Monthly Archives: March 2021

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Over the last year, the Covid-19 pandemic has not only revealed the true depth and scale of structural global inequalities but has also exacerbated a dire need for liquidity across most of the Global South. Countries face stalled economic activity, sharp drops in revenue and increased costs of shoring up domestic economies amidst a rise in unemployment and business closures, while they must also respond to the public health emergency. Fiscal needs are urgent. In response, a wide range of civil society organisations (CSOs), academics and governments started calling for a new issuance of the IMFs Special Drawing Rights (SDRs) in March last year. SDRs are an international reserve currency maintained by the IMF that can be exchanged by governments for cash, based on a basket of five currencies (the US dollar, the Euro, the Chinese renminbi, the Japanese yen and the British pound) (see Background, Special Drawing Rights). Unlike other IMF instruments, SDRs are a non-conditional, non-debt creating resource. It is, in effect, a liquidity booster. Yet, no new allocation was made in 2020 because US Treasury Secretary, Steve Mnuchin, blocked the initiative, reportedly over geopolitical concerns (see Dispatch Spring 2020).

After a new US administration was voted into office in November, calls for an SDR allocation regained strength. In January at the World Economic Forum, UN Secretary General Antnio Guterres called for SDRs to form part of a worldwide fiscal relief campaign, so that no one is forced to choose between providing basic services for their people or servicing their debts.

Ahead of a Group of 20 (G20) finance ministers meeting in February, more than 200 civil society organisations from around the world called for a $3 trillion allocation of SDRs in an open letter. Because SDRs are allocated across countries according to the IMFs quota formula, which is mostly based on the size and openness of economies, around 60-70 per cent of a new allocation would go to rich countries and large emerging market economies, who largely do not need them. In order for a new allocation to meet the needs of the worlds most vulnerable countries in this period of health, social and economic crises, the overall allocation needs to be significant. A $3 trillion allocation would enable the countries that need it most to boost reserves and stabilise economies, helping to minimise other economic and social losses. The CSO letter stressed that developing countries need liquidity in order to free up funds urgently required for the pandemic response, including gender-responsive public health systems, universal social protection and comprehensive vaccine rollouts (see Observer Spring 2021). The letter also pointed out that SDRs would provide much-needed foreign exchange resources to countries whose capacity to earn them continues to be severely constrained in the short-to-medium term. SDRs do not add to countries debt burdens, promote debt sustainability and do not represent a loss for anyone only a gain. Importantly, they would provide a liquidity injection with economic stimulus benefits worldwide.

After their February meeting, the G20 issued a statement expressing their support for the IMF to formulate a proposal for a new SDR allocation. That means the ball is now in the court of IMF staff, who are expected to propose a figure for a potential SDR allocation during the IMF and World Bank Spring Meetings in April. While it seems the political reality of the moment dictates that any new allocation made is lower than $680 billion, because anything above that requires the approval of the US Congress which is considered unlikely to materialise, it is essential that the economic analysis underpinning the IMFs proposal be unbiased by such political considerations and be based solely on the needs of the worlds most vulnerable countries.

While this potential new allocation, its size, and how rich countries unused SDRs might be reallocated are crucial discussions perhaps the most consequential in terms of the international financial response to the pandemic it is also critical this opportunity is used to revisit deeper, systemic questions about how our international monetary architecture operates, how it is failing us, and how we got here.

When the SDR was created in 1969, one of its main purposes was to allow rich countries other than the US to reduce their dependence on running a balance-of-payments surplus with the US, which they had to do to accumulate US dollars for foreign exchange reserves under the Bretton Woods System. In part to prevent that system from collapsing, the US agreed to introduce SDRs, but when it collapsed anyway in 1971, the SDR stuck around.

In negotiations that then took place between 1972 and 1974, IMF member states were unable to agree on a new international monetary system in a dedicated committee, known at the time as the Committee of Twenty. As a result, the system that evolved in an ad-hoc fashion instead has been termed to effectively be a non-system, in that it is still based on the US dollar but is open in principle to competition from other reserve currencies. In other words, nation states are free to choose their exchange rate regime, as long as they avoid manipulating their exchange rates a term that has never been clearly defined.

This non-system poses three central challenges and has long been critiqued for lacking an effective multilateral arrangement that averts the distortions created by the global reliance on the US dollar as the reigning reserve currency.

First, the asymmetric adjustment problem was highlighted by Keynes early on. It relates to the strong pressure that deficit countries face to reduce their balance of payment imbalances versus the weak pressure hat surplus countries experience to do so.

This generates a global recessionary effect during crises when global financing circuits dry up. Deficit countries are expected to adjust their ledgers while enduring the fallout of economic crises, while surplus countries are off the hook. This results in a spectre where surplus countries have the opportunity to recover from crises at a much faster pace and in more equitable ways than deficit countries can, as we see in the responses to the Covid-19 pandemic.

Second, an inequity bias is generated by the need for developing countries to self-insure against the volatility in external financing flows through the accumulation of foreign exchange reserves. This generates an inequity because reserves are invested in safe industrial countries assets, which creates a perverse reality where developing countries are actually systematically lending to rich countries at low- or zero-interest rates. Developing country reserves, on average, have increased from 5 per cent of GDP in 1990 to almost 30 per cent in 2018.

As developing countries accumulate reserves, global imbalances between surplus and deficit countries are worsened and a deflationary bias is created, in that dormant reserve holdings have a contractionary effect on the world economy. The large sums of financial resources frozen in reserves are essentially foregone development resources, which, if invested in social and economic development needs, could yield higher long-term returns and allow countries to escape their export-led growth dependence.

This precautionary move to self-insure by developing countries contributes to the generation of global imbalances, i.e. the third central problem of the current system: the instability link. Together with the inequity bias, this results in a dangerous combination of inequity and instability baked into the post-war design of the world reserve system.

Meanwhile, reserve accumulation is not a systemic or sustainable solution to prevent financial vulnerability and instability, or the threat of conditional loans from the IMF. Capital outflows, and in particular sudden and volatile exits, could be prevented by capital controls, but the IMF continues to maintain an overly restrictive approach to their use, as confirmed by the Funds Independent Evaluation Office in September last year (see Observer Spring 2021). In the absence of both a normative acceptance of capital controls by international capital and financial markets, and in particular credit rating agencies, as well as the lacuna of a fully adequate global safety net, developing countries are left with little option but to accumulate reserves as a form of self-insurance.

The more general problem with a global reserve system that relies on a national currency, also known as the Triffin dilemma, is that the provision of international liquidity requires that the country supplying the reserve currency run balance-of-payments deficits, which could eventually erode the confidence in that currency. It also implies that the stability of the global reserve system may be inconsistent with the monetary policy objectives of the reserve-issuing country, i.e. that the world economy is effectively hostage to the monetary policy of the US Federal Reserve and US Treasury Department.

Over the years, proposals to reform the global reserve system have stressed the need to address the systemic inequalities that characterise the international monetary system. In 2010, after a new issuance of SDRs was made in response to the global financial crisis (GFC), the United Nations Conference on Trade and Development called for abandoning the dollar as the single major reserve currency and moving to a system that permits the disbursement of international liquidity that could underpin the financing of investment in long-term sustainable development. Such annual, or regular, counter-cyclical issuances of a global reserve currency could serve to create a more stable, equitable and resilient global financial safety net, without an attendant risk of inflation, particularly if they are equivalent to the estimated additional demand for foreign reserves in times of economic crisis and recession. Another salient advantage of using a global reserve currency in such a counter-cyclical manner is that it would, in principle, facilitate the task of preventing excessive currency depreciations for countries in crisis. Over time, different proposals have been made for what the principal global reserve asset itself could look like, from Keynes original Bancor concept to the more recently proposed International Currency Certificates. While originally proposed by some with the intent of becoming the principal global reserve asset, SDRs have in practice been designed as a residual reserve asset instead, with severe limitations to their use. A 2018 IMF report on SDRs revealed that using SDRs for such larger, pro-cyclical issuances was avoided in the 1970s because their unconditional nature began to raise concerns that it could be used by members to avoid necessary policy adjustment.

In addition to those debates on currency, a broad range of proposals have been made on what type of international architecture would be required to govern such a global reserve asset. In his 2009 report to the UN General Assembly in the aftermath of the GFC, former vice president and chief economist of the World Bank, Joseph Stiglitz, recommended such a new reserve currency system could be established by broadening out existing SDR arrangements and therefore be maintained by the IMF. Critically however, Stiglitz pointed out that this could only work if the long-standing deficiencies in governance of non-representative institutions like the IMF are addressed, which had impaired the ability of these institutions to take adequate actions to prevent and respond to the crisis. The report specifically recommended restoration of the weight of basic votes, which are equally distributed among all countries, and the introduction of double or multiple majority voting at the IMF and electing IMF and Bank leaders under an open, democratic process (see Inside the Institutions, IMF and World Bank decision-making and governance).

Eleven years on, the clock has run out. These critical reforms have not been implemented and the typically slow pace of IMF governance reforms even came to a complete halt in December 2019, as the US blocked the 15th regular review of IMF quotas (see Observer Winter 2019). Just a few months later, this failure in governance reform that continues to provide the US with an effective veto on major decisions on the IMF board, allowed a particularly insular US administration to hold the entire world hostage and block an SDR allocation in the midst of a global pandemic painfully demonstrating the human costs of the failures of our international monetary architecture.

It is therefore high time to consider alternatives. One counterproposal is that of creating a new global reserve currency and a new institution to manage this, such as a Global Reserve Bank. Under such a new agency, an SDR-like allocation methodology could be carried out more equitably, based on a combination of economic needs, size and consideration of global economic trends. Such an arrangement, according to Stiglitz, should be designed to regulate the creation of global liquidity and maintain global macroeconomic stability and make problems related to the creation of excess liquidity by the reserve currency country less likely to occur. On a systemic level, a new global reserve system should put pressure on surplus countries to reduce their contribution to the insufficiency of global aggregate demand and productive financing.

Another method of implementing a reformed reserve system would be to assign regional economic formations (e.g. BRICS, ASEAN, SADC, Mercosur, etc.) to lead the process. Regional mechanisms can be based either on swap arrangements between central banks to exchange an agreed reserve currency or on a pooling of foreign reserves. While governments may hesitate to collectivise their reserves, establishing reserve pools allows for a counter-cyclical use of the funds as well as the issuance of a currency or reserve asset that could be used at the regional or global level.

While the specific contours of the institutional architecture, methodology and governance of a Global Reserve Bank or regional formations may vary in detail, scope and ambition, the point is that reforming the current reserve architecture through counter-cyclical and regular allocations of some type of global reserve currency would create a more equitable and efficient reserve architecture by mitigating the three central challenges described above. By embodying characteristics such as being unconditional, predictable and needs-based, regular global reserve allocations would be akin to a global public good. Deficit countries could concentrate on better financing domestic development priorities rather than protecting themselves through reserves or balancing their payments, while the entire world could benefit from greater autonomy from US monetary policy. Dethroning the US dollar as the worlds reserve currency ultimately represents a decolonial approach, one which creates a more stable, equitable and just international monetary system.

The pandemic has revealed the true depths of structural inequalities between Global North and South, as the North hoards vaccines and enacts generous fiscal stimulus, while many countries in the South spend more public resources repaying private creditors than they do on domestic health and economic resuscitation. The urgency of democratising multilateral economic and financial governance has never been clearer.

by Bhumika Muchhala. Bhumika Muchhala is an advocate, activist, public speaker, researcher and writer on international financial architecture, feminist economics and global economic governance. She has 20 years of experience in global justice policy advocacy organisations. Since 2009, she has been the senior policy researcher on global economic governance at Third World Network where she is engaged with UN processes, as well as G20, IMF and World Bank policies. She is a PhD candidate in political economy and decolonial theory at The New School in New York, and has a Masters of Science in Development Economics from the London School of Economics.

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Tip of the iceberg: How the call for SDRs reveals the urgency for deeper reforms of the global reserve system to address systemic inequalities -...

LONDON--(BUSINESS WIRE)--Following eight years extensive research, Nextek Ltd has launched a global multi-participant project (NEXTLOOPP) to address a missing link in the plastics recycling stream - Polypropylene (PP).

PP accounts for around 20 percent of the worlds plastic.1 Mostly used in pots, tubs, trays and films for food packaging, it is also prevalent in non-food household and personal care products, which complicates recycling the 700,000 tonnes/annum used in the UK alone.2

Currently PP packaging is either going to waste-to-energy, landfill or being down-cycled into low-performance applications, wasting precious resources. Furthermore, the absence of food-grade recycled PP (FGrPP) means that all PP food packaging is currently made from virgin plastics.

Looming plastic packaging taxes have sharpened a focus on including at least 30 percent recycled content in packaging and transforming the way we manage our short-lived materials to minimise and reduce current waste levels.

NEXTLOOPP uses commercially-proven technologies to separate food-grade PP using marker technologies. These include cutting-edge decontamination stages to ensure compliance with food-grade standards in the EU and the USA. Now we can finally close the loop on FGrPP.

Major organisations including brand-owners, suppliers, universities and industry associations, through to end-users in the PP supply chain, have joined NEXTLOOPP to produce a world-first; high-quality FGrPP that will be available in the UK by 2022.

Professor Edward Kosior, founder and CEO of Nextek Ltd, explains that creating a circular economy for food-grade PP packaging waste fills the enormous gap in the packaging recycling sector and helps reach Net Zero Carbon targets. It will allow brand owners to meet their recycling targets and significantly reduce the use of virgin plastics from petrochemicals. It will also greatly reduce CO2 emissions and divert waste from landfill and waste-to-energy.

UK-based WRAP has confirmed that The UK Plastics Pact is pleased to support the NEXTLOOPP project in delivering a technology that will achieve food-grade polypropylene. WRAPs Acting Director Insights and Innovation, Claire Shrewsbury, says that finding a way to successfully recycle food-contact polypropylene is a key challenge. Achieving this will enable UK Plastics Pact members to reach the target of an average of 30 percent recycled content across all packaging by 2025. WRAP believes that NEXTLOOPP offers a potential solution to this and we will work closely with the other stakeholders to develop the project further.

Viridors Director of Business Development (Polymers), Luke Burgess, says the companys participation in the food-grade trial is in line with Viridors ongoing commitment to the UK circular economy. Viridor believes that extending its polymers expertise and recycling experience to cross-sector collaboration and innovation is key to ensuring more waste is valued as a resource and returns to the circular economy where it belongs. Reducing our reliance on virgin plastic not only empowers greater circularity, but the continued use of recycled material also offers significant energy savings, contributing to considerable wider environmental benefits for the UK.

Lubna Edwards, Group Sustainability and Marketing Director at Robinson Packaging says: NEXTLOOPP is absolutely aligned with Robinsons goals and those of our customers for closed-loop solutions, as well as governmental circular economy targets. Demand for this high-value recycled material will continue to rise as we shift away from using virgin material. Much of our UK business depends upon PP and this ground-breaking project gives us the opportunity to tap into cutting-edge technology, learn from industry partners and trial the material for sustainable use in our packaging.

Andrew Fisher, Managing Director of leading plastic packaging manufacturer Sharpak Yate, says: As part of the Guillin Group, Sharpak has recyclability in its DNA. NEXTLOOPP is an industry-leading initiative and we are proud to be collaborating with this multi-participant project.

Adam Elman, Group Sustainability Director at Klckner Pentaplast says: Capturing the value of plastics by keeping them within the economy and out of our natural environment is key to meeting the Plastics Pact targets and very much part of our business strategy. Swapping the traditional take-make-waste linear model for a circular system is also one of the many important steps towards significantly reducing our carbon emissions. We are proud to be working in collaboration with NEXTLOOPP on this important project.

As of 23 March 2021, 29 organisations across the PP supply chain have joined NEXTLOOPP. Other multinational companies are soon to join.

About Nextek Ltd

Nextek is a global sustainability consultancy that offers strategic advice to regional and multi-national organisations and recycling companies. Launched in 2004, Nextek researches and develops innovative strategies and processes within the recycling ecosystem from designing recycling plants to developing ground-breaking projects for governments and major organisations. Nextek launched NEXTLOOPP, a two-year multi-participant project, to close the loop on food-grade rPP. This project incorporates unique technological breakthroughs that include innovative sorting and cutting-edge decontamination technology.

http://www.nextek.org

http://www.nextloopp.com

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Nextek Reveals Global Participants in Ground-breaking Project to Tackle Post-consumer Polypropylene Packaging - Business Wire

Although it should go without saying that women have long played an invaluable role in conservation, were going to say it anyway. From those who work in companies, nongovernmental organizations, or government to individuals stepping up on local issues, women have helped to safeguard lands and waters that are vital to the health of our planet, and to the economies and well-being of communities. To mark Women's History Month, The Pew Charitable Trusts celebrates five women who are leading efforts across the U.S. to ensure that our rivers remain clean and free-flowing for future generations.

Courtesy of Julie Nania

Julie Nania is the water program director at High Country Conservation Advocates in Crested Butte, Colorado, where she works to protect the states rivers. One approach is to identify and advocate for rivers that qualify for designation as outstanding natural resource waters, and another is to recommend rivers for protections as part of the forest planning process for the Grand Mesa, Uncompahgre, and Gunnison national forests. She also leads stewardship projects to enhance watershed health and restore riparian habitats and works with municipalities to improve water efficiency and landscape conservation. One can find Nania building community support for river protections, advising local decision-makers, or collecting water quality data in the field with partners. Relationships with rivers are both a personal affair and essential to the survival of our ecosystems, she says. Spending time on rivers offers us an opportunity to grow. Few things can match the experience of a rowdy whitewater run with friends, helping to pick up the pieces if things go awry. And while these experiences are irreplaceable, our landscapes would simply not exist were it not for the life force that rivers provide. Nania has also served on the Upper Gunnison River Water Conservancy District board of directors for the past four years.

Faith Briggs Tracy Nguyen-Chung

Riversare such a part of my understanding of this country, says Faith Briggs, a documentary filmmaker and storyteller who grew up near the Hudson River in New Yorkwhich she notes is the first place I jumped off cliffs and learned to skip rocks. While working on the series Drought at Discovery Communications, she learned about water rights controversies along the Colorado River. It hit home to me then that rivers are our lifeblood. I think the more we understand that, the more we'll know how important it is to keep them clean and support river health. Briggs lives in Portland, Oregon, and works with nonprofits, institutions, and outdoor businesses to increase diversity and create media that represent the world in which we live. Since I've fallen in love with fly fishing, I've experienced rivers from Kamchatka, Russia, to Alaska to eastern Oregon. I've had the joy of working at nonprofits like Soul River that connect people to rivers and help young people from [communities of color] learn about entomology. Briggs is also an ambassador for Brown Folks Fishing, which works to expand access for people of color in fishing and its industry. I've always felt a kinship with rivers based on the place they occupy in the African American literary tradition, she says. I think about 'The Negro Speaks of Rivers' by Langston Hughes, which begins, I've known rivers. The more that I have the joy and opportunity to experience rivers, the closer I feel to that part of my heritage."

Courtesy of Liz Hamilton

As executive director of the Northwest Sportfishing Industry Association, an Oregon-based association of businesses , Liz Hamilton has spent the past three decades working to ensure that healthy rivers and the fisheries they sustain will be around for future generations. Recovering salmon and steelhead is about so much more than saving a fish, Hamilton says. Our entire ecosystem, culture, andNorthwest economy is built on the backsof salmon and steelhead, she told the Eugene Register-Guard newspaper in December.If we have any hope of safeguarding our fishing jobs and sustaining them into the future, we need to actand we need to do it now. Hamilton is backing legislation introduced by Senator Ron Wyden (D-OR) to safeguard thousands of miles of Oregon rivers as wild and scenic, and she speaks to the need for river protection in an upcoming segment of This American Land, which will air on PBS stations nationwide. Rivers not only provide recreation and food for our table through fishing; they provide nourishment for our souls and unparalleled bonding with close ones, she says. I love teaching my grandchildren to fish, but a close second is helping someone catch their first salmon!

Courtesy of Ashley Nichole Lewis

Born and raised on Washington states Olympic Peninsula, Quinault Indian Nation member Ashley Nichole Lewis spent much of her childhood outdoors, exploring the areas lush rainforests, remote landscapes, and clear, clean rivers such as the Quinault and Queets. Now the owner of Bad Ash Fishing and host of a new show for aspiring anglers, Break Out With Bad Ash, which will air on NBC Sports, she guides clients on those waterways in the pursuit of salmon and steelhead. As she explains on her company website, When you take people outside and they experience how great that time spent is, they become more curious and invested in what happens to our environment. Lewis has been a local leader in the coalition backing legislation by Representative Derek Kilmer (D-WA) and Senator Patty Murray (D-WA) to protect about 126,000 acres of wilderness and hundreds of miles of rivers on the Olympic Peninsula. When that bill cleared the House of Representatives in February, Lewis told the Aberdeen, Washington, newspaper The Daily World: Conservation for me on the Olympic Peninsula means that generations to come can come out here and experience it the way that I experience it and the way my grandpa experienced it when he fished out here, and that forever we always have this."

Courtesy of Axie Navas

AxieNavasis the first director of New Mexicos newly formed Economic Development Departments Outdoor Recreation Division. She comes by this work naturally as a former journalist withOutside magazine and an outdoor recreation enthusiast. Her office is petitioning for an outstanding national resource waters designation for 150 miles of New Mexico rivers, which would protect their water quality in perpetuity. The division is leading this effort for the upper Rio Grande, Rio Hondo, headwaters of the Jemez River, and Rio Guadalupe.Navas office also supports federal efforts to win a wild and scenic designation for the states Gila and San Francisco rivers,citingdata showing that protecting these important waterways will boost the local economy. Rivers are the ecological, cultural, social, and recreational centers of New Mexico, Navas says. We gather on their banks and in their waters to fish, raft, feel wonder, and come together as communities. Their waters flow through our acequias and our biologically rich riparian areas. Sheadds that her love of nature came from spending her childhood outside, skiing, biking, and exploring the Rockies. I am fortunate enough to live within walking distance of the Rio Hondo. My favorite activity isnt a high-adrenaline one: Its listening to the murmur of the water in the early mornings when the birds and the valley are just waking up.

Nicole Cordan oversees river corridor work for The Pew Charitable Trusts U.S. public lands and rivers conservation project.

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Five Women Work to Keep U.S. Rivers Clean and Free-Flowing - The Pew Charitable Trusts

Government has approved the implementation of the Education and Training Sector Strategic Plan (ETSSP).

ETSSP is the Ministrys roadmap for transforming education and supporting Botswanas ambition to graduate from a resource based to a Knowledge Based Economy.

This was said by the Minister of Basic Education, Fidelis Molao in parliament when delivering his speech during the Committee of Supply sitting.

Molao said that With the Covid-19 pandemic depleting resources, these reforms will be more relevant now than ever as Botswana needs to rely on its own knowledge and skills to drive innovation and other sectors of the economy such as manufacturing.

Molao said that through the implementation of the ETSSP, curriculum is being overhauled and other flagship programmes undertaken which include the rollout of Early Childhood Care, School Leadership Training, the development of an Outcome Based Education (OBE) curriculum for senior secondary schools, and the introduction of multiple education pathways for learners to access higher education as well as the introduction of e-learning at all levels.

The senior secondary school curriculum has been reviewed. To date, all the planned 38 subjects for senior secondary level have been developed, checked and quality assured for implementation. The Ministry will implement the new subjects in a phased approach where three phases of implementation are planned with Phase-1 starting in 2021, said Molao.

The Minister further noted that the new subjects to be introduced are; Animal Production; Field Crop Production and Horticulture for Moeng College and Hospitality and Tourism Studies for Maun Senior Secondary School.

Some of the learning facilities have been altered and new facilities are being constructed within the two schools to make a provision for teaching of the new subjects to Form 4 learners, explained the minister.

He added that the Ministry is also developing a new Junior Certificate outcome based curriculum aligned to the new Senior Secondary School Curriculum.

He said that the implementation of outcomebased education curriculum requires the modernizing and digitalising of schools to create an environment that is conducive to learning.

Going forward, the Ministry needs to be facilitated and fully supported by Honourable Members to fast-track expanding access as well as attending to the aged school infrastructure across the country,said Molao

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Govt approves Ministry of Educations transformation Roadmap - The Voice Newspaper Botswana