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	Profit-shifting has become a core pillar of corporate strategy by Eduardo Porter New York Times   October 2014   When the European Commission charged this week that Ireland’s sweetheart tax treatment of Apple amounted to an illegal corporate subsidy, the company said that it had done nothing wrong. Apple executives might have added that whatever they did, they were not alone.   Corporate tax strategies intended to minimize global taxes, by hook or by crook, are by now standard practice. Google and Facebook move money through Ireland to lower their taxes. Starbucks uses the Netherlands, a practice that is under review by Europe as well.   “The commission picked up a case which is quite common in terms of tax planning,” said Pascal Saint-Amans, who runs the Center for Tax Policy and Administration at the Organization for Economic Cooperation and Development, the policy advisory organization of the world’s advanced nations.   The question is whether this sort of strategy — as common to multinational companies as filing a tax return every year — can truly be stopped. What hangs in the balance is whether governments can continue to tax corporations beyond the barest minimum. Or whether globalization will make such taxation all but impossible.   Over the last several years, United States corporate taxes, relative to profits, have reached rates lower than those of the late 1930s.   If corporations can continue to evade taxation — using strategies like sham transactions between phantom subsidiaries to shift profits to the lowest tax jurisdictions and costs to where taxes are highest — the burden of public finance will land almost entirely on the shoulders of ordinary workers, the only link in the economic chain that can’t move.   Some scholars — including Robert B. Reich, who served as Labor Secretary during the Clinton administration and now teaches at the University of California, Berkeley; and Greg Mankiw of Harvard, who was former chief economic adviser to President George W. Bush — have proposed abolishing the corporate income tax, replacing it with direct taxes on shareholders.   But it is highly doubtful that the American political system could raise taxes on dividends, capital gains and upper incomes enough to compensate for the lost revenue from business. Rich taxpayers also have their own sophisticated tools to shield income, including parking money in tax havens around the world.   Mr. Saint-Amans said he feared that without the corporate income tax, income taxation would fall apart entirely as the wealthy could avoid taxation by becoming companies, inserting several corporate layers between themselves and their money.   Nobody has a confident grasp of the scale of corporate tax avoidance. Corporate tax revenue in the United States today amounts to some 2.6 percent of total economic activity, roughly the same as it did in the early 1980s, when the latest wave of globalization took off.   Across the 34 O.E.C.D. nations, corporate tax revenue actually grew from just above 2 percent of G.D.P. in the 1960s to some 3.7 percent in 2007, before the financial crisis walloped companies around the world.   These figures can be misleading, though. In the United States, corporate taxes have remained flat despite a sharp increase in corporate profits, which today take the highest share of national income since the government started measuring them in the 1920s. Profits have similarly risen in other industrial countries around the world.   Plus, there is plenty of suggestive evidence that profit-shifting has become a core pillar of corporate strategy.   In 2012 the Irish subsidiaries of American multinationals generated $120 billion in profit, according to United States government data, eight times as much as their German subsidiaries. Subsidiaries in Bermuda generated $82 billion, four times as much as subsidiaries in Mexico.   That’s not where companies make their stuff, or sell it, for that matter. According to a report from Kimberly Clausing of Reed College, the top five countries for American affiliates, measured by jobs, are Britain, Canada, Mexico, China and Germany. Measured by reported profit they are the Netherlands, Luxembourg, Ireland, Canada and Bermuda.   Americans seem to be the most nimble dodgers. The United States has a higher statutory corporate tax rate than Europe, but according to a recent study by Reuven S. Avi-Yonah of the University of Michigan Law School and Yaron Lahav of Ben-Gurion University of the Negev, European multinationals effectively pay a higher rate than their American counterparts.   The problem is global. In 2010, according to the International Monetary Fund, Barbados, Bermuda and the British Virgin Islands received more foreign direct investment combined than Germany or Japan. The British Virgin Islands was the second-largest investor in China, after Hong Kong. These fictions are possible because most of the money flows through shell corporations that employ nobody and produce nothing.   The European Commission’s deployment of competition policy to go after dubious tax breaks in Apple’s case is a novel and potentially powerful strategy, which could be applied to many other arrangements.   Governments in both the rich and poor world are fed up, Mr. Saint-Amans said. Having spent the last few decades drafting rules to prevent double taxation, they are now terrified that they have built a system of double non taxation instead.   Governments that turned a blind eye to the tax avoidance of their multinational champions to give them a competitive edge against foreign rivals are now under enormous pressure from voters to prove that it’s not only workers and dupes paying taxes.   There are reasons, however, to remain cautious that the world’s tax collectors can get ahead of its corporate tax strategists.   The trend in the United States, if anything, is going in the opposite direction. Despite the Obama administration’s new rules to prevent so-called corporate inversions, where companies move their tax residency abroad, companies like Burger King and Medtronic are still dropping their American “citizenship” to reduce their tax liability.   Ireland has based its entire development strategy on becoming a low tax base for the multinationals of the world. And until the financial crisis walloped its banks, it had been successful.   Today companies need move little more than a post office box to gain the benefits of a tax haven. If the rules were tightened so that a company could claim a profit only where it really made it, it might decide to move a lot of operations and jobs there.
	Southern African leaders meet as region faces food crisis by Alertnet, AFP, WFP, Oxfam, agencies   December 2015   Southern Africa''s food crisis - from bad to worse, by Obi Anyadike, Africa Editor IRIN News.   Close to 29 million people in southern Africa are already facing food shortages as a result of this season’s poor harvest, but worse could be on the way.   “Serious concerns are mounting that Southern Africa will this coming season face another poor harvest, possibly a disastrous one,” the UN’s aid coordinating agency, OCHA, warned in a recent report.   A drought-inducing El Niño – perhaps the strongest ever recorded – is already underway. Floods are expected to hit the region early next year, and there is a 65 percent chance of a cyclone slamming into the island of Madagascar.   This year, Southern Africa’s cereal harvest fell by almost a quarter, down to 34 million tonnes. Major food shortages are affecting Malawi, Zimbabwe, South Africa and Madagascar. In Lesotho and Namibia, whose populations are tiny, 30 percent of rural people are classified as “food insecure,” which essentially means they lack access to food that’s sufficient to lead healthy, active lives.   After the previous year’s good harvest, “The crisis has been to an extent mitigated by the region’s grain reserves, but they are now largely exhausted,” OCHA humanitarian officer Yolanda Cowan told IRIN.   Their own stockpiles finished, many poor households are already having to buy their staple foods, so the current abnormally high maize prices – up between 15 and 40 percent – is causing real hardship.   Less cash in rural areas means markets start to close. “Once traders realize the crop is lost they will pack up and go,” taking with them the lines of credit they extend to poor farmers, said Daniel Sinnathamby, regional humanitarian coordinator for Oxfam.   Governments will have to respond this coming year by importing commercial food from outside the region, but are facing tightening budgets. Many have economies dependent on commodity exports, and have felt the pinch of the global downturn in prices.   Most countries in the region boast well integrated middle-income economies, and so in theory should not need humanitarian assistance year after year. Yet “Southern Africa suffers from chronic vulnerability. Very small events can send large numbers of people into humanitarian crisis,” said Sinnathamby.   Wealth inequality is reflected in appalling rates of malnutrition-related child stunting. In Malawi and Zambia, stunting is above 47 percent – among the highest in the world. Even in economic powerhouse South Africa more than one in five children show stunting.   Despite the key role agriculture plays in people’s livelihoods, government investment has been limited.   Farm plots are typically small, barely generating subsistence incomes. Farmers are dependent on rain-fed crops rather than irrigation; extension and development services are generally weak; and even in years of good rainfall, millions of people continue to require emergency aid.   Southern Africa is expected to be hit hard by global warming, with extreme rainfall variability forecast. But the innovation and adaptation needed to contend with a changing climate is only slowly emerging.   “I suspect governments across the region have not made the necessary infrastructural investments,” said World Food Programme spokesman David Orr. “There needs to be greater investment in all sorts of agricultural schemes, from water harvesting to conservation farming.”   Building resilience – the ability of communities to cope with adversity - is increasingly seen as a key strategy. “What we have learnt is just responding to the immediate crisis is not effective,” said Maxwell Sibhensana, World Vision technical director.   “Every time there is a crisis we are just alleviating the impacts. There is not enough investment in recovery, and bringing people back into robust livelihoods,” said Sinnathamby.   There is a “regional resilience framework” prepared by humanitarian and development agencies, which emphasizes the need for climate-smart initiatives such as drought-resistant seeds and new farming techniques, alongside social protection programmes for the vulnerable.   Cowan believes that there is a growing realization by governments in the region that the cyclical boom-and-bust agricultural model is no longer sustainable as a path to growth and development.   World Vision has worked closely with communities on conservation farming and adaptation methods. “A lot is happening, but a lot more needs to happen in terms of climate-smart initiatives,” said Sibhensana.   http://www.irinnews.org/report/102271/cop21-southern-africa-s-food-crisis-from-bad-to-worse http://www.irinnews.org/report/102391/southern-africa-s-food-crisis-in-numbers http://www.humanitarianresponse.info/en/operations/southern-africa/document/southern-africa-humanitarian-outlook-201516-special-focus-el http://reliefweb.int/report/malawi/southern-africa-alert-severe-drought-southern-africa-expected-drive-large-food http://reliefweb.int/disaster/dr-2015-000137-mwi http://www.fews.net/fews-net-el-ni%C3%B1o-monitoring-resources http://www.irinnews.org/report/102361/low-food-prices-but-poor-still-go-hungry   August 2015   Johannesburg (AFP) - Leaders of 15 southern African countries will gather for an annual summit on Monday as the region grapples with serious food shortages that have left a record number of people needing aid.   A toxic mix of erratic rains, abnormally high temperatures and floods have wreaked havoc on farming, writing off the bulk of this year''s crop.   An estimated 27.4 million people out of the region''s combined population of 292 million -- or nearly one in 10 people -- will be depending on food handouts by the end of the year.   Yields of the staple corn have shrunk by up to 90 percent in some countries of the 15-nation Southern African Development Community (SADC), a June report by the group said.   "Given the hazards faced, the number of food insecure people.. increased by 13 percent (to) 27.4 million this year compared to 24.3 million for last year," said the report.   But the leaders meeting in Botswana from Monday are not expected to launch a joint regional appeal for help.   "Instead, individual countries will do so," said Margaret Nyirenda, director of SADC''s Food, Agriculture and Natural Resources Division.   Malawi, Zimbabwe, Namibia and Botswana are among the worst-hit.   World Food Programme spokesman David Orr told AFP Zimbabwe and Malawi were facing their "worst food security crisis" in a decade.   Zimbabwe, with a shortfall of 49 percent, will need to import 700,000 tonnes of the staple corn to feed 1.5 million people.   The country''s Vice President Emmerson Mnangagwa has already appealed for cash from "development agencies and the private sector" to ensure that the vulnerable are not "exposed to hunger and starvation".   In Malawi floods earlier this year ravaged fields, killing 176 people.   Traditionally the third largest producer of maize in the region, this year it is being forced to import from neighbour Zambia.   According to official estimates, up to 2.8 million Malawians will need food relief from year end when the food shortages peak.   A sharp decline in rainfall combined with a heatwave across Botswana, meanwhile, have caused a dramatic 70 percent drop in land under cultivation -- and 90 percent of the crop parched.   The country has allocated $44 million in emergency funds to tackle what the government is calling its worst drought in 30 years.   And with regional breadbasket South Africa recording a 31 percent decline in output this year, fears are high of a ripple effect across importers Swaziland, Botswana and Lesotho.   The current maize harvest in South Africa is "the lowest yield since 2007,"the country''s agriculture department told AFP, adding that the country will have to import around 600,000 tonnes of maize to cover the deficit and meet its contractual export obligations.   The prolonged dry spells in parts of the region have also reduced grazing land and feed for livestock, and are likely to push up the prices of red meat, milk, chickens and eggs.   Hunger hits 1.5 million in Zimbabwe as maize production halves-WFP   Around 1.5 million Zimbabweans are predicted to go hungry this year after a dramatic fall in maize production, the World Food Programme (WFP) said.   Some 16 percent of the population are expected to be ''food insecure'' at the peak of the 2015-16 lean season, the period following harvest when food stocks run especially low - a 164 pecent increase on the previous year, the WFP said.   Zimbabwe''s staple maize crop of 742,000 tonnes is down 53 percent from 2014-15, according to data from the South African Development Community.   The problems in Zimbabwe are being felt across the region known as the ''maize belt'', making an estimated 27 million people ''food insecure'' in southern Africa due to droughts, inadequate farming methods and political and economic instability.   "The situation in Zimbabwe is more extreme than most countries in the region, but it is not unique", WFP spokesman David Orr told the Thomson Reuters Foundation.   "Zimbabwe is particularly bad because it was hit very hard by the drought, which was severe this year."   Less than a quarter of Zimbabwean children between the ages of 6 and 23 months receive the recommended minimum acceptable diet for adequate nutrition, and 56 percent of all children between the ages of 6 and 59 months suffer from anaemia, the WFP said.   More than 850,000 people face acute food insecurity in Somalia, UN food assessment shows.   Somalia’s humanitarian situation remains “alarming” four years after a devastating famine with the number of people requiring emergency aid rising 17 per cent to more than 850,000 and those in “food-stressed” situations still at 2.3 million, according to the latest United Nations-managed food assessment study released today.   “The levels of food insecurity and malnutrition are critical,” said UN Humanitarian Coordinator for Somalia, Peter de Clercq. “Humanitarian actors and donors have prevented the situation being a lot worse than it is, but we all need to do more.”   “The situation among internally displaced people is particularly worrying,” Mr. de Clercq said.   In 2011, Somalia experienced a devastating famine, according to the UN Office for Coordination of Humanitarian Affairs (OCHA). Things have since improved, but humanitarian needs remain vast and the number of people in need of humanitarian assistance continues to fluctuate around 3 million. The ability to absorb shocks – whether conflict or natural disasters – is very limited.   According to the Food Security and Nutrition Assessment for Somalia managed by the UN Food and Agriculture Organization (FAO), “widespread acute malnutrition persists across Somalia and large numbers of people will be acutely food insecure through December 2015.”   Some 215,000 children aged under five are acutely malnourished.   August 2015   Haiti drought cuts harvests, lifts prices, food crisis looms - WFP   A severe drought in Haiti has led to acute water shortages, shrivelled harvests and raised food prices, weakening the fragile food supply and worsening hunger among the poor, the U.N. World Food Programme (WFP) said.   The poorest country in the Americas, Haiti already struggles to feed its population of 10.4 million, and 600,000 Haitians already rely on international food aid to survive, the WFP says.   "Thirty percent of the population is moving into food insecurity. That means families are having reduced ability to purchase food and have had to reduce their calorie intake. Families are now having fewer and smaller meals," said Wendy Bigham, WFP''s deputy country director in Haiti.   The drought, linked to the El Nino weather phenomenon, has gripped other parts of the Caribbean and Central America as well as Haiti, and is expected to last until early next year.   "This is the third year in a row with below average rainfall. The drought is especially severe this year and all departments across Haiti are affected," Bigham told the Thomson Reuters Foundation in a telephone interview in the Haitian capital Port-au-Prince.   By February next year, it is likely that "at least one in five households in Haiti will face significant food consumption gaps with high or above usual acute malnutrition," according to an August report by the Famine Early Warning Systems Network (FEWS NET), a service run by the U.S. Agency for International Development (USAID).   Half of Haiti''s population live on less than $1 a day and many Haitians spend the bulk of their income on food. Even a slight increase in food prices can make hundreds of thousands of Haitians too poor to buy enough food.   The depreciation of the Haitian gourde has contributed to the rise in the price of staple foods such as rice, maize and beans.   Prices have shot up "by as much as 60 percent" since April, Bigham said.   Poor harvests caused by low rainfall have also meant fewer jobs in the agricultural sector, which provides around 50 percent of all jobs in Haiti, putting more pressure on families.   "If El Nino continues and we don''t have a good next harvest at around the end of this year, then the situation will quickly deteriorate and we will see many families falling into a (food) crisis situation. The outlook isn''t good," said Bigham.   In June, the government asked the international aid community to help in drought-hit areas, including cash-for-work schemes to inject money into the local economy, sending in water tanks and drilling new water wells.   "It''s quite serious when the government needs to call the international community to come in," said Bigham.   The drought has also affected school meals, which make up the country''s largest food safety net, provided mainly by the WFP which feeds around 500,000 children a year.   In May and June, WFP school meals could not be provided in around 20 percent of schools in Haiti''s southeast and northeast provinces because of a lack of clean water to cook meals in.   Aug 20, 2015   Central American and Caribbean governments have issued an official alert as severe drought in the region damages the crops of some 1.6 million people.   As part of the step, governments from the farming-dependent region pledged to help afflicted families and coordinate international relief efforts to deal with the drought.   "Agreement has been reached to declare an agricultural alert across all of Central America and the Caribbean, not just to take preventive steps for what follows, but also raise international awareness and seek cooperation," Orestes Ortez, El Salvador''s Agriculture Minister, told reporters.   Officials from Central American governments and the Dominican Republic took part in a meeting on the drought in El Salvador.   Last week, the U.N. Food and Agriculture Organisation (FAO) said nearly 1 million people in Guatemala alone are struggling to feed themselves due to drought and poor harvests.   Number of Ethiopians needing food aid surges to 4.5 million after failed rains   The number of Ethiopians who will need food aid by the end of this year has surged by more than 1.5 million from earlier estimates due to failed rains, United Nations agencies said on Monday.   Ethiopia needs extra funding from donors to secure aid for a total of 4.5 million people now projected to require assistance this year, the Office for the Coordination of Humanitarian Affairs (UNOCHA), the World Food Programme (WFP) and the U.N. children''s agency UNICEF said in a statement.   The country of 96 million people is one of Africa''s fastest-growing economies, but failed rains have devastating consequences for food supplies.   "The belg rains were much worse than the National Meteorology Agency predicted at the beginning of the year. Food insecurity increased and malnutrition rose as a result," said David Del Conte, UNOCHA''s acting head of office in Ethiopia, referring to the short, seasonal rainy season that stretched from February to April.   Areas normally producing surplus food in the Horn of Africa country''s central Oromia region were also affected by shortages, the statement said, adding lack of water had decreased livestock production and caused livestock deaths in other pastoralist areas.   Meteorologists have warned that the El Nino weather phenomenon, marked by a warming of sea-surface temperatures in the Pacific Ocean, is now well established and continues to strengthen. Models indicate that sea-surface temperature anomalies in the central Pacific Ocean are set to climb to the highest in 19 years.   The El Nino can lead to scorching weather across Asia and east Africa but heavy rains and floods in South America.   The United Nations cautioned that the anomaly could further affect Ethiopia''s "kiremt" rains that stretch from June to September.   "A failed belg followed by a poor kiremt season means that challenges could continue into next year," said John Aylieff, WFP''s Ethiopia representative.   El Niño and the threat to food security. (Oxfam)   At least ten million poor people face hunger this year and next due to droughts and erratic rains, influenced by climate change and the likely development of a ‘super El Niño’.   In ''Entering Uncharted Waters: El Niño and the threat to food security'', Oxfam says crops have already failed in Southern Africa and Central America, driving up the price of maize on local markets. Ethiopia and parts of South East Asia are suffering from the effects of drought and are braced for worse in coming months.   World leaders are set to meet in Paris in December to negotiate a universal and legally-binding UN climate agreement. Oxfam is warning that climate chaos could increase humanitarian emergencies at a time when resources and capacity are already under enormous strain.   Scientists say climate change could double the frequency of ‘super El Niños’. It is a natural phenomenon, occurring every 7 or 8 years, when a huge release of heat from the oceans into the atmosphere influences global weather patterns.   Winnie Byanyima, Oxfam International’s Executive Director said: “Millions of poor people are already feeling the effects of this super El Niño, seeing their crops fail and the price of staple foods soar because of shortages. Such extreme weather events are only going to increase as climate change ramps up.   2014 was the hottest year on record and this year looks set to exceed it. Governments are waking up to the fact that climate change is already happening and there is an urgent need for a global deal to tackle it.”   In 2011, the delay in responding to the food crisis in the Horn of Africa meant more than 260,000 people died.   Rains are needed from November in Southern Africa to avert a food crisis early next year. The effects of record high temperatures and the ‘super El Niño’ are already being felt;   The Government of Ethiopia estimates that 4.5 million people will need food relief by the end of the year because of poor rains   The maize harvest in Zimbabwe is 35% below average following drought   By February 2016, more than 2 million people in Malawi are expected to be struggling to find enough food   In Guatemala and Honduras hundreds of thousands of farmers have suffered the partial or total loss of their crops through drought and changes to the seasons   Papua New Guinea has been hit by torrential rains that caused landslides, then drought and severe heat that withered crops, affecting 2 million people   Indonesian authorities have declared a drought in the majority of the country’s 34 provinces   The last big El Niño in 1997-98 caused climate chaos and humanitarian disasters in many countries from Peru to Indonesia.   In addition, the pattern of El Niños is getting harder to predict. With ongoing climate change, 2014 was the hottest year on record. No El Niño developed then but growing seasons in Southern Africa and Central America behaved as if one were occurring. Temperatures continued to soar this year and some scientists are expecting it to be the most powerful El Niño to date.   http://www.oxfam.org/en/pressroom/pressreleases/2015-10-01/super-el-nino-and-climate-change-cause-crop-failures-putting http://reliefweb.int/report/world/africa-s-smallholders-adapting-climate-change Visit the related web page
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