu- Economic and political The book includes several of prosperous nations rests setts Institute of Technology institutions are interdependent. case studies. The trajectories upon sound political institu- and Robinson teaches at the Inclusive economic institutions of Botswana and Zimbabwe, tions. Acemoglu and Robinson University of Chicago. support inclusive political insti- two former British colonies, show convincingly that market The book argues that un- tutions, and the latter reinforce are very different, for example. forces, left to themselves, do derstanding differences in coun- the former. In societies marked After independence in 1960, not make nations prosper. They tries’ institutions is essential by inclusive institutions, the Botswana quickly developed need an appropriate political to explaining disparities in na- power of the state is geared to inclusive economic and politi- environment that not only re- tional prosperity. According to safeguarding the needs of all cal institutions. An old sense of wards the strongest members the authors, institutions are en- people. Moreover, a sense of im- pluralism had survived colonial of society but offers opportuni- gines of development to the ex- partial law and order prevails. rule, and it was reflected in the ties to everyone (also see D+C/ tent that they allow individuals If extractive institutions pre- new institutions. From 1960 on, E+Z e-Paper 2018/08, page 38). to grasp economic opportunities dominate, by contrast, a small Botswana prospered as demo- Rebecca Renz and create incentives to start minority gets its way and public cratic nation with regular elec- new and innovative businesses. life is marked by corruption and tions. It has never experienced Reference The performance of economic authoritarianism. civil war or military rule. Acemoglu, D., and Robinson, J. institutions, they argue, de- According to Acemoglu By contrast, Zimbabwe A., 2012: Why nations fail. Crown pends on political institutions. and Robinson, extractive eco- gained independence in a lib- Business New York.

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