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	Challenging financial sector backing to land enclosures by Shalmali Guttal Focus on the Global South, agencies   In 2011, Olivier de Schutter, then UN Special Rapporteur on the Right to Food cautioned, “The commodification of land, which the global phenomenon of land-grabbing is accelerating, entails risks that go far beyond what the current proposals for regulating it seem willing to recognize.”   The risks he alluded to stem from treating land, labour and money as mere tradable commodities and allowing market mechanisms to be the sole arbiter of society, culture and nature. Adequately addressing them would require subordinating markets to the interests of society and the natural environment, recognizing non commoditized valuations of land and nature in ‘official’ governance discourse and practice, and putting in place national and international regulations that stop rather than encourage land grabbing.   Private and state enclosures of lands, forests and water, now generally referred to as land, water and resource grabbing, are not new phenomena; struggles for control over the ownership, use, management and governance of land, water, territory and their associated wealth are central motifs in colonial and other national histories. Nor has land ever been out of markets: what grows naturally on land, what is grown by humans on land, what flows on and under land, what forms landscapes and eco-systems, what is built on land, and what is extracted from under the land, have all been commodities in some market or the other over the past centuries.   What is new about the current era of enclosures is the array of means, mechanisms and instruments by which political and economic control over land and nature are exercised, and by which land and land-based wealth are becoming commodities in new markets. Developing countries with large agrarian economies have thrown their borders open to foreign direct investment (FDI) in the agricultural and natural resource sectors, ostensibly to spur economic growth and create employment. Many of these investments are backed by complex financing arrangements and multiple sources of capital, including public, private and multilateral financiers.   The spread of neoliberalism in much of the world since the 1980s provided new impetus to the corporate capture of agriculture and food systems through vertically integrated value chains that included land, labour, inputs, credit, processing, distribution and retailing.   Financial deregulation allowed commodity markets to expand rapidly and into new areas through new financial instruments, and also allowed new actors to enter the land-agricultural-food investment arenas. Investment banks created new types of investment instruments such as commodity index funds that amalgamated agricultural commodities, lands, minerals and energy futures, and directed floods of unregulated investment capital towards land and nature. Many agricultural derivatives transformed risk itself into a new assets class, thus increasing the volatility of commodity prices and economic uncertainty for small-scale agricultural producers who had no protection against market risks.   Over the past 10 years, sovereign wealth funds, private equity firms, insurance companies, pension and hedge funds, investment banks and other finance corporations have become implicated in land, forest, mineral and water deals as financial underwriters as well as direct investors. While land itself is immovable, financialization enables the wealth that springs from it to move across the world and be traded in distant markets.   Natural, ecological, social, cultural, nutritional, health and even economic values associated with land are reduced to exchangeable financial instruments (such as derivatives) and a single landscape can be subjected to more than one financialization scheme, for example, Payment for Ecosystem Services (PES), forest carbon trading and a fast-growing tree plantation.   The subversion of rights, regulation and governance   Land, water and resource grabbing are human rights violations and have far reaching negative impacts on environmental quality, biodiversity, society, culture, employment, livelihoods, health and local peoples’ access to basic/essential goods and services. Promises made by investors to affected communities of providing employment, schools, health and other social services rarely materialize; jobs are poorly paid, precarious, often with unsafe work conditions, and distress out-migration is common.   Local populations are robbed of their agency to make decisions about how to use, manage and govern their lands and territories, and of their ability to participate in political processes as migrants. Those who resist the incursions on their lands and territories face violent threats, intimidation, arbitrary arrests and incarceration, extra-judicial killings and enforced disappearance.   States enable these enclosures by enacting policies, laws and regulations that favor markets and by using their legal and security apparatus to suppress and punish those who resist. International financial institutions (IFIs), multilateral agencies, international policy institutions, transnational corporations (TNCs) and even some civil society organisations (CSOs) have sought to re-frame and re-present land, water and resource grabbing as “win-win” investments whereby investors can secure the assets they covet by meeting conditions outlined in voluntary codes of conduct to minimize negative impacts.   IFIs—for example the World Bank, the International Finance Corporation (part of the World Bank group) and the Asian Development Bank (ADB)–provide financing, policy advice and technical support to governments and private firms sector actors for investments in agriculture, infrastructure, energy, urban development, and extractive industry, which demand secure access by investors to land, water and natural resources.   The World Bank has played a central role in promoting land markets in developing countries by financing land tenure administration reforms that established private property regimes, eased land transactions and enabled wealthy and powerful individuals to use land for financial and speculative gain.   Anticipating water shortages as Asian economies intensify their pursuit of economic growth, the ADB has proposed a comprehensive framework for water governance that promotes water markets, water trade and increased private investment in water services and infrastructure.   The Green Economy, elaborated by the United Nations Environment Programme (UNEP) in 2011 with the support of multilateral agencies, IFIs, states, private sector and environmental organisations, further advances financialisation by proposing a system of natural resource appropriation and commodification whereby eco-systems and biodiversity are valued in monetary terms rather than the varieties of life they sustain.   The Green Economy treats nature, its functions and its capacities as “natural capital,” and aims to estimate appropriate economic values for the vital eco-system services that forests, trees, lakes, wetlands and river basins provide by capturing and storing carbon, creating water catchments, ensuring the stability of water cycles, soil fertility, local micro-climates for safe habitats, nurturing and regenerating biodiversity (including fisheries), etc. These values are considered crucial components of a country’s “natural capital,” and can be packaged and traded in international markets to attract investment and development finance.   The capture of land, forests, water sources and minerals are justified by states and many policy actors through narratives of global hunger and food scarcity, classifying lands as “idle, empty or under-used,” energy needs to meet development goals, tackling climate change and even environmental protection as described by journalist John Vidal in the “The great green land grab.” In order to satisfy commodity, food, energy, finance and conservation markets, the rights of local communities and populations to make decisions about the use, management and governance of lands and eco systems that sustain them are wrested away and replaced by regulatory regimes that enable commodification and financialization.   Proposals to regulate land and nature based investments promoted by the World Bank, ADB and other IFIs, G-7/8, International Land Coalition and similar alliances do not aim to stop the commodification of land and nature. Rather, they provide conditions by which medium and large-scale investors can acquire land and associated resources with veneers of responsibility, transparency, democracy and participation. Voluntary codes of conduct may bring about some welcome changes in the way investments proceed but the actual facts of land and resource grabs will continue.   Rethinking governance   For those whose lives, livelihoods, cultures, societies and identities are turned upside down by destructive investments, land and resource grabbing cannot be regulated; they must be unconditionally stopped. The discourse and practice of governance must be reoriented to prioritize the rights of local populations and communities while respecting nature and the carrying capacity of earth.   “Keeping Land Local: Reclaiming Governance from the Market” explores some of the challenges facing peasants, farmers, forest dwellers, fisher-folk, pastoralists, indigenous peoples and other local communities in their efforts to build systems for the governance of land, water, forests and territories that are just, participatory, ecologically sound and foster genuinely sustainable forms of living.   * Shalmali Guttal is Coordinator, Defending the Commons Programme, at Focus on the Global South. Visit the related web page
	Exposing the great ''poverty reduction'' myth by Dr Jason Hickel London School of Economics   The received wisdom comes to us from all directions: Poverty rates are declining and extreme poverty will soon be eradicated. The World Bank, the governments of wealthy countries, and - most importantly - the United Nations Millennium Campaign all agree on this narrative. Relax, they tell us. The world is getting better, thanks to the spread of free market capitalism and western aid. Development is working, and soon, one day in the very near future, poverty will be no more.   It is a comforting story, but unfortunately it is just not true. Poverty is not disappearing as quickly as they say. In fact, according to some measures, poverty has been getting significantly worse. If we are to be serious about eradicating poverty, we need to cut through the sugarcoating and face up to some hard facts.   False accounting   The most powerful expression of the poverty reduction narrative comes from the UN''s Millennium Campaign. Building on the Millennium Declaration of 2000, the Campaign''s main goal has been to reduce global poverty by half by 2015 - an objective that it proudly claims to have achieved ahead of schedule. But if we look beyond the celebratory rhetoric, it becomes clear that this assertion is deeply misleading.   The world''s governments first pledged to end extreme poverty during the World Food Summit in Rome in 1996. They committed to reducing the number of undernourished people by half before 2015, which, given the population at the time, meant slashing the poverty headcount by 836 million. Many critics claimed that this goal was inadequate given that, with the right redistributive policies, extreme poverty could be ended much more quickly.   But instead of making the goals more robust, global leaders surreptitiously diluted it. Yale professor and development watchdog Thomas Pogge points out that when the Millennium Declaration was signed, the goal was rewritten as "Millennium Developmental Goal 1" (MDG-1) and was altered to halve the proportion (as opposed to the absolute number) of the world''s people living on less than a dollar a day. By shifting the focus to income levels and switching from absolute numbers to proportional ones, the target became much easier to achieve. Given the rate of population growth, the new goal was effectively reduced by 167 million. And that was just the beginning.   After the UN General Assembly adopted MDG-1, the goal was diluted two more times. First, they changed it from halving the proportion of impoverished people in the world to halving the proportion of impoverished people in developing countries, thus taking advantage of an even faster-growing demographic denominator. Second, they moved the baseline of analysis from 2000 back to 1990, thus retroactively including all poverty reduction accomplished by China throughout the 1990s, due in no part whatsoever to the Millennium Campaign.   This statistical sleight-of-hand narrowed the target by a further 324 million. So what started as a goal to reduce the poverty headcount by 836 million has magically become only 345 million - less than half the original number. Having dramatically redefined the goal, the Millennium Campaign can claim that poverty has been halved when in fact it has not. The triumphalist narrative hailing the death of poverty rests on an illusion of deceitful accounting.   But there''s more. Not only have the goalposts been moved, the definition of poverty itself has been massaged in a way that serves the poverty reduction narrative. What is considered the threshold for poverty - the "poverty line" - is normally calculated by each nation for itself, and is supposed to reflect what an average human adult needs to subsist. In 1990, Martin Ravallion, an Australian economist at the World Bank, noticed that the poverty lines of a group of the world''s poorest countries clustered around $1 per day. On Ravallion''s recommendation, the World Bank adopted this as the first-ever International Poverty Line (IPL).   But the International Poverty Line proved to be somewhat troublesome. Using this threshold, the World Bank announced in its 2000 annual report that "the absolute number of those living on $1 per day or less continues to increase. The worldwide total rose from 1.2 billion in 1987 to 1.5 billion today and, if recent trends persist, will reach 1.9 billion by 2015." This was alarming news, especially because it suggested that the free-market reforms imposed by the World Bank and the IMF on Global South countries during the 1980s and 1990s in the name of "development" were actually making things worse.   This amounted to a PR nightmare for the World Bank. Not long after the report was released, however, their story changed dramatically and they announced the exact opposite news: While poverty had been increasing steadily for some two centuries, they said, the introduction of free-market policies had actually reduced the number of impoverished people by 400 million between 1981 and 2001.   This new story was possible because the Bank shifted the IPL from the original $1.02 (at 1985 PPP) to $1.08 (at 1993 PPP), which, given inflation, was lower in real terms. With this tiny change - a flick of an economist''s wrist - the world was magically getting better, and the Bank''s PR problem was instantly averted. This new IPL is the one that the Millennium Campaign chose to adopt.   The IPL was changed a second time in 2008, to $1.25 (at 2005 PPP). And once again the story improved overnight. The $1.08 IPL made it seem as though the poverty headcount had been reduced by 316 million people between 1990 and 2005. But the new IPL - even lower than the last, in real terms - inflated the number to 437 million, creating the illusion that an additional 121 million souls had been "saved" from the jaws of debilitating poverty. Not surprisingly, the Millennium Campaign adopted the new IPL, which allowed it to claim yet further chimerical gains.   We need to seriously rethink these poverty metrics. The dollar-a-day IPL is based on the national poverty lines of the 15 poorest countries, but these lines provide a poor foundation given that many are set by bureaucrats with very little data. More importantly, they tell us nothing about what poverty is like in wealthier countries. A 1990 survey in Sri Lanka found that 35 percent of the population fell under the national poverty line. But the World Bank, using the IPL, reported only 4 percent in the same year. In other words, the IPL makes poverty seem much less serious than it actually is.   The present IPL theoretically reflects what $1.25 could buy in the United States in 2005. But people who live in the US know it is impossible to survive on this amount. The prospect is laughable. In fact, the US government itself calculated that in 2005 the average person needed at least $4.50 per day simply to meet minimum nutritional requirements. The same story can be told in many other countries, where a dollar a day is inadequate for human existence. In India, for example, children living just above the IPL still have a 60 percent chance of being malnourished.   According to Peter Edwards of Newcastle University, if people are to achieve normal life expectancy, they need roughly double the current IPL, or a minimum of $2.50 per day. But adopting this higher standard would seriously undermine the poverty reduction narrative. An IPL of $2.50 shows a poverty headcount of around 3.1 billion, almost triple what the World Bank and the Millennium Campaign would have us believe. It also shows that poverty is getting worse, not better, with nearly 353 million more people impoverished today than in 1981. With China taken out of the equation, that number shoots up to 852 million.   Some economists go further and advocate for an IPL of $5 or even $10 - the upper boundary suggested by the World Bank. At this standard, we see that some 5.1 billion people - nearly 80 percent of the world''s population - are living in poverty today. And the number is rising.   These more accurate parameters suggest that the story of global poverty is much worse than the spin doctored versions we are accustomed to hearing. The $1.25 threshold is absurdly low, but it remains in favour because it is the only baseline that shows any progress in the fight against poverty, and therefore justifies the present economic order. Every other line tells the opposite story. In fact, even the $1.25 line shows that, without factoring China, the poverty headcount is worsening, with 108 million people added to the ranks of the poor since 1981. All of this calls the triumphalist narrative into question.   A call for change   This is a pressing concern; the UN is currently negotiating the new Sustainable Development Goals that will replace the Millennium Campaign in 2015, and they are set to use the same dishonest poverty metrics as before. They will leverage the "poverty reduction" story to argue for business as usual: stick with the status quo and things will keep getting better. We need to demand more. If the Sustainable Development Goals are to have any real value, they need to begin with a more honest poverty line - at least $2.50 per day - and instate rules to preclude the kind of deceit that the World Bank and the Millennium Campaign have practised to date.   Eradicating poverty in this more meaningful sense will require more than just using aid to tinker around the edges of the problem. It will require changing the rules of the global economy to make it fairer for the world''s majority. Rich country governments will resist such changes with all their might. But epic problems require courageous solutions, and, with 2015 here, the moment to act is now.   http://www.aljazeera.com/indepth/opinion/2014/08/exposing-great-poverty-reductio-201481211590729809.html
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