Daily Archives: May 29, 2020

Council received an update on the impact of COVID-19 on the City of Timmins bottom line during Tuesdays meeting.

The potential impact on revenue is projected to be about $2.4 million ($2,423,000), while the impact on expenses is an additional almost $650,000 ($649,000), said Dave Landers, the citys chief administrative officer.

And the potential impact on agencies, boards and commissions is nearly $1.7 million ($1,699,000).

Landers pointed out the report looks at a period running from give or take March 17 to June 30.

A report will follow from Finance in June that will look forward based on activity we can cut, defer or move forward in a way that will consider the current financial situation, he said.

That being said, there is some positive information to report.

Landers noted even though the Building and Planning department was not able to move forward with some of the applications and permits it had received electronically, with the construction ban now lifted permits with an additional $ 1.2 million of value have been realized as of the end of March in comparison to the same point last year.

Financial services can report, as well, we have received about $58,000 in summer student funding for essential student positions, he said.

The CAO also had some good news to report in terms of property tax collection.

Right now, we are not experiencing a significant tax collection shortfall, Landers said.

At this point in time, we are tracking along the same lines as last year, for both water billing and property taxes.

As the year goes on, that situation may very well change but as it currently stands, we are in good position, particularly from a cash-flow basis.

According to the report, by the end of April the city collected 42.63% of its budgeted tax levy, compared to 42.53% in 2019, which amounts to $85,214 more collected than in the prior year.

In terms of water billing, at the end of April the city had collected 37.68% of its budgeted revenues, compared to 38.25% in 2019, resulting in a $124,180 decrease from the previous year.

The City of Timmins has continued to work closely with the (Timmins) Chamber of Commerce and others through a (Business) Continuity and Recovery Task Force, which we are co-chairing, Landers said.

A number of different community agencies involved in that group, as we try to plan for impacts to the business community. The (Downtown Timmins) BIA participates, Timmins Economic Development Corporation (TEDC) is at the table, The Venture Centre, our MP (Charlie Angus) and our MPP (Gilles Bisson) also participate, so we are able to get information carried back.

At this point in time, an additional business survey is going forward as we try to track the impact of whats happening on the business community.

So far, there are a few areas of focus the group is working on. We are looking at evaluating and making some recommendations to government on the programs that have been rolled out.

We do know, from the business community, there has been a wide uptake of the programs that have been announced some of them quite effectively.

Some of them, I think we could recommend some positive changes, particularly things like commercial rent.

Also, as a group, we are trying to turn our heads toward business modernization and customer service in a post-pandemic world, how we support the business community as it moves forward into I guess what we can consider uncharted waters.

Landers noted they are also looking at business support in terms of health and safety and activities that might stimulate the citys urban core.

At the same time, as you are aware, there has been work updating our Community Improvement Plan, he said.

We are at the state where a couple of drafts have been completed. At this point, it is going out for stakeholder comment.

We are looking to receive information from the public and stakeholders on how to improve that Community Improvement Plan.

Landers also noted moving forward the city is looking from a health and safety perspective on how to get back to normal, or what normal will look like as it moves through the restart of Stage 1, Stage 2 and onward.

At this point in time, I think there are a couple of things we need to consider from a city point of view, he said.

There have been a number of announcements that have come from other (federal and provincial) levels of government to support individuals and businesses, but we still really havent seen anything to support municipalities which isnt surprising at this point.

The business of government is focusing on higher risk areas, but from a municipal point of view there are a few areas of advocacy we need to consider.

Specifically, our municipality and others across Ontario are going to need funding to offset revenue losses in airports and transit services, as well as some other areas throughout the municipality.

Additionally, there is going to be a requirement for funding for social and health services due to increased service demands, particularly in areas like long-term care, homelessness and childcare.

Mayor (George) Pirie has taken the lead in calling on governments to look to initiate a specific Northern Ontario Recovery Task Force, as part of a broader provincial task force.

Many of the issues in the North, with our resource-based economies, are distinct from the south.

Those are areas of advocacy I think we need to keep in front of us over the new few months.

Additionally, the report presented to council indicated the CAO is working with TEDC to apply for grant funding for a strategic planning process for an economic diversification strategy to help build resiliency into the economy and plan for future growth.

Link:

Pandemic projected to cost city $2.4M in revenues - Timmins Press

object(WP_Post)#890 (24) { ["ID"]=> int(66914) ["post_author"]=> string(1) "1" ["post_date"]=> string(19) "2020-05-28 16:03:19" ["post_date_gmt"]=> string(19) "2020-05-28 10:33:19" ["post_content"]=> string(12640) "Between 1970 and 2015, India registered a six-fold increase from 1.18 billion to 7 billion tonnes in annual material consumption. By 2022, India will be the most populous nation in the world, and its expected that by 2030, its annual material consumption would double to 14.2 billion tonnes due to population growth, urbanisation, economic mobility, and the resulting growth in per-capita resource consumption. Currently, Indias resource extraction of 1,580 tonnes/acre is 251% higher than the world average of 450 tonnes/acre. While Europe recycles 70% of its consumption items, India recycles only 20%. India is also the third highest emitter of greenhouse gases, and accounts for 9.2% of total world emissions. Given that India aspires to become a global manufacturing hub, we would witness higher levels of consumption of raw materials, than whats required to meet Indias domestic needs. Therefore, Indias traditional take-make-waste linear economic approach will cause severe ecological damage with untoward economic and social ramifications. Maximised extraction of utility from raw materials, produced goods, and perishables, through-out their life-cycle, is central to building a circular economy. Given that India currently recycles only 20% of its consumption, there is enormous scope for improvements in this area, and this provides opportunity for innovation and employment. Hence the journey from the current linear economic model to a circular economic model is filled with both ecological and economic benefits. According to the Ellen McArthur foundation, transitioning to a circular economy will result in US$ 624 billion in economic benefits, and reduce carbon emission by 44% (compared to current development path) in 2050 alone. As part of the sweeping economic reforms announced in the wake of the COVID-19 pandemic, the national government, in coordination with the state governments, must develop a roadmap for institutionalising a circular economic growth model for the nation. The journey towards building a circular economy needs a multi-pronged approach requiring the engaged participation of governments, industry and citizens. It needs a robust roadmap jointly owned and championed by the central, state, city and other local governments, and it must focus on the following aspects:

Citizen awareness and source segregation across the entire population

Tax incentives and financing to make investments in CE more financially viable

Industry specific roadmap to enable transition to CE based business and operating models in key industries

Technological innovation in technologies that make CE possible and viable

Policy roadmap and coordination between the national government, state governments, city governments, and industry

Read the original here:

As India rebuilds its economy, it is time to make it circular and sustainable - Observer Research Foundation

This weekend The Irish Times presents a series of articles on remaking Ireland after the pandemic. As part of this, Prof Mariana Mazzucato of the University College London a leading international economist and author answered questions from Cliff Taylor about what should happen next

Cliff Taylor: In your view has the Covid-19 crisis shown up shortcomings in the ability of states to respond?

Mariana Mazzucato: The crisis has shown up shortcomings in states capabilities, but more than that, it has shown up how the way that we have been thinking about the role of the state over the past half century has been entirely inappropriate. Since the 1980s, governments have been told to take a back seat and let business steer and create wealth, intervening only for the purpose of fixing problems when they arise.

The result is that governments are not always properly prepared and equipped to deal with crises such as Covid-19 or the climate emergency.

By assuming that governments have to wait until the occurrence of a huge systemic shock before they resolve to take action, insufficient preparations are made along the way. In the process, critical institutions providing public services and public goods more widely such as the NHS in the UK, where there have been cuts to public health totalling 1 billion since 2015 are left weakened.

The austerity measures imposed after the 2008 financial crisis were the opposite of the investment needed to increase capability in the public sector, and make it ready for the next shock to the system.

Cliff Taylor: What are the lessons of this for the recovery?

Mariana Mazzucato: This crisis, and the recovery we need, give us an opportunity to understand and explore how to do capitalism differently. This requires a rethink of what governments are for: rather than simply fixing market failures when they arise, they should move towards actively shaping and creating markets to take on societys most pressing challenges. They should also ensure that partnerships with business involving government funds are driven by public interest, not profit.

When private companies ask for bailouts from governments, we must consider the world we want to build for the future, and the direction of innovation that is needed to get there, and add conditions to these bailouts accordingly, to benefit public purpose, not just private.

This will secure the direction of travel we want green, sustainable, and equitable. When conditionalities are done well, they align corporate behaviour with the needs of society. In the short term, this focuses on preserving employment relations during the crisis and maintaining the productive capacity of the economy, whilst avoiding extraction of funds to financial markets and executive compensation. In the long-run, it is about ensuring that business models lead to more inclusive and sustainable growth.

Cliff Taylor: Can governments aim to direct the recovery to be greener and more sustainable, or is it just about fire-fighting for the moment?

Mariana Mazzucato: Governments can and should take a long-term and directional view, avoiding the tyranny of the urgent in only fire-fighting. Governments have the upper hand in public-private negotiations for the first time in decades they must use it!

A clear example is happening in the green and sustainable arena, around the conditionalities attached to government assistance; when planning these large-scale interventions, governments should be focusing on smart conditions that match their green new deal strategies of lowering carbon emissions while also investing in workers.

The French government has putgreen conditions on Air France to decrease CO2 emissions in domestic flights by 50 per cent by 2024, and to stop flying domestic routes where there are rail competitors; conditions for Austrian Airlines could include securing jobs, in addition to green commitments, and the US CARES Act conditions include limits on compensation for the highest paid airline employees, and maintenance of employee pay.

US Senator Elizabeth Warren has also called for strict bailout conditionalities, including higher minimum wages, worker representation on boards and enduring restrictions on dividends, stock buybacks and CEO bonuses. When relevant and possible, governments should use conditionalities to advance longer-term, ambitious, green and social missions.

The recovery cannot just be a return back to the normal we were in before: it was that economic normal of finance-led and debt-led growth; of failing to correctly assign value to the key workers and essential delivery systems we rely on; of dramatic and growing inequality between ordinary people, and CEOs and other owners of capital; and, in many places, of austerity and public sector outsourcing leading to a decimated, under-invested public sector, which in itself was not able to make vital investments in public value.

Instead, the recovery needs to be a full-scale economic renewal, in which we harness the tools at the disposal of government from investment, to procurement, to challenge prizes to tilt the playing field in the direction of equitable, green and sustainable economic growth.

Cliff Taylor: Is there a risk that things will just go back to being done the way they were or does the crisis give an opportunity to restart in some areas? Does restarting in a new way require new national cultures new ways for the State and private sector to work and new national goals etc?

Mariana Mazzucato: The work I have been leading at the institute I founded and direct at University College London, the Institute for Innovation and Public Purpose, has long focused on the governments role in steering ambitious, long-term, cross-sectoral (and, in government, inter-departmental) approaches to societal challenges missions, which allow governments to actively shape markets, not just fix market failures.

We have worked with governments from Scotland to South Africa to craft mission-oriented innovation plans. Re-orienting the economy in a green, climate-friendly, and fair direction, should not just be a government mission for moral reasons. It is not even because this future world will give us all rich and poor a better way to live. It is because not doing so is a risk that is not worth taking.

Earlier this year, the news media were full of frightening images of overwhelmed firefighters, not overwhelmed health-care providers: we thought this would be the story of 2020.

The climate crisis still is the story of 2020 and the coming century; Covid-19 is a product of environmental degradation, and we see new climate-linked crises on the horizon cyclone Amphan is currently breaking in India and Bangladesh in the middle of the pandemic, and weather events like this are becoming more intense due to the climate emergency.

The Covid-19 pandemic is a wake-up call that we can no longer afford to encroach on and degrade our environment in the way that we have been doing.

Large long-term investors are already radically changing their definitions of risk; and definitions of ESG environmental, social and governance investment metrics are the vital discussions ongoing in these industries.

At the same time as the pandemic poses a risk to heavily-hit industries, and in itself flags up the materiality of environmental risk, the oil market is crashing, and stranded assets are becoming very short-term realities for investors. We need to understand that we live not just in an age of risk, but one of uncertainty, and plan accordingly for a renewal of business and the state not moving back to business as usual or to government as usual.

Cliff Taylor: Where will the money come from to pay for recovery and rebuilding? Does a bigger State mean more taxes?

Mariana Mazzucato: Money is a social technology and not an inherently scarce resource as the public has been led to believe. The inability to handle our common monetary technology to recover forcefully from the Great Financial Crisis is emblematic of our inability to use technological advancement to deliver a vigorous green transition.

The wealth of our nations comes from our ability to activate our resources to solve our problems and improve the way we use them through innovation and more mutualistic relationships between the public and private sector. Money is a crucial instrument to mobilise our common potential.

We should therefore meet the Covid -19 challenge with an upgrade of state investment banks and a general fiscal commitment to do whatever it takes and make sure to steer the spending via missions to solve our challenges rather than restore the status quo.

Restoring the unsustainable status quo is a major threat at the moment. Obviously, the euro zone faces its own financial challenges, as fiscal and monetary policy have been split apart only to be partly re-integrated via the quantitative easing policies by the European Central Bank. There is a need for additional institutional ingenuity to bring the euro zone up to fiscal speed of other developed economies.

When Roosevelt launched his sweeping New Deal programmes, he did not wait to find the money. The core point of macroeconomics is that spending equals income - and indeed creates the income. When the private sector is not spending, governments must do the spending or lower taxes to stimulate the spending.

Do not force taxes to come first, as it may be a futile task. Instead of asking where the money is going to come from, we should ask where are the physical and intellectual resources going to come from?

We urgently need a recovery that is transformational of the economic structures that constrain our decision-making in normal times. Why should I buy an electric vehicle if I cannot be sure to find a rapid charging station? Why should I buy an electric vehicle if I have to charge it with coal- or gas-based electricity?

Such a transformation is not a cost but an investment in a future of resilience, sustainability and better resource efficiency. This is long overdue, but the current disruption is an opportunity to break out of the path-dependency that has so far mired us in incrementalism. .

Mariana Mazzucato, is Professor in the Economics of Innovation and Public Value at University College London (UCL). She is also the Founding Director of the UCL Institute for Innovation and Public Purpose. She is author of The Entrepreneurial State: debunking public vs. private sector myths (2013) and The Value of Everything: making and taking in the global economy (2018)

More:

The recovery needs to be a full-scale economic renewal - The Irish Times

The pandemic is very quickly teaching us whats important: health, love, food, a safe and comfortable home, creativity and learning, connectedness, and being able to get out into nature. Shouldnt those things be the pillars around which our societies are organised? The virus has also shown how it is possible to make drastic changes in an incredibly short space of time. Now we need to transform the structures of our societies so that changes whichput the brakes on climate disasterdont bring recessions, unemployment and poverty, but health, nourishment, time with our loved ones, safe and comfortable homes, opportunities to learn and be creative, and to be in nature.

This is not a pipe dream. Our interlinked economic, political and environmental crises are just as much crises of the imagination. Often when I suggest that we can do better than the status quo, the response I get is yes things are really bad, but whats the alternative communist Russia? We have been convinced that as a species we are incapable of creating good societies. But the idea that humans by our nature are selfish and greedy, that we have insatiable needs, is a lie. Our needs arefinite, satiable and unsubstitutable. The virus has taught us that. When given the opportunity, we want tohelp each other and contributeto the good of our communities.The virus has taught us that also.

We need transformation not just in our economies but across the whole of our societies from the economy and our politics, to our family structures and media and communications systems as all these social spheres are interlinked and all are fundamental to our well-being. And while were at it, we should think about the question of scale how are we all connected in this world and on what scale should we be thinking about new ways of organising these systems?

Not only can think along the lines of multiple social spheres but also multiple timescales at least two. We know that we have less than ten years to makeunprecedentedchanges to the ways our societies are run if we are to halt the climate catastrophe we are already in. But we dont have to limit our imaginations to the next ten years. The changes put in place over the coming decade as epic as they will be in themselves might be just a jumping off point for something even more marvelous. Its not that we have to have a blueprint for what this future will look like, its about well and truly breaking the chains of TINA (There Is No Alternative) andcapitalist realism, and opening up our imaginations to other, better, possible worlds.

So, what might these good societies look like, and how can we get there?

We are heading for thebiggest global economic crisissince the Great Depression, bigger than after the financial crash in 2008.Half a billion peoplecould fall into poverty. What kind of a daft system means that if we put the brakes on and calm down for a few weeks the whole thing implodes? Sadly, this is the exact same dynamic that has brought on our existential climate and environmental crisis. At the same time,big pharmaand others are set to profit from the death and suffering being caused by the coronavirus, just as the fossil fuel industry, airline industry, and finance sector have profited from environmental breakdown.

Transformative change over the next ten years has to be aboutGreen New Dealsthat will create millions of high paying public sector jobs insulating homes, building renewable technology and constructing green and affordable public transit. How will this be paid for? Taxes, for a start including wealth taxes. At the moment, taken as a whole, our tax systemsareregressive, with less well off people paying a higher proportion of their income than the rich. This needs to be reversed. And of course, the trillions lost to tax havens need to be recovered and corporate tax abuse prevented in the future, partly through aunitary tax on multinationals.

A rethink of work is also central to building good societies. Just as the virus has made it painfully clear who key workers are, it has also shown that much of the work we do is not particularly necessary or enjoyable we do it purely to get money to survive. This wasteful work is not just socially useless but isactually destructive, both to our wellbeing and to our natural environment. We need to be able to get rid ofbullshit jobswithout millions falling into poverty.Universal basic incomessitting alongsideuniversal basic servicesandshortening the working weekare good starting points.

Perhaps most importantly, we need topivot wildly away from GDP growthtowards more care-based economies. This means reducing consumption and waste for the better off, and being a lot smarter about what and how much we produce globally. We can be much more efficient in our resource use by using thedecentralised planning toolsalready used bymultinational corporations. For most of those who will need to reduce consumption, this is unlikely to be much of a sacrifice. The drive to constantly accumulate profits means that pointless trash is pushed onto us through advertising, and obsolescence is built-in to the products that we do really want or need. Building things to last and having social spaces where it isnt compulsory to consume would make our lives better.

The key principle in all this is removing profit from a significant portion of economic activity, and bringing democracy in. It isnt economic growth that drives environmental destruction and inequality. It is the driver that lies behind economic growth: capital accumulation and the profit motive. This does mean, then, transitioning away from capitalism to postcapitalist societies.

The return ofpublic ownershipneeds to be high on the agenda, but in a more democratic, decentralised way than we have seen before. In particular,the foundational economyshould be brought into democratic control. We know what is foundational because the virus has shown us healthcare, food, water, energy, education, housing, care. Our good societies will also be freed from the tyranny of private finance through public and mutual bankingas well asbanning most speculationandclosing tax havens.Money creation too, can come into public and democratic control.

But this doesnt mean replacing capitalism with state socialism. To begin with, we can think about whatHilary Wainwright callsdiversified ecologies of ownership, where co-operatives and community owned enterprises sit beside publicly owned initiatives. The example she gives is a combination of local energy co-operatives and regional public energy companies in the framework of a cap on energy prices and a publicly owned national grid all based on renewable energy.

Later down the line we can further reduce the role of the state, or, hell, why not think about removing the state entirely? The founder of social ecology,Murray Bookchin, wrote that the state institutionalised hierarchy, and with capitalism, state domination and bureaucracy reached into every corner of society. While we may think of capitalism more as the absence of the state in favour of the market, in reality, the domination of the market is impossible without a domineering state to impose it.

Bookchins vision for a good society is for a sort of confederalism where small-scale communities manage their own provisioning systems, working in partnership with other communities where necessary. Resources, or what he calls the means of life arent owned by anyone, they form a commons based on the principle of usufruct everyone is free to use them as long as they do not damage or deplete them. The principle of the irreducible minimum means that everybody is entitled to the means of life no matter what they contribute an even more generous maxim thanMarx famousfrom each according to his [sic] ability to each according to his needs!

Versions of eco-feminism have similar ideas, of eco-sufficiency or the subsistence perspective, in which communities are autonomous and relatively self-sufficient. This doesnt have to mean going back to the stone age, though we might want to tone down calls for full automation. Technology will have an important role to play, but the principle has to be that the technologies we develop will enhance rather than harm our relationship with nature. What is certain is that technology wont save us while the current drivers of the economy capital accumulation and the profit motive remain in place.

This brings us to the question of scale. One of the most important lessons this virus has taught is that we are all connected. It has reached almost every corner of the world and attacks the body in the same way. Countries are having towork togetherto pool resources and develop a vaccine, although there is also the reality of intensifiedtrade warsandcompetition.

But the impacts of the crisis are far from egalitarian. The same economic process that allowed the virus to spread so far so quickly neoliberal globalisation also createsgrotesque wealth for some and hardship for many;maldevelopmentin some parts of the world and underdevelopment in others. Why should our life chances be so far determined by the accident of where we are born? Why would we want to live in societies that benefit some people in some placesat the expenseof other people in other places? The good societies that we build now, during the great pause, need to work for everyone in the world.

Theres a tension when were thinking about scale when formulating alternatives, should we be thinking global or local? The universal or particular? Our current capitalist economy is certainly global there probably isnt a person in the world whose life isnt integrated into it somehow, though in different ways in different places. So it makes sense to start there.

This means that Green New Deals need to beGlobal Green New Deals, not ones based on extractivism andgreencolonialism. Similarly, if were thinking about living wages, why shouldnt they be global living wages? Since capital is transnational, maybeunions should be transnational. Wealth taxes should beglobal wealth taxes. We also need to thinkabout reparationsand far-reaching technology transfers.Open borderscould help focus minds on global justice, eradicate hostile environments and eliminate the detention centres and refugee camps that the virus has revealed to be houses of horror.

Crucially, structural adjustment programmes and the Washington Consensusneed to be replaced though preferably not by Chinasimply replacingthe US as the global hegemon. Yanis Varoufakis and his colleagues propose a new global economic architecture whereby, to keep the world economy in balance, national surpluses and deficits would both be taxed, with the funds raised being channeled into a Global Green New Deal. They also want to changeproperty rights, so that 10% of the shares of large companies are placed into a global equity fund and the dividends disbursed as a global universal basic dividend. Over time this percentage could increase until we end up with a kind of world-wide market-based socialism.

An alternative vision is fordeglobalisation. Instead of entire countries being turned into massive export processing zones, Walden Bellos deglobalisation paradigm advocates production primarily for local markets. Trade and industrial policy including subsidies, quotas and tariffs would be used to protect local markets from flooding by corporate-subsidized commodities and strengthen manufacturing sectors. Measures for land and income redistribution would be taken, helping to create vibrant local markets and local sources of financial investment. Meanwhile, the multilateral bodies like the WTO, World Bank and IMF that have been vehicles for neo-imperialism would be replaced by regional institutions built on cooperation instead of free trade and capital mobility.

Another world is possible was the slogan of the anti-globalisation movement | Image: democraciaglobal

Some are squeamish about the idea of deglobalisation, worrying that it means nationalist isolationism and indeed, that is what the term has come to stand for in its nativist iteration (though this is wildly different from what Bello has in mind). More fundamentally, there is a question mark over whether a system of nation-states competing within the framework of global capitalism no matter how attenuated that version of capitalism might be can ever really transcend economic imperialism and trade wars (or actual wars for that matter).

Yet shortening supply chains, at least for essential items like food, seems like a no brainer from an environmental as well as a global justice perspective. Lets carry on our thought experiment of imagining a future beyond the nation-state: instead of states competing for resources on a lopsided playing field, we can envision the stewardship of commons by local communities that are relatively self-sufficient but networked transnationally. There would be no need to squabble over resources because instead of a logic of scarcity there would be a logic of abundance. This doesnt mean that everyone in the world would suddenly be able to fly every week or own a Ferrari we are living within planetary boundaries here. Murray Bookchin wrote that real abundance is not about being able to satisfy an infinite parade of desires, but having the collective autonomy tochoose our needs(i.e. decide whats important), and work out how to satisfy them together therein lies true freedom.

The response to Covid-19 has put us at risk fromencroaching authoritarianismand has further exposed the lack of trust people already had in their political systems. In liberal democracies, the decades of neoliberalism havehollowed outdemocratic institutions, as power has been transferred to transnational corporations. Politics has become about marketing and spin, and citizens are treated as consumers.

Meanwhile,spreading democracyhas been a cover for the invasion and occupation of territories that were supposed to be sovereign byimperial powers. Marxists, anarchists and feminists have long asked whether capitalism is compatible with democracy at all. The gap between what liberal democracy promises in theory and what it has delivered has led to many people punting on illiberal democracy instead, withanti-democraticleadersbeingdemocratically elected.

If we are going to put the brakes on the ecological and social catastrophes under way, we will need to democratise democracy. Its not for nothing that one of Extinction Rebellions key demands is for citizens assemblies. The rapid transformations we will need to our social structures will have to be decided upon collectively, if we are to avoid eco-authoritarianism or eco-fascism.Peoples assemblies, town halls, participatory budgeting,citizens juries, and properly resourced, empowered local governments will be key.

Democratising democracy obviously meanstaking big money out of politics, but it also means removing the line that separates politics from the economy. In liberal democracies, huge swathes of society are out of reach of the decision-making powers of the citizenry. That will need to change. As discussed, we will need workplace and economic democracy, where fundamental decisions about provisioning are made by everyone, not just ruling elites.

The question of scale arises again here. Democracy isnt really democratic if the resources people are enjoying in one part of the world are actually being pilfered from other parts of the world, or if they are producing environmental impacts felt elsewhere. One proposal to ameliorate this is to introduce democracy on a global scale through aworld parliament, where every citizen in the world would be able to directly elect representatives.

Others have criticised the idea of a world parliament asuniversalising a singleversion of politics and imposing it onto the entire globe, thereby reproducing the colonising drive it is supposed to combat. They prefer the idea of unity in diversity in the Zapatistas words: one world where many worlds fit. In this vision, the issue of scale would be addressed horizontally rather than vertically with autonomous communities working together to solve large-scale problems.

Citizens assemblies and town halls are about supplementing representative democracy with more direct forms of democracy. Down the line, we could take this much further. The horizontal, confederalist approach described above has direct democracy at its core. Direct democracies already exist ChiapasandRojavaare famous examples, and there are many impulses towards what Ashish Kothari calls Radical Ecology Democracy. Here, the commune or neighbourhood is the basic political unit, with people meeting face to face to make the decisions that affect their lives. For larger-scale issues, there are representative local assemblies and municipal councils, but these are accountable to the grassroots level.

The Democratic Confederalist project in Rojava is in peril after the Turkish incursion into the region of northeastern Syria in 2019. | Source: The New Inquiry

These movements reject the nation-state as the locus of sovereignty, viewing the state as inextricably bound up with environmental destruction, repression and patriarchy. Radical Ecology Democracy instead advocates local custodianship of the commons combined with bio- and eco-regionalism. Crucially, to avoid repeating the patriarchy of the state, these direct democracies must be and are explicitly feminist,enshrining gender equalityin their constitutions and instituting women-led committees on womens rights. And again, thinking about local communities as the locus of sovereignty doesnt have to mean parochialism and isolation. On the contrary, going beyond the nation-state can mean removing borders to the free flow of people and ideas.

Globally,women carry out 76% of unpaid labour mainly domestic and care work, which takes place inside the home. The family home can also be a dangerous and even deadly place for queer people and women, asone in three womensuffer violence, usually by an intimate partner. The pandemic hasintensified these problemsand brought them further into the light. Given the reaction toan article we publishedon ourEconomy on the coronavirus and the family, challenging this most fundamental of institutions can make people, erm, emotional. If youre lucky, the family is also the source of deep bonds of love the stuff that makes life worth living, another thing that the virus has driven home.

But, as the authors ofFeminism for the 99% point out, the unique feat of capitalism was to separate the public from the private, delegate the private to women and banish it to the home. Without the unpaid and invisible domestic, care and emotional work of women, the capitalist economy would not be able to run. Because it is women who carry out most of this reproductive labour, it is also women who are on the front line of environmental breakdown; as they are the main providers of food and fuel, they are worse impacted by flooding and drought.The U.N. estimates80% of those who have been displaced by climate change are women.

Under neoliberalism, women are being more and more squeezed, making up an increasing proportion of the paid workforce as well as doing the vast majority of unpaid work. This has led to the erection of vastglobal care chains, as women who can afford to outsource their unpaid work to less well off women, often from the global south, who have their own families to care for. These gendered and racialised structures need to be transformed.

At the very least, this has to mean free daycare available to all (paid for by highly progressive taxation), and paid parental leave that parents have the option to split equally. It also means closing gender pay gaps so it doesnt become the default option that the man keeps working while the woman takes maternity leave (for those lucky enough to be in that situation). Shortening the working week with no loss of pay can mean people of all genders have more time to take care of their reproductive labour. Universal basic incomes and a higher social wage (better public services) can provide recognition, support and some form of remuneration for reproductive labour. Again, we should be thinking about these rights and conditions on the global scale, as well as open borders that will help equalise pay globally, so people are not having to do other peoples reproductive work.

But we can go bigger than this, with a more comprehensive socialisation of reproductive labour. Thinkcommunity kitchensand community child-raising. Collective housing andcommunal livingfor those who want it. One other thing Covid made painfully clear in my privileged circle when the news came that schools and daycare centres were about to close, my women friends who were going to have to look after their own kids for an indefinite period of time entered a state of dread. Sophie Lewiss call for Full Surrogacy Now! is a call to stop theprivatisation of the family and child-raising, so that all children have multiple strong bonds with adults and other children and can feel safe and loved both in their homes and in their wider surroundings.

Aspirin commerical from 1937. Women still do the vast majority of unpaid domestic, care and emotional work. | Photo: genibee, CC by 2.0

And its not just about the young. Care and residential homes have become spaces of terror, showing quite how inhumane they were to begin with. This is not to blame those working there, who are often on minimum wage, overworked and under-supported. But instead of outsourcing care, wouldnt we prefer to be cared for in our extended families of choosing by those we love and who love us?

At the moment, one kind of family formatis privileged think tax breaks and citizenship rights for married couples. Why should there be one way of having a family that is sanctioned by the state while those in other kinds of relationships are excluded from those benefits? That sounds like the nanny state to me. The point is not to impose one family structure on everyone but to create societies that are flexible enough to accommodate a wide variety of different family forms and kinship structures, supported by economic and political structures that allow these bonds to flourish.

The virus has made it clear how important it is both to be able to connect with others and access knowledge and information. At the same time, the viral spreading of misinformation, and the misuse of data by corporations and governments bent onmass surveillanceshows how deep the crisis of our media and communications systems runs.

We know the dangers involved with huge corporations sucking up data on the most intimate aspects of our lives how they collaborate with governments to enable wholesale spying, crackdowns on democratic freedoms, and dystopianpredictive policingandfacial recognitionpractices; how voters aremanipulated during elections; howdiscrimination is built into algorithms; how the data-based business modelencouragesfake news, polarisation and hate; and how these companies resolutely dodge tax.

The data frenzy is also wreaking havoc on the environment a 2015 report found that data centres areresponsible for about 2 percent of global greenhouse gas emissions, putting them on par with the aviation industry. And its exacerbating global inequality. It is China and the US who are set toreap the biggest rewardsfrom AI, while Africa and Latin America will see the lowest gains. It is unlikely that the profits accrued to multinationals based in the US or China from data mined in lower-income countries will trickle down to those supplying that data. The concept ofcultural imperialismhas been around for decades. Now we can also speak of data imperialism. Again, it is the profit motive thats at the bottom of all this.

And again, democratisation is at the heart of the solution. When it comes to data, Anita Gurumurthy proposes a newdata constitutionalism, where through a collective process we decide what data should be collected and what should not, and how that data is used, culminating in an international covenant on data rights. The advertising industry has too often avoided scrutiny in discussions about data and surveillance. After all, the main reason these companies gobble up our data is to sell advertising back to us. We also need a public conversation about how much advertising we want in our media and communications systems and alternative ways of funding these systems. Which also means a conversation about ownership.

Instead of trying to regulate and tax the social media behemoths, some are calling tonationalise them. (Or could we think about internationalising them?) Better still, we can create public alternatives. In the UK, the BBC isunder threatfrom the Conservative government. There are serious problems with the BBC but the solution is not to abolish or impoverish it. One proposal is to create aBritish Digital Corporationinstead, which would include socially useful platforms that are subject to democratic control. It would form part of a diversified media ecosystem, sitting alongsidemedia collectivesthat are supported by public funds,paid for through progressive taxes. There are valid concerns here about governments having too much control both over information and our data. However, with proper structures in place this risk can be reduced, making such enterprises recipients of public money but run independently.

And in the long run, can we think about our media and communications systems beyond both the market and the state? If a kind of democratic confederalism and commons-based approach would be desirable for our economies and politics, could this also work for media and communications?Data commonsalready exist, which enable members to pool their data, anonymously, for social benefit. This philosophy could be extended to other parts of our media.The P2P and open sourcemovements help point the way to alternative ways of organising these systems so that they are not enclosures for profit-making but are autonomous, participatory and accessible to all.

At the same time, we can consider the benefits of unplugging, at least for many. The lockdown has exacerbated thedigital divide, showing just how essential connectivity has become. As with all other means of living well, connectivity needs to be shared better and its footprint on our environment greatly reduced. There are wonders to be found online that we all want access to. But lets face it, most of the stuff out there is just rubbish to make us spend time and money. Many of us would be happy to spend a bit less time glued to our screens, especially if we had the time, opportunity and energy to do other enjoyable things which we could if we reorganised our economies, politics and family setups.

Given where we are, it seems almost impossible that we will be able to create good societies, let alone within the next ten years. Yet this is exactly what we must do, if we are to prevent things quickly deteriorating into something even worse.

The even better news is that all the people who have joined mutual aid groups during the pandemic are now part of this tsunami of change.

Nobody said it was going to be easy. This will be one heck of a struggle because it means reversing the decades-longclass warthat has transferred wealth and power to the top, and those with vested interests in the way things are wont give up without a fight. But there are a lot more of us than there are of them, so its a fight we can win.

The good news is that there areliterally millionsof grassroots groups and organisations all over the world trying to change things, whether they are fighting for climate justice, economic rights, womens and trans rights, or global justice. The even better news is that all the people who have spontaneously initiated or joined mutual aid groups during the pandemic are now part of this tsunami of change. Reaching out to each other and keeping up momentum is a key challenge to all of us.

There are ongoing attempts to actively forge alliances across these struggles to create a movement of movements that builds capacity and momentum. Ideally, these movements would have allies in political parties representing their interests and winning elections. In this regard, recently we have had hopes and we have hopes dashed in different parts of the world. International alliances of fearless political parties created out of and pushed forwards bylinkedsocial movements is still something we can strive for.

Taking this idea further, there are fertile discussions taking place about the possibility of creating anew International.Sahan Karatasliargues for not one but two Internationals: a horizontal, fluid movement of movements and a vertical, structured world political party that would articulate the connections between all these movements, build unity out of their diversity, and represent the totality of their struggles. We return once more to the question of scale as well as structure the idea here would be to combine the locally rooted and horizontal with the global and vertical.

Many social movements arent waiting for the war to be won but are busy creating nowtopias in the present. From Rojava to Chiapas toFreetown Christiana, these places show that thereareviable alternatives, even in the most hostile of political conditions. Imagine what could be achieved given the right conditions? These might seem far removed from most people but its not difficult to find initiatives in every community, from local currencies to community gardens to communal kitchens. These projects are not only improving the lives of those who participate in them. They are strategically vital they build capacity and sow the seeds of future societies in the here and now.

Lastly, lets not forget about the power of ideas.Milton Friedmanfamously said that, during a crisis, the actions taken will depend on the ideas lying around. Since the last global crisis in 2008, a huge array of great ideas have been generated, forged in the heat of social struggles and by an ecosystem of new and established organisations. More work needs to be done to bring those think tanks and NGOs closer together to grassroots movements.

One of the aims of this essay has been to gather some of the ideas that are lying around and help fashion them into a vaguely coherent vision or multiple visions of the kinds of worlds we can and might want to live in. Its just a start and is part of a big conversation to which many are contributing. The coronavirus is taking our loved ones. It has shown us what is important and has shown us how short our societies fall of prioritising what is important. It has hit pause on our lives (at least, those of us who are able to pause).

Lets use this time to open our imaginations to what is possible, and start building better worlds.

Teaser photo credit: Photo: Antonio Marn Segovia, CC by 2.0

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How to Fix the World - Resilience

As part of the stimulus package to revive the economy, the Union government has announced a slew of measures to boost production and reduce imports of coal. It has liberalised the sector, curtailed the monopoly of Coal India Limited (CIL), and has announced an investment of Rs 50,000 crore for coal transportation infrastructure. All this has been done to double coal production in the next four years from 730 million tonnes in 2019-20 to 1.5 billion tonnes in 2023-24. The question is: Can India afford such a massive increase in coal consumption?

Till three years back, coal was the cheapest source of electricity. Then in May 2017, the solar power tariff nosedived to Rs 2.62/kWh 20% lower than the coal based power tariff of NTPC and changed the energy market forever. Since then the coal power prices have kept increasing because of the increase in coal mining and transportation costs, while the costs of renewable and energy storage systems have continued reducing on the back of global and local innovations.

Just three weeks back, the Solar Energy Corporation of India awarded a project to ReNew Power to supply 400 MW of renewable energy, round the clock, at a tariff of Rs 2.90/kWh. Very few, if any, new coal power plants can compete with this tariff. In fact, the business case to install a new coal power plant is fast vanishing with such steep reduction in the prices of renewables with storage.

The business case entirely erodes if one includes health and environmental costs. Coal is the single largest source of air pollution and CO2 emissions in India. About half of all the CO2 emissions come from burning coal, and coal power plants account for 60% of particulate and 50% of sulphur dioxide emissions of the entire industrial sector. Deaths and diseases due to air pollution cost India a GDP loss of more than 5% and coal-related pollution constitutes a significant proportion of this. If we add carbon price and pollution cost to coal, then we should be shutting down even the existing power plants.

The private sector understands these risks and has practically stopped investing in coal power. According to a report published jointly by Global Energy Monitor, Sierra Club and others, a staggering 47,400 MW worth of coal power projects, mainly of the private sector, was scrapped in India in 2019. The private sector, instead, is now investing in renewable energy. In 2019, more than two-thirds of all the new power plants constructed in India were based on renewables, with the bulk of investments coming from the private sector and FDIs. The question, therefore, is why in the face of an overwhelming case against coal, the government is still promoting it?

The reason seems to be twofold: One, coal is viewed as the foundation of energy security and self-reliance (Atmanirbhar Bharat); and two, it is considered as a shovel-ready venture to revive the economy in parts of central and eastern India (about 25 districts) that are primarily dependent on coal for growth and employment. While these reasons can be justified as short-term expediency, they would become a liability very soon.

We need to understand that the investments made today will lock our economy to expensive coal for the next 20-30 years. This will limit our scope of innovation and reduce the pace of transition to clean and cheap renewable energy. We will, therefore, be paying a high cost of energy even when much more affordable options would be available. Can India, which already has one of the highest costs of energy in the world, afford this?

As far as coal mining areas are concerned, they have been suffering from resource curse for decades. Most coal districts are polluted and poor with some of the worst human development indicators.

More coal mining will perpetuate the status quo. The need, therefore, is of economic diversification and a just transition plan for these districts to reduce their dependence on coal.

If Covid-19 pandemic has taught us anything, it is that our current economic system is akin to sawing-off the branch on which we are sitting. By investing in coal, we will exacerbate climate change, increase air pollution and make energy more expensive in the future. We need an Atmanirbhar Bharat, but atmanirbharta (self-reliance) must also be affordable and sustainable.

DISCLAIMER : Views expressed above are the author's own.

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India is too poor to afford coal as a primary source of energy in the near future and that is aside from e - Economic Times

The world's oceans are now facing a multidimensional crisis, of which human-made climate change, overfishing, plastic pollution and ocean acidification are all factors. There is an urgent need to step up our efforts to protect the marine environment by averting this crisis. This is a matter of national security.

The protection of the marine environment is an urgent issue for Japan as well, an island nation surrounded by the sea, but its policies are fragmented and insufficient, and lag behind those of many other developed countries.

We need to fundamentally change the structure of policy-making and to strengthen efforts to achieve a sustainable marine environment, as well as making a positive contribution to the international community.

As a maritime nation, as a large consumer of marine products, and also as a country that is heavily dependent on marine ecosystem services, it is Japan's international responsibility.

Last year, the Intergovernmental Panel on Climate Change (IPCC) compiled a Special Report on the Oceans and Cryosphere in a Changing Climate, which showed us a clear picture of the ocean's current state and grim future.

The oceans contribute to climate stability by absorbing 90% of the excess heat stored in the global climate system thanks to the use of fossil fuels. As a result, however, sea surface temperatures continue to rise and abnormally high water temperatures persist for long periods of time, sometimes for more than a year, resulting in 'ocean heat waves'.

The ocean has absorbed 20%-30% of the CO2 generated by human activities since the 1980s. The result is ocean acidification. There are concerns that this increased acidity of seawater will have significant negative effects on many organisms important in the marine food chain, including plankton and crustaceans with calcium carbonate shells, as well as shellfish and sea urchins.

Rising sea surface temperatures are also intensifying stratification between surface and sub-medium seawater, leading to the spread of ocean regions around the world in which oxygen concentrations are very low and life is difficult to sustain.

As the oceans have absorbed more CO2 (green), they are growing more acidic (blue)

Image: NOAA

We must understand that human activity has altered the temperature, acidity, and distribution of oxygen in the world's 1.4 billion cubic kilometres of ocean.

The crisis goes beyond that, however. Overfishing is becoming a serious problem, and if the current trend continues, combined with the climate crisis, it will have a major negative impact on the food security of many countries. Illegal, unreported and unregulated (IUU) fishing, ignoring international regulations and agreements, is rampant in the world's fisheries, According to the Food and Agriculture Organization of the United Nations (FAO), IUU accounts for an annual landing of 26 million tonnes of fish, 30% of the total annual catch worth up to $23 billion in value. This has become a huge burden for poor fishermen mostly in developing countries.

While there is an urgent need to step up efforts to prevent a multidimensional ocean crisis, international efforts to-date have been insufficient when measured against the magnitude of the problem.

Last year, the 25th Conference of the Parties (COP25) to the United Nations Framework Convention on Climate Change (UNFCCC) in Spain was positioned as a 'Blue COP' at the request of the Government of Chile, the presiding country, which put the relationship between the oceans and climate change at the top of the agenda. However, it is far from the case that marine environmental conservation was properly addressed.

Negotiations on an international agreement for the conservation and sustainable use of 'marine biodiversity in areas beyond national jurisdiction' (BBNJ) under the United Nations Convention on the Law of the Sea are now coming to a close, but the interests of each country are complex and there is no prospect of a positive conclusion anytime soon. Negotiations have been postponed in the wake of the new coronavirus epidemic.

A number of Regional Fisheries Management Organizations (RFMOs) have been established to oversee sustainable management of endangered fish stocks like bluefin tuna. Although some have contributed to the recovery of resources, others have performed disappointingly. Efforts to protect marine biodiversity and endangered species under environmental treaties, such as the Washington Convention and the Convention on Biological Diversity, are also very limited.

Although marine plastic contamination has attracted a lot of attention in recent years, it is very sad to see that there is no international framework for promoting measures to reduce ocean plastic pollution. The Blue Ocean Vision, which Japan spearheaded at the G20 meeting in Osaka in 2019, offers very little in the way of concrete measures to reduce plastic waste.

Using the discussions at the BBNJ as a starting point, it will be necessary for the international community to establish a forum for comprehensive discussion and decision-making systems on the conservation and sustainable use of the marine environment. It must cover everything from the climate crisis, biodiversity and fishery resource management to plastic waste, by promoting the participation of multiple stakeholders, including industry and civil society.

This is a major challenge for Japan as well. While recognizing itself as a maritime nation, it cannot be said that the Japanese government has played an active role in international efforts to protect the marine environment. Japan has always taken an opposing stance on the protection of endangered marine life under the Washington Convention, and even after the decision is made, has filed a 'reservation' indicatingit will not accept international regulations for many marine species. Japan's Fisheries Agency, which participates in the RFMO meetings, has based its actions on its position as the representative of domestic fishermen and has always backed away from strong regulations; those participating in the BBNJ negotiations are not high-level persons, and politicians have shown virtually no interest. Here, too, the Japanese government has remained reluctant to establish marine protected areas on the high seas.

Our oceans cover 70% of the worlds surface and account for 80% of the planets biodiversity. We can't have a healthy future without healthy oceans - but they're more vulnerable than ever because of climate change and pollution.

Tackling the grave threats to our oceans means working with leaders across sectors, from business to government to academia.

The World Economic Forum, in collaboration with the World Resources Institute, convenes the Friends of Ocean Action, a coalition of leaders working together to protect the seas. From a programme with the Indonesian government to cut plastic waste entering the sea to a global plan to track illegal fishing, the Friends are pushing for new solutions.

Climate change is an inextricable part of the threat to our oceans, with rising temperatures and acidification disrupting fragile ecosystems. The Forum runs a number of initiatives to support the shift to a low-carbon economy, including hosting the Alliance of CEO Climate Leaders, who have cut emissions in their companies by 9%.

Is your organisation interested in working with the World Economic Forum? Find out more here.

At the UN General Assembly in December 2017, the UN decided to designate 2021-30 as the UN Decade of Marine Science for Sustainable Development to strengthen scientific input for the sustainable use of the oceans. Many Japanese marine scientists have been involved in the resolution and are expected to contribute in the future. A number of research institutions in Japan have advanced ocean research tools, as well as long-term observation data about climate change, acidification and so on. Some policy recommendations have been made by scientists, but unfortunately, these have not been accepted by policy-makers. On the contrary, marine research funding is in a sharp decline.

In order to continue contributing to increasingly important international research and policy formulation, the Government of Japan, together with other like-minded countries, must promote science-based policy development as well as increased investment in scientific research.

And most importantly, Japanese citizens should have an understanding and clear view of the worsening marine environmental, should raise their awareness, and also raise their voices to demand stronger actions.

License and Republishing

World Economic Forum articles may be republished in accordance with our Terms of Use.

Written by

Tetsuji Ida, Senior Staff Writer and Editorial Writer, Kyodo News

The views expressed in this article are those of the author alone and not the World Economic Forum.

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The world must pull together to stem the crises in our oceans - World Economic Forum

Guy on Rocks is aStockheadseries looking at the significant happenings of the resources market each week.

Former geologist and experienced stockbroker Guy Le Page, director and responsible executive at Perth-based financial services provider RM Corporate Finance, shares his high conviction views on the market and his hot stocks to watch.

It looks as if investors are feeling more comfortable to return to riskier stocks, particularly in the resources space.

According to Bloomberg data, miners and explorers raised nearly $2.1bn alone in May.

Weve had a general increase in sentiment with a belief in the economic recovery after the virus, so weve had a flow of funds back into the resources sector broadly and I suppose its risk-on again, Guy Le Page told Stockhead.

We continue to see some of the stocks weve mentioned like ABR (American Pacific Borates) make some very strong moves up over 70c, from the high 20s when we talked about it [in April].

Le Page said Chinas retaliatory tactics in response to Australias calls for a COVID-19 inquiry had, and would continue to have, little impact on the demand for iron ore.

Interestingly, despite the noise that China has been making about tariffs on iron ore, Australian iron ore imports are just over 63 per cent of total Chinese imports, so I think thats a game of brinkmanship that one, he said.

I think as long as Brazil, in particular Vale, is struggling with iron ore exports and that 100-million-tonne decline in shipments annualised, I think its going to be hard for China to muscle Australia to any significant level.

Another thing working in Australias favour is the fact that Brazil is still battling to get on top of the COVID-19 pandemic.

Certainly in Brazil the virus is far from under control and I think thats going to have a continued impact on global supply, Le Page said.

He expects the impact of the pandemic to flow through to copper and nickel stocks also.

Thats contributing to some fairly wild fluctuations in forecasts for in particular supply for the likes of copper and nickel, Le Page noted.

Interestingly copper has had a 14 per cent gain in imports into China year-on-year. On the other hand, nickel looks like it is in oversupply according to the consensus economics.

Based on the review of forecasts we did last week, it will be interesting to see how prices actually respond with this anticipated improvement in the economy.

Le Page ran his ruler over some nickel stocks this week, saying its not easy to find good nickel sulphide plays right now.

Aside from Rox (ASX:RXL), St George (ASX:SGQ), Poseidon (ASX:POS), Duketon (ASX:DKM), Cassini (ASX:CZI) and Mincor (ASX:MCR), theres not that many active nickel sulphide explorers, Le Page said.

One that has come onto Le Pages radar is Auroch Minerals (ASX:AOU).

The junior, which has a market cap of just $10m, is exploring for nickel 65km northwest of Kalgoorlie at the Saints project and just south of Leinster at the Leinster project.

Le Page says the Leinster region is host to some world-class deposits such as BHPs (ASX:BHP)Yakabindie nickel mine and Western Areas (ASX:WSA) Cosmos nickel operation.

Whats interesting about that is that the Norseman-Wiluna Belt has obviously got a fantastic track record, but Auroch has a resource of about 1 million tonnes at 2 per cent.So its pretty high grade. Its just over 20,000 tonnes of contained nickel, he said.

Auroch recently booked some pretty impressive intersections like 31m at 1.66 per cent nickel, and it has done further drilling and down hole electromagnetics.

Theres some pretty prospective ground along that belt and the mineralisation looks like its open along strike and down dip, Le Page says.

I think thats going to get pretty interesting. Im reasonably optimistic they are going to hit some high-grade nickel sulphide.

Another stock to watch that Le Page briefly mentioned, and plans to elaborate more on next week, is Ansila Energy (ASX:ANA).

It started off with some unconventional gas in Poland. That didnt work out, so we saw the share price retreat from almost 6c back to 0.8-0.9c. Its just poked its head up above 1.5c, Le Page explained.

Theyre putting a bid in for the Hartshead gas project in the North Sea. So that asset could have a very significant valuation of well over $50m.

That is definitely one to put on the watch list.

At RM Corporate Finance, Guy Le Page is involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles.

He was head of research at Morgan Stockbroking Limited (Perth) prior to joining Tolhurst Noall as a Corporate Advisor in July 1998. Prior to entering the stockbroking industry, he spent 10 years as an exploration and mining geologist in Australia, Canada and the United States.

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Guy on Rocks: Investors flip the switch to risk-on, resources sees the money roll in - Stockhead

Debapriya Bhattacharya | Published: May 28, 2020 21:56:58 | Updated: May 28, 2020 22:04:59

As announcement of the national budget for the fiscal year 2020-21 (FY21) draws close, my transcendental thought process goes haywire trying to figure out how this document is going to square the circle!

Our childhood learning of Euclidian geometry reminds us that the Greek geometers in the 4th century BC developed three-dimensional thinking. One of the problems that Hippocrates of Chios posed was, "can you construct a square having the same area as a given circle" with a finite number of steps and with only two instruments? Since then, this proposition has often been used as a metaphor for trying to do the impossible. The great poet Dante compares squaring the circle to his own inability to comprehend Paradise. However, subsequent advancement of mathematics, fueled among others by the illustrious Srinivasa Ramanujan, did find an approach to it through derivation of a "Golden Ratio." More on this later.

It is a severe understatement when one says that formulating the Bangladesh's budget for the next one year-while the stressed economy is reeling under growing, yet uncertain, devastating impact of the Covid-19 (C19) pandemic-will be a "challenging" exercise. For me, it is the closest to the mentioned impossibility theorem!

To my mind, the upcoming budget will have to "circle a square," i.e. reverse of squaring a circle. Through a circular causation, it will have to link up at least four linear segments of the task at hand. Let me first lay out the "four angles" of the square that I have in my mind.

FIRST, HOW TO LINK SHORT-TERM PERSPECTIVES TO MID-TERM RECOVERY?: The government has decided to stick to the routine and go for the annual budget as a regular event. This may be interpreted as a political signal indicating that everything is under control, and no need to deviate from the "business as usual" practice. However, this is being done when there is no reliable projection regarding how the pandemic curve with all its consequences will play out in the coming weeks. This creates the problem of not having a dependable benchmark based on a robust assessment of the damages done to different parts of the economy and the different segments of the society by the still unfolding scourge. Thus, the year-closing projected readings of macroeconomic variables for the Budget21 will remain under suspicion.

It is well-recognised by now that for Bangladesh economy to recover and rebound from the debilitating impact of C19 will take a couple of years, to say the least. So, the mid-term macroeconomic framework for upcoming three years, which usually accompanies the annual budget, will be on extremely shaky grounds because of the above.

Moreover, under normal circumstances, the budget for FY21 would have been the first year of the Eighth Five Year Plan (8FYP, 2021-25) of the country. Arguably, the 8FYP now has to be fundamentally rearticulated in view of the damages done by the pandemic, which is yet to be estimated comprehensively. Thus, we are yet to have any clue regarding the preparedness of the 8FYP document to provide operative guidance to the upcoming national budget.

Finally, the country has aligned itself with the global agenda (2015-30) espousing the Sustainable Development Goals (SDGs) with the explicit commitment to "leave no one behind." It is obvious, the ongoing pandemic is hurting the traditionally left behind groups and communities in Bangladesh more than the others. One wonders, how the budget for FY21 will bond with SDGs priorities for Bangladesh during the United Nations' Decade of Action (2020-30).

In the absence of a realistic assessment of the impact of the pandemic, without a credible three-year macroeconomic framework and with an incomplete five-year planning exercise, the annual budget will be seriously handicapped in linking short-term emergency measures with mid-term rebound and recovery strategy, with an eye on those who are left behind. It is to be seen how the best of the intentions of the budget-framers take us beyond rhetoric in this regard.

SECOND, WHAT ARE THE GROWTH-EQUITY TRADE-OFFS TO BE MADE?: It is no secret that the economic growth story is bitingly embedded in the development narrative of Bangladesh. In the recent past, however, independent sources have raised issues regarding the serious lack of consistency between GDP growth figures and related performance indicators of the economy.

It has now been empirically established that, parallel to robust GDP growth over the last decade, economic inequalities have not only deepened, but have also accelerated. In fact, income inequality has grown faster than consumption inequality, and asset inequality has grown faster than income inequality. The rate of poverty reduction has also slowed down in the elapsed decade. Indeed, Bangladesh has the dubious distinction of being the country, where rich is being produced faster than anywhere else in the world. Concurrently we have been labelled as a country which is "least committed" to reducing the rich-poor gap.

The C19 pandemic is definitely going to accentuate the pre-existing structural disparities within the country, but also create new vulnerabilities for certain groups of people. For example, the lower segment of the middle class as well as a large part of those employed in the informal sectors are emerging in the country as the nouveau-pauvre.

In view of the above, Budget21 will be scrutinised against the extent to which it can overcome economic growth paranoia to give way to distributive fiscal policies. As is known, in developing economies like ours, fiscal policies are more potent than monetary policies; while within the former, public expenditures are more powerful than the taxation measures. Till date, the government has front-loaded its C19-related stimulus packages with monetary policy measures; the upcoming budget will provide the government an exclusive opportunity to undertake inclusive fiscal measures as well.

Currently, there is limited flexibility to reorder priorities within the revenue as well as the development budget components. At the margin, some additional funds may be allocated to certain sectors such as health and agriculture. Yet a number of innovative and redistributive fiscal measures could have been designed, such as allocation of the estimated savings, on account of fuel import at very low global price, to the health sector. In fact, the substantial subsidy kitty (more than Tk. 30,000 crore) has to be revisited taking note of the current priorities. It would be quite reasonable to expect that the huge subsidy given to the rental power plants, largely a patronage distribution, is to be redirected towards expanding the safety net programmes based on cash transfers to the newly unemployed.

Similarly, within the tax measures, with a view to increasing disposable income in the hands of the low-paid wage-earners, the minimum taxable income level needs to be enhanced from Tk. 2.5 lakh to Tk. 3.5 lakh, while the minimum personal income tax may be lowered to 5.0 per cent, with the highest rate being 15.0 percent (instead of 10.0 and 20.0 per cent, respectively). From revenue perspectives, there is little rationale for decreasing the corporate tax rates, particularly for the commercial schedule banks. One will observe with great vigilance that the pandemic-related adversities are not used as an excuse to provide discriminating and discretionary tax benefit to unearned and undeclared monies. Rather one would welcome radical measures to expand the tax base and plug the illegal financial outflows.

At the same time, due to the subsidence of the exports and remittance incomes, it would be a win-win strategy if the upcoming budget extends helpful supports to the domestic market-oriented productions and services with a view to having employment-oriented productivity growth. This approach would call for a comparative review of the effective rate of protection accorded to different industrial activities in the country.

Indeed, to what extent the budget is promoting inclusive distribution of fiscal resources can become transparent, if the finance minister in his speech explicitly mentions the empirical outcomes of his fiscal measures and who benefit from them. This was, in fact, the general practice during the tenures of the late lamented Shah AMS Kibria and Saifur Rahman.

THIRD, HOW DO YOU DESIGN A CREDIBLE FINANCING PLAN?: It is by now well-agreed that Bangladesh will have to push into more resources into the economy to cushion the impending slump triggered by C19 within the country as well as globally. The central bank has already initiated a number of policy and procedural measures to increase liquidity in the economy. It is now turn of the national budget to coalesce a set of budgetary measures to give substance to the counter-cyclical macroeconomic stance. This macroeconomic stance will critically hinge on the ability to announce a credible fiscal framework for the next fiscal year. Regrettably, the country's record in this regard, particularly in the area of resource mobilisation, is not very inspiring.

The finance ministry has always preferred to project its revenue target based on the revised budget figures of the outgoing year (instead of realistically projected actual collection). This resulted into imposing unrealistic collection figure on the National Board of Revenue (NBR). In order to balance the expenditure side, including the Annual Development Programme (ADP), the revenue targets (along with that of the non-NBR collections) are often enhanced further. This has led to secular increase of the gap between actual off-take by the NBR and its annual target. It has been estimated that such shortfall in the outgoing fiscal year would be around Tk. 100,000, which is more than a quarter of its target. Incapability to use external aid, particularly project loan, aggravated the resource situation. Knowing full well about the water in the target, the fiscal planners may have regularly banked on the possibility that the full bundle of public expenditures will not be delivered, thus demand on resources will remain manageable. Accordingly, the fiscal deficit figure till date has remained modest-at around 5.0 per cent of the GDP.

The second order problem of the fiscal framework lies in the targets set for financing of the programmed deficit. Shortfall in foreign aid utilisation resulted into heavy borrowing from the domestic sources-earlier through sale of costly National Saving Deposit (NSD) certificates, and now from the liquidity-starved fragile banking sector. In the outgoing fiscal year (till February 2020), the government has resorted to borrowing from the banking sector to the extent of about 200 percent of its net budget deficit (as against a target of about 55.0 per cent).

It may be safely assumed that the budget deficit figure for FY21 will be higher than the trend rate. A large part of the incremental deficit has to be underwritten by accessing new sources of external finance, including budgetary support. However, if that derived estimate is not based on reliable income-expenditure figures, then the whole fiscal framework will suffer from credibility gap, subsequently weakening the strength of other policy pronouncements.

FOURTH, WHAT ARE THE MEASURES FOR ENHANCING THE DELIVERY CAPACITY?: Capacity deficit affecting full and faithful implementation of its fiscal commitments had been the Achilles' heel of Bangladesh's budgetary programmes. Chronic delivery problems, underpinning the public financial management system, also undermined the quality of spending of the government's outlays. Years of neglect in undertaking structural reforms in the areas ranging from tax administration, ADP management, debt and capital markets to local government, public administration and deployment of social accountability tools has inhibited scope of the government to deliver its declared commitments. The C19 pandemic has brutally exposed these institutional weaknesses, as the government struggled to provide health and livelihood sustenance to its citizens. Learning from the gruelling experience, will the government initiate a series of reform measures to deal with C19 and thereafter more competently?

Accordingly, Budget21 has to come with a well-thought-out implementation plan, desirably with a set of time-bound interventions indicating the authorities responsible for them. Understandably, the suggested approach has to build on a "whole of the government," if not a "whole of the society" exercise, by including the non-government development organisations in dealing with the pandemic aftermath. A run-of-the-mill posture will hardly generate confidence in deliverability of the annual budget, even with its perceived drawbacks.

THE GOLDEN RATIO: So, will the Budget21 be able to capture the space located within the four stated angles with a dynamic causation? Great minds over the centuries have deduced that one may not fully capture the exact space of a circle in a square, but may come very close to it. In order to do that, one would need to know the "Golden Ratio"-usually portrayed by the Greek alphabet phi-of the task in hand. The Egyptians deployed the Golden Ratio while building the Pyramid, Da Vinci adopted it while painting Mona Lisa.

What would constitute the Golden Ratio of Bangladesh's Budget21? To my mind, the two wedges to define that ratio will be empirical robustness of the fiscal framework and reform disposition of the implementation plan. These two may unleash a virtuous causation by circling four corners of the square-embodying the core challenges of the upcoming national budget.

Dr Debapriya Bhattacharya is a Distinguished Fellow at the Centre for Policy Dialogue (CPD). deb.bhattacharya@cpd.org.bd

Link:

Circling the Square What is the golden ratio for Budget 21? - The Financial Express