Sub-Saharan Africa, Remittances & Action needed – Dilip Ratha

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Today I would like to share two things—an amazing World Bank blog and a TEDGlobal 2014 talk filmed Oct 2014 on the subject of remittances. The blogger/speaker is Economist Dilip Ratha. According to his bio page on TED, he “was the first to point out the global and national significance of remittances and their social and economic impact. He is the manager of the Migration and Remittances team at the World Bank and the head of the Global knowledge partnership on migration and development (KNOMAD). He also co-coordinates the G8/G20 Global Remittances Working Group, and is involved in a number of other organizations focusing on remittances”.

The New York Times wrote of him, “No one has done more than Dilip Ratha to make migration and its potential rewards a top-of-the-agenda concern in the world’s development ministries.”

FACTS & FIGURES

In 2013, international migrants sent $413 billion home to families and friends — three times more than the total of global foreign aid (about $135 billion). This money, known as remittances, makes a significant difference in the lives of those receiving it and plays a major role in the economies of many countries. Economist Dilip Ratha describes the promise of these “dollars wrapped with love” and analyzes how they are stifled by practical and regulatory obstacles.

Dilip Ratha has also written a fascinating and enlightening blog with Dame Tessa Jowell titled, ‘It’s time to repeal the remittances “Super Tax” on Africa’. It’s a must read. Here are some excerpts:

Remittances are the shining light of development policy. While debate rages in austerity-hit Western capitals about spending on aid, remittances cost tax-payers nothing. Remittances to developing countries are worth nearly half a trillion dollarsthat’s three times the level of aid – and they’re rising fast, quadrupling since the turn of the century. And remittances work. It’s hard to imagine a more efficient targeting system than people sending money home to their own families and the facts bear that out; remittances are linked to improved economic, health and education outcomes. And as if those benefits weren’t enough, remittances are a huge driver of financial inclusion, acting as a gateway to banking for the people sending and receiving them.

But people sending money home to many parts of the world, particularly sub-Saharan Africa, are paying far too much. They face what is, in effect, a remittances ‘super tax’. A worker sending $200 from London to Lagos can pay fees of over 13%, more than fifty percent above the global average. And within Africa it’s even worse, sending money from South Africa to Malawi could cost upwards of 20%. Of course we all expect some fees for financial transactions but there is strong evidence that these costs are excessive and are restricting the poverty-zapping remittances that reach poorer countries. Reducing fees for sub-Saharan Africa to the global average for instance would mean an extra $1.3 billion reaching families in the region.

…Indeed, if the cost of sending remittances could be reduced by just 5 percentage points relative to the value sent, remittance receipts in developing countries would receive over $20 billion dollars more each year than they do now. That amount of money could educate 18 million children and buy enough vaccines to prevent 8 million children dying from diseases like malaria.

To fix this situation, we need action on three fronts.

To read more on the action needed, read the enlightening blog here or use this shortened link: http://ow.ly/K6zUv

Below is the TEDGlobal 2014 video.

Putin, the USA and recent foreign policy interventions

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For whatever reason, you may not like Vladimir Putin but take a couple of minutes to analyze the transcript of his carefully crafted answer to this Senior Advisor at the Valdai International Discussion Club, 24 October 2014 quoted below the full video.

SENIOR INTERNATIONAL ADVISOR, AKIN GUMP STRAUSS HAUER & FELD LLP TOBY TRISTER GATI (retranslated from Russian): I will speak in the spirit of the Valdai forum. I hope you will understand my question in this same way.

Several weeks back, Mr Obama spoke of three challenges: Ebola, the Islamic State, and Russia, the Russian Federation, because of the events in Ukraine.

This statement greatly angered the Russian leaders. And I must say that what I heard from you today was not talk of three challenges, but of a single global problem that you outlined – the United States.

Some in the United States will welcome what you said because these are not statements about ‘soft power’, perhaps, not about a Cold War, but about a ‘hot war’ in the global system created by the United States.

Others will be surprised at your words and your tone, because many in the United States do not think that it is a good idea to completely destroy our ties, and I am one of these people.

I do not think that foreign policy should be based on not taking Russia’s interests into account, but I think that America’s interests need to be respected too.

To be honest, I do not recognise the country that you described in your statements.

My question is, who is the ‘they’ that you refer to in your statements? Is it President Obama, is it the US elite, which sets the foreign policy, or is it the American people? What did you describe as the ‘United States’ genetic code in the post-war world’? Did you say that you cannot work with the United States in general or with their closest allies?

One more question: do you see any special role that other countries could play, in particular China?

Finally and most importantly, what response do you expect from the Americans to your words?

VLADIMIR PUTIN: First of all, I did not say that we perceive the United States as a threat. President Obama, as you said, views Russia as a threat. I do not think that the United States is a threat to us. I think that, to use a hackneyed term, the ruling establishment’s policies are misguided. I believe that these policies are not in our interests and undermine trust in the United States, and in this sense they damage the United States’ own interests by eroding confidence in the country as a global economic and political leader.

There are plenty of things we can pass over in silence. But I already said, and Dominique mentioned the same thing too, that unilateral action followed by a search for allies and attempts to put together a coalition after everything has already been done is not the way to reach agreement. This kind of unilateral action has become frequent in US policy today and it leads to crises. I already spoke about this.

President Obama spoke about the Islamic State as one of the threats. But who helped to arm the people who were fighting Assad in Syria? Who created a favourable political and informational climate for them? Who pushed for arms supplies?

Are you really not aware of who is fighting there? It is mostly mercenaries fighting there. Are you not aware that they get paid to fight? And they go wherever they get paid more.

So they get arms and they get paid for fighting. I have heard how much they get paid. Once they’re armed and paid for their services, you can’t just undo all that. Then they hear that they can get more money elsewhere, and so they go there, and then they capture oil fields in Iraq and Syria say, start producing oil, and others buy this oil, transport it and sell it.

Why are sanctions not imposed on those engaged in such activities? Doesn’t the United States know who is responsible? Isn’t it their own allies who are doing this? Don’t they have the power and opportunity to influence their allies or do they not want to do so? But then why are they bombing the Islamic State?

They started producing oil there and were able to pay more, and some of the rebels fighting for the so-called ‘civilised opposition’ rushed off to join the Islamic State, because they pay better.

I think this is a very short-sighted and incompetent policy that has no basis in reality. We heard that we need to support the civilised democratic opposition in Syria, and so they got support, got arms. And the next day half the rebels went off and joined the Islamic State. Was it so hard to foresee this possibility a bit earlier? We are opposed to this kind of US policy. We believe it is misguided and harmful to everyone, including to you.

As for the question of taking our interests into account, we would love to see people like you in charge at the State Department. Perhaps this would do something to help turn the situation around. If this does not happen, I ask you to get the message across to our partners, the US President, Secretary of State and other officials, that we do not want or seek any confrontation.

You think that with some respect for our interests many problems could be resolved. But this needs to be about action, not just words. Respecting others’ interests means, as I said in my opening remarks, that you cannot just put the squeeze on others by using your exceptional economic or military clout.

It is no good thing that they are fighting in Iraq, and Libya ended up in such a state that your ambassador there was killed. Are we to blame for these things? The [UN] Security Council took the decision at one point to declare a no-fly zone in Libya so that Gaddafi’s aircraft would not be able to bomb the rebels. I do not think this was the wisest decision, but be that as it may. But what happened in the end? The United States started carrying out air strikes, including against targets on the ground. This was a gross violation of the UN Security Council resolution and essentially an act of aggression with no resolution to support it. Were we to blame for this? You did this with your own hands. And what was the result? Your ambassador was killed. Who is to blame? You can only blame yourselves. Was it a good thing for the United States that an ambassador was killed? It was a terrible thing, a terrible tragedy.

But you should not look for scapegoats if you are the ones who made the mistakes. On the contrary, you need to overcome the desire to always dominate and act on your imperial ambitions. You need to stop poisoning the minds of millions of people with the idea that US policy can only be a policy of imperial ambitions.

We will never forget how Russia helped the United States to obtain independence, and we will never forget our cooperation and alliance during World War I and World War II. I think that the American and Russian peoples have many deep strategic interests in common, and it is on these mutual interests that we need to build our foundations.

Ukrainian crises: An Alternate Explanation from Putin’s Perspective

Putin_ValdaiclubThe following is culled from the Meeting of the Valdai International Discussion Club, 24 October 2014.

PROFESSOR OF POLITICAL SCIENCE, DIRECTOR OF THE CENTER FOR GOVERNANCE AND PUBLIC POLICY AT CARLETON UNIVERSITY (OTTAWA) PIOTR DUTKIEWICZ: Mr. President, if I may I would like to go back to the issue of Crimea, because it is of key importance for both the East and the West. I would like to ask you to give us your picture of the events that lead to it, specifically why you made this decision. Was it possible to do things differently? How did you do it? There are important details – how Russia did it inside Crimea. Finally, how do you see the consequences of this decision for Russia, for Ukraine, for Europe and for the normative world order? I am asking this because I believe millions of people would like to hear your personal reconstruction of those events and of the way you made the decision.

VLADIMIR PUTIN: I do not know how many times I spoke about this, but I will do it again.

On February 21, Viktor Yanukovych signed the well-known documents with the opposition. Foreign ministers of three European countries signed their names under this agreement as guarantors of its implementation.

In the evening of February 21, President Obama called me and we discussed these issues and how we would assist in the implementation of these agreements. Russia undertook certain obligations. I heard that my American colleague was also ready to undertake some obligations. This was the evening of the 21st. On the same day, President Yanukovych called me to say he signed the agreement, the situation had stabilized and he was going to a conference in Kharkov. I will not conceal the fact that I expressed my concern: how was it possible to leave the capital in this situation. He replied that he found it possible because there was the document signed with the opposition and guaranteed by foreign ministers of European countries.

I will tell you more, I told him I was not sure everything would be fine, but it was for him to decide. He was the president, he knew the situation, and he knew better what to do. “In any case, I do not think you should withdraw the law enforcement forces from Kiev,” I told him. He said he understood. Then he left and gave orders to withdraw all the law enforcement troops from Kiev. Nice move, of course.

We all know what happened in Kiev. On the following day, despite all our telephone conversations, despite the signatures of the foreign ministers, as soon as Yanukovych left Kiev his administration was taken over by force along with the government building. On the same day, they shot at the cortege of Ukraine’s Prosecutor General, wounding one of his security guards.

Yanukovych called me and said he would like us to meet to talk it over. I agreed. Eventually we agreed to meet in Rostov because it was closer and he did not want to go too far. I was ready to fly to Rostov. However, it turned out he could not go even there. They were beginning to use force against him already, holding him at gunpoint. They were not quite sure where to go.

I will not conceal it; we helped him move to Crimea, where he stayed for a few days. That was when Crimea was still part of Ukraine. However, the situation in Kiev was developing very rapidly and violently, we know what happened, though the broad public may not know – people were killed, they were burned alive there. They came into the office of the Party of Regions, seized the technical workers and killed them, burned them alive in the basement. Under those circumstances, there was no way he could return to Kiev. Everybody forgot about the agreements with the opposition signed by foreign ministers and about our telephone conversations. Yes, I will tell you frankly that he asked us to help him get to Russia, which we did. That was all.

Seeing these developments, people in Crimea almost immediately took to arms and asked us for help in arranging the events they intended to hold. I will be frank; we used our Armed Forces to block Ukrainian units stationed in Crimea, but not to force anyone to take part in the elections. This is impossible, you are all grown people, and you understand it. How could we do it? Lead people to polling stations at gunpoint?

People went to vote as if it were a celebration, everybody knows this, and they all voted, even the Crimean Tatars. There were fewer Crimean Tatars, but the overall vote was high. While the turnout in Crimea in general was about 96 or 94 percent, a smaller number of Crimean Tatars showed up. However 97 percent of them voted ‘yes’. Why? Because those who did not want it did not come to the polling stations, and those who did voted ‘yes’.

I already spoke of the legal side of the matter. The Crimean Parliament met and voted in favour of the referendum. Here again, how could anyone say that several dozen people were dragged to parliament to vote? This never happened and it was impossible: if anyone did not want to vote they would get on a train or plane, or their car and be gone.

They all came and voted for the referendum, and then the people came and voted in favour of joining Russia, that is all. How will this influence international relations? We can see what is happening; however if we refrain from using so-called double standards and accept that all people have equal rights, it would have no influence at all. We have to admit the right of those people to self-determination.

The International Decade for People of African Descent

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Appiah – This decade 2015-2014 has been declared the International Decade for People of African Descent. It’s laudable initiative but not a strong enough denunciation and rejection of the atrocities perpetrated against people of African descent. When one reads the full background of this proclamation,  we cannot help but feel this resolution was birthed in part as a result of recent police brutalities against people of colour in the United States of America with the Justice Department seemingly looking the other way. If this was the case, it should have been stated as such. If these atrocities happened anywhere else, chances are the resolution would have been more straight to the point calling out names and demanding justice. But the nation committing these atrocities is not just any other nation. Its the United States of America- the lone standing hegemon in the international system.

Not only is the United States of America the sole hegemon in the international system, it also picks up a sizable portion of the bills at the United Nations and its agencies. Since the United Nations depends to an extent on United States of America’s financial support, it seems it is ‘wary’ of directly reprimanding or rebuking the United States of America forthright. Instead it has chosen a round about approach, making use of blanket statements that point no fingers at the United States of America.

The above notwithstanding, the following background information is quite informative.


United Nations – There are around 200 million people identifying themselves as being of African descent live in the Americas. Many millions more live in other parts of the world, outside of the African continent.

Whether as descendants of the victims of the transatlantic slave trade or as more recent migrants, they constitute some of the poorest and most marginalized groups. Studies and findings by international and national bodies demonstrate that people of African descent still have limited access to quality education, health services, housing and social security.

In many cases, their situation remains largely invisible, and insufficient recognition and respect has been given to the efforts of people of African descent to seek redress for their present condition. They all too often experience discrimination in their access to justice, and face alarmingly high rates of police violence, together with racial profiling.

Furthermore, their degree of political participation is often low, both in voting and in occupying political positions.

In addition, people of African descent can suffer from multiple, aggravated or intersecting forms of discrimination based on other related grounds, such as age, sex, language, religion, political or other opinion, social origin, property, disability, birth, or other status.

The promotion and protection of human rights of people of African descent has been a priority concern for the United Nations. The Durban Declaration and Programme of Action acknowledged that people of African descent were victims of slavery, the slave trade and colonialism, and continue to be victims of their consequences.

The Durban process raised the visibility of people of African descent and contributed to a substantive advancement in the promotion and protection of their rights as a result of concrete actions taken by States, the United Nations, other international and regional bodies and civil society.

Still, despite these advances, racism and racial discrimination, both direct and indirect, de facto and de jure, continue to manifest themselves in inequality and disadvantage.

The International Decade for People of African Descent, proclaimed by General Assembly resolution 68/237 and to be observed from 2015 to 2024, provides a solid framework for the United Nations, Member States, civil society and all other relevant actors to join together with people of African descent and take effective measures for the implementation of the programme of activities in the spirit of recognition, justice and development.

It is also a unique opportunity to build on the International Year for People of African Descent, which was observed by the international community in 2011, and to further underline the important contribution made by people of African descent to our societies and to propose concrete measures to promote their full inclusion and to combat racism, racial discrimination, xenophobia and related intolerance.

Source: UN Web Services Section, Department of Public Information

INVITATION: 2014 State of the Nation Summit

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You are cordially invited to participate in the 2014 STATE OF THE NATION SUMMIT, being held October 25, 2014, at the Sam Jonah Hall at the African University College of Communication, Accra, Ghana. The theme under consideration is: National Transformation: Role of the Youth.

The organizers would be delighted to have you join in the State of the Nation Summit. Personal invitations are not necessary to attend. This is an open event, and we welcome everyone who is interested in increasing their knowledge about the current state of the nation and what they can personally do to contribute to a positive transformational process.

The organizers are Team One CaaT GH—transforming one community at a time.

Rawlings, Restoring Morality To Global Affairs: When the right of might supersedes the sacred might of right

Solomon Appiah:

Below is a part of a speech by Ex-President Jerry John Rawlings on 12 September 2014 at a seminar attended by Namibian Prime Minister, leading Pan Africanists and other political figures. The Ex-Prez made some relevant observations about the global order. Here is one:

“In one fell swoop, the right of might was made to supersede and almost destroy the sacred might of right.”

This was the case with U.S. interventions in Afghanistan, Libya and the Ukraine. I like the United States of America. It is a great country with some amazing history and people.

Morality is not an easy subject to broach in our day—not by even the most ‘moral’ voices of our times. A man with alleged blood on his hands (by way of the coup d’état) might be deemed by some unfit to give such a public address on morality.

But with such an opinion, I’d beg to differ. Truth is Truth regardless of the mouth from which it ushers. President Rawlings has a somewhat blemished record tied to the military government he headed. Agreed! But to his credit, unlike some of SSA’s military rulers, he eventually returned Ghana to democratic rule despite the huge support he still enjoys from the Ghana Armed Forces. Do read his remarks with an unbiased lens if possible.

For the full speech read the shared blog below

Originally posted on J.J. Rawlings:

President Pohamba welcomes President RawlingsGhana’s former President, Flt Lt Jerry John Rawlings, has in an address in Windhoek, Namibia, challenged the United States and other Western powers to restore morality into the manner they manage global affairs.

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What are Illicit Financial Flows?

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The Global financial Integrity disclosed that, “As a percent of GDP, Sub-Saharan Africa suffers more from illicit financial outflows than any other region in the world”. The gravity of this statement is better appreciated when one considers that this part of the globe constitutes a huge percentage of the world’s youthful populations—many of which are poor, live on less than a dollar a day and suffer from low human development with poor access to healthcare, education and security. In effect, the region that needs help the most suffers the most from Illicit Financial Flows (IFF) which if rightfully curbed could aid development.

In the past I have written about Illicit Financial Flows in my article entitled “Africa: Tackling Illicit Outflows” but I have not really taken the time to define what they are. So what are they?

Illicit flows are all unrecorded private financial outflows involving capital that is illegally earned, transferred, or utilized, generally used by residents to accumulate foreign assets in contravention of applicable capital controls and regulatory frameworks. Thus, even if the funds earned are legitimate, such as the profits of a legitimate business, their transfer abroad in violation of exchange control regulations or corporate tax laws would render the capital illicit.

This definition was taken from the Global Financial Integrity Report dubbed, “Illicit Financial Flows from Developing Countries: 2002-2011“.

Illicit Money & Flight Capital

Further deepening our understanding, below is an excerpt from another report which defines some more terms for the uninitiated titled, “Illicit Financial Flows From Africa: Hidden Resource For Development“:

Illicit money is money that is illegally earned, transferred, or utilized. If it breaks laws in its origin, movement, or use it merits the label.

Flight capital takes two forms. The legal component stays on the books of the entity or individual making the outward transfer. The illegal component is intended to disappear from records in the country from which it comes.

By far the greatest part of unrecorded flows are indeed illicit, violating the national criminal and civil codes, tax laws, customs regulations, VAT assessments, exchange control requirements, or banking regulations of the countries out of which the unrecorded/illicit flows occur.

There are two main channels through which illicit capital, unrecorded in official statistics, can leave a country.

The World Bank Residual model captures the first channel through which illicit capital leaves a country through its external accounts. The second type of illicit flows, generated through the mispricing of trade transactions, is captured by the Trade Misinvoicing model which uses IMF Direction of Trade Statistics.

Mohamed Sultan, an economic governance program officer at the Open Society Initiative for West Africa offers yet another explanation of IFFs as follows:

When money is moved secretly and illegally from one jurisdiction to another, this constitutes an illegal financial flow. For developing countries, the term refers to money that leaves the continent instead of being used to finance development.

Such funds may be proceeds from organized crime, smuggling, corruption, money laundering, tax evasion, or international trade manipulations.

He adds:

While concentrated in a few countries such as Nigeria and Ghana, and essentially stemming from extractive and mining industries, IFFs are a burden for nearly all West African countries. Across the continent, only 3 percent of IFFs are derived from government corruption, while 33 percent comes from organized criminal activity and 64 percent from trade manipulations.

African economies have lost between $597 billion and $1.4 trillion in illicit financial flows in the past three decades. That’s nearly equal to the entire continent’s current gross domestic product. This plunder results in missed development opportunities, increased poverty, and continued injustice.

While many African nations are experiencing unprecedented economic growth, illicit financial flows (IFFs) prevent this growth from translating into better overall living conditions for Africans.

For more on measurements and the impact of IFFs on the human family and specifically sub-Saharan Africa, read the hyperlinked reports.


Africa Tells EU to Back Off Uganda, Nigeria

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A couple of weeks ago, I wrote an article titled Africa and the West: Revising the Rules of Engagement. It tackled what in my opinion was uncivil and derogatory treatment of Uganda and Nigeria (and by extension the entire sub-Saharan African people) by some developed countries. These countries attempted to use development assistance as a control mechanism to force these states to abrogate an anti-gay bill arrived at democratically through parliamentary and executive arms of governments.

I wondered why African leaders had not yet spoken up for their citizens and beliefs. In addition to withdrawing aid, the European Union had gone as far as tabling the EU Parliament resolution of 13 March 2014 on launching consultations to suspend Uganda and Nigeria from the Cotonou Agreement in view of recent legislation further criminalising homosexuality (2014/2634(RSP)).

Today I was very pleased to chance upon a response to the EU Parliament from the African, Caribbean and Pacific Group of States (ACP)—79 member nations, all signatories to the Cotonou Agreement save Cuba. .

The Parliamentary Assembly of the African, Caribbean and Pacific (ACP) Group of States answered the West by issuing the following DECLARATION OF THE ACP PARLIAMENTARY ASSEMBLY on recent proposals adopted by the EUROPEAN PARLIAMENT with regard to UGANDA and NIGERIA.

It is good to see Africans and other developing nations speaking up for what they believe in and not cowering at intimidatory control measures from the West. Hopefully this is a sign that Africans, Caribbeans and the people of the pacific are ready to take up the mantle of responsible [independent vis-à-vis controlled] leadership required to forge a better future for their peoples.

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Solomon Appiah
Twitter: @s_apiah
Email: connect@solomonappiah.com

 

Equity and Justice form the foundation of enlightened ethical leadership—Solomon Appiah

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