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The World Bank’s BEE: Old wine in a new bottle | Business and Economy

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The World Bank seems to be going through its very own Groundhog Day with the announcement of the Business Enabling Environment (BEE) Project. Even a cursory look reveals that it is little more than a rebranding of the (rotten) apple of its eye: the Doing Business (DB) report and rankings, which was discontinued last year.

The BEE appeared just weeks before the Bank’s Independent Evaluation Group (IEG) published a report questioning the development effectiveness of DB and recommending “to avoid using business regulatory or similar global indicators as explicit reform objectives”. Yet the bank marches on regardless, apparently ready to repeat the same mistakes.

The DB Report was certainly highly influential: it was one of the World Bank Group’s most widely read publications and its content steered policy decisions worldwide. But it was also one of the Bank’s most controversial projects, criticised for its methodology, accuracy, inherent biases and for the harmful impact of the policy reforms it advocated. For example, improving the DB score meant cutting corporate income taxes and contributions to employees’ retirement schemes in India; reducing social tax rates in Hungary and Kazakhstan; and completely abolishing social security contributions in Georgia.

Civil society organisations and social movements around the world celebrated when the WB announced its discontinuation in September 2021. The decision followed an investigation by law firm WilmerHale which revealed data manipulation to change the rankings of five countries – China, Saudi Arabia, the United Arab Emirates, Jordan and Azerbaijan – following undue pressure from World Bank leadership – malpractice not new to the DB.

The investigation threw up questions about the integrity of the institution. More than 140 civil society organisations and academics from around the world called for the bank to carry out a root and branch reform to address its outdated quota system, ditch the “gentleman’s agreement” dictating how its leaders are selected and revise its ideological bias in favour of neoliberal policies.

Instead, less than six months after the scandal, the BEE appeared: a “new project to measure the business enabling environment in economies worldwide.” It is supposed to differ from DB because it will evaluate the business environment from the standpoint of the private sector as a whole and not only of the individual firm; it will account for the positive role of the state in functioning markets; it will collect both de jure and de facto information on policies of interest.

Yet, these methodological tweaks look like tinkering around the edges while failing to address most of the previous faults.

First, the project remains vague on the use of aggregate scoring and ranking of countries. The risk is that, like the DB, its indicators will continue to be used to incentivise policy competition between countries which leads to a harmful race to the bottom in deregulation.

Second, it continues to include harmful indicators based on the simplistic assumption that what is good for business is also good for people and the planet. For instance, as noted by The International Trade Union Confederation (ITUC), the BEE version of the labour indicator continues to incentivise deregulation of the labour market. The Tax Justice Network has noted that the tax indicator retains its predecessor’s focus on the total tax and contribution rate, an approach that ultimately undermines contributory social protection systems and progress on corporate taxation, therefore contributing to increased inequality.

Most disturbing is the BEE’s claim to address the DB anti-state bias by introducing indicators assessing the existence of “public services” (intended as institutions, rules and infrastructure) that support the smooth functioning of markets. This approach is based on the long-held assumption that the only role of the state in the economy is to make markets work better. It ignores well-established evidence showing that the state can and should play a proactive developmental and entrepreneurial role in the economy, creating public value and sharing prosperity.

This approach also risks creating trade-offs within governments between providing those “public services” most helpful to private businesses (eg increasing “efficiency” to obtain environmental permits) and those that address basic needs, such as public healthcare or education, but with no immediately quantifiable economic return.

Finally, the BEE glosses over the question of the true impact of the DB. The IEG report alone should warrant the halt of the BEE project. It finds that most claims made about the alleged positive links between DB’s indicators and job creation, economic growth, extreme poverty and shared prosperity do not meet a “high standard of evidence”.

In practice, the evidence available is not strong enough to confirm the positive impact of business-enabling reforms on the WB’s goals of ending poverty and sharing prosperity. Perhaps most importantly, the BEE will do very little to help developing countries address key challenges such as the energy transition and the creation of green and decent jobs, and will perpetuate the harmful effects of the DB.

The bank should abandon this project and instead rethink its approach to the role of the private sector in development in light of the COVID-19 recovery and the urgent climate and inequality crises. This month’s Spring Meetings offer a chance for the bank to own up to its wrongdoings and be accountable for the harm done, to break with the past and embrace a new model that truly puts people and the planet first.

The views expressed in this article are the authors’ own and do not necessarily reflect Al Jazeera’s editorial stance.



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‘Worse than predicted’: G7 meets to keep climate action on track | Climate Crisis News

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Environmental groups warn nations risk undermining their green goals by scrambling to secure new sources of natural gas to make up for shortfalls in supplies from Russia.

Ministers from the world’s wealthiest democracies will wrangle over how to keep climate change goals on track as they meet in Berlin on Thursday for talks overshadowed by surging energy costs and fuel supply worries sparked by the war in Ukraine.

Energy, climate and environment ministers from the Group of Seven (G7) countries want to reaffirm a commitment to cap global warming at 1.5 degrees Celsius (2.7 degrees Fahrenheit) and protect biodiversity at the meeting.

They will seek to agree on common targets for the shift from fossil fuels to renewable energy that scientists say is urgently needed to curb catastrophic climate change.

Alden Meyer, senior associate at climate think-tank E3G, said tackling climate change was the best and quickest way for countries to achieve energy security.

“Climate impacts are worse than scientists originally predicted and there’s far worse ahead if we don’t cut emissions rapidly,” Meyer said. “Delivering on climate promises really becomes even more vital in this tense geopolitical environment.”

The ministers will consider committing to a phase-out of coal power generation by 2030, according to a draft communique, though sources suggested that opposition from the United States and Japan could derail such a pledge.

‘Ecological transformation’

Germany’s energy and climate minister said the G7 can lead the way on ending the use of coal, a heavily polluting fossil fuel that is responsible for a large chunk of global greenhouse gas emissions.

“The G-7 … can perhaps take on a certain pioneering role to push forward ending the use of coal for electricity and in decarbonising the transport system,” Robert Habeck said.

Habeck said the issue could be carried forward to the G7 leaders’ summit in Elmau, Germany, next month and then to the meeting of the Group of 20 leading and emerging economies later this year. Getting G20 countries to sign on to the ambitious targets set by some of the most advanced economies will be key, as countries such as China, India and Indonesia remain heavily reliant on coal.

It would be wrong to view efforts countries are making to tackle the current energy crisis, stoked by Russia’s war in Ukraine, as countering efforts to end fossil fuel use, Habeck said.

“What we are seeing at the moment is an acceleration of the ecological transformation,” he said.

Environmental groups have warned countries such as Germany risk undermining their green goals by scrambling to secure new sources of natural gas – including from the United States – to make up for the shortfall in supplies from Russia.

Fossil fuel subsidies

The meeting in Berlin will also seek to reach agreements on boosting financial aid for poor countries to cope with climate change, additional funds for biodiversity, protecting oceans and reducing plastic pollution.

The draft communique, which could change considerably by the time talks conclude on Friday, would also commit G7 countries to have a “net zero electricity sector by 2035” and to start reporting publicly next year on how they are delivering on a past G7 commitment to end “inefficient” fossil fuel subsidies by 2025.

Campaigners urged the ministers of the G7 to make clear commitments that the fallout of the Ukraine war would not derail their climate targets.

“We have a new reality now. The G7 need to respond to that, and they should respond through renewables and not through fossil fuel infrastructure,” said David Ryfisch, climate policy expert at non-profit Germanwatch.

While seeking consensus on an oil embargo on Russia, the European Union is pushing to accelerate the bloc’s pivot to renewable energy while finding fossil fuel alternatives to Russian supplies.

Ahead of the meeting, the B7 group of leading business and industry federations of the G7 states called on the group to back a plan along the lines of German Chancellor Olaf Scholz’s “climate club” to harmonise standards on emissions and CO2 pricing.

Scholz had suggested the idea to try to avoid trade friction in areas including green tariffs, the development of markets for decarbonised products, carbon pricing, and removal methods.



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Former NATO general says Putin has 8-9 month window to win war | Russia-Ukraine war News

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A resurgent Russian army has refocused its hitherto lumbering efforts to claim Ukraine’s east, making its first significant advances there in the 13th week of the war.

Russian forces have re-launched offensives at three main points to surround a spearhead of Ukrainian defenders, at Izyum to the north, Severodonetsk to the east, and Popasna to the south.

At Popasna, combined forces of Russian conscripts and mercenaries from the Wagner group broke through Ukrainian defences, taking several settlements on May 20. Three days later, they captured Myronovsky, the starting point of a highway leading to Sloviansk, where all three prongs of the Russian attack are likely aiming to converge.

On the northern front, Russian artillery at Izyum sprang to life at the same time, in what Ukrainian authorities described as the opening act to a full assault.

Russian forces appear to be attempting a pincer movement from Izyum and Popasna to isolate Ukraine’s entire tactical army of about 50,000 men in the Luhansk and Donetsk regions to the east.

On May 21, the battle for Severodonetsk, the easternmost Ukrainian-held city, began in earnest. To the city’s east, a punishing bombardment began. To its west, Russian military bloggers said Russian forces destroyed one of two bridges connecting the city to Lysychansk across the Siversky Donetsk river and complicating Ukrainian lines of supply.

Ukrainian President Volodymyr Zelenskyy said Russia’s bombardment was turning the Donbas into “hell”.

The governor of Luhansk, Serhiy Haidai, said Severodonetsk remained firmly in Ukrainian hands on May 24 amid darkening prospects.

“The situation is very difficult and unfortunately it is only getting worse. It is getting worse with every day and even with every hour,” Haidai said in a video on Telegram. “Shelling is increasing more and more. The Russian army has decided to completely destroy [key city] Severodonetsk.”

Russia’s tactics are now notorious in the southern port of Mariupol, which finally surrendered on May 21 after more than two months of aerial and artillery bombardment that have reduced the city to rubble.

Armies cannot turn on a dime

Ukraine has fought valiantly and driven the Russians back from the northern cities of Kyiv, Chernihiv, Sumy and Kharkiv in recent weeks, but its counteroffensive has not been sustained because Ukrainian forces need time to assimilate Western military equipment, a retired NATO commander said.

“Tanks and armoured vehicles need an initial stage of personal training and team training for the driver, gunner, reloader and commander,” said Lt-Gen Konstantinos Loukopoulos, who has taught tank warfare at military academies in Kyiv and Moscow.

“They need tactical training, including test firing and exercises, which cannot be done in a few weeks. The training cycle is at least six months, and that doesn’t change in wartime,” he said.

“After [Russian President Vladimir] Putin’s illusions about winning the war in 96 hours, the illusions began on the Western side,” he added.

The United States, United Kingdom, Canada, France, Germany and the Czech Republic are among those who have pledged various types of armour and artillery, and that complicates matters, Loukopoulos said.

For instance, out of 90 howitzer M777 artillery pieces sent by the US to Ukraine, about 18 have been absorbed, he said, adding that it is unknown how many of the 12 or 14 César self-propelled howitzers sent by France are in use.

“For Ukraine to absorb the weapons from the West and make them operational, form the right units, and train them, it needs eight, nine months. It can’t pull active units from the front to train them,” Loukopoulos said.

That is the timeframe, he believes, within which Putin must win the war on the ground and reach a negotiated settlement.

“Under the present balance of forces, the general trend is in favour of the Russians. Right now nothing can change that,” he said.

“After a few months, with training of reserve units, there could be a [Ukrainian] strategic counteroffensive that could throw the Russians out.”

Loukopoulos believes this could likely be done by Ukraine seizing Russian territory that it could exchange for its own territory in negotiations.

“Can the Ukrainians create a fact on the ground to counter Russian gains? Right now they cannot,” he said.

“Whether we like it or not, Russia has the political and military initiative. The West is reacting to what Putin is doing.”

The fate of Mariupol

Adding to Ukraine’s woes was the final surrender of Mariupol on May 21.

Days earlier, Ukraine had given the port city’s last defenders the order to cease fighting in an effort to save their lives.

Russia said it now holds 2,431 Ukrainian prisoners of war (POWs) who had been holed up in the underground nuclear bunkers of the Azovstal metallurgical complex. To back up claims that it is de-Nazifying Ukraine, Moscow released video of surrendering soldiers stripped to reveal tattoos of swastikas and Adolph Hitler.

The surrender not only deprived Ukraine of a large number of experienced fighters, who might be swapped for Russian POWs, it also marked the fall of a symbol of Ukrainian resistance against the odds.

Denis Pushilin, the leader of the self-declared Donetsk People’s Republic, said the Azovstal plant will not be restored.

Instead, he said, Mariupol will be developed as a resort town. His reasoning was that Western sanctions will hamper sales of iron and steel exports from Russian-controlled territory, but Mariupol can benefit from Russia’s economic isolation by wooing a captive Russian tourism market.

The Azovstal plant once exported thousands of tonnes of iron and steel. It was one of two metallurgical plants in the city, representing a $2bn investment by Metinvest. The Ukrainian government, too, had invested $600m in remodelling the city with new roads, parks and a children’s hospital.

Mariupol’s Ukrainian municipal authority believes Russia’s victory over the city killed an estimated 22,000 civilians. The attack on the city also displaced three-quarters of the population and reduced the city to rubble. The city’s new Russian occupiers admit that 60 percent of its buildings are damaged beyond repair.

The apocalyptic reality of the Russian victory at Mariupol may drive Ukrainian determination to fight along the eastern front. The question is whether Ukrainian material shortages will be insurmountable.



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UN Security Council sets vote on tougher North Korea sanctions | United Nations News

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Vote was called by the US after Pyongyang launched three missiles in the space of an hour, including an intercontinental ballistic missile.

The United Nations Security Council will vote on Thursday on a US push to strengthen sanctions on North Korea over a spate of recent ballistic missile launches, a move that China, which has a veto in the council, has said would not solve any problems.

The vote comes a day after Pyongyang fired three missiles, including one thought to be its largest intercontinental ballistic missile (ICBM), the latest in a string of banned ballistic missile launches that the country has carried out this year.

Security Council Resolution 2397, which was adopted unanimously in 2017, talked of further consequences in the event of another ICBM launch.

“That was a provision of that resolution. That’s precisely what happened and so we feel it’s now time to take action,” a senior US official told the AFP news agency on condition of anonymity.

The draft resolution would “further restrict North Korea’s ability to advance its unlawful WMD (weapons of mass destruction) and ballistic missile programmes, it would streamline sanctions implementation and further facilitate the delivery of humanitarian aid to those in need,” a US official told the Reuters news agency.

North Korea has been subject to UN sanctions since 2006, which the Security Council has steadily – and unanimously – stepped up over the years to cut off funding for Pyongyang’s nuclear weapons and ballistic missile programmes.

China and Russia, however, have been pushing for an easing of sanctions on humanitarian grounds telling a council meeting on May 11 that they wanted to see new talks and not more punishment. Russia also has a veto in the council.

“We don’t think a resolution as proposed by the US can solve any problem,” China’s UN Mission said in a statement on Wednesday evening.

China proposed in recent weeks that the US consider a presidential statement instead of a resolution, which “was supported by many delegations but fell on deaf ears of the US,” the statement said. “They know what is the best way for de-escalation, but simply resist it.”

The draft US resolution would target tobacco, crude oil and fuel exports, and expand a a ban on ballistic missile launches to apply to cruise missiles or “any other delivery system capable of delivering nuclear weapons”, according to Reuters.

It would also impose an asset freeze on the Lazarus hacking group, which UN monitors said earlier this year that Pyongyang had used to steal hundreds of millions of dollars in cyberattacks.

Earlier this week, US President Joe Biden wrapped up his first visit to Asia, after reaffirming the US commitment to support Japan and South Korea in the face of the North’s nuclear threat.



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