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	Global Austerity Alert: Looming Budget Cuts in 2021-25 and Alternatives by Isabel Ortiz, Matthew Cummins IPS, Initiative for Policy Dialogue, agencies   Last week (April 2021), Ministers of Finance met virtually at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank to discuss policies to tackle the pandemic and socio-economic recovery.   But a global study just published by the Initiative for Policy Dialogue at Columbia University, international trade unions and civil society organizations, sounds an alert of an emerging austerity shock: Most governments are imposing budget cuts, precisely at a time when their citizens and economies are in greater need of public support.   Analysis of IMF fiscal projections shows that budget cuts are expected in 154 countries this year, and as many as 159 countries in 2022.   This means that 6.6 billion people or 85% of the global population will be living under austerity conditions by next year, a trend likely to continue at least until 2025.   The high levels of expenditures needed to cope with the pandemic have left governments with growing fiscal deficit and debt. However, rather than exploring financing options to provide direly-needed support for socio-economic recovery, governments—advised by the IMF, the G20 and others—are opting for austerity.   The post-pandemic fiscal shock appears to be far more intense than the one that followed the global financial and economic crisis a decade ago. The average expenditure contraction in 2021 is estimated at 3.3% of GDP, which is nearly double the size of the previous crisis. More than 40 governments are forecasted to spend less than the (already low) pre-pandemic levels, with budgets 12% smaller on average in 2021-22 than those in 2018-19 before COVID-19, including countries with high developmental needs like Ecuador, Equatorial Guinea, Kiribati, Liberia, Libya, Republic of Congo, South Sudan, Yemen, Zambia and Zimbabwe.   The dangers of early and overly aggressive austerity are clear from the past decade of adjustment. From 2010 to 2019, billions of people were affected by reduced pensions and social security benefits; by lower subsidies, including for food, agricultural inputs and fuel; by wage bill cuts and caps, which hampered the delivery of public services like education, health, social work, water and public transport; by the rationalization and narrow-targeting of social protection programs so that only the poorest populations received smaller and smaller benefits, while most people were excluded; and by less employment security for workers, as labor regulations were dismantled.   Many governments also introduced regressive taxes, like consumption taxes, which further lowered disposable household income. In many countries, public services were downsized or privatized, including health. Austerity proved to be a deadly policy. The weak state of public health systems—overburdened, underfunded and understaffed from a decade of austerity—aggravated health inequalities and made populations more vulnerable to COVID-19.   Today, it is imperative to watch out for austerity measures with negative social outcomes. After COVID-19’s devastating impacts, austerity will only cause more unnecessary suffering and hardship.   Austerity is bad policy. There are, in fact, alternatives even in the poorest countries. Instead of slashing spending, governments can and must explore financing options to increase public budgets.   First, governments can increase tax revenues on wealth, property, and corporate income, including on the financial sector that remains generally untaxed. For example, Bolivia, Mongolia and Zambia are financing universal pensions, child benefits and other schemes from mining and gas taxes; Brazil introduced a tax on financial transactions to expand social protection coverage.   Second, more than sixty governments have successfully restructured/reduced their debt obligations to free up resources for development.   Third, addressing illicit financial flows such as tax evasion and money laundering is a huge opportunity to generate revenue.   Fourth, governments can simply decide to reprioritize their spending, away from low social impact investments areas like defense and bank/corporate bailouts; for example, Costa Rica and Thailand redirected military expenditures to public health.   Fifth, another financing option is to use accumulated fiscal and foreign reserves in Central Banks. Sixth, attract greater transfers/development assistance or concessional loans.   A seventh option is to adopt more accommodative macroeconomic frameworks. And eighth, governments can formalize workers in the informal economy with good contracts and wages, which increases the contribution pool and expands social protection coverage.   Expenditure and financing decisions that affect the lives of millions of people cannot be taken behind closed doors at the Ministry of Finance. All options should be carefully examined in an inclusive national social dialogue with representatives from trade unions, employers, civil society organizations and other relevant stakeholders.   #EndAusterity is a global campaign to stop austerity measures that have negative social impacts. Since 2020, more than 500 organizations and academics from 87 countries have called on the IMF and Ministries of Finance to immediately stop austerity, and instead prioritize policies that advance gender justice, reduce inequality, and put people and planet first.   * Isabel Ortiz is Director of the Global Social Justice Program at Joseph Stiglitz’s Initiative for Policy Dialogue at Columbia University, former Director at the International Labour Organization (ILO) and UNICEF. Matthew Cummins is senior economist who has worked at UNDP, UNICEF and the World Bank. http://bit.ly/3Bo23EC   http://policydialogue.org/publications/working-papers/global-austerity-alert-looming-budget-cuts-in-2021-25-and-alternative-pathways/ http://policydialogue.org/ http://policy-practice.oxfam.org/resources/adding-fuel-to-fire-how-imf-demands-for-austerity-will-drive-up-inequality-worl-621210/ Visit the related web page
	The human rights impact of China's global investments by Business & Human Rights Resource Centre   "Going out" responsibly: The human rights impact of China's global investments, a report by the Business & Human Rights Resource Centre.   Since the “Going Out Policy” was initiated in 1999 by the Chinese Government to promote Chinese investments abroad, the footprint of Chinese enterprises has expanded considerably. This has been further accelerated by President Xi Jinping’s launch of China’s Belt and Road Initiative (BRI) in 2013, after which China committed to work “together with other countries to foster the environmentally-friendly and sound development of the Belt and Road, featuring peace and the exchange of wisdom, and to build a global economy more vibrant, open, inclusive, stable and sustainable.”   As Chinese businesses – particularly energy, construction, and mining and metals companies – continue to venture abroad, civil society and the media have reported an unfortunate increase in social, environmental and human rights violations – particularly in Asia, Africa and Latin America.   Key findings   Between 2013 and 2020, we recorded 679 human rights abuse allegations linked to Chinese business conduct abroad, and 102 company responses to these allegations.   While there are many emergent positive developments from China’s businesses overseas, China’s aspiration to be a responsible great power could be undermined by the following:   Higher rates of alleged abuse in countries with weaker governance and where Chinese investments are dominant:   Myanmar had the highest number of recorded allegations (97), followed by Peru (60), Ecuador (39), Laos (39), Cambodia (34) and Indonesia (25). China is a major investor or trading partner in all these countries.   Many human rights concerns related to projects in Myanmar pre-dated the military coup, which is concerning. With ongoing escalating challenges in the country, and the possibility for more Chinese investments being approved in this conflict-affected area, it is imperative for companies to implement robust human rights due diligence to ensure commitment to international standards on human rights and responsible business conduct.   Higher rates of alleged abuse in extractive and construction sectors:   Our data showed human rights risks are particularly high in metals and mining (35% or 236 allegations), construction (22% or 152 allegations) and fossil fuel energy (17% or 118 allegations).   Chinese renewable energy investments overseas have gained momentum because of China’s pledge to meet targets under the Paris Agreement and to build a green BRI. However, human rights risks in the sector are also prominent, with 87 allegations (13%) recorded.   Lack of corporate transparency and accountability:   Despite commitments to openness and transparency, five Chinese companies had a very low response rate (24%) when invited by the Resource Centre to address human rights allegations made against their overseas operations.   This is lower than the Resource Centre’s overall response rate from Asian companies (53%), particularly companies from major economies such as Japan (68%), India (47%) and Indonesia (41%).   Chinese banks had a dismal 5% response rate. Only one response was received from 20 invitations, indicating a general reluctance by Chinese banks to engage with allegations from civil society actors or to learn more about their impact and improve their social and environmental performance.   Business associations and government ministries have developed guidelines and rules to promote responsible business conduct. These inform business practice overseas. Unfortunately, our data showed this guidance and its enforcement is not sufficiently effective.   Chinese businesses continue to sideline rights of communities and workers. Our data indicated a prevalence of inadequate disclosure or environmental impact assessment (EIA) (31% of allegations recorded), followed by violations of land rights (29%), loss of livelihoods (28%), labour rights (19%), and pollution and health threat (18%).   Positive developments include:   Renewable energy companies had the highest response rate (36%), although all responses came from hydropower companies and none from solar or wind energy companies. This is still low compared to the Asian company average, but higher than the Chinese company average.   Chinese companies can build on this enhanced performance to strengthen their contribution to a ‘just transition’ towards clean energy.   Companies listed on various stock exchanges are more likely to respond (with response rate of 27%), when compared with companies not publicly listed (18%).   Various requirements by stock exchanges (including those on information disclosure and governance), influence by investors, as well as a higher level of scrutiny of listed companies might play a part in persuading these companies to engage with civil society more often.   State-owned companies (among which many are also listed companies) are more likely to respond to allegations, with an overall response rate of 27%, compared with privately-owned companies (16%).   Key recommendations   Given the challenges illustrated in this report, there are great opportunities for companies, business associations, the governments of China and countries hosting investments to further strengthen the regulatory environment and its implementation by Chinese companies operating overseas.   Supported by legislation, comprehensive guidance and effective implementation mechanisms, actions should prioritise addressing heightened risks across countries and sectors through three key approaches: transparency, human rights due diligence, and grievance mechanisms and access to remedy.   http://www.business-humanrights.org/en/from-us/briefings/going-out-responsibly-the-human-rights-impact-of-chinas-global-investments/ http://ourworld.unu.edu/en/areas-in-africa-with-more-chinese-backed-projects-were-more-likely-to-experience-protests http://www.business-humanrights.org/en/latest-news/ Visit the related web page
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