Environment and conflict in Sudan

I've moved to the Sudan... and I'm sitting under a fan in Khartoum writing this... I've now been here a couple of weeks and am no longer totally lost. I've a new job as the UN Environment Programme (UNEP) Representative for Sudan. We hail from UNEP's Post-Conflict and Disaster Management Branch, which addresses the links between environment (or more specifically, 'natural resources') and conflict.

The Sudan programme has had a fantastic start through a two-year project to create a Post-Conflict Environmental Assessment for Sudan, which was published this year and is one of the best surveys of the challenges of a developing country environment you will find anywhere - a tribute to the energy and drive of Andrew Morton, who led the effort. The assessment develops some 85 recommendations, and our job here is to make as much of that happen as we can.
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Atrocity exhibition

There is something stunning in the brilliance of Google Earth [download] - a streaming map of the world in the form of satellite photography with the mean to zoom from planet to street level in scale. 'Layers' are overlaid on the map images showing an ever expanding range of surface features: national boundaries, roads, video stores, government offices, monuments - with 3D buildings, flights through the Grand Canyon etc. Each year the images increase in resolution and the coverage of higher resolution photography increases.

But potentially interesting political uses are also emerging: take the pictured map of conflict in Darfur... The recently announced (CNN / BBC) layer by the United States Holocaust Memorial Museum documenting atrocities in Darfur (an image grab shown to the left) is a pivotal development that would have been impossible just five years ago. When actually using the Google Earth program, you click on the icons showing destroyed villages and can see details about the location, population and what happened. The layer blends information about villages destroyed with testimony, photographs and statistics - essentially allowing the world to 'bear witness' while keeping a live record of what is happening on the ground. Also, providing a live record or the failure to accept our common responsibility to protect.

Another layer in the 'global awareness' category is the UN Environment Programme: Atlas of our changing environment documenting major impacts on the environment. One can hardly imagine where this could eventually go... but I'm excited!
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Diamonds - curse or charm?

Saw Blood Diamond - an action-movie-with-a-message, though laced with clichés (mercenary with a heart of gold, pouting female journalist as searcher after truth, silly shoot-outs etc). But also brutal depiction of what the very dirty end of the diamond business looks like - militarised mining slave-labour , child soldiers, violent abuse like amputations and, of course, an illegal trade funding arms and militias fuelling conflict that reaches up to the comfortable cities of London, Antwerp, Jo'burg and New York. The film had a good airing for the excellent Global Witness and Amnesty diamond campaigns, and their joint venture Blood Diamond Action.

Despite the horrors of the film, conflict diamonds are one aspect of Africa's habitual miseries where things are getting better and there may even be cause for optimism...

The Kimberley Process has established a system for identifying legitimately produced diamonds and now has wide participation (it claims covering 99.8% of diamonds). In several major diamond producers, conflicts have at least reduced in intensity, for example in Sierra Leone, Angola and DR Congo (though each of these should be regarded as high risk and deserving of great attention on the part of the international community). Only Cote D'Ivoire and Liberia now face UN diamond sanctions. The diamond industry (overview) has realised that reputational risk is extreme for such 'positional goods' as diamonds and is working to get its case across (see the World Diamond Council and its Diamond Facts web site) and its act together.

All of this is not without critical voices, and rightly so given the history of abuse and oligopoly. The critics are essential to keep the pressure on and to widen and strengthen the coverage of the controls. See for example: Kimberley Process at Risk by Global Witness and True Cost of Diamonds - the Kimberley Process by Amnesty International, which detail shortcomings, points of leakage and areas for improvement. It doesn't look that convincing from the retail end... I'm not a particularly big user or buyer of diamonds myself, but I did find the consumer information on the origins and conflict-free status inconsistent between suppliers and not really confidence-inspiring (see conflict policy for suppliers: Diamond Geezer, Blue Nile and De Joria)

Perhaps the most hopeful aspect of the diamond business is that it does not always visit the 'resource curse' on those countries blessed or condemned with diamond deposits. The really good example comes from the largest diamond producer of all - Botswana (see chart - source), where diamonds have been a force for good (see Botswana's Diamonds for Development web site). The government of Botswana's 50:50 joint venture with DeBeers, Debswana, is perhaps the nearest thing to model (at least as near as you could get with a monster like DeBeers). This to me is the key structural issue - as with so much else in Africa, success or failure comes down to governance, transparency and a leadership that wants to serve its people, not pillage them. The trouble is that diamonds and other resources are often the reason for poor governance - if a government takes its revenue from the ground, it has less reason to be accountable to its citizens.

An excellent paper from the IMF, Did Botswana Escape from the Resource Curse? makes this point through regression analysis:

As to the role of governance in transforming resource abundance into economic development, data from 89 countries reveal that an abundance of natural resources does not guarantee growth. What determines the degree to which natural resources can contribute to economic development is governance. Good governance—specifically a strong public voice with accountability, high government effectiveness, good regulation, and powerful anticorruption policies—tends to link natural resources with high economic growth. The last two dimensions of governance are especially important for natural resource management in developing countries.

So why am I going on about this... ? Well I just think the governance agenda in Africa is central - including and especially the governance of natural resources endowments. We don't hear that much about it in the Make Poverty History and Aid, Trade, Debt mantras that dominate the discourse on development. Perhaps we think it impolite and improperly post-colonialist to mention the despicable behaviour of so many African leaders and the completely inadequate efforts of the African Union and NEPAD to build governance through peer review and peer pressure.

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Free trade with Kyrgyzstan

My favourite Xmas present this year is a beautiful shyrdak (actual one pictured) from Kyrgyzistan. A shyrdak is a felt rug originally designed for a yurt. It has a base layer of felt onto the top of which is sewn a second felt layer containing the patterning. No felt is wasted because the artisans produce a duplicate rug with the design in opposite colours (more on construction). Apparently, the design is rich in symbolism and I will report back once it has been decoded. A friend, Tim Moock, is importing these using fair trade principles - a three way split of profits between him (the importer), his partner (the exporter) and the artisans that produce them. Prices are already rising as his shyrdaks are to be featured at the Rebecca Hossack Gallery early next year and designer interest is gathering pace. Some quite poor people are about to become relatively rich and globalisation appears to be serving everyone involved, especially me, rather well...
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Second oldest profession in the world - arms dealing

I fear it was a terrible move to axe the Serious Fraud Office (SFO) investigation into the Al Yamamah ("the dove") arms deal between UK and Saudi Arabia.

All parties have been stressing (implausibly) that the decision was not economic - supposedly 50,000 arms-related jobs at stake. For example, see SFO's terse statement. The trouble is that OECD's Convention on Combating Bribery of Foreign Public Officials in International Business Transactions goes further in article 5:

Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved. (emphasis added)

Oh dear: the Prime Minister defended the decision as follows: [No 10 statement]

"Our relationship with Saudi Arabia is vitally important for our country in terms of counter-terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel-Palestine, and that strategic interest comes first, particularly in circumstances where if this prosecution had gone forward all that would have happened is that we would have had months, potentially years, of ill feeling between us and a key partner and ally and probably to no purpose"

That contradiction with the convention, and others in the government statements, could form the basis for legal challenge to the decision [FT - Decision to halt case may be illegal].

Sorry it just doesn't add up...
Corruption allegations were extensive and serious [wikipedia summary of the allegations / Corporate watch]. The Telegraph reported that the Saudis were threatening to take the business to France [Halt inquiry or we cancel Eurofighters], and as if by coincidence a few days later the argument that national security was at risk was produced as the basis for closing the investigation. But why would the Saudis refuse to cooperate on security matters? They have a problem with Al Qaeda too.

Unprincipled
A novel argument was floated by the Attorney General [statement]: It has been necessary to balance the need to maintain the rule of law against the wider public interest.

Might be worth reading that again...!! The Financial Times dismissed it as a 'specious assertion' and called the move A Damaging Cave-in. Wrong signals have been sent in virtually every direction: allegedly corrupt Saudis and arms executives have flexed muscle and won; BAE's shares are well up; Jonathan Aitkin is back on the telly; the day of reckoning for the UK arms industry has been postponed (but not cancelled) delaying diversification again; honest firms have been let down; the rule of law has come second to vague secretive assertions of national interest.

Bad news for international development
Much damage will flow from this, but hit hardest will be the modernisers in Britain's international development agency DFID and the intended beneficiaries of their work. Modernisers stress the role of good governance in securing development outcomes rather than just piling in aid. The most recent DFID white paper Eliminating world poverty: making governance work for the poor majored on this [see section 2]. As recently as June 2006, Hilary Benn was appointed 'Ministerial champion for addressing international corruption' as part of a package of anti-corruption measures. With hapless timing (suggesting they may not have been entirely in the loop) on 9 December and just 5 days before the plug was pulled on the investigation, DFID announced that: UK calls for more action to tackle corruption and Secretary of State for Development, Hilary Benn declared:

“Tackling corruption wherever we find it – whether here or abroad – is essential. We will not tolerate those who extort, corrupt and deceive. Together we can make progress and by strengthening the institutions of government, promoting better transparency and accountability and giving a voice to those who are hit hardest by corruption – the world’s poorest – we can make a difference.”

Ooops! Of course, it looks ridiculous now - the timing especially so. But the damage is profound: it's hard enough to exercise leverage on corrupt kleptocrats, but how can you do it unless you are acting in a principled way against corruption where you find it at home? And this does rather cut the ground from under the feet of those appointed to tackle corruption abroad.

What about the jobs?
The conventions and principles are clear. Turn a blind eye and you may win a battle or two, but you and everyone else will lose the war. I'm not convinced that this is a long term business anyway - the jobs are alreday heading offshore. Better think about finding something else to make or do.
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Global public goods - the Achilles heal of globalisation

Attended a stimulating session today on "Global Public Goods" (FAQ) run by the ubiquitous penseurs of globalisation, E3G. The idea is that there are important global things [goods, services, networks, resilience, risk reduction] that are under-provided, for example: reduction in disease transmission, financial system resilience, stability of the the climate, control of criminal networks, difusion of innovation, energy security and possibly values and norms like human rights. We underprovide mainly because of collective action failures - between nations (and between generations). Public goods theory stresses the non-rival and non-excludable characteristics of public goods, and these are useful characteristics to identify as they often foreshadow collective action failure. Well, they are useful only as long as the definitions are not applied too pedantically.

The chart shows one academic's attempt to compare the costs of acting to address these challenges with the cost of inaction in a few of the areas classed as global public goods... Even if wrong by miles, it still raises the question are we, and by how much, underproviding these things? We could spend more on these things and be substantially better off but we don't for a variety of reasons, including but not exclusively:

• Their global nature and the need for large numbers of countries or all to be involved, combined with weak institutions for co-operation.
  
• The fact that everyone benefits regardless of who pays so there are incentives to free-ride;
  
• Concern that spending on these things will displace aid transfers and compromise efforts to focus on poverty reduction (ie. the provision of private goods and national public goods in poor countries through overseas development assistance)
• That governments are often loss-minimisers and examine costs and benefits asymmetrically, focussing on what they lose in co-operation with greater emphasis than on what they gain.
• Short-termism - and a huge discount rate applied to the value of future welfare
  

I think one of the most important things is to distinguish provision of global public goods from 'compassionate' spending, whereby we fund development and poverty reduction in poor countries for ostensibly altruistic reasons: ie. we are meeting an equity objective (we may hope for positive externalities in stability and improved trade too, but that's not the prime purpose). Global public goods are things we all benefit from but contrive to provide insufficiently, thus reducing our collective welfare. So we should see this a failure to meet an efficiency objective.

But in many ways that's the easy part... the real problem is how to achieve the necessary collective action... Knowing there is a robust economic case for doing it is the start, but how to fight through the seemingly irrational and self-harming political economy that actually does make the decisions about all this? One approach is to be clear what is new and interesting about analysing these issues through undertsanding the characteristics of global public goods, and making clear distinctions between the case for providing these and the case for provision of private and national public goods through aid. Each of the public goods in question has subtley different characteristics and different reasons why it is likely to be under-provided... teasing those out will help. Once the underlying failure is understood and assessed, then the analysis should return to political economy and how to cause the necessary collective action to happen in the real world - informed by a new and fresh analysis of the underlying failure.

DfID is taking the initiative in taking this work forward with E3G, and that is to be welcomed! ... continues. Read full post.

Copenhagen consensus - wrong question leads to wrong answer on climate change

In theory, it would be good to prioritise resources for global do-gooding by asking what is the best use of an additional $50 billion,and weighing costs and benefits of different approaches. The Copenhagen Consensus Center, headed by Bjørn Lomborg author of the Skeptical Environmentalist and bête noire of the greens, attempts to address this sort of question. In doing so, they've created a list of 40 possible global interventions and asked workshop participants drawn mostly from UN represenatives (China, India, Pakistan, Tanzania, Thailand, the United States, Vietnam and Zambia) to rank them. The ranking they came up with places climate change at the bottom and tackling communicable diseases at the top. There are several flaws in this superficially attractive approach. These are:

• The climate change measures listed are really 'efficiency' measures... ie. an "optimal carbon tax", meaning that the carbon externality is reflected in energy prices. Not to do this is inefficient. A carbon tax doesn't cost anything: it represents redistribution of the tax burden to pollution and away from other tax bases, like employment or investment. Most of the other measures are 'equity' approaches, and involve transfers from one group to another. Measures taken for efficiency reasons should be done anyway, and not compared with measures taken for equity reasons. The question is badly framed in this critical respect.
  

• The choice as framed is artificial - not disimilar to asking someone if they would spend all their money on health care or on fire insurance. Most people, and most governments, establish a portfolio of responses designed to manage risks of very different types and timetables. The climate risks are long-term, potentially disasterous but uncertain in magnitude and form, and likely to be irreversible. It is difficult to compare these in isolation with more immediate risks.
  

• The choices made may reflect indifference to intergenerational equity consequences by those seeking equity-driven transfers for the current generation - ie. most of the participants. It is true that societies have tended to under-provide for and over-exploit the resources of future generations... and this is likely to be the case for climate change. If there are going to be transfers, the case for transfers to future generations is unlikely to be made convincingly by those that want transfers to them now. However, in deciding on priorities for transfers for equity reasons, principles of justice need to be applied (usually by the donors, which must also strike a bargain with their own taxayers over altruistic use of funds). They should not just respond to the aggregated expressed preferences of those representing current generations at a workshop. A type of 'Rawlsian veil of ignorance' could have been drawn over the exercise and participants asked to imagine they did not know when in the next 200 years they were living or who they were serving.
  

• The responses of participants may reflect a general belief in the underprovision of aid and global public goods. There may well have been different choices made for the marginal $50 billion if we had been more effective in securring efficient level of provision of global public goods.

Having said all this, I welcome Lomberg's approach and wish there was more of this sort of challenge and debate - though with a more thoughtful approach to what is a transfer for equity reasons and what is an attempt to deliver efficient provision of public goods and internalisation of externalities.
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What's the opposite of "human rights with common sense"

What is the opposite of 'common sense'? 'Stupid' could be right. Or 'arbitrary'. But one opposite might also be 'principled'... meaning that you stick to deeply-held principles, even if they give you discomfort in specific cases. Conservative leader David Cameron called for "human rights with common sense" as he promised to repeal the Human Rights Act and replace it with a Bill of Rights (BBC or original speech). He can probably have a Bill of Rights (which the Human Rights Act already is) or the appearance of common sense - but not both.

The whole problem with common sense is that it implies a very elastic view of what is right - ambiguous wording that would allow a view to be taken on the spot guided by what seems right (or expedient) at the time by someone in authority. That can never provide a useful compass in situations of great dilemma and difficulty. In the last two days we have seen courts strike down convenient authoritarian fixes at the expense of human rights -UK High Court rules against control orders and US Supreme Court rules Guatanamo tribunals illegal - that is because principle is applied, not some expedient interpretation of common sense, and that's a vital check on executive power to erode liberty. ... continues. Read full post.

Is Millennium Development Goal no.1 rubbish?

As a call to arms, you can't beat the first target in the first of the Millennium Development Goals ... "Between 1990 and 2015, reduce by half the proportion of people living on less than a dollar a day". There were about 1.2 billion people living on $1 per day or less in 2001 (about 1 in 5 people). The trouble with this goal is that it encourages efforts to focus on the second poorest 600 million people in world, in the hope that they can be dragged over the MDG line because they are nearest to it. [Similar things happen with any target for clearing a threshold: eg. in education, getting 5 good GCSEs... teacher's incentive is not to waste time on some kid that can't read]. As the chart shows most of the MDG progress to date is from rapidly growing China and the Far East... in sub-Saharan Africa, it's actually heading the wrong way.

There is good theory (backed by common sense) that says a given sum of money is worth more to you, the poorer you are. This means the relation between 'utility' or welfare and consumption is not a straight one-for-one. The UK Treasury has examined this relationship and its bible of economic rectitude, the Green Book (see relevant section), gives the function as:

extra welfare = extra consumption x 1/consumption level

Assuming something like this applies to the very poor, this relationship is plotted to the left. This means a one cent per day increase is worth 5 times as much to someone on 20c per day compared to someone on $1 per day. If the aim of a development organisation was to maximise welfare from its programmes (rather than meet MDGs), it would be focussing on making small improvements in the position of the ultra poor, not pushing the upwardly mobile 2nd income decile over the MDG line. And even though it is difficult and expensive to do it, the welfare return would could be more than enough to justify the extra costs and apparent inefficiencies.

Apart from the fact that the MDGs disincentivise it, why doesn't this happen? Probably because the most wretched people live in conflict zones, fragile states, and/or on environmentally marginal or threatened lands. Here the development organisations find it much harder to operate - the 'aid agency' model is comfortable funding photogenic schools and hospitals... but what the ultra poor need is their basic needs met, and usually security and stability above all. But peace-keeping or peace-making expenditures don't count against the UN commitments for rich countries to spend 0.7% GDP on overseas development assistance, so these large sums go elsewhere.

So, to summarise: big totemic development targets discourage the most welfare-maximising interventions for the most desperate people. Great!

(with thanks to Catriona Laing)
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The biggest possible question - growth in the 21st Century

A session with Her Majesty's Treasury yesterday reminded me that one of the most startling things is just how big the world economy has become. It has increased by about 8 times since 1950 - now about $55 trillion. Growing on average at about 3.74% per year, meaning it doubles in size about every 19 years

You might recall the Hindu legend of Ambalappuzha in which Krishna arrived in the court of the king and challenged him to a game of chess. The prize would be an amount of rice calculated using the chess board - one grain on the first square, two on the second, four on the third, eight on the fourth and so on. The king accepted, lost the game and then found there wasn't enough rice in the world to match the bet. Benevolent Krishna let the king off with a promise that he'd serve free rice pudding to passing pilgrims forever.

It might not be so easy with the world economy... This proverb of expenential growth is relevant because the world economy consumes a lot of things that are limited like oil, iron ore, copper, river water and land or only renewable at a certain sustainable rate like rice, forests, fish or soils. But if the current rate of growth continues through the 21st Century then we end up with an economy 36 times the size it is today by 2100 (log-scale chart to the left). Unlike the 20th Century in which growth proceeded unconstrained by natural limits, the 21st Century will be very different... environmental and natural resource limits will come to matter a great deal and economic growth will be constrained. Basically, we have to find a way to grow while taking much less from the environment and ultimately using only renewable resources at a sustainable rate. That is why the key economic and environmental concepts for the 21st Century are resource productivity and sustainability.
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Climate change in Africa

Christian Aid says that 180 million people likely to die from climate change in Africa by the end of this century - see BBC story But the coverage focuses on mitigation (reducing greenhouse gases) rather than adaptation - which is what will matter most in Africa over the next 50 years. Here's a map showing where the deaths from climate change are already happening. And it isn't the USA...


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