Many people migrate to another country to earn a decent income and to attain a better standard of living. But my recent research shows that across all destinations and generations studied, many migrants from Turkey to European countries are financially worse off than those who stayed at home.
Even if there are some non-monetary benefits of staying in the destination country, such as living in a more orderly environment, this raises fundamental questions. Primarily, why are 79% of the first-generation men who contributed to the growth of Europe by taking on some of the dirtiest, riskiest manual jobs – like working in asbestos processing and sewage canals – still living in income poverty? There is a strong indication that the European labour markets and welfare states are failing migrants and their descendants.
In my recent book, Poverty and International Migration, I examined the poverty status of three generations of migrants from Turkey to multiple European countries, including Austria, Belgium, Denmark, France, Germany, Sweden and the Netherlands. I compared them with the “returnees” who moved back to Turkey and the “stayers” who have never left the country.
The study covers the period from early 1960s to the time of their interview (2010-2012), and draws on a sample of 5,980 adults within 1,992 families. The sample was composed of living male ancestors (those who went first were typically men), their children and grandchildren.
For my research, the poverty line was set at 60% of the median disposable household income (adjusted for household size) for every country studied. Those who fall below the country threshold are defined as the income poor.
Data for this research is drawn from the 2000 Families Survey which I conducted with academics based in the UK, Germany and the Netherlands. The survey generated what is believed to be the world’s largest database on labour migration to Europe through locating the male ancestors who moved to Europe from five high migration regions in Turkey during the guest-worker years of 1960-1974 and their counterparts who did not migrate at the time.
It charts the family members who were living in various European countries up to the fourth generation, and those that stayed behind in Turkey. The period corresponds to a time when labourers from Turkey were invited through bi-lateral agreements between states to contribute to the building of western and northern Europe.
The results presented in my book show that four-fifths (79%) of the first-generation men who came to Europe as guest-workers and ended up settling there lived below an income poverty line, compared with a third (33%) of those that had stayed in the home country. By the third generation, around half (49%) of those living in Europe were still poor, compared with just over a quarter (27%) of those who remained behind.
Migrants from three family generations residing in countries renowned for the generosity of their welfare states were among the most impoverished. Some of the highest poverty rates were observed in Belgium, Sweden and Denmark.
For example, across all three generations of migrants settled in Sweden, 60% were in income poverty despite an employment rate of 61%. This was the highest level of employment observed for migrants in all the countries studied. Migrants in Sweden were also, on average, more educated than those living in other European destinations.
My findings also reveal that while more than a third (37%) of “stayers” from the third generation went on to complete higher education. This applied to less than a quarter (23%) of the third generation migrants spread across European countries.
Turkish guest workers in a Berlin park in the 1980s. DPA/Alamy
Returnees did well
Having a university education turned out not to improve the latter’s chances of escaping poverty as much as it did for the family members who had not left home. The “returnees” to Turkey were, on the other hand, found to fare much better than those living in Europe and on a par with, if not better than, the “stayers”.
Less than a quarter of first- and third-generation returnees (23% and 24% respectively) experienced income poverty and 43% from the third generation attained a higher education qualification. The money they earned abroad along with their educational qualifications seemed to buy them more economic advantage in Turkey than in the destination country.
The results of the research should not be taken to mean that international migration is economically a bad decision as we still do not know how impoverished these people were prior to migration. First-generation migrants are anecdotally known to be poorer at the time of migration than those who decided not to migrate during guest-worker years, and are likely to have made some economic gains from their move. The returnees’ improved situation does lend support to this.
Nor should the findings lead to the suggestion that if migrants do not earn enough in their new home country, they should go back. Early findings from another piece of research I am currently undertaking suggests that while income poverty considerably reduces migrants’ life satisfaction, there are added non-monetary benefits of migration to a new destination. The exact nature of these benefits remains unknown but it is likely to do, for example, with living in a better organised environment that makes everyday life easier.
However, we still left with the question of why migrants are being left in such poverty. Coupled with the findings from another recent study demonstrating that more than half of Europeans do not welcome non-EU migrants from economically poorer countries, evidence starts to suggest an undercurrent of systemic racism may be acting as a cause.
If migrants were welcome, one would expect destination countries with far more developed welfare states than Turkey to put in place measures to protect guest workers against the risk of poverty in old age, or prevent their children and grandchildren from falling so far behind their counterparts in Turkey in accessing higher education.
They would not let them settle for lower returns on their educational qualifications in more regulated labour markets. It’s also unlikely we would have observed some of the highest poverty rates in countries with generous welfare states such as Sweden – top ranked for its anti-discrimination legislation, based on equality of opportunity.
Overall, the picture for “unwanted” migrants appears to be rather bleak. Unless major systemic changes are made, substantial improvement to their prospects are unlikely.
In today’s world, the riskiest investments are in the Middle East and Africa, whilst Big Oil’s greenwashing campaign is in full swing, as described in RGnB.org. Aren’t Big Oils and Hydrocarbon economies of the MENA in cahoots?
The above Image is of Canva
Big Oil’s greenwashing campaign
A released new memo and documents last week showed how the fossil fuel industry engages in “greenwashing” to obscure its massive long-term investments in fossil fuels and failure to reduce emissions meaningfully, writes Dan Bacher.
The new documents are part of a Committee’s ongoing investigation into the “fossil fuel industry’s role in spreading climate disinformation and preventing action on climate change,” according to a press statement.
“Even though Big Oil CEOs admitted to my Committee that their products are causing a climate emergency, today’s documents reveal that the industry has no real plans to clean up its act and is barreling ahead with plans to pump more dirty fuels for decades to come,” said Chairwoman Maloney.
Syria, Yemen, and Libya were on the list of the highest-risk countries in the third quarter of 2022
The Middle East and Africa (MEA) have been identified as the region with the highest risk offerings, with a score of 54 out of 100, for investors driven by “social unrest, food insecurity, rising debt, and inflation,” according to a leading data and analytics company, GlobalData.
Syria, Yemen, and Libya were on the list of the highest-risk countries in the third quarter of 2022.
The research showed that the Americas region’s risk score was 47.7 out of 100 during the third quarter, making it the second-highest area with investment risk, followed by the Asia-Pacific region at 41 and Europe at 33.4.
“While rising oil prices have increased the revenue of major oil producers and exporters in the MEA, high fuel costs have adversely impacted low-income nations – especially given their heavy dependence on staple food imports from Russia and Ukraine,” GlobalData economic research analyst Puja Tiwari said.
Tiwari added: “Humanitarian crisis across Lebanon, Syria, Iraq, Libya, and Yemen, along with skyrocketing poverty, is impacting the MEA region. Due to curtailment of wheat exports from two main producers in the world (especially wheat from Russia and Ukraine), many countries across the MEA are already facing a major food crisis.”
The research also showed that global risk rose from 44 and 44.9 out of 100 in the second and third quarters of 2022, respectively.
“While governments of major economies are undertaking various fiscal measures to deal with the rising prices, this will weigh on already strained government finances. Moreover, with several economies tightening monetary policy, the increased borrowing costs will remain another challenge moving into Q4 and beyond,” Tiwari said.
Unfortunately, those Western governments with decision making power and resources to help vulnerable countries respond to the polycrisis are not inclined to use it, given domestic cost-of-living crises in G7 countries, the ongoing conflict in Ukraine, and limited domestic political appetite for international initiatives.
In October, the International Monetary Fund (IMF) published what is perhaps its most bleak economic outlook in a decade, forecasting that the world economy will grow by only 2.7 percent in 2023 and warning that “the worst is yet to come.” Not since the global financial crisis of 2007–2008 have we seen such pressure on vulnerable countries grappling with what Carnegie scholar Adam Tooze describes as “polycrisis.” Climate change, food and energy price inflation, debt distress, and an ongoing pandemic have created a dynamic where, in Tooze’s view, “the whole is even more dangerous than the sum of the parts.”
This constellation of crises demands that G20 leaders design a new global financial architecture that delivers urgent liquidity for vulnerable countries, a solution for countries facing debt distress, and long-term financing at an order of magnitude greater than currently available—all while giving those vulnerable countries a more meaningful voice in the design of that architecture.
This polycrisis comes to its most acute head within the twenty-five countries that, according to Bloomberg, are most vulnerable to debt distress. Home to 1.5 billion people, they range from middle-income countries like Pakistan and Egypt to low-income countries like Ethiopia. And while the UN’s Food Price Index has retreated from the all-time highs that appeared immediately in the wake of Russia’s invasion of Ukraine, food prices remain higher than they were during the crises in 2008 and 2010—the latter of which precipitated unrest in more than forty countries as well as contributing to the Arab Spring protests. This is happening against a backdrop of increasing extreme weather events—from historic drought in the Horn of Africa to devastating floods in Pakistan that displaced 33 million people. In the first half of this year, extreme weather events cost an estimated $65 billion in damages globally.
Such an unprecedented cocktail of volatility is systemic in nature and is, in part, created by the collective inability of the world’s most powerful governments to build a multilateral system more resilient to these shocks. At a minimum, it warrants an unprecedented response from the international community. Unfortunately, those Western governments with decisionmaking power and resources to help vulnerable countries respond to the polycrisis are not inclined to use it, given domestic cost-of-living crises in G7 countries, the ongoing conflict in Ukraine, and limited domestic political appetite for international initiatives.
A DANGEROUS MYOPIA ON THE PART OF WESTERN LEADERS
Taking a step back, if leaders from Europe and North America have thus far been reluctant to meet the current crisis moment, this is myopic for two reasons.
First, helping vulnerable countries avoid widespread hunger, mitigate debt distress, and build resilience to climate shocks is not charity but enlightened self-interest. It will contribute to stability in those nations and help avert the challenges created when large populations migrate to flee conflict and famine in search of economic opportunity. Europe’s so-called migration crisis in 2016, which helped fuel a wave of populism on the continent, was catalyzed in part by instability in Libya and Syria.
Second, Western countries are increasingly aware that their relationships with countries in the Global South are not what they assumed. A succession of UN General Assembly resolutions condemning Russia’s actions in Ukraine, most recently on October 12, 2022, saw many African countries abstain (see figure 1). While there are a number of reasons for such nonalignment, it is clear that some African countries want to be free to chart their own path and choose their own partnerships—and that the choice of partners depends in part on what the partner country can bring to the table.
In this regard, the West risks falling behind. Russia, the largest supplier of weapons to Africa, now provides 44 percent of major arms to the region. China committed about $160 billion in infrastructure financing in Africa between 2000 and 2020 in comparison with $153.4 billion in official development assistance from the United States1. In June, China announced a restructuring of some African countries’ debts amid concerns of debt sustainability and agreed to co-chair Zambia’s creditor committee to address the restructuring of the country’s debt.
In contrast, leaders from the Global South at UN General Assembly meetings both in public and private have disparaged European countries for stepping back from their role as custodians of the multilateral system, for their lack of support during the coronavirus pandemic, and for a litany of promises that remain unfulfilled. While they are more positive that the United States is in listening mode, as reflected in the recently published U.S. Strategy Toward Sub-Saharan Africa, they remain wary that U.S. domestic politics could see a shift of administration in two years’ time.
A study of developing countries’ attitudes compiled by Rosa Balfour, Lizza Bomassi, and Marta Martinelli at Carnegie Europe demonstrated the disconnect between how Europe thinks it is perceived and how it is actually perceived in key countries of the Global South. In many cases, the role of Europe’s development programming remains invisible to citizens of these countries, while steps to use the EU’s market access to enforce human rights and environmental standards, viewed at home as a positive impact of Europe in the world, are perceived elsewhere as simple market protectionism.
Likewise, a large-scale survey of African youth conducted by the Ichikowitz Family Foundation shows that in 2022, China overtook the United States as the geopolitical superpower viewed most favorably—in part because its actions on the continent are so visible. Analysis from Afrobarometer (see figure 2) presents a similar trend.
THE WEST’S CRISIS RESPONSE IS FUELING MISTRUST IN THE GLOBAL SOUTH
There is a growing perception among Africans that African countries are victims of crises created in and by other regions. This view is rooted in fact: the global financial crisis began in the U.S. housing market, the coronavirus pandemic began in China, and industrialized countries in the Global North caused the climate crisis (Africa has contributed just 4 percent to historical carbon emissions). In each case, Western countries’ policy responses to these crises further disadvantage African countries.
During the pandemic, Western countries have monopolized vaccine supply, and the current response to the climate crisis sees some Western governments seek to limit the ability of African countries to exploit natural gas to support economic and social development—while those Western countries continue to use natural gas themselves.
Not only is inflation greater in African countries, but it also has a more devastating impact on ordinary people. Analysis in a new data portal from the ONE Campaign, where the author is executive director for global policy, shows that, in comparison to higher-income countries, a larger proportion of Africans’ income is spent on food and other essential goods, leaving them more vulnerable to inflation (see figure 3).
Yet the current inflationary challenges illustrate the failure of global economic governance institutions to prevent macroeconomic policy decisions by major powers from spilling over to the wider world and harming vulnerable nations
The U.S. Federal Reserve’s steep interest rate hikes in recent months to quell inflation in the United States will greatly impact other countries, particularly those with heavy debt burdens. The U.S. dollar is the world’s reserve currency. About half of international trade is invoiced in dollars, about half of all international loans and global debt securities are denominated in dollars, and dollars are involved in 90 percent of foreign exchange transactions. As a result, increases in interest rates are hitting vulnerable countries in a number of ways.
But while African countries’ fortunes are shaped by these global events, they have limited agency over the response, thanks in part to an outmoded global economic architecture created after the Second World War—before most African countries gained independence.
The Bretton Woods institutions—the International Monetary Fund and the International Bank for Reconstruction and Development (now part of the World Bank Group)—were established in 1944 to safeguard the stability of the international financial system and finance postwar reconstruction. But their governance remains archaic.
Under a long-standing “gentleman’s agreement,” Europe gets to choose the managing director of the IMF and the United States chooses the World Bank president. The voting shares of these institutions are highly unequal, since they are pegged to the size of shareholders’ economies. As a result, the United States, with a population of 330 million people, controls roughly 16 percent of the voting power at the IMF and World Bank, while Africa’s fifty-four countries—accounting for 1.4 billion people—collectively have a voting share of roughly 7 percent. Per capita, an American’s vote is worth twenty times as much as a Nigerian’s at the IMF, and sixty-four times that of an Ethiopian. And even on its own terms, current quota shares disproportionately benefit wealthy countries—particularly Europe—at the expense of emerging economies.
Increasingly, countries in the Global South are demanding a meaningful seat at the table of international institutions. These calls were particularly prominent at this year’s UN General Assembly. Indian Minister for External Affairs Subrahmanyam Jaishankar described the current architecture as “anachronistic and ineffective.”
We need to reform a morally bankrupt global financial system. This system was created by rich countries to benefit rich countries. Practically no African country was sitting at the table of the Bretton Woods Agreement; and in many other parts of the world, decolonization had not yet taken place. It perpetuates poverty and inequalities. We need to balance the scales between developed and developing countries and create a new global financial system that benefits all.
These increasingly emphatic statements are no longer general calls for reform. Instead, leaders from the Global South have an agenda and are putting specific proposals on the table.
In April, following Russia’s invasion of Ukraine, members of the Africa High-Level Working Group on the Global Financial Architecture, coordinated by the UN Economic Commission for Africa, proposed a specific set of measures to create fiscal space to help them respond to the invasion, including the recycling of $100 billion in special drawing rights, a renewed debt service suspension initiative, and a liquidity and sustainability facility to reduce the cost of African borrowing on capital markets.
Since then, Barbados’s Prime Minister Mia Mottley has proposed the Bridgetown Initiative, which seeks to address immediate fiscal concerns and proposes a more structural set of reforms to help vulnerable countries become resilient to economic, climate, and pandemic shocks.
Yet debates about Bretton Woods reform risk becoming fragmented in a political environment in which achieving the necessary consensus for reform is challenging. Furthermore, in an era of great power competition, G20 countries are unlikely to voluntarily give up some of their power in these institutions.
AS A RESULT, A FOCUSED AGENDA IS MORE LIKELY TO GAIN TRACTION.
Firstly, G20 countries should urgently take steps to provide the necessary liquidity to help vulnerable countries weather the economic storm and build resilience for the future. They should reinstate the debt service suspension initiative, which helped free up fiscal space during the coronavirus pandemic, and make good on their promise, made in October 2021, to provide emergency liquidity in the form of $100 billion in special drawing rights. To date, $81 billion has been pledged (including $21bn from the US that is yet to be appropriated by Congress) to this target but very little has been disbursed. These funds should be urgently committed to the IMF’s Poverty Reduction and Growth Trust, the IMF’s newly established Resilience and Sustainability Trust, and multilateral development banks (MDBs), enabling vulnerable countries to draw down these resources.
Second, the polycrisis requires long-term resourcing that is an order of magnitude greater that what is currently on the table. There is hope on this front. In October, ahead of the IMF and World Bank annual meetings, U.S. Treasury Secretary Janet Yellen signaled U.S. government support for the reform of MDBs relating both to how they lend and to how much they lend. Australia, Canada, France, Germany, Italy, Japan, the Netherlands, Switzerland, the United Kingdom, and the United States then announced an “evolution roadmap” for the World Bank to address its investment in cross-border challenges such as pandemic preparedness and climate change (in addition to its current model of bilateral lending to countries), and support for more risk-taking to more effectively leverage the World Bank’s balance sheet.
According to a G20-commissioned expert group, MDBs (including the World Bank) could mobilize up to an additional $1 trillion without risking their AAA credit ratings. The boards of the MDBs (largely composed of G7 finance ministers) should lay out a roadmap for implementing these recommendations and increasing the speed and flexibility of lending to vulnerable countries.
Finally, there are increasing calls for Global South countries to have a meaningful seat at the decisionmaking table. Establishing a permanent African Union seat at the G20 would send an important signal, and the IMF’s 2023 quota review could provide an opportunity for the creation of a new African chair on the IMF’s board as well as an increase in quota or a change in quota distribution in favor of African countries.
These specific steps would signal that Western countries are listening to countries in the Global South, provide urgent finance at a scale needed to address the current challenges, and catalyze a broader debate about the kinds of international institutions needed in the twenty-first century.
All of this could be accomplished without significant investments of domestic budgets or political capital. In this respect the usual explanations for inaction do not stand.
1 Author’s calculations of statistics from the Development Assistance Committee of the Organisation for Economic Cooperation and Development. See Organisation for Economic Cooperation and Development, Query Wizard for International Development Statistics (accessed October 18, 2022), https://stats.oecd.org/qwids/.
In their understanding of good governance and its role in sustainable development, Gulf Business addresses this theme only within the business world of the MENA region, specifically within the Gulf area countries. Let us see what it is all about.
Insights: Understanding good governance and its role in sustainable development
By Dr Ashraf Gamal Eldin
Good corporate governance fosters fair competition, enables efficient utilisation of resources, increases employment opportunities, and develops domestic and regional capital markets.
11 November 2022
Dr Ashraf Gamal Eldin
The term ‘governance’ refers to all forms of regulations, including that of institutions, procedures, and practices used to decide on and regulate matters of public concern. In its most basic sense, governance is about providing direction and ensuring that an institution operates efficiently.
Good governance, however, adds a normative or evaluative attribute to this process. In simple terms, good governance refers to the institutional and political outcomes necessary to achieve developmental objectives. The concept has become increasingly important in recent years, emerging as one of the essential components for growth and sustainable development. The key measure of good governance is the extent to which it upholds human rights, including civil, cultural, economic, political, and social indicators. As a result, it is important to understand good governance and its significance in sustainable development.
Good governance reassures stakeholders that an organisation fulfills its obligations to all of its stakeholders, it treats everyone with respect and dignity, by being transparent about its operations, finances, and conduct. In fact, a major indicator of an institution’s quality and excellence is how committed it is to adopt the principles of good governance in all facets of its operations and decision-making. This is even more important, as it significantly supports sustainable development in institutions. It is widely observed that the inability to uphold these principles can have negative effects on welfare, efficiency, and operational excellence, thereby affecting the long-term success of organisations.
The private sector is growing rapidly in the Middle East and North Africa (MENA) region. Despite the fact that every country is unique, forward-thinking companies throughout the region see better corporate governance as a competitive advantage in their quest for growth and profitability. Consequently, countries in the MENA region are at various stages of developing unique corporate governance frameworks. This could be further driven by making strenuous efforts to create a national environment that supports and encourages corporate governance in the region. The UAE ranked first in the Middle East and 24th globally on the Good Governance Index 2022, which was released by the Chandler Institute for Governance, a non-profit organisation that works with governments to strengthen their capabilities.
Sustainable development argues that the current use of resources should minimize the level of harm to the future generations’ share of resources. ‘Good Governance’ is capable of common sense and the versatile planning that is required for sustainable development.
A good corporate governance system fosters fair competition, enables more efficient utilisation of resources, increases employment opportunities, and the development of domestic and regional capital markets. With governance playing a crucial role in driving efforts to meet institutional goals, it has been referred to as the fourth pillar of sustainable development alongside social, environmental, and economic factors. As there is a strong emphasis on minimising future harm from the current use of resources, governance will certainly aid in shaping versatile strategies that ensure sustainable development across organisations.
Good governance is not a luxury, it creates a competitive edge for companies and economies.
Dr Ashraf Gamal Eldin is the CEO of Hawkamah Institute for Corporate Governance
We tend to surf on how and why disputes arise between countries because each has interests to preserve. Notably, the advanced countries have the most to lose, and the developing ones are convinced they have too little to wait for. Despite that, at COP27, the authors found three reasons rich countries can no longer ignore calls to pay the developing world for climate havoc.
The enormous global paradox is that progress and development are the natural causes of planetary embarrassment and which, combined with the misdeeds of nature, pose a problem.
Payments from high-emitting countries to mitigate the harm that climate change has caused in the most vulnerable parts of the world is finally on the agenda for discussion at a global climate change summit, more than 30 years after the idea was first articulated by delegates from small island developing states.
Loss and damage is the term used by the UN to describe these impacts of climate change that cannot be prevented and to which people cannot adapt. These include lives that have been and will be lost, communities displaced by rising seas, extreme weather and famine, livelihoods and cultural heritage destroyed and ecosystems damaged beyond repair because of a failure to arrest greenhouse gas emissions, and so, global temperature rise.
The UN’s Intergovernmental Panel on Climate Change (IPCC) reported that approximately 3.3 to 3.6 billion people are highly vulnerable to climate change. Many of them live in west, central and east Africa, south Asia, central and South America, as well as in small island developing states, such as Vanuatu in the Pacific, and in the Arctic.
As countries in these regions divert more of their wealth towards preparing for and recovering from storms, spreading deserts and melting glaciers, they are left with less money to cut their emissions and contribute to meeting the 1.5°C goal agreed at the negotiations in Paris in 2015. Rich countries, who are responsible for most emissions, promised US$100 billion (£87.2 billion) a year in aid in 2015.
But a recent UN report found that international finance to help the most vulnerable countries adapt to climate change (with bigger sea walls, for instance) has amounted to less than one-tenth of what is needed, and the gap between the two is widening. The US, UK, Canada and Australia are among the biggest laggards when their historical responsibility for climate change is taken into account. There has been no separate funding to address the damage already caused by warming.
At COP26 in 2021, developing countries proposed a loss and damage finance facility to help communities recovering from disasters and compensate them for what they have lost already. The EU and US resisted this in the final days of talks.
Instead, the Glasgow Dialogue was established: a series of discussions about how to arrange funding to help countries bearing the brunt of climate change. Delegates from developing country were sorely disappointed. Instead of material support, they got another talking shop.
But many of these same negotiators are heading into COP27 with new resolve. Here are three reasons why loss and damage is becoming harder for rich countries to ignore.
1. The latest science
Attribution science, which clarifies the links between extreme weather events and emissions, has taken great leaps forward in recent years. Across more than 400 studies, scientists have examined wildfires in the US, heatwaves in India and Pakistan, typhoons in Asia and record-breaking rainfall in the UK.
Broadly, this research shows the poorest and most vulnerable are bearing the heaviest burden despite having contributed the least to the problem. This growing evidence base bolsters the case for reparations.
2. Climate impacts are escalating
The deadly floods in Pakistan in August are the latest in a series of disasters to push loss and damage up the global agenda. According to a recent study, as much as 50% of the rainfall would not have happened without climate change.
Pakistan’s leaders have said that wealthy countries must help pay the bill. After all, it is the latter’s actions that precipitated the disaster. Pakistan’s historically low emissions mean its own contribution to climate change is negligible.
From droughts in Somalia to floods in Nigeria, extreme weather during 2022 has also heaped suffering on African countries with little culpability for climate change. Given that COP27 will be held in Egypt and has been dubbed “the African COP”, these arguments will be brought to the fore.
3. Growing momentum outside of the UN process
The increasing number and importance of lawsuits brought against countries and companies failing to reduce their emissions highlights growing frustration with negotiations under the UN Framework Convention on Climate Change (UNFCCC). As long as rich countries continue to evade the loss and damage issue, vulnerable countries and communities – and their lawyers – will search for alternative solutions.
That is not to say they haven’t had some notable recent successes. The UN Human Rights Committee (UNHRC) decided in September that the Australian government is failing to protect the Torres Strait Islanders from the effects of climate change. This sets a precedent in international human rights law which could one day extend to governments and institutions which have affected people further afield.
But, outside the UN, poorer countries are organising to explore ever more sophisticated diplomatic and legal ways of applying pressure on rich countries. At COP26, the prime ministers of Antigua and Barbuda and Tuvalu launched a commission to explore the kinds of compensation small island states might seek under international law. A group of countries led by Vanuatu is heading for the International Court of Justice.
Since high levels of debt hinder their ability to recover from the ravages of climate change, African and small island leaders are demanding debtors (including development banks and rich countries) write off, suspend or reschedule payments so that vulnerable nations can spend more on cutting emissions and adapting to climate change. These proposals have been called “debt for climate swaps”.
The International Monetary Fund recently announced a resilience and sustainability trust to help shield the finances of vulnerable countries from climate disasters, suggesting development policy is slowly shifting. This followed campaigning by Mia Mottley, the prime minister of Barbados.
Some rich countries are now taking action, suggesting a growing acknowledgement that this funding cannot be delayed forever. In September, Denmark was the first UN party to pledge finance – about US$13 million – to address loss and damage. The G7, under the leadership of the German presidency, has launched an initiative to expand access to financial aid in the immediate aftermath of climate disasters through improvements to existing insurance and social security schemes.
Because these initiatives have come outside of the UNFCCC negotiations, donor countries are free to dictate the terms of their support, sidestepping a process that should be about meeting the needs of vulnerable communities. Much of their funding will go into insurance schemes. Many of the insurance firms that would benefit are based in Europe and the US.
Insurance payouts may be a lifeline for drought-scarred small farmers and flooded homeowners. But some risks are uninsurable, especially those with a slow onset, such as those resulting from sea-level rise. Then there are less tangible harms, such as lost livelihoods, illness and biodiversity loss. Insurance against cyclones won’t compensate fishers in Tuvalu who stand to lose their coastal fisheries as coral reefs succumb to warming.
The next front in the loss and damage debate will involve exploring whether providing finance as a form of solidarity (rather than compensation) is more palatable for rich countries. If that money is wrapped up in insurance schemes, designed to enrich consultants, it won’t really help poor countries. Progress at COP27 will be determined by whether these nations feel the UNFCCC is even capable of helping them.
Originally posted on HUMAN WRONGS WATCH: Human Wrongs Watch (UN News)* — Disinformation, hate speech and deadly attacks against journalists are threatening freedom of the press worldwide, UN Secretary-General António Guterres said on Tuesday [2 May 2023], calling for greater solidarity with the people who bring us the news. UN Photo/Mark Garten | File photo…
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